A television manufacturing company, after years of painstaking effort, introduced a circuit with a neat and clean layout which was extremely easy to service. The company spent large amounts of money promoting this new circuit and its improved servicing but the customers were not impressed and sales did not pick up as per expectations. Customers were not convinced because they could not really perceive the difference and importance of the circuit since its impact on performance was very marginal. The marketing consultant to the company recommended that instead of using plywood the company should use transparent plastic back-covers for the chassis. This would allow the customers to see the circuit and decide for himself the truth of the company's claim. This is an innovation because it makes a vital difference to the customer, since he can see and understand for himself the improvement.
Very often it is the customer himself who provides the source of innovation. Digital Equipment Corporation, a U.S. company manufacturing and marketing minicomputers, does not spend its own time and money in finding new business applications for its mini-computers. Instead, it maintains close contact with its customers and relies on them to find uses for their mini-computers. A study conducted by Eric Von Hippel and James Utterback on the source of innovation in the scientific instruments business revealed that more than 75 per cent of ideas for innovations came from users.
To plan and manage for innovation as an on-going task, the first thing the manager must do is to maintain close contact and relation with customers. The firm's salesmen provide the most direct link for the company with its customers. The task of the manager is to train these salesmen to keep their eyes and ears open for any type of information, ideas, suggestions, complaints, criticisms, and feed it back to the company. An extensive innovation study conducted by Christopher Freeman has concluded that successful companies pay a great deal of attention to the market. Successful firms innovate in response to market needs, involve potential users in the development of the innovation, and understand users' needs.
The manager can also maintain a direct link between customers and the company. Proctor and Gamble, one of America's largest consumer goods company, put on its packaging a telephone number at which the customers could call at company's expense and give any information regarding the product. In 1979 this company received 20,000 telephone calls, each of which was followed through, and was a major source of ideas for innovation and improvements.
Keeping track of competitor's activities and moves can also be a source of innovation as can improvements in technology. To qualify as innovative, the technology must be market and customer-oriented rather than research-oriented. In most cases, innovation as finally introduced in the market was never originally intended to be so.
You can appreciate the truth of this statement better when you know that xerography was originally aimed at a small segment of the lithography (a special type of printing process) market, it was never intended to be used in making mass copies. Transistors, which, prior to the development of integrated circuits, were used in manufacture of television, radio, etc., were originally developed for military use. As a manager you should keep a close watch on the technology improvements taking place and try to find a customer-oriented application for it.
The manager who has his finger on the pulse of the market can quickly find out under-the-surface changes and shifts taking place and accordingly modify his product to match the customer requirement. It is not the absolute amount of money and effort which a firm invests in research and development but its ability to quickly adapt and place in the market the improved product which accounts for its innovativeness. This calls for flexibility in organizational structure to accommodate the necessary changes. In the final analysis, it is the manager who inculcates and nurtures curiosity and an open mind, and combines it with market feedback, who will emerge as winner in the race in which innovation is at a premium.
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