Importance of Innovation and Creativity in Organizations
Question:
Discuss About The Manga Innovation Creativity Organizations?
The assignment focuses on the concept of innovation and creativity within a business organization. Creativity and innovation have remained increasingly relevant in today’s world as organizations face competition in their increasingly complex and competitive business environment (Anderson, Potocnik and Zhou 2014). Creativity and innovation can play an important role in any organization as a business strategy to provide competitive advantage over competition under the understanding as defined in WBS lecture as the production of ideas that are both novel and useful (WBS Lesson). The goal is to produce an innovative product, service or process within an ever-shortening developmental cycle. The incremental improvements to the products are done to create continuing value. The challenges are more strongly felt by the team leaders where changing job demands require them to restructure the mode of delivery and execution of the business operations. Thus, the need arises to work creatively in teams as well as facilitate creativity in the subordinates. The individual, team and organizational perspectives could be brought together for the development of innovation and creativity in the organization. Here, the organization acquires knowledge for identifying the promising projects, later deciding which projects to develop.
The rest of the write up is centered on Cisco System and how the leader in networking gears can improve creativity and innovation in this 21st century of increased competition. Creativity could be referred to as the development of high quality, original ideas. Innovation transforms the creative ideas into actual products. In this respect, though different in meaning both the parameters cannot exist without each other. Cisco’s current state of innovation and creativity will be discussed, inhibitors to its creativity and innovation will be analyzed, effort will be made to proffer a solution proposal and identify key implementation issues to ensure it can be negated.
CISCO SYSTEMS INC. is the worldwide leader in networking for the Internet. The company was founded in 1984 by two computer scientists from Stanford University seeking an easier way to connect different types of computer systems (Cisco.com). This was a breakthrough and a radical innovation in the technology world as it changed the way in which machines would communicate in the same environment or distant places (Cisco.com 2018). In my view Cisco’s start up vision set the foundation of how Cisco’s core solution is described on their website. Cisco’s networking solutions connect people, computing devices and computer networks, allowing people to access or transfer information without regard to differences in time, place or type of computer system (Cisco.com). The Cisco business strategy as described on the Cisco.com website, states that it aims to solve business challenges of its customers with technology that would improve their customer services, enhances employee productivity and helps to grow the business of the various business organizations (Cisco.com 2018). Definitely with such strategy, evolution of products, process and positioning are a must. Customer centricity must drive creativity and innovation as its solution is centered round solving customer business process (Cerne, Jaklic and Skerlavaj 2013). The networking environment is an area that faces constant disruption from competition and to maintain strategic advantage a huge budget and time needs to be focused on creativity and innovation (Cerne, Jaklic and Skerlavaj 2013).
Cisco Systems: A Brief Overview
Cisco has a large list of competitors in its space and has remained competitive by either developing new inventive solutions internally or by acquisition. Its acquisition strategy is aimed at adding new technologies and business models to Cisco’s business. At the basis of its growth strategy are market transitions. It strategically acquires companies that help it capture these market transitions (Cheshnotes 2018). These transitions are either for market acceleration, expansion or entry. Cisco’s investment in R&D compliments its acquisition strategy for an all-round creative and innovative strategy (Cisco.com 2018).
Cisco Systems Inc., a best-practice organization in APQC’s 2012 study Open Innovation: Enhancing Idea Generation Through Collaboration, is one such organization. Cisco’s innovation strategy is, simply stated, to build, buy, and partner (Cisco.com 2018). The company builds products and solutions, partners with innovative companies, or acquires new technologies and companies (Cisco.com 2018). Cisco has purchased more than 150 companies to access new technologies—and more importantly, the people who developed those technologies—in order to accelerate its growth in key markets (Cisco.com 2018). Cisco believes in retaining and integrating entrepreneurial leadership from its startup acquisitions in order to gain a competitive advantage. Cisco positions this talent to help the organization grow into new business areas. At the same time, these employees’ backgrounds influence Cisco’s overall culture in an entrepreneurial direction (APQC 2018
Being a market leader (figure 1) comes with financial strength, a large install base of customers and intellectual properties. These components are the keys for promoting creativity and innovation within organizations. Financial strength gives the business organization the ability to invest in the right resources and materials to organically develop creative ideas that should eventually through proper selective process become innovation or acquire existing innovations (Cerne, Jaklic and Skerlavaj 2013). With a large install base of customers and residing intellectual property from device installation on customer sites Cisco is positioned to have a broader and diverse input to shape and stimulate through feedbacks creativity and innovation.
