Why Innovation is Important in Marketing

Marketing is a way companies use to sell a product, idea or service to their consumers. Being innovative in marketing can help you set a new high bar for your competition. Sometimes your competition will fail to reach these new standards. Finding new ways to get the job done or tweaking existing ways, can increase companies revenue and make your marketing team more efficient. Apple's new marketing strategy focusing more on their current consumer base worked really well. Apple increased their R&D and came with new products that would make their consumer base happy. With products such as I phone and I touch not only was the base happy, but their base grew dramatically with new consumers thus increasing the market share of Apple, Inc. in the industry.

Companies like Google, Inc. have one the most innovative marketing team in the world. Google has the most powerful search engine in the world and their marketing team saw niche on online advertisement and took advantage of the situation. Today of over 98% of Google's revenue is generated from online advertisement. Google is ranked the most innovative company in the world. The reason is that Google employees have one of most relaxed work environment and they get free time to work on project that they feel will improve their company. You can't be the leader of innovation with only your marketing team doing the innovating. That's why Google and GE make it a top priority to put innovation in their employee's blood.

In today's global economy where competition is coming from all over the world and where companies are struggling to survive due to the global recession, marketing teams all over the world are scratching their heads to come up with new or different innovative ways to reach their consumers and try to get a small piece of the everyday shrinking pie. American companies have the reputation of being the most innovative companies in the world. But with a dramatic increase of good quality education throughout the world there is a risk that America will lose its title of being the most innovative country in the world. But we are not ready to give up just yet. The new idea that Professor Felix and his team are working on is a huge step in the right direction. By creating a social website and hopefully a new class at GRCC and other colleges throughout United States on how managers, marketers and other businessman can be more innovative will keep this nation at the top of the most innovative countries in the world.

Why Innovation is Important in Marketing

Why Innovation is Important in Marketing
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Max Weber's Typology of Forms of Authority - Traditional, Rational-Legal, and Charismatic

In pre-modern and modern societies, there has been a hierarchy of command of which everyone must adhere to. In order for this system to operate, there must be someone in charge or otherwise known as authority. According to Weber, authority is power accepted as legitimate by those subjected to it. Weber outlines three forms of authority in modern societies: traditional, charismatic, and rational-legal. These forms of authority are ideal pure types that are rarely "pure" in real life.

Rational-legal authority is belief in the legality of patterns of standard rules and the right of those elevated to authority under such rules to issue commands. Authority is held by legally established impersonal orders and extends to people only by virtue of offices they hold. The power of government officials is determined by the offices to which they are appointed or elected because of their individual qualifications. As long as individuals hold these offices, they have a certain amount of power, but once they leave office, their rational-legal authority is lost

There are various ways that rational-legal authority could develop. Systems of laws and regulation develop in many societies and there are many different principles of legality that could occur. With the development of a rational-legal system, there is likely to be a political system which becomes rationalized in a similar way. Associated with political systems are constitutions, written documents, and established offices, regularized modes of representation, regular elections and political procedures. These are developed in opposition to earlier systems such as monarchies or other traditional forms, where there are no well developed set of rules.

Max Weber's Typology of Forms of Authority - Traditional, Rational-Legal, and Charismatic

As political systems develop in a rational manner, authority takes on a legal form. Those who govern either have or appear to have a legitimate legal right to do so. Those who are subordinate within this system accept the legality of the rulers, believing in the right of those who have legitimate rights to exercise power. Those with the power then exercise power based on this right of legitimacy.

Rational-legal authority may be challenged by those who are subordinate but this challenge is unlikely to result in changes in the nature of the system very quickly. According to Weber, such power struggles could be based on ethnicity, nationalism, not classism, and are mostly political struggles.

Weber's examination of legitimate authority led him to define an ideal-type bureaucracy. An ideal-type is a rationally and systematically constructed pure type of action, which can rarely taken place in reality and used as a measuring tool to determine the similarity between actual social institutions and defined ones. The ideal-type bureaucracy Weber developed incorporated hierarchy, impersonality, written rules of conduct, promotion based on achievement, specialized division of labor, and efficiency. Information flows up the chain of command and directives flow down, according to Weber's model. Impersonal rules explicitly define duties, responsibilities, operating procedures, and rules of conduct.

