The document discusses the importance of innovation for organizational change and success, noting that innovation happens through creative collaboration, idea generation tools, and an idea management system to evaluate ideas, with management playing a key role in establishing an innovative culture and powering the corporate innovation machine.

1. A Basic Premise
Corporate Innovation
The theory that propels business
Devasis Chattopadhyay 1

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3. Invention versus Innovation
Invention Innovation
Happens in a lab Happens in the market with customers
You have to fail to succeed Can’t afford to fail
No intrinsic value Has value because it solves a real problem
Expense Revenue is the return on innovation
Individual performance Organizational Leverage
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4. Innovation Plays a very major role in any Organizational Change…
Globalisation Cost-effective
Innovation producer Supply chain
 Partnerships  Push to pull
 New competitors  Logistics
 New products/technology  Time to market
Work Practices Imperatives Customer focused
 Organisation
 Processes
 Procedures for  Culture
 Values
 Key performance
indicators (KPI)
change in  Style
Design
 Continuous improvement Company 
 Recruitment
Technology
 Products
 Process Knowledge capital
 Systems  Information
Speed World class  Training
to market quality

5. Need for Innovation
The proliferation of new technologies, disruptive delivery and distribution
mechanisms, and frequent changes in business models are forcing companies to adapt
in order to survive and thrive. This requires constant innovation…..
— The Winners — — The Survivors — — The Losers —
 Far reaching, rapid  Sluggish, “me too”  No action; performance
improvements in service improvement gap leaves them far
capability behind
 May be able to hold
 Will be able to increase ground if they stay close  Market share gains of
market share enough to early movers early movers will be at
the expense of these
 Will be well positioned  Will lose some ground as manufacturers
during industry consolidation takes place
consolidation phase  Consolidation/shakeout
will threaten survival
Company must move quickly; those who lag will survive at best

6. Innovation: The Concept
Innovation is generally understood as the successful introduction of
new products, services or methods. Innovation is the embodiment,
combination, or synthesis of relevant knowledge in original form along
with valued new products, creative processes, or innovative services.
Like many business functions, it is a management process that
requires specific tools, rules, and discipline
Innovation is viewed as an invention that adds sustaining value or creates
quantum leap improvement for companies - the kind of value that one can
quantify – it could be increased revenues and/or profits leading to increased
valuations of businesses

7. Innovation: The Organizational Concept
 In the organizational context, innovation in most cases is linked to
performance and growth through improvements in efficiency, productivity,
quality, competitive positioning and market share.
 All innovation begins with creative ideas . Innovation is defined as the
successful implementation of creative ideas within an organization that
generates economic value. Creativity of individuals and teams is the
starting point for innovation; a creative team is a pre-requisite but that does
always guarantee successful innovation.
 For innovation to be successful, something more than just the generation of
a creative idea or insight is required: the idea must be put into action to
make a genuine difference. Such a change might require new or altered
business processes within the organization, or changes in the products and
services or a launch of a radically different new product or a business
model.
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8. Innovation – The Goal Being First or Great ?
 Innovation must enable businesses to not only excel in today’s globally
competitive environment but also ensure survival for a longer term.
Companies must innovate primarily for ensuring sustainability and
long-term competitive advantage. Hence the question is not whether one is
first or great.
 There is no place in today’s global marketplace for those companies that
cannot continually envision, conceptualize, and continuously innovate
whether it is products, services or a new business model that delivers
perceived value to the customers.
 It is not only critical that business innovate and launch new products and
services in a highly profitable manner, but also equally important agenda
would be to build a highly knowledge-oriented organization for effectively
competing in the global markets.
 In order to enable all the above, it requires a different kind of leadership
style, mindset, work culture to become an “innovative organization”.
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9. What drives successful innovation ?
If one asks, “What drives successful innovation?” one is likely to get these
answers:
“Desire for growth.”
“Demand for increased profitability.”
“Motivation and Retention of People.”
 Typically what drives successful innovation are:
 Entrepreneurial leadership
 Respect for creative thinkers
 Desire to be known as a knowledge-based organization
 Desire to be one of the best in the world – whether products, unique
service/delivery or cost competitiveness
Every business needs an innovation engine to generate the great or
unique ideas that will propel the business forward into the future.
Cont…… 9

