What is Innovation

2. • 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 = Invention + exploitation (Ettlie)
• A new way of doing things, which is commercialized. The
process of innovation cannot be separated from a firm’s
strategic and competetive context (Porter)
• Adoption of ideas that are new to the adopting
organization
• Today it is also said to involve the capacity to adapt
quickly by adopting new innovations (products,
processes, strategies, organization, etc)
• Traditionally the focus has been on new products or
processes, but recently new business models have come
into focus, i.e. the way a firm delivers value and secures
profits.

3. • Innovation is the application of better solutions that meet new
requirements, inarticulated needs, or existing market needs. This
is accomplished through more
effective products, processes, services, technologies,
or ideas that are readily available to markets,
governments and society. The term innovation can be defined as
something original and, as consequence, new that "breaks in to"
the market or into society. One usually associates to new
phenomena that are important in some way. A definition of the
term, in line with these aspects, would be the following: "An
innovation is something original, new, and important - in
whatever field - that breaks in to (or obtains a foothold in) a
market or society.
• While something novel is often described as an innovation, in
economics, management science and other fields of practice and
analysis it is generally considered a process that brings together
various novel ideas in a way that they have an impact on society.
• Innovation differs from invention in that innovation refers to the
use of a better and, as a result, novel idea or method, whereas
invention refers more directly to the creation of the idea or
method itself.
• Innovation differs from improvement in that innovation refers to
the notion of doing something different rather than doing the
same thing better.

4. • Innovate where you differentiate. Most
organizations dissipate their energies by not
focusing on the opportunities to set yourself
apart from the competition. This should
trickle down to every department and person.
For any activity that is not a differentiator, you
should optimize, automate, outsource,
replicate or partner with others.

5. REQUIREMENT OF INNOVATION
• It’s all about the money;
unresolved problems = financial losses and lost
opportunities
• “Innovation is the most vital factor in shaping a
corporation’s success throughout the coming years. For
several decades, corporations have optimized products,
processes and services for efficiency and quality; without
losing control of quality, it is now time to innovate. Today’s
corporate challenge is to unshackle its innovation capacity to
control growth and profitability while achieving leadership
in its targeted markets. Global-economic forces and
financial constraints have made innovation-driven growth
more essential than at any other time in
history. Corporations face an unprecedented need to stay
ahead of continuously accelerating global changes,
unyielding pressure for rapid results, and fierce competition
from corporations that are aggressively pursuing their own
innovation-driven futures.”

7. This is the most often cited reason for needing
innovation. Innovation is the route to economic
growth. Industries are maturing. Products are
maturing. Innovation is the creation and
transformation of new knowledge into new products,
processes, or services that meet market needs. As
such, innovation creates new businesses and is the
fundamental source of growth in business and
industry.

10. Desire for higher business
revenues
On the same side of the profit equation as cost is the revenue term. It is
the most often neglected term, but it takes only a little insight to see
that profits can be increased by increasing revenue. With costs reaching
bottom and few opportunities to reduce them
further, companies can turn to increasing sales. Marketing innovations
come to mind here and do well to sell more of what you have to sell. But
new products and services bring in new revenues too. Innovation sells.
Sony grabbed the recorded music market with the introduction of the
compact disc. The Japanese gained advantage over the Swiss with digital
watches.
• Text processors, now computers, obsoleted Smith Corona's product,
the typewriter.

11. Profit = revenue cost. The profit
equation shows that for profits to
grow, or even be maintained, you've
got to manage cost, even reduce it.
It is the most obvious way to grow
profits. And companies have been
doing this: with technology; by
downsizing; through re-engineering.
While U.S. companies have been
very good at squeezing the last
ounces of efficiency out of their
organizations and work processes,
and while companies have pared
their costs to the bone, many are
looking anorexic. These practices
simply allow you to stay in the
game, to stay in the business. They
alone are not enough.

12. It is no surprise that surprises,
often disappointing surprises, are
the seeds of innovation. Take the
oil companies. It is no surprise
that some oil companies are
becoming oil-and gas companies.
Why? Because gas is found more
often and in greater abundance
than oil is.
After the surprise and
disappointment of continued gas
finds, oil companies realized that
opportunity might be presenting
itself.

13. For a more constant flow of
innovation
For some companies, it's feast or famine. They find
themselves either scooping up the wealth of new
ideas turned into new products or waiting for one to
arrive. Or pouring money into existing operations
with no visible new output. Or cutting back so hard
that
output is a trickle. Innovation and the deliberate
systematic management thereof can even out the
surges and slumps by providing a continuous stream
of ideas for the innovation pipeline.

15. FOR
BUSINESS
SURVIVAL