Process for innovation

Abstract

There are only a few things different between a truly outstanding company and the rest. Truly outstanding companies understand that consistent innovation is the key to a company's survival. And that the most powerful changes they make are the ones that create value for the customers and potential customers. Roughly only one in ten companies is able to sustain an above average increase in shareholder returns over more than a few years. The natural question that emanates: why is achieving and sustaining growth so difficult? While a popular answer is to blame the managers for failing to generate new growth, it is not always the case because about 90% of all organizations do fail in this regard. Infact if new products represent innovations, most new products don't generate substantial financial returns despite firms' almost slavish worship of innovation. According to studies, between 5 and 9 products out of 10end-up being financial failures (Andrew and Sirkin 2003)Another common explanation provided is that managers running successful business become risk averse and therefore are unable to sustain growth. But this is also not necessarily true. Several organizations have taken large risks in new lines of products and still not being able to sustain growth. Yet another explanation for lack of sustained growth is that creating new-growth business is unpredictable. There are several management thinkers trying to manage the unpredictability. To make innovation more predictable, it is important to understand the forces that act upon the managers that decide what they can do and what they cannot. Software Product development is one of the areas where innovation is required at a rapid pace, continuously. There are several firms doing quite well in their own spheres of business. This makes the software industry an ideal candidate to understand how successful companies are able to sustain their leadership. In this study, I have tried to understand the process of innovation as advised by business thinkers and tried to map it with the practices in the software product development organizations.