Cisco as at 2017 boasts of a diverse employee base of 72,790. A 2013 study found that companies with a diverse workforce – both culturally and in terms of professional experience – “out-innovate and out-perform others. Employees at these companies are 45% likelier to report that their firm’s market share grew over the previous year and 70% likelier to report that the firm captured a new market” (Csikszentmihalyi and Sawyer 2014) This makes intuitive sense (fresh ideas come from fresh faces), so at Cisco, we’ve tried to bring together people with different backgrounds, educations, and geographical origins to find new lanes of opportunity.
We find that innovation flows from the dynamic created by putting people with different backgrounds together; it emerges naturally from the tensions that exist between opposite requirements (Csikszentmihalyi and Sawyer 2014). For example, if some players within a team are inclined to be risk averse (say corporate risk managers) and others are not (an innovation group), incorporating the risk managers’ input will produce more innovative and viable ideas than if the group had not had to synthesize opposing viewpoints (Csikszentmihalyi and Sawyer 2014). As the world continues to become a global village, the network is becoming more critical and valuable to business sustainability and this is center to the thought of Cisco as evident in the statement extracted from their 2017 financial statement.
Innovation Strategies adopted by Cisco Systems
As our customers add billions of new connections to their enterprises, we believe the network is becoming more critical than ever. We believe that our customers are looking for intelligent networks that provide meaningful business value through automation, security, and analytics (Cisco.com 2018). Our vision is to deliver a highly secure, intelligent platform for digital business (Cisco.com 2018). Our strategic priorities include accelerating our pace of innovation, increasing the value of the network, and delivering technology the way our customers want to consume it (Cisco.com 2018). We are building, buying, partnering, investing, and co-developing in the belief that the next innovative idea can come from anywhere (Cisco.com 2018). We are applying the latest technologies such as machine learning and advanced analytics to operate and define the network, exemplified by our development of intent-based networking and the launch of our new intuitive network, which we believe to be the only network designed for security while maintaining privacy (Cisco.com 2018). We are furthering our innovation with respect to the move toward more programmable, flexible, and virtual networks, or software-defined networking (SDN) (Cisco.com 2018). An inference from the discussion so far aligns to Cisco been an organization that practices Open innovation. Open innovation as defined and described in the WBS lecture is ‘the type of innovation we see organizations using today, particularly large organizations, is oriented around collaboration with other key members of the ecosystem – members of their supply chain, their customers, universities, other complementary organizations, and even their competitors. This approach to innovation – Open Innovation – was not always how it was done, however, and many firms are still resistant to it, choosing to house all innovation activities in house. Rothwell (1994) “Note that Cisco combines input from R&D, customer feedbacks, competitor knowledge and acquisition of innovation from partners or existing firms to meet the demand for creativity and innovation”.
Despite the strength Cisco has there are areas of weakness and this inhibits innovation and the speed with which innovation is introduced. Reliability on external vendors with a combination of internal bureaucracy due to its hierarchical structure creates a delay in converting loads of creative ideas into innovation (Ezepue and Ochinanwata 2017). In the opinion of many people and also my time spent with Cisco (11 years) and my own personal experiences working in various innovative groups I can deduce that there isn’t a shortage of ideas within Cisco, rather most creative ideas usually don’t find their ways through the process or are delayed from becoming innovative solutions. Therefore, the challenge is more of time taken to mature creative ideas. I have represented the cause as gathered during internal peer’s interviews of the effect on the fishbone diagram below. Furthermore, it is significant to note that the business organization under consideration here has always relied on the use of innovative as well as new ideas for the process of their business operations and it is precisely the use of these innovative ideas as well as strategies which has enabled the business organization under consideration here to become one of the leaders in the genre of technology (Ezepue and Ochinanwata 2017). However, in the present times, it is seen that every year numerous business organizations are emerging in the technology industry and they are providing quality services to the customers from the different parts of the world at a very lower price in comparison to the ones provided by the business organization under consideration here (Ezepue and Ochinanwata 2017). Furthermore, in addition to the superior quality of products which these business organizations provide to the customers they also take the help of various innovative strategies for the promotion as well as the sale of these services or products (Ezepue and Ochinanwata 2017). It is a reflection of this particular aspect that the growth rate as well as the profit margin of the business organization under consideration has decreased in the recent times in a considerable manner. The below given figure clearly that the amount of revenue earned by the business organization under consideration here has considerably decreased in the recent years-
Acquisition Strategy
The revenue growth rate of the business organization under consideration here in the last two years has been only 2% and in addition to this the share value of the business organization under consideration here has decreased by almost 15% in the same period of time (Forbes.com. 2018). This particular aspect can be seen as a reflection of the increasing competition which the business organization under consideration here has been facing in the recent times. Therefore, it is becoming very important for the business organization under consideration here to take the help of the concepts of creativity as well as innovation for the process of their business.
