UNIT-V Innovation Management

UNIT-V
Innovation Management

Introduction to Innovation Management

“Innovation management” refers to handling of all the activities needed to “introduce
something new”, which in practice means things like coming up with ideas, developing,
prioritizing and implementing them, as well as putting them into practice, for example by
launching new products, or by introducing new internal processes.
By simply looking at the definition, it’s easy to demystify the term. Innovation management
is simply the process of coming up with and introducing new things and developing the
business, one way or the other.
Innovation management is simply the process of coming up with and introducing new
things and developing the business, one way or the other.

Innovation management involves the process of managing an organization's innovation

procedure, starting at the initial stage of ideation, to its final stage of successful
implementation. It encompasses the decisions, activities and practices of devising and
implementing an innovation strategy.
According to Gartner, innovation management is a structured process of generating,
capturing, discussing and improving, organizing, evaluating and prioritizing valuable insight
or alternative thinking that would otherwise not have emerged through normal processes.
Capturing innovative ideas from employees at various levels, building an active and
collaborative workforce, recognizing employees effort and communicating effectively with
all stakeholders are the vital building blocks innovation management for continuous
improvement.
According to the recent study by Accenture, over 90% of executives think innovation is key
to their business success.

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The key aspects of innovation management

Capabilities
Capabilities is an umbrella term used to cover the different abilities and resources the
organization has for creating and managing innovation.
The capabilities aspect revolves primarily around people, as innovation relies heavily on the
abilities of both individuals and teams collectively. It refers first and foremost to
the abilities, unique insights, know-how and practical skills of the people working for the
organization. However, it also covers areas, such as the information capital and tacit
knowledge of the organization, as well as their other resources and available financial
capital, all of which might be required to create innovation.

Structures
The difference between structures and capabilities is that structures enable the effective
use of the said capabilities.

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In practice, this means the organizational structure, processes, and infrastructure of the
organization.
The right structures can work as a force multiplier allowing the organization to operate and
innovate much more effectively.
For example, without the right communication channels, the right processes for making
decisions, and the right infrastructure for implementing ideas, very few of the ideas that
people are coming up with will actually see the light of day. This is where tools, such as
innovation management software, can make a difference.

Without the right communication channels, the right processes for making decisions, and
the right infrastructure for implementing ideas, very few of the ideas that people are
coming up with will actually see the light of day.

Organizational structure is one of the keys here. If every new innovative initiative is forced
to go through the same chain-of-command and same processes as minor changes to the
existing organization, it’s very likely that many innovations will be smothered.
Teams working on innovation need to be able to move fast and adapt to their environment,
as well as make decisions independent of the traditional ways of doing things in the
organization.
So, don’t try to force the same rules and processes for everyone in your organization.
Economics of scale simply don’t work when it comes to innovation.
One of the more popular approaches for starting to create a more innovative organization is
to work towards building a so-called ambidextrous organization. This simply means that the
organization is structured in a way that allows new businesses to be independent from the
pre-existing ones.

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Structures can also be used to reinforce (or if done poorly, erode) the culture of the
organization, which brings us to our next aspect.

Culture
If structures allow the effective use of capabilities, culture is what enables the organization
to acquire the capabilities related to people.
With the right kind of pro-innovation culture, the organization is much more likely to be
able to recruit and keep the right people in the organization.
An appropriate pro-innovation culture encourages the right kind of behaviour and
discourages the wrong kind. As the effects quickly cumulate, culture can make a
tremendous difference for the innovativeness of an organization. Here are some of
the more commonly accepted traits for an innovative culture:
• Emphasizes the need to always think of ways to get better
• Values speed, learning and experiments
• Considers failure as just a normal part of the process for creating anything new
• Provides enough freedom and responsibility and is led primarily
with vision and culture instead of a chain-of-command approach

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Strategy
Last but not least, is strategy. Strategy is, simply put, the plan the organization has for
achieving long-term success.
But what’s critical to understand is that strategy is ultimately about making a deliberate
choice between a number of feasible options to have the best chance of “winning” and this
choice shouldn’t obviously be separate from the execution.
The link between innovation and strategy is quite an extensive topic, but in essence,
innovation is simply one of the means to achieving your strategic goals.
Innovation is simply one of the means to achieving your strategic goals.

Ideas For Successful Innovation Management:

1. Involve Everyone and Create Conversations

To make your innovation culture efficacious, involving every employee remains crucial.
Innovation isn’t effective in isolation. Bringing employees together, in the beginning, may
stir a better chance for success. As mentioned above, crowdsourcing can be one of the best
techniques to involve employees in innovation and generate a pool of ideas within the
organization.
The best way to inspire innovative thinking isn’t to force a brainstorming session, it’s to
create an ongoing conversation. The quality of conversation is an important determinant
impacting the quality of creativity and innovation.
It provides an interactive platform to bridge the gap between senior management and
employees during their ideation sessions.
2. Do Not Push Employees, Pull Them In
Nurturing the internal side of open innovation amplifies participation. Forcing or mandating
involvement may lead to frailties in due course of time.
To involve employees in ideation – make them understand how their ideas will contribute to
the organisation’s success. Explain the significance of innovation, describe the potential they
have in improving the organization’s productivity, individual growth, rewards & recognition,
overall purpose and values they get.
Employees might get motivated by recognizing these values and participate in innovation.

