GLC, Advanced Entrepreneurship and Innovation (MGMT 4161)

Chapter – I – Innovation Imperative

Introduction
Innovation is the specific tool of entrepreneurs, the means by which they
exploit change as an opportunity for a different business or a different
service. It is capable of being presented as a discipline, capable of being
learned, capable of being practiced. Entrepreneurs need to search
purposefully for the sources of innovation, the changes and their
symptoms that indicate opportunities for successful innovation. And they
need to know and to apply the principles of successful innovation.
There is a growing importance of knowledge and innovation to economic
growth and technological competitiveness in all fields and it is a strong
concern for scientist, managers and for countries in its entirety. The
universities, business sector and the public sector all play an important
role in the development of innovation. The key to innovation development
involves a close collaboration with science, financing and technology and
this has developed a model called triple helix model. Innovation is now
days a key ingredient to manage the global competitiveness and
companies have to deal with the creation of new products and services
(Farniha, Ferreira & Gouveia, 2016).
There are different factor that influence a customer´s decisions to either
adopt an innovation or to reject it. These factors are following:
 Relative advantage
 Compatibility
 Risk Relative
An innovation has an advantage when it appears to be better the previous
generation and has a high rate of adoption. An innovation also has a
greater chance of getting adopted if it is compatible with people’s
experiences and values. The younger generation is more willing to take
risks in innovation and we can therefore expect more willingness in
taking on risk with innovative technology.
What is Innovation?

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 GLC, Advanced Entrepreneurship and Innovation (MGMT 4161)
Innovation is a word that is derived from the Latin word “innovare”,
which means “into new”. Innovation means to improve or to replace
something, for example, a process, a product, or a service. In the context
of companies, however, the term needs a definition. In the complex
context of business, a definition is needed.

Definitions of Innovation
 American sociologist Everett Rogers, defined Innovation "An idea,
practice, or object that is perceived as new by an individual or
other unit of adoption".
 According to Alan Altshuler and Robert D. Behn, innovation
includes original invention and creative use and defines innovation
as a generation, admission and realization of new ideas, products,
services and processes.
 Organisation for Economic Co-operation and Development (OECD)
manual's definition: Innovation is production or adoption,
assimilation, and exploitation of a value-added novelty in economic
and social spheres; renewal and enlargement of products, services,
and markets; development of new methods of production; and the
establishment of new management systems. It is both a process and
an outcome.
 The simplest definition of innovations is doing something different.
Innovation is a word that often is used in the business world and
for companies this usually means something risky, costly and time
consuming (Costello & Prohaska, 2013).
 Innovation is a process by which a domain, a product, or a service
is renewed and brought up to date by applying new processes,
introducing new techniques, or establishing successful ideas to
create new value.
 Innovation can also be explained as s new idea, product, device or
novelty. It is a mind- set, a way of thinking beyond the present and
into the future. Innovations are important for companies and when
used well it can be a process, strategy and management technique

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 GLC, Advanced Entrepreneurship and Innovation (MGMT 4161)
(Kuczmarksi, 2003).
 Baregheh, Rowley & Sambrook (2009) brought a suggestion of a
complete and multi stage process definitions of innovation:
“Innovation is the multi-stage process whereby organizations
transform ideas into new/improved products, service or processes,
in order to advance, compete and differentiate themselves
successfully in their marketplace”.

Innovation Matters
Why Innovation Matters?
Innovation matters not only at the level of the individual enterprise but
also increasingly as the well spring for national economic growth. An
Australian government website states that “Companies that do not invest
in innovation put their future in doubt. Their business is unlikely to
prosper, and they are unlikely to be able to compete if they do not seek
innovative solutions to emerging problems”.
In fact, research has identified the following factors which characterise
successful sme’s
 Innovation is consistently found to be the most important
characteristic associated with success
 Innovative enterprise typically achieves stronger growth or are
more successful than those that do not innovate
 Enterprises that gain market share and increasing profitability
are those that are innovative
Innovation, through new product or service development, can help
capture and retain market share and increase profitability in these
markets.
At the same time new product development is an important capability
because the environment is constantly changing. Shifts in what people
believe, expect, want and earn create opportunities and challenges.
Legislation may open up or close opportunities and competitors may
introduce new products which represent a major threat to existing
market positions. In all these ways businesses need the capability to
respond through innovation.
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Importantly though we need to remember that advantages gained
through innovation gradually get eroded away as others imitate. Unless
an organization is able to move into further innovation it risks being left
behind as others take the lead in changing their offerings, their processes
or the underlying models that drive their business.
So how can businesses seek strategic advantage through innovation?

