Module Teaching ObjectivesTo introduce students to the concept.docx

Module Teaching Objectives
To introduce students to the concept of innovation
To explain why it is important for all types of firm or
organisation and country economies
To learn how to innovate and the role of ‘entrepreneurial
management’ in this context
1
BS2402 Innovation & Entrepreneurship
1
Module Learning Outcomes
Understand what is meant by innovation
Understand what is meant by entrepreneurship
Assess why innovation and entrepreneurial management are
important for wealth and value creation
Evaluate the potential importance of innovation and
entrepreneurial management in your own organisation by using
what you have learnt
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2
Module Structure OverviewDateContentManual refAssignment
linkWed 5th SeptIntroduction to Innovation & defining

Assignment Brief.
Entrepreneurship.
Importance of innovationUnit s 1,2,3Define innovation & types.
Recent innovations in org’n
Understand assignment. Define entrepreneurship/
entrepreneurial management.Sat 8th SeptEntrepreneurial/
innovation mgt process
Context for Innovation. Factors supporting/ hindering.
Managing the process
Overcoming barriersUnits 4,5,6Behaviours that impede or
facilitate entrepreneurial management .
Critical factors/barriers?
Making the innovation happen
3
3
Today’s Agenda
am
9.00 Mktg feedback form
9.10 Recap
9.30 Assignment detail
10.00 Context - external
10.20 BREAK
10.30 Context – internal
Management style & orientation
12.40 LUNCH
pm
13.40 Innovation Process
13.55 Ideas Generation
15.00 BREAK

15.10 Remainder of Innovation Process
15.40/16.00 Assignment Q&A
16.00/16.30 END
(mini breaks as required)
Take chocolates and grapes + a big bottle of water (take cups
from staff room)
4
What is the difference
between invention & innovation?
5
INNOVATION: A Definition (E. Roberts)
Successful Exploitation and Implementation
INNOVATION
Good Idea
Invention

=
Innovation as Source of Competitive Advantage for Economic
Renewal
+
6
What is the difference between creativity & innovation
Innovation as a process with many different inputs to achieve an
innovative output
(Joseph Shumpeter, 1934)
Five Categories of Innovation

‘Totally new or significantly improved good’ - Product
Innovation (DVD, Walkman, iPod, PC, car)
2. ‘New method of production’ - New Process (Synthetic
Insulin; float glass; iPod; Zara
http://www.msnbc.msn.com/id/5457434/site/newsweek/
3. ‘Opening New Market’ - Applying a product or process to
a new application (Plastic Jug Kettle; Sushi bars; Benihana)
4. New source/ supply of raw materials (Synthetic Slate,
Silicone)
5. New form of organisation (Direct Line, Amazon)
7
Schumpeter – will see alot in your manual – talks of five main
categories that cross-over with the types looked at. They are
distinct ways that innovation causes change in the market.
Walkman – “platform innovation’ Tidd & Beasant p28 portable
music – foundation that deploys minidisk / cd/ mp3
Entrepreneurship
How did we define it?
Mindset – willingness to take opportunities
Risk-taking : Different attitude to risk-taking: Heuristics
(trial and error) with fast feedback loop rather than highly
planned.
Tolerance of failure as a source of learning.

Process – with Innovation as an outcome. Ie: ‘creating
something new’.
8
A Useful Definition of Entrepreneurship
‘entrepreneurship is the manifest ability and willingness of
individuals, on their own, in teams, within and outside existing
organisations, to perceive and create new economic
opportunities (new products, new production methods, new
organisational schemes and new product market combinations)
and to introduce their ideas in the market, in the face of
uncertainty and other obstacles, by making decisions on
location, form and the use of resources and institutions’
(Wennekers and Thurik, 1999):
9
Qn: How did we define entrepreneurship?
Key points:
WILLINGNESS – ie: mindset
NEW (economic or value creation) opportunities. ie:innovation
Ability to cope with UNCERTAINTY – ie: handling and
managing risk.
Decisions on resources

Entrepreneurship (according to Wilson, 2005):
Is a process of social change
In which particular individuals (entrepreneurs) undertake
specific projects
Which lead to new or transformed firms and markets
With innovation as an outcome
10
Another useful definition .
Draws out:
PROCESS
INNOVATION as outcome. – ie: entrepreneurship is all about
the process of innovating.
11
Fitting the entrepreneurial management process onto innovation
using Robert’s innovation model
INNOVATION
Good Idea
Invention
=
+

INPUTS
Group member
Knowledge, skills, effort
Entrepreneurial/ Innovation Management Process
OUTPUTS
adding or creating value
11
A pattern of management behaviour that produces innovation
(individual, group or firm level)
Perceives and Identifies innovative opportunities
Takes ‘Risk’ in pursuing this opportunity (link to self-
confidence)
Finds and Gathers scarce resources into appropriate
combinations to produce an organisation to deliver that
innovation(s)
Continually ‘reaches’ for the necessary resources to solve
problems and foster firm growth (Baumol)
Entrepreneurial Management
Decision-making based on bias and heuristics; networking;
opportunism
12
GOT TO HERE – NOW CHECK VERSUS MANUAL – BEST
POINTS FOR SLIDES

Ie: recognises innovative opportunities and encourages pursuit
of these. (Acutely tuned to spotting opportunities)
RISK: Not bigger risks , just a different approach to risk. Some
say ‘overoptimistic’ (Cooper et al, 1988, p3.17), - perhaps it is
a lower fear of failure – or just an unwillingness to let that stop
you (what is the risk of not taking the opportunity?) . Others
link it to the decision-making process
Appropriate combinations of resources – it is this dynamic
resource building concept of changing patterns and
combinations of resources to create something unique that
makes entrepreneurial management exp different from
traditional management.
Q? what do we mean by resources? – people, finance, ‘stuff’.
Q: Heuristics = process of discovering & learning by
doing/trial and error
13
Recognise opportunity
Find Resources
Develop Venture by picking and deploying resources
Create Value
Entrepreneurial
Goals and Innovation Context
Strategic Vision and direction
Learning
CG Adapted Innovation and E’ship Management Model: Bessant
and Tidd 2nd Ed 2011

Round edges = aspects affecting entrepreneurial management
capability. Through centre = innovation management process.
Key outcome of management approach is that you can define a
process and approach that you can understand, practice and
make happen. So develop your organisation’s ability to act
entrepreneurially, and innovate successfully.
Here = suggests it is a process for one idea. In your assignments
final task = take one idea through this process. How can you
make it happen?
BUT: For your organisation (= rest of assignment) you need to
be able to do this many, many times, at once and learning for
each one.
Your assignment asks you to consider both the one individual
example (your idea) and the overall organisation ability to
foster & support successful innovation.
Recognising opportunities : need to have ways to identify
changes that give rise to opportunities and encourage ideas to
be shared and built upon.
Finding Resources:
Assess benefits versus risks & costs. How do you balance these
in order to decide which ideas to pursue?
Need to build the Case: Often Business Plans required to access
resources. How do ideas fit with organisation’s strategy?
Resources won’t all come at once – may a little released for a
concept assessment; a little released for a pilot etc..... Until
proven.
Develop Venture:
This is turning the idea into reality. Project Managing the

process – with all the risk management and controls that that
involves. How do you do this safely? Here pilots or prototypes
are often used.
Create Value:
Even once new product is launched or process implemented you
might not be getting value from it. How do you ensure you
capture that value? E.g. The management ‘team meeting’ idea
that was launched internally then not followed through to gain
the value. Esp true of internal process changes. Need scale-up
and persistence to make new habits stick. OR In pharma, new
product needs to be protected with patents, else it would get
copied before the research investment has been recovered.
Also – here reflect to learn what worked , and didn’t, so can
improve future capabilities at managing innovation.
13
Takes ‘Risk’ in pursuing this opportunity
innovation(s)
Management approach to Entrepreneurship
opportunism

14
(manual, unit 4 p 28)
Entrepreneurial management is becoming a way of
distinguishing a dynamic innovation capability, where the
organisation’s routines and processes are finely honed to
achieve responsiveness (Teece et al , 1997).
Assignment talks of Entrepreneurial Management Orientation =
which is effectively this.
15

Entrepreneurial Management Style which on in G-TEC (after
Stevenson & Gumpert , 1989)
‘PROMOTOR’ ‘TRUSTEE’
‘Entrepreneurial’ ‘Administrative’
Proactive Disinclined to change
Tolerant of uncertainty and ambiguity Guards resources
Able to make incremental changes in Interested in
maintaining
response to environmental pressures the status quo
Q: What type of manager is your manger?
16
NB: This is a continuum!!
Your type of manager? – will influence how easily you can
implement an innovation.
They could be a champion or a barrier.

(Q – what is an intrapraneur? Internal entrepreneur – think
difficulty of this. Can you think of people in your organisation?
– My example ‘Vivek’ – brought in to foster innovation.
Continual battling against the tide – “overoptimism/overselling”
required to get people to buy into new ideas)
CHECK: All can place their manager somewhere along this
continuum.
Types of Organisation (Burns and Stalker, 1961)
‘mechanistic reproducer’ ‘organic innovator’
Routines and competencies similar to existing organisations
Copied routines
Decisions base on ‘rational’ and ‘scientific’ principles
Formal planning and budgeting
Risk averse resource maximisers
Structured heirarchy
Competencies and routines significantly different to others
Decisions based on cognitive biases and heuristics
Incremental change to direction and resource allocation
expected.
New resource combinations
Overconfidence and optimism
Resource leveragers; use rather than own
Flat organisation structure
Where does your organisation sit on this continuum?
17
At Organisational level = Corporate Entrepreneurship.

