iNnovation
What is it?
…concerned with the new or the novel.
Distinction between innovation and invention?
Is innovation technology based? Many of the more
significant innovations of the 20th century are
organizational rather than technology based.
Managing and Facilitating
Innovation: New Business Ideas and
Some useful definitions
Fritz Machlup wrote in 1962, “Ought we perhaps to avoid the
term innovation’ since it is so promiscuosly used for a variety
of meanings”.
Building on Schumpeter’s useful definition between invention and
innovation “Invention implies bringing something new into being;
innovation implies bringing something new into use”.
Innovation has been defined as the successful introduction into an
applied situation of means or ends that are new to that situation.
(Mohr, 1969, quoted in Cummings and O’Connell, 1978, p.34)
Managing and Facilitating
Innovation: New Business Ideas and
An innovation may therefore be a thing!
Whether artefact, product or process
or indeed service, system or infrastructure
The innovation process should also be
remembered.
Need to differentiate between types of innovation and
stages of adoption to facilitate developing useful theories
of organizational development.
Distinguish between: Product and process innovations
Technical and organizational innovations
Radical and incremental innovations
Managing and Facilitating
Innovation: New Business Ideas and
Management of Innovation
Some Important Issues
Within an organisation
Fundamental tension between stability and creativity
Conflict between top and lower tiers?
Between strategy making and local autonomy?
Managing and Facilitating
Innovation: New Business Ideas and
Main sources and strategies
for innovation
“Innovation is work rather than genius”,…and very much a
matter of discipline (Peter F Drucker, 1985)
Concept of uncertainty matrix offers characteristics which reduce
the risks of innovation (Alan W Pearson, ).
Knowledge creation and innovation: Four standpoints
Managing and Facilitating
Innovation: New Business Ideas and
Strategic Innovation
Peter F Druker
What all successful entrepreneurs have is not a certain kind of
personality but a commitment to the systematic practice of innovation.
All sizes of businesses engage in highly successful entrepreneurship.
Hence it is an activity!! At the heart of that activity is innovation.
Sources of innovation:
*Within a company: Unexpected occurences
Incongruities
Process needs
Industry and market changes
*Outside a company: Demographic changes
Changes in perception
New knowledge
Managing and Facilitating
Innovation: New Business Ideas and
Managing Innovation:
an uncertainty reduction process
Alan W. Pearson
Innovation means change.
Such changes can be incremental or radical,
evolutionary or revolutionary, enabling or disruptive. They can have
different effects upon producers and users.
“intuitive..tumultous process…Individual discoveries tend to be
highly individualistic andserendipitous, advances chaotic and
interactive, and specific outcomes unpredictable and chancy
until the very last moment” (Quinn, 1986).
Technological innovation is therefore a messy process!
Managing and Facilitating
Innovation: New Business Ideas and
Pearson’s Uncertainty Map
Applications
engineering
Uncertainty
about
output
ENDS
Exploratory
research
Technical market Development
combination
engineering
Uncertainty about process
MEANS
Managing and Facilitating
Innovation: New Business Ideas and
Knowledge Creation
From four standpoints:
1. Knowledge creation in the process of design, emphasizing
the role of reflective practitioner
2. Nonaka’s framework for analysing knowledge creation as
the interplay of tacit and explicit knowledge.
3. Knowledge creation through experimenting and prototyping.
4. Learning and innovation.
Managing and Facilitating
Innovation: New Business Ideas and
Knowledge Creation
Continuous innovation
Competitive advantage
Knowledge creation as the basis of competitive advantage
(Nonaka and Takeuchi, 1995)
Managing and Facilitating
Innovation: New Business Ideas and
Intellectual Capital
* In 1969 J.K.Galbraith used the term ‘intellectual capital’, defining it as more
than ‘intellect as pure intellect’ but rather as including some type of intellectual
action (Bontis, 1996).
* Thomas A.Stewart, editor of Fortune magazine, whose first article,
* ‘Brainpower’ (1991), acted as a catalyst for incorporating intellectual capital
into managerial thought and activities.
Since than it has undergone many transformations, and is now definable by those
intangible assets that do not show up on companies’ financial statements, and
specifically, those which can be codified, and valued and managed by a company.
Popular business writers such as Stewart(1991) define it as the combination of
patents, processes, management skills, technologies, information about customers
and suppliers, and experienec.
Economists define it as Tobin’s-q (Tobin, 1969), a broad proportional
measure of market value to book value.
Managing and Facilitating
Innovation: New Business Ideas and
Intellectual Property Rights
IPR is qualitatively different from most others within
the intellectual capital area, notably because these rights
are legally enforceable.
Exploitation of IPR
Defense by companies of their knowledge against those
who seek to appropriate it.
Managing and Facilitating
Innovation: New Business Ideas and