innovation in business strategy essay

Organizational Innovation as Business Strategy: A Review and Bibliometric Analysis

• Published: 23 February 2024

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• Ansita Aggarwal 1 ,
• Harold Kent Baker 2 &
• Nisarg A. Joshi 1  

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Strategic organizational innovation is a cornerstone for sustaining competitive advantages and encouraging growth in today’s dynamic business landscape. This paper provides a thorough overview and bibliometric analysis of organizational innovation, providing significant insights to both scholars and practitioners using database of SCOPUS and ABDC. This work throws light on prolific authors such as Y. L. Chong and M.A. Vonderembse, highlighting the most influential publications in journals such as the Journal of Product Innovation Management and Technological Forecasting and Social Change. Miller in Management Science 29(7),770-792, 1983 , Hurley and Hult in Journal of Marketing, 62(3), 42-54, 1998 , and Jansen et al. in Management Science, 52(11), 1661-1674, 2006 emerge as significant pillars with long-term effect, with annual citations demonstrating their perpetual importance. National affiliations highlight the prominence of the USA, followed by the UK and China, while institutions such as Florida State University, University of California, University of Colorado, and University of Warwick make significant contributions. Thematic outlines are defined by keywords such as innovation, knowledge management, and dynamic capabilities, which frequently resonate with conceptual frameworks such as TOE theory and DOI theory. Organizational learning, culture, human capital, technology, top management, and industry dynamics all appear as elements’ driving organizational innovation. Common themes of culture, management, learning, market orientation, and human resources constantly fuel innovation across sectors such as education, software, construction, healthcare, and hospitality. The ramifications of this work stretch beyond academics, informing government policies and organizational tactics. A strong appeal to foster innovation-friendly settings resonates powerfully, with decentralization and the promotion of organizational learning as essential components. Finally, our study emphasizes the need of innovation not just as a tool, but as a requirement for firms managing contemporary issues.

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Aggarwal, A., Baker, H.K. & Joshi, N.A. Organizational Innovation as Business Strategy: A Review and Bibliometric Analysis. J Knowl Econ (2024). https://doi.org/10.1007/s13132-024-01830-2

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The eight essentials of innovation

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January 4, 2024

In the time since this article was first published, McKinsey has continued to explore the topics it covers. Read on for a summary of our latest insights.

Innovation may sound like a creative art: hard to quantify, dependent on lightning-bolt inspiration, subject to the availability of magic dust and luck. It’s true that innovation relies, to an extent, on the vagaries of ingenuity. But according to McKinsey research, innovation—and, crucially, the type of outperformance that innovation can spark in organizations—is much more likely to happen when there is a rigorous process  in place to bring ideas to fruition.

The simple fact is that innovation translates to growth : innovation leaders generate almost twice as much revenue growth from innovation as their competitors. Our research in the years since the COVID-19 pandemic has found that these organizations, which we call “innovative growers,” do this by cultivating four best practices :

• Link innovation to growth aspirations and reinforce its importance in strategic and financial discussions.
• Pursue multiple pathways to growth, both in core businesses and when entering adjacent customer segments, industries, or geographies. Innovative growers also only enter markets where there are clear opportunities to create value.
• Invest productively in all innovation capabilities, including research and development, resourcing, and operational agility.
• Cultivate strong M&A capabilities, particularly programmatic dealmaking.

Innovation can be especially rewarding when deployed as a crisis-management measure . During periods of uncertainty, organizations that invest in innovation—contrary, perhaps, to the impulse to batten down the hatches—are also more likely to emerge ahead of competitors. More specifically, innovative organizations are more likely to find emerging pockets of growth  in times of uncertainty.

Looking ahead, we expect innovative organizations to keep outpacing their peers. Our 2023 McKinsey Global Survey  reveals a striking connection  between organizations’ innovation capabilities and their abilities to increase value through the newest digital technologies, including generative AI. Everyone is talking about gen AI, but organizations with strong innovative cultures are walking the walk, too: thirty percent of top innovators we surveyed said they are already deploying gen AI at scale in their innovation and R&D functions, more than six times the rate of companies that are lagging on innovation. Top innovators are also already reaping significantly better business outcomes from their AI investments than slower-moving competitors.

Articles referenced:

• “ Companies with innovative cultures have a big edge with generative AI ,” August 2023
• “ Innovation: Your solution for weathering uncertainty ,” January 2023
• “ Committed innovators: How masters of essentials outperform ,” June 2022
• “ Innovation in a crisis: Why it is more critical than ever ,” June 2020

It’s no secret: innovation is difficult for well-established companies. By and large, they are better executors than innovators, and most succeed less through game-changing creativity than by optimizing their existing businesses.

Yet hard as it is for such organizations to innovate, large ones as diverse as Alcoa, the Discovery Group, and NASA’s Ames Research Center are actually doing so. What can other companies learn from their approaches and attributes? That question formed the core of a multiyear study comprising in-depth interviews, workshops, and surveys of more than 2,500 executives in over 300 companies, including both performance leaders and laggards, in a broad set of industries and countries (Exhibit 1). What we found were a set of eight essential attributes that are present, either in part or in full, at every big company that’s a high performer in product, process, or business-model innovation.

Since innovation is a complex, company-wide endeavor , it requires a set of crosscutting practices and processes to structure, organize, and encourage it. Taken together, the essentials described in this article constitute just such an operating system, as seen in Exhibit 2. These often overlapping, iterative, and nonsequential practices resist systematic categorization but can nonetheless be thought of in two groups. The first four, which are strategic and creative in nature, help set and prioritize the terms and conditions under which innovation is more likely to thrive. The next four essentials deal with how to deliver and organize for innovation repeatedly over time and with enough value to contribute meaningfully to overall performance.

To be sure, there’s no proven formula for success, particularly when it comes to innovation. While our years of client-service experience provide strong indicators for the existence of a causal relationship between the attributes that survey respondents reported and the innovations of the companies we studied, the statistics described here can only prove correlation. Yet we firmly believe that if companies assimilate and apply these essentials—in their own way, in accordance with their particular context, capabilities, organizational culture, and appetite for risk—they will improve the likelihood that they, too, can rekindle the lost spark of innovation. In the digital age, the pace of change has gone into hyperspeed, so companies must get these strategic, creative, executional, and organizational factors right to innovate successfully.

President John F. Kennedy’s bold aspiration, in 1962, to “go to the moon in this decade” motivated a nation to unprecedented levels of innovation. A far-reaching vision can be a compelling catalyst, provided it’s realistic enough to stimulate action today.

But in a corporate setting, as many CEOs have discovered, even the most inspiring words often are insufficient, no matter how many times they are repeated. It helps to combine high-level aspirations with estimates of the value that innovation should generate to meet financial-growth objectives. Quantifying an “innovation target for growth,” and making it an explicit part of future strategic plans, helps solidify the importance of and accountability for innovation. The target itself must be large enough to force managers to include innovation investments in their business plans. If they can make their numbers using other, less risky tactics, our experience suggests that they (quite rationally) will.

Establishing a quantitative innovation aspiration is not enough, however. The target value needs to be apportioned to relevant business “owners” and cascaded down to their organizations in the form of performance targets and timelines. Anything less risks encouraging inaction or the belief that innovation is someone else’s job.

For example, Lantmännen, a big Nordic agricultural cooperative, was challenged by flat organic growth and directionless innovation. Top executives created an aspirational vision and strategic plan linked to financial targets: 6 percent growth in the core business and 2 percent growth in new organic ventures. To encourage innovation projects, these quantitative targets were cascaded down to business units and, ultimately, to product groups. During the development of each innovation project, it had to show how it was helping to achieve the growth targets for its category and markets. As a result, Lantmännen went from 4 percent to 13 percent annual growth, underpinned by the successful launch of several new brands. Indeed, it became the market leader in premade food only four years after entry and created a new premium segment in this market.

