Some+guiding+principles+for+firms+that+want+to+be+innovative

1. ** Some guiding principles for firms that want to be innovative **

There is no one, single way to innovation. There are many ways depending of firm's strategic objectives, resources, capacities,organizational culture and every firm has to chart its own route. However innovation means change and a common prerequisite for implementing innovation is strong positive attitude towards change management. It involves risk in same time, so readiness to take and accept risk and eventual failure is a part of the innovative mindset. Innovation should not be driven by a group of few executives. They can initiate and support the creation of innovative atmosphere, but innovation should be embedded in company's DNA, in everyone mindset. That is the only way to assure long term sustainable development. Innovation is not for free. It asks for investment in capacities, training and persistent development. It asks for strong, open minded and dynamic leadership. It asks for customer focus and sense for value creation. Innovation is not always an "in house recipe". It could be delivered from outside network. Innovative company should involve its supply chain (suppliers and customers) in its R&D activities and creation of the technology road maps. Innovation is demanding, but innovation is rewarding. Innovation helps firms to be competitive, attract more potential customers, win the market.

Innovation offers new solution, either technical or business, management, organizational, logistical solution. It could be small improvement (incremental innovation), or radical improvement (disruptive innovation). Incremental innovation makes the product or the process to fit better to the needs of the existing market. Disruptive innovation creates new market. It is widely accepted opinion that innovation oriented firms listen to customer needs and response to market demands. However in the case of disruptive innovation, there are no apparent customer needs that a firm should meet. The market that still does not exist cannot be analyzed. It is on a firm own responsibility to take the risk and launch radical new solution. Out of disruptive innovation emerges new technology. The substitution of the old technology with the new one does not happen overnight. It needs some time until new technology is optimized enough to be adopted by the wider market audience and replace the old one. In meantime they exist in parallel. As elaborated in prof. Christensen's famous book "The innovators dilemma" the substitution takes form of two parallel slightly displaced S curves. An adapted version is shown on the following slide.