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CREATING SERVICES THAT ADD VALUE for the customer takes precedence over all other drivers in determining organizational success in the twenty-first century. Libraries uniquely capable of anticipating and meeting customer needs in ways that mirror a changing world are the libraries that are deemed successful and, therefore, are able to attract resources and talent. It is evident from current environmental indicators that organizations need to utilize two tools skillfully in order to create customer value: innovation and strategy. While strategy can exist without innovation, it is unlikely that effective innovation can occur without the use of strategy. For organization leaders the challenge is threefold: develop the ability to create value-added innovative services on a continuous basis; utilize strategy to make decisions about innovations; and deliver innovative services to the customer. This article will review recent theories of innovation and strategy and place them in the context of the work of nonprofit organizations (such as most libraries). Suggested approaches to creating innovation and effective strategy will also be reviewed.
STRATEGY AND INNOVATION: BUILDING A TWENTY-FIRST-CENTURY KNOWLEDGE PRACTICE
"Different is not always better but better is always different." (Luce, 2003)
There is nothing new about the need for organizations to be creative in problem solving, to be customer oriented, or to be strategic. When pointed to in many professional and trade presses as well as by the media in general, however, the need for organizational innovation and strategic thinking is rarely defined and put in specific context. This article will explore the nature of innovation, particularly in the public sector, and will look at the role that strategic thinking plays in fostering and promoting innovation. These issues will be placed in the context of organizational development in libraries.
WHAT IS INNOVATION?
At face value an invention is something that strikes most of us as ephemeral and sometimes foolhardy--things seen on late-night television advertisements. Yet, we all know and use the many inventions that have changed modern life in the past century: telephones, dishwashers, computers, automatic teller machines (ATMs), and so on. These are innovations--things that change the way we can do what we want to do; they have added value to our daily lives. In many cases what was once an innovation is now taken for granted. Remarkable inventions, once assimilated into daily life, become routine, an imperceptible part of our lives. Interestingly, however, once assimilated an innovation can be eclipsed and even made obsolete by a new innovation. Examples such as cell phones, music on compact discs, and computers indicate that something new can be created on the basis of older innovations.
In the public sector innovation often relates to services rather than products. Creative new services and processes that make a difference to customers are where the prospects for innovation lie. Potential innovation in this area is less obvious than in the area of three-dimensional products, but innovative services can have the power to keep existing customers and attract new customers.
For innovation to occur libraries must tap the creative potential of their staffs, vendors, and customers. While very much related, creativity and innovation are distinct from one another in important ways. Creativity is the act of generating new ideas and new perspectives. Innovation, on the other hand, occurs when creativity is applied and a product or service results. Creativity (including creative thinking skills), then, is certainly critical to the practice of innovation. Thus, creativity is a means and innovation is an end.
Leonard and Swap define innovation as "the embodiment, combination, and/or synthesis of knowledge in novel, relevant, valued new products, processes, or services" (Leonard & Swap, 1999, p. 7).
Creativity is a process of developing and expressing novel ideas that are likely to be useful. This definition assumes the use of specific tools and skills in order to develop these novel ideas. Innovation implies a buyer or target audience for these new products, processes, or services. In much of the literature on innovation, booming profit margins and focused competition are implied in the commercial sphere. How do libraries, as nonprofit organizations, create innovation when they do not have profit margins to watch, or when they do not wish to compete in the same fashion as many corporate sector enterprises do?
Library literature points to innovations in organizational structure and performance. Yet these do not, in and of themselves, create added value for the user. For instance, the powerful approach taken at the University of Arizona (to name just one library) in restructuring how they approach work is, in and of itself, not an innovation that adds value for the customer. The innovative services made possible by the new organizational team-based model, however, are what could be pointed to as true innovation--that is, new, desired, or needed services that add value for university faculty, students, and other scholars. Improving our internal methods and practices indirectly, or perhaps not at all, has an impact on how the end user does what he or she needs to do. Innovation is more significantly about what our target audience can do--about the increased capacity of library users to do what they want and need to do in the way that most benefits their productivity, pleasure, and excellence.
In his unique book Sustaining Innovation, Paul Light describes the critical difference between innovation in the private sector and innovation in the public sector:
Whereas in the private sector an innovation merely needs to be profitable to be worth doing, in the public sector innovation must be about doing something worthwhile.... Second, public sector innovation involves more than simply doing the public's business well.... Third, non-profit and government innovation involves the broader public good. The ultimate purpose of innovation is not to win awards, boost public confidence, or attract foundation support, but to create public value. (Light, 1998, p. IV, emphasis in the original)
Hence, rather than being defined as something "new to us," innovation in the public sector must be about facilitating the work of our primary constituents in ways that are new and useful to them. It does not matter how innovative libraries are in creating their organizations if they do not produce innovative services, processes, and products for their clientele--library users.
HOW DO PUBLIC SECTOR ORGANIZATIONS INNOVATE?
Light studied a number of nonprofit …