26806034 1 Meeting Intro to Innovation

8/7/2019 26806034 1 Meeting Intro to Innovation

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PG DIPLOMA IN ENTREPRENEUR DEVELOPMENT:

ENTREPRENEURSHIP & INNOVATION

Prepared by

Mr. N.RAMESH KUMAR


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SyllabusSyllabus UnitUnit II ::

InnovationInnovation andand InnovationInnovation ManagementManagement:: TheThe

evolutionevolution ofof innovationinnovation -- levelslevels ofof innovationinnovation --

mythsmyths of of innovationinnovation -- innovationinnovation modelsmodels --

categoriescategories ofof innovationinnovation innovationinnovation managementmanagement

-- mainmain requirementsrequirements -- basicbasic practicespractices of of

innovationinnovation managementmanagement-- barriersbarriers toto innovationinnovation inin

anan organizationorganization --innovationinnovation inin thethe futurefuture --

differentdifferent waysways toto innovativeinnovative -- principleprinciple ofof goodgood

innovationinnovation


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UnitUnit IIII ::

InnovationInnovation ProcessProcess:: buildingbuilding thethe innovationinnovationprocessprocess -- innovationinnovation diffusiondiffusion thethe

innovationinnovation:: decisiondecision processprocess-- fivefive stagesstages ofof

thethe diffusiondiffusion processprocess -- thethe newnew learninglearningaboutabout innovationinnovation

UnitUnit IIIIII ::

InnovationInnovation cultureculture:: introductionintroduction -- innovationinnovation

systemsystem -- communitycommunity andand socialsocial capitalcapital --

innovationinnovation cultureculture -- buildingbuilding innovationinnovation

cultureculture-- innovationinnovation climateclimate


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Unit IV:

Creativity and Innovation: Introduction - definingcreativity - the relation between creativity andinnovation - different ways of thinking - qualities ofa creative person the difference between creativityand innovation creativity, problem solving:

guidelines

Unit V:

Innovators and Entrepreneurs: Social and cultural

context of entrepreneurs - processes encouragingand discouraging entrepreneurship - Ethical socialand political issues of innovation -Innovation as apersonality, innovative process andentrepreneurship


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REFERENCES :REFERENCES :

1. Jeffrey A. Timmons and Stephen Spinelli, "NewVenture Creation: Entrepreneurship for he 21stCentury," McGraw-Hill, 2004.

2. Malcolm Gladwell, "The Tipping Point: HowLittle Things Can Make A Big Difference," title,

brown February 20003.Peter F.Drucker, INNOVATION AND

ENTREPRENEURSHIP PRACTICE ANDPRINCIPLES , West Press Limited

4. Keith Herndon, ENTREPRENEURS ANDINNOVATION: CREATING VALUE WITHEMERGING TECHOLOGIES, InnovationsPublishing, Atlanda, Georgia


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55.. ClaytonClayton MM.. ChristensenChristensen andand MichaelMichael EE.. Raynor,Raynor,"The"The Innovator'sInnovator's SolutionSolution:: Creating Creating andand

SustainingSustaining SuccessfulSuccessful Growth,"Growth," HarvardHarvardBusinessBusiness SchoolSchool Press,Press, SeptemberSeptember 20032003

66.. GeoffreyGeoffrey AA.. Moore,Moore, "Crossing"Crossing thethe Chasm,"Chasm,"

HarperHarper Business,Business, AugustAugust 20022002

77.. WilliamWilliam AA.. SahlmanSahlman andand HowardHoward HH.. Stevenson,Stevenson,ENTREPRENEURIALENTREPRENEURIAL VENTURE,VENTURE, HarvardHarvard

BusinessBusiness SchoolSchool Publications,Publications, 19921992..


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Introduction toIntroduction to

innovationinnovation


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What is innovation?What is innovation?

Innovation is the process and outcome of

creating something new, which is also of

value.

Innovation involves the whole process from

opportunity identification, ideation or

invention to development, prototyping,

production marketing and sales, whileentrepreneurship only needs to involve

commercialization (Schumpeter).


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Today it is said to involve the capacity to quickly

adapt by adopting new innovations (products,

processes, strategies, organization, etc)

Also, traditionally the focus has been on new

products or processes, but recently new business

models have come into focus, i.e. the way a firmdelivers value and secures profits.


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Schumpeter argued that innovation comesabout through new combinations made byan entrepreneur, resulting in

a new product,

a new process,

opening of new market,

new way of organizing the business

new sources of supply


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Dimensions of innovationDimensions of innovation

There are several types of innovation

Process, product/service, strategy,

which can vary in degree of newness: Incremental to radical,

and impact:

continuous to discontinuous


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Drivers for innovationDrivers for innovation

Financial pressures to reduce costs,Financial pressures to reduce costs,increase efficiency, do more with less, etcincrease efficiency, do more with less, etc

Increased competitionIncreased competition

Shorter product life cyclesShorter product life cycles

Value migrationValue migration

Stricter regulationStricter regulation

Industry and community needs forIndustry and community needs forsustainable developmentsustainable development


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Increased demend for accountabilityIncreased demend for accountability

Demographic, social and maket changesDemographic, social and maket changes

Rising customer expectations regardingRising customer expectations regardingservice and qualityservice and quality

Changing economyChanging economy

Greater availability of potentially usefulGreater availability of potentially usefultechnologies coupled with a need totechnologies coupled with a need to

exceed the competition in theseexceed the competition in thesetechnologiestechnologies


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Gary Hamel argued that todays marketGary Hamel argued that todays market

place is hostile to incumbents, who nowplace is hostile to incumbents, who now

needs to conduct radical businessneeds to conduct radical business

innovation:innovation:

Radically reconceiving products and services,Radically reconceiving products and services,

not just developing new products and servicesnot just developing new products and services

Redefining market spaceRedefining market space

Redrawing industry boundariesRedrawing industry boundaries


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New conditions for innovationNew conditions for innovation

Small startSmall start--up entrepreneurs increasinglyup entrepreneurs increasingly

depend on large firms:depend on large firms:

as suppliers or customersas suppliers or customers for venture finance,for venture finance,

for exit opportunites,for exit opportunites,

for knowledge (production, markets and R&D)for knowledge (production, markets and R&D)

and for opening new markets.and for opening new markets.


