Value creation is an interesting topic. So as
innovation, rather micro innovation. Equally interesting is new breed of
business enterprise (a.k.a Enterprise 2.0). And the ecosystems around it.
Observe, how these three (value creation, micro innovation & new business
enterprises) are connected and how a new definition of value system is
emerging.
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| Hiya2 |
Traditionally we understand the value creation
by any business entities lies around three thing - value (rather wealth) for
promoter/ share holder, customer & employees. Successful organization
has created values for these three entities - definitely for the first two. Closer
looks into some of the new generation business entities highlight another
dimension, 4th dimension, of value creation - Societal value. There are whole
of new generation business organization from whom you really don't buy
anything. And without being a real customer in traditional sense these
organizations adds tremendous value to our lives. What do you buy from Google,
Facebook or Twitter? Look at the valuation of facebook, linkedin, groupon ...
simply amazing!
Let’s look at innovation now. Innovation
is essentially creating values out of an idea or implementation of an idea to
create wealth. Without tangible value a new idea can be invention but not
innovation. Even thought Humphry Davy invented light bulb early 1800 but
it was not useful. Later, in 1880 Edison made commercially viable light bulbs -
this is innovation. Even though Edison didn't invent the bulb but due to
unparallel impact on human civilization we call Edison the inventor. Today
successful organizations, commercial or non-commercial, are fostering innovations.
These innovations are like making colored bulb - each new colored bulb creates
value. This is micro innovation!
Successful organizations have built in these
two paradigm (creating value for society & investing in micro innovation)
in their culture. Engaging employees & customers in innovation, and
creating services for people in general without attaching a $ string is the way
to go to build a lasting organization. Money is the byproduct of these new
generation organizations.
Earlier this month Facebook acquired Instagram for $1B. What was insgram's revenue?
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