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5 Benefits Of Implementing Innovation Management

5 Benefits Of Implementing Innovation Management

Enhance Competitive Advantage

Innovative management is essential to improve the competitive advantage of a company. Innovative management implies that businesses focus on creative solutions that would help differentiate their solutions in the saturated market. In particular, this is illustrated by innovative management approaches of Apple Inc. The company has been focusing on innovative product design and innovative customer experience. For instance, the first iPhone was introduced to the public and other companies in the cell phone industry. After successful sales, the iPhone revolutionized the industry and expanded the opportunities for other companies and customers. Therefore, operational management innovation should imply consistent operations improvements that directly or indirectly reduce operational costs.

Operations streamlining through innovative management

Operations streamlining can imply more opportunities consistent with the strategic objectives of a company or reduced process duration or other innovative management approaches focused on improved process efficiency. For instance, Amazon operations, a company that we’re all familiar with, employs advanced robotics in their warehouses. Packing and dispatching robots have improved the sorting and conveyance of parcels from their storage boxes. The equipment helps to pack the items faster, which often cannot be achieved in other warehouses the Amazon operates. Robotics has been beneficial in processing more items per day, which is supported by Amazon‘s innovation in providing customers with short delivery times. In 2020 alone, the advanced robotics operations saved Amazon operational costs by 50%.

Employee-driven innovative management

Innovative management is not limited to innovative operations led by company’s managers. Instead, encouraging employees drives innovative management, as well. A good example is Google, which uses a policy “20% Time: employees are encouraged to donate 20% of their working time to a problem or task of their interest, for whose solution – acquisition of new skills, testing ideas, etc. – they can use the company’s resources. As a result, Google News, Gmail, and other famous services were created. At Netflix, big data analytics is used to interpret the preferences of viewers, which resulted in a 30% increase in the number of subscribers to Netflix with the release of the television program “Stranger Things. Cross-departmental staff is encouraged to collaborate at Microsoft, leading to businesses’ engagement in certain niches like Microsoft Azure is partly results from business lines commingling engineers from multiple departments to work on varying aspects of the product.

Improve Efficiency and Productivity

Innovative management is an aspect that can significantly increase the efficiency and productivity in the work environment. By implementing new technologies and procedures, integrating automation, business owners can improve the way that both the workforce and the tasks are managed.

Embracing technology as the tool of automation

Many businesses have started to implement automation, which, in turn, has brought many benefits regarding their own performance. For example, banks have reduced the time it takes to issue a loan, as well as to provide customer services. JPMorgan Chase has introduced AI-based software, which processes loans in a matter of seconds . In comparison, a staff of 360,000 loan officers would take annually to process the loans secured by the bank. As a result, the business benefits from improved services provided at a faster pace; moreover, emissions have more time at their disposal, which can be spent on performing more complex and high-level activities.

Implementation of Lean Management Techniques

By utilizing the Lean management techniques, productivity can directly benefit from the reduction of waste. Toyota Production System , which is the top instance of a Lean management system, implies the concept of continuous improvement, which, in practice, is the wage of improving efficiency and reducing any form of waste. By implementing the Lean control approach and optimizing their production units, Toyota has ensured that they remain as productive as possible, with the costs being kept critically low.

Improved communication tools

Communication devices are an essential aspect of the work process that can significantly increase the efficiency in the workplace. For example, the primary advantage of Slack is that it allows for the integration of various work streams and other applications into the workspace. As a result, users will need to spend less time switching between applications and dealing with masses of information sent by email . The major organizations that have started to implement Slack have reported that they now send an average of 48.6 percent fewer e-mails.

Continued Growth and Development

Business grows and develops using extended management that enables it to create and constantly improve the product. An innovative approach is the best technique for perpetuating growth even in an unstable market. First, it involves the use of new technologies and ideas that are constantly appearing to improve this or that process. Secondly, the innovation involves a creative approach, trying “to step out of the comfort zone,” which is essential for development. Below are the examples of how companies implement different types of innovative management.

Creating a Learning Organization

First of all, it has an innovative management scheme. It is not a secret that one of the leading companies in the world, Google, essentially requires continuous studying and improving from its workers. For this purpose, management spent about $100-150 million a year on its retraining . Most of the programs are internal, but some are based on the resources of the World Wide Web Universities or seminars. It lets equip with new knowledge or strengthen what we already know and does not drop out of modern requirements. It should be said that Google is constantly creating something new, something changing the whole globe, and, therefore, it should be on the cutting edge of technological and scientific progress.