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New developments in innovationNew developments in innovation

raises new issues and problemsraises new issues and problems Greater emphasis on commercializing scientificGreater emphasis on commercializing scientific

discoveries, particularly in IT and the biodiscoveries, particularly in IT and the bio--sciencessciences

Speed and potential value of scientific progressSpeed and potential value of scientific progress

leads to emphasis on solid and wellleads to emphasis on solid and well--designeddesignedportfolios of research projectsportfolios of research projects

Universites as active drivers of innovation:Universites as active drivers of innovation:

Academic entrepreneurship and theAcademic entrepreneurship and the

entrepreneurial universityentrepreneurial university

UniversityUniversity--industry partnershipsindustry partnerships

Increased search for radical innovation and topIncreased search for radical innovation and top--

line growth.line growth.


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LEVELS OF INNOVATIONLEVELS OF INNOVATION

Managers and policy makers are increasingly

recognizing that the 'linear model' of innovation,

i.e. an orderly progression from R&D to

development to market exploitation, is oversimplistic.

In today's complex and changing business

environment Successful innovation is much more

iterative and interactive, involving many peopleand processes. In short, commercial success

depends on effective Innovation networks..


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Effective innovation networks bring the

following benefits:

. Faster development of new products and

services;

. Better optimization of R&D investment;

. Closer alignment with market needs;

. More successful product introductions; .

Better anticipation of customer needs; and .Competitor differentiation.


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Levels of innovationLevels of innovation

Level 1 -Technology transfer

Discrete movement of something from oneplace to another - technology push ordemand pull. Something moves from lab to

production, from university to industry.

Most typically, information(e.g. reports) orknowledge 'embedded' in prototypeproduct.


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Level 1 -Technology transfer

Discrete movement of something fromone place to another - technology pushor demand pull. Something moves

from lab to production, from universityto industry. Most typically, information(e.g. reports) or knowledge 'embedded'in proto type product.


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Level 2 -Knowledge exchange

Recognizes the role of people as a transferRecognizes the role of people as a transfer

medium and of knowledge as information inmedium and of knowledge as information in

a context. Ideas flow between researchersa context. Ideas flow between researchers

and users. Each informs the other. More ofand users. Each informs the other. More of

a twoa two--way dialogue, though, since it oftenway dialogue, though, since it often

starts late in the innovastarts late in the innovation cycle, muchtion cycle, much

knowledge exchange has a oneknowledge exchange has a one--waywayemphasisemphasis


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Level 3Level 3-- Knowledge collaborationKnowledge collaboration

Ideas are developed jointly. There is less

certainty at the outset of 'what' will be

developed. People from multiple disciplineswork together to solve a problem, as in

concurrent engineering processes. New

ideas and insight are gained as a result of the interaction.


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Level 4 - Knowledge innovation

systems

There is too much at stake to be left toserendipity. Management issues crone to thefore. A more systematic and systemic

approach is adopted. Social-technical andbusiness systems are aligned; priorities arecontinually reviewed in light of the progressof the innovation and the developments inthe marketplace.

The innovation system is a learning system.


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Level 5 -Knowledge innovation

networksInnovation is dynamic. Different strategicbusiness partners are needed as theinnovation moves into business

development. Several strategic businessnetworks (SBNs) Intertwine, each with adifferent focus and purpose, though withmany common partners. Networks ebb andflow. 'Knowledge flow becomes the sourceof collaborative advantage.


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Principles Of Good Innovation


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Innovation starts when people convertproblems to ideas.

NewNew ideasideas areare bornborn throughthrough questions,questions, problemsproblems andandobstaclesobstacles.. TheThe processprocess ofof innovationinnovation isis indebtedindebted toto thethetroubletrouble thatthat comescomes aboutabout whenwhen wewe areare surroundedsurrounded bybythatthat whichwhich isis notnot solved,solved, notnot smoothsmooth andand notnot simplesimple..Therefore,Therefore, inin orderorder forfor thethe innovationinnovation processprocess toto

flourish,flourish, itit needsneeds aa climateclimate thatthat encouragesencourages inquiryinquiry andandwelcomeswelcomes problemsproblems..

Innovation needs a system.AllAll organizationsorganizations havehave innovationinnovation systemssystems..

SomeSome areare formal,formal, designeddesigned byby thethe leadership,leadership, andand somesomeareare informal,informal, takingtaking placeplace outsideoutside establishedestablished channelschannels..InformalInformal channelschannels areare untidy untidy andand inefficient,inefficient, yetyetinnovationinnovation isis alwaysalways associatedassociated withwith themthem..


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Passion is the fuel, and pain is the hiddenPassion is the fuel, and pain is the hiddeningredient.ingredient. Ideas do not propel themselves; passionIdeas do not propel themselves; passionmakes them go. Passion, in addition to talent andmakes them go. Passion, in addition to talent and

skill, is a valuable company asset. Passion is whatskill, is a valuable company asset. Passion is whattransforms other resources into profits, but it nevertransforms other resources into profits, but it nevershows up on a balance sheet. Unfortunately, thereshows up on a balance sheet. Unfortunately, thereseems to be some universal law that says whenseems to be some universal law that says whenpursuing a passion or following a dream, pain is partpursuing a passion or following a dream, pain is part

of the process. Innovation leaders need to take theof the process. Innovation leaders need to take thepain with the passion and learn to manage bothpain with the passion and learn to manage botheffectively.effectively.


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Co-locating drives effective exchange.

Co-location refers to physical proximity betweenpeople. It is a key for building the trust that is essential tothe innovation process. It also increases the possibilityfor greater exchange of information, cross-fertilization ofideas, stimulation of creative thinking in one another and

critique of ideas during their formative stage. Differences should be leveraged.

The differences that normally divide people such as language, culture, race, gender and thinking andproblem solving styles can be a boon to innovation.When differences are used constructively and peoplemove beyond fear, suspicion, mistrust and prejudice,differences can be leveraged to enhance and sustain theinnovation process.


