CHAPTER 2

INNOVATION AND IDEA GENERATION

2.1 Innovation
2.1.1 Types of Innovation
2.1.2 Principles of Sustainable Innovation
2.2 Idea Presentations
2.3 Idea Selection
2.4 Customer Needs
2.5 Market Research and Validation
2.6 The Decision-Making Process
2.6.1 Problem or Need Recognition
2.6.2 Information Search
2.6.3 Evaluation of Alternatives
2.6.4 Selection Stage
2.6.5 Evaluation of Decision

After this chapter, the students will be able to:

1. Explain the definition of Innovation;
2. Identify the types of Innovation; and
3. Distinguish the principles of Innovation.

2.1 Innovation

Innovation is something that involves developing, creating new concepts and new
ideas that will be useful for the target customers.
According to Joerg Gemuenden, a professor emeritus of Technology and Innovation
Management of the Department of Leadership and Organizational Behavior in BI
Norwegian Business School in Berlin Germany, Innovation is a process, involving multiple
activities, performed by multiple actors from one or several organizations, during which
new combinations of means and ends, which are new for a creating and adopting unit, are
developed or produced, implemented and transferred too old and new.

2.1.1 Types of Innovation

Sustaining Innovation is also known as routine innovation happens on an incremental

basis, is often a response to customer and market demands or improvements in technology.
The company obtained feedback from the customers about the product and services
rendered to improve and provide greater value to the customers. Most companies that used
the sustaining innovation has been successful in building their businesses and continue
improving their offerings to their customers and they have the awareness of the market
needs.
Disruptive Innovation in this type of innovation, most companies did not pay too much
attention on the smaller business because they are most likely focus on how they will
improve their products and services. A classic example of disruptive innovation is the boost
of cellular phones or mobile phones that competed with the fixed line telephony. When the
mobile phones hit the market, people decided to buy it for their own purpose because it is
more convenient to use anywhere.
Breakthrough Innovation is defined as an innovation from inside a company that
pushes something to the next level. It is innovation that opens the company to new markets
or changes the way customers interact with the market or the industry.

One great example of breakthrough innovation is the Apple iPhone, that generated
various units of mobile phones from 2007 to present.
Basic Research this type of innovation begins with the discovery of some new
phenomenon. Basic Research is a key-driver to innovation as it provides information about
a certain problem and derive with possible solutions. Basic Research is often described as
research without any clear goals, or science to satisfy the curiosity of a lone scientist
without anyone else even realizing that it exists. Thus, Basic Research can be defined as a
process of conducting a study about a specific problem and finding out solutions that will
benefit companies and industries in lieu with innovation. Basic research in innovation is
practically a basis that will improve a product or a service that will gratify the consumers.

2.1.2. Principles of Sustainable Innovation

As an investor, you have to be knowledgeable about the principles for a sustainable

innovation. According to Robert F. Brands in his classic book “Robert’s Rule of
Innovation: A 10-step Program for Corporate Survival” he introduced a ten-step program
for corporate survival;
Inspire. In Innovation, there should be a leader who can inspire others. They need to
possess positive attitude, vision and ability to communicate so that people will be able to
acquire what they should emphasize in innovating products or services.
NO Risk, NO Innovation. Most Technopreneurs are risk taker because they are
innovating new products or services which they have no assurance if it will survive in the
market.
New product process. Innovation starts with a vision; an innovator should understand
what they intend to develop for the benefit of their consumers and undergo with a structured
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process which includes idea generation, evaluation, prototyping, customer feedback and
success metrics.
Ownership. The business leader has all the ownership on the new products and
innovation in such a way that he/she generates the ideas and develop the appropriate
business model.
Value Creation. Once there is an innovation, those new products should have a value
and will be served as a solution to real customer problems.
Accountability. It is a standard that the team members and leaders have the full
responsibility and obligations in the innovations. They have the commitment to
manufacture quality products and services and distribution.
Training and Coaching. Proper hiring and staffing of the people in the organization
is a must to make sure that they are cautious of their responsibility and right mindset to
perceive the future innovations. Continuous coaching is necessary to maintain the attitude
and spirit.
Idea Management. In building products and rendering quality services, the
organization should value the presence of the customers and sales members in order to
have a brainstorming of what will be the best for the company.
Observe and Measure. It is a need to track the results if it is already an ideal Return
of Investment. That is how the company will measure their profitability whenever they
released new products to sustain the needs of the company as well.
Net Result and Reward. If the company achieve their ROI, incentives for their
employees is one way of motivation. There are several ways to motivate people aside form
financial aspect such as recognition for a job well done.

2.2. Idea Presentations

Presentation is a big challenge to everyone because we never know if the audience will
listen to you and if they are interested about your topic. That is why in every presentation,
the presenter must be fully prepared and knows what is the topic thoroughly. There are
various creative presentation ideas that can be helpful to those who are presenting a
proposal to a prospective client, presenting the output of your work and presenting to
potential investor with a goal to inspire the audience.
Check these ten (10) incredible presentations ideas that will inspire your audience by
Annie Pilon to Small Business Trends:
Storytelling Presentation – If you are presenting, make sure that it is not only about
the facts of your product or services but rather you can tell a story where they will be
interested to listen and focus to.
Musical Presentation – It will be more inspiring to try set some captivating tune that
will help your presentation to stand out and in order to be remembered by prospective
clients.

