By M. Isi Eromosele

A company must innovate to affect growth for its business. If a company does not innovate, it will fail. If a company innovates unsuccessfully, it will also fail.

The key is to manage innovation better than your competitors. Innovation and imagination can be turned into capabilities. The innovative process needs to be managed carefully as a set of processes.

These processes include idea development, idea screening, concept development and testing, business analysis, prototype development and testing, test marketing and commercialization. Companies need to develop or acquire the required competencies to implement each phase of this process.

Innovation can be a strategic resource for a firm. It cannot be attained in a few brainstorming sessions. It is a process that has to be imbued into the culture of the company.

The best way to achieve this is to establish three knowledge areas within the company: idea knowledge area | a capital market area | and a talent knowledge area. New ideas need to be encouraged and rewarded; a special fund need to be set aside to finance building upon of ideas that have great potential and the company must attract the kind of professional talent it needs to implement innovative new ideas.

Innovation is not restricted to new products or services. It includes new business development and devising new services. Nestle had been selling coffee for ages, but it was Starbucks that thought of a most creative concept to sell coffee at retail.

Amazon thought of and implemented a new business model for selling books online and Dell came up with a very successful way of direct selling computers to worldwide customers. Other companies that have created innovative business ideas include Walt Disney | Virgin Group | CNN | IKEA | Swatch.

Companies need to pursue continuous improvements and discontinuous innovation. Continuous improvement is significantly essential. Discontinuous innovation is imperative.

One of the more important benefits of discontinuous innovation is the attainment of prolonged competitive advantage, although at a higher cost and risk. Implementing a new innovation always carries a certain level of risk. This includes the following facts: the targeted market segment is not yet completely defined | delivery infrastructure is not yet set up and the technology underpinning is still evolving.

Here, marketing research is not required. In the short term, the company will spend more to implement a new innovation.

Companies can get new ideas from various sources. Customers can be encouraged to produce new ideas. While this approach can yield helpful ideas, they are usually incremental, rather than breakthrough ones.

The company harbors staffs that are potential breeding ground for ideas. A company can appoint a dedicated idea manager who will work with a committee to sift through submitted ideas, rewarding those whose ideas are implemented.

Every business should establish and monitor an innovation index. This explains the percentage of sales resulting from products and services that are less than three years old. A company that acquires a zero innovation index will not survive. To be viable, a company must achieve at least a 20 per cent innovation index.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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