Whether it’s a question of survival or a matter of strategy, innovation is where most competitive advantages are created. And while many companies’ efforts to innovate are limited to product development, applying the innovation drive to operational effectiveness can yield an equally significant edge on your competition. Organizations can realize genuine growth, not by relying solely on new sales, new markets, or new products and services, but by radically rethinking how work is performed.

Redefining the dimensions

Innovation is not the same as excellence. To be sure, operational improvements and excellence are ideals to be pursued. But innovation goes beyond just better business practices—it’s better practices through competitively different approaches. Excellence is performing work the way it should optimally be performed (diminishing errors, reducing costs, eliminating delays). Operational innovation, on the other hand, is the close examination of how work is carried out and the invention of totally new ways to radically change it.

Such innovation isn’t necessarily complicated. It can be as simple as eliminating bureaucracy to create fast, flexible operations. In fact, changing procedures and protocols to simplify work processes can be considered a very radical innovation within some organizations. And although not necessarily complicated, true innovation is often disruptive. Therefore, companies may wish to weigh in on the number of innovation programs they can prudently support at any one time given their resources. However, be wary of overanalysis; it could paralyze your organization from taking any action whatsoever, and may get in the way of creativity, the soul of innovation. 

Staying ahead, not staying the course

Companies with the right people and philosophies in place can maximize the value of new ideas. Idea generation takes seed by challenging everyone in your operation to challenge assumptions; to confront the reasons for why and how work is done. This will call for going outside the proverbial comfort zone, as well as require leadership that can be catalysts for sweeping change.

It’s also crucial to have specific goals that are daunting, even seemingly unattainable. For example, having a goal that requires your organization ship all orders the same day they’re received can incite the kind of radical ideas that will spawn innovation, and ultimately achieve this reality. By setting significant targets that are also explicit, your organization will begin to find revolutionary new ways to fill orders, service customers, streamline manufacturing, or turn inventory.  

Another key to operational innovation is to turn the exceptional response into expected practice. At one time or another, many organizations have likely risen to a challenge and accomplished some exceptional feat of operational effectiveness in the face of extraordinary circumstances. Cultivating innovation requires converting this kind of special-circumstance response into everyday performance.

Great expectations

Innovation can and should come from any place, any time, and should not be something organizations do once and forget about. To the contrary, relentless and ongoing operational innovation is the way to establish a lasting advantage.