WHAT IS INNOVATION?
The word innovation has been used to refer to so many things that its meaning has become very extensive and depends on the context in which it is used. The use of this word has been abused in recent years, causing the meaning of it to lose its essence and intermingle with other terms such as creativity, entrepreneurship or change.
The Royal Spanish Academy defines it as:
- F. Action and effect of innovating f. Creation or modification of a product, and its introduction in a market. (Royal Spanish Academy, 2017)
While the OECD considers that innovation is:
An iterative process activated by the perception of an opportunity provided by a new market and / or new service and / or technological advance that can be delivered through the definition, design, production, marketing and commercial success of the invention.
From before looking for a concept of what this word means, the Latin structure of the word can offer an idea of where it refers. The prefix "inn" orients towards the introduction to something, while the "novus" refers to the new, therefore, the whole word is the introduction of the new. (Sunday, 2017)
TYPES OF INNOVATION
Innovation can be of different types depending on the point of view from which it is analyzed.
By the type of result expected to be found, it can be classified as:
- Product Innovation: It is one where a totally new product is created or with improvements that make it quite different from the previous version. Innovation in the Organization: It is defined as making changes within an organizational structure, in order to make the company more efficient. Market Innovation: It is the implementation of new trading strategies that allow entering the market. Innovation in Business Models: It is the introduction of new strategic management techniques that allow the company to occupy a better position in the market. Innovation in Management: Creation of new theories that allow adopting a different philosophy from the one that was had before. (Aragonese Council of Chambers of Commerce, 2015)
By the type of change it generates:
- Incremental innovation: It is said that it is the evolution of the product, which occurs gradually. Its changes are gradual and sometimes imperceptible. The time that elapses between one stage and another does not take that long, however the complete transformation process can be very long. Radical innovation: It is the appearance of a new or extremely different product from its predecessor. This change can take a long time to make, from the initial product stage to the final result, but the process in general tends to be very fast. The changes are drastic.
INNOVATION AS A RESULT
By product.
It is the search for a change in a product or service. There are many examples of products that are frequently used today that seem so common but have nevertheless been a complete novelty at the time they emerged, such as the telephone, the computer, and the internet.
In the organization
Because this type of innovation represents the changes within the organizational structure required by a company, this type of innovation is partly theoretical and partly practical.
Institutions are entities full of movement that require constant changes for their proper functioning. The organization of the personnel is the pillar of the systemic process in which the company develops.
Some of the types of organizational design most used within the administration today and that are part of the innovation in this area are: linear, functional, linear-functional, staff, matrix and by committees. (Morales, 2012)
In the market
Like organizational innovations, the innovations that have emerged to help companies gain a good market share segment are based on the use of theoretical-practical techniques that lead the organization to develop new business strategies.
Some of the best known innovation techniques are:
- Benchmarking. - Which is the process of exchanging and obtaining data by comparing the company with other leading companies in the sector. (Brocca, 2016)
A clear example of the application of this technique in real life is the exchange of information provided between the different supermarket chains in order to establish similar prices and not be mutually affected by the discounts offered by the opposing chains.
- Branding. - It is the process by which the organization builds a brand through which it will be identified by its public. (MGlobalMarketing, 2015)
There are quite a few examples in the market of well-structured brands such as Adidas, Ford, Kellogg, which invest capital and time to give a good image to the public, that is, they focus on being the focus of attention in their field.
- Merchandising. - It is an association of techniques oriented to the point of sale in order to achieve the optimization of variables such as place, time, space, environment, etc., in order to promote the purchase of the product in a more profitable way. (Ale, 2015)
The companies that focus the most on this type of marketing innovation are franchises and chains because their level of sales depends mainly on their location. Some examples are: Oxxo, Starbucks and McDonald.
In business models
- Outsourcing. - It is the method that some companies use to carry out work that does not add much value to their product. That is, they hire an external company to carry out secondary activities and thus focus on developing the central function of the organization (Expert, 2000). - It is a variant of outsourcing, in contrast to the fact that this method does not use companies, but rather uses people interested in participating without the need for them to be specialists in the area.
In management
In this section, all the philosophies that the great authors of administrative science have established can be grouped. The theories and currents of thought, from the oldest that is scientific to the most recent that is virtual, have been great innovations in thought and the establishment of processes in their time, whose teachings and applications are still valid today.
Some of the most innovative that have emerged in recent times (as the previous ones did in their time) have broken the mental schemes that we had and have allowed us to broaden the vision regarding how to attack business problems.
