One of the critical questions confronting the senior management in any organisation is, “where to innovate?" And there is a strong tendency for this question to evoke a blank response. A blank response is, however, more desirable than a (negative) response along the lines, "what have we got to do with innovation? Innovation is for product-oriented companies or for R&D departments." Another remarkable negative response is, "our job is to enable the system to operate and that’s it. We have nothing to do with innovation." Responses like these are embedded with ignorance about innovation.

Such responses strongly indicate that innovation is not everyone's cup of tea. Certain personnel in the organisation are designed to supervise operational systems and ensure their optimal functioning. And their general thought process is limited to ensuring that the system runs within a given set of operational parameters, and to ring the alarm in the event of a breach in a critical operation parameter. So, when exposed to the challenge of system innovation without warning, the expected response is that of resistance to change, withdrawing themselves into the comfort zone of known knowledge, and resisting the application of higher-order thinking skills to the challenge of innovation. The optimal utility of such personnel should be in terms of their deployment in roles involving their strength of knowledge for system monitoring rather than innovation. However, personnel who are willing to challenge the status quo of the existing system and take it to a new level of performance should be assigned on innovation task forces to take on "Innovation Hotspots."

In Quotes “Personnel who are willing to challenge the status quo of the existing system and take it to a new level of performance should be assigned on innovation task forces to take on "Innovation Hotspots." ”

What are Innovation Hotspots?

Every organisation has innovation hotspots. Innovation hotspots are those points in the organisational system where the organisation needs to innovate in order to survive and grow. These remain unaddressed because organisations tend to run their resources to the ground by spreading them so thin that their entire energy gets exhausted to merely keep the system in motion. The resultant consequences are bare survival for the organisation in a state of mediocrity. These innovation hotspots also remain unaddressed because the organisation’s senior management does not comprehend their existence. Since they are not a part of the managerial perception of being an innovation hotspot, the consequential impact is lack of innovation, and the best possible outcome is maintaining a status quo in the value produced by the organisations in terms of goods or services.

The first and the most potent innovation hotspots in the organisation are "problems." Why do problems exist? Problems exist because the current work system and the underlying concept fail at that point. For instance, one of the projects given to a management trainee when he joined the HR department in an organisation was "the performance appraisal system" of workers. The problem was that it did not reflect the actual performance of the workers. If the actual performance was "mediocre", the performance as per the appraisal system was "excellent." This is a typical example of an innovation hotspot. It indicates that an innovation in the appraisal system for workers is required at this point. This also indicates that innovation hotspots exist all over the organisation and are not confined to R & D departments.

Creating new organisational values

It further indicates that the set of innovators is not limited to scientists, but extends to all professionals in their work domains, who choose to address innovation hotspots in their domains by designing new and innovative solutions which create new value for their organisations. A power distribution company was facing a problem related to electricity pilferage. The innovative solution that they came out with was the conversion of the power transmission line from Low Tension(LT) to High Tension(HT) and the installation of step down transformers. This is a typical case of innovation in operations.

Some of the innovation hotspots in the operations of a typical thermal power plant are boiler tube leakage, high cost of fuel, fuel transportation cost, ash dyke, and sulphur dioxide emissions which create pollution. These innovation hotspots emerge from problems in plant operations. The existence of problems in other functional areas of the plant such as finance, raw material, materials, HR, or security indicate the existence of innovation hotspots where innovative solutions need to be designed - unless the organisation wants to learn to live with its problems which, over a period of time, will drag the organisation to its doom.

A different approach

This innovation hotspot is very vast. An organisation can use up all its competent resources to address this innovation hotspot without arriving at a point where it can say that it has no problems. However, problems are not the be all and end all of all innovation hotspots. There are other innovation hotspots in the organisation which require a different approach for their identification. The second major innovation hotspot in the organisation is the "Value Chain." The value chain is the core system of the organisation which enables it to convert the input in terms of raw materials into output in terms of the finished product in the hands of the consumer.

Every element of the value chain is an innovation hotspot. Any innovation at any element of the value chain directly impacts the value created by the organisation. A successful value chain innovation thereby impacts the competitive capability of the firm, and if the innovation is an industry benchmark, it will invariably create a competitive advantage for the firm. Every organisation has a value chain. Therefore, the senior management of every company need not search high and low for innovation hotspots. Innovation hotspots are embedded in the value chain of their organisation. Thus, innovation is a core function of every organisation, and is not limited to small R&D centres located in the corners of enterprises - which more often than not focus on quality assurance rather than innovation.

Macro and micro technology shifts

The third potent source of innovation hotspots are technology shifts, both at the macro and micro level for an enterprise. Macro-level technology shifts impact the business model of the enterprise. An organisation can choose to ignore this innovation hotspot at its peril. In spite of the prevalence of such knowledge, organisations have chosen to ignore technology shifts, presuming them to be flashes in the pan, resulting in their demise. Organisations choose to protect their investments in the current technology rather than invest in the technology shift. This results in them being steamrolled by the technology shift, which, to say the least, is a juggernaut that destroys everything in its path. Technology shifts can be opportunities or threats. If the organisation identifies technology shifts as innovation hotspots and puts into motion task forces for designing innovations in reference to technology shifts, the organisation develops an aura of being an innovator, and if the organisation chooses to ignore the technology shift with the presumption that nothing will change, it will not be long before it is enveloped by the shroud of death.

Even micro-level technology shifts in reference to the value chain of every department indirectly affect the core value chain of the organisation. Thus, innovation emerges as the core competency of every professional in the organisation which enables the individual to influence the value produced by the organisation through value chain innovation. The three sources of innovation hotspots - problems, value chain, and technology shifts lead us to a prioritised list of innovation hotspots. And every organisation needs to prepare and put into motion a system of innovation task forces for designing and executing innovations in these innovation hotspots, thereby enabling themselves to continuously develop new competitive advantages.

In Quotes “Every organisation needs to prepare and put into motion a system of innovation task forces for designing and executing innovations in these innovation hotspots, thereby enabling themselves to continuously develop new competitive advantages.”