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 Video Presentation – It is desirable to make presentations that will have both visuals
and audio content to make it as a video. It is more appealing to the audience or clients as
they can envision what your products and services.
Photo-Only Presentation – If you will use the photo-only presentation this to make
your audience or clients prone from reading slides word-for-word. The photos or images
must be related to what you are presenting.
Immersive Presentation – Most conferences, seminars, and start-ups usually use the
immersive presentation where they encourage their audience to get involve on discussions,
games and open forum. Giving them a part to play on the presentation and providing them
with new initiative for the business.
Question Presentation – It is preferably advisable to ask questions to your audience
in order for you to know if they are interested and make them involved in your presentation
and you can have an idea if they understand your products or services to be offered.
Demonstrative Presentation – If you are selling a specific product, the demonstrative
presentation is the best way to promote. Some clients would like to see and touch the
product for actual demonstration and they can even try using the product themselves.
Humorous presentation – A speaker with great humor will make the presentation
livelier because the audience will become active in the discussion. However, the speaker
should be careful of using jokes to some clients to avoid misunderstandings.
Animated Presentation – The animated presentation is a one way of demonstrating
the product instead of using a video. You can film the product in a 3D style where the
audience or your client can visualize the entire interface of the product.
Props Presentation – This not a techy presentation that you need computers because
you will use visual aids to make a creative presentation.

2.3. Idea Selection

An innovative leader will encounter challenges in selecting the best ideas among the
list of different innovative process. What are the criteria for choosing the best ideas? What
will be the purpose of those ideas? There are usually different methods that can be used in
the process of selecting ideas. Below are the steps introduced by Michael Putz for Lead
innovation management:
Step 1- Rough Selection
In the first step, the chaff has to be separated from the wheat, i.e., the ideas without potential
have to be selected quickly. For this purpose, an “ABC analysis” can be used, where ideas
are divided into three classes:
A are those ideas that are absolutely necessary for further processing.
B ideas are those where you disagree about good or bad and are certain.
C ideas that have no value and are to be rejected.

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The A-ideas are definitely going into the next round, the B-ideas are discussed and it is
decided together per idea whether the idea will be adopted. C-ideas are no longer
considered.
Step 2- Fine Selection
In the next step, the sifted ideas are further selected. The method of “dots gluing” has
proven its worth. Each participant receives five sticky points and can distribute them to
their own favorites. If you count the points together you get a ranking.
If there are less than ten ideas, the “rating” method can also be used. Each participant gives
each idea between 0 and 5 points. The points are also added up and you get a ranking and
a priority.
Step 3- Detailed Analysis
In the detailed analysis, ideas are qualitatively analyzed and evaluated on the basis of
criteria. For product ideas, for example, these are:
• Customer benefit
• Differentiation potential and competitive factor
• Technical and economic feasibility
In this process step, additional information is collected on the ideas, which is then analyzed
and concretized in detail. A canvas, such as that of Osterwalder, can be used as a method
for new business models. On the basis of the findings from the analyses, a decision is made
as to whether the idea will be pursued further or not.

2.4. Customer Needs

One of the top priorities in business is to meet the demands and needs of customer. An
innovative leader undergoes a thorough research and identify the specific requirements or
needs of the customer to produce a useful product.

1 2
Customers have
latent needs;
Customers struggle
needs they don’t to articulate their
even know they needs
have

3 4 5
Customers’ won’t
Customers’ needs It is impossible to
know what they
changes quickly ever know all the
want until they
overtime. customers needs.
see it

Top 5 Myths about customer needs

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2.5. Market Research and Validation
An innovative leader should conduct a market research and validation to justify the
needs of customers. Quality measurement that demands the data gathered during
surveys, interviews and market research.
Market Validation is the process of determining whether your product is of interest to
a given target market. Market validation involves a series of customer interviews with
people in your target market, and it almost always takes place before you’ve made
significant investment in your product/concept (Semick, 2016).

2.6. The Decision -Making Process

Decision-Making is an enormous task because the success of the business relies on its
process to come up with a great solution. Various methods, models and processes can be
considered to make a decision.

Problem or Need Recognition

Information Research

Evaluation Alternatives

Selection Stage

Evaluation of Decision

Five Steps of Decision-Making Process

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2.6.1. Problem or Need Recognition
As an innovative leader you must identify the different problems or need recognition of the
consumer. The needs of the consumers are the basis or foundation of creating or producing
a new product or services in the market. By assessing the needs of the consumer, an
innovative leader can generate excellent ideas for innovation.

2.6.2. Information Search

When the problem occurs, there should have a solution. And to develop a solution an
innovative leader should be resourceful in such a way that he or she can think or bright
ideas. Information search of products and services that will satisfy the needs and wants of
the customer.

2.6.3. Information Search

In determining the needs and wants of the consumer, the innovative leader should provide
different choices of products. Customers will begin to seek out the best deal as they will
compare the details of the product, read many reviews if the product is poor or excellent
and probably compare prices of which is more affordable.

2.6.4. Selection Stage

After a thorough research and evaluation of the alternatives, an innovative leader should
select the best ideas that will be used in the decision-making. They may have had prior
experience with this exact decision or maybe they succumbed to advertising about the new
product or service and they want to give it a try. (Flekel, 2013).

2.6.5. Evaluation of Decision

The goal of every marketer is not for a one-time customer but a repeating lifetime customer.
One bad experience of buyer’s remorse and your branding perception could be tarnished
forever (Flekel, 2013). This process depends on the evaluation of the various assessment
done for decision-making. Whatever the company decided is considered the best idea.

REFERENCES

1. Juaneza, J. P., et al. (2019). Introduction to Technopreneurship, Unlimited

Books Library Services & Publishing Inc., Philippines.
2. Sison, L. G. (2018). Tech to Go, Philippines.
3. Modules of Dr. Jonathan W.L. Salvacion