The document discusses the concept of reverse innovation, where innovations are developed first in developing markets and then distributed globally. It provides examples of companies innovating in emerging markets like India and China to create affordable products for those markets. GE Healthcare developed a portable and inexpensive ECG machine called MacIndia for the Indian market that costs $500, much less than their traditional $50,000 machine. A hospital in India developed extremely low-cost open heart surgery for $3,000 compared to $150,000 in the US through process innovations like standardization and economies of scale. These reverse innovations developed for emerging markets can then be distributed worldwide.

3. WHAT IS AN INNOVATION?
 Innovation is profitable implementation of Ideas.
 It is an idea, practice or object that is perceived as new by
an individual or other unit of adoption.
 It is a use of new knowledge to offer a new product or
service that customers want. Thus, it is
Invention + Commercialization.
“Innovation is the search for and the discovery,
developed, improvement, adoption and commercialization
of new processes, new products and new organization
structures and procedures.”

4. GOALS OF INNOVATION
 Improving quality
 Creation of new markets
 Extension of the product range
 Reducing labor cost
 Improving production process
 Reducing materials
 Reducing environmental damage
 Replacement of products/services
 Reducing energy consumption
 Conformance to regulations

6. CHARACTERISTICS OF INNOVATION
 There is an object or target which is being changed.
 It can be a product, a process, an individual’s lifestyle,
an organization's strategy, a society culture.
 Innovation vary in extent or magnitude i.e. degree to
which one deviates from the past.
 It is closely related to problem solving since generation
& implementation of ideas for change never transpire
without difficulty.
 A final characteristic is the impact of the change, the
significance or range of its effects.

7. Difference between Innovation & Invention
Invention Innovation
1. It’s creation of new product, service
or process.
2. May not be commercialized
3. It can be autonomous or induced
4. Can be for economic or non-
economic motive
5. Usually restricted to R&D centre
6. May bring few changes in
organization
7. Precedes innovation
1. It is the introduction of new product,
service or process into the
marketplace.
2. Results into commercialization
3. Usually induced
4. Economic motive
5.Spread across the organization
6. Brings organizational change
7.Succeeds invention

8. WHY INNOVATE ???
OTHERWISE THEIR
SURVIVAL CHANCES
ARE SERIOUSLY
THREATENED
ORGANIZATION
PREPARE
THEMSELVES TO
INNOVATE ON A
CONTINUING BASIS
TURBULENT AND
RAPIDLY CHANGING
ECONOMY

9. SOURCES OF INNOVATION
 Organizational Structure.
- Organic structures positively influence innovation. As there is lower
vertical differentiation, formalization, centralization. Organic
organizations facilitate the flexibility, adaptation & cross-fertilization.
 Long tenure in Management
- Managerial tenure apparently provides legitimacy & knowledge of how
to accomplish a task and obtain desired outcomes.
 Slack Resources
- Having an abundance of resources allows an organization to afford to
purchase innovations, bear the cost of instituting innovations & absorb
failures.
 Interunit Communications
- Innovative organizations are high users of committees, task forces,
cross-functional teams that facilitate interaction across departmental
lines.

10. TYPES OF INNOVATION
 Product & Process Innovation
 Open & Closed Innovation
 Incremental & Radical Innovation
 Modular and Architectural Innovation

11. PRODUCT & PROCESS
INNOVATION

12. Open & Closed Innovation
Concept
Development
Implementation
PROJECT
START
CONCEPT
FROZEN
MARKET
INTRODUCTION
Concept
Development
Implementation
PROJECT
START
CONCEPT
FROZEN
MARKET
INTRODUCTION
Open Model For Innovation
Closed Model For Innovation

13. INCREMENTAL INNOVATION
Improving Inherent
Processes/Inputs to achieve
Higher Output

14. RADICAL INNOVATION
Displacing Existing Technology

15. Architectural
Innovation
Change in
Product Structure
Modular
Innovation
Change in
Component
Technology
Steam Engine
of Car
Fuel Engine
of Car

16.  Recognizing or scanning the environment.
 Aligning the overall business strategy & proposed
innovation.
 Acquiring technology from outside.
 Generating technology in-house.
 Exploring & selecting the most suitable response to the
environment.
 Executing & implementing innovation.
 Learning lessons for improvement.
 Developing the organization.
INNOVATION PROCESS

