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Competitive advantage: how innovation culture enhances it

Competitive advantage: how innovation culture enhances it

Technology | Article
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  • Noviembre 2017
  • Date of publication
  • Noviembre 2017
  • Technology
  • Article
ESIC Business & Marketing School

ESIC Business & Marketing School

ESIC Business & Marketing School.

The accelerated process of globalization in which we find ourselves and the competitive rivalry that comes with it, as well as the increased complexity, uncertainty and turbulence of markets, have created an environment in which maintaining a competitive advantage over a long period of time is difficult, if not impossible, to achieve. As a result, some companies, especially large organizations, are addressing changes in the way they organize their processes and dispose of their resources to gain temporary competitive advantages.

Creativity and innovation are a diamond in the rough to create a competitive advantage. 

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One of these resources is the incorporation of knowledge that, combined with other organizational capabilities, constitutes a potential source of competitive advantage. Research related to knowledge management, networking, intellectual work and the contribution of these elements to the development of a knowledge-based economy has generated a large literature in the social sciences.

However, knowledge is not a resource waiting to be used as such, but requires the interaction of agents, so that innovative activity becomes an imprecise process, with no clear or defined limits.Ideas can be found in different parts of the organization and not only in R&D departments.

Innovating beyond technology: the culture of innovation 

On the other hand, if during the last decade of the 20th century the possibilities associated with the convergence between the exponential increase in digitalization capacity and the extension of the Internet applied to all business management and the way work is organized were key to achieving greater productivity, fifteen years later the focus of business innovation is directed at how to use the available technologies to capture these ideas and, possibly, move from an idea to the generation of knowledge in a more versatile and effective way. However, technology alone is not enough to embrace such an initiative. A culture of innovation is required to attract and unite the different agents in the work of co-creation, as well as to foster an entrepreneurial spirit within organizations. In short, it is a matter of making the culture of innovation part of the "DNA" of the entire organization and not just in isolated silos.

The Internet's ability to facilitate the flow of information and knowledge on a global scale creates the conditions for a new ecosystem that is more enriching and open, but also much more complex. Technological disruption and social transformation, which have gone hand in hand in recent decades, have caused radical mutations in the viability of business strategies. This environment of continuous change at an unprecedented pace requires organizations to anticipate, prepare and adopt new approaches to their creation, innovation, manufacturing, marketing and even financing processes.

These changes are leading organizations to become more permeable to the outside world and its ideas. This approach is embodied in the concept of open innovation coined by Henry Chesbrough (2003), who describes it as the innovation paradigm that assumes that companies can and should use both internal and external ideas, as well as internal and external routes to market as their products and technologies advance.

On the other hand, competitive advantages used to be obtained by exploiting technology, but they are short-lived, as they are almost immediately replicated by competitors. For this reason, organizations are turning to their employees as a source of competitive advantages that will enable them to differentiate themselves in a more lasting way, since this sustainability over time is provided by the expertise with which productive resources are exploited. How? Thanks to people's knowledge and skills, as well as their attitudes.

From this point of view, the participation of all members of the organization would not only increase the idiosyncratic character of the competencies developed for the generation of sustainable competitive advantages that are difficult to imitate, but would also produce adaptive advantages, since the new ideas would come to solve problems or satisfy latent or patent needs, detected outside and inside the organizations. If this requirement were not met, the ideas would not be selected.

As you can see, an open innovation culture model not only fosters innovation, as is natural, but also becomes an adaptive system that favors the growth and survival of organizations.

Innovation is key to the progress and competitiveness of companies and organizations. If you want to specialize in this field, train with ESIC's Senior Management Program in Digital Innovation.

  • Date of publication
  • Noviembre 2017
  • Technology
  • Article
  • Author

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