Individual offices are highly specialized, and appointments are made one the basis of qualifications rather than ascribed status. Working together, these characteristics are designed to promote the collective goals of the organization. This ideal-type bureaucracy was intended to promote economic growth and prosperity. Many of its concepts are echoed in today's capitalist and political systems.

Traditional authority is authority in which the legitimacy of the authority figure is based around custom. Legitimacy and power to control is handed down from the past and this power can be exercised in quite dictatorial ways. This is the type of authority in which the traditional rights of a powerful and dominant individual or group are accepted, or at least not challenged, by subordinate individuals. These could be religious, sacred, or spiritual forms, a well established and slowly changing culture, or tribal, family, or clan type structures.

The dominant individual could be a priest, clan leader, family head, or some other patriarchal figure, or dominant elite might govern. In many cases, traditional authority is supported by myths or connection to the sacred, social artifacts such as a cross or flag, and by structures and institutions which perpetuate this authority. Historically, traditional authority has been the most common form among governments. An example of this is the kings and queens in the English monarchy system, which must belong to certain families in order to obtain their positions.

Traditional authority often dominated pre-modern societies. It is based on the belief in the sanctity of tradition, of "the eternal yesterday." Because of the shift in human motivation, it is often difficult for modern individuals to conceive of the hold that tradition had in pre-modern societies.

According to Weber, traditional authority is a means by which inequality is created and preserved. If no one challenges the authority of the traditional leader or group, the leader is likely to remain dominant. Also, for him, traditional authority blocks the development of rational-legal forms of authority, a viewpoint he was particularly partial to.

Charismatic authority exists when the control of others is based on an individual's personal characteristics, such as extraordinary ethical, heroic, or religious virtuosity. Charismatic leaders are obeyed because people feel a strong emotional bond to them. Hitler, Gandhi, Napoleon, and Julius Caesar were all charismatic leaders. Whether such powers actually exist is irrelevant; the fact that followers believe that such powers exist is what is important.

Weber considers charisma to be a driving and creative force which surges through traditional authority and established rules. The sole basis of charismatic authority is the recognition or acceptance of the claims of the leader by the followers. Charismatic authority can be revolutionary in nature, challenging traditional authority and sometimes rational-legal. This type of authority could easily degenerate into traditional authority in which the power is exercised by those who surround the charismatic leader.

Charismatic authority is the antithesis of routine activities and represents the desire for disruption and change of the prevailing social order. It is a necessary part of the dialectic between the human need for structure and the equally human need for variation and innovation in society. Charismatic authority is different from rational or traditional authority in that it develops not from established orders or traditions, but rather from the special trust the charismatic leader induces in his followers, the peculiar powers he exhibits, and the unique qualities he possesses. According to Weber, it is difficult for charismatic leaders to maintain their authority because followers must continue to legitimize this authority. There is a need for the charismatic leader to constantly exhibit leadership performance to his followers to reinforce the legitimacy of his authority.

The basis of Weber's distinction between power and authority is that power is the ability to impose one's will on another, regardless of the other's wishes, and despite any resistance he may offer. Power is therefore relational; it requires one person to dominate, and the other to submit. This assumes that one person will acquiesce, co-operate with or consent to the domination of the other, and this cannot be true of all relationships. The act of issuing a command does not presuppose obedience. Weber argues that an individual can exercise power in three ways: through direct physical power, by reward and punishment and by the influence of opinion. The exercise of power is more likely to be indirect and coercive: a combination of rewarding and punishing through the use of argument, debate and rhetoric.

Authority, by comparison, is a quality that enhances power, rather than being itself a form of power. The word "authority" comes from the verb "to authorize"; therefore an individual's power must be authorized by the group in order for it to be legitimate. An individual is considered an authority because of his technical expertise, combined with his ability to communicate effectively with the group. The individual in authority is the one who is primary in the group, controlling certain aspects of what the other group members do and say, and perhaps even what and how they think.

Max Weber's Typology of Forms of Authority - Traditional, Rational-Legal, and Charismatic
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Innovation: Thinking Outside The Box

When innovators talk about thinking outside the box, they mean coming up with creative ways to solve problems - new ways to look at things. How do they do it? How can you do it too? We first have to ask what the "box" is. Then we can look at how to get outside of it.