Such performance parameters can seem painful to managers more accustomed to the traditional approach. In our experience, though, CEOs are likely just going through the motions if they don’t use evaluations and remuneration to assess and recognize the contribution that all top managers make to innovation.

Fresh, creative insights are invaluable, but in our experience many companies run into difficulty less from a scarcity of new ideas than from the struggle to determine which ideas to support and scale. At bigger companies, this can be particularly problematic during market discontinuities, when supporting the next wave of growth may seem too risky, at least until competitive dynamics force painful changes.

Innovation is inherently risky, to be sure, and getting the most from a portfolio of innovation initiatives is more about managing risk than eliminating it. Since no one knows exactly where valuable innovations will emerge, and searching everywhere is impractical, executives must create some boundary conditions for the opportunity spaces they want to explore. The process of identifying and bounding these spaces can run the gamut from intuitive visions of the future to carefully scrutinized strategic analyses. Thoughtfully prioritizing these spaces also allows companies to assess whether they have enough investment behind their most valuable opportunities.

During this process, companies should set in motion more projects than they will ultimately be able to finance, which makes it easier to kill those that prove less promising. RELX Group, for example, runs 10 to 15 experiments per major customer segment, each funded with a preliminary budget of around $200,000, through its innovation pipeline every year, choosing subsequently to invest more significant funds in one or two of them, and dropping the rest. “One of the hardest things to figure out is when to kill something,” says Kumsal Bayazit, RELX Group’s chief strategy officer. “It’s a heck of a lot easier if you have a portfolio of ideas.”

Once the opportunities are defined, companies need transparency into what people are working on and a governance process that constantly assesses not only the expected value, timing, and risk of the initiatives in the portfolio but also its overall composition. There’s no single mix that’s universally right. Most established companies err on the side of overloading their innovation pipelines with relatively safe, short-term, and incremental projects that have little chance of realizing their growth targets or staying within their risk parameters. Some spread themselves thinly across too many projects instead of focusing on those with the highest potential for success and resourcing them to win.

These tendencies get reinforced by a sluggish resource-reallocation process. Our research shows that a company typically reallocates only a tiny fraction of its resources from year to year, thereby sentencing innovation to a stagnating march of incrementalism. 1 1. See Stephen Hall, Dan Lovallo, and Reinier Musters, “ How to put your money where your strategy is ,” McKinsey Quarterly , March 2012; and Vanessa Chan, Marc de Jong, and Vidyadhar Ranade, “ Finding the sweet spot for allocating innovation resources ,” McKinsey Quarterly , May 2014.

Innovation also requires actionable and differentiated insights—the kind that excite customers and bring new categories and markets into being. How do companies develop them? Genius is always an appealing approach, if you have or can get it. Fortunately, innovation yields to other approaches besides exceptional creativity.

The rest of us can look for insights by methodically and systematically scrutinizing three areas: a valuable problem to solve, a technology that enables a solution, and a business model that generates money from it. You could argue that nearly every successful innovation occurs at the intersection of these three elements. Companies that effectively collect, synthesize, and “collide” them stand the highest probability of success. “If you get the sweet spot of what the customer is struggling with, and at the same time get a deeper knowledge of the new technologies coming along and find a mechanism for how these two things can come together, then you are going to get good returns,” says Alcoa chairman and chief executive Klaus Kleinfeld.

The insight-discovery process, which extends beyond a company’s boundaries to include insight-generating partnerships, is the lifeblood of innovation. We won’t belabor the matter here, though, because it’s already the subject of countless articles and books. 2 2. See, for example, Marla M. Capozzi, Reneé Dye, and Amy Howe, “ Sparking creativity in teams: An executive’s guide ,” McKinsey Quarterly , April 2011; and Marla M. Capozzi, John Horn, and Ari Kellen, “ Battle-test your innovation strategy ,” McKinsey Quarterly , December 2012. One thing we can add is that discovery is iterative, and the active use of prototypes can help companies continue to learn as they develop, test, validate, and refine their innovations. Moreover, we firmly believe that without a fully developed innovation system encompassing the other elements described in this article, large organizations probably won’t innovate successfully, no matter how effective their insight-generation process is. 

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Business-model innovations—which change the economics of the value chain, diversify profit streams, and/or modify delivery models—have always been a vital part of a strong innovation portfolio. As smartphones and mobile apps threaten to upend oldline industries, business-model innovation has become all the more urgent: established companies must reinvent their businesses before technology-driven upstarts do. Why, then, do most innovation systems so squarely emphasize new products? The reason, of course, is that most big companies are reluctant to risk tampering with their core business model until it’s visibly under threat. At that point, they can only hope it’s not too late.

Leading companies combat this troubling tendency in a number of ways. They up their game in market intelligence, the better to separate signal from noise. They establish funding vehicles for new businesses that don’t fit into the current structure. They constantly reevaluate their position in the value chain, carefully considering business models that might deliver value to priority groups of new customers. They sponsor pilot projects and experiments away from the core business to help combat narrow conceptions of what they are and do. And they stress-test newly emerging value propositions and operating models against countermoves by competitors.

Amazon does a particularly strong job extending itself into new business models by addressing the emerging needs of its customers and suppliers. In fact, it has included many of its suppliers in its customer base by offering them an increasingly wide range of services, from hosted computing to warehouse management. Another strong performer, the Financial Times , was already experimenting with its business model in response to the increasing digitalization of media when, in 2007, it launched an innovative subscription model, upending its relationship with advertisers and readers. “We went against the received wisdom of popular strategies at the time,” says Caspar de Bono, FT board member and managing director of B2B. “We were very deliberate in getting ahead of the emerging structural change, and the decisions turned out to be very successful.” In print’s heyday, 80 percent of the FT ’s revenue came from print advertising. Now, more than half of it comes from content, and two-thirds of circulation comes from digital subscriptions.

Virulent antibodies undermine innovation at many large companies. Cautious governance processes make it easy for stifling bureaucracies in marketing, legal, IT, and other functions to find reasons to halt or slow approvals. Too often, companies simply get in the way of their own attempts to innovate. A surprising number of impressive innovations from companies were actually the fruit of their mavericks, who succeeded in bypassing their early-approval processes. Clearly, there’s a balance to be maintained: bureaucracy must be held in check, yet the rush to market should not undermine the cross-functional collaboration, continuous learning cycles, and clear decision pathways that help enable innovation. Are managers with the right knowledge, skills, and experience making the crucial decisions in a timely manner, so that innovation continually moves through an organization in a way that creates and maintains competitive advantage, without exposing a company to unnecessary risk?

Companies also thrive by testing their promising ideas with customers early in the process, before internal forces impose modifications that blur the original value proposition. To end up with the innovation initially envisioned, it’s necessary to knock down the barriers  that stand between a great idea and the end user. Companies need a well-connected manager to take charge of a project and be responsible for the budget, time to market, and key specifications—a person who can say yes rather than no. In addition, the project team needs to be cross-functional in reality, not just on paper. This means locating its members in a single place and ensuring that they give the project a significant amount of their time (at least half) to support a culture that puts the innovation project’s success above the success of each function.

Cross-functional collaboration can help ensure end-user involvement throughout the development process. At many companies, marketing’s role is to champion the interests of end users as development teams evolve products and to help ensure that the final result is what everyone first envisioned. But this responsibility is honored more often in the breach than in the observance. Other companies, meanwhile, rationalize that consumers don’t necessarily know what they want until it becomes available. This may be true, but customers can certainly say what they don’t like. And the more quickly and frequently a project team gets—and uses—feedback, the more quickly it gets a great end result.