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Failure Of Innovation


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Innovations that fail are often potentially good

ideas but have been rejected or postponed due to budgetary constraints, lack of skills or poor fit withcurrent goals. Failures should be identified andscreened out as early in the process as possible. Early

screening avoids unsuitable ideas devouring scarceresources that are needed to progress more beneficialones. Organizations can learn how to avoid failurewhen it is openly discussed and debated. The lessonslearned from failure often reside longer in the

organisational consciousness than lessons learnedfrom success. While learning is important, highfailure rates throughout the innovation process arewasteful and a threat to the organisation's future.


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TheThe causescauses of of failurefailure havehave beenbeen

widelywidely researchedresearched andand cancan varyvary considerablyconsiderably..SomeSome causescauses willwill bebe externalexternal toto thethe

organisationorganisation andand outsideoutside itsits influenceinfluence ofof

controlcontrol PoorPoor LeadershipLeadership

PoorPoor OrganizationOrganization

PoorPoor CommunicationCommunication PoorPoor EmpowermentEmpowerment

PoorPoor KnowledgeKnowledge ManagementManagement


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CommonCommon causescauses ofof failurefailure withinwithin thethe

innovationinnovation processprocess inin mostmost organisationsorganisations cancanbebe distilleddistilled intointo fivefive typestypes::

PoorPoor goalgoal definitiondefinition PoorPoor alignmentalignment ofof actionsactions toto goalsgoals

PoorPoor participationparticipation inin teamsteams

PoorPoor monitoringmonitoring ofof resultsresults PoorPoor communicationcommunication andand accessaccess toto

informationinformation


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Myths of

innovation


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Myths of InnovationMyths of Innovation

Myth 1Myth 1 Always keep your eye on the ball.Always keep your eye on the ball.

Its really hard to notice other things if you keep yourIts really hard to notice other things if you keep youreye on the ball. You need to focus to get your workeye on the ball. You need to focus to get your work

done. But you might miss things that come out of leftdone. But you might miss things that come out of leftfield. Its really hard to balance that.field. Its really hard to balance that.

Myth 2Myth 2 Failure is not an option.Failure is not an option.We can be paralyzed by fear as well. Fear of failure isWe can be paralyzed by fear as well. Fear of failure is

probably the biggest impediment to innovation.probably the biggest impediment to innovation. Message to newsrooms: The culture needs to embraceMessage to newsrooms: The culture needs to embrace

failure and trying.failure and trying.


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Myth 3Myth 3 Everyone loves an innovator.Everyone loves an innovator.

Theyre rebels, theyre difficult to deal with sometimes.Theyre rebels, theyre difficult to deal with sometimes.Theyre not always fun to have around.Theyre not always fun to have around.

Message to newspaper editors: Its important that youMessage to newspaper editors: Its important that youas a leader embrace the irritant.as a leader embrace the irritant.

Myth 4Myth 4 Innovators are problem solversInnovators are problem solvers

Actually, innovators ask why? In the music business,Actually, innovators ask why? In the music business,

people might askHow do we sell more CDs? Thepeople might askHow do we sell more CDs? Theinnovator might ask, how do we provide the bestinnovator might ask, how do we provide the bestmusic listening experience? (and Napster did it.).music listening experience? (and Napster did it.).


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Myth 5Myth 5 Knowledge is Power.Knowledge is Power.

Organizations may know too much. Funny example: AOrganizations may know too much. Funny example: Aremote with 52 buttons on it. The designer knew howremote with 52 buttons on it. The designer knew howto use every one and thought you might want too asto use every one and thought you might want too aswell. Similarly, sometimes the customer knows toowell. Similarly, sometimes the customer knows too

muchmuch think photographers who said the would neverthink photographers who said the would neverwant a digital camera and fast forward.want a digital camera and fast forward.

Myth 6Myth 6 Innovation can be predicted.Innovation can be predicted.

Measurement and management may spell death ofMeasurement and management may spell death of

innovation. When you try to manage it, you actuallyinnovation. When you try to manage it, you actuallykill it..kill it..


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Myth 7Myth 7 First place always wins.First place always wins.

Its not the person who comes up with the ideaIts not the person who comes up with the ideafirst. Its the one who delivers the product,first. Its the one who delivers the product,

delivers the experience that the market want it.delivers the experience that the market want it.Innovation build on the successes and failures ofInnovation build on the successes and failures of

the innovators before.the innovators before.

Example: iTunes didnt invent mp3Example: iTunes didnt invent mp3


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The Four Categories of InnovationThe Four Categories of Innovation

Incremental InnovationIncremental Innovation Doing more of the sameDoing more of the samethings you have been doing with somewhat better results.things you have been doing with somewhat better results.

Additive InnovationAdditive Innovation More fully exploiting alreadyMore fully exploiting alreadyexisting resources, such as product lines extensions, andexisting resources, such as product lines extensions, and

can achieve good results. These opportunities shouldcan achieve good results. These opportunities shouldrarely be treated as high priority efforts. The risks shouldrarely be treated as high priority efforts. The risks shouldbe smallbe small and they should not take resources away fromand they should not take resources away fromcomplementary or breakthrough opportunities.complementary or breakthrough opportunities.

Complementary InnovationComplementary InnovationOffers something newOffers something newand changes the structure of the business.and changes the structure of the business.

Breakthrough InnovationBreakthrough Innovation ((Radical InnovationRadical Innovation)) Changes the fundamentals of the business, creating a newChanges the fundamentals of the business, creating a new

industry and new avenues for extensive wealth creation.industry and new avenues for extensive wealth creation.


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Future of InnovationFuture of Innovation Many changes are taking place in the way we discover new treatmentsMany changes are taking place in the way we discover new treatments

and cures for disease. Cancer, diabetes, heart disease, and other deadlyand cures for disease. Cancer, diabetes, heart disease, and other deadlyconditions affect millions of Americans. New medicines have led toconditions affect millions of Americans. New medicines have led toimproved treatments of certain forms of breast cancer, hypertension,improved treatments of certain forms of breast cancer, hypertension,and AIDS, while other drugs have slowed the decline of degenerativeand AIDS, while other drugs have slowed the decline of degenerativeconditions such as Alzheimers disease or arthritis.conditions such as Alzheimers disease or arthritis.

As impressive as advances in biopharmaceuticals have been, our workAs impressive as advances in biopharmaceuticals have been, our workis far from over. Millions of Americans with serious diseases andis far from over. Millions of Americans with serious diseases andconditions, and a health care system struggling with rising costs andconditions, and a health care system struggling with rising costs andgaps in quality, can benefit from new pharmaceutical discoveries.gaps in quality, can benefit from new pharmaceutical discoveries.

