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Posted on October 10th, 2012, by

The importance of innovations is discussed. The example of a company manufacturing hardware devices and appropriate software (“Generic Mobile”¯) is analyzed. Innovative idea of creating a web portal for selling software and multimedia content to customers and integrating related software into “Generic Mobile”¯ devices is suggested. The possible benefits of such idea are regarded. Innovative leadership styles are considered and the necessary leadership vision for “Generic Mobile”¯ is created. The necessity of an innovation value chain is emphasized.

Keywords
Innovation, innovative leadership, “architects”¯ and “planners”¯, innovative value chain, mobile devices, hardware, software, web portal.

Introduction

Nowadays the importance of innovation is evident: it is one of the key factors determining the company’s market success and perspectives of development. Though during crisis times the attention to innovative issues decreases and most companies tend to care about maintaining stable development rather than innovating, this tendency is only short-time (and the companies which do not follow this tendency are most likely to become market leaders). In the context of globalization and subsequent intensification of competition the strategy of introducing innovation ideas and step by step implementing them is one of the best. This essay is dedicated to exploring the innovation possibilities for a company which produces mobile devices and to elaborating recommendations for implementing this idea and creating an innovation value chain for the idea.

1. Company description

The company discussed in the essay (“Generic Mobile”¯) is the one which produces mobile hardware such as mobile devices, communicators and smartphones as well as appropriate software for their devices. The company’s sales are stable and market share concerning mobile devices constitutes around 25%. Though the development perspectives are stable and sales are maintained on the same level, the crisis forecasts are not so positive for the company: sales level may decrease in future and since the company’s revenues strongly depends on those customers who buy new devices, it can seriously influence the whole company’s efficiency. Therefore, there exists a need for innovative decisions which may open new market possibilities and increase of revenues for “Generic Mobile”¯, and it should also be taken into account that these innovative ideas should not be directly related to selling new hardware (because in long-term perspective the overall hardware sales are going to decrease).

2. Innovation opportunity

There are plenty of innovational opportunities in the sphere of mobile communications, but it is necessary to take into account the restrictions discussed in section 1. In this case the best innovative idea for “General Mobile”¯ will be the creation of a web portal for selling software, multimedia content and multiple user activities such as online games and clients for interactive online games. The whole idea of web portal is not new, but in case “Generic Mobile”¯ integrates appropriate software into their devices, it can kill two birds with one stone: both attract new customers and gain new revenues with the help of web portal and at the same time increase the popularity of their hardware. In case this innovation is properly advertised and implemented, it can even move the company to a different market sector and stimulate growth of sales outside the country.

3. Importance of leadership

Research shows (How companies approach innovation, 2009) that successful implementation of innovations depends not on technical issues primarily, but on the efficiency of leadership within the organization. From 600 organizations analyzed in the research, 94% of leaders stated that the key drivers of innovation are people and corporate culture. Thus, the first thing necessary for effective innovative strategy is the presence of one or more strong leaders. However, there are different kinds of leadership. Concerning innovative leadership in particular, scientists outline two different kinds of it (Couchman & Sanderson, 2004).

The first one is the “planners”¯ who prefer using traditional methods of innovation, use goal setting and business planning for the process of introducing an innovation and use standard processes for managing the innovation. Such leaders are likely to use directing and controlling approach to innovating, and their weakness is in perceiving the barriers for innovation as those that cannot be overpassed by management methods. The second kind of innovative leaders are the “architects”¯ who are less directing and controlling; they are rather likely to use brainstorming, inspire and motivate people to innovate as well as generate new ideas for innovation. However, these leaders are weak in implementing something because they lack systematic planning in their actions.

For current development stage of “Generic Mobile”¯ the importance of strategic innovation and creative ideas is higher than that of direction and control. Therefore, the company needs at least a couple of “architect”¯ leaders in order to create the vision of the idea and outline long-term perspectives of its development. As for planning and control, the company needs one “planner”¯ to keep track of the implementation process.

4. Advantages of suggested innovation
”¢ The creation of web portal can bring lots of benefits for “Generic Mobile”¯ which can be divided into primary and secondary. Primary:
Ӣ The company will increase revenues because of portal sales
Ӣ The same content may be sold several times
”¢ Since web portal can be available not only to “Generic Mobile”¯ customers, more people will know about the company

Secondary:
”¢ Existing customers will be spending more money on the company’s products such as software and multimedia content
”¢ The devices of “Generic Mobile”¯ will gain more popularity because they have embedded software for web portal
”¢ The community of the company’s customers will be united at the portal which makes marketing extremely easy and efficient
”¢ “Generic Mobile”¯ will no more be regarded as hardware manufacturer only and public image of the company will benefit a lot

5. Innovation value chain

Inventing innovation and the strategic vision is only the start of innovative process. In order to justify the project and get a return on the invested funds the company needs to create an innovation value chain. Research shows (Adair, 2007, p. 67) that the sole idea of innovation without proper planning and analysis is not efficient. The innovative value chain consists of three main steps: idea generation, idea conversion (Hansen, & Birkinshaw, 2007) and idea diffusion. Idea generation includes gathering information and brainstorming; idea conversion means the analysis of the idea and defining the benefits for the company as well as the degree of technical difficult of a particular idea (it often happens that the company lacks resources or possibilities to implement rather fruitful ideas). Finally, idea diffusion means spreading the ideas within and outside the company in order to attract customers and investors as well as to persuade shareholders (Barsh & Capozzi & Davidson, 2008). Also, innovative value chain includes the stage of strengthening the weakest links; for “Generic Mobile”¯ the weakest link is the “hardware”¯ image of the company and the fact that people do not associate it with web service and content. This issue can be solved by appropriate management strategy and advertising campaign preceding the innovation.

Conclusion

Innovation is one of three key drivers that contribute to business success of any company, especially for the companies operating in mobile devices segment. In order to promote development and to create new market opportunities, “Generic Mobile”¯ needs to create and implement in innovative idea. For realization of the idea of web portal two or more distinct leaders belonging to “architects”¯ are needed, and at least one “planner”¯. In cease of successful realization, the idea can be very fruitful: it unites the customers of “Generic Mobile”¯ into one powerful community; moreover, the idea can boost sales of mobile devices of the company, increase revenues and the value of stock chares as well as expand the scope of activity outside the country.

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