Rational /scientific principles – assumes can analyse the
environment fully and make strategic decisions based on this.
Classic annual strategic review/budgeting process w little in
between.
Planning – still needed in the innovative organisation, but may
not be as formal as the mechanistic reproducer. “Formal
planning is often the enemy of organisational adaption to
innovation opportunities” (Stevenson & Gumpert, 1985)
Q = why would this be so?
Incremental strategy – assumes you can’t know all
environmental impacts and hence maintain acute awareness of
environment and flexibility to change as needed.
New resource combinations – eg: Direct line insurance (?); First
direct;
Q: If you look at these why do you think small organisations
have a tendancy to be more entrepreneurial than large
organisations? (NOTE: resource constraints tend to be the main
reason small organisations manage differently. They don’t have
the resources so have to be imaginative and network to get
resources & pursue opportunities.)
Q: Think public sector – what are the particular issues for the
public sector? Get people’s responses (Beaurocratic; formal
planning; risk-averse: NOTE – risks perceived as big eg:
education, health)
Where your organisation sits on this continuum - will influence
how easily you can implement an innovation.
It could support or be a barrier in particular areas.
Assignment Brief Detail

18
Assignment Brief.
Entrepreneurship.
19
19
Assignment Brief Recap
Word limit 3,000 words

20
Assignment – section 1
Critically analyse and evaluate the management / employee
behaviour and its ability to support and foster and achieve
innovation within the organisation (entrepreneurial management
orientation) in which you work.
21
It is more academic than last year
Could argue it’s broader in its scope than customer service –
need to read – Tidd & beasant
&
Key elements of section 1
Critically analyse & evaluate
Current innovation levels & management style
Organisation culture
Organisation structure
Team working
Human capital
Knowledge management
22
This is too certain judgement call / sensitive
Marking Criteria – 30%
Demonstrate knowledge of the many factors that influence the
ability of an organisation to produce innovation outcomes
Analysis must include entrepreneurial management orientation
i.e. management style likely to facilitate innovation

Demonstration of an ability to apply these factors to your
organisation, through analysis & evaluation of these factors that
may encourage / discourage entrepreneurial management
orientation & innovation within their work organisation &
critically assess them
23
Management/employee behaviour influencing innovation in your
organisationFactor (Assignment)Factor (Manual &Tidd)Current
innovation levelsYour critical reflectionManagement
styleLeadership, vision (& promotor vs trustee, strategic
management)Organisation Culture
Involvement in innovation, creative climate, external/customer
focus, communication, rewardsStructureAppropriate structure
(& mechanistic bureaucracy vs organic innovator)Team working
Effective Team workingHuman CapitalKey individuals,
recruitment, training & developmentKnowledge
managementLearning organisation
24
Critical reflection – judgement call – need to be able to explain
clearly & precisely before pen is put to paper – know where
you’re going early –
We’re learning strategy as administrator
Promotor –trustee (in manual 3.18 ) scale entrep – admin
manager
24
Assignment – 40%
Identify the critical factors within the organisation/area which

prevent better innovation supportive management
(entrepreneurial management orientation) and innovation
outcomes
Provide suggestions on how to overcome these barriers, based
on evidence of appropriate reading in entrepreneurship &
innovation management literatures, clearly indicating the level
of difficulty likely to be encountered in accomplishing them
25
Barriers
Have to get creative – plan to overcome lot of the ideas come
from the situational analysis in section1
Assignment - 40% contd.
Then identify a specific potential innovation you would like to
carry out within the organisation/area & identify specific
changes in working practice that would help the implementation
of the innovation with reference to the overall analysis
26
Remaining 30 %
Overall depth & breadth of research & background reading –
20%
Clarity of presentation & report writing style, Harvard Business
referencing

27
Oppurtunity to pick up narks
Context for Innovation
Factors Affecting Innovation
28
Context for Innovation - External Factors
External factors
Sector
Size
National systems of innovation
Lifecycle
29
THINK ABOUT YOUR ORGANISATION -
Sector – SHARE p4.4
eg: Big,mature,capital intensive industries like Oil & Gas –
R&D driven; process improvements.
Contrast with restuarants – where scope for all manor of
customer-focussed innovations – service; (product=
taste/quality); environment; whole experience; convenience.
FAT DUCK – anyone eaten there?? Heston Blumenthal –

Product innovation combining new ideas & ingredients – Crab
icecream; using smells and sounds to both change & enhance
the experience.
Q: IT? – types of innovation – product, process, technology -
driven.
Q: Public sector? – types? – service/process;
Q: Your sector?
TECHNOLOGICAL TRAJECTORIES – share p4.5. Country-
specific.
Q: where is your organisation?
Q: public sector? 6th – “Gov’t policy driven”. Get group to
complete??
Implications = path dependency (nb: can change, but
radical/major disruptive)
Example: typewriter – QWERTY. Difficult to change even if
better ways.
2. Size – how do you think size impacts innovation?
Oil and Gas companies
Generally large scale
R&D labs
Process innovation

30
Haulage
Some small businesses
Customers as source
Process / service innovation
31
IT hardware & software
Specialist or niche vs. large scale
Technology driven
Product and process innovation
32
Large Firms
Considerable Resources - £ + people
Large R & D. Budgets / Capital

Economies of Scale
Dominant in innovation in mature industries
Market Power / Mass markets
Balance Risk from innovative projects with ‘cash cows’
33
Small Firms:
Behavioural Advantage in flexibility and adaptability in early
stages of market and industry development
Early stages of market development before standardisation -
dominant design
Experimentation role
Less bureaucracy and inertia preventing change
34

Context for Innovation – National systems
Natural resources (or lack of)
Market Pressures
Local demands
Competition
Clusters – eg: related and supporting organisations

Skilled labour/ competencies
eg: in production and research
Management style & corporate governance
Government policies & activities ?
Adapted from Porter: the competitive advantage of nations,
1990
35
Resources – Japan & energy
P: 4.16 table. (Tidd, Bessant and Pavitt, 1997)
Management style:
Anglo-saxon vs Nippon-Rhineland.
Responsive , but short- termist vs long-term R&D, but
slower exploitation or back-out
Q:What impact do you think Government policies have?
Private? Public?
- Will look at more, Tuesday.
Product innovation
Process innovation
Rate of Major Innovation
Fluid phase Transitional phase Specific phase
The Dynamics of Innovation (with Lifecycle)

(Abernathy-Utterback model in Utterback (1994) p.xvii
Early participants in new industries experiment freely with new
forms and materials
There is a sense of pioneering
This ‘flurry’ of radical product innovation eventually ends with
the emergence of a dominant design
The marketplace forms expectations for a product in terms of
features, form and capabilities
In the early days of a new product technology, processes used to
produce the good are usually crude, inefficient etc.
But product and process innovation are interdependent…as the
rate of product innovation decreases, it is common to observe a
growing rate of process innovation (Utterback, p.83)
RADICAL DISRUPTION - > NEW PRODUCT
TECNOLOGY/NEW TECHNOLOGY:
Video – DVD (minidisc etc..)
Walkman – iPod
Q: Relevance to service industries/public sector? THINK NEW
TECHNOLOGY/LOW TECH.
(not sure) – leave them to think about.
Q: where is your organisation industry/sector in lifecycle? (Any
radical disruptions?)
36
BREAK

Do assignment brief here.
37
Context for Innovation
Internal Factors Affecting Innovation
38
Class discussion re.Tidd & Beasant self assessment
How well do we manage innovation?
Leadership style – where on promotor to trustee scale?
Culture – ‘the way we do things around here?’
Cross functional activity
Key Personnel
Team work
39
Refer to NESTA P4 LEADERSHIP MODELLING
BEHAVIOURS & HOW NESTA CAN HELP WITH
ASSIGNMENT
BESPOKE OR ONE SIZE FITS ALL?
© 2009 John Wiley & Sons Ltd.
www.wileyeurope.com/college/tidd
40

40
Innovative organisation ‘implies more’ than a structure – it is
an integrated set of components that work together to create &
reinforce an environment where innovation can flourish
Appropriate structure - not always loose / level of mechanistic
an advantage
Shared
Shared Vision, leadership & will to innovate
Innovation about learning, change often risky & disruptive
Often organisations & individuals develop ways to maintain the
status quo
Entrepreneurs challenge the accepted rules of the game
Core competencies v core rigidities
One of concerns in innovative organisations is finding ways to
ensure individuals with good ideas can progress them –
‘intrareneurship’
41
Mindset good at one thing – block another
I SOLVED A LOT OF ISSUES THROUGH MECHANISTIC
PROCESS – INFRA STRUCTURE ALLOES FOR
INCREMNTAL CHANGE
Role of ‘Top’ Management
Changing mindset & refocusing organisational energies requires
articulation of a new vision
Need to demonstrate long term commitment & involvement
Need to prepared to take risk & utilise lessons from failiure
Leaders with focus who enable their people to focus

