Chapter 1 Innovation Management

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PERSPECTIVES
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INNOVATION
Innovation
nt
Manageme
WBB10202
Every organizationnot just

business needs one core
competence: innovation.
- Peter F. Drucker
Innovation
nt
Manageme
WBB10202
Michael Dell: Innovator of the

Personal Computer Industry
started the road to success
out of his University of

Texas dorm room in 1984
with just $1,000 and an
idea to provide affordable
personal computers to
college students.
Dell is now Chairman and
CEO of his company with a
net worth of over $30
billion.
sells primarily direct to the
customer to avoid
middleman mark-ups.
Innovation
nt
Manageme
WBB10202
Tony Fernandes
Born 30 April 1964
Kuala Lumpur,
Malaysia
Occupation Group
Chief Executive Officer
/ Director of Air Asia
Berhad
Net worth US$230
million
Innovation
nt
Manageme
WBB10202
Innovation
nt
Manageme
WBB10202
Creativity vs. Innovation
Creativity
the generation of ideas that result in the
improved efficiency or effectiveness of a

system.
a mental process involving the generation
of new ideas or concepts, or new
associations between existing ideas or
concepts.
Innovation
nt
Manageme
WBB10202
Important aspect of creativity

1) Process
2) People
Innovation
nt
Manageme
WBB10202
Innovation
introducing something new or doing

something in a new way.
to take an idea from concept to
realization and improve business
performance.
can be a new product, a new process, or
a new way of doing business.
Innovation
nt
Manageme
WBB10202
Creativity is thinking new things

while
Innovation is doing new things
Innovation
nt
Manageme
WBB10202
Ideas
The Innovation
Continuum
Concept
Invention
Innovation
Innovation
nt
Manageme
WBB10202
Innovation
nt
Manageme
WBB10202
Ideas
A raw idea .
is a spur of the moment thought, a
reflection of some visual or audible
stimulus, or the result of daydreaming.
needs hard thinking to determine its
significance. Ideas need to be framed in
some acceptable manner in order to be
communicated to others.
Innovation
nt
Manageme
WBB10202
Ideas
Innovation
nt
Manageme
WBB10202
Ideas
3,000 raw
ideas
Numbe
r of
ideas
Source: Stevens and

Burley Plotting the
rocket of radical
innovation, 2003
300 ideas
submitted
125 small
projects
9 early stage
developments
4 major
developments
1.7 launches
1 success
Stage of new business development process
Innovation
nt
Manageme
WBB10202
Concept
The work effort to develop a concept:

Identifying the available resources
Understanding the organizational
infrastructure
Assessing the competencies and
capabilities of the organization
Interpreting economic and global
demographic information
Innovation
nt
Manageme
WBB10202
Concept
It requires a proof of concept to show that

the concept is workable.
Developing a concept takes time
to clear up
the undefined
the uncertainties
the unpredictable
issues and circumstances
Innovation
nt
Manageme
WBB10202
Invention
A management scholar:
We discover what before existed, though to, us
unknown; we invent what did not exist before.
An eminent educator:
The invention process covers all efforts aimed at
creating new ideas and getting them to work.
An economist:
Every invention is (a) a new combination of (b) preexisting knowledge which (c) satisfies some want.
Innovation
nt
Manageme
WBB10202
INNOVATION
INVENTION
IMPLEMENTATION
/COMMERCIALIZATION
Innovation
nt
Manageme
WBB10202
The Factors That Affect

Innovation
Culture
Resources
INNOVATION
Process
Infrastructure
Innovation
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Manageme
WBB10202

Innovation
Resources
People
Money
Time
Customers
Suppliers
Infrastructure
Vision
Mission
Objectives
Strategies
Management attributes
Support to innovation
Capability
Intellectual property
Access to information
Plant and equipment
Financial reserves
Innovation
nt
Manageme
WBB10202

Innovation
Culture
Past accomplishments
Policies and practice
Rules of conduct
Philosophy
Artifacts
Process
Idea (from
recognized need)
Developed into
concept,
Invention
Development
Production
Diffusion
Adoption by end users.
Shared values
Belief
Legends
Rituals
History
Traditions
Innovation
nt
Manageme
WBB10202
1.
2.
3.
4.
5.
6.
7.
Sources of Innovation
(Peter Drucker)
The Unexpected
The Incongruity
Process Need
Industry and Market Structure Change
Demographics
Changes in Perception, Meaning, Mood
New Knowledge
Innovation
nt
Manageme
WBB10202
(Peter Drucker)
1. The Unexpected
An unexpected success, an
unexpected failure or an unexpected
outside event.
Innovation
nt
Manageme
WBB10202
The invention
of Post-it Notes
Art Fry came upon

the Post-it Notes
concept out of
frustration at how
his scrap paper
bookmarks kept
falling out of his
church choir
program.
Innovation
nt
Manageme
WBB10202
(Peter Drucker)
2. The Incongruity
the gap between what is and what

should be.
These occur whenever a difference
exists between expectations and
reality.
Innovation
nt
Manageme
WBB10202
(Peter Drucker)
3. Process Need
task focused rather than situation

focused. A process is perfected or
redesigned or a weak link replaced.
Innovation
nt
Manageme
WBB10202
(Peter Drucker)
4. Industry and Market Structure

Change
The opportunity for an innovative

product, service or business approach
occurs when the underlying foundation
of the industry or market shifts.
Innovation
nt
Manageme
WBB10202
(Peter Drucker)
5. Demographics
Changes in the populations size, age
structure, composition, employment, level
of education and income can create
innovative opportunities.
Innovation
nt
Manageme
WBB10202
(Peter Drucker)
6. Changes in Perception, Meaning,

Mood
Innovative opportunities can develop

when a societys general assumptions,
attitudes and beliefs change.
Innovation
nt
Manageme
WBB10202
THANK YOU
Innovation
nt
Manageme
WBB10202

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Chapter 1 Innovation Management

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Chapter 1:

Every organizationnot just

Michael Dell: Innovator of the

started the road to success

out of his University of

Creativity vs. Innovation

the generation of ideas that result in the

improved efficiency or effectiveness of a

Creativity vs. Innovation

Important aspect of creativity

Creativity vs. Innovation

introducing something new or doing

Creativity vs. Innovation

Creativity is thinking new things

Innovation is doing new things

Source: Stevens and

Stage of new business development process

The work effort to develop a concept:

It requires a proof of concept to show that

The Factors That Affect

The Factors That Affect

The Factors That Affect

Art Fry came upon

the gap between what is and what

task focused rather than situation

4. Industry and Market Structure

The opportunity for an innovative

6. Changes in Perception, Meaning,

Innovative opportunities can develop

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