Chapter-1

Introduction To Innovation
Introduction

Innovation is essential for business survival in highly competitive markets where it is increasingly
difficult to differentiate products and services. Innovation is important for the following reasons:

• It allows businesses to expand their customer base by refreshing the market with new and
improved products

• It is a key component of competitive advantage and helps companies stay ahead of competitors
before rivals’ innovations take market share

• It supports the ability to charge a premium

• It provides incremental revenue and profit and also increases shareholder value.

Businesses that are not growing through new product and service introduction are likely to decline as their
existing sales portfolio inevitably matures.

It is not surprising that companies such as Procter & Gamble and General Electric have actively embraced
the management of innovation. Their principal goal is to drive growth and then to improve shareholder
value.

‘Nothing is more central to sustain growth than innovation that leads an industry and not only product
innovations, but innovative design, innovative marketing, innovative in-store shopping experiences,
innovation across the entire business. The companies and brands that lead innovation are the catalysts for
growth.’

1.2 MEANING AND DEFINITIONS OF INNOVATION

The term “Innovation” seems to derive from the Latin novus (Hsu 2005), which means new or young or
novel. For most people “to be innovative” means to be creative and/or to make something new.

Unfortunately there is no single accepted definition of the term “Innovation”. For some people it means a
new idea, for others it means an invention (a materialized new idea), for some it means a new product (a
developed invention), for some others it means the act of creating a new product or process, while for
others it means to create a new business.
Innovation is defined simply as a "new idea, device, or method. However, innovation is often also viewed
as the application of better solutions that meet new requirements, unarticulated needs, or existing market
needs. This is accomplished through more-effective products, processes, services, technologies, or
business models that are readily available to markets, governments and society. The term "innovation" can
be defined as something original and more effective and, as a consequence, new, that "breaks into" the
market or society. It is related to, but not the same as, invention.

The process of translating an idea or invention into a good or service that creates value or for which
customers will pay.

To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific
need. Innovation involves deliberate application of information, imagination and initiative in deriving
greater or different values from resources, and includes all processes by which new ideas are generated
and converted into useful products. In business, innovation often results when ideas are applied by the
company in order to further satisfy the needs and expectations of the customers.

“Innovation is the introduction of new ideas, goods, services, and practices which are intended to be
useful (though a number of unsuccessful innovations can be found throughout history). The main driver
for innovation is often the courage and energy to better the world. An essential element for innovation is
its application in a commercially successful way. Innovation has punctuated and changed human history
(consider the development of electricity, steam engines, motor vehicles, etc.).”
Innovation is

 The act of introducing something new: something newly introduced

 The successful exploitation of new ideas

 A creative idea that is realized

Innovation is the entire process by which an organization generates creative new technological ideas
(invention) and converts them into novel, useful and viable commercial products, services, and business
practices for (potential) economic gain.

According to Rosabeth Kanter, “Innovation is the generation, acceptance and implementation of new
ideas, processes, products or services”.

Importance of Innovation
Innovation is the process of creating and implementing a new idea. It is the process of taking useful ideas
and converting them into useful products; services or processes or methods of operation. These useful
ideas are the result of creativity, which is the prerequisite for innovation. Creativity in the ability to
combine ideas in a unique way or to make useful association among ideas. Creativity provides new ideas
for quality improvement in organizations and innovation puts these ideas into action.

Change and innovation are closely related, even though they are not the same. Change often involves new
and better ideas. The new idea may be the creation of a new product or process or it can be an idea about
how to change completely the way business is carried out. Successful organizations understand that both
innovation and change are required to satisfy their most important stake holders.
Why We Need Innovation

“Nokia used to be a great strategic planner. Now, later Nokia was not sure of the right way to
go. There has got to be something else, another way to look at our industry and their future.”

“We know innovation is part of the answer. But how do we do it?”

“Obviously, we can’t keep doing the same things over and over again. Our internal systems
aren’t efficient and our best products are old news.”

Innovation Leadership Has Two Components

1. An innovative approach to leadership.

This means to bring new thinking and different actions to how you lead, manage, and go about your work. How can you
think differently about your role and the challenges you and your organization face? What can you do to break open
entrenched, intractable problems? How can you be agile and quick in the absence of information or predictability?

2. Leadership for innovation.

Leaders must learn how to create an organizational climate where others apply innovative thinking
to solve problems and develop new products and services. It is about growing a culture of innovation, not just hiring a few
creative outliers. How can you help others to think differently and work in new ways to face challenges? What can be done to
innovate when all resources are stressed and constrained? How can you stay alive and stay ahead of the competition?

Six Innovative Thinking Skills

Designers ask questions such as: How do we make something beautiful and usable? How does it mechanically go
together? How do we reflect the brand? Leaders ask questions such as, What are we trying to achieve and why? How do
we accomplish our goals? What people and resources do we need to make it happen?

By weaving together the leadership process with the design process, CCL and Continuum have identified six
innovative thinking skills. Using these skills, organizations are able to create something that is useful and
desirable—whether it’s a breakthrough technology, a valuable service, or a fresh solution to an old problem.
Each of these skills shifts your understanding of a situation and opens the door for new approaches and
solutions.

1. Paying attention. First impressions and assumptions are not the whole picture, so they don’t lead to an
accurate assessment or best solution. Paying attention is the ability to notice what has gone unnoticed. It is about
 looking more deeply at a situation, being a clear-eyed observer, perceiving details, and seeing new patterns.
Paying attention begins with slowing down, temporarily, in order to be more deliberate in grasping the situation.
Consider different points of view and multiple inputs. Literally look and listen from a new perspective.

2. Personalizing. At work, we tend to under-value individual, personal experience. The practice of personalizing
elevates it, seeking insight from the human experience. For innovative thinking, personalizing is a twofold process:
tapping into our own broad scope of knowledge and experience, and understanding our customer in a deep, personal
way.

The ability to tap into (seemingly unrelated) personal experiences and passions introduces fresh perspec-tives on
challenges. Personalizing draws on your interests, hobbies, or avocation and applies them to work. Consider how ideas,
patterns, or strands of insight from the whole of your life might contribute to your work. For example, a manager may
find that her experience as a musician helps her to orches-trate and communicate the varying pace and inten-sity of her
team’s long-term product development.The customer side of personalizing is the ability to understand your customer
in a full and real way: Who are you reaching? What matters to them? What don’t you know? Personalizing requires
you to interact with customers in their environment. It pushes you to understand who they are and how they live.
Deep customer knowledge leads to the new ideas, patterns, and insights that fuel innovation.

3. Imaging. Imaging is a tool to help you pro-cess information. Words by themselves are usually not enough for
making sense of complexity or vast amounts of information. Imagery is a very good way to take it in and make sense of
it. Pictures, stories, impressions, and metaphors are powerful tools for describing situations, constructing ideas, and com-
municating effectively. Using your imagination to answer the question “what if?” can lead to extraordi-nary images and
possibilities.
The customer side of personalizing is the ability to understand your customer in a full and real way: Who are you
reaching? What matters to them? What don’t you know? Personalizing requires you to interact with customers in their
environment. It pushes you to understand who they are and how they live. Deep customer knowledge leads to the new
ideas, patterns, and insights that fuel innovation.

4. Imaging. Imaging is a tool to help you pro-cess information. Words by themselves are usually not enough for making
sense of complexity or vast amounts of information. Imagery is a very good way to take it in and make sense of it. Pictures,
stories, impressions, and metaphors are powerful tools for describing situations, constructing ideas, and com-municating
effectively. Using your imagination to answer the question “what if?” can lead to extraordi-nary images and possibilities.