42
‘Bottom up’ innovation
IBM turnaround partly due to bottom up team initiative – entry
into e-business
Tidd & Beasant – outline development of the idea of the
execution of leadership vision by management drones to argue
that they may be ‘two constructs on a continuum, rather than
two opposing characteristics’
43
MIX OF TOP DOWN / BOTTOM UP
Appropriate organisation structure
“Organisations – rigid hierarchies top down, one way
communication – unlikely to be supportive of smooth info flows
& cross functional cooperation
Burns & Stalker – outlined characteristics of ‘organic’ &
‘mechanistic’ organisations
Innovation not confined to R & D depts. Innovation becoming
corporate wide – cross functional
44
PHOTOPCOPY P 108-9
smooth info flows & cross functional cooperation – recognised
as important success factors in Innovation

45
45
Very Useful folis – look at your own organisation for the
assignment – shades of grey – but look characteristics – try to
build up a picture so that you can describe this as succintly
46
46
Discuss – decentralised forums
47
47

48
48
Activity
How does organisational structure impact on innovation levels
in your organisation?
In Groups of 3 (5mins – then share back & exchange ideas)
Key Individuals
Champions – help overcome complexity & uncertainty involved
in innovation
Roles:
Sources of critical technical knowledge -often inventor / team
leader
Organisational sponsor / project team leader
Business innovator
Technological gatekeeper
50
High involvement in innovation
Quality Miracle – Japanese ‘continuous improvement’
Involvement of a wide range of- personnel providing limited,
incremetal innovations (kaizens)

XYZ systems – rewards
Needs organisational culture to support & encourage over the
long term. Now recognised as a major source of competitive
advantage (P117 Tidd & Beasant)
Secondary effect – more people involved in change the more
receptive they become to it
51
Photocopy p115-116
52
52
Plot your org / dept / area on here – useful tool
Next slide – there’s a progression – can give you some strategic
direction / help with objectives
53
53
Effective Team Working

Research on high performing teams
Selection & investment in team building
Clearly defined tasks & objectives
Good balance of team roles & match to individual behavioural
style
Team working critical determinant to success – can bridge
boundaries, cross functional teams bring together different
knowledge.
Provide a decentralised & agile operating structure
54
High performing teams – not an accident
Myers Briggs
P124 vancom zuid limburg
Effective Team Working –Tidd & Beasant
A clear, common & elevating goal
Results-driven structure
Competent team members
Unified commitment
Colloborative climate
Standards of excellence
Principled leadership
Appropriate use of the team
Participation in decision making
Team spirit
Embracing appropriate change

55
56
56
Creative Climate
Reward systems – innovative organisations look to reward
creative behaviour & to encourage its emergence. Linked to the
idea of intrapreneurship - internal entrepreneurship. Concept of
rewarding failiure, people learn from their mistakes and will get
it right – look at Dyson philosophy
www.whatifinnovation.com
Matt Kingdon – 3 elements of Innovation energy: attitude,
behaviours & structures
http://vimeo.com/15118963
http://www.youtube.com/watch?v=0ZgajaPkwyE
57
On interview - emotion
In Groups (5min discussion; 3min share back)

What policies are in place in your organisation to:
Encourage the identification of innovative opportunities?
Reward the successful implementation of innovative
suggestions?
What sort of rewards, tangible and intangible, might change
your behaviour?
( think individuals and teams)
Alternative – if time, but possibly need to allocate different
aspects to each group
58
58
GROUPS – 5mins and present back 3min each.
NB: Some tangible rewards to protect innovation – copywrite,
patents, trade-marks. (see p4.24 )
eg: if manager accepts and encourages new ideas then people
will bring new ideas [perhaps devotes 15mins at end of a
meeting to considering new ideas, AND makes sure they are
received positively.
59
59
Climate – ‘recurring patterns of behaviour, attitudes & feelings

that characterise life in the organisation
Trust & openness: emotional safety in relationships – people
share common values & trust
Challenge & involvement - degree to which people are involved
in daily operations, long term goals & visions
Support & space for ideas – high idea-time situation where
there are possibilities to discuss & test unplanned impulses &
fresh suggestions. Low idea time – research confirms
individuals are less creative.
60
Mechanisms Stimulating Innovation at 3M
Q: YOUR ORGANISATION – Allowing space for new ideas?
61
Risk Taking – high risk taking: bold new initiatives can be
taken even when the outcomes are known. People feel ‘they can
take a gamble’. Risk avoiding climate – cautious, safe, decide to
‘sleep on the matter’ It’s about balance between risk & stability
Freedom – ‘the independence in behaviour exerted by people in
the organisation’

62
KEEP STRESSING ITS ALL ABOUT CALIBRATING
CORRECT BALANCE FOR PEOPLE / CULTURE
Boundary Spanning
The extent to which innovation has become an open process
involving richer networks across & between organisations
Successful innovating organisations – an orientation which is
essentially open to new stimuli
63
Matt Kingdon Interview
Please can you pull out key points re the internal context for
discussion
64
organisationFactor (Manual)
Factor (Assignment)Visionary LeadershipManagement style,
cultureOrganisational structureStructureKey IndividualsHuman
capital, Effective TeamworkingTeamworkingTraining and skill
developmentHuman CapitalCommunicationOrganisation
CultureCustomer OrientationOrganisation CultureInnovative
ClimateOrganisation CultureProcesses to institutionalise

knowledge managementKnowedge Management
65
65
organisationFactor (Manual)
Factor (Assignment)Visionary LeadershipManagement style,
cultureOrganisational structureStructureKey IndividualsHuman
capital, Effective TeamworkingTeamworkingTraining and skill
developmentHuman CapitalCommunicationOrganisation
CultureCustomer OrientationOrganisation CultureInnovative
ClimateOrganisation CultureProcesses to institutionalise
knowledge managementKnowledge Management
66
Mechanisms Stimulating Innovation at 3M
Q: YOUR ORGANISATION – Allowing space for new ideas?
67
(manual, unit 4 p 28)

Entrepreneurial management is becoming a way of
distinguishing a dynamic innovation capability, where the
organisation’s routines and processes are finely honed to
achieve responsiveness (Teece et al , 1997).
Assignment talks of Entrepreneurial Management Orientation =
which is effectively this.
68
Corporate Entrepreneurship and Innovation Management
Difference between entrepreneurial management and innovation
management.
69
Dynamic Capabilities – emphasises two aspects
The shifting character of the environment
The key role of strategic management in adapting, integrating
and re-configuring internal and external organisational skills,
resources and competencies towards a changing environment.
Tidd (2009) p 174
70

Barriers to Innovation
71
Reluctance to close down failing programmes or organisations
No innovation
Poor skills in active risk or change management
No rewards or incentives to innovate or adopt innovations
Short-term budgets and planning horizons
Technologies available but constraining cultural or
organisational arrangements
Delivery pressures and administrative burdens
Over-reliance on high performers as sources of innovation
Culture of risk aversion
Figure 6:1: Barriers to Innovation in the Public Sector
Source: Cabinet Office (2003) p.31

72
Path Dependence
Convergence of reward and incentive schemes with innovation
reasoning
Access to sufficient capital to fund long term innovation
Organisational inability to tolerate uncertainty innovation
requires chaos
73
The Innovation Process
74
Do we have a clear innovation strategy?
Simple Model of the Innovation Process (Tidd & Bessant, 2009)
Select – what are we going to do – and why?

Implement – how are we going to make it happen?
Capture – how are we going to get the benefits from it?
Search – how can we find opportunities for innovation?
Do we have an innovative organisation?
This version from Tidd shows a simple process within the
context of the innovative organistion.
Search for ideas -> select the best ideas to progress ->
implement them -> capture benefits/value.
In manual there are two other processes shown:
75
This – like New product development process (know from
marketing 1?)
It is easier to see this process in big business (eg: Unilever and
Lilly) because it is more structured this way, but even in small
organisations the innovation process will go through these
steps, even if instinctively.
(EXAMPLE: at extreme, development of a new pharma product
– like a funnel)
Won’t focus on this.

76
The Innovation Process: Conceptual Model
Analysing
and learning
Generating
possibilities
Incubating and
prototyping
Replication
and scaling up
Source: Government Strategy Unit (2003) p.12
From Unit in manual: I Like this coz shows the iterative nature
& touches on the trial and error in the incubation step with fast
learning feedback.
What aiming to create dynamic capability to support.
Innovation process – but encouraging more than just each – lots,
concurrently occuring.
Key – is idea of iterations – (which this example shows in terms
of piloting) – because innovation is (coz new) not predictable,
so need systems in place to learn and feedback to improve.