10. Purposeful Innovation
 Before the 1880s, invention was mysterious. During the early nineteenth
century, books talked incessantly of the' flash of genius.’ By the time World
War I broke out in 1914, ‘invention’ had become ‘research,’ a systematic
purposeful activity, planned and organized with high predictability both
with respect to the results aimed at and likely to be achieved. Something
similar would need to be done with respect to innovation.
 Enterprise will have to learn to practise systematic purposeful innovation.
Successful company’s do not wait for a bright idea to strike; they do not
look for the big time innovation that will revolutionize the industry they are
operating in nor do they work to create a multi-billion dollar business.
Therefore, those companies who start out with the idea of making it big and
thus are in a hurry, are probably destined to fail because they are bound to
do wrong things.
Cont…………..
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11. Purposeful Innovation
 An innovation that looks very big may turn out to be nothing more than
technical virtuosity while the one with modest intellectual pretensions, a
McDonald’s for example, may eventually turn out to become a gigantic and
highly profitable business. Successful companies, whatever their individual
motivation — be it money, power, curiosity or a great desire for fame and
recognition — try to create value and make a tangible contribution.
 It is true that successful companies aim high; they are not content simply to
improve on what already exists or to modify it. They try to create new and
different value propositions to convert a ‘material’ into a ‘resource,’ or to
combine the existing resources in a new or more productive configuration.
And, it is this change that always provides the opportunity for the new and
different. 11

12. Entrepreneurship and Innovation - Examples
 According to conventional wisdom, “Big businesses don’t innovate”. This is
to a large extent true that new and major innovations of this century did not
come from out of the old, large businesses of their time.
Examples of large companies that have done well as Entrepreneurs and
Innovators are:
 The railroads did not spawn the automobile or the truck; they did not even
try. On the contrary, the automobile companies did try (Ford and General
Motors pioneered in aviation and aerospace), all of today’s large aircraft
and aviation companies have evolved out of separate new ventures.
 Similarly, every one of the giants of the electrical industry –
General Electric, Westinghouse, and RCA in the United States; Siemens
and
Philips on the Continent; Toshiba in Japan – rushed into computers in the
1950s. Not one was successful. IBM and Hewlett Packard now dominate
the field and both were either small or barely mid-sized and most
Cont…………..
definitely not influential companies fifty years ago. 12

13. Entrepreneurship and Innovation – The Truth
 In the current era of rapid change, success of a business will clearly depend
on how much the top management encourages and practices
entrepreneurship and innovation. If the enterprise does not innovate, it will
inevitably age and fast decline. Sometimes successful and financially
healthy
businesses do run the risk of becoming bureaucratic and complacent. And
this could become a serious impediment to entrepreneurship and
innovation.
 However, we must understand and appreciate that entrepreneurship is not
“natural”; it is not “creative”. It is hard work as opposed to what
conventional wisdom would like us to believe. Entrepreneurial businesses
treat entrepreneurship as a duty. They are disciplined about it; they work
for it and religiously practice it.
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14. Corporate Innovation Machine
The Corporate innovation machine is a model for understanding how to
implement an effective, idea management based innovation strategy in
the firm.
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15. Principles behind the
Innovation Machine Strategy
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16. Corporate Innovation Machine - Powered by Management
 The corporate innovation machine is powered by management. Just as the
most sophisticated machine will not run without a power source, likewise
your corporate innovation strategy will go nowhere without top
management taking the lead.
 Management's main task is to create within the organization a culture of
innovation which will empower workers to think creatively, collaborate on
ideas and contribute their ideas to the company. This is not an easy task,
but done well it will make construction of the remainder of the innovation
machine a relatively easy job.
 Management must have a plan that’s put into place to move the
company towards innovation
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17. Do’s and Don’t for Management
 Ensure that there is environment of trust - If the workforce does not trust
the company, they will not innovate for the company. Survey after survey
has shown that trust is one of the most critical factors in establishing a
culture of innovation. If your workforce trusts the company, this is not an
issue. If not, establishing trust must be your very first step.
 Establish innovation goals - Determine what you wish to achieve through
innovation. This should translate into a series of short term and long term
goals against which the results of implementing the innovation machine
strategy can be compared.
 Designate responsibility and resources - Who will take charge of the
innovation programme?What tools will you invest in? What resources will
you provide? What budget will be available for the innovation programme?
Cont……
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18. Do’s and Don’t for Management
 Develop a communications plan - Likewise, your shareholders and
customers should also be aware of your new innovation strategy and how it
will benefit them. This all demands a comprehensive communications plan.
 Demonstrate innovation - If management is seen as managing by the book,
employees will doubt management's commitment to innovation. Instead,
management should be sharing and implementing innovative ideas – and
must communicate this to the workforce.
 Reduce creative risk - Albert Einstein once said: “If at first the idea is not
absurd, then there is no hope for it.” For many people, sharing a potentially
absurd idea with their company is overly risky. At best, they may be
ridiculed by their colleagues. If the level of creative risk in your organization
is too high, people will keep ideas to themselves, rather than share them.
You need to ensure creative risk is as low as possible.
Cont……
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19. Do’s and Don’t for Management
 Establish a rewards scheme - Rewarding innovative thinking is an
important part of an idea management based innovation strategy.
Rewards increase motivation for employees to continue developing and
sharing ideas.
How management implements these actions varies from
organization to organization and depends on existing culture,
existing tools, innovation goals and facilities.
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20. Idea Generator
If management is the power source of the innovation machine, then the
idea generator – the tools and techniques for generating ideas – is the
motor that drives the innovation process.
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21. Creative collaboration – Essential part of Innovation
Creativity is the generation of new ideas.
Collaboration is an essential element of organizational
Creativity innovation. When a team of people come together to
vs. devise and develop ideas, they can potentially be
Innovation
much more innovative than any individual member of
the team can be on her own.
Innovation is the implementation of
creative ideas.
Creative collaboration occurs in several ways:
Creative Teams Brainstorming groups Open collaboration
Employees should be Again, an effort should be made Possible through web based
discussion fora, some web
encouraged to form teams to bring as wide a variety of
with members of other people as possible into each based software and other
on-line collaborative tools.
departments. brainstorming session.
Open collaboration is where
Build the team with people When appropriate, business
any user can interact with any
from different divisions partners, Customers and others
other user in a transparent
and locations session. from outside the company
manner. Open collaboration is
should be brought In to
particularly useful for idea
participate.
Management in large
organizations with multiple
locations. 21