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3. Run Awareness Campaigns

Creating innovative ideas that drive business growth don’t just happen, it requires a
strategic orientation to adopt the culture and generate new ideas. It is a proven way to
encourage the widest range of participants in innovating.
Creating awareness by running campaigns is a proven way to generate interest to use the
ideation space. This has a direct influence on capturing creative ideas stirring enhanced
productivity, cut down operational costs and drive improvements from the bottom up in a
short time period.
This campaign can be within your organization’s social network via emails, news and events,
announcements, posts etc.
4. Introduce A Common Space for Innovation with An Innovation Management Tool
Employees might not have a separate place and time to meet to discuss ideas addressing a
common challenge. Introducing an innovation management platform can create a digital
workplace environment in which employees can interact, collaborate & contribute ideas,
and evaluate, select and provide the best innovative strategies across the organization from
anywhere anytime.
5. Transparency
Transparency boosts the culture of innovation. It is essential that employees should know
what the buzz is around the ideas shared, challenges posed by the organization, etc. Often
employees are left in the dark having no clue on further steps on the ideas posted. This may
create chaos and trust issues in the entire innovation initiative.
In such instances, social collaboration tools can provide a platform to employees where they
can collaborate, communicate, engage and share the selection process updates in real time.
6. Rewards and Recognition
Building an effective reward and recognition system is a key aspect of maintaining and
encouraging innovation. Appreciation and recognition are essential to an outstanding
workplace.
Employees want to be respected and valued by others for their contribution. When
employees and their work are valued, they seem to be happy, loyal, satisfied with the
organization.
Therefore, developing an effective tool for rewards and recognition can encourage and keep
employees continue to post their ideas to get recognized and rewarded their effort.

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Elements of gamification in innovation management tools can help in streamlining rewards

mechanism. Awarding badges/ points to the highest contributor or bestowing the winning
idea can fuel competitive spirits and active participation.
As organizations strive to develop an innovative culture in the organization, it is necessary to
consider implementing the right strategies to bring about the transformation from the
ground up. We suggest integrating an effective idea management software or tools into the
digital workplace which can collaborate, capture, evaluate and pick innovative ideas that
can help in business growth.

Innovation management methods:

Broadly speaking, innovation can be incremental, breakthrough or disruptive.
• Incremental: In an era where businesses are required to constantly reinvent
themselves, incremental innovation helps them thrive by constantly improving
current products, services, processes or methods.
• Breakthrough: A breakthrough innovation refers to technological advancements that
can boost the level of a product or service, within an existing category, ahead of its
competitors.
• Disruptive: Disruptive innovations are ideas that are capable of radically changing
the market behavior after being implemented.

Innovation Management Solutions:

The Innovation Management suite includes the following:

• Product Requirements and Idea Management supports and simplifies the
innovation process with creating and managing ideas, requirements specifications,
and requirements business objects.
• Concept Design Management supports defining a product in its conceptual phase,
using concepts and proposals. Requirements, concepts, and proposals are designed
to work together closely.
• Portfolio Management gathers product concepts and proposals into a portfolio.
Portfolio scenarios are modified based on analyses of value, balance, strategy,
resources, and product mix.

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Business Incubation is the name given to the process, wherein an individual or an

organization supports the establishment and growth of a start-up. Those supporting the
start-up or new companies are called business incubators. These business incubators see
the growth potential and weigh the opportunity before supporting or funneling funds into
any start-up. The selection of a start-up involves a high level of research before any decision
is taken to support or fund a start-up. In a nutshell, we can say the goal of incubation is to
increase the success chances of business.
Over the years, experts have defined Business Incubation in their own way. The underlying
concept, however, remains the same. According to Sherman and Chappel, a business
incubator is an “economic development tool primarily designed to help create and new
businesses in a community.” Further, Sherman and Chappel note that the business
incubator support emerging businesses with several services, such as assistance in building
management teams, developing business and marketing plans, funds, professional services,
shared equipment and more.
The number of incubators has grown considerably in recent years. This rise is due to several
factors, such as corporate downsizing, increased entrepreneurship, new technologies,
economic globalization and the transfer of technology.
Importance of Business Incubation
There is no dearth of start-ups that work on a brilliant idea with a huge scope of scaling.
However, these companies have little knowledge about management, and therefore, burn
cash rapidly. Business incubators help the start-ups to manage finances and ensure proper
utilization of the money. Managing a business at a very local level play a significant role in
making the foundation strong and scale it. Business incubators essentially perform the same
function.
There are various business incubators that target businesses that want to establish
themselves formally in the market. Such businesses with great growth potential might
require various types of support such as planning, training and development, research
support and so on.

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Stages of Business Incubation:

The whole process of business incubation is broadly divided into three categories:
Physical Facility Support
This refers to the incubation service provided within the physical facility.
Networking Facilities
After the physical facility, business incubators help the start-up with networking facilities so
as to grow the business.
Support Services
Once the business is up and running, the incubators offer various support services to the
businesses in order to run the business smoothly.

Managing Innovation Within Firms

Introduction
Virtually all innovations, certainly major technological innovations such as pharmaceutical
and automobile products, occur within organizations. The management of innovation within
organizations forms the focus for this chapter. The study of organizations and their
management is a very broad subject and no single approach provides all the answers. The
identification of those factors and issues that affect the management of innovation within
organizations are addressed in this chapter.

Theories about Organizations and Innovations:

The previous chapter outlined some of the difficulties in studying the field of innovation. In
particular, it emphasized the need to view innovation as a management process within the
context of the organization. This was shown to be the case especially in a modern
industrialized society where innovation is increasingly viewed as an organizational activity.
This chapter tackles the difficult issue of managing innovation within organizations. To do
this, it is necessary to understand the patterns of interaction and behaviour which represent
the organization.

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The theory of organizations is a set of ideas drawn from many disciplines and lies beneath
much of the study of innovation. In many ways organization theory bridges pure social and
behavioural sciences and management practices at the level of the organization. As an
applied science it examines the behaviour of organizations and provides useful information
about how organizations respond to different management techniques and practices, hence
its importance in understanding how the process of innovation is managed.

