Chapter 1 Innovation management

Slide 1Every organization—not just business— needs one core competence: innovation.
- Peter F. Drucker
Innovation Management WBB10202
Michael Dell: Innovator of the Personal Computer Industry
started the road to success out of his University of Texas dorm room in 1984 with just $1,000 and an idea to provide affordable personal computers to college students.
Dell is now Chairman and CEO of his company with a net worth of over $30 billion.
sells primarily direct to the customer to avoid middleman mark-ups.
Occupation Group Chief Executive Officer / Director of Air Asia Berhad
Net worth US$230 million
Creativity
the generation of ideas that result in the improved efficiency or effectiveness of a system.
a mental process involving the generation of new ideas or concepts, or new associations between existing ideas or concepts.
Creativity vs. Innovation
introducing something new or doing something in a new way.
to take an idea from concept to realization and improve business performance.
can be a new product, a new process, or a new way of doing business.
Creativity vs. Innovation
while
The Innovation Continuum
A raw idea ….
is a spur of the moment thought, a reflection of some visual or audible stimulus, or the result of daydreaming.
needs hard thinking to determine its significance. Ideas need to be framed in some acceptable manner in order to be communicated to others.
Number of ideas
3,000 raw ideas
300 ideas submitted
125 small projects
1.7 launches
1 success
Source: Stevens and Burley Plotting the rocket of radical innovation, 2003
Identifying the available resources
Understanding the organizational infrastructure
Interpreting economic and global demographic information
Concept
It requires a proof of concept to show that the concept is workable.
Developing a concept takes time
to clear up
A management scholar:
We discover what before existed, though to, us unknown; we invent what did not exist before.
An eminent educator:
The invention process covers all efforts aimed at creating new ideas and getting them to work.
An economist:
Every invention is (a) a new combination of (b) pre-existing knowledge which (c) satisfies some want.
INNOVATION
Process
Culture
Resources
Resources
Capability Intellectual property Access to information Plant and equipment Financial reserves
Infrastructure
Culture
Past accomplishments Policies and practice Rules of conduct Philosophy Artifacts
Process
Development Production Diffusion Adoption by end users.
Sources of Innovation
Demographics
New Knowledge
1. The Unexpected
An unexpected success, an unexpected failure or an unexpected outside event.
of Post-it Notes

These occur whenever a difference exists between expectations and reality.
3. Process Need
task focused rather than situation focused. A process is perfected or redesigned or a weak link replaced.
4. Industry and Market Structure Change
The opportunity for an innovative product, service or business approach occurs when the underlying foundation of the industry or market shifts.
(Peter Drucker)
5. Demographics
Changes in the population’s size, age structure, composition, employment, level of education and income can create innovative opportunities.
Innovative opportunities can develop when a society’s general assumptions, attitudes and beliefs change.

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Chapter 1 Innovation management