Innovation Management

INNOVATION MANAGEMENT
JAYANT KULKARNI
Unit 1 - Introduction
✓ Innovation – definitions
✓ Conceptualization & models of innovation
✓ Innovative Firms
✓ Case study on Innovation
Which of these statements do you agree with?
Today’s world is full of immense opportunities

Today’s world is full of myriad challenges
Where do we start?
It was the best of times, it was the worst of times,

It was the age of wisdom, it was the age of foolishness,
It was the epoch of belief, it was the epoch of incredulity,
It was the season of light, it was the season of darkness,
It was the spring of hope, it was the winter of despair
- Charles Dickens, A tale of two cities
Today the world stands at the cusp of great change – change

driven by unprecedented opportunities and myriad challenges !!
Where do we start?
Myriad Challenges
➢ Environmental degradation
➢ Depletion of natural resources
➢ Global population explosion and the pressure on food systems,
education and health care
➢ Uneven distribution of wealth and resources
➢ Pandemic induced and growing feeling for anti-globalization
➢ Inter country and inter society widening gap between haves and have-
nots!!
How can businesses tackle these seemingly ‘impossible to solve’

problems??
Where do we start?
Today’s business world is filled with both promise and peril
It has potential to
• Alleviate human suffering
• Enhance human lives
• Make businesses more efficient and effective
• Solve social problems
• Chart unexplored territories
However, it also faces

• High rate of failure
• Commercial unsustainability
• Rapidly changing business landscape
Fortune 500 – List of companies
The Fortune 500 is an annual list compiled and published

by Fortune magazine that ranks 500 of the largest United
States corporations by total revenue for their respective fiscal years.
Class discussion – ED2

Why would once great companies fall off the high positions?
- Not adjusting to changing marketplace, not focusing on customer asks, Nokia - Anushka
- Lack of flexibility, Blackberry - Kashish
- Not meeting customer’s service expectations, Vi - Jay
- Poor management decisions incl financial planning, HTC - Parth
- Failure to control prices, - Shubhanshu
- Operational issues, staffing - Gautam
- Leadership issues, ethical issues, Volkswagon - Bhakti
- Lack of marketing and advertising, - Anushka
- Pre-mature scaling and over expansion – Shubhanshu
- A company falling in love with its own success, Nokia, Kodak, Hitachi - Jayant

- Rigid strategies, not adopting to changing marketplace, Nokia, HM – Veeransh
- Lack of innovation, Nokia, Blackberry – Nikhil
- Lack of planning – Aman
- Lack of leadership and related decisions – Ford – Pranav
- Wrong financial planning – Vi – Harsh
- Global economy crisis – Megha
- Change in customer preferences, tastes – Retail shops – Varun
- Corrupt business practices, Ethical issues – Lehman brothers, Theranos – Aditya
- Advent of new technology - Heeth
Class discussion
- Technological competitiveness
- Price competitiveness
Case study – Intel
Intel has successfully managed to stay in the fortune 500 list for last
more than 25 years. What has it done well?
Class discussion
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Intel has successfully managed to stay in the fortune 500 list for last more than 25 years. What has it done
well?
Class discussion – ED2 - 23/07/2022
Team A (Siddharth, Shreya)

- R & D, product upgrade
- Customer preferences – Listen to what market wants
- Partnership with major campanies
- Advertising – ‘Intel inside’
- Undifferentiated target strategy
Team B (Gautam, Parth)
- Advertising, Marketing
Team C (Deval, Kashish)
- Technologically, always a step ahead of competition
- New generations of microprocessors
- Main competitor – AMD. Intel able to command higher prices
- Brand pulling
- Marketing – ‘Intel Inside’
Intel has successfully managed to stay in the fortune 500 list for last more than 25 years. What has it done
well?
Class discussion – ED1 - 23/07/2022
Team A (Palash, Varun)

- R&D
- Aim for the masses
- Advertising – ‘Intel Inside’
Team B (Pranav, Rajat)

- Performance
Team C (Aman, Abha)

- PC centric to data centric
Intel product line

strategy
Customers (Businesses and individuals) will always demand higher

processing speeds and features and will be willing to pay for it
List of top 10 most innovative companies in the world – 2021
- Apple Samsung New product launches

- Alphabet Apple Invest in R & D
- Amazon Tesla
Better futuristic vision
- Microsoft LG
Google
Social angle
- Tesla
- Samsung Amazon Technology upgrade
- IBM Huawei Better at adopting
- Huawei MS Market share
- Sony Invidia Pioneers in their sectors
- Pfizer TCS
Snapdraggon
SpaceX
List of top 10 most innovative companies in the world – 2021
- Apple Apple New products