Given the diversity of the literature in this field, there are few clear prescriptions on what
organizations need to do in order to manage innovation successfully. Nonetheless, there are
numerous analytical frameworks and organization-specific models of innovation. The
literature can be classified into four dominant strands (Perrow, 1970).

Classical or Scientific Management Perspective:

The classical view of organizations took hold after the industrial revolution and the
huge increase in world trade at the beginning of the twentieth century. It is built around
traditional management concepts, bureaucratic theory (Weber, 1964) and scientific
management (Taylor, 1947). This school of thought tends to view the organization as an
instrument for achieving established goals, in which members of the organization can be
made to serve these goals by management’s use of reward and motivation techniques. It
assumes that all tasks confronting the organization can be rationalized. Hence, organizations
should be designed to ensure a predictable flow of work. Specialization of tasks is employed
to maximize efficiency and there is emphasis on rules to achieve co-ordination between
units. This view assumes that people can he combined with machines to produce an orderly
output. Within this framework innovation is a series of rational decisions leading to a clearly
defined outcome. Indeed, this school of thought contributed to the dominance of the
‘technology-push’ model of innovation.

Human Relations Approach

It was following extensive questioning of the classical view in the 1930 that the human
relations school evolved. Much of the original impetus was provided y the Hawthorn Studies

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at Western Electric (Roethlisberger and Dickinson, 1939). These new approaches identified
informal and non-legitimized group processes within the organization. Informal
communications and activities were unearthed by social scientists and found to influence
organizational behaviour. This school of thought also led to the development of the
contingency theory.

A slightly different perspective views the organization as a political system and

suggests that change will result in some conflict between different units in the organization
when a unit perceives that the innovation or change might reduce its influence (Harvey and
Mills, 1970). This also introduces the notion of routine and innovative solutions. It is argued
that problem situations and problem solutions are arranged along a routine innovative
dimension. A routine solution is defined as ‘a solution that has been used before while an
innovative solution is defined as a solution that has not been used before and for which
there are no precedents in the organization’ (189-90). Harvey and Mills (1970) argue that an
organization will tend to impose routine solutions unless there is pressure on the
organization’s structural arrangements. These arrangements reinforce the continuation of
routine patterns around which interests have formed. Innovative solutions will only be
imposed when the organization is in a higher stress-threat situation, which is more likely to
demand innovative behaviour if the organization is to adapt. This model builds on the work
of Burns and Stalker (see below), who indicate that there are different types of solutions,
mechanistic routine and organic innovative, that are appropriate for different situations.

Contingency Approach
The third main strand of literature is represented by organization contingency
theories. These posit the view that there is not necessarily a single best organizational
structure, but rather that the structure should be adapted to the activities being performed.
Organizational activities or tasks arc the things that individuals do as part of groups in order
for the organization to achieve its purposes. This emphasis on internal activities rather than
structure is an important factor with regard to innovation. This book takes the view that the
process of innovation is made up of a series of linked activities within an organization. This
book takes the view that the process of innovation is made up of a series of linked activities
within an organization.

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Research in this field (Thompson, 1967; Perrow, 1970; Hull and Haige, 1981) has
identified a range of different characteristics that organizations have exhibited that, it is
argued, more accurately describe the range of different organizational environments. The
following list represents a typology of characteristics that have been identified within
certain organizations:

Certainty vs uncertainty
Stability vs instability
Uniform vs non-uniform
Few exceptions vs many exceptions
Many repetitive events vs few repetitive events

In general, contingency theory argues that tasks that are certain, stable, uniform, have
few exceptions and many repetitive events are compatible with bureaucratic organizational
forms, which stress formality. At the other end of the task continuum, tasks have many
exceptions and few repetitive events are compatible with organic flexible organizational
forms .

Systems Theory
The fourth set of ideas developed concurrently with contingency theory during the
1960s and 1970s. However, systems theory emphasizes processes and dynamic analysis
rather than characteristic and structural analysis. (Checkland, 1989; Thompson, 1967; Katz
and Khan, 1966). The origins of the theory can be traced back to the 1950s when Ludvig von
Bertalanffy, a biologist, first used the term ‘systems theory’ (Bertalanffy, 1951). Systems
theorists analyze the commercial organization from the perspective of complex organic
systems).

A system is defined as any set of elements linked in a pattern which carries

information ordered according to some pre-determined rule. Organizations are seen as
goal-directed systems. All systems have both structures arid process. Structures are the

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relatively stable elements, whereas processes are the dynamic relationships among system
elements over time.
Table
Issues identified by systems theory that need to be managed
Issue Characteristics
Adaptation The ability to alter ways of working to meet the changing
environment.
Co-ordination Enabling the different parts of the organization to function as
one
Integration The ability to harmonise a diverse range of activities and people
Stability Coping with friction between organizational parts
Output Achieving purposes and goals
Maintenance Keeping elements in the system active

Table
Organizational characteristics that facilitate the innovation process
Organizational Characteristics
requirement
Growth orientation A commitment to long term growth rather than short term
profit.
Vigilance The ability of the organization to be aware of its threats and
opportunities
Commitment to The willingness to invest in the long term development of
technology technology
Acceptance of risks The willingness to include risky opportunities in a balanced
portfolio
Cross functional co- Mutual respect among individuals and a willingness to work
operation together across functions
Receptivity The ability to be aware of, to identify and to take effective
advantage of externally developed technology

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Slack An ability to manage the innovation dilemma and provide room

for creativity to accept change
Adaptability A readiness to accept change
Diverse range of A combination of specialization and diversity of knowledge and
skills skills

This school of thought has led to a richer and better understanding of organizational
activities. For example, the issues in Table 2.2 are said to be continually addressed by
organizations. They should be viewed as issues that need to be managed rather than
problems that can be solved (Georgopoulos, 1972).

