Innovation Stimulation
Dr. Bukaza Chachage
1
Understanding Innovation
Introduction
• The objective of this lesson is to:
– Understand what innovation is
– Introduce the major types of innovation:
invention, extension, duplication and synthesis.
– Define and illustrate the sources of innovation for
entrepreneurs.
– To review some of the major myths associated
with innovation.
– Define the 10 principles of innovation.
The leaders mindset is without a doubt the key to survival and success
If he is obsessed with the will to win and has the courage to delve into
the unknown, the organisation will most certainly experience renewal
and add value
Emerging business trends
The Connected
Marketplace
Traditional model of change Emerging model of change
Customer-Focused
Mass Enterprise
Customization
Supplier
Globalization
Knowledge as a
Key Competitive Channel
Resource Clustered Sales
and Transactions
Business drivers
Unquestionably
Superior
products and
services Client Service
Through Reduced cycle time
Effective Relationships
Growth and Profitability
Managed
Business Risk
Strategically Positioned
So what?
The only sustainable competitive
advantage in a rapidly changing
environment will come from the
organisation’s ability to out-
innovate the competition.
Simply put ...
s
rce
Innovate
ta l fo
enm
on
vir
En
Organizational inertia
Or die...
The Innovation
Innovation is the process of exploiting
inventions to increase the
organisation’s ability to achieve and
sustain competitive advantage.
Definition of innovation
Innovation in its broadest sense comes from the
Latin word “innovare” meaning “to make
something new.”
The definition used in this presentation, relates to
the process of turning opportunity into new
ideas and putting these into widely used
practice.
TYPES OF INNOVATION
Product
Process
Organisational
Service
Product innovation
‘30% of sales to come from products
less than 4 years old’.
The emphasis is on engineering new
products either new to the world or
new to the market.
Process innovation
The emphasis is on the the production
mechanisms that bring about the products.
By improving the processes it leads to
reduced production costs which then provide
a cost competitive advantage.
Service innovation
This involves the deployment of knowledge
and is not always embodied in a physical
product or piece of equipment, but in an
intangible form. A company seeks to acquire
competitive advantage by offering unique
propositions to those offered by competitors.
Organizational innovation
This involves the way the organisational
structures, the people, the tasks and cultures
are knitted together to obtain the best from
an individual.
Categories of innovation
• There are 4 basic types of innovation:
1. Invention:
• The creation of a new product, service or process
often one that is novel or untried.
– E.g. airplane (Wright Brothers), light bulb (Thomas Edison),
telephone (Alexander Graham Bell)
2. Extension:
• New use of different application of an already existing
product, service or process.
– E.g. McDonalds (Ray Kroc)
Categories of innovation
3. Duplication:
• The replication of an already existing product, service
or process.
– Entrepreneur adds own creative touch to enhance the
concept.
4. Synthesis:
• The combination of existing concepts into a new
formulation.
Sources of innovation
• The sources of innovation include:
1. Unexpected occurrences:
• These are success or failure that, because they were
unanticipated or unplanned, often end up proving to
be a major innovative surprise to the firm.
Sources of innovation
2. Incongruities:
• These occur whenever a gap exists between
expectations and reality.
3. Process needs:
• These exist whenever a demand arises for the
entrepreneur to innovate and answer a particular
need.
Sources of innovation
4. Industry and market change:
• Continual shifts in the market place occur because of
developments such as consumer attitudes,
advancements in technology, industry growth.
Sources of innovation
5. Demographic changes:
• These arise from trend changes in population, age
education, occupations, geographic locations.
6. Perpetual change:
• These changes occur in people’s interpretation of
facts and concepts
Sources of innovation
7. Knowledge based concepts:
• This is based on new thinking, new methods and new
knowledge.
Principles of innovation
• There are principles to innovation that exist
and these can be learnt.
• These principles include:
1. Be action oriented – be active and searching for
new ideas, opportunities or sources of
innovation.
Principles of innovation
2. Make the product, process or service simple and
understandable – people must readily
understand how the innovation works.
3. Make the product, process or service customer-
based – innovators always must keep the
customer in mind.
Principles of innovation
4. Start small – innovators should begin small and
then build and develop allowing for planned
growth and proper expansion in the right
manner and at the right time.
5. Aim high – aim high for success by seeking a
niche in the market place.
Principles of innovation
6. Try/test/revise – this helps out any flaws in the
product, process or service.
7. Learn from failures – failure often gives rise to
innovations.
8. Follow a milestone schedule – a schedule is
important in order to plan and evaluate the
project.
Principles of innovation
8. Reward heroic activity – innovate activity should
be rewarded and given the proper amount of
respect.
9. Work, work, work – it takes work and not genius
or mystery to innovate successfully.
Innovation and the entrepreneur
• Innovation is a key function in the
entrepreneurship process.
• According to Drucker innovation is:
– …the means by which the entrepreneur either
creates new wealth-producing resources or
endows existing resources with enhanced
potential for creating wealth.
Innovation and the entrepreneur
• Thus, innovation is the process by which
entrepreneurs convert opportunities into
marketable ideas.
– It is the means by which they become catalyst for
change.
Innovation and the entrepreneur
• The innovation process is more than just an
idea.
– It is a combination of the vision to create a good
idea and the perseverance and dedication to
remain with the concept through implementation.
Innovation and the entrepreneur
• Equally important is that entrepreneurs blend
imaginative and creative thinking with a
systematic, logical process ability.
Innovation and the entrepreneur
• Potential entrepreneurs are always looking for
unique opportunities to fill needs or wants.