Now will think about each step. As go through, reflect on how
the management and employee behaviours can support or hinder
the steps.
77
Seven ‘sources’ of innovation (areas to exploit)
The unexpected
The incongruous
Process need
Industry and market structure
Demographics
Changes in perception
New knowledge
(Source: Drucker)
More clearly – these are potential areas to exploit through
innovation. Is your organisation in a position to perceive
opportunities from these?
Remember – technological trajectories – where are ideas likely
to come from for your organisation?
Ask for examples.
Unexpected – Viagra (developed as a heart treatment - noticed
ED function).
Incongruous – steel market - gave rise to minimills
Process need – synthetic insulin (not possible to get enough
animal insulin);
Industry and market structure – banking – first direct.
Demographics – aging population; immigration; global
mobility; dispersal of families – all given rise to possible

opportunities and new needs.
Changes in perception – rise of concern for environment/global
warming; organic food; farmers market (eg: Hampton)
New Knowledge – much high tech; iPod etc..
Q Can you think of examples either in your own organisation or
have come across of any of these?
78
an urgent or nagging business imperative
different perspectives on this imperative
an environment conducive to reflection
(“successful innovation” Michael Syrett and Jean Lammiman,
2002)
Inspiration for new ideas mostly stems from the presence of,
and interplay between....

79
IMPERATIVE = NEED
Q: Can you think of any nagging business needs in your
organisation?
Q: What was the nagging need for Dyson? (other example?)
Jaipur foot?
(adversity is the mother of invention – certainly heightens the
need for ideas)
Q What differences public/private? Large/small firms?
Eg:
Unilever – competition always fierce. If don’t innovate then
will lose market share.....
Small companies- survivial
Public sector – cuts in funding – think mission/customer
service/ value for money. Huge urgency to find more cost
effective ways of meeting needs.
Q: Do you think needs always exist?
I would say yes “even if people haven’t recognised it yet”.
Perspectives – we’ll look at this next
Conducive – space to reflect
Organisation
>50%
Customers/
Users
30%
Suppliers/

Distributors/
Partners
Competitors
30%
Sources of Ideas
Environmental scanning
More than half of ideas come from within the organisation –
particularly front-line staff. (This is why the numbers don’t add
up to 100% coz some of the internal ideas will have originated
from customers and other external sources)
So it is critical to encourage these ideas to come forward.
It is also a reason to build diversity within the organisation. Inc
– bringing in fresh thinking from outside the organisation who
might look at things differently.
Q: Do you have any examples of where, say, someone new into
the organisation has had ideas to improve things? (how were the
ideas received?)
Many come from customers... So we’ll look at this a bit more.
80
Customers or
interest group
SEEN BUT CAN’T
FIND IT?
OUT OF DATE
OR STYLE?
NOT EASY TO USE?

QUALITY…NOT
GOOD ENOUGH?
WANT BUT
DOESN’T EXIST?
IT’S TOO
EXPENSIVE?
PEOPLE WANT THINGS
Adapted from Scottish Enterprise Foundation (U. Stirling) 1990
So lets look at customers:
Q: Can you think of examples? Ask going round the circle:
Want but doesn’t exist. (eg: Anita Roddick – Bodyshop wanted
to buy toiletries like she bought fruit & veg, in difft amounts)
seen but can’t find. (poss seen in another country. Eg: food
found in Poland/other countries)
Not easy to use. (broadband growth to make internet use easier;
Sharon’s cavity wall wire threading tool)
It’s too expensive (many new industries; + why so much
innovation/change being pushed on the NHS currently? ; cheap
copies; minaturisation (Sony) covered price and use)
Quality... Not good enough (eg: banking service; Sharon and

cavity wall tool)
Out of date/style (fashion)
I would add at top aka Steve Jobs “A lot of times people don’t
know what they want until you show it to them”.
81
c
Generating Innovation Possibilities through crossing boundaries
Boundary spanning activities
External
Internal
Govt regulation & support
Inspection & audit
University research; science & tecnhology parks
Other public services & countries
Supportive culture – eg. cross disciplinary working
Organisational heterogeneity/ diversity
Users, front-line staff, middle mgrs
Networking
Scanning of environment
Benchmarking
R&D

When you look for opportunities for innovation in your
organisation you can try looking at these areas.
Q: Examples of innovation, or changes made, picked up these in
your organisation/generally?
Internal – covered this am.
Networking – e.g.between departments; conferences – e.g.
Universities Russell group; doctors/consultants specialities
often have international conferences in specialism.
Scanning env – customer trends; new technology? (e.g. Key-
hole surgery; texting pts)
Benchmarking – e.g. Comparing Police forces, or a Police force
might look at how customs complete their work. OR Swedish
schools – results & approach.
Internal = much as for private sector and as have considered this
am. Key diversity in recruitment and encouraging constructive
conflict. (unit 5 manual)
, sch
Govt regulation & support: “ Breaking the Rules”: “there is a
need to develop a dissident culture in which organisational rule-
breaking is encourgaed and managed”. BUT: impact of this in
public sector??? examples – encouraging Beacon schools –
trying new ideas; protecting considered experimentation
+ Creating competition (e.g. Hospitals , schools – to incentivise
new ideas for improvement)
Inspection and audit. Eg: Internal auditing such as within FE;
Ofsted – inspecting Schools (whether agree – aim = to spot
good practice and spread ideas); Six sigma - & other structured
approach to auditing processes using problem solving

techniques with aim to create improved/better value solutions.
Research: e.g. Toiletries – anti-aging research from
Universities.
Other sectors: Airport passenger movement – patient movement
in hospitals (but now poss need the other way)
Other Countries: Gov’t initiatives. Current banking – Govts all
looking to other countries for ideas. Eg: Policing – zero
tolerance (New York); Education – Scandinavia – Swedish
‘Open Schools’ being piloted here.
82
Environmental scanning...
When you look for opportunities for innovation in your
organisation you can try looking at these areas.
Q: Examples of innovation, or changes made, picked up these in
your organisation/generally?
Inspection and audit. Eg: six sigma = structured approach to
auditing processes using problem solving techniques with aim to
create improved/better value solutions.
Research: Gov’t think tanks?; Toiletries – anti-aging research
from Universities.

New Technologies: minaturisation; gene technology; mobile
technologies.
Other sectors: Airport passenger movement – patient movement
in hospitals (but now poss need the other way)
Other Countries: Gov’t initiatives. Current banking – Govts all
looking to other countries for ideas. Eg: Policing – zero
tolerance (New York); Education – Scandinavia – Swedish
‘Open Schools’ being piloted here.
83
Changing your perspective
Look around you:
Now look around again – focusing on any objects that match
your chosen colour
Now choose a colour…
Does the scene look the same? Try with a different colour…
Source: www.spaceforideas.uk.com (Professor Wiseman)
84

How could the Foundation Degree be improved?
Source: University of Teeside
Innovation on your doorstep - A TASK
85
Brainstorming...
Generate as many ideas as possible - the more the better
Improve and build on each others’ ideas: as well as suggesting
new ideas, try and develop someone else’s ideas by proposing
improvements or ways of combining ideas
encourage long shots: crazy-sounding ideas can often spark off
original and practical thoughts
encourage rather than criticize others: praise other group
members’ ideas to encourage them to come up with more rather
than turning off their creative tap by adverse comments
always record all ideas on a sheet of paper or a flip chart

86
5mins.
AT LEAST 20 ideas – but don’t stop at 20.
Mid way through – add in:
Group 1) ‘take something away’ – ie: degree has no teachers –
more ideas?
Group 2) ‘provocation’ – ie: the degree makes you less
employable – what is good about this.
Share back in overview – 3min each group.
Changing perspective .…
Take Something Away
The foundation degree has no lecturers
Provocation
The foundation degree makes you less employable
Analogy
The foundation degree is like a car servicing garage (window/
rugby game etc..) because......
Blank Sheet – back to original purpose
Providing access to higher education to wider group
87
Changing perspective is about forcing yourself to break away
from how things are done now.
There are also other ideas in your manual in Unit 6.
General Points on Opportunities
Creating Value not lowering cost
Opportunities not the same for everyone

Not every Good Idea is a business opportunity
Look for opportunities in emerging markets rather than
established ones: entry barriers
Does not need to be hi tech / high risk innovation:
Schumpeterian innovation
Derived from Birley and Muzyka in Mastering Enterprise
Value = in public sector could be improving outcomes.
e.g: Keyhole surgery.
Congestion charge
88
Q: How are your progressing with an Innovation Idea?
In 3s.
Take turns to share your ideas, or your plans to generate
innovative ideas. Help each other create a plan. (1min each)
Where will you go to for your innovation ideas?
Who to?/sources? – new employees; customers; suppliers;
outside sector? This group?
Techniques useful? – eg: brainstorm with work colleagues?
Where do you have your best ideas?
How will you create space for yourself to reflect?
IDEAS ALREADY?

Where will you go : think about the areas we’ve looked at – eg:
asking customers/users; someone new to the organisation. Can
you set up an internal brainstorm? Perhaps creating an
innovation culture would be the biggest innovation??
IDEAS TO SHARE WITH OTHERS TUESDAY?
+ think about this process – creating space for ideas.
NB: Like we did with Foundation Degree theme. Can provide a
theme for a brainstorming session. Also use for overcoming
barriers.
89
Analysing
and learning
Generating
possibilities
Incubating and
prototyping
Replication
and scaling up
Incubating and prototyping

There is at the start of this phase and throughout the issue of
allocating resources to support the best ideas going forward.
90
Is the innovation likely to succeed?
Is the problem the innovation is designed to address well-
formulated?
Have similar innovations been tried elsewhere?
Is there is a clear plan for how the idea can be developed?
Are the potential benefits commensurate with the development
costs?
PLUS:
Does the innovation fit with the organisation goals?
Is the organisation capable of coping with it?
Incubation, prototyping & managing risk...
In effect…how do you (safely) turn a good idea into an
innovative opportunity?
Key questions
Critical - allow innovations to flourish, rather than dismissed
pre-chance. STRONG HISTORY OF INNOVATION REQ’D/
Product development: concept development, business and
market analysis; market research, test marketing.
(MARKETING)
Public sector: timescales to plan/mechanisms to foster
innovation = harder to grab opportunities.

