Reviewer in Innovation Management
environment- modernize their employee’s
Chapter 1: Basic on Innovation
Innovation- both necessary means and a desirable end
for a business in a fast moving global economy.
Importance of Innovation
Innovation is important to organizations because of:
- Competitive pressure and the need to survive
- Managers have to implement change, new processes
and improvement in systems.
- The impact of innovation on organizational life
Competitive Pressure and Need to Survive
Gary Hamel (1998)- writing in the Sloan
Management Review, suggests that only those
companies that are capable of recreating themselves
and their industries in a profound way will be around
a decade hence. The warning is simple, innovate or
perish!
Implement Change, New Process & Improvement
in the System
Research in the fields of organisational management
and marketing, suggests that companies and
organizations that use the innovation process to
differentiate their own products and services from
their competitors are twice as likely to be successful
both strategically and financially.
The Impact of Innovation in the Organization
Complex Relationships, Innovation is more, ‘art
than science’ and outcomes tend to be both
psychological and materialistic in nature.
Outcomes from the Innovation Process
Tangible Outcomes are outcomes which are
observable and apparent. They include:
 Increased Corporate Success in Measurable
Terms –value of the organization’s shares,
the general profitability and growth rate.
 Greater Efficiency- delivers effective
changes and greater efficiency.
 Happier, more flexible and productive
employees- to feel more valued and to be
more loyal to the organization.
 A more modern, high-tech working
working environment and employ new
technology
 Continuous Improvement- both innovative
and increasingly effective.
Intangible Outcomes tend to be
psychological in nature, at the level of
beliefs and attitudes.
 Senior Managers tend to exhibit a high level
of confidence in their own judgment- they
tend to be willing take the risks.
 Employees tend to develop a profound
interest in each other’s ideas and opinions-
results from adopting an innovative attitude
 An increase in team cohesion at project and
organizational level.
 A change in leadership style- tends to
exhibit leadership style that is founded on
mentoring, encouraging and understanding.
Additional Info; Internal Environment of SWOT
Strength and Weaknesses
CISS- Competition, Industry, Substitution &
Supply
Definition of Innovation
Dictionary Definition
Innovation (Latin-innovare) to make something
new.
(Oxford English Dictionary)- opportunity
exploitation
Tidd et al,1997- innovation is a process that
turns new ideas into opportunities and puts these
widely used practices.
Industrial Innovation
Freedman, 1982- the technical design,
manufacturing, management and commercial
activities involved in the marketing of a new or
improved product.
 Changes in Technological Know-How
Rothwell and Gardiner, 1985- innovation does
not only concern itself with major advances in
technology but it also concerns itself with the
utilization of small scale changes.
The Entrepreneurs Tool
Porter, 1990- innovation is the way that
companies gain competitive advantage by
approaching the way they do thing in the
broadest sense.
Short and Sweet
UK DTI Innovation Unit, 1994- innovation is the
successful exploitation of new ideas.
The European Commission Definition
The European Commission Green Paper on
Innovation (1995) - indicates the term innovation
commonly used in different ways:
1. To refer to the innovation process itself
- the process of bringing any new, problem
solving idea into use.
2. To refer to the result of the innovation process
- new process,product,service or work practice.
Definitions emphasizing the input to the
innovation process
Rogers(1983)- innovation as an idea, practice or
object
The ERSC Innovation Research Programme (1995-
2000) – had adopted this definition, innovation the
successful exploitation of new ideas.
Tom Peters- Seminar Brochure for “Implementing in
Search of Excellence” says innovation simply a good
new idea acted upon.
Kanter (1984) – innovation is a process of bringing
any new, problem solving idea into use.
Definitions emphasizing the output from the
innovation process
Smith and Ainsworth (1989) – innovation includes
the idea of invention and discovery, but goes beyond
it.
Rogers (1983) – innovation output as an idea,
practice or object. This makes evolution of an
innovation subjective- innovation in the eye of the
beholder.
Hard work not genius
Peter Drucker (1991) – innovation is a systematic and
focused requires new knowledge and a change in
perception. Innovation takes (hard) work rather than
genius.
Our attempt at a comprehensive definition – the
creation,development and introduction of new
products or services.New procedure or process for
doing things to benefit one or more of the
stakeholders in the organization.
Types of Innovation
Higgins (1996) suggests that there are four types of
organizational innovation:
Product Innovation – new products or services or
enhancements. New “things” you can sell to
customers.
Process Innovation – step by step procedure,
improved processes within the organization. Doing
what is already done, but better. Cheaper, quicker
easier ways to run a business
Management Innovation – improves the way the
organization is managed
Marketing Innovation – functions of product
promotion, pricing and distribution.
( LAZADA & SHOPEE).
Service Innovation - new services you can offer to
customer. Often intangible so harder to sell.
Business Model Innovation – change the way
industry operates. Often involves a new venture or
complete business restructure.
Tactical Plans – 1 to 5 years
Product Development
Product Enhancement
Strategic Planning – 5 years or more
Product Diversification – different products, sizes
and flavor.
Characteristics of an Organization that is involved and ultimately its
in Developing New Products & Services “competitiveness” and its
success.
Scanning for Ideas – ideas that are starting point of Prahald & hamel (1990)
the innovation. To scan for ideas for new products - many organizations are
and services. not fast innovators.
Strategy Formulation – devote energy and time to
formulating strategy.
Effective Resourcing – involving itself to correct
resourcing changes to new products and services.
Managing Product Innovation – involves managing
the structure and culture of the organization as well
as managing external linkages and the innovation
process itself.
Wheelwright & Clark (1992) – new product
development can be considered to be a funnel.
Implementation – new service or product is
accompanied by organizational acclaim in an
innovative company.
Recognising innovation in process and procedures
- support systems that are enable the products and
services to be developed, produced and deliver to the
customer.

Characteristics of Innovation

 Timing
 Radicalness
 Speed

Timing – very nature,

sound the most ridiculous.
Degree of Radicalness
- innovation can be
classified as radical or
incremental.
Radical Innovation – tend
to come about through a
rationalist approach and
aim to create large scale
change
Incremental Innovation –
emerge in a more organic
and create gradual, bit by
bit change
Speed of Innovation – can
be critical
- affects the cost, quality
& timing of the innovation