Every day, nearly 80,000 researchers go to work seeking tomorrow'sEvery day, nearly 80,000 researchers go to work seeking tomorrow'smedical miracles. Explore this section to learn about the tools they aremedical miracles. Explore this section to learn about the tools they arenow using to better understand the mechanisms of disease, tracknow using to better understand the mechanisms of disease, trackmolecular biomarkers that signal the emergence of disease or itsmolecular biomarkers that signal the emergence of disease or itsresponse to treatment, and design drugs that are tailored to be safe andresponse to treatment, and design drugs that are tailored to be safe andeffective for individuals based on a personalized approach.effective for individuals based on a personalized approach.


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New Medicines in DevelopmentNew Medicines in DevelopmentFind out what's on the horizon of pharmaceutical innovation.Find out what's on the horizon of pharmaceutical innovation.New medicines in the pipeline are targeting entirely newNew medicines in the pipeline are targeting entirely new

pathways of disease. Search the database by disease, drug namepathways of disease. Search the database by disease, drug nameor company.or company.

Next Wave of InnovationNext Wave of InnovationThe drug discovery toolbox has become quite sophisticated inThe drug discovery toolbox has become quite sophisticated inrecent years. Automation, robotics, and miniaturization arerecent years. Automation, robotics, and miniaturization areenabling millions of candidate drugs to be tested within aenabling millions of candidate drugs to be tested within amatter of weeks; nanotechnology promises to enhance thematter of weeks; nanotechnology promises to enhance theability to detect, deliver and treat disease with unprecedentedability to detect, deliver and treat disease with unprecedented

precision; and the tools of genomics and proteomics areprecision; and the tools of genomics and proteomics arerevealing the mechanisms of disease, and the molecularrevealing the mechanisms of disease, and the molecularmarkers used to track its emergence and treatment. See howmarkers used to track its emergence and treatment. See how

pharmaceutical innovation is expanding the frontiers of science.pharmaceutical innovation is expanding the frontiers of science.

Future of Health CareFuture of Health CareProviding highProviding high--quality, affordable health care for a growing andquality, affordable health care for a growing andaging population is a daunting challenge. What role willaging population is a daunting challenge. What role will

pharmaceutical discovery play in finding new solutions, andpharmaceutical discovery play in finding new solutions, andwhat dynamics will shape our health care system as a whole?what dynamics will shape our health care system as a whole?


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Challenges in Innovation

Management


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Challenges in InnovationChallenges in Innovation

ManagementManagementInnovationInnovation representsrepresents thethe corecore renewalrenewal processprocess inin anyany

organizationorganization.. IfIf anan organizationorganization wantwant toto survivesurvive inin today'stoday'sturbulentturbulent (unstable)(unstable) environmentenvironment hehe shouldshould havehave toto prepareprepareforfor renewingrenewing thethe offeringsofferings andand itsits deliverydelivery processprocess toto theirtheir

stakeholdersstakeholders.. InnovationInnovation givesgives twotwo distressingdistressing (difficult)(difficult)conclusionsconclusions-- first,first, thatthat mostmost innovationsinnovations whichwhich destroydestroy thetheexistingexisting orderorder originateoriginate fromfrom newcomersnewcomers andand outsidersoutsiders toto aa

particularparticular industry,industry, andand second,second, thatthat fewfew of of thethe originaloriginalplayersplayers survivesurvive suchsuch transformationstransformations.. So,So, herehere thethe questionquestion

isis notnot toto innovateinnovate butbut howhow toto implementimplement thethe innovationinnovationsuccessfullysuccessfully.. ManagingManaging innovationinnovation becomesbecomes oneone ofof thethe keykeystrategicstrategic dimensionsdimensions forfor organizationorganization ofof allall thethe sizesize andandfromfrom allall thethe sectorssectors..


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TheThe wordword innovationinnovation originallyoriginally comescomes

fromfrom LatinLatin wordword 'innovare''innovare' thatthat meansmeans "to"to

makemake somethingsomething new"new".. TheThe mostmost exhaustiveexhaustive

definitiondefinition isis presentedpresented byby thethe innovationinnovation

unitunit of of thethe UU..KK.. departmentdepartment ofof tradetrade andandindustryindustry whowho seesee itit simplysimply asas 'the'the successfulsuccessful

exploitationexploitation ofof newnew ideas"ideas"..


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EveryEvery organizationorganization havehave toto managemanage fourfour differentdifferentphasesphases inin thethe processprocess ofof turningturning ideasideas intointo successfulsuccessfulrealityreality;; scanningscanning thethe environment,environment, strategicstrategic selectionselection ofofKey,Key, SelectingSelecting mostmost feasiblefeasible andand profitableprofitable option,option,implementingimplementing thethe innovationinnovation toto ensureensure successsuccess fromfromideaidea generationgeneration toto finalfinal launchlaunch of of thethe

productproduct.. InnovationInnovation managementmanagement isis aboutabout learninglearning totofindfind thethe mostmost appropriateappropriate solutionsolution toto thethe problemproblem ofofconsistentlyconsistently managingmanaging thisthis process,process, andand doingdoing soso inin thethewaysways bestbest suitedsuited toto thethe particularparticular circumstancescircumstances inin

whichwhich thethe organizationorganization findsfinds itselfitself.. ThereThere isis notnot aa singlesinglebestbest wayway toto dodo thisthis asas therethere areare somesome challengeschallenges whichwhichareare involvedinvolved inin innovationinnovation managementmanagement.. ThereThere willwillalwaysalways bebe aa needneed toto developdevelop newnew approachesapproaches toto meetmeetnewnew andand emergingemerging challengeschallenges..


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Challenge 1: why change?Challenge 1: why change?As we know that weAs we know that we

are living in the doubtful world where the onlyare living in the doubtful world where the onlycertainty is that simply sitting also carries highcertainty is that simply sitting also carries highrisk. Change is necessary for every organizationrisk. Change is necessary for every organizationif they are willing to stay in the market for longif they are willing to stay in the market for long

term. Agile firms constantly reterm. Agile firms constantly re--inventinventthemselves to solve the puzzle posed by thethemselves to solve the puzzle posed by thethreat and opportunities in their environment bythreat and opportunities in their environment byadopting new technology and other novel wayadopting new technology and other novel way

to do the things. It may involve reconfiguringto do the things. It may involve reconfiguringproducts, processes or markets. And in eachproducts, processes or markets. And in eachcase it involves learning and unlearning and itcase it involves learning and unlearning and itrequires strategic direction to focus this process.requires strategic direction to focus this process.