- Alphabet Tesla Performance
- Amazon MS Security
- Microsoft Walmart
Customer satisfaction
- Tesla IKEA
- Samsung Amazon Marketing
- IBM Dell Status symbol
- Huawei Utube Strategy
- Sony Tiktok Ease of problem solving
- Pfizer Google Price
Innovation
(Latin nova meaning new)
Any new approach to designing, producing or marketing goods that gives the innovator or her
company an advantage over the competition
Application of invention into a product or a process to drive value for the organization and customers
An act which endows resources with a new capacity to create wealth and new resources
Innovation is intelligently breaking the rules

Innovation
(Latin nova meaning new)
Innovation includes but is not limited to
✓ Spotting opportunities and taking advantage of them

✓ Examples ??
✓ Opening up new markets
✓ Examples ??
✓ Serving established and mature markets in a new ways
✓ Products, services, processes
✓ Providing the firm with advantage over its competitors
✓ Thinking of new products, designing them
✓ Increasing price competitiveness
✓ Shortening TTM (time-to-market)
Class exercise
Are you a creative person? Rate yourself on a scale of 1 to 10, 10 being

‘exceedingly creative’
Do we underrate ourselves when it comes to measuring our creativity?
Can creativity be ‘nurtured’ or does it all come from ‘nature’ i.e. god’s
gift?
➢Types of Innovations
What difference do you notice in the following two innovations?
 A company introducing newer version of a car…..a new model that has rain sensing wipers
and light sensing headlamps
 In 1990s, Xerox introducing digital technology in document copying and gradually shifting
away from the analogue technology that was existing then
What difference do you notice in the following two innovations?
 Gillette introducing new, better razor that has a pivoting head
 Apple launched iPhone in 2007

More examples of incremental innovations
 Gillette
 Coca-cola – Standard coke, Diet coke, Cherry coke, Coke with lime, Coca-cola Life
 Cadbury – Newer flavours, new tastes, new ingredients
 Sainsbury’s – Process innovation….Newer delivery channels, methods
More examples of breakthrough innovation

 Airbnb
 Dyson – World’s first bagless vacuum cleaner

 Video – Dyson – An innovation story
 Electric cars
 ………………….
 ………………….
➢ Incremental v/s breakthrough (radical)
➢ Breakthrough v/s disruptive
➢ Product v/s process
➢ Architectural v/s component (modular)
➢ Organizational
➢ Types of Innovations
➢ Incremental
➢ Continuations of existing products, methods or

practices
➢ Generally minor improvements
➢ Breakthrough (radical)
➢ Totally new products with considerable change in basic

technologies and methods
➢ Idea that can create new market
Types of innovations
Incremental Breakthrough
Product characteristics well defined R&D invention in lab
Competitive advantage on low-cost production Superior performance over old technology
Often developed in response to specific market need No specific market opportunity and need
Demand-side market Supply-side market
Customer pull Technology push
e.g. Newer versions of a car, versions of a software e.g. New technologies, entirely new product or
product services, create new markets
Types of innovations
Disruptive Breakthrough
Keen focus on low-end or emerging customer R&D invention in lab
At least initially, based on features not attractive Superior performance over old technology
to existing customers
No specific market opportunity and need
Over the period, the new product development
improves it’s performance and even mainstream
customers see better price/performance Supply-side market
Technology push
e.g. Tata nano, Reliance Jio phone, pharma company like Amgen which takes
a new scientific innovation and finds a unique use for it.
What type of innovation would Netflix (i.e. streaming services) be?

Model Generation Characteristic Strengths Weaknesses
Technology Push First Simple linear sequential process, emphasis on Simple Lack of feedbacks
R&D and science
Radical innovation No market attention
No networked interactions
MODELS OF No technological instruments
INNOVATION
Market Pull Second Simple linear sequential process, emphasis on Simple Lack of feedbacks
marketing, the market is the source of new
ideas for R&D Incremental innovation No technology research
No networked interactions
No technological instruments
Coupling Third Recognizing interaction between different Simple No networked interactions yet
elements and feedback loops between them,
emphasis on integrating R&D and marketing Radical and incremental innovation No technological instruments
Feedbacks between phases
Interactive Fourth Combination of push and pull models, Actor networking Complexity increment of
integration within firm, emphasis on external reliability
linkages Parallel phases
No technological instruments
Network Fifth Emphasis on knowledge accumulation and Pervasive innovation Complexity increment of
external linkages, systems integration and reliability
extensive networking Use of sophisticated technological
instruments
Networking to pursue innovation

Open Sixth Internal and external ideas as well as internal Internal and external ideas as well Assumes capacity and willingness
and external paths to market can be combined as internal and external paths to to collaborate and network
to advance the development of new market can be Combined
technologies Risks of external Collaboration
MODELS OF INNOVATION
LINEAR MODEL
Science & Technological

