Innovation and creativity

1. 11
‘‘CREATIVITY IS THE GENERATION OF IDEAS THATCREATIVITY IS THE GENERATION OF IDEAS THAT
RESULT IN THE IMPROVED EFFICIENCY ORRESULT IN THE IMPROVED EFFICIENCY OR
EFFECTIVENESS OF A SYSTEM’EFFECTIVENESS OF A SYSTEM’ - Timothy A.Matherly.- Timothy A.Matherly.
 Entrepreneurs with creativity have the ability to see,Entrepreneurs with creativity have the ability to see,
recognize, & create opportunity where others find onlyrecognize, & create opportunity where others find only
problems.problems.
According to Global Innovation Index India ranks 23 amongAccording to Global Innovation Index India ranks 23 among
the world nations with a score of 3.57, whereas USAthe world nations with a score of 3.57, whereas USA
tops with a score of 5.80 (www.managementtoday.co.uk )tops with a score of 5.80 (www.managementtoday.co.uk )
 Top 5 countries are:Top 5 countries are:
USA 5.80USA 5.80
Germany 4.89Germany 4.89
UK 4.81UK 4.81
Japan 4.48Japan 4.48
France 4.32France 4.32

2. 22
According to “World Patent Report” the number of patents filed per millionAccording to “World Patent Report” the number of patents filed per million
of resident population in 2005 in respect of a few countries is as under:of resident population in 2005 in respect of a few countries is as under:
Japan
Korea
USA
UK
India
Philippines
2875
2530
701
296
6.04
1.82

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CREATIVITYCREATIVITY
Can we develop it ? OR Is it hereditary ?Can we develop it ? OR Is it hereditary ?
Yes, partly hereditary BUT also can be developed.Yes, partly hereditary BUT also can be developed.
- Many think that only geniuses are innovative.- Many think that only geniuses are innovative.
- But everybody has streaks of creativity – may be in a- But everybody has streaks of creativity – may be in a
different area.different area.
CREATIVE PROCESS:CREATIVE PROCESS:
1.1. Accumulation of Knowledge:Accumulation of Knowledge:
Knowledge accumulation is one and using it as entirelyKnowledge accumulation is one and using it as entirely
different and is essential. It could bedifferent and is essential. It could be ‘domain knowledge’‘domain knowledge’ oror
knowledge in various related or unrelated fields. Variousknowledge in various related or unrelated fields. Various
Processes for knowledge accumulation:Processes for knowledge accumulation:

4. 44
Normal Sources of Knowledge:
Reading from various sources, (b) professional groups, (c) magazinesReading from various sources, (b) professional groups, (c) magazines
travel, (e) discussions, (f)travel, (e) discussions, (f) pursuing natural curiosities (g) observation
2. Incubation:
Allowing sub-conscious mind to sift and synthesizeAllowing sub-conscious mind to sift and synthesize
volumes of information gathered. Occasionally avoid routine activitiesvolumes of information gathered. Occasionally avoid routine activities
for introspection. Thought process can be continuous. Sometimesfor introspection. Thought process can be continuous. Sometimes
Giving a break helps.Giving a break helps.
3. Idea Experience:
Answers or solutions to the problems is important. Experiencing theAnswers or solutions to the problems is important. Experiencing the
solution is critical. Solutions should withstand enquiry from varioussolution is critical. Solutions should withstand enquiry from various
Angles. This is a thought-process based exercise.Angles. This is a thought-process based exercise.
4. Evaluation & Implementation:
This is the last stage of creative process. This is an iteration processThis is the last stage of creative process. This is an iteration process
Between stage 3 and 4.Between stage 3 and 4.

5. 55
ADAPTORADAPTOR
1.1. Employs a disciplined,Employs a disciplined,
precise, methodical approachprecise, methodical approach
2.2. Is concerned with solvingIs concerned with solving
rather than finding problemsrather than finding problems
3.3. Attempts to refine currentAttempts to refine current
practicespractices
4.4. Tends to be means orientedTends to be means oriented
5.5. Capable of extended detailCapable of extended detail
workwork
6.6. Is sensitive to group cohesionIs sensitive to group cohesion
INNOVATORINNOVATOR
1.1. Approaches tasks fromApproaches tasks from
unusual anglesunusual angles
2.2. Discovers problems andDiscovers problems and
avenues of solutionsavenues of solutions
3.3. Questions basic assumptionsQuestions basic assumptions
4.4. Has little regard for means; isHas little regard for means; is
more interested in endsmore interested in ends
5.5. Has little tolerance for routineHas little tolerance for routine
6.6. Has little or no need forHas little or no need for
consensus; often insensitiveconsensus; often insensitive
to othersto others
Source: Michel Kirton, “Adopters & Innovators: A Description & Measure”
These are general observations and need not be very accurate and
are suggestive in nature. You can have your own understanding of these

6. 66
A CREATIVE CLIMATE
• A trustful management that does not over control the personnel
• Open channels of communication among all business members
• Considerable contact & communication with outside members
• A large variety of personality types
• A willingness to accept change
• An enjoyment with experimenting with new ideas
• Little fear of negative consequence for making a mistake
• Selection and promotion of employees on merit
• Use of techniques that encourage ideas, including suggestion
system and brainstorming
• Sufficient managerial, financial, human and time resources for
accomplishing goals
Note: These suggestions are mostly followed in Indian Corporates
without much result. Following in letter and not in spirit.

