Competitive Advantage and Innovation

Get Ahead: Innovate!

Innovation is an issue that deeply concerns today’s top managers. Yet what exactly is innovation and how can it help a company get – and stay – ahead? Using information gleaned from research on companies such as Xerox, General Electric and Wal-Mart, Professor Bruno Cassiman suggests ways to improve a firm’s innovation process, with insight on where to find great ideas.

Executive Summary
Top managers are increasingly concerned about innovation, yet little is know about the relationship between innovation and firm value. Are innovating companies actually more profitable and more successful? This article reveals that the capability of a company to successfully manage the innovation process can be an important source of sustainable competitive advantage. Yet starting on the path towards innovation should not be decided lightly because of all of the possible pitfalls. There are three important ways to improve the performance of the innovation process. The first is to open up the innovation process at the idea generation stage by being receptive to ideas that come from inside and outside of the company. The second is to think about innovation from a strategic perspective when selecting projects. And the third way to improve the innovation process is to organize it by building on the strengths of both the company and its partners.

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