The document discusses the nature of innovation, emphasizing the balance between inspiration and hard work, as outlined by Peter Drucker. It identifies sources of innovation, including internal and external factors, demographic changes, and unexpected occurrences, as well as the importance of learning from both successes and failures. Additionally, it highlights principles of effective innovation, such as simplicity and focus, and underscores that entrepreneurship involves systematic innovation.

1. The Discipline of Innovation
by Peter F.Drucker
Group Members:
Lajbar Khan
Muhammad Taimoor
Sajjad Ullah
Yasir Sehti
Fawad Gul

2. Introduction
 How much of innovation is inspiration, and how much is hard work?
 Inspiration: Hire the right people, and get out of their way
 Hard Work: Establish the right roles and processes, set clear goals and relevant
measures, and review progress at every step
 “Innovation is the work of knowing rather than doing “ (Peter Drucker)

3. Cont…
 The entrepreneur either creates new wealth-producing resources or endows
existing resources with enhanced potential for creating wealth
 Entrepreneurship refers to a certain kind of activity
 Innovation: the effort to create purposeful, focused change in an enterprise’s
economic or social potential

4. Sources of Innovation
Internal Sources External Sources
Unexpected Occurrences Demographics
Incongruities Changes in Perceptions
Process Needs New Knowledge
Industry & Market Changes

5. Internal Sources
Unexpected Occurrences
 The richest source of Innovation
 Most of the time Neglected
 Alfred Einhorn’s Novocain
It may be;
1. Exploitation of Unexpected Success
 The case of IBM
 Marriott and Airline Catering

6. Unexpected Failures:
 The case of Ford Edsel
 “Failure is our most important product.”
R. W. Johnson, Jr., Former CEO, Johnson & Johnson (1954)
 “You can learn from success, but you have to work at it; It’s a lot easier to
learn from failure.”
Lewis Lehr, Former CEO – 3M Corporation

7. Incongruities
 The state of not fitting in its location or situation
 Incongruity within the logic of a process
 Alcon Laboratory & Incongruity in Medical technology
 Incongruity b/w Economic realities
 The Mini Mills
 Incongruity b/w expectations & results
 The Roll-on and Roll-off ships

8. Process Needs
 Innovations created to support other processes and products
 It is looking for “the missing link” in the existing process
 Japan: No modern Highway system
 Process Need: Smooth traffic & less accidents
 Innovative Response: Reflectors
 Media in 1890
 Ottmar Mergenthaler’s Linotype
 Social Innovations: Modern Advertising

9. Industry & Market Changes
 Industry & market structures may change overnight.
 Structure changes due to growth in an Industry.
 Established companies are more defensive and less attacking
 Thus, Innovators have a chance to gain success
 Donaldson, Lufkin and Jenrette (DL&J)brokerage firm
 American Health care Industry

10. Demographic Changes
 Out sources of innovation opportunities;
 demographics are the most reliable
 changes occur in populations, income levels, Education, age ranges etc.
 The Japanese are ahead in robotics because they paid attention to
demographics

11. • In 1970 the baby bust and an education explosion going on
 More then half of the people were staying in school beyond high school
 Consequently, the number of people for blue collar was to decrease and become inadequate
by 1990.

12. Changes in Perception
 “The glass is half full”
 “The glass is half empty”

13. Example: Health
 markets for new healthcare magazines,
 for exercise classes
 jogging equipment,
 health foods.
 The fastest growing new U.S. business in 1983 was a
company that makes indoor exercise equipment

14. NEW KNOWLEDGE
•Change is a continuous Process.
•The discovery of wheel revolutionized the human lifestyle.
•New Knowledge has produces opportunities for new products.
•Information age requires to have up-to-date business knowledge.

15. NEW KNOWLEDGE

16. Principles Of Innovation
 New opportunities
 Innovation is both conceptual and perceptual
 To be effective innovation has to be simple and it has to be focus
 Effective innovation start small. They are not grandiose (Swedes)
 Big business vs modest achievement
 Modesty reach set the grounds for new technology

17. What Innovation needs
 Innovation is working rather than genius
 It required knowledge
 It required ingenuity
 It required focus
 Innovator rarely work in more tan one area.( Thomas Edison)
 If diligence, persistence, and commitment are lacking, talent, ingenuity, and
knowledge are of no avail.

18. entrepreneurship and innovation
 entrepreneurship is the practice of systematic innovation

19. Thank You