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Challenge 2: what to change?Challenge 2: what to change?

Even if firms can recognize and accept theEven if firms can recognize and accept the

need for continuous innovation they may findneed for continuous innovation they may find

difficulties in framing an appropriate innovationdifficulties in framing an appropriate innovation

agenda. Different agenda may be in the area ofagenda. Different agenda may be in the area ofproduct, process, market positioning andproduct, process, market positioning andunderlying business model. After selecting aunderlying business model. After selecting a

feasible agenda attempt is made for continuousfeasible agenda attempt is made for continuousand radical improvement to ensure success.and radical improvement to ensure success.


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Challenge3: understanding innovationChallenge3: understanding innovation

There is often considerable confusion betweenThere is often considerable confusion between'invention' and 'innovation'. Invention describes about the'invention' and 'innovation'. Invention describes about themoment of creative insight which first opens up a newmoment of creative insight which first opens up a new

possibility as Edison is said that "it is 1% inspiration, 99%possibility as Edison is said that "it is 1% inspiration, 99%perspiration!". There are lots of examples in the historyperspiration!". There are lots of examples in the history

that distinguish invention from innovation. As, Spenglerthat distinguish invention from innovation. As, Spenglerinvented the vacuum sweeper but Hoover innovate it.invented the vacuum sweeper but Hoover innovate it.Howe developed the first sewing machine but singer tookHowe developed the first sewing machine but singer tookfrom invention to widespread acceptance means hefrom invention to widespread acceptance means heinnovates the product at large. Sometime it is thought thatinnovates the product at large. Sometime it is thought that

innovation is all about science and technology creating newinnovation is all about science and technology creating newopportunities. Sometime it is also viewed that 'necessity isopportunities. Sometime it is also viewed that 'necessity isthe mother of invention' may sound persuasivethe mother of invention' may sound persuasive-- but abut atotally marketing led approach to innovation may misstotally marketing led approach to innovation may misssome important tricks.some important tricks.


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Challenge4: building an innovation cultureChallenge4: building an innovation culture

Building an innovative culture is not a small task andBuilding an innovative culture is not a small task andit requires heavy effort from the organization. Sometimeit requires heavy effort from the organization. Sometimecopying may simply make the problem worse. Researchcopying may simply make the problem worse. Researchsuggests that the task of managing innovation is all aboutsuggests that the task of managing innovation is all aboutcreating firm specific routinescreating firm specific routines -- repeated, reinforcedrepeated, reinforcedpatterns of behaviorpatterns of behavior -- which define its particular approachwhich define its particular approachto the problem. 'Routine' in this sense does notto the problem. 'Routine' in this sense does not

meanmean robotic but it does mean an established patternrobotic but it does mean an established pattern--'the'theway we do things around here'way we do things around here' -- which represents thewhich represents theapproach a particular organization takes to dealing withapproach a particular organization takes to dealing withthe innovation challengethe innovation challenge


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Challenge 5: continuous learningChallenge 5: continuous learningContinuous learning is necessary for the development ofContinuous learning is necessary for the development of

every organization and for this they have to develop some 'goodevery organization and for this they have to develop some 'goodpractice' model. In the good practice, we know how anpractice' model. In the good practice, we know how anorganization can create and deliver a stream of new products andorganization can create and deliver a stream of new products andservices. There are some key features of emerging 'good practice'services. There are some key features of emerging 'good practice'modelmodel-- systematic process for progressing new products, earlysystematic process for progressing new products, early

involvement of all relevant functions, overlapping/parallelinvolvement of all relevant functions, overlapping/parallelworking, appropriate project management structures, crossworking, appropriate project management structures, cross--functional team working, advanced support tools, learning andfunctional team working, advanced support tools, learning andcontinuous improvement. If we consider about the trouble withcontinuous improvement. If we consider about the trouble withinnovation, as we have already seen, is that it is not a staticinnovation, as we have already seen, is that it is not a static

problem to which we might try and find a particular solution,problem to which we might try and find a particular solution,which fits. Instead, it is a mutating and shifting set of puzzleswhich fits. Instead, it is a mutating and shifting set of puzzlesthat shift and change over a period of time.that shift and change over a period of time.


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Challenge 6: high involvement innovationChallenge 6: high involvement innovation

We know that traditionally innovation has been theWe know that traditionally innovation has been the

area of the specialist who often works apart from thearea of the specialist who often works apart from themainstream (normal) of the organization's operations.mainstream (normal) of the organization's operations.Innovation is fundamentally about creative problemInnovation is fundamentally about creative problem--solving and as environments become more turbulentsolving and as environments become more turbulentand uncertain, so the requirement for this capabilityand uncertain, so the requirement for this capabilityincreases. With uncertain markets, rapidly changingincreases. With uncertain markets, rapidly changingtechnological threat and opportunities, increasingtechnological threat and opportunities, increasingregulatory pressures, shifting customer and competitiveregulatory pressures, shifting customer and competitiverequirements, and a host of other variables to deal withrequirements, and a host of other variables to deal with

the likelihood of getting the 'right' innovation responsethe likelihood of getting the 'right' innovation responseis low. Organization need to increase their innovativeis low. Organization need to increase their innovativecapacity, and one powerful mechanism for doing so iscapacity, and one powerful mechanism for doing so isto extend participation in the process to a much widerto extend participation in the process to a much wider

population.population.


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Challenge7: dealing with discontinuityChallenge7: dealing with discontinuityMuch innovation can be seen as a 'steadyMuch innovation can be seen as a 'steady

(stable) state' activity. Of course it is about(stable) state' activity. Of course it is about

change, but it takes place within a frameworkchange, but it takes place within a frameworkwhich is relatively consistent. Most changewhich is relatively consistent. Most change

happens as incremental developments of what ishappens as incremental developments of what isalready therealready there--'doing what we do better'.'doing what we do better'.


