Innovation Management

Chapter 1

The Need for Innovation

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 Hello Friends!
You are now entering the
wonderful arena of Innovation
Management,
which, we are sure, will help you
to become an excellent leader as
well as an effective manager,
and you will be a valuable asset
to your organization.
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PETER F.DRUCKER
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Peter Ferdinand Drucker, was
an Austrian -born American
management consultant,
educator and author.
According to Peter Drucker,
“every organization, not just
business, needs one core
competence and that is
innovation”.
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 Innovation is the application of
better solutions that meet
customer’s new and changed
requirements, their implicit
needs, or existing market needs.
This is accomplished through
products, processes, services,
technologies or ideas that are
more effective
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 One of the definitions of
Innovation is
“something original and, as a
consequence, new and
important, in whatever field, that
breaks into the market or
society”.
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 However, innovation is not only
associated with new products,
new technology, and R&D team.
Innovation can be applied
broadly across all elements of
the organization, such as existing
products, services, programs,
processes and business models.
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 Ideas that provide marginal
improvements to existing
products, services, programs,
processes and business models
are also a part of overall concept
of innovation.

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Innovation differs from
invention.
Innovation refers to the use of
a better and, as a result, novel
idea or method;
whereas,
invention refers more directly
to the creation of the idea or
method itself.
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 Innovation differs also
from improvement.
Innovation refers to the notion of
doing something different rather
than doing the same thing better.

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 Some of the areas that add to
everyday quality of life are:

The innovations to the light bulb

from incandescent to CFL then
LED technologies which offer
greater efficiency, durability and
brightness
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Smartphones which supply the
public with internet access any
time or place

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From Cathode ray tube to Flat
screen LCD/LED televisions.

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 Look how the USBs are
properly organized in this
design.

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Creativity and Innovation
Creativity is discovery of a
new idea.
Many ideas already do exist
somewhere.
Creative thinking is about
finding these ideas and
connecting them in a new
way.
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 However,
Innovation is much more than
just finding these ideas and
connecting these creative ideas.

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Innovation is about strategy and
action.
It is about bringing value to the
organization through the
implementation of these
creative and strategic ideas so
effectively that they are
profitable also.
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 Hence,
Innovation is defined as
“Profitable implementation of
strategic and creative ideas”.

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 There are three types of
innovations:

Efficiency innovation:
Marginal improvements to what
already exists. Look at the chair
in the following photograph as
an example of it.

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Efficiency innovation:

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 Evolutionary innovation:
Distinctly new and better ideas

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 Revolutionary innovation:
Radically new and better ideas

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The wheelchair of a new concept is
powered by a strong single cylinder
4-stroke engine. It contains
adjustable footrest and translucent
compartments to put food and
other handy materials. There are
armrests, backrests, and leg rests to
ensure that the owner of the wheel
chair is comfortable.
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The need for innovation:
Technology:
Smaller organizations that are fast
and flexible can now outsmart the
traditional large cats by employing
new technology that enables them
to deliver goods and services to
their customers at a faster pace and
lower cost.
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The need for innovation:
Technology:
Machines can replace people.
ATMs have replaced tellers.
Internet sites have replaced sales
personnel.
Photo radar has replaced police
patrols.

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The need for innovation:
The world is becoming more
accessible:
The Internet, low cost long distance
telephone calls, etc. are just a
couple of examples how the entire
world is becoming more accessible.
Everyone has more buying options.
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The need for innovation:
Customers ever demanding
more:
Customers have more buying power.
They have more choice.
They know exactly what they want.
They are more demanding.
They want it their way and they
want it now!
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Some seven hundred organizations
worldwide were surveyed.

84% of business leaders agreed that

innovation is more a critical factor
than it was five years ago.
However, only 25% of these business
leaders were pleased with their
current performance in innovation.
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Change:
Once upon a time, in business you
could experience a change and then
return to a period of relative
stability.
That era was followed by one, in
which, as soon as you handle one
change, you had to get ready for
another.
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 Change:
Nowadays, the changes are
occurring rapid fire: one on top of
another. There is no rest and there is
no getting ready. In the heat of this
chaos, it is hard for people to
maintain perspective.

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The Zundapp models never held the
fascination of a BMW or a Harley
Davidson, but their mopeds were
inexpensive and robust.
Their advertisements promised
'Motorcycles for everyman'.
In 1977, the company employed a
workforce of 1,900 and produced
115,000 mopeds and motor assisted
bicycles.
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However, the management of the
company failed to recognize the
changes taking place around them
until it was too late.
Rapidly increasing insurance
premiums and changes in
legis-lation, making it compulsory
for drivers of mopeds to take a
driving test, sent sales plummeting.
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In addition, competition from
cheaper Japanese manufacturers
made life no easier for Zundapp
either.
Zundapp was forced into liquidation
in 1984.

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 Beware the “Thomas Lawson
Syndrome”
The Thomas Lawson Syndrome
strikes whenever managers have
become so accustomed to dealing
with existing products and processes
that they are Complacent and
literally blind to new ideas.
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It is the task of top management to
think differently, to embody a
readiness to embrace change and
dynamism.
In all fairness, it has to be admitted
that this is not exactly easy.
And the reason that it is so difficult
is that the path to change is paved
with the objections of the skeptics.
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The defenders of the status quo will
doubtlessly tell you that it is not
possible or necessary to implement
your idea.
After all, they are the people who
established the status quo, and now
they are under attack from you.
And so, if you want to bring about a
revolution, you must steadfastly
ignore these arguments..
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Innovation is an essential ingredient
for today’s social and economic
growth.
It improves our quality of life, raises
our standard of living, and enables
our organizations to grow and
prosper.

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We need to have every employee in
every area of the organization to be
on the lookout for innovative ideas.

We need an innovation roadmap

and detailed action plans in order to
help our teams and organization to
support innovation on a continuous
basis.
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-Innovation is not a flash of genius
-Innovation is not just a
“new technology”
-Innovation is not sector specific
-Innovation is not just for the
R&D department

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-Innovation is not isolated to
special teams
-Innovation is not a creative playroom
-Innovation is not a one-off event
-Innovation is not just creativity training
-Innovation is not just applicable to
new products

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It is hard work to move people away
from their sacred traditions and their
tendency to conform to industry norms.

It is hard work to get people to admit

that what they are doing today might
not work anymore.

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It is hard work to get people to drop
their emotional attachment to “the way
they did the things around there” and
take the leap to a new way.

It is hard work to stay the course and

confront the natural tendency to return
to their old and comfortable way of
doing this.
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The mind is like a parachute.
It functions only when it is open.
One of the most important elements is
the organizational climate that is
conducive to free flow of ideas.

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Several human tendencies affect the
creation, development and
implementation of the idea.
The environment under which people
work can act as a stimulant to bring out
their innovativeness.

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Inhibitions and misconceptions act as
roadblocks.
When people do not worry about
making mistakes, even the timid and
the reticent may come up with some
good ideas.
Aimless and undirected activity does
not bring about innovation. Endeavors
must be planned and organized.
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Motivation is essential to successful
innovation, and reward is single most
important motivator.
People will go to great lengths to solve
problems, but only if they know that
their efforts will be recognized and
rewarded.

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Are you crazy enough to dare to try
something new?
It is madness to keep on following the
same old routines yet expect to achieve
different results.
Dare to be different.

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In the spirit of the famous innovator,
Walt Disney,
let us dream, believe, dare and do!

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THANK YOU

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