Innovation is often linked to high-tech industries such as telecommunications and pharmaceuticals where perhaps some of the greatest technological breakthroughs this century have taken place. There is no disputing that developments like the internet and cures for many terrible diseases would not have come about were it not for an innovative solution to a problem being sought by somebody.
But innovation has also transformed our lives in many less glamorous ways that we now take for granted. Think about cleaner fuels for our cars or ticket-less travel making our holidays simpler. Closer to home in retailing, products and services that started as a good idea are now multimillion pound businesses generating significant profits, creating jobs and serving customers well.
Our home delivery service Tesco.com was born out of an idea to try and make it easier for people to shop who find it hard to get to a supermarket. It now generates sales of more than £700 million and profits of more than £35 million. The service reaches 96 per cent of the UK population and handles more than 170,000 orders a week. Not bad for an idea that many said would never catch on!
Elsewhere in the business our flower growers have developed technology to predict within a couple of hours when stems are the correct length to fulfil our forecast demand for Mothers' Day. This improves productivity, because the supplier can better plan when he needs to plant and pick, reduces waste and, of course, it means mum gets her flowers on time.
Businesses must learn to harness the creativity of their workforce and encourage staff to come forward with ideas.
Both of these examples demonstrate the importance of innovation to our customers but also to our business. Innovation provides a competitive advantage so businesses or economies that stand still and do what they have always done will lose out to those prepared to take the risk.
Innovators are all around us; innovation is after all just another word for an idea and we can all have those. Businesses must learn to harness the creativity of their workforce and encourage staff to come forward with ideas. It's not always easy as some good ideas will fail but companies have to be comfortable with that if they are to avoid stifling innovation.
At Tesco some of our best ideas come from the shop floor usually inspired by what our customers tell us or what our staff observe. Through simple systems and lean management structures we make sure these ideas are harvested and do not get lost in a suggestion box somewhere, which would mean we miss out on a potentially money-making idea and the person who thought of it feels ignored and undervalued.
To help encourage this exchange and development of ideas we also send thousands of our head office managers out to work in store for a week every year so that they can experience the products and processes they develop and make them better, cheaper or simpler.
So my advice to others on innovation: Try things - be good in practice, not great in theory because customers don't buy theories. Never be complacent - keep listening at every level of the business and be prepared to learn from anybody who takes the time to tell you something you didn't know. Be prepared to change and above all be determined that no other business will achieve more for customers than you do.