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Innovation is the secret to competitive advantage in today's rapidly changing environment, but how does a company ensure an innovative environment? Is innovation all in the process, or does organizational culture play a role?
NEC Corporation was recently forced to withdraw its low-priced monochrome ink jet printer from the market only four months after its introduction. Why? Because the dominant firm in that industry, HewlettPackard, had already beaten them to the market with the introduction of an improved color printer and a cost reduction of 40 percent on its monochrome ink jet printer. HP used product innovation to enhance existing products and process innovation to reduce costs and create a relative low-cost position in the market.
There are other firms where innovation is also a way of life: Sony, the recognized world leader in consumer electronics with 200 new products and major enhancements to 800 existing products each year; 3M, where 30 percent of sales must come from products that didn't exist four years previously; Hitachi, one of the top ten patent filers in the United States every year, and a firm with a twenty-year R&D plan that includes biocomputers that will repair themselves; and Canon, whose innovative ingenuity at miniaturization is world renowned.
Then there are firms where innovation may not be a way of life, but where it has been critical to success, for example, Intel, Toshiba, Chrysler, and GE have all recently met strategic challenge through innovation. They may not live and breathe innovation, but at the very least, they find it fundamental to their success. All of these firms, because of their experiences and leadership, have come to recognize that they need this same fundamental core competency. These are the firms others should emulate, because they know that to do business in the 21st century, to meet major strategic challenges, and to create them for others, "every organization-not just businesses--needs one core competence: innovation."'
Innovation and Competitiveness
Innovation is the process of creating something new that has significant value to an individual, a group, an organization, an industry, or a society. Innovation is how a firm or an individual makes money from creativity.
Now, more than at any time in history, the...