So how can businesses seek strategic advantage through innovation?

Mechanism Strategic Advantage Examples
Novelty in Introducing the first MP3
Offering something no one
product or player, DVD, Digital
else can
service offering Camera
Offering it in ways others
Internet banking,
Novelty in process cannot match – faster,
online book selling
cheaper, higher quality
Rolls Royce and aircraft
Offering something which engines. Only a handful of
Complexity
others find it difficult to competitors can master
master the complexities of
machining and metallurgy
Drugs like Prozac and
Legal Protection of Offering something others
Zantac. Many specific
Intellectual cannot do unless they pay a
designs, eg. Dyson vacuum
Property fee for
cleaner, Apple iphone
Japanese car
Move basis of competition,
Add/extend manufacturing, which
e.g. from price of product to
range of systematically moved the
price and quality, or price,
competitive competitive agenda from
quality, choice
factors price to quality, to flexibility
and choice
First mover
Amazon – others can follow
advantage First
but the advantage sticks to
follower advantage the early movers PalmPilot
Timing
and other PDA’s
Sometimes being first benefitted from the failed
means you encounter Apple Newton which
problems. It can make experienced
better sense to watch technical difficulties
someone experience the
problems and to
move fast with a follow up
product

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Offering something which
Intel and AMD with
Robust platform provides the platform on
different variations of
design which other variations can
their processors
be built
Offering something which
represents a completely new
Rewriting the rules Typewriters vs computers
product or process concept
and makes the old ones
redundant
Reconfiguring Rethinking the way in Zara, Benetton in
parts of the which bits of the system Clothing, Dell in
process work computing
Transferring
Recombining established Polycarbonate wheels from
across different
elements for different luggage into children’s toys
application
markets
contexts
Innovation is all about
Spotify in music, Netflix in
Others finding new ways to do
TV and film Skype in
things and to obtain
communication
strategic advantage
Innovation and Entrepreneurship
Innovation and entrepreneurship are two different concepts having
entirely different meanings. However, there is a striking relationship
between innovation and entrepreneurship which sometimes causes
confusion.
The main difference between innovation and entrepreneurship is
that innovation involves introducing something new. This can be a new
business model, product, idea, or service. On the other hand,
entrepreneurship involves turning a great idea into a business
opportunity.
Successful innovation should be a part of your business strategy,
where you can create a culture of innovation and make a way for
creative thinking. Innovation is a facilitator of entrepreneurship;
innovative ideas are what will make a startup competitive.
In the long run, in order for a business to survive and grow, innovating a
product or service becomes a crucial step, and as observed and
experienced innovation in any business helps an entrepreneur to improve
or restore a particular product, process, or service.

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Difference between Innovation and Entrepreneurship
Although there is a link or relationship between innovation and
entrepreneurship, they have different meanings altogether. Here are the
major differences between the two concepts:
Point
Innovation Entrepreneurship
of
Differe
nce
Innovation is the Entrepreneurship identifies the
Definitio process of creating opportunities in great innovations and
n something new. creates opportunity, adds value, and
keeps the value improving over a period of
time.
In converting an idea into a business
In innovation, there
Risk- opportunity, risk- taking cannot be
is no major risk
Taking avoided. Risk-taking is a key factor in
involved.
entrepreneurship.
Innovation Entrepreneurship has long durability, which
Durabilit
generally has a adds and improves the value of the
y
short durability opportunity created.
Innovators lose Entrepreneurs fail, rethink and work hard to
Interest
interest after the make the venture more successful.
idea stage.
Innovators have a Entrepreneurs need skills like planning,
passion for inquiry leading,
Skills
and experiment managing, and decision-making.
with creative Entrepreneurs take
thinking. risks, work hard, and are committed to
achieving success in their business.
Innovation is
Entrepreneurship is the process of making
Cause the outcome
innovation a business opportunity.
of new
thinking.
Characteristics of Innovation and Entrepreneurship Characteristics
1. Risk-Taking
Entrepreneurship: In converting an idea into a business
opportunity, risk-taking cannot be avoided. Risk-taking is a key
factor in entrepreneurship.
Innovation: In innovation, there is no major risk involved.
2. Durability
Entrepreneurship: Entrepreneurship has long durability, which

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adds and improves the value of the opportunity created.
Innovation: Innovation generally has a short durability
3. Interest
Entrepreneurship: Entrepreneurs fail, rethink and work hard
to make the venture more successful.
Innovation: Innovators lose interest after the idea stage.
4. Skills

5. Cause

Entrepreneurship: Entrepreneurs need skills like planning, leading,

managing, and decision-making. Entrepreneurs take risks, work hard, and
are committed to achieving success in their business.
Innovation: Innovators have a passion for inquiry, and experiment with
innovative thinking.
Innovation: Innovation is the outcome of innovative thinking.
Entrepreneurship: Entrepreneurship is the process of making innovation
a business opportunity.