Barriers and ‘won’t work here’; ‘not how we do things around
here’ can start to emerge.
BREAKING THE RULES p5.8 (within rules) “Rule-breaking is
encouraged and managed” Govt Strategy Unit paper on
innovation.
91
Safe Spaces...
If Innovation is to succeed – need to protect it from day to day.
In Co.s often set up a separate project team, or even separate
business unit to pursue an innovation. NB: Part of structure/mgt
behaviours needed in org’n.
‘Safe spaces’ are areas where fledgling ideas or firms are
encouraged.
P 5.11
Examples:
Pilot – widely used (examples from group)
[EXAMPLE: Teleweb – 1st = 3rd party, measure results; 2nd =
in house small scale w contract staff. Self allocated as project
manager, so outside other distrctions; 3rd = recruit and scale up,
results measured all time]
Decision to go ahead rests on outcome of pilot. NB: Appropriate
pilot thinking of scale-up. (+ texting example).
NB: Must test, analyse, learn – example of Poll tax.

Pathfinders: Govt & Private. Strategic link to full scale;
shortened timescales. Tests practicalities and make
modifications. Qn: any of you been involved in a pathfinder
project?
Zones: similar to pilot (again public sector mostly).
Incubators: much used for small firms. So such as office space;
legal advice; financial advice and opportunities available within
a network or area. Support mechanism for the fledgling firm.
Kingston University links to Kingston Innovation Centre.
So, for your innovation(s) – how can you create ‘safe space’ to
allow them to be tried and tested to give them best chance of
success? How does your company support this? Q: How would
you measure if your pilot or trial has been successful?
EXAMPLE:
(eg: ring-fencing funds for pilots/innovations- Teleweb
example)
Q: WHAT IS YOUR ORGANISATION ATTITUDE TO
FAILURE? – examples?
92
Analysing
and learning
Generating
possibilities
Incubating and
prototyping

Replication
and scaling up
Q: Main issues regarding replication and scale-up? Flip chart
ideas.
(private and public sectors)
V. FOCUSSED SELECTION REQUIRED – TIMELY
EVALUATION?
Specific combination of resources/competencies – how created
competency? (Esp public sector). Potential barrier.
Costing & resources – this where big commitments needed.
Was the pilot appropriate to all? Barriers/excuses that not
relevant to other parts of organisation. Esp true in public sector
“not invented here/won’t work here/our situation is different”.
Need proper assessment of pilot and its implications
Manufacturing – manufacturing on bigger scale/sourcing –
some processes in development phase may nee redesigning
Replication and scaling up – barriers big in public sector –
initiatives in one area working elsewhere in the country.
(ownership for an idea; differences in local population – real
and perceived). Also rules and norms entrenched. Need
appropriate reward/penalty balance.
e.g. Roll out of new way of working. Monitored and included in
performance measures. (Lilly CRM)

93
Replication and Scaling Up...
In general, Governments have relied on two sets of mechanisms:
law, central direction and administrative command; and
dissemination of evaluations of pilots, case studies and best
practice
Both can be appropriate in particular circumstances but both
have their weaknesses.
Q: Can you think of some examples of each?
Easier in private
94
Analysing
and learning
Generating
possibilities
Incubating and
prototyping
Replication
and scaling up

Q: How good is your organisation at analysing success of new
initiatives?
What difficulties in evaluating? How might these be overcome?
Links back to Learning Organisation.
95
Identify and example of an innovation in your
organisation that you have been involved in.
To what extent were the phases identified and
explicitly or implicitly followed?
Which phase appeared to the most challenging?
Why?
Discussion – Innovation Process

96
Summary of the Day
Reviewed Assignment
Considered context for innovation
External and internal factors
Reflected on own organisation internal context – ready for first
part of assignment
Barriers to entry
Innovation Process
Put the internal factors affecting innovation into the context of
the innovation process.
Started to think creatively about our innovation idea(s) – ready
for final section of assignment
97
MECHANISM
EFFECT

15% Rule
Employees are allowed to allocate around
15% of their official time to pursue
independent research, irrespective of their
official project. This rule resulted in the
development of many innovative products at
3M
Genesis Grants
Under Genesis grants employees were
provided around $50,000 financial support for
their research for developing prototypes and
conducting market tests. This stimulated
entrepreneurship at 3M
Own Business
Opportunities
3M gave employees the opportunity to run
their projects depending on the sales. This
stimulated internal
Dual Ladder
This approach at 3M enabled technical
employees to move up the career path without
compromising their research / professional
interests
Technical Forums
Technical forums were established to give 3M
employees the opportunity to present their
technical papers and exchange ideas with
others.
New Product Forums
These forums were established to enable all
divisions to discuss new ideas, thus
encouraging the generation of ideas across all
divisions
Source: James, C. Collins, and Jerry I.
Porras Built to

Last (Harper Business, 1997)MECHANISM
EFFECT
15% Rule
Employees are allowed to allocate around 15% of their official
time to pursue independent research, irrespective of their
official project. This rule resulted in the development of many
innovative products at 3M
Genesis Grants
Under Genesis grants employees were provided around $50,000
financial support for their research for developing prototypes
and conducting market tests. This stimulated entrepreneurship
at 3M
Own Business Opportunities
3M gave employees the opportunity to run their projects
depending on the sales. This stimulated internal
Dual Ladder
This approach at 3M enabled technical employees to move up
the career path without compromising their research /
professional interests
Technical Forums
Technical forums were established to give 3M employees the
opportunity to present their technical papers and exchange ideas
with others.
New Product Forums
These forums were established to enable all divisions to discuss
new ideas, thus encouraging the generation of ideas across all
divisions
Source: James, C. Collins, and Jerry I. Porras Built to Last

(Harper Business, 1997)
MECHANISM
EFFECT
15% Rule
Employees are allowed to allocate around 15% of their official
time to pursue independent research, irrespective of their
official project. This rule resulted in the development of many
innovative products at 3M
Genesis Grants
Under Genesis grants employees were provided around $50,000
financial support for their research for developing prototypes
and conducting market tests. This stimulated entrepreneurship
at 3M
Own Business Opportunities
3M gave employees the opportunity to run their projects
depending on the sales. This stimulated internal
Dual Ladder
This approach at 3M enabled technical employees to move up
the career path without compromising their research /
professional interests
Technical Forums
Technical forums were established to give 3M employees the
opportunity to present their technical papers and exchange ideas
with others.
New Product Forums
These forums were established to enable all divisions to discuss
new ideas, thus encouraging the generation of ideas across all
divisions

Source: James, C. Collins, and Jerry I. Porras Built to Last
(Harper Business, 1997)
Wilson (04)
New Business within
Firm
Corporate Venturing:

Product / Process
Innovation
management:
Focus on one off
process (i.e. product /
process innovation)
Firm 1 Firm 2
Corporate Renewal:
Organisational
Corporate Leadership:
Transformational
Market / Industry
competition
Entrepreneurial
Management:
Dynamic capability
Product / Process
Innovation
Wilson (04)
Corporate Leadership:
Transformational
Market / Industry
competition
Entrepreneurial Management:

Dynamic capability
Firm 1
Firm 2
Corporate Renewal:
Organisational
New Business within Firm
Corporate Venturing:
Product / Process
Innovation management:
Focus on one off process (i.e. product / process innovation)

Product / Process Innovation
The Innovation Management Process
(Source ABI Assisting Business Competitiveness
CDRom, 2003)
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
Stage 6
Idea Generation
Idea Screening
Concept development and testing
Market strategy and business analysis
Product development and testing
Market introduction & life-cycle
management
Customer IntegrationThe Innovation Management Process
(Source ABI Assisting Business Competitiveness CDRom,
2003)
Stage 1
Stage 2
Stage 3
Stage 4

Stage 5
Stage 6
Customer Integration
Idea Generation
Idea Screening
Concept development and testing
Market strategy and business analysis
Product development and testing
Market introduction & life-cycle management
Source: Strategy Unit (2003)
p.x

scanning, networking,
benchmarking,
openness to challenge
other organisations
other countries
other sectors
new technologies
research findings
inspection and audit
Source: Strategy Unit (2003) p.x
inspection and audit
other organisations
scanning, networking,
benchmarking,
openness to challenge

other sectors
research findings
new technologies
other countries
Safe Space
Characteristic
Pilot
Provides a local or small-scale test
Pathfinders
Similar to pilot but linked strategically to
subsequent full-scale development
Zones
Testing ground for new ideas within pre-determined
arbitrary boundary
Incubators
Support & resource infrastructure bringing together
various different parties within one ‘safe space’
Safe Space
Characteristic

Pilot
Provides a local or small-scale test
Pathfinders
Similar to pilot but linked strategically to subsequent full-scale
development
Zones
Testing ground for new ideas within pre-determined arbitrary
boundary
Incubators
Support & resource infrastructure bringing together various
different parties within one ‘safe space’
Module Teaching Objectives
To introduce students to the concept of innovation
To explain why it is important for all types of firm or
organisation and country economies
To learn how to innovate and the role of ‘entrepreneurial
management’ in this context
1
1
Module Learning Outcomes
Understand what is meant by innovation
Understand what is meant by entrepreneurship

Assess why innovation and entrepreneurial management are
important for wealth and value creation
Evaluate the potential importance of innovation and
entrepreneurial management in your own organisation by using
what you have learnt
2
2
Your Expectations for module?
Think /note down, for 1min and be ready to share
3
3
Assignment Brief.
Entrepreneurship.

