Creativity involves generating novel ideas, while innovation is implementing ideas to create useful products or services. Innovation can be measured more objectively than creativity. Creativity produces ideas, but innovation combines ideas with action. Organizations innovate to meet growing consumer demands and cope with uncertainty, ambiguity, diversity, and complexity. Innovation provides competitive advantage. Invention is a new product or process, while innovation is applying new knowledge to modify offerings. Fostering the right environment for innovation involves adopting structures, cultures, and human resource practices that support risk-taking, creativity, and change.

1. CREATIVITY & INNOVATION

2. Creativity & Innovation
 Creativity
 The ability to generate & combine ideas in a
unique way or to make an unusual association.
 Innovation
 Turning the outcomes of the creative process into
useful products, services, or work methods.

3.  “Innovative” is an “external” word. It can be
measured. It generally talks about things that
have been tested properly and found to have
worked in the real world.
 “Creative”, however, is more of an “internal”
word. It’s subjective, it’s murkier. It’s far
harder to measure, it’s far harder to define.
It’s an inward journey, not outward.

4. Creativity = Ideas
but
Innovation = Ideas + Action

5. Systems View of Innovation
13–5

6. NEED FOR INNOVATION
 Organisations face challenges to meet the growing demands of
the consumers and hence Innovation helps to meet those
demands.
 Innovation helps to cope with:
1. Uncertainty
2. Ambiguity
3. Diversity
4. Complexity
 It is regarded as strategic resource for sustainable competitive
advantage

7. Innovation Vs Invention
 A new product or process originally made is
termed as Invention,
Whereas,
 Conversion of new knowledge into new or
modified products, process and services is
known as Innovation
 E.g. MP3 and i-pod

9. Creating the “Right”
Environment for Innovation
 Structural Variables
 Adopt an organic structure
 Make available plentiful resources
 Engage in frequent interunit communication
 Minimize extreme time pressures on creative
activities
 Provide explicit support for creativity

10.  Cultural Variables
 Accept ambiguity
 Tolerate the impractical
 Have low external controls
 Tolerate risk taking
 Tolerate conflict
 Develop an open-system focus
 Provide positive feedback

11.  Human Resource Variables
 Actively promote training and development to
keep employees’ skills current.
 Offer high job security to encourage risk taking.
 Encourage individual to be “champions” of
change.

12. TYPES OF INNOVATION
 Product and Process Innovation
 Radical and Incremental Innovation
 Technical and Social Innovation