Innovation in Entrepreneurship Benefits:

1- Creative Development: Innovation entrepreneurship enhances the
creativity, nature, and design thinking process of an organization. A new
brand can attain a desirable height by tapping into the creativity of
employees. Entrepreneurship innovation can open the doors of various
opportunities by helping the business keep up with current market
demands and trends.
2- Reinforcing Your Brand: The process of brand development discloses
the details which help the HR innovation team to learn different digital
business models. This is highly important because it is among the main

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drivers of success for businesses.
3- Persistent Improvement: Innovation entrepreneurship sets the
course for organizational durability when you’re making continual
improvements. A good business entrepreneur will realize the importance
of innovation, which will help in improving their creativity.
4- Responding to Trends and Competition: The HR innovation team
responds to the current needs and focuses on predicting/positioning the
business for future market trends. Innovation entrepreneurship helps
you understand how to respond to future trends. This positions you to
come up with solutions that make your business grow more.
5- Making the Best of Your Existing Products: We know that for a
business entrepreneur, it is important to introduce new products and
services. However, beyond introducing new products into the market, it’s
more important to maintain innovative culture and make the best of
existing products. Little improvements on existing products and services
can help a company increase its profits and efficiency. So, a company can
scale to greater heights by combining the enhancement of the design
thinking process and with continuous innovative improvements.
6- Having a Unique Selling Point: Consumers understand that
innovation culture adds value to products and services. Innovation
entrepreneurship adds some interesting values that can help the
company in getting positive exposure and having a unique selling point.
7- The Use of Social Media: You can leverage social media to get your
innovation campaign across a wide target market. Social media can help
you gather information on the basic needs of customers and how you can
improve your products and services to meet those needs and demands.

Innovation Isn’t Easy

Innovation isn’t easy, but it’s worth it!
Who knew being innovative would be so hard? Surely you just come up
with a good idea, the HIF will give you the money and you implement it?
The problem with innovation is that no one has done it before, so there
are not the usual lessons learned, evaluations, how-to guides and

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checklists to follow. We are literally trying something for the first time,
which means the process is one massive learning curve.
When the IFRC in Haiti first decided to launch a new 2-way telephone
line using Interactive Voice Response (IVR) technology we scoured the
internet for journal articles to help us plan. Unfortunately, there were
very few examples of how this type of telephone technology had been
used in the past to increase beneficiary participation recovery following a
major disaster. The idea is simple enough; use technology which has
been around for years in a new way. You have most likely come across
IVR when calling your bank or the local cinema. By working through a
list of menu options you can access the information you need or provide
responses to the company. For the IFRC in Haiti this means giving people
access to a wealth of information on Red Cross services and advice on
staying safe and healthy – as well as the chance to feedback on all
aspects of Red Cross work and their lives through touch tone surveys. A
simple enough idea, but as they say, the devil is in the detail.
Our first mistake was to estimate we could build and launch a system
within 4-6 months. However, we need a system that the Haitian Red
Cross can continue to maintain and update easily for years to come so it
needed to be easy to use for non-technical people. This meant a custom-
built system, taking even longer to develop. We thought we could write
and record the information in a month – but we found everyone wanted to
be involved and provide information, including the Haitian Government,
so the process took several months. Who could anticipate floods in
Taiwan would lead to a world-wide shortage of servers, slowing the
project by another month or two. The critical support of Digicel also
meant adding a second server to ensure the telephone line could be
accessed free of charge by anyone on either of Haiti’s two major mobile
networks. While slowing the project, these setbacks have all had major
benefits and will make the final result a stronger, more accessible system
for people in Haiti.Now one day before the launch we face our final
(hopefully, but unlikely) set back – one of the servers has broken down!
With a major country-wide publicity campaign due to launch this week
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using billboards, TV and radio adverts, SMS, street banners and sound
truck, our project is in the hands of an HP technician due to arrive this
morning. If he can’t fix it, we face another 6-8 weeks delay while our
Canadian IVR partner Vocantas order a new server, load the system and
re-ship it to Haiti for installation.
While these setbacks are massively frustrating and a little bit heart
breaking, they have taught us that this is all part of the process of
innovation. The lesson is innovation takes time and determination.
A recent set of focus groups by American Red Cross have shown us
though we are on the right path and encouraged us to keep persevering.
They found that people cite access to information as critically important
to them, agreeing information can save lives and allow people to protect
and look after themselves.
One female participant commented: “Having access to information like for
example on cholera
– if you have a son or a daughter who gets bad diarrhoea and you don’t
even realise that it is not a normal illness because you don’t have the
right information it is serious. So having access to information allows you
to plan the future.”
These focus groups also confirmed that using a phone line to provide and
get information is the right way to go. Eight-five percent of participants
owned a mobile phone and 100% had access to one and while receiving
information via SMS is seen as a unanimously good thing in Haiti, only
36% of participants know how to write SMS messages. Phone lines are
very popular though and 100% of participants said they would use a free
information line if it existed. Additionally when asked if they would like to
take part in more monitoring and surveys, 100% said yes and telephone
was the most popular way to provide feedback.
One of the first surveys planned will ask Haitian people about safety in
their community and their personal experiences of violence. This kind of
survey has not been done before and people tell us these are questions
they wouldn’t feel comfortable answering face-to-face. The data we get
from this will be shared with Government and Civil Society and will help