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Challenge8: managing connectionsChallenge8: managing connections

InterInter--organizational networking is becoming anorganizational networking is becoming anissue of considerable interest amongst researchers,issue of considerable interest amongst researchers,policypolicy--makers and practitioners. In part this reflects themakers and practitioners. In part this reflects theperception of advantages of networking over traditionalperception of advantages of networking over traditionaltransactional models of organization, in which there istransactional models of organization, in which there is

often a tradeoften a trade--off between modes of interaction and inoff between modes of interaction and inpart it acknowledges the impact of technological andpart it acknowledges the impact of technological andmarket changes which have blurred the boundariesmarket changes which have blurred the boundariesbetween enterprises and opened up the arena in whichbetween enterprises and opened up the arena in whichnew forms might emerge. 'virtual enterprises',new forms might emerge. 'virtual enterprises',

'boundary'boundary--less organizations' andless organizations' and 'networked'networkedcompanies' are typical examples of the thinking andcompanies' are typical examples of the thinking andexperimentation which is going on to try and establishexperimentation which is going on to try and establishdifferent approaches to the problem of interdifferent approaches to the problem of inter--organizational relationships.organizational relationships.


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Conclusion:Conclusion:

FromFrom allall thethe aboveabove discussiondiscussion wewe cancan saysay thatthat ifif onceoncethethe firmfirm hashas masteredmastered thethe basicbasic 'skills''skills' ofof innovation,innovation, ititneedsneeds toto looklook atat howhow wellwell itit cancan involveinvolve thethe fullfull rangerange ofof itsitsstaff,staff, howhow wellwell itit cancan managemanage toto operateoperate inin networksnetworks ratherratherthanthan onon itsits own,own, howhow wellwell itit cancan handlehandle continuouscontinuous andanddiscontinuousdiscontinuous changes,changes, etcetc.. thisthis makesmakes thethe managementmanagementtasktask notnot simplysimply oneone ofof buildingbuilding andand sustainingsustaining routinesroutines forforinnovationinnovation butbut alsoalso--andand mostmost importantlyimportantly-- oneone ofof creatingcreatingthethe underlyingunderlying learninglearning routines,routines, whichwhich enableenable thetheorganizationorganization toto dodo soso..


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UNIT-II

INNOVATION PROCESS


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UNIT II :UNIT II :

InnovationInnovation ProcessProcess:: buildingbuildingthethe innovationinnovation processprocess --

innovationinnovation diffusiondiffusion thetheinnovationinnovation:: decisiondecision processprocess--fivefive stagesstages ofof thethe diffusiondiffusionprocessprocess -- thethe newnew learninglearningaboutabout innovationinnovation


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What is an Innovation Process?What is an Innovation Process?

AnyAny processprocess ofof innovationinnovation mustmust definedefineandand describedescribe thethe actionsactions andand outcomesoutcomes thatthatresultresult fromfrom thethe applicationapplication ofof specificspecificmethodsmethods andand toolstools (and(and thethe reasonsreasons behindbehind

thesethese methodsmethods andand tools)tools).. TheThe actionsactions ofofpeoplepeople followingfollowing thethe processprocess taketake placeplace overovertimetime and,and, therefore,therefore, havehave aa timetime linearlinearnaturenature that,that, ifif describeddescribed strictlystrictly byby aa linearlinear

sequencesequence ofof activitiesactivities andand events,events, beliesbelies oneoneofof thethe mostmost importantimportant aspectsaspects of of thetheinnovationinnovation processprocess itselfitself -- itit isis notnot linear!linear!


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TheThe processprocess ofof innovationinnovation reliesrelies onon thethe nonnon--linearlinear methodsmethods of of iterationiteration andand abstractionabstraction..IterationIteration becausebecause thatthat isis howhow wewe learnlearn thingsthings andandobtainobtain newnew knowledge,knowledge, byby goinggoing back,back, refiningrefiningandand maturingmaturing whatwhat wewe knowknow toto gaingain insightinsight andandunderstandingunderstanding ofof thethe thingsthings wewe seesee andand learnlearn..AbstractionAbstraction becausebecause thatthat isis how how wewe synthesizesynthesizeknowledge,knowledge, seesee patternspatterns andand makemake connectionsconnections totonewnew thingsthings.. BothBoth ofof thesethese activities,activities, iterationiteration andandabstraction,abstraction, areare inherentlyinherently nonnon--linear,linear, yetyet mustmustnecessarilynecessarily taketake placeplace overover timetime asas aa seriesseries ofof

concreteconcrete actionsactions byby peoplepeople usingusing aa processprocess forforinnovationinnovation..


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THE INNOVATION PROCESS

CYCLE


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The ChallengeThe ChallengeThe cycle starts with a problem or goal which needs to beThe cycle starts with a problem or goal which needs to be

formulated into an innovation challenge. Once this is done, theformulated into an innovation challenge. Once this is done, thechallenge is presented to the problem solving group. This may bechallenge is presented to the problem solving group. This may bedone in the form of a brainstorming event, ideas campaign ordone in the form of a brainstorming event, ideas campaign orother activity. The group problem solving group may be a team,other activity. The group problem solving group may be a team,all employees in the firm, the public or any other group ofall employees in the firm, the public or any other group of

people.people.

CollaborationCollaborationIn order to maximize the creative potential of the problemIn order to maximize the creative potential of the problem

solving group, the idea generation activity should besolving group, the idea generation activity should be

collaborative in nature. This can be accomplished in many ways.collaborative in nature. This can be accomplished in many ways.Idea management and innovation process management softwareIdea management and innovation process management softwareoften provides onoften provides on--line collaboration tools, while facilitators ofline collaboration tools, while facilitators ofbrainstorming and other ideation events should promotebrainstorming and other ideation events should promotecollaborative idea development.collaborative idea development.

C i iC i i


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CombinationCombinationBecauseBecause anan innovationinnovation processprocess cyclecycle startsstarts withwith aa challenge,challenge,

ideasideas tendtend toto bebe interrelatedinterrelated andand manymany areare complementarycomplementary..Hence,Hence, beforebefore goinggoing further,further, itit isis bestbest toto combinecombine suchsuch

complementarycomplementary ideasideas intointo larger,larger, moremore sophisticatedsophisticated ideasideas soso thatthattheythey cancan bebe handledhandled asas aa singlesingle packagepackage.. ThisThis makesmakes thethe nextnextstepssteps inin thethe cyclecycle moremore efficientefficient..

