The challenge of adaptation through innovation based on the quality of the innovation process

Abstract

For most firms competing in the global economy, the urgent message in our time is to innovate and adapt or face the prospect of extinction. To respond to this challenge, their management is called upon to evaluate the quality of each firm's innovation process. This can be measured by the amount of new revenues and profits it generates, by the speed of introducing new innovations to the marketplace and by well-planned initiatives to reduce their ecological footprint. In recent years we have witnessed a dramatic decline in a business firm's expected lifetime. A dramatic drop from 40–45 years in 1990 to 18 years in 2008 has been attributed to the continually increasing rate of change in the business environment. More recently, the significant pressures for firms to adapt have been reinforced by the impact of the 2008–2009 global economic crisis causing even role model firms such as General Motors, Sony and Toyota to sustain huge financial losses. In this new setting with ongoing shifts in customer preferences in developed and developing economies, innovation has been replacing quality as the main source of competitive advantage. The needed adaptation to a changing business landscape can occur only through successful innovations for new products or processes, innovations for more effective business models and innovations for new leadership styles and organisational structures. Despite a widespread acceptance of innovation's importance by the leadership of most companies, as recorded in recent executive surveys, there is a general dissatisfaction with the results realised from their innovation investments. Managing the quality of the innovation process for survival and excellence in adaptation requires a systemic view of the innovation process, using a balanced set of innovation metrics which inform and enable managers to make desirable interventions on the stages of the innovation value-chain.

Keywords:

• customer preference shifts
• adaptation
• innovation process
• innovation metrics
• innovation value-chain balance
• innovation leadership tasks