17. INNOVATION OCCURS AT
THREE LEVELS
NATIONAL LEVEL
ENTERPRISE
LEVEL
INDIVIDUAL LEVEL
GOVT. POLICIES &
SUPPORT
ENTERPRISE
POLICIES,
SUPPORT &
INITIATIVES
INDIVIDUAL &
GROUP
INNOVATION
ACTIVITIES

18. SEARCH SELECT IMPLEMENT
LEARN
T I M E

19. INNOVATION MANAGEMENT
 Innovation management is all about
- learning to find the most appropriate solution
- to the problem of consistently managing
aforestated process
- doing so in the ways best suited to the particular
circumstances in which the organization finds
itself.
 It is the search of effective routines.
 It is about managing the learning process to deal
with the challenge of the innovation process.

20. Innovation Management
Management of Innovation comprises three
things:
- linking of engineering,
- science &
- management disciplines
 to plan, develop & implement technological
capabilities to shape & accomplish the strategic
& operational objectives of an organization.

21. Need/Objectives of Innovation Management
 To reap in the economic benefits of new technological
inventions by commercializing them on time
 To integrate technology into overall strategic objective of
the organization.
 To get into and out of the technologies faster and more
efficiently.
 To accomplish technology transfer.
 To reduce new product development time.
 To manage large ,complex & interdisciplinary projects
and systems.

22. Organizational Process for Innovation
Management
Market
Learning
Effectively
Building
Business
Models
Creating a
Cause &
not a
business
Designing
an open
market for
:Ideas,
Capital,
Talent
Listening
to New
Voices
Setting
Unreasonable
Expectations
& Stretching
the Business
Definition
Building
Partnership
and
Alliances
Lowering the
risks of
experimentation
Paying the
Innovators
Well

23. VALUE INNOVATION(VI)
 One of the most prominent programmatic approaches to
innovation currently in use.
 It is different from building layers of competitive
advantages & does not means segmenting market &
accommodating customer needs.
 It’s main focus is on offering those products & services
which creates a superior buyer value in existing markets &
enables a quantum leap for the firm to create new
markets.
 Value Innovation also differs from technology innovation.
New technology developed does not becomes a value
innovation unless it is cheap enough for MASS BUYERS.

24. Three Basic
Building Blocks
of Strategy
Conventional
Focus
Value Innovation
Process
Competition Outperforming the Seeking Radically Superior
Competition value to capture the entire
mass market
Customers Retaining & better Targeting the mass of buyers by
satisfying existing following non-customers closely
customers & willingly losing some
existing customers
Corporate Leveraging & extending Willing to combine
Capabilities the current capabilities a company
of with other companies capabilities

25. 1. Why Change?
- Only innovation matters.
2. What to Change?
- Ranging from changes in product & service to the
ways(i.e. process innovation).
3. Understanding Innovation.
- Understanding common problems associated with partial
views of innovation.
4. Building an Innovation Culture.
- Managing Innovation is all about creating firm specific
routines(i.e. repeated, reinforced patterns of behavior)
which define its particular approach to the problem.
CHALLENGES FACED WHILE
MANAGING INNOVATION

26. 5. Continuous Learning
- Firms constantly needs to develop their routines to
deal with the environmental challenges.
6. High Involvement Innovation
- Higher level of participations in innovation represents
a competitive advantage.
7. Managing Connections
- In current scenario business organizations are required
to operate in relationship with others rather than in
splendid isolation.
CONTD……….

27.  External Barriers
- Market-Related Barrier
- Government & its Policies
- Others (Technical, Societal, & Inter
Organizational Barriers)
 Internal Barriers
- People Related
- Structural
- Strategy Related
BARRIERS TO INNOVATION

28. • Clearly articulated &
shared sense of purpose
• Stretching strategic intent
• Top management
commitment.
SHARED
VISION,
LEADERSHIP &
THE WILL TO
INNOVATE.
• Encouraging creativity
• Enabling learning &
interaction
• Balancing between ‘organic
& mechanistic’
APPROPRIATE
CULTURE
HOW TO OVERCOME THESE BARRIERS
LEARNING TO MANAGE INNOVATION