Scientific Peer Review Evaluation

HereHere isis wherewhere aa lotlot of of innovationinnovation initiativesinitiatives breakbreak downdown::choosingchoosing thethe bestbest ideasideas.. ManyMany poorlypoorly thoughtthought outout approachesapproachesuseuse voting,voting, whichwhich isis aa goodgood wayway toto identifyidentify thethe mostmost popularpopular idea,idea,butbut anan appallinglyappallingly ineffectiveineffective methodmethod forfor identifyingidentifying thethe mostmostpotentiallypotentially innovativeinnovative ideaidea.. II havehave alsoalso seenseen organisationsorganisations putput aagreatgreat dealdeal ofof efforteffort intointo ideaidea generation,generation, leavingleaving thethe finalfinal decisiondecisiontoto aa managermanager whowho basicallybasically pickspicks outout herher favouritefavourite ideaidea..

AssumingAssuming thethe managermanager hashas suitablesuitable businessbusiness expertise,expertise, suchsuch ananapproachapproach isis betterbetter thanthan votingvoting asas itit isis basedbased onon expertiseexpertise ratherratherthanthan popularitypopularity butbut itit isis typicallytypically farfar fromfrom perfectperfect..


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Testing and DevelopmentTesting and DevelopmentIdeas identified as being potential innovations areIdeas identified as being potential innovations are

now ready to be tested and developed. Here is wherenow ready to be tested and developed. Here is wheretypical business tools come in useful. A business case istypical business tools come in useful. A business case isa useful means of hypothetically implementing ana useful means of hypothetically implementing aninnovative idea and projecting the potential results.Ofinnovative idea and projecting the potential results.Ofcourse it is not perfect, but it indicates possible issues incourse it is not perfect, but it indicates possible issues in

the implementation of the idea, as well as benefits thatthe implementation of the idea, as well as benefits thatmay not have been obvious to the original ideamay not have been obvious to the original ideadevelopers.developers.

ImplementationImplementation

Ideas that make it through testing and development areIdeas that make it through testing and development areready to be implemented. Unless the idea is a radicalready to be implemented. Unless the idea is a radicalchange from your usual activities, you don't need me tochange from your usual activities, you don't need me totell you how to do this!tell you how to do this!


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ReviewReviewOnceOnce ideasideas havehave beenbeen implemented,implemented, theythey needneed toto bebe

reviewed,reviewed, probablyprobably againstagainst anan ongoing ongoing seriesseries of ofmilestonesmilestones.. IfIf anan implementationimplementation doesdoes notnot achieveachieve aamilestone,milestone, itit needsneeds toto modifiedmodified oror killedkilled.. Moreover,Moreover, eveneventhethe mostmost spectacularlyspectacularly effectiveeffective andand profitableprofitablebreakthroughbreakthrough innovationsinnovations needneed toto bebe improvedimproved onon aaregularregular basisbasis..

New Needs and InspirationNew Needs and InspirationHence, reviewing the implementation of new ideasHence, reviewing the implementation of new ideasshould indicate new needs which can be transformedshould indicate new needs which can be transformed

into challenges which, in turn, start a new innovationinto challenges which, in turn, start a new innovationprocess cycle. Likewise, implementations can inspire newprocess cycle. Likewise, implementations can inspire newcorporate goals. Again, these can be turned into newcorporate goals. Again, these can be turned into newchallenges and new cycles.challenges and new cycles.


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INTEGRATEDINTEGRATED

INNOVATIONINNOVATIONPROCESSPROCESS

MANAGEMENTMANAGEMENT


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INTEGRATEDINTEGRATED INNOVATIONINNOVATION PROCESSPROCESS

MANAGEMENTMANAGEMENT

AnAn innovativeinnovative company,company, however,however, shouldshould notnot

havehave aa singlesingle innovationinnovation processprocess cyclecycle inin operationoperation..

RatherRather itit shouldshould havehave manymany ofof them!them! LargeLarge cyclescycles

areare suitablesuitable forfor enterpriseenterprise--widewide innovationinnovation..Meanwhile,Meanwhile, businessbusiness unitsunits cancan runrun somewhatsomewhat

smallersmaller innovationinnovation processprocess cyclescycles inin orderorder toto

managemanage theirtheir ownown ideasideas (although(although itit shouldshould bebe

noted,noted, collaborativecollaborative groupsgroups needneed notnot bebe limitedlimited totoemployeesemployees of of thatthat businessbusiness unit)unit).. Teams,Teams,

departmentsdepartments andand anyany otherother groupgroup cancan alsoalso runrun

theirtheir ownown innovationinnovation processprocess cyclescycles..


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Diffusion (distribution) ofDiffusion (distribution) of

InnovationsInnovations

Diffusion of Innovations is a theory ofhow, why, and at what rate new ideas andtechnology spread through cultures. Theconcept was first studied by the Frenchsociologist Gabriel Tarde (1890) and byGerman and Austrian anthropologists such as

Friedrich Ratzel orLeo Frobenius.


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HistoryHistory

TheThe originsorigins ofof thethe diffusiondiffusion ofof innovationsinnovationstheorytheory areare variedvaried andand spanspan acrossacross multiplemultiple disciplinesdisciplines..RogersRogers identifiesidentifies sixsix mainmain traditionstraditions thatthat impactedimpacteddiffusiondiffusion researchresearch:: anthropologyanthropology,, earlyearly sociology,sociology,ruralrural sociologysociology,, educationeducation,, industrial,industrial, andand medicalmedical

sociologysociology.. TheThe diffusiondiffusion ofof innovationinnovation theorytheory hashas beenbeenlargelylargely influencedinfluenced byby thethe workwork ofof ruralrural sociologistssociologists..

InIn thethe bookbookDiffusionDiffusion ofof InnovationsInnovations,, RogersRogers

synthesizessynthesizes researchresearch fromfrom overover 508508 diffusiondiffusion studiesstudiesandand producesproduces aa theorytheory forfor thethe adoptionadoption ofof innovationsinnovationsamongamong individualsindividuals andand organizationorganization..