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us plan interventions that will make communities safer for people.

Managing Innovation and Entrepreneurship

Innovation management involves the process of managing an
organization's innovation procedure, starting at the initial stage of
ideation, to its final stage of successful implementation. It encompasses
the decisions, activities and practices of devising and implementing an
innovation strategy.
According to Gartner, an IT research and consultancy company,
innovation management is a business discipline that aims to drive a
sustainable innovation process or culture within an organization.
Oftentimes, these innovation management initiatives utilize a disruptive
method of change to transform business.
In the age of digital transformation, organizations are faced with the
need to innovate more and innovate quickly. Innovation drives business
growth and helps organizations stay ahead of their competitors.
Innovation management helps in generating new business models and
creates new products, services and technologies designed for the
changing market. Proper innovation management also boosts customer
satisfaction and employee engagement.
Innovation management methods
Broadly speaking, innovation can be incremental, breakthrough or disruptive.
 Incremental: In an era where businesses are required to
constantly reinvent themselves, incremental innovation helps them
thrive by constantly improving current products, services,
processes or methods.
 Breakthrough: A breakthrough innovation refers to technological
advancements that can boost the level of a product or service,
within an existing category, ahead of its competitors.
 Disruptive: Disruptive innovations are ideas that are capable of
radically changing the market behavior after being implemented.
Achieving innovation management success
For innovation management process to be successful, it is essential that

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the company support an innovation culture and make employees feel
valued. This will encourage employees to generate quality ideas in
return.
Organizations today are leveraging collaborative technology like social
networking to get feedback, which helps in generating a steady stream of
ideas from stakeholders both within and outside the company.

To make innovation management a routine part of business, many

organizations follow a disciplined and cyclic approach. Ideation is the
first step to innovation and incentives and feedbacks help encourage a
steady flow of ideas. The next step in a well-managed innovation process
is to identify the most valuable and viable ideas. Companies can then
move forward to create prototype products based on the shortlisted ideas
and implement them to see how they work. In the final step of full
implementation, it is important to evaluate the outcome to see whether
the desired business goals were met once the ideas were implemented.
Creative Method & Approach for Innovation management
Creative thinking is integral to the problem-solving process. Employing
creative thinking at work can make you a valuable team member since
you'll generate ideas the company can use. Thinking creatively can also
enable you to develop ideas that might lead you to come up with new
innovations. Many great thinkers and entrepreneurs are or were creative
thinkers who went independent routes and made some of the greatest
discoveries and inventions of all time: Marie Curie, Steve Jobs, Nikola
Tesla, Ada Lovelace…the list is endless. While many of these genius
innovators had unorthodox ideas and methods that seemed odd to their
contemporaries, their results speak for themselves; they made the
modern world what it is.
1. Brainstorm ideas: Brainstorming sessions can go a long way in
generating ideas. They can be especially effective if you have a
large team because you’ll be able to generate more ideas. Make
sure to include all members of the group or team, even people who
aren’t directly involved in the project or whose jobs don’t usually

