Ielts Reading Practice 040322 – IELTS READING PRACTICE 040322 A Comparative study of Innovation – StuDocu

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IELT

S READING PRACTICE 040322

A

Comparative study of Innovation Practices in Busines

s

Results

of

interviews

with

corporate

executives

and

senior

innovation

offic

ers

in

four

of

the

largest

publically-traded

companies and one government agency

in the Chicago-area provide some insigh

t into how businesses approach innovation.

The

dictionary

defines

innovation

as

“the

introduc

tion

of

something

new”.

Regardless

of

the

type

of

innovation

whether

it

be

product,

process

or

service

it

results

i

n

significant

change.

This

change

could

be

as

simple

as

changing

the

way

we

do

something routine: a

breakthrough which

provides a substantial

benefit to t

he customer

, or one

that dramatically increases

the

revenue or profitability of the co

mpany

Participants

interested

in

breakthrough

innovation

believe

‘if

innovation

doesn’t

deliver

bottom-line

results,

it

is

just

creativity’. Indeed,

the

very

definition

of

innovation

for

Afuah (2003)

is

‘invention plus

commercialization.’

The

relationship

of

innovation

to

financial

performance

was

well

demonstrated

by

Kim

and

Mauborgne

(l997).

In

manufacturing

environments, they found

that while

86% of

product launches i

nvolved some small

improvements to

existing models –

that is

incremental changes, they ac

counted for only 62% of total revenues and 39% of tota

l profits, The r

emaining 14% of launches,

the real breakthrough innovations – g

enerated 38% of total revenues and a huge 61 %

of total profits.

Innovation

may

offer

one

si

gnificant

way

that

companies

can

gain

an

advantage.

Utterback’

s

(1994)

concept

of

‘dominant

design’

provides

insight

i

nto

how

innovation

can

create

a

temporary

monopoly

situation

that

will

weaken

competitive

forces,

however

,

when

an

innovative

product

or

service

is

launched,

rivals

typically

begin

t

o

copy

it

(

once pat

ents

run

out).

Hence

it

is necessary for the company to cont

inuously seek further ways to innovate.

Every

innovation

process

has

Its

strengths

and

weaknesses,

but

it

seems

that

when

a

com

pany

sets

up

a

systematized

innovation

process

i

t

communicates

the

importance

of

innovation

to

the

entire

organi

zation.

In

these

com

panies,

more

resources

are

devoted

to

development.

The

best

companies

have

learned

t

o

systematize

t

he

process

(Hargadorn

&

Sutton

2000)

The

primary

disadvantage

of

having

a

structured

innovation

process

is

speed

to

market

t

he

more

structure,

the

longer

the

lead

time

is

from

idea

to

product.

The

only

company

that

described

its

process

as

‘quick’

did

not

have

such

a

process.

Employees

were

empowered

to

solve

pr

oblems

and

create

new

products

for

the

customer

by

responding

to

demand.

While

this

benefits

customers,

the

company

stated

it

lacked

systems

to

share

learning

with

other

segments

of

the

organization.

A

potential

disadvantage

of

this

approach,

according

to

Utterback,

is

that

evolutionary

change

can

be

missed

when

companies

are too focussed on pleasing custome

rs.

The

most

challenging

aspect

of

any

innovation

is

determining

marketability

.

No

company

said

It

lacked

creative

ideas

or

creative

people,

but

many

ideas

require

significant

resources

to

test,

develop,

and

launch.

Millions

of

dollars

are

at

stake,

so

an

element

of

risk-taking

is

required.

T

aking

risks

is

generally

defined

as

being

able

to

drive

new

ideas

forward

in

the

f

ace

of

adversity

.

Publically

traded

companies

have

a

m

ajor

di

lemma.

T

o

guarantee

a

leadership

position

they

have

to

stay

on

the

leading

edge

of

innovation.

This

requires

a

long-term

approach

and

a

hi

gh

tolerance

for

risk.

Investors

especially

in

a

down

economy

,

want

short-term

results.

As investors’

tolerance for risk decreases, so

does the company’

s ability

to lake the

significant financial risk necessary

to create breakthrough changes;

however

, most recognize that investing in innovation is the ‘right thing to do’.

One

company

actively

pursues

a

rather

unusual

strategy

of

acquiring

innovation

by

purchasing

other

smaller

companies

or

partnering

with

specialized

com

panies.

This

enables

the

acquiring

company

to

bring

a

product

to

market

more

quickly

and

gives the smaller company access

to funds it might not otherwise have.

How

can

a

company

involve

all

its

employees

in

the

innovation

process?

It

may

be

as

simple

as

requesting

new

ideas.

A

brainstorming

session

during

a

staff

meeting

need

only

take

30

minutes.

Another

system

is

to

use

existing

suggestions

box

processes,

Involving

employees

in

idea-generation

can

reap

s

ome

large

benefits

at

a

very

low

cost.

Only

m

odest

monetary

rewards

are

neces

sary

for

successful

innovation

ideas,

especially

since

many

companies

have

found

that

employees

place

a

high value on recognition.

In most or

ganizations, teams are extensive

ly used to evaluate ideas, but rarely to gener

ate them. Companies need to learn how

to construct

teams

for

the

purpose of

i

nnovation.

A

team

member

should be

selected

for

their

tendency to

be

more

creative

or

more risk-taking. This coul

d markedly

increase innovation

output.

Accordi

ng to

Hargadon and Sutton,

using

teams to

capture