Some ideas, such as luxury goods and many smartphone apps, are destined for niche markets. Others, like social networks, work at global scale. Explicitly considering the appropriate magnitude and reach of a given idea is important to ensuring that the right resources and risks are involved in pursuing it. The seemingly safer option of scaling up over time can be a death sentence. Resources and capabilities must be marshaled to make sure a new product or service can be delivered quickly at the desired volume and quality. Manufacturing facilities, suppliers, distributors, and others must be prepared to execute a rapid and full rollout.

For example, when TomTom launched its first touch-screen navigational device, in 2004, the product flew off the shelves. By 2006, TomTom’s line of portable navigation devices reached sales of about 5 million units a year, and by 2008, yearly volume had jumped to more than 12 million. “That’s faster market penetration than mobile phones” had, says Harold Goddijn, TomTom’s CEO and cofounder. While TomTom’s initial accomplishment lay in combining a well-defined consumer problem with widely available technology components, rapid scaling was vital to the product’s continuing success. “We doubled down on managing our cash, our operations, maintaining quality, all the parts of the iceberg no one sees,” Goddijn adds. “We were hugely well organized.”

In the space of only a few years, companies in nearly every sector have conceded that innovation requires external collaborators. Flows of talent and knowledge increasingly transcend company and geographic boundaries. Successful innovators achieve significant multiples for every dollar invested in innovation by accessing the skills and talents of others. In this way, they speed up innovation and uncover new ways to create value for their customers and ecosystem partners.

Smart collaboration with external partners, though, goes beyond merely sourcing new ideas and insights; it can involve sharing costs and finding faster routes to market. Famously, the components of Apple’s first iPod were developed almost entirely outside the company; by efficiently managing these external partnerships, Apple was able to move from initial concept to marketable product in only nine months. NASA’s Ames Research Center teams up not just with international partners—launching joint satellites with nations as diverse as Lithuania, Saudi Arabia, and Sweden—but also with emerging companies, such as SpaceX.

High-performing innovators work hard to develop the ecosystems that help deliver these benefits. Indeed, they strive to become partners of choice, increasing the likelihood that the best ideas and people will come their way. That requires a systematic approach. First, these companies find out which partners they are already working with; surprisingly few companies know this. Then they decide which networks—say, four or five of them—they ideally need to support their innovation strategies. This step helps them to narrow and focus their collaboration efforts and to manage the flow of possibilities from outside the company. Strong innovators also regularly review their networks, extending and pruning them as appropriate and using sophisticated incentives and contractual structures to motivate high-performing business partners. Becoming a true partner of choice is, among other things, about clarifying what a partnership can offer the junior member: brand, reach, or access, perhaps. It is also about behavior. Partners of choice are fair and transparent in their dealings.

Moreover, companies that make the most of external networks have a good idea of what’s most useful at which stages of the innovation process. In general, they cast a relatively wide net in the early going. But as they come closer to commercializing a new product or service, they become narrower and more specific in their sourcing, since by then the new offering’s design is relatively set.

How do leading companies stimulate, encourage, support, and reward innovative behavior and thinking among the right groups of people? The best companies find ways to embed innovation into the fibers of their culture, from the core to the periphery.

They start back where we began: with aspirations that forge tight connections among innovation, strategy, and performance. When a company sets financial targets for innovation and defines market spaces, minds become far more focused. As those aspirations come to life through individual projects across the company, innovation leaders clarify responsibilities using the appropriate incentives and rewards.

The Discovery Group, for example, is upending the medical and life-insurance industries in its native South Africa and also has operations in the United Kingdom, the United States, and China, among other locations. Innovation is a standard measure in the company’s semiannual divisional scorecards—a process that helps mobilize the organization and affects roughly 1,000 of the company’s business leaders. “They are all required to innovate every year,” Discovery founder and CEO Adrian Gore says of the company’s business leaders. “They have no choice.”

Organizational changes may be necessary, not because structural silver bullets exist—we’ve looked hard for them and don’t think they do—but rather to promote collaboration, learning, and experimentation. Companies must help people to share ideas and knowledge freely, perhaps by locating teams working on different types of innovation in the same place, reviewing the structure of project teams to make sure they always have new blood, ensuring that lessons learned from success and failure are captured and assimilated, and recognizing innovation efforts even when they fall short of success.

Internal collaboration and experimentation can take years to establish, particularly in large, mature companies with strong cultures and ways of working that, in other respects, may have served them well. Some companies set up “innovation garages” where small groups can work on important projects unconstrained by the normal working environment while building new ways of working that can be scaled up and absorbed into the larger organization. NASA, for example, has ten field centers. But the space agency relies on the Ames Research Center, in Silicon Valley, to maintain what its former director, Dr. Pete Worden, calls “the character of rebels” to function as “a laboratory that’s part of a much larger organization.”

Big companies do not easily reinvent themselves as leading innovators. Too many fixed routines and cultural factors can get in the way. For those that do make the attempt, innovation excellence is often built in a multiyear effort that touches most, if not all, parts of the organization. Our experience and research suggest that any company looking to make this journey will maximize its probability of success by closely studying and appropriately assimilating the leading practices of high-performing innovators. Taken together, these form an essential operating system for innovation within a company’s organizational structure and culture.

Marc de Jong is a principal in McKinsey’s Amsterdam office, Nathan Marston is a principal in the London office, and Erik Roth is a principal in the Shanghai office.

The authors wish to thank Jill Hellman and McKinsey’s Peet van Biljon for their contributions to this article.

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Business Strategies to Ensure Innovation Essay (Critical Writing)

At a time when globalization, need for transparency and new technologies have assumed the center stage in dictating the business environment, performance and consumer satisfaction patterns, innovation has become the best platform for adapting the unpredictable market environment.

Numerous changes have been experienced in the global business arena and also in the recent years due to the aforementioned factors to a point where it becomes almost impossible to identify the position of a business in a market, its competitors and even profitability.

This poses tremendous risk among managers in devising business strategies due to the levels of change and unpredictability of the market environment, as explored in the article We live in an era of risk and instability .

Earlier on, the world market was relatively stable and as such, developing business strategies using traditional approaches enabled a business to perform extremely well.

Adopting traditional approaches was effective in linking producers, traders, and consumers with greater efficiency, thereby making a business to exploit resources and capabilities a market has, occupy attractive niche, achieve a dominant scale and competitive edge.

However, it is clear that the need for greater transparency, the coming of new technologies and globalization have made sustaining resources, positioning and competitive advantage unmanageable.

Innovation for competitiveness is fast replacing the traditional methods with new methods that are much convenient and easy to execute. Due to advancement of technology, business energy has been propelled by easier capacity to simulate new products designs and easier interlink between the local and international markets.

Market competitiveness as dictated by the current trends entails the ability to remain highly peculiar in design and approach to reduce imitation and therefore reduce overall competition. This consideration has over the years seen major companies fast raise their image at the market while others still relying on traditional approaches take a nose dive into heavy losses.

Innovation becomes the key in achieving this competitiveness. This calls for a management that is capable of reading signals of change in strategies, processes and business models and acting on them via proper technology and IT systems.

The article The innovators solutions, creating and sustaining successful growth by Clayton Christensen and Michael Raynor sheds immense light on how to develop effective business strategies that will beat competitors and ensure growth in innovation. One interesting piece of information raised in the article is the introduction of disruptive strategy innovation to counter leading, established and incremental firms’ competition.

I noted that the authors raise two types of technologies that exist among competitors depending on the circumstance of a business. They include sustaining and disruptive technologies.

The latter is essential for outwitting incumbents in a market arena by producing and selling convenient and simpler products at a lower price to unattractive and new customers while the former is the opposite in that better products are made and sold at a high to attracted customers, a practice by well-established companies.