In addition, systems theory has also highlighted the importance of the organization’s
interaction with the external world. Indeed, this interaction is identified as an important
element of the innovation process. It is precisely the way in which organizations manage
and capture the benefits from the knowledge flows, which are the product of these
interactions, that will affect their ability to innovate.

Together these four schools of thought have contributed enormously to the

understanding of the management of innovation. Some of the more significant issues will be
addressed in more detail.

The Dilemma of Innovation Management

Within organizations there is a fundamental tension between the need for stability
and the need for creativity. On the one hand, companies require stability and static routines
to accomplish daily tasks efficiently and quickly. This enables the organization to compete
today. For example, the processing of millions of cheques by a hank every day, or the
delivery of food by multiples to their retail outlets all over the country, demands high levels
of efficiency and control. On the other hand, companies also need to develop new ideas and
new products to be competitive in the future. Hence they need to nurture a creative

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environment where ideas can be tested and developed. This poses one of the most
fundamental problems for management today.

Take any medium to large company and examine its operations and activities. From
Mars to Ford, and from P & G to Sony, these companies have to ensure that their products
are carefully manufactured to precise specifications and that they are delivered for
customers on time day after day.

Managing Uncertainty
It is becoming clear that product innovation is a complex process. Figure 1.6
highlighted the main areas of attention, but each of these represents a complex area in
itself. Innovation involves numerous factors acting separately but often influencing one
another. Organizations have to respond to internal and external events, some of which are
beyond their control. While management in general involves coping with uncertainty,
sometimes trying to reduce uncertainty, the purpose why involved in innovation is to
develop something different, maybe something new. The management of the innovation
process involves trying to develop the creative potential of the organization. It involves
trying to foster new ideas and generate creativity. Managing uncertainty is a central feature
of managing the innovation process.

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Organizational Characteristics that facilitate the Innovation Process

The innovation process, outlined at the end of Chapter 1, identified the complex
nature of innovation. It also emphasizes the need to view innovation within the context of
the organization. Table 2.3 represents a classification of the main organizational
characteristics that are continually identified in the literature as necessary for successful
innovation.

Growth Orientation
It is sometimes surprising to learn that not all companies’ first and foremost objective
is growth. some companies are established merely to exploit a short-term opportunity.
Other companies, particularly family run ones, would like to maintain the company at its
existing size. At that size the family can manage the operation without having to employ
outside help. Companies that are innovative are those companies whose objective is to
grow the business. This does not imply that they make large profits one year then huge
losses the next, but they actively plan for the long term. There are many companies who
make this explicit in their annual reports, companies such as J. Sainsbury, ICE, BMW, Renault
and Mercedes-Benz.

Vigilance
Vigilance requires continual external scanning, not just by senior management but also
by all other members of the organization. Part of this activity may be formalized. For
example, within the marketing function the activity would form part of market research and
competitor analysis. Within the research and development department scientists and
engineers will spend a large amount of their time reading the scientific literature in order to
keep up to date with the latest developments in their field. In other functions it may not be
as formalized but it still needs to occur. Collecting valuable information is one thing, but
relaying it to the necessary individuals and acting on it are two necessary associated
requirements. An open communication system will help to facilitate this.

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Commitment to Technology
Most innovative firms exhibit patients in permitting ideas to germinate and develop
over time. This also needs to be accomplished by a commitment to resources in terms of
intellectual input from science, technology and engineering. Those ideas that look most
promising will require further investment. Without this long-term approach it would be
extremely difficult for the company to attract good scientist. Similarly, a climate that invests
in technology development one year then decides to cut investment the next will alienate
the same people in which the company encourages creativity. Such a disruptive
environment does not foster creativity and will probably cause many creative people to
search for a more suitable company with a stronger commitment to technology.

Acceptance of Risks
Accepting risks does not mean willingness to gamble. It means the willingness to
consider carefully risky opportunities. It also includes the ability to make risk assessment
decisions, to take calculated risks and to include them in a balanced portfolio of projects,
some of which will have a low element of risk and some a high degree of risk.

Cross-functional Co-operation
Inter-departmental conflict is a well-documented barrier to innovation. The
relationship between the marketing and R&D functions has received a great deal of
attention in the research literature. This will be explored further in Chapter 6, but generally
this is because the two groups often have very different interests. Scientists and
technologists can be fascinated b new technology and may sometimes lose sight of the
business objective. Similar y, the marketing function often fails to understand the
technology involved in the development of a new product. Research has shown that the
presence of some conflict is desirable, probably acting as a motivational force (Souder,
1981). It is the ability to confront and resolve frustration and conflict that is required.

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Receptivity
The capability of the organization to be aware of, identify and take effective advantage
of externally developed technology is key. Most technology-based innovations involve a
combination of several different technologies. It would be unusual for all the technology to
be developed in house. Indeed, business are witnessing an increasing number of joint
ventures and alliances (Hinton and Trott, 1996), often with former competitors. For
example, IBM and Apple have formed a joint venture to work on mutually beneficial
technology. Previously these two companies fought ferociously in the battle for market
share in the personal computer market.

Slack
While organizations place great emphasis on the need for efficiency, there is also a
need for a certain amount of ‘slack’ to allow individuals room to
think, experiment, discuss ideas and be creative (Cordey-Hayes et a!., 1997). In many R&D
functions this issue is directly addressed by allowing scientists 10—15 percent of their time
to spend on the projects they choose. This is not always supported in other functional areas.

Adaptability
The development of new product innovations will invariably lead to disruptions to
established organisational activities. Major or radical innovations may result in significant
changes, although the two are not necessarily inked The organization must be ready to
accept change in the way it manages its internal activities. Otherwise opposed innovations
would be stifled due to a reluctance to alter existing ways f working or to learn new
techniques. In short, organizations need the ability to adapt to the changing environment.