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entail problemsolving. These members could have unique insights
because they’re coming from different perspectives and may have
different ways of approaching the problem from your usual
methods.
2. Role-play scenarios: Role-playing is a common training method in
the military and emergency response groups. Some businesses
have begun using the method to train new employees as well. Role-
playing doesn’t need to be limited to new employees, though. When
you act out different situations and scenarios, you may develop new
ways of looking at an issue and come up with potential solutions.
You’ll also help team members develop confidence and become
more comfortable when dealing with unfamiliar situations since
they’ll need to respond quickly and think on their feet. Role- playing
involves two or more members of a group acting out a situation.
It might

concern dealing with a new client, giving a presentation,

interviewing, or resolving conflicts. Essentially, you can role-play
any situation that might be difficult and improved with rehearsal.
When people are able to role-play a scenario before encountering
the situation in real life, they’ll have some practice developing
resolutions quickly on their feet. You can also view the scenario in a
different way and up with unique ways of solving problems.
3. Reframe the issue: Reframing a problem or situation can help you
reinterpret it. When you present the issue in a new way, you’ll open
up different possibilities for how people react, feel, and examine the
situation, which can ultimately lead to new solutions. Consider
alternative meanings, contexts, and perspectives for the situation
at hand. Also, think about what the problem can teach you.
Once you’ve examined these different angles, you might see the
situation in a new light and discover a new approach. You might
ask others to reframe the issue for you as well. This can increase
the number of angles from which you’ll be able to consider the

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problem and potential solutions.
4. Make the most of creative flow: When you become completely
absorbed in a project to the point at which you’re so fully immersed
that you don’t notice other distractions, you’re in a state of creative
flow. This state is correlated with strong creative performance,
meaning you might produce some of your best ideas when you’re
immersed in it. While you can’t induce flow, since there are actual
changes the chemistry and activity of your brain while you’re in
this state, you can seek out experiences that will cause you to
produce your best work.
Creative flow occurs when you’re deeply involved in an activity that
engages you and brings you pleasure, so if you’re passionate about
a project, you’re more likely to find yourself in this state. Creative
people make the most of the insights and ideas they develop while
in a state of creative flow, so it can be an important part of your
creative process. Your thoughts during this state could represent
some of your greatest work.
5. Stay open-minded and flexible: One consistent quality of
creative people is that they tend not to see boundaries where
others might; boundaries only impede innovation. If you’re
constantly noticing the limitations of what you can do, you won’t be
able to develop solutions that are off the beaten path. That is, after
all, what it means to think

outside the box. Instead of limiting themselves to what the rules

allow, people who are innovative thinkers don’t see solutions as
limited to what can happen within the confines of rules. Instead,
they employ creative problem-solving skills to see the possibilities
as virtually limitless. If you want to improve your creative process
and skills, be open-minded to solutions that may extend beyond the
parameters with which you’re familiar. Also appreciate the ideas of
others, which may involve problem solving processes that are
unfamiliar or atypical for you and your team.

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6. Keep your ego out of it: You may and likely will encounter
setbacks in your career and life. Not all your ideas are going to pan
out. What will set you apart is your ability to see failures as
temporary, rather than permanent. If you keep trying, you’ll
eventually achieve success—you might just need to find a new
approach to achieving it.
Approaches to the Management of Innovation and Entrepreneurship
1. Agile Management: Agile management focuses on delivering
maximum value against business priorities in the time and budget
allowed, especially when the drive to deliver is greater than the
risk. Principles include: The project breaks a requirement into
smaller pieces, which are then prioritized by the team in terms of
importance. The agile project promotes collaborative working,
especially with the customer. The agile project reflects, learns and
adjusts at regular intervals to ensure that the customer is always
satisfied and is provided with outcomes that result in benefits. Agile
methods integrate planning with execution, allowing an
organization to create a working mindset that helps a team respond
effectively to changing requirements. It’s useful for organizations to
understand and see agile methodology examples and case studies,
to understand if they need to consider this approach. Long have the
times passed where Agile was the sole domain of I.T. or the Tech
industry. Agile is now seen as the optimum business model
methodology to adopt for most industries. Most industries or
organizations are looking to create efficiencies. In their productivity,
increased speed to market, and better employee empowerment and
morale.
Who uses Agile Methodology?
ADAPTOVATE has worked with clients from every type of industry
including:
 Intensive Capital Heavy Industry (Energy, Mining, Manufacturing
etc.)
 Financial (Banking, Insurance, Loans etc.)Health (Pharmaceutical,
Institutions, etc.)
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 Government departments, agencies, lobby
 Human Resources
 Engineering
 Food & retail (Large chains, manufacturing)
 Not Profit sector
ADAPTOVATE will work closely with our client to best meet the
outcome that they are looking for. It should be said that during our
assessment we can determine that what a client ‘thinks’ they are
looking for often turns out not to be what, in actual fact, is needed.
Agile Transformation: When embarking on an Agile
Transformation of any kind, it’s important to start off the right way.
This doesn’t mean, it needs to start big. In fact, often times, we
may encourage pilot teams. If the organization is global, and is
looking to roll a new business model across many teams and
regions this can be useful. As business change can involve 1000’s
of people, pilot teams can be the way to start. Other times not.
Have a look at our article on Top-down vs Bottom-up approaches.
Agile Methodology: The very term agile methodology may be
confusing, misleading or obstructive to some. Many times, we will
engage with an organization, who have hired us to review their
business model and are looking for a new business design to lead
them into the future. ‘Agile’ may not even enter the conversation.
ADAPTOVATE believe that applying best practices that have
formed the basis of Agile methodology, is always going to bring
about positive change. However, sometimes it’s useful, particularly
when speaking to employees, not to start with the terminology.
Change can be difficult. We recognize that, and are able to help
leaders and their teams write the playbook of their future.
2. Six Thinking Hats
Six Thinking Hats or Edward de Bono’s Six Hats is a good decision-
making technique and method for group discussions and individual
thinking. Combined with the parallel thinking process, this

