Where Does Innovation Come From?

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Cost-cutting is a form of innovation often overlooked, Harris says. In fact, she adds, most people wrongly associate innovation with spending money. “They think of [innovation] as investing in something unknown,” she says. “The concept of the word sometimes scares people.”

If you’re quick to discount these maneuvers as not truly innovative, consider their effects. “One example is to innovate your business models, such as move a line of business entirely to the Web,” Harris says. A sales department may modify its team structure, shifting from local teams with specific processes to regional or global teams with shared processes and strong knowledge management. Such internal changes not only alter business flow, but can save money, too. 


In the spirit of open innovation, many organizations seek external help—fresh eyes can often see the problem in a new light. That was the case for Blue Ridge Communications, a provider of cable, Internet, and phone services in northeastern Pennsylvania, when bringing in TOA Technologies for a customer support solution. “The president [of TOA Technologies] came in to talk to us—he wasn’t a cable insider, but he came from outside and saw the problem,” says Mark Masenheimer, a general manager with Blue Ridge. “He took an innovative approach and an intelligent approach.” 

TOA’s very existence, as it turns out, was a customer-driven innovation: The company’s founder, tired of waiting on the cable guy, thought there had to be a better solution for customer care visits. From that idea TOA was built—a customer interaction solution that delivers accurate times for cable-company visits.

Being able to do more with less requires a lot of thinking and often an innovative approach—and is part of what’s behind the current call for open innovation to restore the economy. 

Innovation always requires the allocation of resources. Sure, those resources often involve dollar signs, but sometimes brainpower can prove just as lucrative.  

Sidebar: In Times Like These, Is Innovation a Priority?

In May 2009, consulting firm Accenture conducted an online survey with executives across a range of industries. Many reported innovation faring well in their organizations, despite the budget crunch.

  • 32 percent say that their organization’s innovations efforts are more important, relative to the majority of other current initiatives—such as cost-cutting—for successful positioning as the economy improves. 
  • 57 percent say that innovation is equally important as other initiatives for success in the economic recovery. 
  • 48 percent of those surveyed say that funds for innovation increased in the previous six months. 
  • 28 percent say that funding for “large innovations or new ventures” has increased in recent months.
  • 19 percent report decreases in funding. 
  • 64 percent of companies have a formal system in place for innovation. 
  • 54 percent of executives say that a c-level title such as “Chief Innovation Officer” has been given to the person responsible for innovation.
  • 29 percent of respondents say that innovation resides in a separate part of the organization.
  • 45 percent say innovation is part of the research-and-development organization.
  • 38 percent say that their organization uses innovation to drive above average industry growth and continually renovate the core business. 
  • 2 percent say that their innovation strategy is to maintain the core business as it is in the next three to five years. 
  • 52 percent relay that their most successful innovation brought to market in the last two years was in the form of a new product or service; 31% say it was through a new business process or model. 
  • 53 percent say that the primary goal of innovation efforts is to increase share in existing markets. 

Source: Accenture Process & Innovation Performance survey research, Accenture senior marketing director Wouter Koetzier.

Sidebar: Top 3 Goals of Innovations

  1. Increase share in existing markets.
  2. Add new value to a current project.
  3. Enter new markets.

Source: Accenture Process & Innovation Performance survey research, Accenture senior marketing director Wouter Koetzier.

Sidebar: Top 3 Reasons Innovations Fail

  1. Incorrect pricing.
  2. Failure to meet customer needs.
  3. Lateness to market.

Source: Accenture Process & Innovation Performance survey research, Accenture senior marketing director Wouter Koetzier.

Sidebar: Seven Signs Your Vendor Isn't Innovating

  1. Fails to deliver on promised functional enhancements.
  2. Repackages existing products to sell back to you.
  3. Acquires complementary solutions to push out to customers.
  4. Diverts customer attention with the latest fad.
  5. Substitutes professional services and custom development for new license sales.
  6. Lacks key Enterprise 2.0 design principles in future roadmaps.
  7. Relies on partners for core capabilities.

Source: Ray Wang, Partner, Altimeter Group.

Contact Assistant Editor Lauren McKay at lmckay@destinationCRM.com

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