Diverse Range of Skills

Organizations require a combination of specialist skills and knowledge in the form of
experts in, say, science, advertising or accountancy and general skills that facilitate cross
fertilization of the specialist knowledge. In addition they require individuals of a hybrid who
are able to understand a variety of technical subjects and facilitate the transfer of
knowledge within the company. Similarly, hybrid managers who have technical and
commercial training are particularly useful in the area of product development (Trott, 1993).

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It is the ability to manage this diversity of knowledge and skills effectively that lies at the
heart of the innovation process.

Organizational Structures and Innovation

The structure of an organization is defined by Mintzberg (1978) as the sum total of the
ways in which it divides its labour into distinct tasks and then achieves co-ordination among
them. One of the problems when analyzing organizational structure is recognizing that
different groups within an organization behave differently and inter act with different parts
of the wider external environment. Hence, there is a tendency to label structure at the level
of the organization with little recognition of differences at group or department level.
Nonetheless, there have been numerous useful studies exploring the link, between
organisational structure and innovative performance.)

The seminal work by Burns and Stalker (1961) on Scottish electronic organizations
looked at the impact of technical change on organisational structures and on systems of
social relationships. It suggests that ‘organic’, flexible structures, characterized by the
absence of formality and hierarchy, support innovation more effectively than do
‘mechanistic’ structures. The latter are characterized by long chains of command rigid work
methods, strict task differentiation, extensive procedures and a well defined hierarchy.
Many objections have been raised against this argument, most notably by Child (1973).
Nevertheless, flexible rather than mechanistic organisational structures are still seen,
especially within the business management literature, as necessary for successful industrial
innovation. In general, an organic organization is more adaptable, more openly
communicating, more consensual more loosely controlled. As Table 2.4 indicates, the
mechanistic organization tends to offer a less suitable environment for managing creativity
and the innovation process. The subject of organization structures is also discussed in
Chapter 6 in the context of managing new product development teams.

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Table: Organizing versus mechanistic organizational structures

Organic Mechanistic
Channels of communication open with Channels of communication Highly structured,
free information flow throughout the restricted information flow
organization
Open styles allowed to vary freely Operating styles must be uniform and
restricted
Authority for decisions based on the Authority for decisions based on formal line
expertise of the individual management position
Free adaptation by the organization to Reluctant adaptation with insistence on
changing circumstances holding fast to tried and true management
principles despite changes in business
conditions
Emphasis on getting things done Emphasis on formally laid down procedures.
unconstrained by formally laid out Reliance on tried and true management
procedures principles
Loose, informal control with emphasis on Tight control through sophisticated control
norm of co-operation system
Flexible on job behaviour. Permitted Constrained on job behaviour required to
confirm to job description
Flexible on job behaviour Permitted to be Constrained on job behaviour required to
shaped by the requirements of the conform to job description
situation and personality of the individual
doing the job
Participation and group consensus Superiors make decisions with minimum
used frequently consultants and involvement of subordinates

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Formalization
Following Burns and Stalker, there have been a variety of studies examining the
relationship between formalization and innovation. There is some evidence of an inverse
relationship between formalization and innovation. That is, an increase in formulization
procedures will result in a decrease in innovative activity. It is unclear, however, whether a
decrease in procedures and rules would lead to an increase in innovation.) Moreover, as
was argued above, organizational planning and routines are necessary for achieving
efficiencies.

Complexity
The term complexity here refers to the complexity of the organization. In particular, it
refers to the number of professional groups or diversity of specialists within the
organization. For example, a university, hospital or science based manufacturing company
would represent a complex organization. This is because within these organizations there
are several professional groups. In the case of a hospital, nurses, doctors and a wide range
of specialists represent the different areas of medicine. This contrasts sharply with an
equally large organization that is, for example, in the distribution industry. The management
of supplying goods all over the country will be complex indeed; but it will not involve the
management of a wide range of highly qualified professional groups.

Centralization
Centralization refers to the decision-making activity and the location of power within
an organization. The more decentralized an organization the fewer levels of hierarchy
usually required. This tends to lead to more responsive decision making closer to the action.

Organizational size
Size is a proxy variable for more meaningful dimensions such as economic and
organizational resources, including number of employees and scale of operation. Below a
certain size, however, there is a major qualitative difference. A small business with fewer
than 20 employees differs significantly in terms of resources from an organization on with
200 or 2000 employees.

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The Role of the individual in the innovation process:

The innovation literature has consistently acknowledged the importance of the role of
the individual within the industrial technological innovation process. (Rothwell et al., 1974;
Szakastis et al., 1974; Langrish et a!,, 1972; Schock, 1974; Utterback, 1975; Rothwell, 1976).
Furthermore, a variety of key roles have developed from the literature stressing particular
qualities (see Table 2.4). Rubenstien et al. (1976) went further, arguing that the innovation
process is essentially a people process and that organizational structure, formal decision-
making processes, delegation of authority and other formal aspects of a so-called well-run
company are not necessary conditions for successful technological innovation. Their studies
revealed that certain individuals had fulfilled a variety of roles (often informal) that had
contributed to successful technological innovation.