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technique helps groups think more effectively. It is a means to
organize thinking processes in a detailed and cohesive manner.
Edward de Bono is the

founding father of these six thinking hats technique and wrote a

book about this called the Six Thinking Hats in 1985.
A thinking hat is a metaphor for a certain way of thinking. By
mentally wearing different thinking hats people are forced to look
at a problem from different perspectives. Thus, a one-sided way of
thinking is excluded and new insights are created.
He distinguishes six different frames of mind in which the brain can
become sensitive. Each of these frames of mind can be found in the
brain and create conscious thoughts for certain aspects of the
issues that are being discussed. With six hats thinking, you adopt a
parallel thinking process that examines an issue from different
angles. Each hat has a different colour that represents a specific
mindset.
In terms of hat sequences, it always depends on what we’re trying
to achieve, and we don’t always use every hat. When we’re
brainstorming product launches, for example, we usually take the
following approach:
 Blue– to define the purpose of the meeting and get it started.
 Green– to inspire the creativity needed to think of a new and
exciting way to reach client audiences.
 Red– to consider what emotions the various campaign
possibilities would inspire.
The Six Thinking Hats is a role-playing model presented by
Edward de Bono in 1986. It serves as a teambased problem
solving and brainstorming technique that can be used to explore
problems and solutions and uncover ideas and options that might
otherwise be overlooked by a homogeneously thinking group.
The basic premise hinges upon the idea that most people think and
reason in a specific way based on their personality type. This

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means that a more emotional person may generate ideas differently
than a more analytical person, and vice-versa. Similarly, a pessimist
will approach a situation very differently than an optimist.
Edward de Bono identified 6 types of one-dimensional
personalities or “Thinking Hats”. While the average person will
often imbue qualities from several of these 6 types, the goal of the
Six Thinking Hat model is to assign each member of the team a
different, one-dimensional “Thinking Hat” for the duration of the
problem solving or brainstorming session.

The 6 types or “Thinking Hats” are:

A. White Hat: analytical, objective thinking, with an emphasis
on facts and feasibility. (How to remember White Hat - The
color white is often associated with purity. Similarly, the
White Hat has a clean perspective that is unadulterated by
emotion or subjectivity.)
B. Red Hat: emotional thinking, subjective feelings, perception,
and opinion. (How to remember Red Hat - Red is the color of
rage and emotion. Red Hat allows emotion and subjectivity to
dominate.)
C. Black Hat: critical, skeptical, focused on risks, and
identifying problems. (How to remember Black Hat - Black,
the color of gloom and pessimism. The Black Hat is the
skeptic, and pessimist looking for the problems in
everything.)
D. Yellow Hat: optimistic, speculative, best-case scenario. (How
to remember Yellow Hat - Yellow Hat is the sunny one. They
are happy and have a positive outlook on things, always
expecting the best outcome.)
E. Blue Hat: structured thinking, high-level overview of the
situation, the big picture. (How to remember Blue Hat - Blue
is the color of the sky. Imagine the Blue Hat person has a
20,000-foot perspective on this. They can see everything from

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 GLC, Advanced Entrepreneurship and Innovation (MGMT 4161)
a distance and get the big picture view.)
F. Green Hat: creative, associative thinking, new ideas,
brainstorming, out-of-the- box. (How to remember Green Hat
- Green is the color of nature as capture by the artist. The
Green Hat is creative and generates lots of new ideas without
concern for feasibility.)

