Marketing practices

The marketing and sales departments are the eyes and ears of the company in the marketplace. They are part of the market intelligence system that keeps company officials informed about the rapidly changing conditions in the micro and macro environment. The gathering of this information is usually casual, depending on the individual’s own interest. This may consist of market gossip, newspaper and trade reports, clues from the field force and information from outside sources. The information is often random and sketchy. The company may learn too late about a dealer’s need or a customer’s changing aspirations or a competitor’s aggressive move, to respond effectively. Stars are able to excel due to their practice of the following: • Training sales staff in the process and systems of collecting information • Using the internet, media and contacts to gather all available information • Buying information from specialized market research companies

Impact of Innovation on the bottom line

The profits of Stars grew faster than the profits of Aspirants and Non-starters. Stars also reported higher levels of employee satisfaction, lower levels of employee turnover. Additionally, employees of Stars had great faith in the quality of their products. Innovation Stars are on a positive cycle in which increasing profits and high employee morale reinforce each other.

Aspirants and Non-starters

Aspirants: These companies recognize that innovation is integral to success in the marketplace, but have not put in place, systems to drive innovation. These companies want to be innovative, but don’t know how. Many of the companies surveyed fell into this category. These companies have the potential to be much more successful. Non-Starters: These companies do not recognize the importance of innovation.

Leadership and consumer relevance are the top drivers of innovation

There are two essential ingredients for successful innovation: Leadership and Consumer Relevance. Innovative processes do not begin in the R&D laboratory. They are initiated with a mandate from the highest level of the corporation. Identifying the consumer’s needs is an equally integral part of the innovation process. Ensuring employee participation in planning and a complete buy-in into innovative strategy is critical. At Unilever, top management strongly believes that innovation has to be closely linked to the business strategy.

The process of managing innovation ties in closely with organizational freedom

Managing innovation is not an oxymoron. Highly innovative companies manage the actual process of generating, developing and implementing innovative ideas better than their competitors do. This process involves a lot of deliberate duplication and redundancy in order to foster knowledge sharing and communication. There are a million garage start-ups in IT. In rural India, cowshed innovation is common. But in every case, it has blossomed in an atmosphere of organizational freedom. Microsoft says that their only factory asset is the human imagination.

The Six Rules for Innovation

Rule 1: Thinking is something that can be learnt Rule2: Thinking is a progression, a process Rule3: Listen to others Rule 4: Involve everyday Rule 5: Invest and understand Rule 6: Patience is key

Idea generation

Stars make extensive use of brainstorming to generate ideas. Idea generation is most productive when it is used to tackle a specific business problem. The rules for a successful idea generation are: suspend judgment, postpone reaction and extend effort. In addition to brainstorming, Stars make use of many other tools for the generation of ideas.

Factors That Differentiate Stars

Stars were very positive about their company and its future. They believed that the quality of their products was higher, and that their market share was increasing. Employee satisfaction levels were high because people were committed and engaged. Some of the other factors that differentiated Stars from Aspirants and Non-Starters were: • Stars had a greater belief in the need for creativity in the organization. • Innovation was clearly mentioned in their mission statement. • They systematically measured customer satisfaction, and used this information to make course corrections. • They spoke directly to their customers. • New ideas were often obtained through market research. • They made use of outside consultants. • They used cutting-edge technologies to impact bottom lines. • They were able to ensure that different departments worked together. • They excelled in environmental scouting for ideas. • They had a shared process of idea generation.

Factors That Differentiate Stars

Stars were very positive about their company and its future. They believed that the quality of their products was higher, and that their market share was increasing. Employee satisfaction levels were high because people were committed and engaged. Some of the other factors that differentiated Stars from Aspirants and Non-Starters were: • Stars had a greater belief in the need for creativity in the organization. • Innovation was clearly mentioned in their mission statement. • They systematically measured customer satisfaction, and used this information to make course corrections. • They spoke directly to their customers. • New ideas were often obtained through market research. • They made use of outside consultants. • They used cutting-edge technologies to impact bottom lines. • They were able to ensure that different departments worked together. • They excelled in environmental scouting for ideas. • They had a shared process of idea generation