A useful way to visualize the relationship between the operations and
innovation activities is presented in Figure 1.5. This figure illustrates an
activity diagram with two activities labeled with active verbs: Operate and
Innovate. The first activity, Operate, converts orders from customers into
goods and services that fulfill customer orders. Other inputs include raw
materials and resources such as product specifications and processes. All
three inputs are needed to produce the output. The second activity,
Innovate, is about making beneficial changes to products, processes, and
services. It has an entirely different set of inputs and outputs. The major
input is new demands from customers and other major stakeholders.
These new demands can stimulate the generation of ideas, and new ideas
can be converted into new product specifications and new processes for
the Operate activity. The relationship between Innovate and Operate is
symbiotic. One serves the customers; the other changes the way the
customer is served. This figure is simplified and incomplete, but it
illustrates the two core activities in any organization. Although the
majority of innovation output is focused on improving operations, certain
innovation output is focused on the innovation activity itself. Thus, the
organization not only strives to change operations in terms of new
products, processes, and services but also changes the means by which the
innovation itself is achieved. This book is focused primarily on the
innovation management process and how it can be enhanced in
organizations so that it can be more effective and efficient.