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I picked up the April 28, 2008, issue of the Business Week the other day and found that the cover story was an intriguing read around the “Most Innovative Companies.”  It listed 25 companies as the most innovative ones for 2008 (a Business Week-Boston Consulting Group ranking). While reading this it occurred to me that we should have a discussion around, what can be termed, the Innovation Imperative. Why do companies need to innovate? Is innovation a luxury that can only be afforded by the darlings of Wall Street to better position themselves vis-à-vis the competition, or is it something that should be a key aspect of any enterprise’s strategic plans?

In the above referenced article, Jeff Bezos, the CEO of Amazon.com (ranked number 11) was interviewed, who said that in his view “there’s no bad time to innovate.” Interestingly, he also added that “frugality drives innovation.” To me this means that he has placed a challenge before companies to find ways to embark on innovation “when times are good and when times are tough” thus debunking the notion that innovation is a luxury to be availed of only when there are ample available resources.

So how should a company go about identifying resources to dedicate to innovation initiatives? What does it mean to look for a frugal but prudent approach to innovation? How can an enterprise free up resources to make the investment? What is the winning argument for doing so in an economic downturn? I invite you to join in with your views.

P.S. I will return after the annual SAPPHIRE-ASUG 2008 event in May.

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7 Comments

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  1. Puneet Suppal
    Another point that somehow got excised from the body of the blog post was that we need to consider looking closely at the culture of organizations to make them more innovation-friendly. More on that later. Thanks.
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    1. Puneet Suppal
      Ignacio,
      Thanks for the endorsement. What you suggest is clearly a call for shift in culture for an organization where looking at Innovation should not be a project based thing. Instead, looking to do things “better, cheaper, smarter” should become a part of the enterprise’s DNA.

      Thanks,

      Puneet

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    1. Puneet Suppal
      Krutarth,
      Do you think a typical enterprise provides the appropriate environmental support to foster a culture of innovation where “pure and independent imagination that brings innovation” is allowed to flourish? What has your experience been?

      Thanks,

      Puneet

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  2. Benjamin Matten
    First off my personal opinion is that in IT and Business for a company to foster innovation is the key factor for success. A company like Google is not worth that much because they have a very efficient administration…

    Now have a look at really big companies. They tend to be administration-heavy because somewhere the people have to develop to. So the ratio productive people to administrative people tends to emphasise the latter.
    But here’s the problem’s crux: too much administration (just think about cost centers and their strong focus on productive output etc.) normally spurs goals for managers that focus on maximizing output for planned activities and innovation cannot be planned.

    For innovation people have to have freedom, you cannot rely on the illusion that people that work 50-60 hours a week will spend their free time on being innovative for their company…

    Long story short: big companies tend to be innovative by buying innovative small companies because being innovative cannot be measured in a balanced scorecard…

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    1. Puneet Suppal
      Benjamin,
      Thank you for your comment. I find your comment, “For innovation people have to have freedom, you cannot rely on the illusion that people that work 50-60 hours a week will spend their free time on being innovative for their company…” quite telling. This confirms the need for a complete new way of thinking in the organization about innovation. It cannot merely be a workstream or a program, it needs to become a part of the company’s DNA, where we strive to be innovative as a part of what we do on a regular basis. It is in such an environment that innovation will be respected enough to be accorded its due; and it will no longer be something that people are expected to do in their “spare” time!

      -regards, Puneet

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