Technology Developments Needs of the Market
Base
Technology Push
Model
R&D Manufacturing Marketing User
Market Pull
Model
Marketing R&D Manufacturing User
COUPLING MODEL
Manufacturing
Research and
Marketing
Development
INTERACTIVE MODEL
Latest Science and
Technology Technology Advances in
Push society
Commercial
Idea R&D Manufacturing Marketing
Product
Need in society and the

Market Pull
Marketplace
➢ Why to innovate? – Class discussion

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➢ Why to innovate?
➢ Energize your people

➢ Build growth and profit
➢ Survive
➢ Energize your people
➢ Build growth and profit
➢ Survive
Case study – Tata Steel

Shreyas –
Shreya – Protected environment. Global competition, Price, cost, value.
Operational excellence. Use of blue dust..Tata values…international competition..
Tanishka -
Pranav – Protected environment, International competition, Price, cost and value.

Blue dust – Reuse. Cost reduction. 3Cs – Change, Cost, Customers Focus on top
level management. Customers – Profit centres,
Riddhi – Raw material cost reduction, Management accountability, Plant
modernization. Sales strategies
Ayush -
➢ What to innovate?
❖ Vast majority of launches, six out of every seven, were in ‘red oceans’ i.e. incremental
improvements in existing industries. 62% of total launch revenues and 38% of total
launch profits
❖ Small minority of launches, only one in seven, were in ‘blue oceans’ i.e. industries not
in existing today. 38% of launch revenues and 62% of total launch profits
** From a study by Kim and Mauborgne

❖ Start-ups and entrepreneurs strive for path breaking or breakthrough innovations as
they can’t otherwise defeat powerful, established incumbents
❖ Existing companies seek an optimal balance between both types of innovation.
Determining what to innovate will this differ for different firms depending
on their age, resources, size, industry and capabilities.
Three main learnings
❖ Vision, not greed, drives successful innovation
❖ Innovation is fundamentally different for entrepreneurial start-up companies than it is
for established companies
❖ Successful innovations create powerful feelings and emotions and satisfy well defined
needs
Case study – eBay
Class discussion – Case summary

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Vision, Strategy and innovation
Vision, strategy and innovation are closely linked, in a very pragmatic way
Vision, Strategy and innovation
Some famous and successful vision statements
❖ Walt Disney
❖ Make people happy
❖ Wal-Mart
❖ Give ordinary folk the chance to buy the same things as rich people
❖ Target
❖ Democratizing design
❖ LinkedIn
❖ ‘To create economic opportunity for every member of global workforce’
Key questions to ask/check
• How does your idea change your customers’ or clients’ lives?
• How can innovators tell the difference between a winning business
idea and a disastrous one?
Consider case of Motorola’s Iridium – Uninterrupted mobile phone
service everywhere in the world, any time, any place.
It failed as the added value did not justify the $3000 price (The high price was
driven by the enormous cost of building and launching dozens of low-orbit
satellites). In addition, the phones were heavy and clumsy.
Every unique idea has a powerful UVP. If you are not able to frame one, your
innovation is in trouble
Key points/questions to ask/check
• Great innovators anticipate needs long before they are articulated
• Feelings, Needs – Creating an emotional appeal - Starbucks
• Searching for innovation opportunities
Where should innovators search for new ideas and opportunities?
Simple answer to the above question is – Wherever there is significant change in……..
 Tastes
 Preferences
 Technology
 Market structure
 Regulation
Track social changes and find opportunities…….some examples
❖ Aging
❖ With birth rates plummeting, the demographics in both developed and developing countries is changing significantly.
This is creating a new demand for many products tailored for older people. Housing, electronics, vehicles, furniture,
clothing, medical treatment and medicines
❖ Technology
❖ Contrary to general belief, new technologies trumpet their arrival long in advance. Difficult part is translating new
technologies into innovative businesses
❖ Generational changes
❖ Often there are large differences in tastes, values and habits between generations – As
one generation ages, it is often replaced by a higher spending generation opening up huge
new business opportunities
❖ Economic downturns
❖ While recession is generally feared, many new businesses profit from it. Price sensitive
buyers open opportunities for new lower price products
❖ Tastes and preferences
❖ Consumer tastes may change rapidly especially in the face of a ‘tipping point’
phenomenon, where markets seem to change almost overnight. As an example, look at the
customer changes related to dietary preferences.
❖ Legislation
❖ Change in government regulation policies often create new business opportunities
❖ Customers
❖ A great many innovations come from existing major customers
What to innovate?
Spotting new opportunities
• Better, cheaper, faster, smaller
➢ Mainframes computers, Mini computers, Desktops/laptops, tablets/phones
• Observing patterns and transplanting values
➢ Starbucks (Howard Schultz) – Italy
• Evolving vision
➢ FedEx – Founder Fred Smith – Commercial pilot, Logistics challenges, military exposure
• Idea inversion (Turning things upside down)
➢ GPS – Location of Sputnik in the sky…finding location on earth from a known location of a satellite
• Listening to customers
➢ Identifying problems, testing your ideas and solutions with the customers in iterative manner
• Isolating value
➢ Petrol station – Value – Vehicle range extension
Supplementary reading/viewing –
Spotting new opportunities - https://www.youtube.com/watch?v=0_OcmMKVnyI
How to innovate?
Innovators are inspiring speakers…..but more than that, they are outstanding
listeners…. Their ears are always literally to the ground!!
There are four different voices..

