Chapter 1

The Innovation Imperative

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1.1. Definition of Innovation and Innovation Matters

• There is no single accepted definition of the term

innovation.
• Historically, innovation was defined as the introduction
of new elements or a new combination of old elements
in industrial organizations (Schumpeter 1934).
• Much later, Kanter (1983) also defined innovation as
the process of bringing any new, problem-solving idea
into use.
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What is Innovation in Business & Why is it Important?

• In business context, innovation is the creation of better

or more effective products, processes, services, or
ideas that are accepted by users, and proposed at the
right time according to governments and society.
• It is driven by entrepreneurship a powerful
combination of vision, passion, energy, judgment and
etc. which enables good ideas to become reality.

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Cont’d…
According to Drucker, innovation is matter because:
• It is the specific tool of entrepreneurship, the means by
which they exploit change as an opportunity for different
business or a different service.
• It is capable of being disciplined, learned, and practiced.
• It is about growing new markets (E.g. Alexander Bell‘s
invention & Henry Ford).
• It is about rethinking services.
• It is about meeting social needs.

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Cont’d
Some other purposes of innovation are:
• To create business value (incremental improvement to
existing product and services).
• To bridge the gap between the present situation and
environmental challenges.
• To a successful modern economy as water is to life.
• To find new ways to optimize existing resources,
improve efficiency, reduce costs, and enhance
profitability.
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1.2. Innovation and Entrepreneurship

• Entrepreneurship is the capacity and willingness to develop,

organize and manage a business venture along with any of its
risks in order to make a profit (example: starting of new
businesses).
• It is the act and art of being an entrepreneur or one who
undertakes an effort to transform innovations into economic
goods.
• The idea of entrepreneurship is used to drive innovation to create
value, social and commercial across the lifecycle of
organizations.
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1.3. Innovation isn’t Easy!
• It‘s a complex process which carries risks and needs careful
and systematic management.
• It takes a particular mix of energy, insight, belief and
determination to push against these difficulty.
• It also requires judgment to know when to stop and move on
to something else.
• It needs idea generation, evaluation, development and
implementation.

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Cont’d
 Successful entrepreneurs should recognize that:
Learn from their mistakes
Understanding Where and When Timing
Market Conditions
Technological Uncertainties
• Organizations need entrepreneurship at all stages in their
lifecycle, from start-up to long lived survival.
• The ability to recognize opportunities, pull resources together in
creative ways, implement good ideas and capture the value from
them are core skills.
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 1.4. Managing innovation and Entrepreneurship
How do we manage innovation?
• Innovation management is the process of managing innovative ideas.
• Research repeatedly suggests that if we want to succeed in managing innovation
we need to:
 explore and understand different dimensions of innovation (ways in
which we can change things)
 manage innovation as a process
 create conditions to enable them to repeat the innovation trick (building
capability)
 focus this capability to move their organizations forward (innovation
strategy)
 Build dynamic capability (the ability to rest and adapt their approaches
in the face of a changing environment).
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1.5. Dimension of innovation
• Innovation can take many forms but they can be reduced to four directions of change:

1. Product Innovation: This involves creating new or improved products or services.

• It's what most people typically think of when they hear ”innovation”.

• Example: The development of a new smartphone or electric vehicle.

2. Process Innovation: This focuses on improving the ways in which products or services are created
and delivered.

• It's about increasing efficiency, reducing costs, and enhancing quality.

• Example: Implementing a new manufacturing process or streamlining a customer service workflow.

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Cont’d

3. Position Innovation: This involves changing the context in which a product or service is introduced.

• It's about repositioning existing offerings to target new markets or create new perceptions.

• Example: Repurposing a product for a different demographic or changing the way it's marketed.

4. Paradigm Innovation: This is the most radical form of innovation, involving a fundamental shift in the
underlying mental models of an organization or industry.

• It's about changing the way we think about things.

• Example: The shift from traditional retail to e-commerce, or from DVD rentals to streaming services.

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Phases of Innovation
• Innovation has two phases:

1. Design phase: is marked by much divergent thinking and creativity,

brainstorming, search for alternatives, etc.

2. Implementation phase: It requires a very different mode of

management.

• And also, much plans needs to be done, careful coordination and

evaluation of progress.
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Implementation Process of Innovation

A.Incremental innovation: It’s the process of making small,

gradual improvements to an existing product, service, or
process- doing what we do but better.

B.Radical innovation: It’s about making major changes in

something established - doing something completely different.

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A process model for innovation and Entrepreneurship

• The core process involves four key steps:

1.Recognizing opportunities
2.Finding resources
3.Developing the venture
4.Capturing value

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THANK YOU!
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