Unit2_Entrepreneurial Idea and Innovation.pdf

Entrepreneurial Idea and
Innovation
UNIT - 2
Amar Preet Singh
Academic Experience: 6+ years
1
Amar Preet Singh AJas Education
Project Management &
Entrepreneurship [KHU-802]
Typically based on AKTU Syllabus
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https://bit.ly/Amarpreetsingh

2
Evaluation Scheme

• UNIT 2:
• Entrepreneurial Idea and Innovation:
• Introduction to Innovation
• Entrepreneurial Idea Generation and Identifying Business Opportunities
• Management skills for Entrepreneurs and managing for Value Creation,
• Creating and Sustaining Enterprising Model
• Organizational Effectiveness
3
Subject Syllabus

• UNIT-1
• Entrepreneurship: Entrepreneurship: need, scope , Entrepreneurial
competencies & traits, Factors affecting entrepreneurial development,
Entrepreneurial motivation (Mc Clellend’s Achievement motivation
theory), conceptual model of entrepreneurship , entrepreneur vs.
intrapreneur; Classification of entrepreneurs; Entrepreneurial
Development Programmes
• UNIT-3
• Project Management: Project management: meaning, scope &
importance, role of project manager; project life-cycle Project appraisal:
Preparation of a real time project feasibility report containing Technical
appraisal,; Environmental appraisal, Market appraisal (including market
survey for forecasting future demand and sales) and Managerial
appraisal.
4
Subject Syllabus

• UNIT-4
• Project Financing: Project cost estimation & working capital
requirements, sources of funds, capital budgeting, Risk & uncertainty in
project evaluation , preparation of projected financial statements viz.
Projected balance sheet, projected income statement, projected funds &
cash flow statements, Preparation of detailed project report, Project
finance.
• UNIT-5
• Social Entrepreneurship: Social Sector Perspectives and Social
Entrepreneurship, Social Entrepreneurship Opportunities and
Successful Models, Social Innovations and Sustainability, Marketing
Management for Social Ventures, Risk Management in Social
Enterprises, Legal Framework for Social Ventures.
5
Subject Syllabus

Once the student has successfully completed this course, he/she will be
able to:
• CO1: Students can understand the need, scope, competencies and
conceptual model of entrepreneurship
• CO2: Students will know the importance, Entrepreneurial Idea,
Innovation, Creating and Sustaining Enterprising Model
• CO3: Students will have a clear idea about meaning, scope &
importance, role of project manager.
• CO4: Students will be able to acquire knowledge about cost
estimation & working capital requirements, Risk & uncertainty of
project.
• CO5: Students will be able to understand about Social Sector
Perspectives and Social Entrepreneurship.
Amar Preet Singh AJas Education 6
Course Outcome

PO1. Engineering knowledge
PO2. Problem analysis
PO3. Design/development of solutions
PO4. Conduct investigations of complex problems
PO5. Modern tool usage
PO6. The engineer and society
PO7. Environment and sustainability
PO8. Ethics
PO9. Individual and team work
PO10. Communication
PO11. Project management and finance
PO12. Life-long learning
7
Program Outcomes

Program Specific
Outcomes
Course Outcomes
CO1 CO2 CO3 CO4 CO5
PSO1 3 3 3 3 3
PSO2 2 1 - 2 3
PSO3 1 1 1 2 1
CO - PSO Mapping
* High = 3 *Medium = 2 * Low = 1

• Introduction to Innovation
• Entrepreneurial Idea Generation and Identifying Business Opportunities
• Management skills for Entrepreneurs and managing for Value Creation,
• Creating and Sustaining Enterprising Model
• Organizational Effectiveness
9
Content

• Innovation is the process and outcome of creating something new,
which is also of value.
• Innovation involves the whole process from opportunity
identification, ideation or invention to development, prototyping,
production marketing and sales, while entrepreneurship only needs
to involve commercialization.
Innovation

• Definitions:
• Innovation = Invention + exploitation (Ettlie)
• The word “innovation” is derived from the Latin verb innovare,
which means to renew. In essence, the word has retained its meaning
up until today. Innovation means to improve or to replace
something, for example, a process, a product, or a service. In the
context of companies, however, the term needs a definition. In the
complex context of business, a definition is needed.
• Innovation is a process by which a domain, a product, or a service is
renewed and brought up to date by applying new processes,
introducing new techniques, or establishing successful ideas to
create new value.
Innovation

Organizations have several options to increase their competitiveness:
they can strive for price leadership or develop a strategy of
differentiation. In both cases, innovation is essential.
• Companies that choose price leadership must secure their long-term
competitiveness by developing innovative, highly efficient
processes. Process optimization and continuous improvement in
terms of costs are important for them.
Why is innovation so important?