The fishbone diagram, also known as a cause and effect diagram or Ishikawa diagram is a visual representation of many possible causes for a problem or an effect. As a problem analysis tool, the fishbone diagram visually presents the causes of a certain event or issue. In this case the issues to be discussed are the cause of delay in converting loads of creative ideas into innovation within Cisco.
The innovative ideas are generally used by the various business organizations not “only to gain a competitive advantage over the rival business organizations but also to bring about the overall growth as well as the development of their business process” (Westerski, Dalamagas and Iglesias 2013). Furthermore, it is not necessary that the ideas which are being used by the concerned business organization have to be innovative as well as new (Westerski, Dalamagas and Iglesias 2013). On the other hand, it is generally seen that the majority of the business organizations use the ideas as well as strategies which have already been tried and tested and they just use it in a modified form an per the requirement of their business (Toppenberg, Henningsson and Shanks 2015). Therefore, the business organization under consideration here will also follow the same method and try to use the same ideas which it has been since its foundation but in a more innovative form. The business organization under consideration here can take the help of innovation as well as creativity to overcome this particular problem which it is facing. It is generally seen that if the employees are encouraged to take the help of the concepts of innovation and creativity for the performance of their job roles then their performance level generally increases (Toppenberg, Henningsson and Shanks 2015). Furthermore, with the increase in the performance level of the employees the organization under consideration here will be able to deliver better quality services to the customers (Toppenberg, Henningsson and Shanks 2015). The business organization under consideration here can take the help of several kinds of market research tools for the purpose of “finding out the needs as well as the requirements of the customers in the most effective manner” and then taking the help of creativity and innovation to not only design their services but also to promote their services (Soto-Acosta, Colomo-Palacios and Popa 2014). The role of various leaders related to the organization will also be a very significant one in this particular context and the business organization can take the help of the “The Innovation Value Chain” and “Davila’s innovation rules” to enhance not only the individual performance level of the employees but also the quality of the services offered by them to the customers (Soto-Acosta, Colomo-Palacios and Popa 2014). In addition to enhancing the individual performance level of the employees related to the business organization the business organization can also take the help of the concept of cost leadership and product differentiation in an innovative as well as creative manner (Soto-Acosta, Colomo-Palacios and Popa 2014). These strategies are likely to help the business organization in a significant manner to enhance the overall performance of the organization.
Diversity in the Workforce
The telecom industry has been constantly evolving which has resulted in the development of more competition from similar market players (Rofoee et al. 2013). Therefore, CISCO had been covering that extra mile by providing the improved services in much real time and at cost effective prices. This can make the target customers choose CISCO over other similar market players. The business operations of CISCO can be described over here with reference to an innovation strategy (Rofoee et al. 2013). The innovation strategies of CISCO are anchored in the pillars of build, buy, partner, invest and co-develop. The build aspect focuses upon working with the customer or the developer community. The buying aspect focuses upon the ways of acquiring or divestiture depending upon the company goals. The partner aspect focuses upon development of effective partnership for supporting the business through the worse times (Dul and Ceylan 2014). CISCO believes in seeding investment in technology in its infancy stage. The co-develop aspect on the other hand believes in developing new solutions with multi-party teams including channel partners, customers, independent software vendors etc. CISCO adopts an agile than traditional model for achieving incremental improvement (Westerski et al. 2013). As commented by Ezepue and Ochinanwata (2017), this help the organization in adopting to the fast changing business scenario as well as improvise the strategies further for gaining of a competitive advantage over others.
CISCO is partnering with a number of industries and organizations in order to reduce the time of receiving returns on investment from R&D projects. CISCO implements open innovation which enhances generation of ideas through effective collaboration (Gann 2013). Though the build, buy and partner policy of the organization CISCO builds products, partners with innovative companies and acquires new technologies (cisco.com 2018).As supported by Ezepue and Ochinanwata (2017), the implementation of entrepreneurial leadership helps CISO gain a competitive advantage over others. For example, Signavio’s free saaS based platform for modeling Enterprise Architecture (EA) was a result of CISO partnering with some of its suppliers.
The business operation could be further described on the basis of the type of innovation strategy followed by the organization. In this respect, CISCO has implemented the Play to Win (PTW) strategy for gaining competitive advantage over others within a particular business environment. As per the strategy, the organization needs to gain a first mover advantage within the competitive market (Bocconi et al. 2013). The organization takes innovation as the toolkit for the development of the newest of technologies. The action plan development for the organization can be explained on the basis of a few important business strategies which are–acquisition, assimilation, transformation and exploitation.