The article presents an insight into an organization’s demand for articulation of innovation models in its operations to generate the correct status for higher productivity.

In my view, the disruptive model as the authors point aligns a business activities with technology that is highly multi-interactive, where the business strategies are drawn with reference to enhanced technology strategies engrossed in business operations and activities that serve customer needs.

The model is set to meet the trajectories that many markets require in terms of new and improved products. As such, it offers a clear system for meeting current customer needs, unlike the sustainable model designed to achieve the highest possible future targets in terms of productivity and profitability.

I have also noted that business and innovation have become inextricably linked in generating value to organizations, thus needs to collaborate closely and share approaches that reinforce each other.

The use of disruptive innovation as a way of bridging the gap between businesses and competing favorably with giants in the market is not enough in ensuring optimization of business and profitability. A business needs to completely integrate innovation in its operations since by effectively leveraging and using them in producing products that reach diverse customers, a business ensures value maximization.

I have come to realize that the alignment of business and innovation is important and therefore needs to be carried out throughout the entire process of developing products, marketing and selling in order to enhance competitiveness. Innovation provides crucial input to business and strategic plans as assessment of risks and dependencies are all associated with competitiveness.

Innovation involves people, communication and quality of products. All these are focused towards achieving desirable outcomes in terms of market position and profitability. This appears to correlate well with the article entitled When should a process be art and not science? The article stands out as an important guideline towards optimizing business performance.

The authors seek to indicate that a business process should be more artistic bearing in mind that it offers employees an opportunity to gain and use their skills and appreciate culture. They note that standardization is scientific in nature and thus reduces accountability and creativity.

I have learned that positive work as a form of art cannot be realized by an organization without assimilation of the necessary change demands. Globalization has made the current work system to be a highly dynamic environment which appears to have been set loose from the captivity of scientific management.

Organizations are faced by constant changes that emanate from the external or internal factors which seek to liberate workers while attending to their workplace needs such as training in order to gain skills and competence. Making work a science is indeed a major obstacle in effecting workers’ learning needs, development of skills and business competitiveness.

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IvyPanda. (2022, April 22). Business Strategies to Ensure Innovation. https://ivypanda.com/essays/it-and-innovation/

"Business Strategies to Ensure Innovation." IvyPanda , 22 Apr. 2022, ivypanda.com/essays/it-and-innovation/.

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1. IvyPanda . "Business Strategies to Ensure Innovation." April 22, 2022. https://ivypanda.com/essays/it-and-innovation/.

Bibliography

IvyPanda . "Business Strategies to Ensure Innovation." April 22, 2022. https://ivypanda.com/essays/it-and-innovation/.

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Introduction to Strategic Innovation

By: Vijay Govindarajan, Chris Trimble

In today's marketplace, characterized by rapid and nonlinear change, executing strategic innovation successfully has become imperative for generating sustained growth and extending the corporate life…

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• Publication Date: Oct 13, 2005
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In today's marketplace, characterized by rapid and nonlinear change, executing strategic innovation successfully has become imperative for generating sustained growth and extending the corporate life span. In this chapter, the authors describe and demystify strategic innovation.

Learning Objectives

To underscore how critical managing strategic innovation is to an organization's long-term survival and success.

Oct 13, 2005

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Innovation and Strategy

ISBN : 978-1-78754-829-9 , eISBN : 978-1-78754-828-2

Publication date: 3 July 2018

The purposes of this chapter are to propose definitions of innovation, product innovation, business model innovation, marketing innovation, innovation strategy, and strategic innovation, elaborate on their literature and conceptual underpinnings, and provide an overview of the conceptual domains of innovation, innovation strategy, and strategic innovation.

Methodology/Approach

First, certain definitions of innovation, drawn from literature, are presented. Next, certain definitions that incorporate logically incremental refinements in them are presented. Building on these, definitions of innovation, product innovation, business model innovation, and marketing innovation are proposed.

Innovation is the creation of value by using relevant knowledge and resources for conversion of an idea into a new product, process, or practice, or improvements in an existing product, process, or practice. Innovation strategy is an organization’s relative emphasis on different types of innovations and the associated pattern of resource allocation, in alignment with its strategy at the corporate and business unit levels. Strategic innovation is the creation of value by using relevant knowledge and resources for conversion of an idea into a new product, process, or practice with the potential to have a major transformational effect on the evolution of markets and industries.

Practical implications

Over the past several decades, there has been a sustained and high level of interest in issues relating to innovation among academics in a number of disciplines, business and social entrepreneurs, business practitioners, and policy makers. Books, journal articles, and business magazine articles provide a number of definitions of innovation and specific types of innovation. Multiple definitions of a construct can be problematic in certain respects and beneficial in other respects. A potential upside of multiple definitions of innovation is the prospect of each being a source of ideas for one or more innovations that benefit society, and an impetus for research focusing on specific questions.

Originality/value

Implementation of an idea, value creation, and use of relevant knowledge and resources are used as constituent elements in the proposed definitions of innovation, product innovation, business model innovation, marketing innovation, and strategic innovation.

• Product innovation
• Marketing innovation
• Business model innovation
• Innovation strategy
• Strategic innovation

Varadarajan, R. (2018), "Innovation, Innovation Strategy, and Strategic Innovation", Innovation and Strategy ( Review of Marketing Research, Vol. 15 ), Emerald Publishing Limited, Leeds, pp. 143-166. https://doi.org/10.1108/S1548-643520180000015007

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The Importance of Creativity in Business

• 25 Jan 2022

When you think of creativity, job titles such as graphic designer or marketer may come to mind. Yet, creativity and innovation are important across all industries because business challenges require inventive solutions.

Here’s an overview of creativity’s importance in business, how it pairs with design thinking, and how to encourage it in the workplace.

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Why Is Creativity Important?

Creativity serves several purposes. It not only combats stagnation but facilitates growth and innovation. Here's why creativity is important in business.

1. It Accompanies Innovation

For something to be innovative, there are two requirements: It must be novel and useful. While creativity is crucial to generate ideas that are both unique and original, they’re not always inherently useful. Innovative solutions can’t exist, however, without a component of creativity.

2. It Increases Productivity

Creativity gives you the space to work smarter instead of harder, which can increase productivity and combat stagnation in the workplace. Routine and structure are incredibly important but shouldn’t be implemented at the expense of improvement and growth. When a creative and innovative environment is established, a business’s productivity level can spike upward.

3. It Allows for Adaptability

Sometimes events—both internal and external—can disrupt an organization’s structure. For example, the COVID-19 pandemic has dramatically changed how the present-day business world functions . In such instances, imaginative thinking and innovation are critical to maintaining business operations.

Creatively approaching challenges requires adaptability but doesn’t always necessitate significantly adjusting your business model. For example, you might develop a new product or service or slightly modify the structure of your operations to improve efficiency. Big problems don’t always require big solutions, so don’t reject an idea because it doesn’t match a problem’s scale.

Change is inevitable in the business world, and creative solutions are vital to adapting to it.

4. It’s Necessary for Growth

One of the main hindrances to a business’s growth is cognitive fixedness, or the idea that there’s only one way to interpret or approach a situation or challenge.

Cognitive fixedness is an easy trap to fall into, as it can be tempting to approach every situation similar to how you have in the past. But every situation is different.

If a business’s leaders don’t take the time to clearly understand the circumstances they face, encourage creative thinking, and act on findings, their company can stagnate—one of the biggest barriers to growth.

5. It’s an In-Demand Skill

Creativity and innovation are skills commonly sought after in top industries, including health care and manufacturing. This is largely because every industry has complex challenges that require creative solutions.

Learning skills such as design thinking and creative problem-solving can help job seekers set themselves apart when applying to roles.