In a study of biotechnology firms, Sheene (1991) explains that it is part of a scientist’s

professional obligation to keep up to date with the literature. This is achieved by extensive
scanning of the literature. However, she identified feelings of guilt associated with browsing
in the library by some scientists. This was apparently due to a fear that some senior
managers might not see this as a constructive use of their time. Many other studies have
also shown that the role of the individual is critical in the innovation process (Allen and
Cohen, 1969; Allen, 1977; Tushman, 1977; Burgelman, 1983).
Table: Key individual roles within the innovation process
Key individual Role
Technical Expert in one or two fields. Generates new ideas and sees new and
Innovator different ways of doing things. Also referred to as the mad
scientist.
Technical / Acquires vast accounts of information from outside the
Commercial organization, often through networking. This may include market
Scanner and technical information.
Gate keeper Keeps informed of related developments that occur outside the
organization through journals, conferences, colleagues and other

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companies. Passes information on to others, finds it easy to talk to

colleagues. Serves as an information resource for others in the
organization
Product Champion Sells new ideas to others in the organization. Acquires resources.
Aggressive in championing his or her causes. Takes risk
Project leader Provides the team with leadership and motivation. Plans and
organizes the project. Ensures that administrative requirements
are met. Provides necessary co-ordination among team members.
Sees that the project moves forward effectively. Balances project
goals with organizational needs.
Sponsor Provides access to a power base within the organization: a senior
person. Buffers the project team from unnecessary organizational
constraints. Helps the project team to get what it needs from
other parts of the organization. Provides legitimacy and
organizational confidence in the project.

Attraction of creative people

Creative people will be attracted to those companies that themselves are viewed as
creative much the same way as undergraduates apply for positions of em1öiknt with those
companies view successful top will seek employment from those companies which have a
reputation for innovation and scientific excellence (Jones, 1992).

Organization encourages creativity

Many organizations pay lip service to creativity without putting in place any structures
or plans to encourage innovation. It has to be supported with actions and resources. The
organization has to provide people thecan be in a formalized way, as used in much of the
chemical industry. For example, 15 percent scientist’s time may be dedicated to projects of
personal interest. Alternatively, organizations can try to build sufficient slack into the system
to allow for creative thinking (see above).

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In addition, the organization should try to build an environment that tolerates errors
and mistakes. This will encourage people to try new ideas and put mistakes. This will
encourage new ideas need to be rewarded in terms of publicity for the people involved. This
is usually most easily achieved through internal newsletters or company magazine. In
addition, financial rewards - promotions, gifts or holidays-may be offered.

Some organization also use creativity-stimulation techniques such as a weekend away

at a country retreat to discuss new ways of working, new ideas, etc. These activities
collectively will help send a clear message that the organization is serious about innovation.

Development of innovative products

This does not mean the ability to develop products incorporating the latest
technology, although this may be an output. It means developing new products that are
genuine improvements compared to products currently available. Moreover, it is success in
the marketplace that very often leads to further success.

A willingness to accept new ideas

Many organizations suffer from an inability to implement changes and new ideas, even
after rewarding the people involved in developing the new idea. Once a new product idea
has been accepted it is important that it is carried through to completion.

Increased motivation and reduced frustration

If individuals within the organization can see their ideas and efforts contribute to the
performance of the business, they will he encouraged still further. On the other hand, if
seemingly good ideas are constantly overlooked, this will lead to increased frustration.

High morale and retention of creative people

All of the proceeding activities will help contribute to increased morale within the
organization. A rewarding and enjoyable working environment will help to retain creative
people. This in turn should reinforce the company’s innovative capabilities.

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Product Strategy
What is a Product Strategy?
A product strategy is a high-level plan describing what a business hopes to accomplish with
its product and how it plans to do so. This strategy should answer key questions such as who
the product will serve (personas), how it will benefit those personas, and what are the
company’s goals for the product throughout its lifecycle.
Why is Product Strategy Important?
A product strategy serves three main valuable business purposes.
1. It provides clarity for your company.
Your team will be in a better position to deliver their best work when you draft and
communicate a clear and well-thought-out product strategy to your organization.
Your developers will understand how the parts of the product they’re working on
contributing to the larger companywide strategic goals. Developers can sometimes feel
caught amongst all the details and lose sight of the overarching purpose behind all of their
work, and a product strategy clarifies that for them.
Your marketing and sales teams will be able to articulate the product’s benefits and unique
selling proposition. However, without a defined strategy behind a product—generating
anticipation and sales becomes difficult.
Additionally, your customer success team will better understand your product’s use cases
and provide better support for your users’ frustrations.

2. It helps you prioritize your product roadmap.

After you’ve earned stakeholder agreement for your proposal, it will be time to translate
that strategy into a high-level action plan. This means building an effective product
roadmap.
Unfortunately, many product teams skip the strategy-drafting stage and jump right into
listing themes and epics on their roadmap. Without a product strategy to guide these
decisions, the team is more likely to prioritize the wrong items and find itself misusing its
limited time and resources. But when you start with a product strategy, you have a clearer
picture of what you hope to accomplish with your product, translating into a more
strategically sound product roadmap.

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3. It improves your team’s tactical decisions.

No organization delivers a product to the market following the exact plan drafted in the
initial roadmap. Things change along the way, and product managers need to be prepared
to adjust their plans and priorities to deal with those changes.
When you and your team have a clear product strategy to refer back to, you can make
smarter strategic decisions about adjusting your plans if you lose resources or have to
change your estimated timetables.
What are the Key Components of a Product Strategy?
Product management expert Roman Pilcher suggests a product strategy should contain
three key elements:
1. The market for the product and the specific needs it will address.
2. The product’s key differentiators or unique selling proposition.
3. The company’s business goals for the product.
What’s in a Product Strategy?
An effective product strategy should include the following:
Product vision
A product vision (written as a product vision statement) describes the long-term mission of
your product. These are typically written as concise, aspirational statements to articulate
what the company hopes the product will achieve. For this reason, a product vision should
remain static.
For example, Google’s early vision statement for its search engine was, “Organize the
world’s information and make it universally accessible and useful.”
Goals
A product vision should lead to high-level strategic goals. These goals will, in turn, influence
what the team prioritizes on its product roadmap. Examples of product goals include:
• Increase free-trial downloads by 50% in the next 6 months
• Improve our average customer rating by one star on the major product-review sites
• Generate $3MM in revenue within 12 months
Using SMART goals is the best approach to utilize when setting goals for your product
strategy. Like product roadmaps, goals should be Specific, Measurable, Attainable, Relevant,
and Time-bound.

