1. The Concept of Innovation and Innovation Management
Week 4
The Concept of Innovation and Innovation Management
Managing Innovation

2. Outline Innovation – what it is and why does it matters
Models of innovation
Innovation as a management process

3. Innovation – what is and why does it matters
innovation is …
new stuff
that adds value
for various stakeholders
can be monetized 
creates a competitive advantage 
and is sustainable
until the advantage erodes

4. Innovation – what is and why does it matters
Innovation is…
“the process of turning opportunity into new ideas and of putting these into widely used practice” (Tidd & Bessant, 2009)
“the management of all the activities involved in the process of idea generation, technology development, manufacturing and marketing of a new (or improved) product[/service]” (Trott, 2008)
“not just the conception of a new idea, nor the invention of a new device, nor the development of a new market. The process is all these things acting in an integrated fashion” (Myers & Marquis, 1969)

5. Innovation – what is and why does it matters
Innovative Thinking
Innovative thinking goes beyond the mere creation of business.
“Ideas come from people. Innovation is a capability of the many.”
Innovative thinking is an integrated mindset that permeates individuals and organizations.

6. Innovation – what is and why does it matters
Who does it matter to?
Entrepreneurs starting up a venture
Established enterprises trying to grow
Governments (local and national)
Trade and sector bodies
Supply chain ‘owners’

7. Innovation – what is and why does it matters
innovation is …
Innovation is driven by the ability to see connections, to spot opportunities and to take advantage of them.
But innovation is not just about opening up new markets – it can also offer new ways of serving established and mature ones.
Of course, technology often plays a key role in enabling radical new options.
At the other end of the technological scale there is scope for improvement on an old product, often using old technologies in new ways.

8. Innovation – what is and why does it matters
innovation is …
Innovation is of course not confined to manufactured products; plenty of examples of growth through innovation can be found in services.
Public services such as healthcare, education and social security may not generate profits but they do affect the quality of life for millions of people.

9. Innovation – what is and why does it matters
Innovation matters…
not only at the level of the individual enterprise but also increasingly as the wellspring for national economic growth.
Importantly innovation and competitive success are not simply about high-technology companies.
According to Statistics Canada,16 the following factors characterize successful small- and medium-sized enterprises:
Innovation is consistently found to be the most important characteristic associated with success.
Innovative enterprises typically achieve 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.

10. Innovation – what is and why does it matters
Innovation, Creativity, and Entrepreneurship
Creativity is typically described as the process of generating new ideas.
Innovation takes creativity a step further by being a process that turns those ideas into reality.
Innovation is the process by which entrepreneurs convert opportunities (ideas) into marketable solutions.

11. Innovation – what is and why does it matters
Innovation & Entrepreneurship
The nature of innovation is that it is fundamentally about entrepreneurship.
The skill to spot opportunities and create new ways to exploit them is at the heart of the innovation process.
Entrepreneurs are risk-takers, but they calculate the costs of taking forward a bright idea against the potential gains if they succeed in doing something different – especially if that involves upstaging the players already in the game.

12. Innovation – what is and why does it matters
Innovation & Entrepreneurship
Stage in life cycle
Start-up
Growth
Sustain/scale
Renew
Creating wealth
Individual entrepreneur exploiting new technology or market opportunity
Growing the business through adding new products/services or moving into new markets
Building a portfolio of incremental and radical innovation to sustain the business and/or spread its influence into new markets
Returning to the radical frame-breaking kind of innovation which began the business and enables it to move forward as something very different
Creating social value
Social entrepreneur, passionately concerned to improve or change something in their immediate 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

13. Innovation – what is and why does it matters
Innovation & Entrepreneurship
Innovation doesn’t just happen – it is driven by entrepreneurship. This powerful mixture of energy, vision, passion, commitment, judgement and risk-taking – provides the engine behind the innovation process. It’s the same whether we are talking about a solo start-up venture or a key group within an established organization trying to renew its products or services.

14. Innovation – what is and why does it matters
Successful Innovators …..
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)

15. Innovation – what is and why does it matters
Innovative companies are more…
…Adaptable
Flexible strategy, structure, culture
…Competitive
Better processes, services, business models

16. Innovation – what is and why does it matters

17. Innovation – what is and why does it matters
Barriers to innovation include:
Seeing innovation as ideas, not managing the whole journey;
Not recognizing the need for change;
Mindset and complacency – core competence becomes core rigidity;
Closed information network, insulated from new ideas.

18. Misconceptions of Innovation
Innovation Is Planned and Predictable
Technical Specifications Must Be Thoroughly Prepared
Big Projects Will Develop Better Innovations than Smaller Ones
Technology Is the Driving Force of Innovation Success.
© 2012 Pearson Education, Inc. publishing as Prentice Hall

19. Innovation – what is and why does it matters
Nikolai Kondratieff / Joseph Schumpeter
“virtually all of the economic growth that has occurred since the eighteenth century is ultimately attributable to innovation”
Schumpeter’s “Creative Destruction”