Introduction
Innovation is a critical aspect of an organization since it plays a fundamental role in determining success (Gao & Li 2008). In essence, an organisation must keep on developing new strategies and ideas in order to maintain its customers (Malerba & Brusoni 2007). Consequesntly, the knowledge becomes a significant requirement that helps to maintain the attributes of innovativeness (Makani 2012).
In addition, the two factors become inseparable in the sense that discovery depends on knowledge in a great way (Lewis & Andriopoulos 2009). This discussion will focus on the process of creating knowledge, how individual learning supports innovations, how theories and concepts of innovation are used to develop a knowledge-based economy, and applying some of those theories to a real-life problem using empirical evidence.
Process of Creating and Transferring Knowledge in an Organisation
In essence, organisations conduct their undertakings through well-defined courses of actions (Alryalat & Hawari 2008). Creation and transfer of knowledge are conducted in an organized manner (Punaram, Singh & Zollo 2005). From a basic perspective, knowledge creation involves developing knowledge using the present organisational conditions and experiences (Andreeva & Kianto 2012).
The knowledge obtained is then combined with the original one to build updated knowledge (Anthony 2008). This takes place in various steps that include capturing the existing skills, initiating preliminary performance, realising the outcomes, obtaining experience, capturing the new skills, and using them in the subsequent tasks (Barachini 2009).
Capturing Initial Knowledge
In essence, people have diverse skills that vary according to their areas of specialisation and roles (Raisch, Birkinshaw, Probst & Tushman 2009). This implies that despite the aspirations of creating knowledge the people in that organisation has initial knowledge that is used as the basis of developing additional skills (Brem 2012). Respectively, an organisation must capture that knowledge in order to use it as the platform for developing new insights (Mcgee & Kanter 2011).
Essentially, IBM has implemented this step in a notable and effective way. In one of their business reports, it was noted that during transformation of IBM to a social business, the stakeholders took a self-reflection of the company (Baker 2011). This enabled the management to identify how social networks were used by various people to initiate teamwork (Baker 2012).
They also conducted a thorough evaluation to determine the effectiveness of using social media to increase the value of the company’s brand. This implies that the organisation became aware of the knowledge it possessed in order to use it as a platform for developing more skills than the initial ones (Mingers 2008).
Team Job Performance
After identifying the skills possessed by various customers of the organisation, the company chose immediate activities that can facilitate the utilisation of the initial knowledge (Tagg 2009). IBM realised that its customers were versed with use of technology and social media in a substantial way. On this basis, they started the Social Business Initiative that aimed at helping their clients to expand their skills on using social marketing (Scott & Duff 2010).
In this light, IBM collaborated with Group Business partner to help their customers to adopt a lotus application of IBM in mobile devices. During this incorporation, IBM was capable of involving clients in an undertaking that utilised their technological knowledge.
Consequently, it is evident that the company used the existing knowledge as a platform to help its clients develop skills that can be used to seize new market segments. This is based on the premises that social media is of more importance than mere networking (Culnan, McHugh & Zubillaga 2010)
Outcome Realisation
After undertaking this activity that led to development, installation, and use of social business software by clients, the company realised drastic results enabling them to measure the practicality of their innovation. In fact, the IDC hypothesized that the use of Social Business Software will rise to about 38 percent by the end of the year 2014. The positive results indicate that application of this software has corresponded to the initial knowledge of IBM’s clients.
New Experience
Essentially, the introduction of Social Business Software by IBM has led to a fresh experience. Clients have known how to use their original knowledge in marketing products and obtaining more customers. This becomes a new experience to the clients and adds more knowledge than the previous one in which social applications are used for networking only (Ylirenko, Autio & Sapienza 2001). Therefore, clients have learned how to direct networking to a financially productive undertaking.
Capturing New Knowledge
Following this undertaking, clients have captured the emergent knowledge with the idea that social networking is not only meant to create rapport. Instead, they have realised that it can be used in marketing products to new customers in order to increase their market share. As it was stated in a previous paragraph, these clients have adopted the knowledge and combined it with the original one to come up with an updated knowledge.