29. CONTD.
• Promoters, champions &
other roles which facilitate
innovation
KEY
INDIVIDUALS
• Use of teams at cross-
functional & inter-
organizational level
• Investment in team
selection & building
EFFECTIVE
TEAM
WORKING
• Education & training of
employees to ensure high
level of skills &
competence
CONTINUING &
STRETCHING
INDIVIDUAL
DEVELOPMENT

30. • Within & between the
organization and
outside
EXTENSIVE
COMMUNICATION
• Positive approach to
creative ideas,
supported by relevant
motivation systems
CREATIVE CLIMATE
• High level of
involvement within &
outside the firm in
proactive
experimentation
• Knowledge capture &
dissemination
LEARNING
ORGANISATION

31. CONCLUSION
Enterprises should emphasize
Planning &
Controlling
Systems
With high
degree of
Flexibility
Respect for
Individual
Initiative
And
Personal
Growth
Tolerance for
mistakes
And
Allowing
Room for
Failure

32. Past of Innovation
 Developed to Developing world
Developed
World
Developing
World

33. Future of Innovation
 Developing to Developed world
Developed
World
Developing
World

34. Why
 Population
 85% of the people (5.8 billion) live in poor
countries
 Total GDP
 In total GDP China is No. 2; India – No. 4
 Total GDP of poor countries is roughly $35 Trillion
(half of World GDP)

35. Why
 Projected GDP Growth rates
 China and India (Double as compared to Rich
countries)
 GDP per capita
 US – 6th; China – 94; India - 128
 Point is simple
 In rich countries there are few people who each
spend a lot
 In Developing world there are a lot of people who
each spend a little.
Either way, total spending is vast

36. The business challenge
 One person with 10 Dollars
 10 persons with 1 Dollar each
It requires innovation
Reverse innovation

37. Do you know him ?

38. WHAT IS REVERSE INNOVATION?
 Reverse Innovation is the strategy of innovating in
emerging (or developing) markets and then
distributing/marketing these innovations in developed
markets. Many companies are developing products in
emerging countries like China and India and then
distributing them globally.
 It is the reverse process of innovation.
 Developing country don’t need innovation that is why
glocalization strategy makes the perfect sense.

40. Key ideas for Reverse innovation
• Move People , Power and money to where the
growth is the developing countries.
• Create a reverse innovation mind set throughout
the corporation.
• Create separate business scorecards for
developing nations with full income statements and
an emphasis on growth metrics.

42. GE Healthcare – Technology In
Doctor’s Bag
• GE started developing 2001
• Traditional ECG machine costing $
50,000
• GE – Dominant manufacturers of
medical-imaging, diagnostics and
health-information technologies
• High-end devices are typically heavy
and cumbersome to carry

43. INDIAN SCENARIO
 Both patients and clinics has far less to spend than
their western counter parts
 The problem of the Indian market
 Low cost to patients
 Low capital cost
 Portability
 Battery power
 Ease of use
 Ease of maintenance and repairs

44. ADVANTAGE INDIA –
MACINDIA
 Development of MacIndia, a portable ECG
machine costing only $500
 Easy to operate with only two buttons
 Battery operated, No external power source
required
 Easy to carry in Doctor’s bag

46.  Open heart surgery for just $3,000
 US price - $ 150,000
 Despite the ultra-low price, NH hospital’s new
profit margins are slightly higher than USA
 Quality: its mortality rates within 30 days of
bypass surgery is 1.4% as compared to US
average of 1.9%
 The real magic lies in process innovation
 Standardization, specialization of labour,
economies of scale, and assembly line
production (just Like Henry Ford)

47.  Extensive resource utilization – expensive
equipments are used five times more as
compared to USA.
 Specialization of doctors in specific type of
surgery.
 Surgeons perform two to three times more
procedures.
 This accelerates learning, improves skills,
and increases quality.

48.  Now they are building a large 2000 bed
hospital in the Cayman islands (close to USA)
– an hour’s flight from Miami
 Reverse Innovation

49. Artificial Legs
IN USA APPROX CHARGES FOR ARTIFICIAL LEG- $20,000

50. PK SETHI JAIPURI FOOT
SUDHA CHANDRAN

51. Dr. Therdchai Jivacate

53. Artificial Leg
BABY MOSHA