– They sense economic potential in business
problems by continually asking “What if?” or
“Why not?”
– They develop the ability to see, recognize and
create opportunity where others find only
problems.
Innovation and the entrepreneur
• The first rule for developing entrepreneur
vision is to recognize that problems are to
solutions what demand is to supply.
The Innovation Management
Challenge
The primary goal of innovation
management is to assure
sustainable competitive
advantage by means of
continued, intentional, and
effective organisational
transformation.
The Innovation Management
Challenge
• Successful innovation requires
– an understanding of the organisation,
– an understanding of the innovation
management process, and
– the ability to exploit innovation as a core
competency
• An organisation is an
Environmental suprasystem
open, organic
sociotechnical system
consisting of
Goals & values Technical interdependent
subsystem subsystem subsystems
• No sustainable
Managerial transformation without
subsystem a systemic approach
that recognises these
inter-dependencies
Pyschosocial Structural
subsystem subsystem
Lifecycle of inventions
Growth Maturity
Rapid
growth Decline
Discovery Disappearance
Time
The S-curve characteristics of
innovation
Innovation
Time
Long term patterns of
innovation
Growth
Time
The Innovation Management
Process
Future state
Current state Transformation
state
Time
The Innovation Management
Process
Future state
Sustain
Anticipate
Current state
Scope Introduce
Anticipate
Environment Organisation
Identify need for
Transformation
• Identify the need for
transformation from continuos
monitoring of the environment
and the organisation
– What needs to or will change?
Scope
Define Define desired
existing state state
Define gap
• Define the gap between the
current reality and the desired
state
– Consider all sub-systems
– Start with a clean slate, map
migration from the existing state
Introduce
Determine Determine
constraints support
Define transformation
strategies
Implement
strategies
• The best strategies are irrelevant unless
effectively applied
– Determine support and constraints
– Define strategies to migrate subsystems in
appropriately sized, manageable steps
– Implement!
Sustain
• The desired future state becomes the current
reality, once implemented
• The impact and implications of sustaining
desired future states should be understood and
considered
Innovation summarized
Environment Organisation
Identify need for
transformation
Define Define desired • Systematic,
existing state state
well-defined
Define gap
process
Determine Determine • Repeatable,
constraints support
predictable
Define transformation
strategies
Implement
strategies
The Innovation Management
Process
Growth
• Innovation
management is
a process, not
an event.
– Continually
evolve over
time
– Sustain
innovation
moments
Time
Innovation Management is a
strategic process
Future
Strategy Vision
Action Goals and
Values Mission Vision
plans Objectives
How will we What do we What counts What are we Where are we
reach our want to around here? going to do? going?
objectives? achieve, by
when, at what
cost?
Innovation without continuity
Growth Maturity
Rapid
growth Decline
Discovery Disappearance
Time
Long Term Innovation
Growth
Time
Innovation in motion
u t e
t r o Where we want
t e s
e fa s to be tomorrow
n t h
a t io Create a vision of the
ov
In n brand in the future
Where we are
Existing conventions
Where are we?
• All organisations should question their comfort zone
• Human beings seek comfort; we want what we like, and
we like what we know. Doing something different, or
straying from the well worn path of habit or custom
requires effort and risk
WARNING!
In order to remain comfortable we become blind
to change and our comfort is often an illusion leading us to
a cruel awakening
The Future
– Knowing what lies ahead of us, is like
building a puzzle. The pieces are there and
as we put them together, it starts to form a
picture. Missing pieces can fall into place
anytime.
– No one gets ahead by copying the status quo
– Start to explore beyond the boundaries.
Seek out early adopters and study their
behaviour. Every industry has its hot spots,
gather information, network, read!
The Future (continue)
– Permit employees to exercise their creative muscles
without the normal constraints.
– The future should form part of any organisational
culture. Make predictions & formulate a holistic view of
life in ten, twenty years time. Get the creative juices
flowing.
– Businesses succeed in the short term through efficient
implementation of well tried solutions. They survive
and grow in the long term through the process of
innovation
The Future (continue)
– Innovation should be integral to any future strategy.
Companies who want to move into the future
should follow a few basic innovation rules.
• Observe people, especially the enthusiasts.
• Play with your physical workplace, does it project the right
atmosphere to customers and employees.
• Break rules and make change part of the culture.
• Remember little setbacks are expected!
• Stay human, focus on people and create winning teams.
• Build bridges between departments, to prospective
customers and ultimately from the present to the future.
– Start today, no company can afford to wait any
longer!
Invention is better than cure
• Essential principles of innovation that leaders should
install in their organisations
– Set challenging goals and create very high expectations
– Challenge the conventional way of doing things – stretch the
business to continually expand the capacity to create the future
– Create a cause and strive together to achieve this, it is far more
powerful than business as usual
– Listen to your people especially the “revolutionaries”
– Flatten the hierarchy and let ideas flow freely – everyone is
welcome & rule breaking ideas the way to the future
Invention is better than cure
• More principles of innovation that leaders should install
in their organisations
– Provide the necessary funding
– Create powerful teams and encourage exciting new
ventures while maintaining an acceptable level of
operational effectiveness
– Provide a structure to the experimentation process.
– Maintain high energy by dividing into smaller units
when a business gets to big
– Reward innovators
“Dare to be different. Be a pioneer
Be a leader. Be tender. Continue
to give birth to new ideas. Stop
wasting time on being mundane
and mediocre.”
Oprah Winfrey
Thanks
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