Having considered this evolution, it can be concluded that IBM has helped most of its clients to market their products through a social network. This has been achieved through software innovation that can be used for business functionality. Therefore, it is evident that the original knowledge was used to develop a social platform leading to updated knowledge later. The company can thus identify the interaction between innovation and knowledge even in the process of developing skills.
Use of Updated Knowledge in Subsequent Tasks
Bearing in mind that the new Social Business Software has been implemented successfully by IBM in collaboration with Lotus Company, it is expected that the platform will become a basis of executing other business undertakings (Jews & Ahmad 2008). This is underpinned by the condition in which the rate of adopting this software has been rising. When the technology is integrated in the system satisfactorily, it will be considered as one of the most pertinent foundations of executing business.
In essence, these are some of the steps that have been used by IBM during development of knowledge in regard to Social Business Initiative (Jhingran 2010). Evidently, innovation has been blended with knowledge in order to make a platform of marketing products as well as increasing market share. Additionally, the same process portrayed an essence of sharing knowledge where an organisation passes essential skills to clients.
Combination of Individual Learning and Organisational Dynamics for Innovation
In essence, the individual learning activities and organisational dynamics should be combined in a manner that helps to foster innovations (Hislop 2010). IBM has put various strategies in order to harmonise the two aspects as a way of steering innovation (Jackson & Wisniewski 2009).
In regard to supporting individual learning, the organisation has helped their clients to adopt and understand how to use Social Business Software. This has been steered by developing guides on how clients can integrate this software in their businesses. Further, they have developed organisational dynamics that facilitate the harmonisation of individual learning in various ways (Jews & Ahmad 2008).
Deepening Customer Relationship
First, IBM advocates for dynamics that aims at deepening the relationship between customers and the organisation (Jhingran 2010). They noted that customers have changed their behaviour on how they interact with brands due to learning new technological skills. It follows that customers must communicate and connect with their customers if they have to become successful and tap their skills to develop innovations.
In fact, most CEOs who took part in the 2010 IBM convention expressed the opinion that creation of close relationship with customers is the most significant strategy of developing innovation.
It was evident that connecting to customers enables organisations to capture the knowledge of clients and supports their learning activities in order to create new ideas and strategies. In addition, it helps the management to understand the change in knowledge and to identify how they should meet their strategies when involving those individuals.
Pooling Knowledge
In light of creating social business, IBM advocated for driving efficiencies of operation to integrate individual learning with company’s dynamics. The diverse ideas are brought together such that the knowledge of various individuals is combined when making and implementing decisions.
This becomes a critical undertaking since the knowledge of one person cannot be holistic. Pooling various learning experiences brings diverse ideas together is a manner that allows interaction of opinions. After opinions have interacted, the management is capable of identifying new propositions that can establish corporate innovation. In that regard, individual learning is manipulated so as it can be a platform of supporting discoveries.
Information Sharing Platform
In essence, the worst shortcoming that can impact on the progress of an organisation is poor communication among the stakeholders involved in various activities. In essence, when attempting to develop innovation, communication among players becomes very crucial.
This is based on the premises that people must have a platform of sharing ideas to the relevant authorities. It follows that availability of ideas is not the most critical issue about innovation. Instead, the efficiency of communication among people is the most important determinant of innovation capacity. Inefficient communication among parties can lead to poor harmonisation and lack of coordination.
On the other hand, proficient communication leads to efficient use of all available knowledge that arises from learning activities. The vice president of IBM stated that the company had used social media as a major communication avenue (Kloeckner 2008). This platform helps this company to receive opinions from employees and customers (Lam & Chua 2009). These opinions form the basis of developing and implementing new ideas and discoveries.
Theories and Concepts of Innovation
Despite the existence of multiple innovation theories, only two of them will be considered in this discussion when focusing on global economy. One of the most crucial concepts is known as disruptive innovation theory. This theory advocates for development of innovations that creates new markets while replacing others (Christensen & Horn 2008).
This implies that it supports transformation of business to acquire markets in accordance to changes that take place (Cooper 2009; Manu 2010). In regard to IBM Social Business Initiative, it is evident that customers have changed the way they connect in the modern world (Ellis 2011).
