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Innovation is the means by which enterprises create wealth. Enterprises that learn how to integrate innovation into strategy, and strategy into the process of innovation, will gain a competitive advantage and optimize the enterprise's creation of wealth.
Integration of innovation into strategy requires two tools -- the InnoVantage Grid and the InnoVantage Perspective. The InnoVantage Grid provides a way to analyze the innovation opportunities and threats of the market, strategy of competitors, capability of the enterprise, and desires of the stakeholders. The InnoVantage Grid is a matrix of nine different types of innovation. The InnoVantage Perspective includes customers, competition, technology, stakeholders, enterprise capability and the enterprise's capacity for change. This perspective enables the creation of multiple scenarios based on different innovation
strategies that are necessary for strategic wealth creation decisions.
Peter Drucker has written, "Business has only two basic functions: marketing and innovation. Marketing and innovation produce results. All the rest are costs."
Innovation in marketing is also essential. Therefore business really has only one basic function -- innovation. Innovation is the basis of all competitive advantage. Innovation is the means by which enterprises anticipate and fill customer needs. Innovation is the way that enterprises utilize technology.
Innovation endows resources with a new capacity to create wealth or creates a new resource. Innovation results from the enterprise's way of implementation of new ideas, of turning the creative concepts of its members into realities. It can cause change or it can exploit change. Systematic innovation which exploits change is generally the most effective. Strategic innovation is the purposeful and organized search for changes, and the systematic analysis of the opportunities and threats such changes might offer for the creation of wealth.
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