1) Voice of your own products and those of your competitors
2) Your customer’s voice
3) Voice of your organization
4) Your own inner voice
How to innovate?
Voice of the Product
Listen to the voice of your product. It will tell you how to change and improve it,
sometimes even radically.
❖ Subtraction – Most products today are excessively complicated…as innovation is always

equalled to more and better features. Why not reduce features that customers would never use or
find useful?
Example – Philips came up with a winning sleek design of its DVD player
❖ Addition – More conventional approach…can you combine features?

How to innovate?
❖ Division – Divide your product into its component parts, physically or by function…
Example – Sony engineers separated record/play heads of a tape recorder from its speakers (with
earphones), to make it smaller and a new product, the Walkman
❖ Multiplication – Once you have an innovation, can you multiply it to create a whole product
line…….there are more than 200 versions of the Walkman
How to innovate?
Four ways to innovate based on the features of the product
- Raise existing feature or features above the industry standard

- Introduce totally new feature or features
- Lower feature/s below industry standard to reduce cost and price
- Eliminate feature/s low in value to reduce cost and price
How to innovate?
Voice of the Product - Example
How to innovate?
Voice of the Product - Example
How to innovate?
Voice of the Customer
- Observe
- Capture data
- Reflect and analyse
- Brainstorm for solutions
How to innovate?
How to innovate?
How to innovate?
Voice of the Organization
While every organization, big or small, needs an innovation system, there is no ‘one-size-fits-all’
system
Each organization needs to define its innovation system based on its culture, history, values and
personality.
The chosen innovation system needs to

• Channelise the process of ideation and support the creativity of individuals
• Ensure that the overall efforts are in line with the organization’s vision and strategic direction
So the system must ensure both

• Culture of creativity and
• High degree of discipline
How to innovate?
Voice of the Organization
The optimal balance between creativity and discipline may change over time,
varying with the particular stage of the innovation project – early, middle or late
Truth is that you can teach
How to innovate? people to be creative.
Voice of the Organization 1) Motivate 2)Empower and
3) Listen to their ideas
Some myths about creativity in organizations
❖ Creativity comes only from the creative types

The real problem with linking
money with innovation is
that it makes you risk averse
❖ Money is a creativity motivator
People are least creative when
fighting the clock. Urgency is a
must but high time pressure is
❖ Time pressure spurs creativity counterproductive
❖ Fear generates breakthroughs The opposite is true. People

are most creative when they
experience joy, happiness,
freedom and fulfilment.
How to innovate?
Your inner voice
• Our snap judgements and first impressions can be educated and controlled
• Inner Voice of our intuition
How to innovate?
Case study
What we have covered so far
Unit 1 - Introduction
✓ Innovation – definitions
✓ Conceptualization & models of innovation
✓ Innovative Firms
✓ Case study on Innovation
Unit 2 – Innovation Management (8 sessions)
✓ Innovation management: problems, myths, traps

✓ Managing innovation as exaptation
✓ Innovation management: techniques and tools
INNOVATION MANAGEMENT – PROBLEMS, TRAPS, ISSUES
Innovation is not easy…………but, it is imperative!
95% of all product innovations fail

54% of innovating organizations have
trouble bridging gap between innovation
strategy and larger business strategy
Only 6% of executives are happy with

their innovation performance
Throwing cash at the problem does

not necessarily solve it
Best innovators, many times, are not

the ones with highest R & D budgets
Top 6 obstacles to innovation performance (as per BCG 2015 Global Innovation survey)
Issues with Innovation performance (As per Accenture survey 2015)

Innovation failure case studies
Case 1 – Google Glass (Launched 2013)
Class Discussion
Innovation failure case studies
Case 2 – Juicero (Launched 2016)
Class Discussion
Myths about Innovation
Class discussion
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Class discussion
➢ Innovation is a fun process
➢ It takes years to see ROI from innovation OR we should see results from investing in
innovation right away
➢ Innovation is all about improved performance

