Innovation has become important first, to the perpetuation of businesses (a process of renewal): without regular innovation, brands lose their salt and are eventually overtaken by market events.
Secondly, innovation is a major driver of growth and profitability, though it may work against the brand if it does not align with the core tenets of the brand.
Thirdly, innovation is a core brand strategy and must be an integral part of the brand concept.
Studies have shown that the new forms of innovation driving today’s companies are based on an intimate understanding of consumer culture. Unquestionably a deep understanding of consumers and a broader awareness of trends fuel inspiration and creativity – and better position companies to balance innovation risk and opportunity.
Innovative companies possess four distinct cultural characteristics:
Innovation flourishes through well directed collaboration, knowledge sharing and the availability of information.Innovative companies encourage the flow of ideas and information in both horizontal and vertical directions throughout their organizations.
Apart from being highly innovative internally, innovative companies are equally adept at identifying useful or disruptive innovation on the outside. They are more likely to involve external partners and pursue their strategic priorities through alliances, mergers, acquisitions or outsourcing, even if it means working with competitors
Most innovative companies have specific initiatives in place to capture creative concepts and promote innovation. They realize that innovation is less about nurturing solitary genius than about encouraging a whole culture of innovation, so that new ideas are constantly surfacing and being tested, while older ideas are kept alive to be adapted to new circumstances.
Finally, the most important factor without which an innovative culture can never flourish is leadership. Every innovative brand has a solid foundation built by good leadership. Successful leadership in business requires clear communication of the vision to subordinates in order to direct a company towards chosen goals.