Innovation is not just about break-through discoveries and invention. At its most basic level businesses need to innovate within their organizational structure just to stay afloat.
Organizational innovation can be driven through:
- Improved quality
- Creation of new markets
- Extension of the product range
- Reduced labor costs
- Reduced environmental damage
- Replacement of products/services
- Reduced energy consumption
- Conformance to regulations
Most successful businesses spend a significant amount of turnover on making changes to their products, processes and services. The average investment across all types of organizations is believed to be about four percent, but innovation expenditure can range from half a per cent of turnover for organizations with a low rate of change to more than 20 per cent in those industries with a high rate of change.
Innovation in tourism and travel has been mostly incremental and adaptive; a series of small steps leading to growth and improving margins by finding better ways of doing things. It has tended to have been generated through breakthrough technologies in other fields of endeavor, particularly in transport and I.T. For example, major changes to booking systems and information distribution grew out of the global breakthroughs in information technology during the 1970s and ‘80s.
Major tourism innovation often starts in large successful companies, such as airlines, where the process of innovation is programmed into the corporate planning, decision-making and resource allocation. Innovation tends not to function as well in the small business tourism environment, where it is often fragmented and characterized by high labor intensity, many different suppliers and where management and staff are often consumed by the day-to-day needs of customers.
However, small and medium sized enterprises (SMEs) can partially overcome this obstacle by imitating and applying innovations already in the marketplace. They can also expand their size by co-operating with other enterprises, thereby increasing their capacity to innovate. Innovation at the destination level often relies on state and regional tourism organizations, as well as industry professional bodies. Their collective mandate can help to overcome local and individual reluctance to share. Similarly, the research work of leading tourism education institutions can often be harnessed and blended with the practicality of tourism operators.
It is often said that those people who can take a ‘breakthrough’ idea or innovation, improve it, add value, or who can deliver it to the market at a better price are the ones who become the biggest winners. They are sometimes referred to as ‘Fast Seconds’. One of the best known ‘Fast Seconds’ was Henry Ford. He didn’t invent the automobile, but he spotted the need to make it more accessible to the general public. Within the Australian travel industry, a handful of adventurous people had been undertaking their own outback holiday experiences well before the 1960s, but it took Melbourne-based Bill King to spot the market desire, improve its delivery through packaging, adding value and a greater level of comfort, convenience and safety, to make it an affordable reality for ordinary travelers.
You can read more on fostering innovation on tourismexcellence.com.au