Class discussion
➢ Customers will tell us how/what to innovate
➢ Innovation requires big bets
➢ Large organizations are too big and slow to innovate

Class discussion
➢ Best ideas come from workshops, meetings and hackathons
➢ Innovation is done by engineers or designers
➢ Innovation should be centralized to R & D department or innovation labs

Class discussion
➢ Innovation is always a purely positive thing
➢ Only creative geniuses can innovate
➢ Innovations are these big breakthrough ideas
➢ Innovation can’t be taught or learnt

Innovation – Live example – IT industry

Problems and issues with Innovation
✓ Customers
✓ Missed connect with customers
✓ Ignoring the customer (…while in strong market position)
✓ Loving the product more than the customer
✓ Product
✓ Falling in love with your own product/success
✓ Over-engineering or over featuring of product
✓ Organization
✓ Employees not empowered, employees not motivated
✓ Missing focus on innovation, no innovation strategy
✓ Lack of external collaboration
✓ Lack of diversity
✓ Lack of practical goal setting for innovation teams
Problems and issues with Innovation (…Contd)
✓ Innovation process
✓ Incorrect measurement of innovation effectiveness/Incorrect KPIs for innovation
✓ Ineffective way of collating ideas/screening them and selecting the correct one
✓ Commercialization
✓ A great product, a great idea may not necessarily be a commercially winning one
Example – Iridium from Motorola
✓ Overestimating or underestimating demand, wrong payback/breakeven assumptions
Case Study
Commodore – Failing innovation culture

INNOVATION MANAGEMENT – TOOLS AND TECHNIQUES
Tools for Profit and Growth
Tool # 1 – Price – Cost – Value
For effective innovation performance, following three elements must come

together and work cohesively
❖ Engineering
❖ Management
❖ Economics
What is a business model?
A business model is an ecosystem that determines three key variables and how
they interact : Price, Cost and Value
Managers and entrepreneurs seek to build business models that create sustained
growth, profitability and competitive advantage and to build wealth for
shareholders and value for customers
Price, cost and value are three pillars of profit. Wining business models
excel in each of these three variables and in the ways they interact.
Definitions
Price – Is some unit of value (generally, sum of money) given up by one

party in return for something from another party
For the buyer, it is the money given up, along with other indirect or hidden charges
Cost – Cost is the explicit and hidden charge, both monetary and non-
monetary, incurred by an organization in producing one unit of the product
or service
Value – Value is the perceived worth of the set of benefits received by a

customer in exchange for the total price of an offering, taking into
consideration available competitive offerings and prices
What is the maximum price your customer would pay for your product or services, if
the maximum amount was squeezed out of him or her?
Measuring the margins

Creative business model examples
Example 1 – J&J
Example 1 – J&J (…..contd)
Example 2 – Barbie
Example 2 – Barbie (…..contd)
Out of these three, Price – Cost – Value which one is most important?
Class discussion (ED2)

❖ Price is most important as cost is not known to the customer
and value varies - Siddharth
❖ Cost most important as that determines the price - Jay
❖ Value most important as sans value customer won’t buy -
Abhishek
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Class discussion (ED1)

❖ Value – No value, no point in selling - Ayush
❖ Value – Higher the value, more reputed the brand - Pranav
❖ Value – Higher the value, customer will be willing to part with
more - Veeransh
❖ Cost – Cost drives the price - Himanshu
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✓ Value is clearly the most important because if a product or service fails to create
value, relative to competing offerings, then its Price and Cost are irrelevant
✓ Cost is next in importance as unless value can be created at a reasonable cost, the
result will not sufficiently profitable to sustain the organization
✓ Price is last in importance because generally if the value creation is high enough
customers will be willing to pay handsomely.
Case study
Air Deccan
Tool # 2 – Cost functions : ‘Survival of the fittest’
Assume that there are certain number of bakeries in the town that produce an
eatable in cartons. The cost data related to this manufacturing process is given
below. There is a perfect competition and the selling price is Rs 6000 per carton
No of cartons per day Total cost in Rs

0 10000
1 15000
2 19000
3 24000
4 30000
5 40000
Deduction from the total cost data
No of cartons Total cost (TC) Total fixed cost Total variable

(TFC) cost (TVC)
0 10000
1 15000
2 19000
3 24000
4 30000
5 40000
Deduction from the total cost data
No of cartons Total cost (TC) Total fixed cost Total variable