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Initiatives
Initiatives are the strategic themes you derive from your product goals and then place on
your roadmap. They are large, complex objectives your team must break down into
actionable tasks. (The product roadmap is, after all, only the high-level blueprint.) Examples
of product initiatives include:
• Improve customer satisfaction
• Increase lifetime customer value
• Upsell new services
• Reduce churn
• Add customer delight
• Break into new industries or geographical areas
• Sustain product features
• Increase mobile adoption

The Product Strategy Pyramid

What Is New Product Development?

New Product Development (NPD) is the total process that takes a service or a product from
conception to market. New or rebranded products and services are meant to fill a consumer
demand or an opportunity in the marketplace. The steps in product development include
drafting the concept, creating the design, developing the product or service, and defining
the marketing.

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A new product opens a whole new market: It can completely replace a current product, take
over an existing product, or simply broaden the market for something that already exists.
Sometimes existing products are introduced to new markets, repackaged, or marketed
differently. New products can improve the use of a company’s resources, launch a company
into a new market or segment of the market, improve the relationship a company has with
its distributors, or increase or defend a company’s market share
The following eight stages were developed to improve the new product’s marketability and
your team’s productivity once you have a product idea. After each stage is complete, you
must decide whether or not to continue.
Stage 1: Generating:
Your company has a product idea. The first step counts on your performance of
a SWOT analysis. In a SWOT analysis, also known as a SWOT matrix, you perform a basic
scan of your organization’s Strengths, Weaknesses, Opportunities, and Threats. Strengths
and Weaknesses are internal to your company, whereas the Opportunities and Threats are
external. Things to consider during your SWOT analysis are the current marketing trends,
return on investment (ROI), and any notable costs such as distribution. This step is where
you develop the roadmap for the product. Many experts advise developing more than one
road map scaled to fit different risk levels.
Stage 2: Screen the Idea
In this step, an objective group or committee reviews criteria that you developed and
decides to either continue or drop a project. This step is done quickly so that you drop any
ideas that do not make the cut. Market potential, competition, ROI, and realistic production
costs should be part of the criteria.
Stage 3: Test the Concept
In this step, you are testing the concept with your customers. This is after the internal
screening step, so the picture itself is more firm. The customers should be able to display
their understanding of the product, and say whether they want or need it. Their feedback
gives your company some marketing ideas and potential tweaks to the product itself.
Stage 4: Business Case Analysis
In this step, you have a fully formed product; the concept has been reviewed internally and
externally. At this time, you can develop a set of metrics and a business case. The metrics
should include the development time, the value of any launched products, the sales figures,

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and other data that shows the utility of your process. The business case should paint a
complete picture of the product, from the marketing strategy to the expected revenue.
Stage 5: Product Development
This is the step where your product takes flight. You are getting ready for consumer testing,
so the technical team must complete your design. During this step, you should complete
beta versions, settle on manufacturing methods, and address packaging.
Stage 6: Test Market
In this step, the whole concept is together and pitched to your consumer test group as the
beta test. In this way, you validate your concept. At this time, you should work out any
technical issues with the product.
Stage 7: Commercialization
This is the step that finally takes your product to launch in the marketplace. Complete final
marketing and prices, and give the finalized details to rest of your company - especially the
sales and distribution teams. Set up technical support to monitor customer’ needs.
Stage 8: Launch!
The launch plan should be comprehensive for maximum impact. At a minimum, include
these seven things in your launch plan:
1. Market research including who will buy your product
2. A competitive analysis outlining how your product is different and similar to the
competition, why customers may buy elsewhere, and how you will lure them to your
product
3. A marketing strategy and the test of the strategy with your focus group
4. A public relations program
5. A complete product
6. A marketing plan timeline
7. A trained and ready sales team
It is important to understand this model, as many firms still adhere to the traditional eight-
step process. The APQC revamped this eight-step model and consolidated into a five-step,
five-gate model. This also aligns with traditional process mapping. Stage zero of this
consolidated process is your innovation process with all of your company’s great ideas.
Stages one and two could ideally be categorized under the same screening step. Also, after

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you launch the product, you should perform a review of your process. The steps in this
consolidated and slightly reworked model are:
Stage 1: Discover new product ideas
Stage 2: Build your business case
Stage 3: Development
Stage 4: Test
Stage 5: Launch

Role Of Technology In Management Of Innovation:

Small-business owners play an important leadership role in identifying and applying new
technologies. By investing in initiatives that enable them to deliver effective and efficient
products and services, they discover innovative solutions to complex problems. Successful
innovation using technology requires expert project management, collaboration, planning
and implementation. Global competition and rigorous demand to bring products to
market faster influencse decisions. Effective strategies result in creative new systems,
technology, products and services.
Project Management
Successful small-business owners establish projects that enable strategic advancements.
Effective project managers follow the guidelines published in the Project Management
Institute’s “Project Management Body of Knowledge.” Using the five process groups,
known as initiating, planning, executing, monitoring and controlling, and closing, these
project managers take creative ideas and transform them into real products and services.
By gathering requirements, managing stakeholders and improving processes continuously,
they generate solutions that work.
Collaboration
The Internet provides opportunities for small-business owners to easily connect with
other entrepreneurs and learn by sharing tips, tricks and techniques. Using social media
technology, such as wikis, blogs and forums, innovators can get advice on how to solve
problems or troubleshoot complex issues. Collaborative platforms, such as Microsoft
Sharepoint, Jive or Google Docs, enable participants to share files, debate issues and rate
content. Managing innovation and technology tends to be an iterative process that