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INNOVATIONINNOVATION
Innovation is a key function in entrepreneurial Process’. It is
the process by which entrepreneurs convert opportunities
into marketable ideas. Thus, it needs
opportunity identification which in turn is the function of
environment scan & creativity. Ideas must be marketable.
As innovations depend on environment scan, they are
period sensitive (change from time to time). In late 1970s &
early 1980s, the new companies were trying to overtake
the established firms. This was the age of information
technology and the new firms were taking advantage of this
‘Total Quality Management’ was the order of the day. (Sony
Walkman & Toyota cars – All this forced the American Cos.
to adopt new information technology to change their
production techniques).

8. 88
Late 1980s witnessed take-over bids to unlock values of un
utilized assets. This forced the companies to adopt new
processes (process innovation). American Airlines started
‘Sabre Reservation System’ to reduce costs.
How do you Innovate?
 Identify the problem areas
It is not easy to identify the problem. Many pseudo causes
appear to be causes of the problem. When Toyota is
Increasing its share in automobile markets in the US, the
automobile giants thought it is due to undervalued yen,
docile work force, Japanese culture, superior automation
etc. But the fact is that the Toyota adopted a method of
taking innovation to the front-end workforce instead of
experts like in American companies (Is it product or mgmt)

9. 99
Innovation is:
 Introduction of new goods or products
 Introduction of new methods of production
 Discovery or opening new markets
 Finding new sources of supply
 Introduction of new organizational structures
SOUCES OF INNOVATION:
1. Unexpected occurrences: These are unexpected
success or failures often end up in a major innovative
source for the company
2. Demographic changes
3. Change in perceptions. Physical fitness outlets
4. Knowledge-based concepts. Inventions
5. Incongruities. Gap in consumer expectations and
reality.

10. 1010
MANAGEMENT INNOVATION:
Most companies adopt product innovation by earmarking
large portions of their budget and manpower but similar
allocations either by way of budgets or manpower are not
made for management innovations.
What is management innovation?
You have to understand what is management?
 Setting goals & laying out plans
 Motivating & aligning effort
 Coordinating & controlling activities
 Accumulating & allocating resources
 Acquiring & applying knowledge
 Building & nurturing relationships
 Identifying & Developing talent

11. 1111
CLASSIC TRAPS IN INNOVATIONCLASSIC TRAPS IN INNOVATION
Rosabeth Moss Canter:Rosabeth Moss Canter: Strategy Mistakes: Companies areStrategy Mistakes: Companies are
guided by premium prices and high margins to seekguided by premium prices and high margins to seek
blockbuster innovations like iPod. This leads to extensiveblockbuster innovations like iPod. This leads to extensive
screening of ideas and the resultant muffing of new ideas.screening of ideas and the resultant muffing of new ideas.
A related mistake is that too much emphasis is given toA related mistake is that too much emphasis is given to
product at the cost of new ideas emanating from productionproduct at the cost of new ideas emanating from production
and marketing. (example of manufacturing yarn which isand marketing. (example of manufacturing yarn which is
breaking too often and the solution coming from a workerbreaking too often and the solution coming from a worker
who has been toiling with the idea for 30 years).who has been toiling with the idea for 30 years).
Marketing innovations in tetra packs for liquids, new retailMarketing innovations in tetra packs for liquids, new retail
outlets etc. Similarly financial innovations to reduceoutlets etc. Similarly financial innovations to reduce
financial costs.financial costs.

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Process Mistakes: Too tight controls.
A second set of classic mistake lies in process; specifically
The impulse to tighten innovation with tight controls – the
same planning, budgeting and reviews applied to existing
businesses.
Structure Mistakes: Connections too loose, Separations too
Sharp: It is dangerous to hold fledgling companies to the
Same processes as established business and at the same
Time, companies must be careful how they structure the 2
entities, to avoid clash of cultures or conflicting agendas.
(example: Saturn & GM. Gillette having 3 separate
divisions – tooth brush (Oral B), appliances unit (Braun &
A battery unit (Duracell) but failed produce battery operated
tooth brush)

13. 1313
Skill Mistakes: Leadership too weak, Communication too
poor: Undervaluing the human side of innovation is another
common mistake. Technically-oriented managers
mistakenly assume that ideas will speak for themselves &
so they neglect external communication. Or they
emphasize tasks over relationships, missing opportunities
to enhance the team chemistry necessary to turn
undeveloped concepts into useful innovations.