Creativity and Design Thinking

While creativity is highly important in business, it’s an abstract process that works best with a concrete structure. This is where design thinking comes into play.

Design thinking —a concept gaining popularity in the business world—is a solutions-based process that ventures between the concrete and abstract. Creativity and innovation are key to the design thinking process.

In Harvard Business School Dean Srikant Datar’s course Design Thinking and Innovation , the process is broken down into four iterative stages:

• Clarify: In this stage, observation and empathy are critical. Observations can be either concrete and based on metrics and facts or abstract and gleaned from understanding and empathy. The goal during this stage is to gain an understanding of the situation and individuals impacted.
• Ideate: The ideation stage is abstract and involves creativity and idea generation. Creativity is a major focus, as the ideation phase provides the freedom to brainstorm and think through solutions.
• Develop: The development phase is a concrete stage that involves experimentation and trial and error. Critiquing and prototyping are important because the ideas generated from the ideation stage are formed into testable solutions.
• Implement: The fourth stage is solution implementation. This involves communicating the solution’s value and overcoming preexisting biases.

The value of design thinking is that it connects creativity and routine structure by encouraging using both the operational and innovation worlds. But what are these worlds, and how do they interact?

The Operational World

The operational world is the concrete, structured side of business. This world focuses on improving key metrics and achieving results. Those results are typically achieved through routine, structure, and decision-making.

The operational world has many analytical tools needed for the functional side of business, but not the innovative side. Furthermore, creativity and curiosity are typically valued less than in the innovation world. Employees who initiate unsuccessful, risky endeavors are more likely to be reprimanded than promoted.

The Innovation World

The innovation world requires curiosity, speculation, creativity, and experimentation. This world is important for a company’s growth and can bring about the aforementioned benefits of creativity in business.

This world focuses more on open-ended thinking and exploration rather than a company’s functional side. Although risky endeavors are encouraged, there’s little structure to ensure a business runs efficiently and successfully.

Connecting the Two Worlds

Although the operational world and innovation world are equally important to a business’s success, they’re separate . Business leaders must be ambidextrous when navigating between them and provide environments for each to flourish.

Creativity should be encouraged and innovation fostered, but never at the expense of a business’s functionality. The design thinking process is an excellent way to leverage both worlds and provides an environment for each to succeed.

Since the design thinking process moves between the concrete and abstract, it navigates the tension between operations and innovation. Remember: The operational world is the implementation of the innovative world, and innovation can often be inspired by observations from the operational world.

How to Encourage Creativity and Innovation

If you want to facilitate an innovative workplace, here are seven tips for encouraging creativity.

1. Don’t Be Afraid to Take Risks

Creativity often entails moving past your comfort zone. While you don't want to take risks that could potentially cripple your business, risk-taking is a necessary ingredient of innovation and growth. Therefore, providing an environment where it’s encouraged can be highly beneficial.

2. Don’t Punish Failure

Provide your team with the freedom to innovate without fear of reprisal if their ideas don’t work. Some of the best innovations in history were the product of many failures. View failure as an opportunity to learn and improve for the future rather than defeat.

3. Provide the Resources Necessary to Innovate

While it can be tempting to simply tell your team to innovate, creativity is more than just a state of mind. If your colleagues have the opportunity to be creative, you need to provide the resources to promote innovation. Whether that entails a financial investment, tools, or training materials, it’s in your best interest to invest in your team to produce innovative results.

4. Don’t Try to Measure Results Too Quickly

If an innovative idea doesn’t produce desirable results within a few months, you may consider discarding it entirely. Doing so could result in a lost opportunity because some ideas take longer to yield positive outcomes.

Patience is an important element of creativity, so don't try to measure results too quickly. Give your team the freedom to improve and experiment without the pressure of strict time constraints.

5. Maintain an Open Mind

One of the most important components of an environment that fosters creativity and innovation is keeping an open mind. Innovation requires constantly working against your biases. Continually ask questions, be open to the answers you receive, and don't require fully conceptualized ideas before proceeding with innovation.

6. Foster Collaboration

Collaborative environments are vital for innovation. When teams work together in pursuit of a common goal, innovation flourishes. To achieve this, ensure everyone has a voice. One way to do so is by hosting brainstorming sessions where each member contributes and shares ideas.

7. Encourage Diversity

Diversity fosters creativity and combats groupthink, as each individual brings a unique outlook to the table. Consider forming teams with members from different cultural backgrounds who haven’t previously worked together. Getting people to step outside their comfort zones is an effective way to encourage innovation.

Learning to Be Creative in Business

Creativity and innovation are immensely important skills whether you’re a job seeker, employer, or aspiring entrepreneur.

Want to learn more about design thinking? Start by finding fellow professionals willing to discuss and debate solutions using its framework. Take advantage of these interactions to consider how you can best leverage design thinking and devise different approaches to business challenges.

This exposure to real-world scenarios is crucial to deciding whether learning about design thinking is right for you. Another option is to take an online course to learn about design thinking with like-minded peers.

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Innovation in Competitive Business Environment

Types of business innovation, examples of innovative approaches, six sigma as a tool for streamlining the business process.

This paper describes a few types of innovation that can provide a competitive edge for a company. Also, it covers successful examples of innovative companies and discusses the use of Six Sigma as a tool to implement innovative techniques into the business process.

Innovation has always been one of the main methods for achieving a competitive edge in the business sector. A company can innovate using a multitude of ways along with techniques to implement innovations.

In recent years, many new startups have been established, and some have become seriously competitive organizations in their sector. Many of those organizations are focused on technological breakthroughs or implementing new functionality with existing technology. Competition is fierce among these companies. To stand out, many of them use innovation by design. Young companies that focus on design-driven innovation try to provide not only an aesthetically pleasing product but one that can improve the lives of the customers. While focusing on this method, startups often reject traditional strategies and try new methods of development, either through new technology or their business approach. This creativity in management is almost essential for a startup because this type of company has a high risk of failing and going out of business during its first year of operation. A design-driven company must abandon its customer-centric focus and try to get a wider perspective on the market. Researchers within the company have to pay attention to trends in art, popular media, competitors, suppliers, and other factors to help the company acquire information that could be used to create innovative products and services (Moroni, Arruda & Araujo, 2015).

Surprisingly, competition can lead to cooperation between companies to find mutually beneficial business innovations. The rising costs of research and development (R&D) and associated risks are common problems for a company in any industry. To lower these costs, competing companies can choose to cooperate to bring radical innovations to the market. This unusual tactic is sometimes called coopetition, a combination of cooperation and competition. This type of innovation can lower the risk of failure during R&D, but it can also bring new risks for the company, like opportunism and information leakage between companies. On the other hand, it provides a much wider variety of strategies. Coopetition is most valuable in technologically turbulent fields. Although studies show that it supports only incremental innovation in the field of technology, it has great potential to create radical innovations in the business models of both companies, thereby giving them more of a competitive edge. Incremental technological innovation can increase the chances of innovation in business models due to the change in firm-specific value appropriation (Ritala & Sainio, 2013).

Another way of gaining a competitive edge is innovation in pricing. This form of innovation is rarely used because companies often consider it a win-lose relationship with the customers. The seemingly small 5% of companies that tend to employ such an innovation strategy find it to be both financially lucrative and popular with the customers. It is also one of the less-researched tactics, covered by fewer academic studies over the years than other areas of interest, but those studies have shown positive results. A study from 2014 even outlines 20 different ways a pricing innovation strategy can be implemented for different types of companies around the world. These include market segmentation that involves offering different packages of the product to provide more choices for the consumer, segmentation based on the needs of the customer, and pricing to expand the market, as well as many other unique and potentially effective solutions. One of the more appealing factors of innovation in pricing strategy is that the practice can be lucrative even without technological or product innovations. This factor saves the company from taking high risks in R&D and spending large amounts of resources on research (Hinterhuber & Liozu, 2014).