22. Tools & Techniques for generating ideas
 Organizations should have a small “toolbox” of tools and techniques for facilitating
innovation. The central tool should be an idea management system capable of
soliciting, capturing and evaluating ideas.
 Properly used, such a tool permits a steady stream of innovative ideas for
implementation. Other tools, such as skunkworks, brainstorming, creative spaces
and creative meetings further your organization's innovation potential.
Suggestion scheme based idea management
 An innovation manager reviews suggestions on regular basis with other managers
to decide which ideas should be developed further is a good introduction to idea
management, but is flawed as a long term innovation solution, particularly in
medium to large organizations.
An example of suggestion scheme problem
If the suggestion scheme is well promoted, the person in charge will typically be inundated with
all kinds of unrelated ideas. Most likely he/she will be unable to manage the quantity and
variety of ideas. As a result the system will begin to stagnate. At the same time, employees see
that nothing is happening to their suggestions and become demotivated, thus stagnating the
system.
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23. Campaign versus Suggestion-based Idea Management
Campaign based idea management
 A superior alternative to the suggestion scheme model of idea management is the
campaign based model of idea management. In the campaign based approach,
instead of openly soliciting all ideas, the company launches short term campaigns to
solicit ideas on specific issues or problems, for example :
“Ideas for new product features that will make our widgets more appealing to young
home-owners” or “How can we improve the product documentation in order to reduce
customer support demands?”
 Campaign based idea management offers two huge benefits over the suggestion
scheme approach.
 Firstly it forces people to think about and, focus their innovation on, specific business
needs.
 Secondly, it motivates employees to participate by providing specific, time limited
challenges. Compare the demands: “give me an idea” and “give me an idea on how we
can improve our marketing strategy” and it is easy to understand why campaign based
idea management attracts more and better ideas.
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24. Idea Quality Control
The more successful an idea management system is, the more ideas it will
generate. As a result, you need an effective idea quality control system.
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25. Idea Quality Control Components
1. Evaluation Evaluation Matrix

Retain Flexibility in the system.
The 5x5 evaluation matrix is a simple, quick and relatively
 If an idea is clearly a winner, it is accurate method for evaluating ideas. You establish five
often wise to “run with it" criteria by which an idea can be measured. For example, if
immediately, before the competition evaluating a new product idea, the five criteria might be:
comes up with the same idea or learns
about yours. 1. How profitable do your expect this new product to be
over the next 12 months?
 Care should be taken not to over- 2. How quickly can we get this to market?
evaluate ideas.
3. To what extent does this product represent an advance
 If a highly innovative idea has to go over our competitors' products?
through multiple evaluations and reviews
it is almost certain to be rejected for 4. To what extent is this product likely to expand our
perceived risk or so heavily modified in market share?
attempt to limit risk, that it loses its
innovativeness. 5. How good of a fit is this product with our current
product line?
It goes without saying that it would be a tremendous waste of budget to implement an enterprise innovation
strategy only to reject the most innovative ideas that come out of that strategy.

