Nothing is constant. The same is true in the business environment too. Strategies and ideas on which business and industries operated 20 years ago, or even in the last decade, no more find a place in the CEO meeting agendas of today’s organizations. The age-old strategies no more work. Because, competitors are already copying the strategies and delivering it to customers. The one and only solution organizations are left with irrespective of geographical locations is to innovate the way they do business.

Now, what exactly is this innovation? How can one differentiate a simple addition/improvement from innovation? Why is this so important? How can a company become innovative and what role does innovation play for the organizations of the 21^st century?

Well, different people have different definitions of the word Innovation; the legendary father of marketing, Philip Kotler, defines innovation as “the process of bringing out something new all the way to commercialization.” According to another legend Al Ries, “Innovation is a product or service development that allows a company to establish a new category and probably a new brand.” Innovation is all about out-of-the-box thinking. It cannot be done with the preset of minds and thoughts drawn in a single way. It is about changing the way we do business and changing the business environment for the better. It is about coming out from the old ways of thinking of doing business/things and doing something which is entirely new and imaginative.

A true innovation is something that brings a sea change in the way companies do their day-to-day business or something that changes one’s life drastically. Be it the television, Internet, Computer, digital camera, Aeroplane, ATM, etc. All these innovations have made life much easier for mankind today in ways which were previously not thought of.

Innovation is not a new term to the business world, it has just become an intrinsic part for today’s business. To emphasize the importance of innovation in business, Professor Theodore Lewitt of Harvard Business School said, “to survive companies must be constantly look for new ways to satisfy customers needs.” Today, the pace with which change is taking place has accelerated tremendously, so the only option left for organizations is to attack their own product/service with a new one before their competitors do. Another misconception that is prevailing in the market is that only the big companies, who have huge financials to back their ideas into actions, can innovate. This is a totally wrong perception. In fact, innovations can come from any organization, irrespective of their size and nature of business. There are no restrictions or limitations as far as implementing business strategies are concerned.

Areas of Innovation

• Business Model Innovation: It involves changing the way business is done, say in terms of capturing the value
• Marketing Innovation: It is about the development of a new marketing method with an improvement in product design or packaging, pricing strategy, etc.
• Organizational Innovation: It refers to the creation or alteration of business structures, practices or even models. It also include process, marketing and business model innovation.
• Process Innovation: It refers to the implementation of a new or even a slightly significant improved production or delivery method.
• Product Innovation: It is the introduction of a new product that is entirely new or substantially improved. It may be the extension in the form of better functional characteristics, technical abilities and ease to use.
• Service Innovation: It is the opposite of Product Innovation, the only difference being that here the innovation relates to services rather than products.
• Supply Chain Innovation: Innovations that occur at the sourcing of input products from suppliers to the delivery of the output products to the customers refer to supply chain innovation.