Innovation is important because what and how a company sells today might not work later.
Innovation consists of three main phases:
1) Input – understanding the customers,
2) Design – processing the input and designing the output,
3) Results – something new is made and offered to customers.
Each of these phases has its own rules:
Input consists of all the data, information, feedback, reports from the customers, partners, internal team, and all other sources. More is better, even though not all is relevant for the Design phase. Companies should not a priori censor the Input and should learn how to sort and understand the data and feedback.
Big problem in companies is that all the resources are dedicated to whatever sells now and not to creating something new for tomorrow. If there is no time dedicated to processing the input and working on the results then it is impossible to compete in the future. Another aspect of Design phase is that decision making is often a black box. This is unavoidable because of the very nature of creativity.
It is best to innovate with new products, but waiting for the big thing to happen will make the company less competitive in the meantime. Companies do not have to innovate only with products but also with business models, added software, added services, sales methods, distribution, content, etc. Thinking of a company as a product innovator makes it less competitive.
Since innovation is highly creative and hard to formalize, large parts of these phases depends on intuition. This means that formal approaches to improve innovation should not be operational but higher level tools supported by creative motivation and strategic direction.