Innovation is the spice of life. Any business which fails to come up with original and innovative ideas soon falls in the eyes of its beholders and fades away into the darkness of failure. To remain in business one has to reboot and restart with fresh and unique ideas which would readily grab the attention and appraisal of the masses. This immediate urge to reinvent and grow oneself gives birth to what we call is the idea of ‘innovation.’ Innovation is regarded as the hottest and most wanted buzzword among business enterprises in modern times. It undoubtedly is the ‘mother of all inventions and a lifeline for all businesses. In this competitive world, innovation not is the key to success, but is also the last resort for survival.
Innovation can thus be defined as the method of utilizing one’s intellectual capital and skills to encourage generation of positive business results by creating and inventing newer, better products and services which would ultimately reflect in its financial reports and balance sheet. When a high rate of return on investment results as an outcome of introducing newer varieties of products and services, we can claim innovation to be successful and in favor of the company’s growth, success and progress. Hence, value creation, by adding a perceived value to a product or service, is the main driving force which supports returns on investment. It is the parameter which judges whether an innovation has been successfully and universally accepted and acknowledged or not.
Value Creation, on the other hand, is synonymous to customer input, satisfaction and feedback. Understanding customer needs and requirements and providing them with what they desire the most would automatically create value for a particular product or service. Ford Motor Company, for example launched the ‘Your Ideas’ campaign in which customers and the general public were asked to give in their feedback and suggestions for improvement in all spheres as to what they expected out of a newly formulated car, from the point of connectivity, convenience, comfort, safety and performance. On public request, Ford came up with its latest range of cars which had value added services like touch screens, USB connectivity, iPod, push start buttons, MP3 player, navigation keys, voice activated communication systems and so on. The result, just by adding a few innovative keys, Ford soon hit the top of the list with soaring sales figures and having achieved the highest percentage of customer satisfaction in the field of automakers.
To sum up, innovation is a balanced mixture of customer perceived value, cost and manufacturability which ultimately leads to higher returns, greater margins, improved loyalty and increased shareholder value.