Keeping perspective in todays business world - Free Essay Example

Keeping into perspective todays business world, the cut-throat competition that companies face, and the fact that, today, companies operate in a globalized environment, all contribute to the ever increasing importance of information, which is arguably the most important resource an organisation has. Whether it be giving an organisation strategic edge, by bringing in new technology, or trying to maximise shareholder value by trying to optimise the companies Supply chain, the flow of information around the processes and systems in place matter most. It is this dynamic and unforgiving business environment that forces organisations to continuously adapt and change themselves, in order to stay ahead of their competitors or at least match them in order to stay in contention. Hence, they continuously need to innovate and come up with new and improved products and services to retain their market share if not better. Companies are heavily investing in research and development a ctivities, whether it be a pharmaceutical company or a telecom, every organisation wants to capture and absorb the spirit of innovation into their culture. The fact that organisations are keen to inherit the spirit of innovation into their culture is also indicated by the fact that companies are desperately trying to bring in an air of Intrapreneurship into their culture. Huge Multi-nationals such as Procter and Gamble and 3M, have made it compulsory upon their employees to dedicate 20 percent and 15 percent of their daily office hours to Innovate and be an intrapreneur, respectively. The salient characteristics of todays business world are such that they require companies to have shorter cycle time, development and launch of new technologies, new media and a rapid increase in scientific discoveries. This requires efficient flow of information and feeds onto the spirit of innovation. For an organisation to bear an innovative culture, the employees need to be motivated in a manner that they embrace change and creativity. Amabile describes six main areas that can help bolster intrinsic motivation, which can lead to an innovative work environment. The first area is to match people to jobs where the work is optimally challenging enough, such that the work doesnt seem boring and neither too overwhelming or difficult2. Managers need to obtain potent information from an individual to be able to match them with the optimally challenging job. The second area is freedom2. Employees should be autonomous enough to have a sense of ownership of the work they do. The third area is time, which is an important resource, and in certain circumstance can spark creativity in employees, but according to Amabile, time pressure usually kills innovation and creativity, and can thus be counter-productive2. A major reason for this could be the lack of proper communication, as time pressure might cause disruptions in the flow of information amongst employees. The fourth area is team work2. The concept of cross-functional teams has often been credited as to have sparked innovations and new ideas, and this is because individuals of varied ideas, perspectives combine and interact, and thus exchange of critical and unique information takes place, which fuels or triggers formulation of new and innovative ideas. The fifth key area is encouragement2. Innovation has to be in bred at the very top level of an organisation. Supervisors and bosses need to encourage their subordinates, share critical information with them regarding their performance and the expectations attached to them. A lot of researchers and theorists believe, an organisations response to failure, i.e. how they tackle failure is key to promoting innovation. The sixth area is Organisational Support. Intrinsic motivation amongst employees increases when they are aware that those around them are excited by the work they do, and this can only be possible in an organisation that promotes information sharing and collaboration amongst employees3. Thinking processes and collective knowledge are also vital, in addition to motivation, just like creative and innovative individuals, innovative organisations must also be able to break barriers amongst disciplines and combine knowledge in new ways. Mauzy and Harriman believe that the key is to encourage risk taking and improve the flow of information through the organisation. A major misunderstanding arises with managers trying to equate creative ability with rank or position. According to Mauzy and Harriman, what this approach does is reduce the creative abilities of a Thirty thousand workforce to the top 100 executives, a shrinkage from 300 to 14. In March 2006, a research was conducted by IBM Consulting Services, in which 750 of the worlds top CEOs were interviewed. The study indicated that the CEOs were looking beyond growth through new products and services and were primarily focussed on bringing innovation into their busines s model and operations as the basic mechanisms to drive change. The research clearly indicated that, the paradigm had shifted greatly with most CEOs focussing on how to innovate their business model rather than product innovation only. The logical reason behind this is simple, product and service innovation will only benefit you in the short run, as it can be copied, the business model is the real differentiator. Almost 76% of the CEOs interviewed in the study attributed Customer collaboration and business partners as the top sources of new ideas, as opposed to the commonly perceived Internal RD which was ranked eighth. And this is quite surprising as the top two sources of innovation are people outside the organisation. If one talks about a product, starting off with the idea of the product, it becomes evident how important a role information has played all along until the product dies off and is discarded or replaced with a new or better product, which is more meaningful and useful. Companies invest in research, where valuable information is gathered and investigated and organisations make sure that the idea should be materialized and offers a good opportunity. Various marketing functions play an important role in this process, from business research to trying to identify the right target market for the product or service and position it accordingly. Come up with the right price and market the product accordingly. All of these processes require a lot of information, market data, surveys, and even advice or suggestions from 3rd party consultancies, etc. The information flow need not be limited to the marketing and RD department, but it is inter-departmental or cross-functional. Product innovation will also need to involve people from the finance department, who will try to come up with a quantitative analysis explaining how profitable the new investment may be. And then every aspect needs to be kept into consideration, and the results that are expected out of the new project need to be checked, if they align with the companies overall business strategy, and this requires ample information flow. The importance of Information can be realised from the fact that RD departments tend to use special information tools that may help them in bringing the product to the market faster. Most technologically driven products such as Electronic gadgets, cellphones, etc, require investing heavily in RD, as their product life cycles are relatively shorter, and they need to keep coming out with new and advanced phones, in order to stay competitive, even ahead of the competition. There are a few theoretical and conceptual frameworks designed around innovation. One of the more commonly referred to innovation models is the Chain-linked model of Innovation. Kline and Rosenberg, chain-linked model of innovation, divides the process of Innovation into 5 distinct phases. During the first phase, a need in a potential market is identified. The identifi cation of market needs itself is a result of ones perception about the society and the market, and hence a smart innovator will always cross-reference his thoughts and perceptions with others, and this will involve an information exchange between two or more individuals. The second stage marks the invention and the analytical design of the new process or product7. This stage requires insight and ample amount of knowledge on how to invent and design the product. Incase its a product, blue prints are made. This often involves technical and business experts who share their perceptions and about the innovation in process. Hence this stage is also marked by sharing of information, whether it be in the form of knowledge, or an expert opinion, etc. The third stage is marked by development of a detailed design and testing the new product7. Testing, obviously would involve feedback, which is an information loop, and helps in finding drawbacks, if any, in the product design, or concept, product features etc. The fourth stage involves the product going into full scale production, after the design has been finalised. The production, may not be as information intensive a stage as the others, but information on when to produce and in what quantities to produce are vital pieces of the puzzle, and contribute heavily in the success of a new product or service. In the fifth and final stage, the innovation is introduced to the market, and marketing and distribution efforts are then put in. This requires coordination amongst companys supply chain, and this requires both analysis of information available to predict where to distribute the product, what distribution channels to use, what quantities to ship, what lead times to keep or maintain, what inventories to maintain, etc. Every single stage of innovation is almost single-handedly dependent on availability of information. With the dynamic external environmental surrounding businesses information regarding the ma rkets, the competitors, the suppliers, the products, etc has become a priceless resource to companies, and this trend has gradually become more and more strong.