Chapter 1
Chapter 1
Chapter 1
The word ‘innovation’ comes from the Latin, innovare, and is all
about change.
• Innovation doesn’t happen simply because we hope it will – it’s a complex process which
carries risks and needs careful and systematic management. Innovation isn’t a single
event. It’s an extended process of picking up on ideas for change and turning them
through into effective reality.
• This core process doesn’t take place in a vacuum. We also know that it is strongly influenced
by many factors. In particular, innovation needs: clear strategic leadership and direction, plus
the commitment of resources to make this happen . It needs an innovative organization in
which the structure and climate enables people to deploy their creativity and share their
knowledge to bring about change 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.).
Cont.……
Building a capability to organize and manage innovation is a great achievement, but we also
need to consider where and how innovation can be used to strategic advantage.
Putting an innovation strategy together involves three key steps, pulling together ideas
around core themes and inviting discussion and argument to sharpen and shape them. These
are:
So if we want to manage innovation we ought to ask ourselves the following check questions:
• Most of the time innovation takes place within a set of rules of the game which are clearly
understood, and involves players trying to innovate by doing what they do (product, process,
position, etc.) but better.
• But occasionally something happens which changes the rules of the game (e.g. when radical
change takes place along the techno-logical frontier or when completely new markets
emerge). When this happens, we need different approaches to organizing and managing
innovation. If we try to use established models which work under steady-state conditions we
find ourselves increasingly out of our depth and risk being upstaged by new and more agile
players.
Cont.……
• For this reason, a key skill lies in building ‘dynamic capability’ (the ability to
review and reset the approach which the organization takes to managing
innovation in the face of a constantly shifting environment).
• Developing the ideas and engaging others in a network for change – perhaps in
a region or around a key issue, Spreading the idea widely, diffusing it to other
communities of social entrepreneurs, engaging links with mainstream players
like public sector agencies, Changing the system - and then acting as agent for
next wave of change.
Innovation isn't easy
• ‘knowledge workers’ are now much more widely distributed and concentrated in new locations.
The world’s population has just increased fast ,so understanding the needs and constraints of this
‘new’ population represents a significant challenge in terms of market knowledge.
Market fragmentation
• Globalization has massively increased the range of markets and segments so that these are now
widely dispersed and locally varied – putting pressure on innovation search activity to cover
much more territory, often far from ‘traditional’ experiences – such as the ‘bottom of the
pyramid’ conditions in many emerging markets or along the so-called long tail – the large
number of individuals or small target markets with highly differentiated needs.
Rise of active users
• Although users have long been recognized as a source of innovation there has
been an acceleration in the ways in which this is now taking place. In sectors
like media the line between consumers and creators is increasingly blurred - for
example, You Tube has around 100 million videos viewed each day but also has
over 70,000 new videos uploaded every day from its user base.
• Major shifts in resource and energy availability prompting search for new
alternatives and reduced consumption. Increasing awareness of impact of
pollution and other negative consequences of high and unsustainable growth.
Cont.…
• Concern over climate change. Major population growth and worries over ability to sustain
living standards and manage expectations. Increasing regulation on areas like emissions,
carbon footprint.
information and communications technologies around the internet and broadband have
enabled and reinforced alternative social networking possibilities. At the same time the
increasing availability of simulation and prototyping tools have reduced the separation
• Culture – ‘the way we do things around here explore and understand different dimensions of
innovation (ways in which we can change things)
• create conditions to enable them to repeat the innovation trick (building capability).
• build dynamic capability (the ability to rest and adapt their approaches in the face of a
changing environment.
Dimension Type of change
‘ Product’
‘Process’
• Changes in the ways in which these offerings are created and delivered
‘Position’
‘Paradigm’
• Changes in the underlying mental models which frame what the organization does
A process model of Innovation and Entrepreneurship
4 key steps:
• Capturing value.
Thank
u!