• Companies that strive for a differentiation strategy need innovation
to develop unique distinguishing features to their competitors.
• Many start-ups launch their activities by developing an innovative
product or service.
• Continuous innovation is, therefore, crucial for all companies. The
main difference is in the focus of the innovation strategy, which
varies considerably from company to company.

• “Although innovation has always been one of the driving forces in
competition and has always been a primary competitive dimension,
the numerous studies and publications of recent years show that the
speed of change is increasing.”
• This makes innovation one of the most important drivers for the
long-term success of companies. Accordingly, methods of
collaboration and teamwork are increasingly being used in
numerous companies, for example,

• to promote digital innovations and
• overcome the challenges of digital change.
• Innovation requires a higher degree of creativity than the operative
business and a clear innovation strategy, especially in the phase of
the so called “fuzzy front end of innovation“.

• Concepts like lean innovation and the establishment of community-
based innovation networks become increasingly relevant.
• Companies are using modern idea management software and
innovation management software to manage innovation efficiently.

• Innovation requires more creativity and more willingness to take
risks than the implementation of typical projects. To successfully
realize innovation projects, a different mindset is needed.
• Break the rules!
• With traditional approaches and conventional methods, you will
often not get anywhere in the field of innovation. Challenge the
status quo consistently! And explore new paths off the beaten track.
The Right Mindset for Innovation

• Collect ideas everywhere!
• Innovation projects constantly need
new ideas: To overcome obstacles, to
change concepts, and to optimize
strategies.
• Believe in the impossible!
• Imagine how your innovation will
look like in reality. And believe that
you will be able to overcome all
obstacles on the way to realization.

• Put together an innovation team of
individuals with different
perspectives and thinking styles!
• Innovation needs the diversity of
various competencies and diverse
ways of thinking.

In the context of businesses, there are different types of innovation.
• Process improvement and organizational innovation: The
improvement of processes through continuous improvement and the
development of new solutions.
• Product development: The development of innovative products or
product features.
• Service innovation: The creation and introduction of new services
for customers and partners.
• Business Model Innovation: The development of innovative
business models and new revenue streams.
Digitalization and digital transformation also require companies to
rethink and develop new approaches.
The Different Types of Innovation

• There are different degrees of innovation. The mere improvement –
for example, of processes or products – is called incremental
innovation. Major innovations that lead to substantial changes are
called disruptive innovation or radical innovation.
• Incremental innovations are, for example, the optimization of
existing processes and procedures or a product line extension.
• Disruptive Innovations are, for example, major innovations such as
iTunes and Google Android. These are often referred to as “digital
disruption”: Innovations that change the logic of existing markets.
Many Companies Focus on Incremental
Innovation

The Difference Between Incremental and
Disruptive Innovation
• For many companies, innovation means taking existing products and
changing details: The color, the form, the functionalities, the size,
etc.
• This form of incremental innovation ensures the competitiveness of
companies in existing markets.
• In future markets, incremental innovation is often no longer
sufficient. Companies must radically reinvent products and services.
• To ensure their long-term innovation capability, companies
worldwide have established an idea management and innovation
management system that provides a structured approach: From the
development of an innovation strategy to setting up an innovation
roadmap and successfully implementing innovation.

Managing Incremental and Disruptive
Innovation
• For companies, setting up an innovation management is important in
order to keep pace with changing customer needs.
• Incremental innovation provides competitive advantages in terms of
production costs, functionalities, or equipment.
• Conventional innovation management often does not go beyond
incremental innovation: products are improved, but not reinvented.

Managing Incremental and Disruptive
Innovation
• With methodologies like the Stage-Gate Model for the innovation of
process and product development, however, companies quickly
reach their boundaries, – especially in supersaturated markets.
• Particularly in times of digital change, in which new customer needs
emerge, companies must be able to develop more far-reaching forms
of innovation and bring them to market successfully.

Disruptive Innovation Needs Different
Approaches
• Companies that want to drive disruptive innovation forward need to
take a different approach and pursue a revolutionary path in addition
to traditional methods.
• More and more businesses realize that different approaches are
critical to long-term growth.
• Innovation has to be more radical in the future.

