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Ime CH-1

Innovation

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7 views22 pages

Ime CH-1

Innovation

Uploaded by

felpitmom
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Innovation Management

And Entrepreneurship
INNOVATION MANAGEMENT AND
ENTREPRENEURSHIP
Outline
➢Innovation Matters
➢Innovation and Entrepreneurship
➢Managing Innovation and Entrepreneurship
➢Dimensions of Innovation: What Can We Change?
➢A Process Model for Innovation and Entrepreneurship
➢Creating an Innovation Strategy
Introduction
What is innovation?
Dictionary defines ‘innovation’ as ‘change’.

It comes from Latin ‘in & novare’ meaning ‘to


make something new’.

It is a successful exploitation of new ideas.

Those ideas don’t necessarily mean


completely new to the world, or particularly
radical.
What is innovation?
✓Innovation refers to the process of creating products, services, or
processes that bring about significant positive change.

✓It involves the application of creativity, imagination, and


problem-solving skills.

✓Innovation means using new technology and using new ways of


thinking to add value to an existing idea or product
1.1 Innovation Matters: Why innovation matters?

• You don’t have to look far to bump into the innovation imperative.

• Every business documents are stressing how innovation is important


for survival and growth.

• Our lifestyles are constantly shaped and reshaped by the process of


innovation.

• This isn’t just propaganda or advertising babble but a reality


Why innovation matters? …cont’d

▪ Innovation does make a huge difference to organizations of all shapes


and sizes.

▪ If we don’t change what we offer and how we create and deliver


them to the world, we are at risk of being overtaken by others who do.

▪ At the limit it’s about survival, and history is very clear on this point:
✓ Bill Gates used to say of Microsoft that it was always only two
years away from extinction.
✓ Andy Grove used to say Only the paranoid/suspicious survive.
Why innovation matters? …cont’d

▪ Innovation is about Identifying or creating opportunities:


completely new possibilities by exploiting radical breakthroughs.

▪ Innovation is about New ways of serving existing markets:


Innovation isn’t just only about opening up new markets;

▪ Innovation is about Growing new markets: spot where and how new
markets can be created and grown.
1.2 Innovation and Entrepreneurship

▪ Innovation matters – but it doesn’t happen automatically.

▪ It is driven by entrepreneurship – a potent mixture of vision,


passion, energy, enthusiasm, insight, judgement and hard work
which enables good ideas to become reality.

▪ Entrepreneurs are risk-takers, but they calculate the costs of taking a


bright idea forward against the potential gains.
Innovation and Entrepreneurship… …cont’d

Innovation: As a process which can be organized and managed, whether


in a start-up venture or in renewing a 100-year-old business.

Entrepreneurship: As the motive power to drive this process through


the efforts of passionate individuals, engaged teams and focused networks.

Creating value: As the purpose for innovation, whether expressed in


financial terms, employment or growth, sustainability or improvement of
social welfare.
1.3 Managing Innovation and Entrepreneurship

Key things in managing innovation:

i. Explore and understand ways in which we can change things

ii. Manage innovation as a process

iii. Building capability/create conditions to repeat the innovation trick

iv. Establish innovation strategy

v. Build dynamic capability


1.4 Dimensions of Innovation:

What Can We Change?

Where we could innovate -- ‘innovation compass’?-fields for improvement

1. Product: Changes in the things an organization offers.

E.g. new or improved product and parts

2. Process: Changes the ways these offerings are created and delivered.

E.g. change in the manufacturing methods and equipment


Dimensions of Innovation …cont’d

3. Position: Changes in the context into which the products are introduced.

E.g. Car for everyone at a price he could afford through changing hand-made
specialist product to a few wealthy customers to one which offered a car for
Everyman at a price he could afford.

4. Paradigm: Changes in the underlying mental models which frame what the
organization does.

E.g. business model innovations like ownership to rental, and offline to


online, outsourcing.
From Incremental to Radical Innovation…

Changes are common, but sometimes they are so radical and far-reaching
that they change the basis of society.
E.g. the role played by steam power in the Industrial Revolution.

So, the thing here is the degree of novelty involved:


✓ Innovation does not necessarily imply the commercialization of only
a major advance (a radical innovation)

✓ It includes also small-scale changes (incremental innovation).


…to Components and Systems

➢We can change things at the level of components or we can change a


whole system.
➢There’s scope for innovation at each level – but changes in the higher-
level systems often have implications for lower down.
1.5. A Process Model for Innovation and Entrepreneurship
Rather than the cartoon image of a light bulb flashing on above
someone’s head, we need to think about innovation as an extended
sequence of activities – as a process.

Regardless of the firm size there are four key steps to make it happens:
Recognizing the opportunity
Finding the resources
Developing the idea
Capturing value.
A Process Model for Innovation and Entrepreneurship …cont’d

i. Recognizing the Opportunity: Innovation triggers come in all shapes and


sizes and from all sorts of directions.
✓They could take the form of changing requirements on the market.
✓They could be the result of legislative pressure or competitor action.
✓They could be a bright idea occurring to someone head.
✓They could come as a result of buying in a good idea from someone.
✓They could arise from dissatisfaction.
To pick up these trigger signals then we need to be good on searching and
scanning the environment.
A Process Model for Innovation and Entrepreneurship …cont’d

ii. Finding the Resources: The trouble is that innovation by its nature is a
risky business.
Since resources are required to begin the process, how do we build a
portfolio of projects which balance the risks and the potential rewards?
So, this stage is very much about strategic choices.
✓Does the idea fit a business strategy?
✓Does it build on something we know about (or where we can get access
to that knowledge easily)
✓Do we have the skills and resources to take it forward?
✓In case of loan how will we find and mobilize them?
A Process Model for Innovation and Entrepreneurship …cont’d
iii. Implementing the Idea: it is about turning those potential ideas into
reality.
▪ Early on it is full of uncertainty but gradually the picture becomes
clearer – but at a cost.
▪ We have to invest time, money and find people to research and
develop ideas and conduct market studies, competitor analysis,
prototyping, testing, etc.
▪ At this phase diversified team building skills and project
management skills becomes critical.
▪ Risk management, performance review, judgments and courage to
know when to stop and move on skills are also important.
A Process Model for Innovation and Entrepreneurship …cont’d

iv. Capture Value


▪ We also need to think about, and manage, the process to maximize
returns – through protecting our intellectual property and financial
returns.

▪ If we are engaged in commercial innovation or in scaling and spreading


our ideas for social change so that they are sustainable and really do
make a difference.
A Process Model for Innovation and Entrepreneurship …cont’d
The Context of Success
This process doesn’t take place in a vacuum; it is shaped and influenced by a
variety of factors.
For healthy going innovation needs:
✓Clear strategic leadership and direction, plus the commitment of resources
to make this happen.
✓An innovative organization in which the structure & climate enables people
to deploy their creativity and share their knowledge to bring about change.
✓Proactive links across boundaries inside and outside the organization:
suppliers, customers, sources of finance, skilled resources and of knowledge,
etc.
The ability to find, form and deploy creative relationships is of the essence.

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