4
4
“There’s nothing quite like doing it…”
Entrepreneur
Teaching innovation and entrepreneurship...
Tension
“This is how it should be done…”
University
5
7.51pm
‘Teaching innovation and entrepreneurship’ does seem at odds.
Actually I disagree about the university ‘this is how it should be
done’.
Purpose of university should be getting you to think critically.

Skill can take to your workplace.
But even so there is a tendancy of university teaching to be all
about analysis rather than the getting down to doing it trial and
error of the entrepreneurial mindset.
Can’t say we will get fully past this, but perhaps you will leave
with some appreciation of the importance of innovation and
ideas as to how to foster successful innovation further in your
organisations.
Unit1: Introduction to Innovation & Entrepreneurship
Unit Learning Outcomes
Understand broadly what is meant by innovation
Understand broadly what is meant by entrepreneurship
Understand broadly why innovation and entrepreneurial
management are important for the creation of social and
financial value
Introduction to a basic organisational process model
Recognise the potential importance of innovation and
entrepreneurial management in your own organisation
6
6
What is innovation?
What is your understanding of the term?

Brief class discussion
7
Flip-chart answers
7
What is innovation? Participants in the EC Lisbon Council's
2010 Innovation Summit
Listen to this video clip: What is innovation?
http://www.youtube.com/watch?v=2NK0WR2GtFs
Afterwards –
Write down as many of the innovation descriptions as you can!
Just who are these people? Where do they come from
Class Discussion
8
5min 24.
EIT = European Institute of Innovation & Technology.
The EIT is a body of the European Union. Our mission is to
increase European sustainable growth and competitiveness by
reinforcing the innovation capacity of the EU. We facilitate
transitions: from idea to product, from lab to market, from
student to entrepreneur.
To do so, we integrate higher education, research and business
in areas of high societal need through our Knowledge and
Innovation Communities (KICs), focused on the following
topics: climate change mitigation (Climate-KIC), information
and communication technologies (EIT ICT Labs)
and sustainable energy (KIC InnoEnergy).
EIT headquarters are based in Budapest, Hungary. Knowledge

and Innovation Communities gather hundreds of partners in 17
co-location centres across Europe
Suggest Google EIT – interesting information on what EU doing
to promote innovation.
8
INNOVATION: A Definition (E. Roberts)
INNOVATION
Good Idea
Invention
=
+
INPUTS
Group member
OUTPUTS
adding value
9
KEY:
Ie: can consider Innovation both as being a THING = OUTPUT
that adds value. “an innovation”
OR/AND

As being the PROCESS of achieving these. (also called
entrepreneurial management process). “innovation” as
verb/process.
Will come back to concept as Innovation
Management/Entrepreneurial Management as a process next
week.
9
Evolutionary “Creative Destruction” Joseph Schumpeter
“This process of Creative Destruction is the essential fact about
capitalism. It is what capitalism consists in and what every
capitalist concern has got to live in….”
introducing new commodities or qualitatively better versions of
existing ones;
finding new markets;
new methods of production and distribution;
new sources of production for existing commodities;
introducing new forms of economic organisations”
(Schumpeter, 1942)
Schumpeter's Innovation Definition:
Joseph Schumpeter was the first economist who clearly
identified innovation as an outcome of entrepreneurship
(Schumpeter 1934). He identifies the economic effects of an
entrepreneur on the system. Schumpeter argues, early in his
career, that an entrepreneur disrupts markets and causes new
ones to be formed in circular flows.

Nb: His focus was primarily private industry. Had some
suggested types/modes of innovation. (poss share examples, or
just continue)
Defined different modes of innovation as:
New commodities (products) – e.g. Ipad;
New markets – (new segments) e.g. India offering surgery to
UK people; e.g. 3M with an eye-scan technology developed to
understand how people see traffic signs, adapting for
advertising research.
Methods of production – e.g. Key-hole surgery. (& minute
robots- even smaller incisions possible in future); float glass;
synthetic insulin
Methods of distribution – e.g. Downloading music; online
streaming of music and film.
New sources of production – e.g. Silicone;
New forms of organisations – e.g. Amazon; e-bay; Streetcar;
Note he still talks about it in an active, process ways.
“introducing.”; “finding”; i.e. Both the process AND the
outcome can be considered as innovation.
10
Innovation is the process by which new ideas are successfully
exploited to create economic, social and environmental
value.BIS (2011) http://www.bis.gov.uk/innovation

‘innovation is the process of successfully bringing something
new into use, to a market or community, that satisfies need or
latent demand’ (Gurling, 2010, Unit 1)
‘A process starting with an invention or an idea, proceeds with
the development of the invention/idea and results in the
introduction of a new product, process or service to the market
place” (Acs and Audretch, 1998)
Companies achieve competitive advantage through acts of
innovation. They approach innovation in its broadest sense,
including both new technologies & new ways of doing things’
(Michael Porter 2009)
At most simple level “Something new of value to the world,
made to happen!”
Broad set of Definitions for Innovation:
11
Schmpeter focussed on markets and capatilism. But it isn’t just
that.
Here other broad definitions for Innovation.
These mostly focus on the process – with value as outcome.
11
Without “new things” appearing in the marketplace:-
No stimulus to demand and supply
Jeopardises sustainable economic growth
Innovation is therefore an essential ingredient to a free-market
economy to encourage growth in demand and supply – basic
economics

Creative tides of destruction destroying old markets and
replacing them with new ones
12
Innovation creates value
Types of Value
Economic
Financial
Social
Environmental
Aesthetic
13
Examples:
Economic/Financial: New products; New simultaneous project
management process – allowed reduced product to market time
for medicines – financial for drug Co (but also potentially
economic and social if treat diseases better, sooner)
e.g. Microfinance – economic and social
e.g. Oyster card – economic, financial?
e.g. Congestion charge - environmental
e.g. Boris Bikes – Environmental
e.g. Key-hole surgery – social & economic (coz less time in

hospital so save money); Spain – using online technology to
enable patients to manage themselves more from home. Pal –
setting up remote medical diagnostics for oil platforms and
remote rural areas. (Social, economic)
e.g. A new design of bridge (first suspension bridge; Goya’s
architectural style) – Aesthetic
Your examples?
13
Innovation is not the same as Creativity
Creativity: The generation of new ideas
Innovation: The successful exploitation of new ideas
14
14
Kuhn suggests
“creativity forms something from nothing but that innovation
shapes that something into products and services “ (Kuhn,
1985).
15
15

Generation of ideas
So how do you find ideas?
Discuss then watch video:
Watch Video: Steve Jobs Where do ideas come from?
http://www.youtube.com/watch?v=NugRZGDbPFU
16
16
The Creative Thinking Process
Creative Process
Knowledge
Accumulation
Ideas
Evaluation
&
Implementation
Incubation
17
17

Knowledge
Accumulation
Ideas
Evaluation
&
Implementation
Incubation
Individual or team – which is better?
18
18
“Design” links creativity and innovation
Shapes ideas to become practical and attractive propositions for
users or customers
Design may be described as creativity to point to a specific end
(Cox review on Creativity in Business: building on the UK’s
strength 2005)
Design Application
Prototyping
Piloting
Idea/Invention
Innovation

19
20
Find Resources
Create Value
Entrepreneurial
Learning
20
Innovations can be classified (or categorised) in many different
ways
All to help think about what you can do to achieve successful
innovation
So.....here are some categorisations ..