Encouraging an Experimental Mindset

There are many reasons why innovation-friendly corporations have no fear of experimenting. One of the most significant is that a large experiment can be much more successful than a small one, which leads to colossal advantages. For example, one of the Amazon’s leadership principles is “Invent and Simplify,” and due to it, the Amazon Web Services were created as an internal experiment, but later they began to bring huge revenue and now are the leading corporation in this sphere , making $35 billion only in 2020.

Integrating Diversity of Traits

On the one hand, using one national approach to management is easier and more compact, but on the other hand, it can slow the pace of innovation and development. The benefit of a global approach is that different people can offer different solutions to the problem, which is likely to be more profound and richer . It is no secret that the world, including the business one, is ambiguous, and it should be treated as something that is constantly changing and needs to adapt. It is easily achievable by regular creation of “experimental” teams. The most demonstrative example of this practice is IBM, which involves all layers of its employees in small “experimental groups” that solve different tasks in management procedures.

Strategic Partnerships and Collaboration

Finally, different companies can sustain their growth by different approaches, such as mergers, acquisitions, or long-term cooperation. Spotify tries to continue its growth and partnership with other music corporations, records’ brands, or individual artists. There is a pretty fair agreement: Spotify gets rights to the artistic product and becomes the only supplier of that special music.

Drive Organizational Change

Organizational change is a result of innovative management, which allows companies to modify and transform their operations and products to adapt to changes in the business world or meet certain goals. Companies may use their ability to innovate strategically to change their internal organization, culture, or products to better meet market requirements or internal goals.

Irreversible Company Culture

A good example of driving organizational change by changing company culture is the fate of Microsoft under Satya Nadella’s leadership. When he became CEO of the company, he faced serious organizational challenges, one of which was the culture of the enterprise, which should have been changed . Nadella has managed to change the culture of the organization. He introduced the concept of the growth mindset, when it is important for employees not to be ashamed of failure, and success is based on constant improvement. This has already borne fruit: in just six months in 2017, the company’s capitalization increased by $250 million. The company’s cloud and business services are developing particularly dynamically.

Implementing Agile Practices

One more way to drive organizational change is implementing agile methodologies, ensuring that the companies change faster . For example, Spotify is using agile to ensure that it can respond to changes in the business world. The technology company’s product teams have become more fluid in their management, which has reduced both the time for product delivery and the effort required. Valuable products offer solutions to real problems and must be released quickly to test them in the market. As teams become more reversible, less effort is needed to remake their work, and products get to market faster and offer more hinges in their first version.

Implementing Technology Practices

Technology may help with driving organizational change. IBM began investing heavily in blockchain in 2016. Since then, the company has helped its clients use this technology and reorganize their businesses. For example, IBM Food Trust allowed the company to stir up the food supply chain by tracking each product on it . The company has also developed applications for other industries, such as the jewelry supply chain. The company’s customers have been able to improve their service and reduce production costs.

Enhance Creativity and Idea Generation

Innovative management is pivotal to fostering such an environment. With the raft of new innovative practices, companies can make sure they unlock their employees’ creative potential and come up with ground-breaking products and services.

Innovative Practices

Cultivating open innovation spaces

One of the companies setting the standards for creating the environment conductive to creativity is Google. The so-called 20% time, which allows employees to spend 20% of their work time on any project that interests them, has brought about company’s star products such as AdSense and Gmail . The time policy tells employees that they are not only encouraged to think creatively, but are welcome to devote their working time to this endeavor without pressure of producing immediate results. Being a powerful lever of increasing innovative output, such policy has been also improving employee job satisfaction.

Cross-functional teams

Another example of implementing innovative practice is managing cross-functional teams . Pixar, the production company behind “Toy Story” and “Finding Nemo,” requires that all the producers of both artistic and technical ideas of ensembles made up of artists, writers and technologists are with on and oversee a project before, during and after its completion. This close collaboration is bound to produce synergy effect and intensified creativity when story-telling is informed by creative design and vice versa.

New Technology Practices

One may also accomplish innovative management by leveraging the latest technologies to enhance creative work. A case in point is Adobe’s use of artificial intelligence. Its Adobe Sensei platform provides various tools that enable professionals to produce better results in their creative work. Some of examples include parametric design and replicating photo styles for designers, automatic photo tagging or refining target audiences for marketingists. All these tools save the creators the time they would spend doing the boring stuff and let them focus on the substance and content.

Cultural Practices

Innovative management is unthinkable without the surrounding culture where staff is free to take risks and experiment. Corporate slogan, “Fail fast and innovate faster” encapsulates Amazon approach . Having created such an environment, employees can come up with ideas initially considered off-the-wall but ultimately offering new solutions.

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