Innovation often focuses on economic factors. In recent years, however, a need for consideration of environmental and social factors has become apparent, and a new type of innovation has been created: environmentally sustainable product innovation. This form of innovation urges managers to focus on descriptive models and emergent strategies that are devised to increase the growth of the organization through practices with a low impact on the environment. Environmental issues not only can be detrimental to the quality of life but can also limit the growth of a company. Therefore, sustainable innovation can be an essential tactic for such businesses. Products developed with this kind of innovation in mind can have long-term benefits that are not seen under the standard ways of measuring success dynamics. Therefore, a new set of success factors has been developed. Four factors were selected: market, law and regulation knowledge; inter-functional collaboration; innovation-oriented learning; and R&D investments in environmentally sustainable technology. A company that can make use of all four factors is sure to create a valuable and environmentally sustainable product (Medeiros, Ribeiro, & Cortimiglia, 2014).

Many companies use these kinds of innovations. Reliance and effectiveness of technological innovation can be seen in such tech companies as Apple and Google. The introduction of the Apple iPhone in 2007 revolutionized the way people use their phones, and with the second generation of the device, they were able to create a new marketplace for software that enhanced the features of the product while at the same time providing additional revenue from sales on the App Store marketplace. The creation of this technology was a high-risk move for the company, but it happened to be very successful, and the company has not stopped relying on technological innovation since that time (Jun & Sung Park, 2013). Google, on the other hand, focused more on software and internet technologies. After the success of its search engine in 2003, Google focused on creating more internet services for various fields that covered the search for scholarly articles, books, and other items. After the introduction of the Apple iPhone, Google decided to enter the cellphone market; but to distinguish themselves from the competition, as well as save on R&D costs, they opted for a software solution that would be licensed to other manufacturers. This led to the success and proliferation of its Android platform (Gawer & Cusumano, 2013).

One of the more impressive examples of coopetition is the formation of the Thermal Insulation Association of Southern Africa. This association was created out of multiple thermal isolation companies that operated in South Africa. Their combined efforts led to the legislation of energy efficiency in the design of new buildings. This opened up new options for thermal insulation technologies and made insulation more affordable to the public (Odeku, 2014).

General Electric serves as a good example of how pricing innovation can become a competitive edge for a company. For decades, General Electric sold aircraft engines to airlines at a low cost but always used expensive maintenance contracts as a way to generate revenue. This tactic led to low customer satisfaction levels and other issues for the company. To solve these issues, a new pricing strategy was developed. It was given the name “Power by the Hour.” Instead of relying on maintenance contracts, GE sells the right to use jet planes that include spare parts and maintenance. Customers have to pay only when they use the products, and in the case of airliners, this means that they pay only when they earn money. Not only does this create a more cost-efficient option for the customers but it also ensures that GE has a clear incentive to keep the engines in the best possible shape (Smith, 2013).

Six Sigma is a set of tools created to improve the business process of a company. Its goal is to identify and remove the causes of defects, as well as to streamline the business and manufacturing process. Innovation is essential for a company, but it has to be implemented with minimum issues. This result can be achieved with the implementation of the Six Sigma techniques, creating a team within the organization that utilizes empirical and statistical methods to reduce process cycle time, costs, and pollution, as well as increase revenue. Six Sigma has a focus on quantifiable results, verifiable data, and reliance on active support and management (Pyzdek & Keller, 2014).

Innovation is crucial for the development of a competitive edge. For example, Apple uses technology to create unique products, while GE has created new pricing models. To make the most out of innovation, programs like Six Sigma should be used for streamlining the work process. This is how a company can use innovation to gain an edge on the competition.

Gawer, A., & Cusumano, M. (2013). Industry platforms and ecosystem innovation. Journal of Product Innovation Management , 31 (3), 417-433. Web.

Hinterhuber, A., & Liozu, S. (2014). Is innovation in pricing your next source of competitive advantage?. Business Horizons , 57 (3), 413-423. Web.

Jun, S., & Sung Park, S. (2013). Examining technological innovation of Apple using patent analysis . Industrial Management & Data Systems , 113 (6), 890-907. Web.

Medeiros, J., Ribeiro, J., & Cortimiglia, M. (2014). Success factors for environmentally sustainable product innovation: a systematic literature review . Journal of Cleaner Production , 65 (4), 76-86. Web.

Moroni, I., Arruda, A., & Araujo, K. (2015). The design and technological innovation: How to understand the growth of startups companies in competitive business environment . Procedia Manufacturing , 3 (7), 2199-2204. Web.

Odeku, K. (2014). Thermal efficiency for low cost houses using translucent water-based acrylic paint . Mediterranean Journal of Social Sciences , 31 (3), 1540-5885. Web.

Pyzdek, T., & Keller, P. (2014). Six Sigma handbook (4th ed.). Chicago, Ill.: McGraw-Hill Education LLC. Web.

Ritala, P., & Sainio, L. (2013). Coopetition for radical innovation: Technology, market and business-model perspectives . Technology Analysis & Strategic Management , 26 (2), 155-169. Web.

Smith, D. (2013). Power-by-the-hour: The role of technology in reshaping business strategy at Rolls-Royce . Technology Analysis & Strategic Management , 25 (8), 987-1007. Web.

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Start » strategy, how startups contribute to innovation in emerging industries.

Discover how startups’ small business ingenuity drives innovation and impacts emerging industries with new ideas, according to new research.

Startups are known for thinking outside the box and creating revolutionary products and services. Driven by entrepreneurs who set out to meet consumers’ needs, these smaller businesses are more likely to spark innovation in emerging industries and accelerate the development of new technologies, according to research from Texas McCombs .

For small businesses, this underscores the importance of innovation as a strategic tool for differentiation and growth, demonstrating that even as newcomers with limited resources, small businesses have the potential to significantly influence their industries by introducing new ideas and solutions.

Researcher Francisco Polidoro, Jr., a Professor of Management at the University of Texas at Austin’s McCombs School of Business, outlined three key factors in the level of influence a startup’s innovations can wield:

• Resource disparities. Startups often lack resources in their early stages, which hinders development and can lead to business failure. While they may be unable to move forward, startups’ ideas and patents continue to live on, and when these concepts are particularly promising, more resource-rich companies may build upon their innovations and realize those goals.
• Academic citations. When academic institutions cite startups' patents in their research, it significantly boosts the visibility and credibility of those innovations. This implies the academic community's interest can elevate a startup's contributions, making them more influential in driving innovation.
• Lack of legal history. Established companies, known for their litigious and aggressive approach to protecting patents, may inadvertently discourage other companies from building upon their innovations out of fear of legal repercussions. Startups typically do not pose the same threat, making their patents more appealing for others to cite and build upon.

[Read more: What Every New Startup Can Do to Protect Their Intellectual Property ]

Startups with big ideas can leverage the industry know-how and deep pockets of bigger businesses through strategic collaboration to bring their vision to life.

The benefits and challenges of knowledge spillover in emerging industries

According to Polidoro, startup innovations lead to knowledge spillovers, where the developments of one company are utilized by others outside the original entity.

“Other entities can build on their ideas to create subsequent inventions, some of which may eventually benefit consumers in product markets,” said Polidoro in a press release.

Texas McCombs’ research, which analyzed 6,116 patents from the mid-1970s to 2016, demonstrated startups’ influence on innovation, with their patents cited 8.5% more annually — and 21% more over nine years — than those of established businesses.

However, Polidoro notes a downside: Startups’ resource constraints might hinder their ability to profit from their innovations, enabling wealthier companies to capitalize on these ideas. Research shows companies were more inclined to reference and build upon a startup’s patents, particularly when the startup showed limited capability in developing its innovations further.

