Innovation and Operations
Simplified to its most basic level, an organization can be said to consist of
two core activities: operations and innovation. Operations are all the activities
that provide an existing service or product to a customer, including
manufacturing, human resources, and material planning. Operations usually
form the mainstream activities of any organization and are focused on
the here-and-now needs facing the organization. Innovation, on the other
hand, consists of all activities that change operations and are focused on the
future needs that the organization will face. Activities such as product
design, process engineering, and system analysis are processes of innovation.
In many organizations, tension exists between operating the system that
provides existing products and services for the customer and changing the
system in order to add more value to the customer, which disrupts the established
operations. Some organizations often try to maintain the status quo
and resist innovative change. Innovative organizations, on the other hand,
embrace the challenge of maintaining a balance between serving the needs
of the existing customer and meeting the future needs of the market.
Metaphorically, operations can be seen as a rotating wheel. If no
changes are made to products, processes, or services, then the wheel will
continue to turn; the organization will continue to serve customers with
existing products and services for a time. But changes will occur outside
the organization. Customer expectations, business conditions, and competitors
will change. Innovation is about oiling the wheel, making it run
more smoothly and more efficiently—making enhancements to products,
processes, and services that better meet the changing needs of customers.