(TFC) cost (TVC)
0 10000 10000 0
1 15000 10000 5000
2 19000 10000 9000
3 24000 10000 14000
4 30000 10000 20000
5 40000 10000 30000
Deduction of total, average and marginal cost
No of Total Total fixed Total Average Average Average Marginal

cartons cost cost (TFC) variable fixed variable total cost
(TC) cost cost cost cost (MC)
(TVC) (AFC) (AVC) (ATC)
0 10000 10000 0
1 15000 10000 5000
2 19000 10000 9000
3 24000 10000 14000
4 30000 10000 20000
5 40000 10000 30000
Deduction of total, average and marginal cost
No of Total Total fixed Total Average Average Average Marginal

cartons cost cost (TFC) variable fixed variable total cost
(TC) cost cost cost cost (MC)
(TVC) (AFC) (AVC) (ATC)
0 10000 10000 0 -
1 15000 10000 5000 10000 5000 15000 5000
2 19000 10000 9000 5000 4500 9500 4000
3 24000 10000 14000 3334 4667 8000 5000
4 30000 10000 20000 2500 5000 7500 6000
5 40000 10000 30000 2000 6000 8000 10000
Chart Title
16000
14000
12000
10000
8000
6000
4000
2000
0
1 2 3 4 5 6
Average fixed cost (AFC) Average variable cost (AVC)

Average total cost (ATC) Marginal cost (MC)
Case study
Closing Case study

INNOVATION MANAGEMENT – FAT2
Innovation management - FAT2 (Internal assessment no 2) - This will be a group presentation
activity.
The topic for the group report (in PPT format) and then subsequent presentation in the class
will be as follows.
• Select any industry of your choice (e.g. BFSI, Retail, Logistics, IT, Auto, Textile, Petroleum
and any other industry that you like)
• Prepare a ppt report on Innovation and Innovation management in that industry as
observed over the last 5-10 years. You can cover the following aspects
• Challenges faced by the industry
• Innovation activities and initiatives in the industry
• What type of innovation
• Benefits of innovation including cost benefits as applicable
• Everyone in the group must participate in the work and the presentation and absent
students will be marked accordingly. Marks will be given based on involvement,
participation and presentation.
• Timeline - Your group reports must be ready and shared with me latest by EOD Wednesday,
9th November, 2022. Presentations will start on 10th Nov.
INNOVATION MANAGEMENT – FAT3
Innovation management - FAT3 (Internal assessment no 3) - This will be an individual

activity.
You will need to search books and publications including internet sources. Choose
any two articles related to innovation, innovation management, innovation trends,
innovation tools, innovation challenges, benefits and like. Study the articles and
related bits in detail and prepare a handwritten synopsis of the two articles in your
own words.
Your handwritten report should contain
• the source of the articles you have chosen
• A brief summary of what the article says...(this should be in your won words and
not a direct copy from the article)
• Your own take on the subject along with relevant examples that you can quote.
Your handwritten report (no exceeding 6 pages) to be submitted via google form
upload latest by 8th November. Any reports that are found to be similar to each other
or found to have been copied will lose half of the marks just to start with.
Unit 3 – Measures of Innovation
✓ Measures of innovation
✓ Managing innovation through experimentation
✓ Innovation dimensions like technological, human, economic,
organizational, social etc.
✓ Integration of people, processes & technologies for effective
management
INNOVATION MANAGEMENT - MEASUREMENT
Measures of Innovation
Why should we measure innovation? – Class Discussion – ED1
❖ To stay ahead of the competition - Pranav
❖ To check if the innovation investment is giving the required RoI - Pranav
❖ To gauge our progress – Harsh
❖ To check the feasibility of an innovation plan - Aishwarya
❖ To check progress against the plan and to take corrective actions - Abha
❖ To measure actual output/result of a previous innovation - Himanshu
❖ To check if we are moving in the right direction - Aman
❖ To learn from the past mistakes, lessons - Harsh
❖ To decide need for further innovation – Maria
❖ To convince investors - Sanskar
Why should we measure innovation? – Class Discussion – ED2
❖ It will confirm if we are moving in right direction - Bhakti
❖ To quantify outcome of an innovation initiative - Shubhanshu
❖ To analyze if we need any improvement and where - Rituja
❖ To measure the progress we have made - Ramith
❖ To check if we are over-innovating - Cyril
❖ To check our position vis-a-vis the competition - Siddharth
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Why should we measure innovation?
❖ Innovation is a costly affair – Both in terms of resources required and
also in terms of its importance for organization’s continued success
❖ You can’t improve something that you do not measure
❖ Innovation can be a subjective topic at times making measurement of the
same more important
❖ Brings in objectivity in terms of setting targets for the innovation teams
❖ Brings in objectivity in terms of gauging the performance of the team
❖ Only measuring the performance will tell you if you are doing enough
and if you are doing enough of right things
❖ It helps guide your resource allocation process
❖ It holds people accountable for their actions and results
You should choose your innovation metrics carefully
➢ Strive for objectivity
➢ Do not always go for the metrics that seem easy to measure
➢ Do not compromise Quality for Quantity
➢ Be flexible to analyze the effectiveness of the metrics and change them as
necessary
❖ How to measure innovation in a company?
❖ How to measure innovation culture?
❖ How to measure innovation capability?
Input metrics Vs Output metrics
Input metrics measure if you’re doing enough of the right activities to reach
your goals and whether you allocate your resources properly, whereas
Output metrics measure whether these activities and resources have had the
desired impact on your innovation process.
First step would be to pick up a few ‘suitable’ and ‘appropriate’ metrics or