21
Dimensions of innovations space
Transformational
Radical
Incremental
Product Service Process
Perceived extent of change
What is changed
(Tidd, Bessant and Pavitt)
One way of considering innovation.
We will go into this in detail as it is critical to your first task in
the assignment.
22
Tidd,Bessant & Pavitt’s: Definition of Innovation
Incremental Innovation – small improvements to existing
products, services or processes- “do what we do but better”
Radical Innovation – Significantly different changes to
products, services or processes - “ do what we do differently”
Transformational Innovation – Offering something that provides
the platform on which other variations and generations can be
built. (e.g. The wheel, printing press, internet – one thing, wide
impact)

Transformational Innovation – not found a good source of a
definition, but think it is about the basis on which other
innovations are built.
Tidd & Bessant talk about robust platform design = offering
something which provides the platform ion which other
variations and generations can be built.
e.g. Sony’s original walkman architecture. – spawned several
generations of personal audio equipment.
e.g. Boeing 737 – over 30 years old, but design still being
adapted for different users.
e.g. Intel and AMD with microprocessor families.
Transformational innovation leads to new growth platforms - for
example, redefining the the toothbrush business as oral care
leading not only to electric toothbrushes, but to a thorough re-
examination of the oral care ecosystem.
http://oysterinternational.com/white_papers.htm
e.g: The invention of the wheel. The printing press. The
internet. Lots of examples like that. Dramatically changed life
for all of us. One thing, huge impact, new curve.
23
Tidd,Bessant & Pavitt’s: Definition of Innovation
Product innovation – change in the things that
(products/services) which an organisation offers
Process innovation - changes in the ways in which they are
created and delivered

Position innovation-changes in the context in which the product
for services are introduced ( Market)
Paradigm innovation which frame what the organisation does (
Strategic / Domain Transformation)
24
Finnegan's Fish Bar: Video clip applying Bessant & Tidd’s
innovation model to a Fish & Chip shop
http://www.managing-innovation.com/vr_finnigans.php
25
Take note of the innovation examples given, ready to discuss
Greg, Louise, Iain/Shazi you will need to register to the book
website to access the video www.iande.info for this video and
others.
Check time
25
Innovation: the OECD Definition - 4 types of innovation
identified in the Oslo Manual for measuring innovation:
Product Innovation: a good or service that is new or
significantly improved.
Process innovation: involves a new or significantly improved
production or delivery method
Marketing Innovation: Marketing innovation involves a new

marketing method involving significant changes in product
design or packaging, product placement, product promotion or
pricing.
Organisational Innovation : Organisational innovation involves
introducing a new organisational method in the firm’s business
practices, workplace organisation or external relations.
These innovations can be new to the firm/educational
institution, new to the market/sector or new to the world
26
Discuss Organisational Innovation with class
These a bit like/overlap with the Tidd & Bessant:
Positioning = a bit like Marketing Innovations
Paradigm = a bit like Organisational Innovation.
26
Plus...... Service Innovation
A new or significantly improved service concept put into
practice.
e.g. can be a new customer interaction channel,
distribution system or a technological concept or a combination
of them.
Service innovation always includes replicable elements that can
be identified & systematically reproduced in other
environments.
Service innovation benefits both the service producer and
customers
Competitive edge for the service provider can be based based on
some technology or systematic method.

27
Poss handout only
27
Technical / technological innovation
…a mix of physical appliances and human ways of doing things
involving:
1. Creating new knowledge
Generating technical ideas aimed at new and enhanced products,
manufacturing processes and services
Developing those ideas into working prototypes; and
Transferring them into manufacturing, distribution and use
Sources: Scarborough and Corbin (1992); Roberts, E.B. (1988)
28
Poss handout only
28
Social Innovation – Mulgan and Albury 2003
“New ideas that meet unmet needs, social innovations – are all
around us.
Include Fair trade and restorative justice, hospices and
kindergartens, distance learning and traffic calming.
Over last two centuries, innumerable social innovations, from
cognitive behavioural therapy for prisoners to Wikipedia, have

moved from margins to the mainstream.
As this has happened, many have passed through the three
stages identified by Schopenhauer for any new ‘truth’:
‘First, it is ridiculed. Second, it is violently opposed.
Third, it is accepted as being self-evident” “
29
Poss handout only
29
Watch and listen: Skoll Foundation Video
An example of a social entrepreneurship starting with -
Mohammed Yunus
Nobel Prize Winner Grammeen Bank for microfinance
http://www.youtube.com/watch?v=jk5LI_WcosQ
9 mins
30
30
31

So who carries out innovation?
Entrepreneurs!
Where do we find them?
Individuals in independent new ventures – new venture
entrepreneurship
Working inside organisations – intrapreneurs as individuals or
teams
Organisational level – corporate entrepreneurship - many
different types depending on the organisation characteristics
and what needs to be done
31
32
“Innovation is the specific tool of entrepreneurs, the means by
which they exploit change as an opportunity for a different
business or service. It is capable of being presented as a
discipline, capable of being learned, capable of being
practiced.”
32
Peter Drucker on the relationship between Innovation &
Entrepreneurship
Drucker 1991 HBR The Discipline of Innovation

32
33
Innovation & Entrepreneurship
Different sides of the same coin!
Innovation
Entrepreneurship
33
34
So what is it entrepreneurs do?
Class Discussion...
34
35
Definition of Entrepreneurship: Individual
‘A Human Creative Act that builds something of value from
practically nothing.
It is the pursuit of opportunity regardless of resources….to
hand.

It requires vision, passion and the commitment to lead others in
the pursuit of that vision.
It also takes a willingness to take calculated risks’
Source: Timmons New Venture Creation 3rd Edition
35
36
‘Entrepreneurship is process by which individuals - either on
their own or inside organisations - pursue opportunities without
regard to the resources they currently control’
Stevenson, Roberts and Grousebeck 89
Individual or Corporate entrepreneurship
36
37
Stevenson and Gumpert 1990
“the process of discovering innovative opportunities, evaluating
them and managing the innovation process to bring the
innovation successfully into use”
Sharma and Chrisman 1999
“ a process whereby an individual or a group of individuals in
association with an established company, creates a new
organisation or instigates renewal or innovation within the
current organisation”
Corporate Entrepreneurship Definitions

37
38
Takes ‘Risk’ in pursuing this opportunity
combinations to create an organisation, which delivers
innovation and value to customer, founder, investor and
stakeholder
Entrepreneurship:
38
39
Fitting the entrepreneurial management process onto innovation
using Robert’s innovation model
INNOVATION
Good Idea
Invention
=

+
INPUTS
Group member
OUTPUTS
adding or creating value
39
Unit 2: Role of Innovation & Entrepreneurship in the Economy
40
Why is entrepreneurship & Innovation so important?
Class Discussion
National Level
Organisation Level
Individual Level

41
41
National Level - The impact of entrepreneurship / new firm
starts / innovation on economic performance
Number of new enterprises linked to overall GDP performance (
Link of TEA / global entrepreneurship monitor to economic
performance / OECD Audretsch & Thurik
I.e. positive effect of start-ups on economic growth.
In Developed Economies
Industry structure is generally shifting towards an increased
role for small enterprises.
Extent and timing of this shift not identical across countries.
Shift in industry structures towards a greater role for SMEs
heterogeneous / shaped by country-specific factors.
42
42
UK “Innovation Nation” White Paper Mar. 2008
“Innovation is essential to the UK’s future economic prosperity
and quality of life. To raise productivity, meet the challenges of
globalisation and to live within our environmental and
demographic limits, the UK must excel at all types of
innovation.”

UK Coalition Government 2011
Innovation is the process by which new ideas are successfully
exploited to create economic, social and environmental value.
http://www.bis.gov.uk/innovation 2011
43
43
Why innovate? EU Commission considers
http://ec.europa.eu/enterprise/sme/innovation_en.htm#
“Innovation is now widely understood to be the driving force in
economic growth. ( Addition CG- in a free market economy)
It is new products and services, and new methods for making or
delivering them which add value to our economy, and enable us
to improve standards of living.
SMEs are responsible for much of the innovation which leads to
new higher value products and services (even if ultimately
larger firms may take on production and mass marketing of such
innovations), and so the European Commission seeks to promote
innovation to SME’s and all organisations across Europe”
Organisational level
44
44
45

Entrepreneurship & firm creation long been recognised as a
vital force driving innovation.
With globalization & co-incident shift towards a knowledge-
based economy, link between entrepreneurship policy &
innovation received renewed attention.
By underpinning firm creation & firm expansion,
entrepreneurship policies strengthen innovation, increasing
productivity in the enterprise sector.
In return, policies fostering innovation will tend to spur firm
creation as the results of R&D are commercialized.
OECD Fostering Entrepreneurship
45
Individual level: The Organisation for Economic Co-Operation
and Development
Towards an Enterprising Culture. (OECD (1989)
-
"An enterprising individual has a positive, flexible & adaptive
disposition to change, seeing it as normal and as an opportunity
rather than a problem.
To see change in this way, an enterprising individual has a
security born of self-confidence, & is at ease when dealing with
insecurity, risks & the unknown.
An enterprising individual has the capacity to initiate creative
ideas & develop them into action in a determined manner.
An enterprising individual is able, even anxious to take
responsibility, is an effective communicator, negotiator,
influencer, planner & organiser. An enterprising individual is
active, confident and purposeful — not uncertain & dependent“

46
46
Economic renewal / rejuvenation within the business
environment (see J. Schumpeter, 1934) and enterprise
Response to accelerating pace of technological change, shorter
life cycles, globalisation of markets (Krondatiev Waves) (Tidd,
Bessant & Pavitt)
Socio - political cohesion improvement in communities as a
means of furthering economic development through the third
sector (Mort, Weerawardena & Carnegie 2003)
Value Creation and Competitive Advantage for those able to
mobilize knowledge , technological skills and experience to
create new products processes and services (Barney 91)
Reasons for intense focus on Innovation
47
47
48
Find Resources
Create Value
Entrepreneurial

Learning
Dyson Case Study:
see electronic manual p 8 Unit 1
http://www.dyson.co.uk/about/story/
http://news.bbc.co.uk/1/hi/business/1802155.stm
http://news.bbc.co.uk/1/hi/uk/3046791.stm
View, Read and Discuss
49
49
Where do ideas come from within the company?
How does the company encourage
Opportunity selection
Innovation development
Successful implementation ie the management process adopted
What barriers did he face in introducing the Dyson vacuum
cleaner?
Is Dyson an entrepreneur? Why?
Dyson Case Study:
50