Disruptive Innovation Needs Different
Approaches
• This requires rethinking. New management techniques are being
sought. More courage and willingness to take risks are necessary.
• The result of such management approaches are new products and
services for tomorrow’s markets. Business models that are still
impossible to imagine today will emerge. Small teams that can act
flexibly develop innovative concepts faster to market maturity.

Methods for Managing Innovation
• The methods of innovation management are as diverse as the types
of innovation:
• Innovation processes, with which developments are steered by a
clearly defined procedure through different stages and levels.
• Open innovation and Customer co-creation: methods that integrate
customers directly into the development process.
• Innovation labs: Business units in which employees work on the
development of innovations outside the daily business

Methods for Managing Innovation
• Innovation challenges: Competitions in which employees are asked
to contribute solutions to overcome a company’s challenges.
• It is essential to select the right tools for innovation projects and to
build up the innovation culture as well to increase the innovation
capability of a company.

Management skills required to become an
entrepreneur
Entrepreneurs are the individuals who have the courage to take several
risks and single handedly operate their business. An entrepreneur is a
leader, innovator, thinker and motivator for his team. However, it isn’t
an easy task to be an entrepreneur. There are specific managerial skills
that an entrepreneur must master in order to be successful in his
ventures.

entrepreneur
Time Management
The most valuable asset for young entrepreneurs is their time. As an
entrepreneur, you have to take care of so many things together and time
management is the key to keep everything on track. It is vital to get
more work done in less amount of time by eliminating interruptions,
prioritising tasks and increasing effectiveness as well as productivity.
Effectual time management allows entrepreneurs to assign specific time
slots to the activities as per their importance. It also gives them the
ability to participate in economic forecasting and market research.

entrepreneur
Business Planning
Every entrepreneur needs to develop a business plan or a blueprint of
how will he develop his new business. A good business plan consists of
a single document divided into several sections including the
description of the organisation, market research, sales strategies,
competitive analysis and financial data. A well-planned blueprint or
project outline acts as a strong foundation for the success of the
venture. It facilitates the entrepreneurs to make their business fit into
the industry, identify their target market and plan to capture them.

entrepreneur
Employee Management
An entrepreneur must know how to manage the people. He should be a
good judge of character and abilities of an individual such as hiring the
right employee is the foremost step for the success of a company.
Successful entrepreneurs should know how to motivate the employees
in order to work effectively and contribute to garner customer
experience.

entrepreneur
Customer Management
An entrepreneur must know how to manage his relationship with
existing customers with a focus on creating loyalty towards his
business. This is the easiest and most effective method to increase
revenues. Entrepreneurs must have problem-solving skills,
communication skills, attentiveness and patience to manage customers
effectively.

entrepreneur
Sales Management
Selling or sale management is an essential skill every entrepreneur
must master. You need to completely understand the sale activities. This
helps the entrepreneurs to tackle the challenges that they may face in
their sale management journey.
Financial Management
Even if your business’s finance is handled by an accountant or a
finance professional, you must know planning, organizing, directing
and controlling the financial activities such as procurement and
utilisation of funds. With a good financial management system, one can
make decisions to improve the business operations.

entrepreneur
Business Management
Being a successful entrepreneur involves more than enthusiasm and a
good eye for new opportunities. A thorough understanding of the
essential business functions is a prerequisite for entrepreneurs who
want to take their business to the next level. They must have the
complete know-how of general management, finance, marketing,
operations management, purchasing, supply chain, human resources
and public relations. Subscribe My YouTube Channel

Value creation definition
The definition of value creation is giving something valuable to receive
something else that’s more valuable to you. This definition is broad and
captures both costs and benefits.
Some investors have gone beyond that to impact investing and want
more than just income from their investment. This has led to the rising
popularity of B-corporations. Impact investing and B-corporations
balance financial returns with producing a public benefit. They are
driven by both mission and profit.

Value creation definition
Value creation must be defined very broadly for small businesses
because their owners define value in many ways. Small businesses have
even more non-financial definitions of success. You have the freedom
to define value creation of your company for your specific values.

Value creation for customers

Where value creation occurs
You can create value throughout your company. It doesn’t just happen
when you sell your product. It starts with how you structure your
company. Value creation continues with how you build your product or
provide your service. It’s completed with the sale.

Value creation from how you build your
business
1. Committing to what’s best
2. Your supportive team

Sustainability
The dictionary definition for “sustainable” is “able to be maintained at
a certain rate or level.”
“Sustainable development is the development
that meets the needs of the present without
compromising the ability of future generations to
meet their own needs.”

