Innovation is the new industry buzzword. It has been used widely in various scenarios and organisational set-ups in the past decade or more.
This has become an important parameter of success since many companies have started factoring it into their Balanced Scorecards to assess it. For a startup it is usually a benchmark of external growth and internal empowerment. They use it to define the direction of their business and if their internal work culture is empowering enough for employees to innovate or think of growth ideas. So for most startups, scaling up to the next phase of growth is clearly linked to Innovation in practices, ideas, products, technology and people!
However, even if we do believe this to be important, it is essential to know if innovation can be the most important attribute in an entrepreneur. As entrepreneurs, the value one places on innovation can be very high. But it needs to be balanced and aligned to other qualities that he or she possesses. It defines the vision and affects the decision making.
It has a clear and strong significance if an entrepreneur has this capability he or she can truly lead the venture to great heights. Companies like Google, Apple or even some Indian companies which were part of the Forbes list last year (2016) of being World’s Most Innovative companies, such as Asian Paints and TCS, have had leaders who have driven innovation as a core value. But they have also aligned it to their other strengths and competencies.
But to get a holistic view, it is essential to understand the benefits and pitfalls of focusing only on innovation, as an entrepreneur.
Benefits Of Innovation
- The main way to do better than your competitors is to innovate – so, as an entrepreneur, if you are focussed on reinvention and new product/service development, chances are that you will be in a better position to scale up.
- The freedom to innovate is what drives the current millennial workforce and motivates them to continue working for an organisation. So, if you as an entrepreneur endorse and encourage it, your employees are likely to be more engaged particularly if they are millennials.
- Innovation has an overall impact on the business ecosystem because it results in better and improved versions of existing products or services. It ensures that the company is proactively adapting to the changing economic landscape.
- It leads to higher levels of internal operational efficiency for the organisation when the entrepreneur emphasises on innovation. That has a direct impact on the bottom line of the organisation.
Pitfalls Of Innovation
- Innovation without a clear vision to precede it and the ability to execute it flawlessly is of no concrete value. It will not result in focussed growth that is targeted towards performance nor will it lead to an engaged workforce with a clear vision.
- An entrepreneur who possesses only innovation as the primary attribute might not develop into an inspirational leader, because single-mindedly focus on one quality, no matter how important it is, can result in lack of committed effort in developing other competencies.
So, for an entrepreneur, while innovation is definitely an attribute that he or she should possess and leverage. It enables him or her to maximize the organisation’s potential. At the same time there is a clear need to have other attributes which are equally important –since they have the same extent of impact on the growthof the venture. For an entrepreneur therefore, finding the right balance of the competencies, with Innovation at the core of it, is the optimal approach.