[Read more: How Three Startups Scored Millions in Funding ]

Tips for startups looking to partner with larger businesses

Startups with big ideas can leverage the industry know-how and deep pockets of bigger businesses through strategic collaboration to bring their vision to life. Here are a few tips for forging a successful partnership to move your startup’s ideas forward.

Define your goals and ideal partnership

Before you seek out a partner, determine the goals and key objectives you hope to achieve through the partnership. From there, research businesses in your market that can help you reach those goals. Whoever you work with should have a good track record and ample experience in your specific area.

Establish a partnership agreement

A written agreement between you and your partner company should spell out the terms and conditions of the partnership, define the terms of intellectual property (IP) (including assets brought into the partnership versus those created jointly), and describe each party's responsibilities and expectations. Have both parties review the agreement with legal advisors to ensure it is legally binding and avoid any discrepancies or oversights.

Communicate openly and adapt as needed

Throughout your partnership, ensure consistent communication between both parties. Whether sharing success stories or challenges faced, keeping both entities in the loop about business happenings is key to addressing any problems before they arise.

Be flexible in your partnership, too. Situations can emerge that require sudden shifts, so it’s important to be adaptable and willing to switch gears when necessary.

[Read more: Micro-Business vs. Startup: What’s the Difference? ]

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Seven trends reshaping the workplace in 2024.

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Alex Birch is cofounder and CEO of XY Sense , which provides sensors that enable property teams to understand workplace usage.

Where and how we work has changed a lot in the past several years.

Collectively, we’ve experienced some of the most significant and far-reaching changes in the world of work since the Industrial Revolution. Zoom became a noun and a cultural phenomenon (“You’re on mute!”) as workers experimented (and largely succeeded) with working from home during the pandemic.

Next came the “return to office” tug of war, as employers sought to get teams back together in offices and employees held fast to the benefits of flexible working schedules. The outcome? A meeting in the middle: hybrid work schedules in which hundreds of millions of workers split time between home and offices.

With the rhetoric around “return-to-office” finally behind us, it’s clear that 2024 will be another watershed year in which how we engage with work environments is redefined again. As CEO of a leading proptech company, I connect with C-level executives and workplace experts daily, discussing the forces that will continue to reshape the world of work in 2024. Here is my take on seven key trends that will alter workplaces and work environments in 2024.

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First images of helldivers 2 s illuminate alien enemies emerge, one of the most diabolically twisted movies of 2024 is finally streaming this weekend, workplace strategies will become more data-driven..

For the past two years, senior leaders across many industries have demanded a full return to office and pre-Covid work behaviors. It hasn’t worked. Despite get-tough initiatives and threats, average workplace utilization has remained unchanged since Q2 of 2023 . While most workers now spend some time in offices, hybrid work schedules are here to stay, leaving average workplace utilization at about 50% of pre-pandemic levels.

Eighty percent of executive leaders now say they took the wrong approach to the return to office because they based decisions on hunches rather than data. To find a better way, they will ask their real estate and workplace teams to chart the future of their workspaces with approaches rooted in data.

Companies will incentivize workplace attendance.

Angry emails and threats failed to force workers to return to a five-day in-office schedule. The era of office-attendance coercion is giving way to a more nuanced approach to incentivizing in-person engagement. Companies are reimagining workplace culture by offering enticing perks such as happy hours, catered meals and revamped office environments to foster a sense of belonging when teams are together in offices. Yes, employees can work from home, but individual well-being and career prospects will be improved by spending at least some time in an office.

Organizations will use better workplace data and analytics tools.

Traditional methods of tracking workplace attendance, like badge swipes , provide limited data to help companies understand the resources and space teams need. “ Coffee-badging ” and other outmaneuvering tactics make even limited badge data suspect.

Now, many companies are exploring better technologies and solutions to understand exactly what workers are doing in offices, and when. By harnessing real-time data on office utilization and resource allocation, organizations can optimize operational efficiency and create tailored work environments conducive to productive collaboration.

Workplace utilization will increase.

While hard-core work-from-homers want 100% remote roles, a recent Gensler research study showed that workers in many countries believe more time in the office will improve their socializing/companionship, collaboration, relationship-building, training and career advancement. Challenges like commuting costs and childcare are holding many back. As companies offer more incentives, we can expect a gradual increase in workplace attendance throughout the year.

Many workplaces will shrink.

With workers spending only two or three days in the office and devoting much of that time to meetings, antiquated concepts like dedicated desks for every employee no longer fit. Real estate services leader CBRE reports that the average space per employee shrank by 22% in 2023, and 62% of companies have reduced their office space since 2020. Workplace shrinking will continue in 2024 as more company leases come up for renewal, and companies recognize that the hybrid model is here to stay.

There will be a transition to shared spaces.

Traditional desk ratios are giving way to flexible seating models like hot-desking, signaling a fundamental shift toward shared workspaces. By reallocating resources and prioritizing collaborative environments over individual workstations, organizations are optimizing space utilization and nurturing a culture of inclusivity and teamwork.

Further, the demand for flexible workspaces is skyrocketing. Companies are embracing on-demand access to shared workspaces and resources, driving the need for adaptable workplace designs that cater to diverse work preferences and evolving organizational needs.

The workplace environment and experience will be elevated.

While many companies will end 2024 with smaller offices, many are prioritizing premium office locations equipped with state-of-the-art designs and technology. These upgrades are intended to improve productivity and provide more positive reinforcement for the decision to come into the office. By investing in modern amenities and fostering vibrant work cultures, organizations create enticing work environments that attract top talent and enhance employee satisfaction and productivity.

Change is scary to some. For workplace leaders, though, this change provides an opportunity to create environments that make work more engaging and rewarding as they drive outstanding ROI for companies. As companies move away from negative tactics like return-to-office mandates, workplace leaders can get back to doing what they love: connecting people with place and purpose.

Let 2024 be the year companies embrace the opportunity to reimagine their office spaces to reflect the needs of their teams in a post-pandemic world.

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How Netflix has changed the global entertainment industry

• Netflix continues to rewrite the playbook for global entertainment.
• It's solidified its position as the dominant streamer.
• It now faces new challenges as it enters the advertising and gaming markets.

Since Netflix began its worldwide expansion in 2016, the streaming service has rewritten the playbook for global entertainment — from TV to film, and, more recently, video games.

Hollywood used to export most global hit series and movies. Now, thanks to Netflix's investments in international TV and film, programs like South Korea's "Squid Game" and France's "Lupin" have found massive audiences around the world. And Netflix's English-language originals, such as Shonda Rhimes' "Bridgerton," Ryan Murphy's "Dahmer," and Tim Burton's "Wednesday," have broken the streamer's internal streaming viewership records. 

Netflix has been riding high after the 2023 writers' and actors' strikes shut down Hollywood production and other streamers retrenched to stem losses . After a dip in 2022, its stock soared in 2023 and it's making headway with its crackdown on password sharing and its ad-supported subscription tier . Cash-hungry rivals have returned to licensing their shows  back to Netflix, which could help make the streamer even more dominant.

Netflix's impact on the global TV industry remains undeniable, even as it now faces fresh questions about its audience growth potential, ability to compete for ad dollars, and opportunity to capture younger viewers.

How Netflix disrupted the global TV industry

To thrive on an international stage, Netflix sought both US mass-market programming like "Stranger Things" as well as local content that could win over viewers in specific markets (and produce breakout hits).

The strategy helped the streaming service grow its customer base to more than 260 million global subscribers. Its momentum also reinvigorated production in places like Germany, Mexico, and India.

More recently, it along with other streamers has sought broadcast network-type shows that will grab broad viewership, plus fewer, lower-budget movies under new film chief Dan Lin. It's also dipped into live programming like sports and comedy.

