Harvard Business Publishing

those are good questions. in looking at 750 major failures from the past quarter-century for a book that will be out next month, we found numerous examples of companies that ran into trouble that they couldn't have gotten into if they asked these questions. we saw lots of companies that decided they could sell additional products to their existing customers, without ever figuring out how that would benefit the customers. for instance, more than one electric utility decided to sell life insurance ot its base of elderly customers, even though they already had plenty of access to life insurance. we also saw lots of companies that didn't try to find a low-cost way of testing a strategy. loewen funeral homes, for instance, didn't try a rollup in a particular region or metropolitant area to see how tightly it could integrate the funeral homes and how much cost-cutting it could do. instead, loewen bought more than 1,300 funeral homes throughout the u.s. and canada--only then learning that cost savings were minimal. the company went into bankruptcy proceedings, then was sold at a distressed price.

Ultimately innovation (product or service)should come from the customer. Companies in regular contact--deep, sustained contact--with their clients have the best shot at innovation. Surveys, focus groups, interactive blogs--are all some of the ways to "take the temperature" of clients. If necessity is the mother of invention, not a bad idea to figure out the user's necessity.

Steve Gladis

See also: http://survivalleadership.blogspot.com

Since we're discussing innovation, thought of sharing Fast Company magazine's "Fast-50 Readers Favorites" list for 2008 -

http://www.fastcompany.com/articles/2008/07/fast-50-reader-favorites.html

Here are 50 companies (most of them US companies) that are championing innovation and enjoying disruptive growth even in today's economy.

From biotech to software, and from information security to online collaboration, these companies clearly seem to champion innovation.

How important is Process Innovation to a company's success?
What examples and/or case studies exists suppporting this potential connection?

My assumption is that process innovation is one key enabler for successful "strategy implementation".
I.e. to reach the strategic goals.
More often the (glamourous) focus is on delivering an innovative Customer Value Proposition.
Less often you see the connection to internal, or, process innovation. I.e. how to deliver the Proposition.
To be successful, I further assume, that a company needs to be excellent both at setting the strategy and it's operational activities --> processes.
The process efficiency and effectiveness are further dependant on the capabilities, which could be more or less unique for the company.
This is hence an area where a company needs to be innovative in as well, when defining and managing it's capabilities.

How do you boost the interest for Process Innovation within a "creative" company, mainly focusing on Product Innovation?

I seem to remember the old japanese method of "kaisan" where the effort was on continuous improvement in bringing about a change in processes and related mindsets.

"Empowerment" is another word that comes to mind. Whether it be the internal customer or otherwise, the ability to "listen" and then of course take appropriate action is perhaps paramount.

At the end of the day the battle is often lost when we think we know best. [ Investment bankers on Wall Street are a current favourite for all the obvious reasons].

I agree with the comments by Michael - companies are reluctant to invest in process innovation, assuming 'it always worked', why making it more 'bureaucratic'! The psychological stigma is that business processes may make it a 'bureaucratic' work environment, with too many rules - to address this, analyse and highlight the current obstacles impacting delivery time and service to the customer, and propose improvements - if the benefits are clear, it will be sold. I've implemented a complete cultural change in business processes and supporting resources successfully. Elize

I would like to add that every leader strives for external innovation of new products and services. But for internal innovation of the kind discussed above transformational leadership style is required instead of transactional leadership style. The leader should have the requisite scientific temper and understanding so as to encourage his or her employees to go for innovation in the internal processes.

Besides, a check on the extent of fiddling that the employees can do with a particular process in the name of innovation should also be kept. Otherwise it may so happen that such internal innovation might lead to chaos and conflicts within the organization as employees would start competing with each other in the name of innovation ultimately leading to failure of vital organizational processes.