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Dimensions of Innovation

As mentioned before innovation can be classified into many different

classes and into two categories. Now we can continue to divide
innovation to smaller dimensions. Francis and Bessant (2005) have
invented how organizations can map innovations. Framework is called
“The 4Ps of innovation space”. In that framework every innovation can be
mapped somewhere in the four-dimension space. Dimensions are
process, position, product and paradigm. More about these dimensions is
below. In picture 1 is a principle drawing about innovation space. The
following is short explanation how to use it and how to map innovation.

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The 4Ps of innovation space model was developed by John Bessant
and Joe Tidd. They are two professors from Exeter University in the
United Kingdom. They published the model in the book Managing
Innovation – Integrating Technological, Market and Organizational
Change.
The four Ps model is used to clarify how comprehensive our innovation is.
The model focuses on four broad categories.
The four broad categories of innovation types are:
 product
 process
 position
 paradigm.
1. Product innovation (first P of the 4Ps) is the easiest to
understand. It means changes in the things which an organization
offers.
2. Process innovation (second P of 4Ps) is also quite easy to
understand. It means changes in the organization’s processes. In
the other words it means changes in the ways in which
organization is created and delivered.
3. Position innovation (third P of 4Ps) to understand needs some
thinking and it is not as clear as the first two innovation types. It
means changes in the context in which the products/services are
introduced.
4. The last P is meaning for paradigm innovation. It is by far the
hardest to understand. Meaning for that is changes in the
underlying mental models which frame what the organization does.

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How to use innovation space?

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 GLC, Advanced Entrepreneurship and Innovation (MGMT 4161)

 First step for the organization is that they need to think what
innovation type is. Is it incremental or is it radical?
 Second step is to think what the dimension of the innovation is.
That sounds quite easy but there are some innovations that can be
in several dimension groups, for example jet-powered sea ferry.
That innovation belongs both to a product dimension and a process
dimension.
 Third and last step is to map innovation to the innovation space.
The 4P’s of Innovation Space in Action

A Process Model of Innovation and Entrepreneurship

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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. Whether we are looking at an
individual entrepreneur bringing their idea into action or a multi-million-
dollar corporation launching the latest in a stream of new products, the
same basic framework applies.
We can break it down to the four key steps:
 recognizing the opportunity
 finding the resources
 developing the idea
 Capturing value.
1. Recognizing the Opportunity: Innovation triggers come in all
shapes and sizes and from all sorts of directions. They could take
the form of new technological opportunities or changing
requirements on the part of markets. They could be the result of
legislative pressure or competitor action. They could be a bright
idea occurring to someone as they sit, Archimedes-like, in their
bathtub. They could come as a result of buying in a good idea from
someone outside the organization. Or they could arise from
dissatisfaction with social conditions or a desire to make the world
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a better place in some way. The message here is clear: if we are
going to pick up these trigger signals then we need to develop some
pretty extensive antennae for searching and scanning around us - and
that includes some capability for looking into the future.
2. Finding the Resources: The trouble with innovation is that it is
by its nature a risky business. You don’t know at the outset whether
what you decide to do is going to work out or even that it will run
at all. Yet you have to commit some resources to begin the process.
So how do you build a portfolio of projects which balance the risks
and the potential rewards? (Of course, this decision is even tougher
for the first-time entrepreneur trying to launch a business based on
his or her great new idea - the choice there is whether to go
forward and commit what may be a huge investment of personal
time, the mortgage, family life, etc. Even if they succeed, there is
then the problem of trying to grow the business and needing to
develop more good ideas to follow the first.) 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) and do we have the skills and
resources to take it forward? And if we don’t have those resources,
which are often the case with the lone entrepreneur at start-up,
how will we find and mobilize them?
3. Developing the Idea: Having picked up relevant trigger signals,
made a strategic decision to pursue some of them and found and
mobilized the resources we need, the next key phase is actually
turning those potential ideas into some kind of reality. In some
ways this implementation phase is a bit like making a kind of
‘knowledge tapestry’, by gradually weaving the different threads of
knowledge (about technologies, markets, competitor behavior, etc.)
into a successful innovation.
Early on it is full of uncertainty but gradually the picture becomes
clearer - but at a cost. We have to invest time and money and find
people to research and develop ideas and conduct market studies,

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 GLC, Advanced Entrepreneurship and Innovation (MGMT 4161)
competitor analysis, prototyping, testing, etc. in order to gradually
improve our understanding of the innovation and whether it will
work. Eventually, it is in a form which can be launched into its
intended context - an internal or external market - and then further
knowledge about its adoption (or otherwise) can be used to refine
the innovation. Developing a robust business plan which takes all of
this into consideration at the outset is one of the key elements in
entrepreneurial success.