Social media has become the most popular way of connecting with people. This implies that communication takes place through social media (Oprica 2013). In fact, it has been realised that most people prefer obtaining information online and deciding whether to buy an item or not (Espejo 2012). In some instances, some customers can prefer to buy the items at the comfort of their home (Friedman 2011).
Since this has become a global condition, the theory of disruptive innovation is pertinent because it advocates the introduction of strategies that changes with market needs (Flowers 2010). Adopting new strategies that satisfy the people’s need in the modern world can create a global oriented economy for IBM (Grimaldi & Rippa 2011). It could support the development of highly efficient operations, where customers connect with the manufacturer regardless of location.
The second concept is known as diffusion theory of innovation that measures the rate at which new ideas spread around the world (Jones & Miller 2007). This is a very crucial theory when it comes to creating a global economy (Kieff 2012). It asserts that an organisation must be interested in the way people are adopting new ideologies (Mingers 2008). After assessing the rate of adopting the idea, the company can determine whether their innovativeness meets the customers’ expectations.
It also facilitates assessment to determine whether their marketing strategy meets global standards, or they need improvement (Kuratko 2014). The theory suggests that the rate of spreading innovation is determined by communication, marketing, social systems and time (Morone & Taylor 2010; Ngulube & Lwoga 2008).
This implies that creation of globally oriented economy can depend on how an organisation has set its communication network (Oluikpe 2012). Therefore, the communications strategies put in place should be capable of covering and reaching customers worldwide. In addition, the idea should be communicated in a manner that moves through social systems easily (Partridge 2011; Rahe 2009). It thus implies that the construction of that idea must coincide with the social setup.
For example, it was stated previously that IBM’s Social Business Software would spread at a rate of 38 percent by the end of year 2014. This has been caused by setup in which the software has been introduced to a society that is conversant with social media and networking. The introduction of this software in a system where social media is established leads to high rate of spread. Time also plays a crucial role in determining this rate since the mentality of people changes with time (Partridge 2011).
In IBM’s case, they have introduced this software in a generation where people are moving to a world of technology (Pettit 2009). Most of the people have familiarised with technology so that using this software cannot raise major problems. Otherwise, if the software was introduced 20 years ago, it could raise difficult for it to take root in the global autonomy (Robert 2009).
Application of Theories to Real-Life Issues
In essence, IBM noted that customers in the modern world have changed the way in which they purchase and connect to each other (Tian & Nakamori 2009). This implies that there is a fatal problem in regard to marketing since the old strategies have been rendered ineffective.
Consequently, the disruptive theory of innovation becomes important when seeking to modernise marketing strategies. In fact, IBM has implemented this theory based on the premises that development of Social Business Software was meant to satisfy the technological needs of customers and replace the old ones (Li 2013).
However, this theory has not been implemented entirely without considering the theory of sustaining innovation. The software was not meant to replace all other ways of marketing and communicating. In this regard, there were also strategies developed by IBM to sustain the existing frameworks.
Additionally, the company has applied the theory of diffusion innovation where it has been assessing the spread of their idea worldwide. It is noted that the adoption rate of Social Business Software is very high, and it is expected to rise up to 38 percent by the end of 2014. Consequently, the company is aware of the effectiveness of their idea rather than implementing it blindly. It also forms the basis of evaluating whether their marketing strategies are effective or not.
In addition, this theory seeks to evaluate the spread of the idea in different cultures bearing in mind that various backgrounds have diverse exposures. For example, even if social networking has become very popular, some cultures have remained conservative in regard to adopting technology. After considering this situation, the application of the theory enables the company to make fundamental determinations on cultural variation in regard to using the business software.
Conclusion
It is evident that knowledge creation takes place in a process comprising of systematic steps (Venters 2010; Yunus & Weber 2007). In this light, it has been noted that management must make use of the initial knowledge available in the organisation (Gilsing & Nooteboom 2006).
This knowledge forms the basis of initiating performance that gives a new experience that can trigger development of new ideas (Zheng 2009). Additionally, it cannot be disputed that the theories of disrupted and diffusion innovation plays a pertinent role in globalising economy and solving real-life issues (Zoubi 2009). This has been shown evidently by the pertinence of the two theories to change customers’ mentality as noted by IBM.
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