In the opinion of many people the business organization Cisco has since its foundation has always relied on the use of innovation as well as creativity not only for providing better services to the customers but also for solving the various problems faced by it. It is significant to note that the business organization Tesco is one of the global leaders in the innovation and it would be apt to say there is no dearth of innovative as well as creative within the business organization of Cisco. However, in the present times it is seen that the conversion rate of these nascent ideas into meaning ones has significantly decreased. This might be one of the possible reasons for the competitive advantage gained by the other business organizations. Therefore, the business organization under consideration needs to effectively convert meaningful ideas into possible strategies as well as services in order to provide superior quality services to the customers. Taking the help of the “innovation Value Chain” would also considerably help the concerned business organization to convert the potential ideas into innovations.
Challenges in Fostering Innovation and Creativity
The above mentioned strategies as well as plans would require an active initiative as well as intervention on the part of the business organization under consideration here for its plan. However, the primary consideration of the concerned business organization in this particular regard would be the effective use of the concepts of innovations as well as creativity for the implementation of these strategies (Puthiyandyil and Velandy 2013). It is significant to note that these strategies are neither completely new nor completely “out of the box ones”. Therefore, it becomes very imperative for the business organization under consideration to take the help of the concepts of creativity as well as innovation. The business organization under consideration in a bid to encourage the employees related to them to take the help of the concepts of creativity as well as innovation for the completion of their job roles can arrange various kinds of workshops where the employees would not only be able to learn about creativity as well as innovation but would also be able to display their creative as well as innovative skills (Puthiyandyil and Velandy 2013). Furthermore, the business organization under consideration can also take the help of the concept of “total quality management” to enhance the performance level of the employees. Furthermore, the business organization under consideration here for the implementation of the marketing strategies developed by them can take the help of the various advertising agencies as well as market experts (Puthiyandyil and Velandy 2013). Moreover, for the purpose of the acquisition of their rival firms the business organization can try to diminish the business market of its competitors in an ethical manner and thereby create pressure on them to sell their business organizations.
In the opinion of Hansen and Birkinshaw (2007), there are three important entities of the “innovative value chain”, namely, “idea generation, idea conversion and idea diffusion”. It is significant to note that the business organization under consideration here is known for its idea generation ability and also for its idea diffusion process. However, the business organization under consideration here just the other business organizations of the world scores low on the idea conversion section. To solve this particular problem the organization will have to find out the root cause or the weakest link in the chain and work on that. Furthermore, the individuals related to the organization should be encouraged to come up with innovative ideas so that the manager will have more options to choose from and better idea conversion options. It is significant to note that effective conversion of these ideas into innovations is likely to help the organization provide superior quality products to the customers which in turn will help it in the process of gaining competitive advantage.
An effective use of the “innovative value chain” within the framework of the business organization is likely to meet with various kinds of roadblocks. The first roadblock will be the hesitancy of the people for the use of the concepts of innovations as well as creativity. Secondly, it is generally seen that the various business organizations try to use the innovative ideas as well as strategies developed by the other business organizations of the world without taking into consideration the factors which helped in the successful implementation of that particular innovation. As mentioned by Csikszentmihalyi and Sawyer (2014), complex structure and rigid controls that holds organizations together is the chief inhibitor of innovation. Additionally, lack of funding and decision making powers also delimit the process of innovation and creativity within an organization. Therefore, recognizing the inhibitors is the first step to reducing the effect of the roadblocks. Furthermore, a stagnate corporate culture like the one of Cisco is more inclined to satisfying the day to day objectives of a business rather than using the finances for meeting with the creative and innovative ideas (Chen and Hou 2014). These in short are some of the implementation issue which the business organization is likely to face.
The business organization under consideration can take the help of these strategies to overcome the implementation issues faced by them-
- Encouraging the employees to take the help of the concepts of innovation and creativity.
- Working on the weakest link of the value chain.
- Taking the help of effective strategies to improve the conversion of new ideas into innovations.
Conclusion
To conclude, the concepts of creativity as well as innovation have emerged as one of the major aspects of the business world in the recent times and it is a reflection of this particular fact that the various business organizations in the present times are increasingly taking the help of these two concepts for the process of business operations. It is significant to note that the concepts do not require the concerned business organizations to develop new ideas for their business process rather the concepts of innovation as well as creativity require the business organizations to use the old strategies as well as ideas in new modified form as per the requirement of the current scenario.
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