Throughout this implementation phase, we have to balance

creativity - finding bright ideas and new ways to get around the
thousand and one problems which emerge and get the bugs out of
the system - with control - making sure we keep to some kind of
budget on time, money and resources. This balancing act means
that skills in project management around innovation, with all its
inherent uncertainties, are always in high demand! This phase is
also where we need to bring together different knowledge sets from
many different people - so combining them in ways which help
rather than hinder the process and raise big questions around team
building and management.
It would be foolish to throw good money after bad, so most
organizations make use of some kind of risk management as they
implement innovation projects. By installing a series of ‘gates’ as
the project moves from a gleam in the eye to an expensive
commitment of time and money, it becomes possible to review and
if necessary redirect or even stop something which is going off the
rails. For the solo entrepreneur it is in this stage that judgement is
needed - and sometimes the courage to know when to stop and
move on, to let go and start again on something else.
Eventually, the project is launched into some kind of marketplace:
externally, people who might use the product or service or,
internally, people who make the choice about whether to buy into
the new process being presented to them. Either way, we don’t

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have a guarantee that just because the innovation works and we
think it the best thing since sliced bread they will feel the same
way. Innovations diffuse across user populations over time. Usually,
the process follows some kind of S-curve shape. A few brave souls
take on the new idea and then gradually, assuming it works for
them, others get on the bandwagon until finally there are just a few
diehards who resist the temptation to change. Managing this stage
well means we need to think ahead about how people are likely to
react and build these insights into our project before we reach the
launch stage - or else work hard at persuading them after we have
launched it!
4. Capture Value: Despite all our efforts in recognizing
opportunities, finding resources and developing the venture, there
is no guarantee we will be able to capture the value from all our
hard work. We also need to think about, and manage, the process
to maximize our chances – through protecting our intellectual
property and the 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. We also have
an opportunity at the end of an innovation project to look back and reflect
on what we have learnt and how that knowledge could help us do things
better next time. In other words, we could capture valuable learning
about how to build our innovation capability.
The Context of Success
It’s all very well putting a basic process for turning ideas into reality in
place. But it doesn’t take place in a vacuum. It is subject to a range of
internal and external influences that shape what is possible and what
actually emerges. This process doesn’t take place in a vacuum; it is
shaped and influenced by a variety of factors. In particular, innovation
needs:
 Clear strategic leadership and direction, plus the commitment of
resources to make this happen. Innovation is about taking risks,
about going into new and sometimes completely unexplored

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 GLC, Advanced Entrepreneurship and Innovation (MGMT 4161)
spaces. We don’t want to gamble, simply changing things for their
own sake or because the fancy takes us. Innovation needs a
strategy. But, equally, we need to have a degree of courage and
leadership, steering the organization away from what everyone else
is doing or what we’ve always done and towards new spaces. In the
case of the individual entrepreneur this challenge translates to one
in which a clear personal vision can be shared in ways which
engage and motivate others to buy into it and to contribute their
time, energy, money, etc. to help make it happen. Without a
compelling vision, it is unlikely the venture will get off the ground.
 An innovative organization in which the structure and climate
enables people to deploy their creativity and share their knowledge
to bring about change. It’s easy to find prescriptions for innovative
organizations which highlight the need to eliminate stifling
bureaucracy, unhelpful structures, brick walls blocking
communication and other factors stopping good ideas getting
through. But we must be careful not to fall into the chaos trap. Not
all innovation works in organic, loose, informal environments or
‘skunk works’; indeed, these types of organization can sometimes
act against the interests of successful innovation. We need to
determine appropriate organization that is the most suitable
organization given the operating contingencies. Too little order and
structure may be as bad as too much.

This is one area where start-ups often have a major advantage - by

definition they are small organizations (often one-person ventures)
with a high degree of communication and cohesion. They are bound
together by a shared vision and they have high levels of
cooperation and trust, giving them enormous flexibility. But the
downside of being small is a lack of resources, and so successful
start-ups are very often those which can build a network around
them through which they can tap into the key resources they need.
Building and managing such networks is a key factor in creating an

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extended form of organization.
 Proactive links across boundaries inside the organization and to the
many external agencies who can play a part in the innovation
process: suppliers, customers, sources of finance, skilled resources
and of knowledge, etc. Twenty-first-century innovation is most
certainly not a solo act but a multiplayer game across boundaries
inside the organization and to the many external agencies who can
play a part in the innovation process. These days it’s about a global
game and one where connections and the ability to find, form and
deploy creative relationships is of the essence. Once again, this
idea of successful lone entrepreneurs and small-scale start-ups as
network builders is critical. It’s not necessary to know or have
everything to hand but to know where and how to get it.

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