Understand Innovation and Innovation Management
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The document provides an overview of innovation, defining it as the profitable implementation of ideas that can enhance both consumer value and cost efficiency. It emphasizes the importance of innovation in driving growth, productivity, and improving living standards, while distinguishing between various types and degrees of innovation. Additionally, it highlights the difference between inventions and innovations, suggesting that successful market introduction is crucial for an idea to be recognized as innovative.
Understand Innovation and Innovation Management
- 1. © Gordon Graham, 2015 Understand Innovation in Five Minutes
- 2. What will you learn from this? • What innovation is • Why it’s important • The “types” of innovation • The “degrees” of innovation
- 3. What is innovation? Hundreds of similar definitions can be found in the literature. Here is the Broken Bulbs definition. “Innovation is the profitable implementation of ideas.”
- 4. An innovation can increase profits on the value side (customers value the innovation enough to pay more for it) . . .
- 5. . . . or the cost-cutting side (the company produces a product offering in a more efficient way).
- 6. Either way, value is created for the firm and the consumer. $
- 7. An invention is different from an innovation at any particular time in that it doesn’t have commercial value but . . .
- 8. . . . it may have in future.
- 9. Think of inventions as the laying of an egg, innovation as the laying and hatching.
- 10. There is no shortage of ideas and inventions in the world. The challenge is to introduce these successfully to a market.
- 11. Only then can the idea/invention be called an innovation.
- 12. In other words, innovation requires interplay between a product offering (technology) and a market.
- 14. Innovation reduces waste and environmental damage.
- 15. Innovation creates growth, increases productivity, and economic wealth (avoids stagnation).
- 16. Innovation provides better goods and services at a cheaper price – higher standard of living.
- 17. More interesting work for employees.
- 18. Old strategies get replicated and, consequently, margins get squeezed.
- 19. Survival! Source: United Kingdom Dept. Trade and Industry
- 20. What are the types of innovation?
- 21. Numerous types . . .
- 22. . . . but all these labels just describe where something “new” or “better” occurs.
- 24. . . . and many more, depending on the author. Basically, innovation can occur anywhere in the firm’s product offering.
- 25. Note! There is another type that needs to be considered separately. This is “disruptive innovation,” a term coined by Clayton Christensen. This type of innovation refers to a firm’s strategy.
- 26. The degrees of innovation.
- 27. Once again, many labels . . .
- 28. . . . however, they all describe the degree of change required by the innovating firm and/or the market.
- 29. Incremental (sometimes called “continuous” or “evolutionary” or “small”)
- 30. Semi-radical
- 31. Radical (sometimes called “discontinuous” or “revolutionary” or “large”)
- 32. Incremental and radical innovations need to managed differently.
- 33. Here’s a quote: "He who innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new." Niccolo Machiaveli, The Prince
- 34. I hope you enjoyed this brief introduction to innovation. You can learn much more on the topic by listening to my full audiobook online. is.gd/innoUAE Gordon Graham Tel: 052 922 3352