Reflecting the economic data published by Bappenas, we need to be aware of the impact of global economic conditions are not very good and definitely have an impact on this country. In October 2014, the International Monetary Fund (IMF) correcting global economic growth from 4.0% to 3.8%, and growth in emerging markets include Indonesia, from 5.2% to 5.0%.
The correction is due to the growth performance of the economy in the European region and Japan which are still not encouraging. The US economy despites an upward trend but it’s not enough to lift the world economy. It also happens in China and Russia, there is sluggishness in economic growth in each country and the other countries that have trade relations with both.
Sluggishness of economic growth in Europe, Japan, and other countries of course has an impact on Indonesia. Indonesia's economic growth is also slow. Bank Indonesia revises Indonesia's economic growth from a range of 5.4% - 5.8% to just pegged at 5.4% only, while the World Bank from 5.6% to only 5.2%
As the leader of an organization that deals in the business world, what can be contributed to Indonesian economy to be able to increase and bring wealth as well as prosperity to its people?
Contributions from organization leaders must be adjusted to a variety of competency and expertise in his/her capacity as organization leader, and aims merely for the sake of economic growth in Indonesia.
PPM Center of Innovation and Collaboration (CIC) in the period of 2013-2014 has been conducting research to more than 200 organizations from various industries. The research result shows 68.3% of organizations which implement sustainable innovations, its sales grow by 5-30%. In fact, there are 20.7% of companies whose growth above 20% to above 50%.
The question is, what kind of innovation they have implemented so the impact on sales growth? The data shows the innovation implemented is within the scope of product innovation, operational innovation, marketing methods innovation, and of course, innovation targeted the organization itself.
The next question is whether innovation implemented by an organization correlate to slaes growth? CIC concluded that there is only 11% of organizations with sales growth below 5% even though they have been innovating. This means that there are opportunities for low sales growth even though the organization is already doing innovation. Research has proven by implementing innovation, an organization has an opportunity to achieve sales between 5% to over 50%.
Then, how does sales growth correlate with the organization with no innovative action? Data shows that 70% of the organization's successful above average, turned out to approach innovation in its business strategy. So it can be concluded that an innovative organization, has a big opportunity to grow bigger compared to companies that do not innovate.
What should be taken to ensure innovation run smoothly in an organization? As stated in an article in the International Journal of Innovation and Management volume 12 in 2008, explained that there are nine factors affecting the ability of organization in managing innovation.
The nine factors are: Management Style and Leadership; Organization Resources; Organizational Structure; Corporate Strategy; Technology; Knowledge Management; Employees and Innovation Process. From nine factors, the most important factor is the leader's role in building innovation culture within the organization.
The leader's role in creating communication and cooperation that can motivate employees to innovate. The ability of the leader to guide the behavior of employees to be willing to innovate and taking risks when innovating. It is the top leaders who can give a role to build an innovation culture within the organization.
From the above explanation it can not be denied that the innovation contributed to the sales growth. Innovation will be successful if the nine factors are managed properly, especially in building an innovation culture applied by organization leaders.
If all the organizations in Indonesia achieving sales growth through innovation, then in the end of this sales growth will contribute to the growth and development of this nation forward. Organization leaders can proudly say that we also contribute to make this Archipelago standing.
As an organization leader, are you ready to contribute to the nation's economic growth through building an innovation culture in your organization?
*Reni Lestari Razaki MM. – Direktur Program Pengembangan Eksekutif