KPIs.
The selected KPIs should be consistent with your

• Business
• Business Objectives and
• Innovation management process in your company
What innovation KPIs/metrics can you think of? – Class discussion – ED2
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What innovation KPIs/metrics can you think of? – Class discussion – ED1
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A suggested combination of KPIs could be as follows

❖ How to measure innovation capability in a company?
Creating Innovative organization – Process and people
❖ Creating an organization whose structure and underlying culture support
Innovation
✓ It does not mean that we should create an organization that is too

open and too informal. Too little order and structure may be as bad as
too much.
Innovation
✓ People are our greatest assets

✓ Empowerment
✓ Team working
In the field of innovation, the above things can’t be just words but aspects
that are put in practice. Energy, enthusiasm and creative insights must be
encouraged to come together
When this happens across the organization, the results can be surprising!!
Innovation
Set of components linked with Innovation success

• Shared vision, Leadership and the will to innovate
• Story of Alexander Bell inventing phone and how the idea was turned down by senior executives
at Western Union. ‘…..we have come to conclusion that there are no commercial
possibilities…..we see no future for this electrical toy…..’
• Bell went on to form company ‘American Telephone and Telegraph (ATT)’ which became the
largest corporation in USA
• Appropriate organization structure
• Good integration between functions
• Both ways communication
Innovation
• Key individuals (Case study – James Dyson)
• Project champions that have the breadth of understanding of the technology and who also
understand the product as the customers view it
• Someone who can project manage the whole initiative
• Stretching training and development
• Updating knowledge and skills
• New equipment, procedures, concepts, technologies
Innovation
• High involvement in innovation (Case study – High involvement in

Innovation)
• Quality miracle – Kaizen – Millions of suggestions for improvement from employees – Toyota
• One UK company ‘ ….our operating costs are reducing yoy due to improved efficiency. We have
seen a 35% reduction in costs within two and half years. We received an average of 21 ideas per
employee in this period….’
Innovation
• Effective team working
• Reducing development cycle time is critical for success as it results in lower
TMM. Post world war II, Ford and Chrysler succeeded in dramatically reducing
development cycle time. Most of these gains were achieved through effective
team working
• Groups have more to offer than individuals in terms of fluency of idea generation
and flexibility of solutions developed
• High performance teams do not happen by accident
• It takes selection and investing in team building
• Clear guidance on their roles and tasks and
• Effective team management with conflict resolution
Innovation

• Creative climate
• ‘Microsoft’s only factory asset is human imagination’ – Bill Gates
• Creativity is an attribute everyone possesses but style of expressing it varies
widely
• External focus
• Innovation is increasingly becoming an open process involving richer network
across and between organizations
• Developing a sense of external orientation is important
• Extensive communication
Innovation

• Learning organization
• Beyond the boundaries
• Increasingly we are seeing that an individual organization becoming linked with
others in some form of collective entity
• A supply chain
• An industrial cluster
• A product development consortium
• Technological collaboration
• Networking interdependence
Overall case study – 3M
Class discussion – 3 M case – ED2 (24th November 2022)
➢ Sustaining innovation, not autocratic - Ayush

➢ Encouragement, empowerment - Ayush
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Class discussion – 3 M case – ED1 (24th November, 2022)
➢ Rewards and recognition - Sejal

➢ Ensure enough investment in R & D - Harsh
➢ Acceptance of mistakes - Khushi
➢ Keep track of innovation, measure - Pranav
➢ Cross functional involvement - Prachi
➢ Encourage innovative trends during hiring – Pranav K
➢ Training and development – Ashlesha
➢ Strong working culture that encourages innovative
approach - Nikhil
Class discussion – 3 M case – ED1 (24th November, 2022)
➢ Have patience, innovation does not happen overnight –

Maria
➢ Encourage employees to spend part of their time on non-
work activities – Chahat
➢ Encourage creative thinking, alternate approaches -
Saish
Unit 4 Diffusion, Innovation & Entrepreneurship

Collaborations and networks
Collaboration : The act of working together, with the success

of others as well as your own as a central goal (“win-win”)
Why is collaborations and networks important for successful

