Innovation within the organizational framework – The Business Days Bucharest event

As Peter Ducker put it, “Every organization – not just business – needs a core competency: innovation.”

Innovation refers to the introduction of new ideas, concepts, methods for better results.

The market is currently undergoing an accelerated transformation, marked by complex and important changes in all fields of activity.The importance of the innovation introduction activities can now be explained from the perspective of the transformations in the economy and society, determined by the increase of the competition, by the technical progress and, above all, by the rapid development of the information technologies.

The traditional economy was oriented towards production, so the target of the companies was to set up as many factories and produce as much as possible. In the last period the tendency is that of orientation towards innovation, towards new ideas and concepts.By using new ideas, we seek to simplify the effort made by both the consumer and the company. The evolution of a company and the assurance of its good position in the market are given by the degree of receptivity of the changes and the adoption of innovations.

Within organizations, there is an increasing share of innovation actions aimed at introducing modern methods in logistics, marketing, human resources management and other functional areas, contributing to obtaining sustainable competitive advantages.Creating a new McDonalds service system, developing the Toyota production system – which revolutionized the auto industry, rethinking the supply chain – that has placed Dell as a leader in the computer market, are just a few examples that highlight the multitude of innovation facets.

However, these innovations – already belonging to the last century today we are talking about the innovation of Tech @ Core type specific to the companies that generated a global disruption (tourism, transport of people, the entertainment industry, the construction of cars, etc.) of the significant market completely reforming the way we do business in the traditional fields.We are referring to Airbnb, which has not existed for more than 12 years (founded in August 2008) but is valued at an approximate market value of $ 40 billion. Another example would be Uber with a turnover of approximately $ 16 billion in 2019, Netflix (founded in 1997), Tesla (2003), Smarter, etc.

The modern methods introduced in the activity of a department represent in fact the digitization of the processes of that department. The benefits of automating and digitizing business processes as well as the steps to be followed in implementing the digitization can be found here.

Disruptive innovation

Disruptive innovation is a technique generally used by small companies to make themselves known on the market. Large companies focus on targeting customer segments with greater financial strength by bringing different accessories, additional elements, to its products or services, limiting the targeted consumer segment and neglecting the large segment of consumers who want a basic product at a convenient price.

An example would be those at P&G who have released teeth whitening strips, which is an effective and convenient alternative to expensive treatment at a specialist clinic. The concept of disruptive innovation was first defined by Harvard Business School professor Clayton Christensen in a HBR article and introduced later in his book called Innovator’s Dilemma.

In the beginning, disruptive innovation is inferior to existing products and services on the market. When disruptive innovation first enters the market, it initially refers only to a small customer segment and, usually, not very profitable, while established organizations are focused on serving more demanding and high-quality customers. Because the most demanding customer segment is the one with the highest profits, established companies usually choose to focus on serving the more profitable customer segment. When buying a new phone, for example, rational consumers often buy a brand they are familiar with. Although the new operator could use significantly more advanced technology in their product, the main and high-end customer segments are based on the established supplier.

Once disruptive innovation enters mass, established companies usually take over the new concept or technology to respond to the competition. However, at that time, it is often too late. The answer to the new competition only with the new technology is often not enough, because the market participant had a long time to refine the offer and the business model. In addition, product development takes time and requires more iterations, which makes return quite unlikely, even with the additional resources available to it.

Characteristics of disruptive innovation:

  • Low Margins, at least at the beginning
  • Higher risks
  • Either disrupt an existing market or create a new market segment in the existing one
  • Sales arguments and value measures are usually fundamentally changed
  • Often involves a new technology and / or a new business model
  • It happens slowly at the beginning until it reaches the point of mass entry, after which it increases exponentially

Disruptive innovation for large organizations

Creating disruptive innovation involves greater risks, and operators do not necessarily have a failure plan. In other words, they are not used to considering initial efforts to market disruptive technology as learning opportunities.Instead, they want to keep their stock prices and focus on the most profitable customer segments.According to the results of a strategic training and transformation survey, managers in general may be distrustful of their ability to respond to disruption.It has been said that most leaders underestimate the sources of future competition, and instead of considering new entrants a threat, the biggest competition was considered to come from existing players on the market.

The Business Days Bucharest event supports innovation and helps companies by organizing interactive workshops in which they are presented:

  • Digitizing and automating processes by implementing business applications
  • Digitizing the business with the help of technology
  • From traditional Lean to Lean Digital (The Lean process refers to: improving the quality, eliminating the losses, time reduction, reducing total costs)
  • Digital Transformation → Evolutionary Adaptation – Technology as Core Business
  • Responsive Enterprise – How do stakeholders see that the organization will prosper in 2020
  • Why is digitization difficult? Need to change a business model, what seems to work, with something completely new?
  • Lean Six Sigma compatible and complementary methodologies
  • The impact of industry 4.0 on them (the 4 technologies that transform production processes: Big Data, IoT, Analytics, Robotics)
  • Aligning digitization with continuous improvement processes
  • Process digitization – optimization of production, distribution and process flows in line with the standards imposed by both authorities and the final customer.
  • Industrial Internet of Things (IIoT) – Real-time resource management using Cloud & RFID technology. Increasing profitability by using resources at maximum capacity.
  • Business connected to industry 4.0 – adapting the supply to the demand level by connecting processes with customer needs.
  • What technology is required for business automation and digitization?
  • Digital transformation and automation must be designed holistically, even if implemented gradually.
  • Analyzing the best approach for each process, it is not always necessary to automate or digitize.
  • The business solution ecosystem must be the foundation of the company’s development strategy, the decisive competitive advantage.

One of the efficient methods used is given by the company Ascent Soft, which proposes to digitize the processes in a business by using ERP (Enterprise Resource Planning) systems, as well as other modules.


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