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DEFINITIONDEFINITION

DiffusionDiffusion of of InnovationsInnovations ((RogersRogers 19621962)).. HeHedefinesdefines diffusiondiffusion asas "the"the processprocess byby whichwhich anan

innovationinnovation isis communicatedcommunicated throughthrough certaincertainchannelschannels overover timetime amongamong thethe membersmembers ofof aasocialsocial systemsystem..""


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The diffusion of innovations according to Rogers.With successive groups of consumers adopting thenew technology (shown in blue), its market share(yellow) will eventually reach the saturation level.


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Elements of diffusion of

innovations

The key elements in diffusion research are:

The innovation,Types of communication channels,

Time or rate of adoption, and

The social system which frames theinnovation decision process.

T f i iT f i i d i id i i


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Types of innovationTypes of innovation--decisionsdecisions

ThereThere areare threethree typestypes of of innovationinnovation--

decisionsdecisions withinwithin diffusiondiffusion ofof innovationsinnovations.. AnAn

individualindividual oror anan organization/socialorganization/social systemsystem

basesbases thethe typetype of of decisiondecision onon whetherwhether ananinnovationinnovation isis adopted/rejectedadopted/rejected.. TheThe threethree

typestypes ofof innovationinnovation--decisionsdecisions areare:: OptionalOptional

innovationinnovation--decisions,decisions, collectivecollective innovationinnovation--decisions,decisions, authorityauthority innovationinnovation--decisionsdecisions


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Optional Innovation-Decision

ThisThis decisiondecision isis mademade byby anan individualindividual whowho isis ininsomesome wayway distinguisheddistinguished fromfrom othersothers inin aa socialsocial systemsystem..

Collective Innovation-Decision

ThisThis decisiondecision isis mademade collectivelycollectively byby allall individualsindividualsofof aa socialsocial systemsystem..

Authority Innovation-Decision

ThisThis decisiondecision isis mademade forfor thethe entireentire socialsocial systemsystem

byby fewfew individualsindividuals inin positionspositions ofof influenceinfluence oror powerpower..

The adoption process


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The adoption process

Diffusion of an innovation occurs

through a fivestep process. This process is

a type of decision-making. It occurs through

a series of communication channels over aperiod of time among the members of a

similar social system. Ryan & Gross first

indicated the identification of adoption as aprocess in 1943 (Rogers 1962, p. 79).


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Rogers categorizes the five stages (steps)

as: awareness, interest, evaluation, trial, andadoption. It should be noted that an individual

might reject an innovation at anytime during or

after the adoption process. In later editions of the

Diffusion of Innovations Rogers changes the

terminology of the five stages to: knowledge,

persuasion, decision, implementation, and

confirmation. However the descriptions of the

categories have remained similar throughout the

editions.


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Five Stages Of The Adoption Process


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Knowledge

InIn thisthis stagestage thethe individualindividual isis firstfirst exposedexposed toto

anan innovationinnovation butbut lackslacks informationinformation aboutabout thetheinnovationinnovation.. ItIt shouldshould bebe notednoted thatthat duringduring thisthis

stagestage ofof thethe processprocess thethe individualindividual hashas notnot beenbeen

inspiredinspired toto findfind moremore informationinformation aboutabout thetheinnovationinnovation..

Persuasion

InIn thisthis stagestage thethe individualindividual isis interestedinterested ininthethe innovationinnovation andand actively actively seeksseeksinformation/detailinformation/detail aboutabout thethe innovationinnovation..


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Decision

InIn thisthis stagestage thethe individualindividual takestakes thethe conceptconcept ofof thethe innovationinnovationandand weighsweighs thethe advantages/disadvantagesadvantages/disadvantages ofof usingusing thethe innovationinnovation

andand decidesdecides whetherwhether toto adoptadopt oror rejectreject thethe innovationinnovation.. DueDue toto thetheindividualisticindividualistic naturenature ofof thisthis stagestage RogersRogers notesnotes thatthat itit isis thethe mostmostdifficultdifficult stagestage toto acquireacquire empiricalempirical evidenceevidence ((RogersRogers 19641964,, pp.. 8383))..

Implementation

InIn thisthis stagestage thethe individualindividual employsemploys thethe innovationinnovation toto aa varyingvaryingdegreedegree dependingdepending onon thethe situationsituation.. DuringDuring thisthis stagestage thethe individualindividualdeterminesdetermines thethe usefulnessusefulness ofof thethe innovationinnovation andand maymay searchsearch forforfurtherfurther informationinformation aboutabout itit..

Confirmation

AlthoughAlthough thethe namename ofof thisthis stagestage maymay bebe misleading,misleading, inin thisthisstagestage thethe individualindividual finalizesfinalizes theirtheir decisiondecision toto continuecontinue usingusing thetheinnovationinnovation andand maymay useuse thethe innovationinnovation toto itsits fullestfullest potentialpotential..


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The New Learning AboutInnovation

INTRODUCTION


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INTRODUCTION

Our knowledge of innovation at thenational, industry and individual company levelhas increased substantially over the past 20

years. Research into innovation has placedparticular emphasis on its multi-actor nature.This chapter examines the interplay of differentinstitutions and firms and its consequences for

innovation at a macro level, and also examinesrecent analysis of innovation at the level of thefirm.

Research has shown the importance of structural


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Research has shown the importance of structuralfactors, such as

the number and size of firms in an industry,

competitiveness and innovationOthers highlight the importance of institutional factors

influencing national systems of innovation

At the same time, increasingly sophisticated models of theinnovation process within the firm are being developed. These

build upon earlier models by emphasizing: inter-functional and inter-organizational structures,

Iterative (translation) activities,

strategic decision-making, and

enhanced use of electronic media.

Furthermore, greater attention is being paid to preinnovation- and the sources of creativity, on the one hand andpost- innovation or re-innovation.


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Carlssons research into four technology systemsin Swedenfactory automation, electronics and computers, pharmaceuticals (especially biotechnology) and powder

technology - led to the identification of ten dimensions oftechnology systems:

present development phase;

future potential;

buyer competence; buyer-supplier collaboration;

supplier competence;

industrial R&D;

academic infrastructure; government policy;

bridging institutions;

holes/weaknesses;

compensating mechanisms.


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26806034 1 Meeting Intro to Innovation

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