Innovation is something that drives company towards success. The article “Making Innovation Strategy Succeed” by Amy Bernstein provides interview with Barry Jaruzelski – Vice President of Booz Allen Hamilton discussing the process, findings and effectiveness of the annual Global Innovation 100 study. The paper is found in online database through online research. The paper is online source, but the article is very detailed, informative, evidence-based and experience-based.
The author and interviewee are very argumentative illustrating their ideas on example of international companies as, for example, Adidas, Apple, Christian Dior, etc. The paper is directly related with knowledge management as innovation is known to be the key component of knowledge. Every strategy requires knowledge of market, customers and suppliers to become successful and to make company competitive in business world. The article ensures deeper understanding of innovation strategy as essential component of knowledge management. (Bernstein 2008)
Every business is strongly tied with knowledge management as it tends to create new ideas and strategies how to increase effectiveness and productivity. However, not every firm manages to create really successful innovative strategies. Therefore, in the paper Barry Jaruzelski shares his experience of key constituents of innovative strategies. Bernstein, the author of the article, states that innovation is a hot topic in business world and it is considered a key to corporate success. However, the central idea of the article is identify relations between R&D (research and development) and innovative strategies. (Bernstein 2008)
Global Innovation 100 is annual examination of such relations and Jaruzelski takes leading role in it. He provides his own view of the research. Global Innovation 100 has been started in 2005 and it has become an article of faith in innovation sphere. Thus, Jaruzelski recommends spending more on research, differentiation and growth as they give knowledge of things to come.
He says that throwing money at the problem is not the best solution to solve it. Instead, it is necessary to research the causes of the problem and to work out innovative solution. Successful research requires knowledge of decision-making, culture and organization. Jaruzelski argues that “many of the biggest innovation successes of recent years were not produced with the biggest budgets”. (Bernstein 2008) It means that effective innovative efforts may be prevented by excess resources.
More than 90 international companies are listed as innovators. The most famous among them are Christian Dior, Honda Motors, Adidas, Yahoo, Google, Apple, and Hyundai Motors. Jaruzelski argues that these companies had been working the best to implement innovative strategies. They are considered to come up with a model of high-leverage innovation. Further, the role of patents was tested to identify whether they are the indicators of innovation success. Nevertheless, the results showed that the level of patent activities didn’t reflect corporate success in terms of profitability, productivity and growth. (Bernstein 2008)
One more interesting moment is that Jaruzelski says innovation and technologies are different things as new technology is simply a technical advance, whereas innovation aims at driving new revenue streams. New technologies aren’t real business innovations. Recent researches show that innovative strategies are aligned with business, in particular with income growth and shareholders’ returns. The low level of alignment results in low level of return. Depending on the innovation strategy, all industries are divided into Need Seekers, Technology Drivers and Market Readers. Jaruzelski admits that “many companies depend on directly generated customer insight to design their innovation efforts, the higher the level of financial success”. (Bernstein 2008) The ways of innovation development are important for the health of the global economic development and stability.
As Jaruzelski mentions there are three distinct types of companies. Firstly, Need Seekers are a group which concentrates on understanding customers’ needs and desires. This group is considered the first to market with innovation as they appreciate the role of knowledge as the core of every successful business strategy. Secondly, Market Readers are the group which concentrates also on monitoring customers’ needs and desired, but it focuses also on competitor’s moves.
This group is fast followers as they prefer incremental approach to innovation. However, it doesn’t mean that companies will have better financial return, as they don’t spend more time and money on R&D. finally; Technology Drivers are a group which focuses on advanced technologies, but it doesn’t mean they ignore customer’s needs. Thos group tends to address “unarticulated needs of customers, swinging for the fences more than taking an incremental approach to innovation”. (Bernstein 2008) Wee see that all three models pay attention to customers’ need and it is important for them to produce comfortable financial performance. I think that all models are equal if they are aligned with business objectives.
Summing up, every company needs to concentrate efforts on innovation capabilities and should have robust management process aimed at gathering customer insight. The article shows that every business is related with knowledge management either working with customers or developing innovative strategy as all business activities are based, primarily, on knowledge. It means that knowledge management plays crucial role nowadays in business world as it is one of the most effective ways to foster economic development, financial stability and increased productivity of the company.
Bernstein, Amy. 2008. Making Innovation Strategy Succeed. Available at http://www.strategy-business.com/article/li00057?_ref=&pg=1 Accessed March 11, 2008.
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