The "box" is the normal way of doing things and looking at things. It is the assumptions that almost everyone involved is making. The best way to start thinking out of the box then, is to identify and challenge all the assumptions that make up thinking inside the box.

One of the major liquor brands was faltering years ago, and they couldn't seem to boost their sales. Promotions, lowering the price, getting better shelf placement - these were the "in the box" solutions. Then someone challenged the assumptions, by asking "What if we stopped the promotions and just raised the price?"

Innovation: Thinking Outside The Box

The price was raised as an experiment, and sales soon doubled. As it turns out, some types of liquor are bought quite often as gifts. Buyers don't want to buy the most expensive one, but they also don't want to seem cheap, so they won't buy products that don't cost enough. Now imagine what happens to your profit margins when you raise the price and double the sales. That's the power of thinking outside of the box.

Ways To Get Outside The Box

Challenging assumptions is a powerful creative problem solving technique. The difficult part is to identify the assumptions. If you are designing a new motorcycle, write down assumptions like "speed matters," "it has to run on gas" and "it needs two wheels," not because you expect to prove these wrong, but because challenging these can lead to creative possibilities. Maybe the time has come for an electric three-wheeled motorcycle.

Another way to get to creative solutions is to "assume the absurd." This is either fun or annoying, depending on how open-minded you can be. All you do is start making absurd assumptions, then finding ways to make sense of them. The easiest way to do it is by asking "what if."

What if a carpet cleaning business was better off with half as many customers? It seems absurd, but work with it. Hmm...less stressful, perhaps. More profitable if each customer was worth three times as much. Is that possible? Commercial jobs that involve large easy-to-clean spaces (theaters, offices, convention halls) make more money in a day than houses, with fewer headaches. Focusing on getting those accounts could be the most profitable way to go - not so absurd.

Another way to more innovative ideas is to literally do your thinking out of the box. Get out of the house or the office. Look around at how others are doing things. On busses in Ecuador, salesmen put a product into everyones hands and let them hold it while they do a sales pitch. Then you have to give back "your" product or pay for it. It is very effective. How could you use the principle in your business?

Innovation: Thinking Outside The Box
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Steve Gillman has been studying brainpower and related topics for years. For more creative problem solving techniques, and to subscribe to the Brain Power Newsletter, visit: http://www.IncreaseBrainPower.com

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Organizational Structure, Creativity, Innovation

Organizational structure can inhibit or foster creativity and innovation. The problem with organizational structure though, is that it is resultant of many factors, including history, organic growth, strategy, operational design, product diversity, logistics, marketing, client base, supplier base and so forth. Therefore, what managers need, are not recipes for complete structural change, but insights into the properties of fostering structures that can be adapted into the existing structure.

To start, it is useful to analyse the preferred structures against the not so preferred. There are many definitions of types of organizational structure, but one example is:

a) Mechanistic structures (generally not preferred) - includes centralised control and authority, clearly defined tasks, vertical communication links, obedience to supervisors, rigidity and inflexibility.

Organizational Structure, Creativity, Innovation

b) Organic structures (generally preferred) - decentralisation of authority, tasks loosely defined, horizontal communications, greater individual authority, flexible, adaptable.

Experience shows that the above can be misleading. For example, flat organisations are generally preferred and hierarchical ones not preferred, however, even flat organisations are in reality hierarchical.

Importantly, if we have a mechanistic structure, what factors allow us to move in the right direction without wholesale change?

Some answers include:

a) Direct communication links to decision makers.

b) Communication and information flow between departments.

c) Tangible progression of ideas from problem to solution, product development to commercialisation.

d) Creative teams working outside but linked into the organization, whose culture, processes etc diffuse into the existing structure.

These and other topics are covered in depth in the MBA dissertation on Managing Creativity & Innovation, which can be purchased (along with a Creativity and Innovation DIY Audit, Good Idea Generator Software and Power Point Presentation) from http://www.managing-creativity.com

Kal Bishop, MBA

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Organizational Structure, Creativity, Innovation
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Kal Bishop is a management consultant based in London, UK. He has consulted in the visual media and software industries and for clients such as Toshiba and Transport for London. He has led Improv, creativity and innovation workshops, exhibited artwork in San Francisco, Los Angeles and London and written a number of screenplays. He is a passionate traveller. He can be reached on http://www.managing-creativity.com.

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