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The Tension Between Innovation and Knowledge Management

1 September 2010

Innovation deals with new creation, while knowledge management focuses on reusing, positioning, and optimizing what already exists.

There is a significant dilemma of when to prefer innovation and when to prefer knowledge management. The default is knowledge management. Knowledge management is a cheaper process that requires fewer resources since it reuses what already exists.

  1. When might we still prefer innovation? A crisis brings an opportunity for change. A situation of "no choice" is created. This is when it is advisable to change direction and take new actions.

  2. When competitors act differently and show interest in a new solution/direction, I, too, need to change, innovate, and not settle for the existing so as not to "fall behind" and lose customers.

  3. When a new technology develops, this is an opportunity to examine whether it is worthwhile to do things differently (for example, whether using Web 2.0 applications could create better, higher-quality, and more functional solutions than existing ones).

  4. When a long time has passed since the "last change," we are aware that we cannot rely solely on what exists. This is a situation where the product/service's market share is still high, but its growth rate is low. In this case, something new should be initiated to create a competitive advantage, to reach a situation where we can influence market needs, and not vice versa. (This is the difference between a "proactive" and a "reactive" organization.)

Finally, even when a customer offers a new idea or an employee brings a new initiative, it is worth examining and considering the proposal - it may be an opportunity we would not want to miss in the future, and we were fortunate to be the pioneers.

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