More on Netflix's changing content direction:

• Netflix is shifting strategy away from big-budget action flicks and big-name stars. Here's its new plan.
• Netflix helped bring original films to streaming — now it's pulling back, and Hollywood is feeling the pinch
• Leaked documents reveal what Netflix wants in new shows, from more 'Dahmer'-style true crime to its own version of 'The Bear'
• Netflix's 'Squid Game' is part of a robust international TV strategy that's far ahead of rivals
• International TV producers describe how streaming competition is changing their markets

Netflix shook up its leadership to reflect a changing business

After breaking all of Hollywood's rules and disrupting everything about the entertainment industry, Netflix — since its first-ever subscriber loss — has been breaking its own rules, reversing its stances on password sharing and advertising.

It also shook up its leadership in 2023, elevating Greg Peters to co-CEO, reflecting its shift to new revenue streams, alongside Ted Sarandos  as cofounder Reed Hastings moved to executive chair.

Meanwhile, TV head Bela Bajaria was named chief content officer, with film reporting to her. 

An elite team of interdisciplinary execs helps make Netflix's biggest decisions. Known internally as the "Lstaff" — the "L" stands for leadership — the 22-member group sits between the company's officers and its larger executive corps of vice presidents and above, who are called the "Estaff."

More on Netflix's corporate structure:

• Netflix insiders describe its new co-CEO as 'hyper rational' and a behind-the-scenes power player leading key expansions in ads, gaming, and more
• Netflix org chart: The 71 most powerful people at the streamer and who they report to
• Netflix says subscribers to its ads plan have doubled. Meet the 19 execs driving the streamer's aggressive push into advertising.
• Netflix salaries revealed: How much engineers, marketers, content execs, and others get paid

Netflix continues to grow, despite layoffs

Netflix's restructuring hasn't been without obstacles. It's laid off hundreds of staffers over the past couple of years as the broader media and entertainment space grapples with a bear market .

Still, the company's growth has generally made it a desirable place to work in recent years, despite some tests its corporate culture has faced. While hiring has slowed, it's still adding employees to maintain its lead over other paid streamers and fuel its global expansion.

More on Netflix's business model and company culture:

• Netflix insiders describe a culture shift to 'fear-based' decision making, execs stretched thin, and belt tightening amid layoffs and subscriber losses
• Netflix spending cuts fuel fears that its golden creative age is over
• Netflix exec reveals sports ambitions and what's next for live sports as golf series 'Full Swing' debuts
• Netflix is still hiring for hundreds of roles across its games studio, engineering teams, and more. Salary data shows how much the company has offered for 180 different jobs.

Netflix is moving into advertising and gaming

Netflix faces more competition from TV viewers than ever from traditional media companies like Disney and Warner Bros. Discovery and tech players Apple , Amazon, and YouTube, most of which are further along in selling ads and offering live sports programming.

The competition is pushing the streaming giant to continue evolving. Netflix introduced a cheaper, ad-supported tier to combat slowing subscriber growth. It's also building video games and selling merchandise and experiences tied to series like "Squid Game" and "Bridgerton."  

Some creators worried that Netflix would take fewer risks on programming to please advertisers, while the service has been slow to meet the scale demanded by advertisers. 

As it did with movies and TV shows, Netflix is ramping up advertising and games slowly. It's commissioning and licensing mobile games, some of which are based on existing franchises like "Stranger Things" and acquired companies to kickstart the business.

More on Netflix's advertising and gaming ambitions: 

• Netflix has launched its ad-supported tier — here's everything we know about how the streaming giant is pitching advertisers
• Netflix's stock surged after the company's first TV upfront presentation. Meet the 19 execs driving its advertising push
• Why Netflix is placing cars like the Chevy Bolt in its shows, and what the streamer's deal with GM means for its growing advertising business
• How Netflix leaders, including its new co-CEO, are thinking about a FAST streaming service that could supercharge its ads business
• Netflix is doubling down on gaming, with dozens of new hires and a dedicated studio, as it chases younger audiences and battles to turn back subscriber losses

Elaine Low contributed to an earlier version of this post.

Disclosure: Mathias Döpfner, CEO of Business Insider's parent company, Axel Springer, is a Netflix board member.

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Five-year National AI Strategy to be unveiled in May

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Sri Lanka is set to unveil a five-year National Artificial Intelligence (AI) Strategy in May to drive innovation, economic growth and societal progress across the nation. The National AI Strategy is a key output of the Committee to Formulate a Strategy for AI. “As we approach this crucial milestone, your feedback is essential to ensure the strategy meets the diverse needs of our nation,” Committee on Formulating a Strategy for Artificial Intelligence (CFSAI) Chairperson Dr. Romesh Ranawana announced. 

The white paper available on public domain provides an analysis of the prevailing challenges to AI’s rollout in Sri Lanka, proposing a strategic framework to capitalise on AI for societal benefit, elevate living standards, and maintain the nation’s competitive edge. The public is invited to share their ideas insights and perspectives through “[email protected]” till the 26th of April 2024.

 The white paper underscores the imperative of fostering an AI ecosystem conducive to innovation, educational advancement, ethical technology practices, and synergistic alliances between the government, academia, private sector, civil society, and development partners and institutions. This initiative is aimed at establishing Sri Lanka as a leader in the effective and responsible use of AI.

The government allocated Rs.1.5 billion in the 2024 National Budget. In addition it proposed to build a National AI Centre that will be designed and created aligning with the Digital Strategy 2030, to orchestrate AI endeavours nationwide. Sri Lanka is currently ranked 95th out of 193 countries in the Oxford Insights’ 2023 Government AI Readiness Index, marking a ten-place improvement since 2022.

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To Create a Greener Future, the West Can’t Ignore China

• Shameen Prashantham
• Lola Woetzel

Fighting climate change is a promising area for engagement between Western companies and China. However, geopolitical strains, the disruption of business relationships by the Covid pandemic, and domestic Chinese policies all make engagement complex. In this article the authors examine the complexities of the current climate-change opportunities in China and present practical strategies for businesses ready to enter the market.

There is a twofold opportunity, they explain. First, China offers a vast market for Western-developed solutions. The Chinese government has set ambitious targets, aiming to achieve carbon neutrality by 2060. That goal creates significant opportunities for firms with cutting-edge technologies. Second, businesses have an opportunity to integrate China’s own advances in climate-related technology.

The authors go on to outline four strategies, all of which involve partnering in some way. They advise companies to make sustainability a global theme, to join or form coalitions to find safe spaces for technological development, to forge partnerships with local companies for market access, and to insource technology.

Four ways for companies to safely engage

Idea in Brief

The opportunity.

Fighting climate change is a promising area for engagement between Western companies and China. After all, China is responsible for 27% of global emissions and offers a vast market for green tech.

The Challenge

Geopolitical strains, the disruption of business relationships by the Covid pandemic, and domestic Chinese policies all make engagement complex.

The Solution

To engage effectively with China, consider forming coalitions for safe technological development, forging local partnerships for market access, and insourcing innovative technology.

In the current geopolitical landscape, marked by escalating tensions between Western nations and China, it’s a challenge to identify potential areas of collaboration between East and West that would yield mutual benefits and foster trust. But fighting climate change is one. Climate change is a problem that affects every nation, and it cannot be solved without China’s involvement because the country contributes 27% of global emissions, according to the World Bank.

• Shameen Prashantham is a professor of international business and strategy at China Europe International Business School and the author of Gorillas Can Dance (Wiley, 2021).
• Lola Woetzel is a senior partner emerita of McKinsey & Company in Shanghai, and until recently, was the global leader of its Cities Special Initiative and the Asia-based director of the McKinsey Global Institute.

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