26. Idea Quality Control Components
2. Open analysis
If an idea gets a good evaluation score, an open analysis meeting is a good means of
determining the next steps and any issues which should be borne in mind during the
implementation.
The analysis should include the evaluators, the person or people responsible for the idea,
the manager who led the campaign and the person who will be in charge of implementing
the idea. The aim of the meeting is to have an open discussion of the idea, potential
weaknesses uncovered by the evaluators and to establish a pre-implementation and
implementation plan.
3. Pre-implementations
Pre-implementations are post-evaluation actions designed to analyze an idea in more depth than is
possible with an evaluation. Pre-implementations include:
 Business cases
 Business plans
 Market surveys
 Prototype development and testing
 Trials
 Experiments
Companies normally have pre-implementation procedures in place for testing new products and services.
However, they do not always use such procedures for testing operational or other internal ideas. Pre-
implementation is an effective means of testing a new idea while minimizing the risk. Existing pre-
implementation procedures should be integrated into the innovation machine strategy.
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27. Output: Implemented Ideas
Once ideas pass all required quality control processes, they are ready to be
implemented. Interestingly actually implementing ideas is a weakness in
many company's innovation strategies.
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28. Implementation of ideas – Additional Thoughts
In addition to implementing good ideas, it is important to:
 Monitor the results of the idea implementations to evaluate the overall
innovation programme.
 Communicate, via the communication plan details about new ideas that are
being implemented. Be sure to include the names of the people responsible
for the ideas. Disseminating news about successful implementations of
ideas demonstrates the value of the innovation strategy as well as
recognizes the contributions of the idea submitters.
 Reward people who have submitted and implemented ideas. This can
include recognition as well as using any other rewards system you have
implemented. Incidentally, you should also reward people who contribute
good ideas which you are unable to implement for whatever reasons. This
shows that you value their ideas and creative contributions and encourages
them to continue to be creative on the organization's behalf.
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29. Redefining Innovation in Today’s World
 Succeeding as an entrepreneur and an innovator in today’s world is vastly
different from what it was in the 20th century. Our times are radically
different, the challenges are enormous, and innovations continue to disrupt
the way businesses are conducted, and it happens within weeks and
months.
 Organizations will face seven trends in the next decade as they fight to
survive, grow and remain competitive. These are:
 Speed and uncertainty will prevail
 Technology will continue to disrupt and enable
 Demographics will dictate much of what happens in business
 Loyalty will erode
 Work will be done anywhere, anytime
 Employment as we know it will disappear
 The organization will become a nexus of treaties
Cont……
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30. Future Directions
 On Thursday September 13, 2001, just two days after the attack by
terrorists on New York’s WTC, managers at K-Mart noticed an increase in
customer demand for American flags. The day before, managers at Target
Stores had observed the same thing. Both companies tried to purchase
more flags from suppliers but none were available anywhere. That’s
because on afternoon of September 11, just hours after the attack, Wal-
Mart noticed the same increase in customer demand and purchased every
American flag, from every supplier, everywhere. They were able to do so
because they update inventory every seven minutes.
 One international management consulting firm was gathering information
for a client recently on the history and pace of computer technology. While
it was amazing to review the unimpeded advance in computing power
predicted nearly 40 years ago by Gordon Moore, the future holds even
greater, discontinuous change. IBM recently announced its intent to
design a computer on a molecular scale – a computer that will literally
float through the air.
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31. Future Directions
 Today, these stories capture our attention and define our time. If you have
ever worked in a large organization, you know that the speed of Wal-Mart
is daunting. If you have lived long enough to watch the evolution of the
computer age, you must have got used to expecting regular, head-turning
innovations. Even still, molecular computers get attention.
 Technological innovations once came along every generation, then every
decade, and now in this nanosecond world, innovative breakthroughs are
commonplace, more normative. And if you have discovered that the
representative calling about your mortgage payment is sitting in Mumbai,
India, you know it really is a different world – its borderless today. This
would mean that the very word “innovation” needs redefining.
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32. Thank you
Devasis Chattopadhyay 32