50
Your Organisation: Task before next time
Ask around amongst your colleagues at work and find out what
“new things” have been introduced in the past.
It is very easy to forget that the things that surround you were
once probably new?
Eg zips, trainers, biros, plastic bottles....the same has probably
been happening in your work context...
Try and identify their categories using the previous slide
labelled Dimensions of Innovation Space
Any people around who consistently “ make new things
happen? Could you categorise them as having an entrepreneurial
approach through successfully introducing innovation?
51
51
52
Find Resources
Create Value
Entrepreneurial
Learning

52
Dyson Case Study:
http://www.dyson.co.uk/about/story/
http://news.bbc.co.uk/1/hi/uk/3046791.stm
http://www.youtube.com/watch?v=vjD69XIv0xs
(4min)
View, Read and Discuss
53
Interview with James Dyson (4min) Might work as intro to the
case.
http://www.youtube.com/watch?v=vjD69XIv0xs
Failure (59secs)
http://www.youtube.com/watch?v=P5eIyRVpwmc&feature=g-
vrec&context=G2d93a4eRVAAAAAAAAAA
The Dyson Story (includes failure & quite good on learning
from marketing research) 4min02
http://www.youtube.com/watch?v=E4jpQGV_1Hw&feature=rela
ted

53
Where do ideas come from within the company?
How does the company encourage
Opportunity selection
Innovation development
Successful implementation ie the management process adopted
What barriers did he face in introducing the Dyson vacuum
cleaner?
Is Dyson an entrepreneur? Why?
Dyson Case Study:
54
54
Exercise (if time) - in 3s. 10min.
Discuss your own organisations and/or sector.
What innovations can you think of within them?
Some may be quite old
Are they innovations created by your organisation or
innovations that you use?
What type are they?
process, service, product?
incremental, radical?
55

55
Your Organisation: Task before next time
Ask around amongst your colleagues at work and find out what
“new things” have been introduced in the past.
It is very easy to forget that the things that surround you were
once probably new?
Eg zips, trainers, biros, plastic bottles....the same has probably
been happening in your work context...
Try and identify their categories using the previous slide
labelled Dimensions of Innovation Space
Any people around who consistently “ make new things
happen?” Could you categorise them as having an
entrepreneurial approach through successfully introducing
innovation?
56
56
Your Organisation: Task throughout module
Can you think of any nagging work problems or opportunities
that need action?
Start to think, and jot down ,ideas for solving these problems or
taking advantage of the opportunity.
Can you get a few colleagues together, or suggest it as a subject
for a work meeting?
We will look further at prompting ideas and creativity on Sat
3rd March.
57

57
Contributions to Study of Entrepreneurship
CAUSES
Why?
Psychology
Sociology
Importance of the individual culture and community
BEHAVIOUR
How?
Management
How to achieve entrepreneurial behaviour and outcomes
EFFECTS
What?
Economics
Function by which growth in the economy is achieved
(Derived from Stevenson and Jarillo SMJ 1990)
58
Economics = main interest to the Govt.
So: Huge focus on small businesses, as greater potential for

growth and belief of a greater propensity to get breakthrough
innovations from these. + number of small businesses!
What Characteristics do you associate with an Entrepreneur?
59
DISCUSSION: flip-chart answers. (or, if needed, get all on feet
to do)
“Once have said something keep quiet.”
Make sure as many people as possible contribute
The Entrepreneur… (from Southon & West, 2002)
Entrepreneurs are:
confident
charismatic
obsessed with work
ambitious
in a hurry
arrogant
manipulative
high in energy
poor completers
impatient at times
60

Psychology: The Causes
Why do people behave as entrepreneurs?
Why do we want to know?
Picking the right people / economic growth
Psychological approach: Understanding the entrepreneurial
personality
Personality Traits (Hisrich & O’Brien 82, Chell 91)
Cognitive Theories of Behaviour
Socio-cultural:
Environmentally contingent
61
Personality Trait Approach:
Internal Characteristics which explain Behaviour ? -
Internal Locus of Control (Miller & Freisen 84)
Need for Achievement (McCelland 61)
Desire for Autonomy (McCelland 61)
Tolerance of Ambiguity and Uncertainty (Schere 82)
Risk Taking /Overoptimistic (Begley & Boyd 87)
Financial motivation?

62
Number of personality traits have consistently come out in
research.
Some research shows clear financial motivation- as a means of
keeping score- but there has been lots of interest in recent years
about social entrepreneurs – motivated by the mission rather
than financial gains (classic example would be Bob Geldof with
Live Aid).
(NB: recent example where Richard Branson & ??Bob Geldof
have set up a world leaders think-tank to try to get great minds
to find creative solutions to some of the worlds biggest
problems – Nelson Mandela, Bill Clinton & others)
Watch and listen: Skoll Foundation Video
An example of a social entrepreneurship starting with -
Mohammed Yunus
Nobel Prize Winner Grammeen Bank for microfinance
http://www.youtube.com/watch?v=jk5LI_WcosQ
9 mins
63

63
Problems with the Trait approach
Little predictive power: no guarantee of entrepreneurial
performance
Personality traits change over time
Ignores influence and interaction with the Environment: Social
and Cultural, Nature and nurture debate
Difficulty in distinguishing the innate from learnt patterns of
behaviour
64
Socio-cultural Approach
Environment acts as stimulus
Geographic and Demographic Factors (Urban / Rural, Location
/ Cluster effect, Age Profile etc)
Economic Factors (Economic Climate, Legislative Environment,
Specific Govt Assistance Schemes)
Social Factors (Class,Gender, Education, Family antecedents,
Experience, Cultural background)
Market / Technology Development Environment acts as stimulus
65
People have looked at particularly entrepreneurial communities.

Q: To what extent do you think these environmental factors
have an impact?
Some impact, but entrepreneurs come from lots of different
backgrounds.
Some communities – eg chinese, seem to be more
entrepreneurial wherever they go in the world.
(Example clusters: manual shows music clusters in London and
Manchester)
Example Social Factors: Anita Roddick – Italian Immigrant
background. Family self employed + travelled alot. Impacted
her attitudes and experiences for ideas.
Cognitive Theories: Entrepreneurial Behaviour Models
Behaviour modified by interaction with the environment
Personality traits + Environmental Factors + Individual
Attitudes & Motivation + Learning = Behaviour
66
The ‘Cornerstones’ of Support
Entrepreneur

Financier
Sales specialist
Delivery specialist
Technical innovator
Source: Southon & West
67
Innovator doesn’t do it on his or her own. They need support –
think dragon’s den.
Does this look like the functions in an organisation? Ie: R&D =
technical; delivery = supply chain/operations;
Sales = sales & marketing.
Entrepreneur can take one or several of the roles. (often they
are the technical innovator, but not necessarily)
(could share a Dragon’s Den example) – what is their role and
where are the other elements of support coming from?
Takes ‘Risk’ in pursuing this opportunity (link to self-
confidence)
innovation(s)
Management approach

opportunism
68
GOT TO HERE – NOW CHECK VERSUS MANUAL – BEST
POINTS FOR SLIDES
Q? what do we mean by resources? – people, finance, ‘stuff’.
Sharon Wright - Magnamol
Where did Sharon get the idea?
Which roles is Sharon currently fulfilling and what does she
want from the Dragon/ Dragon to fund?
What risks has/ is she taking? (you may have to infer). What do
you think spurred her on to take the risks?

What resources is Sharon using currently?
What characteristics does Sharon have that have helped her
succeed, and so impressed the Dragons?
69
Video = to 7min 50 (or 8min 14 inc magic wand). Have to
explain –get more money than requested from Dragons that
wants.
Idea:
From previous employment /knowledge & practical problem that
needs a solution.
Roles:
Sharon – technical innovator; delivery specialist; sales – all
currently.
Dragon - finance + funds for delivery probably so can do her
‘sales’/ambassador role.
Risks:
Gave up own job; Single mum – no other income (e.g. from
partner).
Spurred on by self-belief that could make this big.
Resources:
Just self, office, one part-time admin (1 day per week). (i.e.
Very few resources – no fat)
Characteristics:
Self-confidence and belief ; ambition (going global); impatience
– 2 years wants to be further forward; forward thinking –
already next invention; determination & stamina; pro-active –
approached BT & has achieved contracts + got patent;

70
Find Resources
Create Value
Entrepreneurial
Learning
Entrepreneurial Management Style (after Stevenson & Gumpert
, 1989)
‘PROMOTOR’ ‘TRUSTEE’
‘Entrepreneurial’ ‘Administrative’
Proactive Disinclined to change

Tolerant of uncertainty and ambiguity Guards resources
Able to make incremental changes in Interested in
maintaining
response to environmental pressures the status quo
Q: What type of manager is your manger?
71
This and next slide – In groups of 3 or 4. Discuss where your
manager and organisation are. Will show where potential
barriers to your innovation could be.
Your type of manager – will influence how easily you can
implement an innovation.
They could be a champion or a barrier.
(Q – what is an intrapraneur? Internal entrepreneur – think
difficulty of this. Can you think of people in your organisation?
– My example ‘Vivek’ – brought in to foster innovation.
Continual battling against the tide – “overoptimism/overselling”
required to get people to buy into new ideas)

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