Innovation is the key to an organization's success. This article highlights the management practices pertaining to building a truly innovative organization in order to gain an edge in a competitive global economy.

Innovation is the source of longterm competitive advantage for the 21st Century business organizations. According to Peter F Drucker the success of any business can be accredited to two basic functions, i.e., Marketing and Innovation. Although the terms creativity and innovation are often used interchangeably, creativity refers to contribute novel insights that can generate new opportunities or alternatives for the organization, whereas innovation refers to the implementation of such novel insights. For example why do business meetings have to be conducted in person? When we pose this question to ourselves a new insight of organizing the meeting through videoconference by satellite can be identified which is known as creativity and the same when implemented turned successful it is innovation.

Innovation is the means through which an individual looks at problems in a new light and goes beyond conventional thinking. For example, Henry Ford, who was known for his creative problem-solving ability visited a meat-packing plant at Chicago on a request made by the company executive to observe how employees processed beef. The automotive executive noticed that at one end of the plant whole carcasses of steers were placed on a giant conveyor belt. As the meat traveled through the plant, workers carved it into various cuts until the carcass was consumed. A flash of whimsical insight hit Ford: If the process were reversed, all the pieces would become a whole steer again. Ford asked himself, "Why can't an automobile be built that way?" He took his creative idea back to the Ford Motor Company in Detroit and constructed the world's first manufacturing assembly line. The central task in becoming innovative is to give up rigid thinking that blocks new ideas and unlearn the conventional approach.

Overcoming rigid thinking is the prerequisite for developing a new paradigm that benefit an organization by giving a new twist to business, thus leading to a new source of revenues. According to componential theory of individual creativity developed by Amabile creativity is the product of expertise, creative thinking skill and task motivation. Expertise refers to the required knowledge to set facts together. Creative thinking skill refers to imaginative ability to approach problems and task motivation refers to unrelenting or adhering a problem to a conclusion which is vital for finding creative solutions.

HRM Review Magazine, Managing Innovation, Global Economy, Strategic Innovation, Organization Culture, Research and Development, R&D, Innovative Organization, Innovation Techniques, Systemic Innovation, Operations Research, Global Markets, Honeywell Technology Solutions Lab, HTSL, Nokia, idea, Google.