As the economy continues to go through rough times, two well-defined camps seem to have formed: the innovation camp and the operations camp. One mindset says, "We must create a new cutting-edge product or service that will blow away the competition", and the other says, "Forget new ideas. We need to stick to the basics and execute better." Unfortunately, these approaches are exclusive, not inclusive. The more effective approach is to merge innovation and operations.

The role of operations is to produce a specific product, service or customer experience. Black'N'Decker, Walt Disney World, Dairy Queen, MGM Studios, Los Angeles Lakers, your local churches and schools and hospitals, and every other organization all take steps to deliver a specific product, service or experience that meets a specific customer need.

Innovation is the process of identifying, combining, evaluating and implementing opportunities to add more value to customers. Innovation is NOT limited to technology or entertainment. The person who realized that storing string on spools was more effective than in big balls was just as innovative as the person who created the rocket ship or the first computer.

Operations is a series of steps to deliver a specific outcome. Therefore, there are three key questions to ask in order to improve operations:

1. What are the customer's current highest priority outcomes?
2. What steps are we currently using to deliver these outcomes?
3. How can we improve these individual steps or the process as a whole that would deliver this outcome faster, with less hassle for the customer, in a more convenient way or with greater quality?

The answers to the third question represent the innovations that could add more value to customers and consequently generate better business results. With this approach, every organization can and must develop the competency of innovation throughout its membership.

Peter Drucker wrote, "Because its purpose is to create a customer, the business enterprise has two - and only these two - basic functions: marketing and innovation. Innovation is the task of endowing human and material resources with new and greater wealth-producing capacity. Managers must convert society's needs into opportunities for profitable business... Any existing organization goes down fast if it does not innovate. Not to innovate is the single largest reason for the decline of existing organizations." (From "The Essential Drucker" pages 22-23.)

No matter how fixed your operations are today, I encourage you to reexamine every step in the process and the process as a whole to identify adjustments that would add more value to customers in the areas that matter the most to them.

Send questions to Dan Coughlin at The Coughlin Company, Inc., a firm specializing in enhancing the effectiveness of top performing executives, groups and organizations.

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