Innovation?
Class discussion
✓ Exchanging ideas and sharing resources – example, Accenture and
MS coming together for a financial software – Prathamesh S
✓ Reach an enhanced set of customers – Kashish
✓ Sharing experience – Abhishek
✓ Cost cutting – Sarvesh
✓ Helps address issues – Jay
✓ For productivity and other operational gains – Shreya
✓ Share capex requirements – Prathamesh S
✓ Reduces TMM – Shreyas P
Why is collaborations and networks important for successful

Innovation?
Class discussion
✓ Better availability of resource – Pranav
✓ Capex and opex optimization – Pranav K
✓ Pulling in resources from each other – Rajat
✓ Exposure to newer customer segments – Pranav
✓ Technological collaboration – Prasad
✓ More diversified offerings – Harsh – JPM, Chase
✓ Better pool of ideas – Sejal
✓ Sharing of expertise – Pranav
✓ Efficient problem solving - Varun
Why is collaborations and networks important for successful Innovation?
✓ Skill is teamwork and cooperative efforts is a key

✓ Collaboration is an adaptive attribute that makes an organization
more competitive
✓ Collaboration allows you to focus on your strengths while benefitting
from others expertise (“win-win” scenario)
Four aspects of collaboration
❖ Collaborate with your competitors

❖ Collaborate with the industry
❖ Collaborate with customers
❖ Collaborate with your colleagues
✓ Collaborating with competitors
Case study – Complimentary products

✓ Collaborating with the industry
❖Increasingly, innovative products comprise portfolios of diverse technologies, each
requiring a different kind of expertise
❖Every business is part of a complex ecology, a complex network of players
❖Suppliers
❖Employees
❖Customers
❖Competitors
❖Regulators
❖Shareholders
❖Others
Business strategy succeeds when it optimizes this value network. For this
to happen, a business must be open to meaningful alliances and
collaborations that will lead to mutual success
✓ Collaborating with the industry
❖Case study – P&G – Working with the industry
❖Case study – P&G and Clorox – Co-working

✓ Collaborating with the customers
❖ Companies whose products find their way to customers’ hearts,
endure and prevail
❖ One of the often forgotten aspect of innovation is collaborating with
your customers
❖Egoistic managers and companies that fail to ‘read’ needs of others
rarely survive
❖It costs on an average 11 times more to acquire a new customer
than to retain the loyalty of an existing one
❖ Great global companies know how to
❖Create customer loyalty
❖Measure it continually and
❖Act to retain it
✓ Collaborating with the customers
❖Case study – How customers help in innovation?

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Which of these statements do you agree with?

Today’s world is full of immense opportunities

It was the best of times, it was the worst of times,

- Charles Dickens, A tale of two cities

Today the world stands at the cusp of great change – change

How can businesses tackle these seemingly ‘impossible to solve’

Today’s business world is filled with both promise and peril

However, it also faces

Fortune 500 – List of companies

The Fortune 500 is an annual list compiled and published

Fortune 500 – List of companies

Class discussion – ED2

Fortune 500 – List of companies

Class discussion – ED1

Fortune 500 – List of companies

Case study – Intel

Case study – Intel

Class discussion – ED2 - 23/07/2022

Team A (Siddharth, Shreya)

Case study – Intel

Class discussion – ED1 - 23/07/2022

Team A (Palash, Varun)

Team B (Pranav, Rajat)

Team C (Aman, Abha)

Case study – Intel

Intel product line

Customers (Businesses and individuals) will always demand higher

List of top 10 most innovative companies in the world – 2021

- Apple Samsung New product launches

List of top 10 most innovative companies in the world – 2021

- Apple Apple New products

Innovation is intelligently breaking the rules

Innovation includes but is not limited to

✓ Spotting opportunities and taking advantage of them

Are you a creative person? Rate yourself on a scale of 1 to 10, 10 being

Do we underrate ourselves when it comes to measuring our creativity?

 Apple launched iPhone in 2007

 Cadbury – Newer flavours, new tastes, new ingredients

 Sainsbury’s – Process innovation….Newer delivery channels, methods

More examples of breakthrough innovation

 Dyson – World’s first bagless vacuum cleaner

➢ Breakthrough v/s disruptive

➢ Product v/s process

➢ Architectural v/s component (modular)

➢ Continuations of existing products, methods or

➢ Totally new products with considerable change in basic

Product characteristics well defined R&D invention in lab

Competitive advantage on low-cost production Superior performance over old technology

Demand-side market Supply-side market

Customer pull Technology push

What type of innovation would Netflix (i.e. streaming services) be?

Networking to pursue innovation

Science & Technological

Need in society and the

➢ Why to innovate? – Class discussion

➢ Energize your people

Case study – Tata Steel

Pranav – Protected environment, International competition, Price, cost and value.

** From a study by Kim and Mauborgne

Class discussion – Case summary

There are four different voices..