One of the most recent innovations in this category is competitive strategy, a theory by the American economist Michael Porter, in which he establishes that a detailed plan is necessary to make the goals to be achieved known to the entire organization and refers to the Independent advances, such as the vision of the company or the improvement of the service, do not result in resounding success by themselves because they are not strategies that allow discovering a value different from that of the competition. (Enews, 2016)
INNOVATION AS A PROCESS
Incremental
It is the product of gradual changes over time.
In 1876 the Scottish American Alexander Graham Bell, under the previous studies of Antonio Meucci, discovered that only the use of direct current was required to reproduce the human voice and transmit it to another place. Therefore, he built and patented the first telephone. This invention underwent several changes over the centuries, and the product that we know now is no longer anything similar to the original, however, its use continues to be for the same purpose, to be able to have communication with people who are not in our reach.. (Buelvas, 2012)
Radical
It is the sudden change that occurs, from one product or service, to a completely different one.
An example of this extreme change applied to a service is clearly the change in instant messaging that was used before, through systems that had previously been installed on the cell phone, due to the arrival of other non-phone applications such as WhatsApp.
This new application was widely accepted and achieved a wide sector within the market due to the ease of use of the app, as well as its low cost, in addition to the innovation of being able to send not only text, but also high-quality images, videos, audios, recordings, documents, location, among others.
DISRUPTIVE INNOVATION
It is the process by which a product or service starts with small changes at the beginning and grows progressively until it displaces the strongest competitors. This type of innovation opens a gap so that consumers who had the product or service out of their reach, due to issues such as cost or difficulty of use, can access it.
Some characteristics that can be found in disruptive innovation are: the creation of a new market or a new way of consumption, the appreciation of consumers for the product for its innovative characteristics, the simplification of the use process and the application of a new business model. (González, 2012)
This type of innovation results in totally new companies, that is to say that although they commercialize a product that was already on the market, the system they make use of is what distinguishes them from other organizations. This is the method known as Ocean Blue and means "Blue Ocean" which establishes that the organization should not be carried away by the competition but rather has to find a creative way to highlight the competitive advantage of the organization in order to reach a new potential and different market.
Some of the companies that have applied this type of radical innovation have been Google and iTunes, among others.
INNOVATION FROM THE PERSPECTIVE OF MIA
Nowadays, those who get the most out of the evolution of the phone are not only the manufacturers. Those who obtain the greatest benefit are those who provide the services related to this product. Applications, telephone and internet service, accessories, among others. Because the latter applied innovation in different types, such as market and business model, which caused them to position themselves within a foreign market.
This is where the importance of innovation in administrative engineering lies. It is not only guiding the approach towards the creation of new products but also the use of all the techniques and approaches of innovation in a comprehensive way. Google, for example, is a company that has grown so much thanks to its constant innovations, not only in the products it offers but in all aspects inherent to an organization. Its administrative processes and its method of introduction to the market (of each of its products) are always in constant change, which has led it to a high level of positioning in the market.
If we extrapolate the example of the previous companies to a person who wants to make a “radical change” in their physical appearance, the importance of integrating the different areas of innovation can be more easily observed. If the person only dyes their hair, they will get a change without a doubt, but it will not be the drastic change that they probably expected. In order to make this forceful change, it is necessary that in addition to your hair, you change your clothing and footwear, your lifestyle, your diet, your attitude and many other factors that separate you from the person you are to the person you will be.
The same happens with a company, if it only makes changes to the products or only does it with the organizational structure, that is, if it only focuses on one area, the radical change that the organization expects will not occur.
conclusion
It is important that in this globalized world there is the capacity to radicalize innovation in a conscious way. The true radical innovation from the vision of an MIA is not simply to create, but to add value through a global and systematized strategy.
For a Master in Administrative Engineering, innovation should not only be wanting to change a product, innovation refers to making use of all types of innovation, that is, innovation by product, in the organization, in the market, in business models and in the management of the company's management.
The most successful companies today are not those that make a new product, but those that offer a different business model, that is, a new purchasing process, a new way of receiving products and other types of things that are not directly related to the company. product or service. In other words, the company may be marketing products that had already been sold long before, but that makes use of the technologies that are available today.
What would be the current administrators if they did not have products like the computer, the internet or the telephone? If they did not make use of them, they could practically not perform the functions of administrators. In the same way, if there are no organizational innovations, techniques such as Branding or Benchmarking, some activities could not be developed. That is, an administrator and more specifically a Master in Administrative Engineering must use all the innovations that are within his reach, not only in products, but in all areas that concern a company in order to be able to make a truly radical innovation. It is not only creating, but making use of the creations of other inventors.
Thanks
The preparation of this article is part of the study of the Master in Administrative Engineering that the author is doing, therefore she thanks Dr. Fernando Aguirre and Hernández for assigning the activity; to the National Technological Institute of Mexico and CONACYT, for their support to carry out these studies
References
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