Principles of Innovation

Updated on: Monday, January 17, 2011

There is an emphasis on generating 'big ideas' in the corporate and business fraternity the world over. "However, the emphasis in terms of turning these ideas into actual breakthrough products, services and process improvements is clearly not adequate," says Vijay Govindarajan, founding director, Centre for Global Leadership, Tuck School of Business, Dartmouth.

This reality of the business world has been extensively and comprehensively examined in The Other Side of Innovation: Solving the Executive Challenge, a book coauthored by Govindarajan and Chris Trimble, another faculty member at Tuck School of Business, Dartmouth.

According to Govindarajan, the book addresses a preliminary question at the outset — How can we make innovation happen? "This question deserves a lot of reflection as it has been observed that people in general are not clear about the definition of innovation in the first place," he explains.

"Innovation is confused with creativity and this straitjacketed perception largely explains why many companies stop at the stage of 'ideation' when it comes to generating breakthrough ideas. They find it difficult to translate these ideas into reality or more simply put, they find it difficult to execute these ideas," adds Govindarajan.

"However, there is a simple and clear solution to this challenge. The business world needs to understand that innovation is not just creativity. In fact, creativity or creative insights constitute a minuscule one percent of the process of innovation. The rest is all about effective implementation. This truth cannot be understood better than in the famous words of Thomas Edison who once said that genius is one percent inspiration and 99% perspiration. It is just that in this case the word genius needs to be replaced by the word innovation," he elaborates. He goes on to state that once this basic fact is understood it becomes imperative for the business fraternity to concentrate their attention and energies in terms of finding commercial values for their creative ideas.

"And there are certain principles that ensure effective commercialisation of creative ideas without disruption of business processes," reveals Govindarajan. "To begin with, innovation should not be the onus of the core business unit. This is because the core units are responsible for profits and hence do not have the bandwidth and scope to contend with even the slightest aberrations in terms of processes and systems. Instead, there should be a dedicated team in charge of innovations," he explains.

Coming to the subject of actually executing innovative ideas (after they are devised by the innovation team), Govindarajan says, "There should be transparency and integration as far as the core business team and the innovation team is concerned. Innovative ideas are after all meant to garner additional profits and better efficiency. So the management should be able to facilitate an environment where employees of both the teams feel that they are working towards shared interests. At least, initially tensions are bound to arise but the management has to resolve and manage these tensions. Companies should bring both the teams together by providing incentives for collaboration."

Talking about how management education can ingrain the real philosophy and principles of innovation, he said, "There is a broad misnomer that innovation cannot be taught. However, management education needs to show how integral innovation is to key business processes like for instance human resources. It needs to teach how to scientifically link incentives and the business scorecard to innovation. In other words, management schools have to play a pivotal role in terms of educating people on the tools and techniques that can create a broad culture of innovation within businesses."

There is a general concern that in India the culture of executing innovative ideas is fairly abysmal. So how can this be improved? "One clear way is by instituting venture capital cells inside universities (at least the IITs to begin with) that can facilitate easy exchange of ideas between academia, entrepreneurs and industry. This will help in implementing breakthrough ideas in the context of real-world challenges. Needless to say these venture capital cells shall also help the original innovator to access the much needed capital. Moreover, our existing incentive system has to be modified whereby the original innovator can make profits. Further, our copyright and intellectual property rights have to be reviewed in the interests of innovators," sums up Govindarajan.

Times of India

Principles of Innovation

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