Sustainable Business Model
To Rex Freiberger, president of Superlativ and Gadget Review, a
sustainable business model is one that generates value for everyone
involved without being a drain on the resources that help create it.
“A business model meant to capitalize on a trend isn’t sustainable, for
example, because the social resources that get it started won’t exist in
years or even months”

Sustainable Business Model
“A sustainable business model is what every business leader hopes to
achieve: that the business will turn a profit quickly and stay afloat for
the long term,”
“A business model that prioritizes sustainability is one that, at a
minimum, considers all stakeholders, assesses and addresses
environmental impacts, and is transparent and thorough in its
reporting.”

What makes a sustainable business model
work?
There are four key elements of a sustainable business model.
1. It’s commercially profitable.
2. It can succeed far into the future.
3. It uses resources that it can utilize for the long term.
4. It gives back.

Why do we need sustainable business
models?
There are plenty of ways to approach the issue of sustainability, but the
simplest one, which can unite all stakeholders, is this: Kinder
businesses attract more customers.
Use your sustainability as a selling point. A 2019 study found that
telling online shoppers that other people were buying eco-friendly
products led to a 65% increase in making at least one sustainable
purchase.

Why do we need sustainable business
models?
It’s OK to be open about your sustainability goals. Customers will ask,
and the friendlier you are about it, the more likely they are to share that
news with their friends.
But maybe you’re not entirely motivated by money. Perhaps you’re
driven by the desire to be the change you’d like to see in the world.
After all, the larger a business grows, the greater its impact on the
world and people around it – and it’s better to start sustainably than to
make the switch 10 years down the line, or when stakeholders begin
pushing back on unreasonable business practices.

5 Principles of a Sustainable Business
Model

How can you start and maintain a
sustainable business model?
1. Plan out your resource usage.
2. Consider alternative forms of company ownership.
3. Engage your customers.

What blockers are there to a sustainable
business model?
1. Innovation meetings are held, but ideas are not developed further.
2. Ideas are not implemented.
3. The implemented business models fail in the market.

What is organizational effectiveness?
Organizational effectiveness refers to how an organization has achieved
full self-awareness due in part to:
1. Leaders setting well-defined goals for employees and outlining
ways to efficiently execute those goals
2. Management implementing clear decision-making processes and
communication pipelines
3. Engaged employees—who are carefully selected and fairly
compensated—producing work that prioritizes results

5 ways leaders can produce long-term
organizational effectiveness
The Bain & Company study maps out five key areas where successful
companies made adjustments to achieve organizational effectiveness:
1. Strategy
2. Metrics
3. Commitment
4. Behaviors
5. Culture Subscribe My YouTube Channel

1. Strategy
Strategy involves shifting an organization’s central identity—how
leaders describe its purpose and goals both internally and externally—
to include effectiveness and efficiency as core values. The more your
company is known to be “effective” and “efficient,” by both the market
and your employees, the more these values will be built into every new
project and goal.
Organizational effectiveness should simplify and clarify long-term
objectives for a company. The clearer these objectives are outlined at a
strategic level, the easier it is to translate across departments.

2. Metrics
Measuring organizational effectiveness through metrics can help
organizations stay accountable. But choosing the right data to
measure—as well as knowing when to prize human judgment and
discussion over hard analytics—is just as important. A few questions to
help your organization get started should include:
1. What concrete goals are your teams working toward?
2. Are they clearly outlined by team leaders?
3. How and at what intervals will progress be evaluated?

3. Commitment
“Strong executive sponsorship is the single most important factor for
success and the most often cited reason for failure when things go off
track,” the Bain & Company study says. The authors stress that “visible
and credible commitment” to effectiveness policies from senior
leaders—in companywide communications and hiring approaches, all
the way down to how quarterly budget meetings are conducted—
creates a trickle-down effect across the organization.

4. Behavior
Meanwhile, recurring behavior is where efforts to achieve
organizational effectiveness are most likely to break down. Identifying
specific decision-making moments in the day-to-day operation of the
company, communicating the ways employees ought to be changing
their behavior in those moments, and then implementing systems for
reinforcement, including incentivizing those choices, can build a much
healthier organization that polices its own effectiveness.

5. Culture
Finally, the degree to which employees are enthusiastically engaged at
work determines how effective their work will be. Therefore, creating
an organizational culture that values effectiveness is key.

Unit2_Entrepreneurial Idea and Innovation.pdf

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Unit2_Entrepreneurial Idea and Innovation.pdf