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requires input from many talented individuals. Even small-business employees can
interact on a global basis.
Process
Successful entrepreneurs develop strategies that enable them to solve business problems
in a creative way. By training their teams to use creative problem-solving processes, such
as the Simplex Process, these innovators view problems as opportunities. They identify the
problem by interviewing customers or evaluating current products. Then, the team
analyzes existing data and conducts market research to understand previous attempts to
solve the problem. They define the problem at the right level. Next, they generate ideas
through brainstorming and discussion. Finally, they select viable alternatives to pursue,
design and develop.
Analysis
An effective strategy for managing innovation and technology usually involves making use
of comprehensive analysis tools. These tools ensure the team can manage risk to minimize
negative impact and exploit opportunities. They also use decision-support tools, such
impact analysis and force field analysis, to examine possible outcomes and choose the
best solution to a problem. By calculating the net present value and internal rate of
return, the project manager ensures that the effort makes sense from a financial point of
view. Net present value represents the difference between cash intake and outflow. The
internal rate of return determines the rate of growth for a project. Accurately determining
whether the return from an investment might be worth less than investment itself
prevents business blunders.

Intellectual Property Rights:

The World Intellectual Property Organization (WIPO) – a specialist agency of the United
Nations – defines intellectual property as follows:
Intellectual property refers to creations of the mind: inventions; literary and artistic works;
and symbols, names and images used in commerce.
Why is IP important?
Intellectual property laws are intended to promote technical ingenuity and cultural
creativity by granting private ownership rights.

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There are several important practical reasons why you should protect your IP.
• protect it against infringement by others and ultimately defend in the courts your
sole right to use, make, sell or import it
• stop others using, making, selling or importing it without your permission
• earn royalties by licensing it
• exploit it through strategic alliances
• make money by selling it.
IP Rights protect several aspects of a business and each type of IP Right carries its own
advantages. The scope of IP Rights is very wide, but the prime areas of intellectual property
which are of utmost importance for any startup venture are as follows:
• Trademarks
• Patents
• Copyrights and Related Rights
• Industrial Designs
• Trade Secrets
TRADEMARKS
The Trade Marks Act 1999 ("TM Act") provides, inter alia, for registration of marks, filing of
multiclass applications, the renewable term of registration of a trademark as ten years as
well as recognition of the concept of well-known marks, etc. It is pertinent to note that the
letter "R" in a circle i.e. ® with a trademark can only be used after the registration of the
trademark under the TM Act.
Trademarks means any words, symbols, logos, slogans, product packaging or design that
identify the goods or services from a particular source. As per the definition provided under
Section 2 (zb) of the TM Act, "trade mark" means a mark capable of being represented
graphically and which is capable of distinguishing the goods or services of one person from
those of others and may include shape of goods, their packaging and combination of colors.
Points to Consider While Adopting a Trademark
Any startup needs to be cautious in selecting its trade name, brands, logos, packaging for
products, domain names and any other mark which it proposes to use. You must do a
proper due diligence before adopting a trademark.

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The trademarks, can be broadly classified into following five categories:

a. Generic
b. Descriptive
c. Suggestive
d. Arbitrary
e. Invented/Coined
Generic marks means using the name of the product for the product, like "Salt" for salt.
Descriptive marks means the mark describing the characteristic of the products, like using
the mark "Fair" for the fairness creams.
Suggestive marks means the mark suggesting the characteristic of the products, like
"Habitat" for home furnishings products.
Arbitrary marks means mark which exist in popular vocabulary, but have no logical
relationship to the goods or services for which they are used, like "Blackberry" for phones.
The invented/ coined marks means coining a new word which has no dictionary meaning,
like "Adidas". The strongest marks, and thus the easiest to protect, are invented or arbitrary
marks. The weaker marks are descriptive or suggestive marks which are very hard to
protect. The weakest marks are generic marks which can never function as trademarks.
India follows the NICE Classification of Goods and Services for the purpose of registration of
trademarks. The NICE Classification groups products into 45 classes (classes 1-34 include
goods and classes 35-45 include services). The NICE Classification is recognized in majority of
the countries and makes applying for trademarks internationally a streamlined process.
Every startup, seeking to trademark a good or service, has to choose from the appropriate
classes, out of the 45 classes.
While adopting any mark, the startup should also keep in mind and ensure that the mark is
not being used by any other person in India or abroad, especially if the mark is well-known.
It is important to note that India recognizes the concept of the "Well-known Trademark"
and the principle of "Trans-border Reputation".
Example of well-known trademarks are Google, Tata, Yahoo, Pepsi, Reliance, etc. Further,
under the principle of "Trans-border Reputation", India has afforded protection to
trademarks like Apple, Gillette, Whirlpool, Volvo, which despite having no physical presence
in India, are protected on the basis of their trans-border reputation in India.

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Enforcement of Trademark Rights

Trademarks can be protected under the statutory law, i.e., under the TM Act and the
common law, i.e., under the remedy of passing off. If a person is using a similar mark for
similar or related goods or services or is using a well-known mark, the other person can file
a suit against that person for violation of the IP rights irrespective of the fact that the
trademark is registered or not.
Registration of a trademark is not a pre-requisite in order to sustain a civil or criminal action
against violation of trademarks in India. The prior adoption and use of the trademark is of
utmost importance under trademark laws.
Patents
Patent, in general parlance means, a monopoly given to the inventor on his invention to
commercial use and exploit that invention in the market, to the exclusion of other, for a
certain period. As per Section 2(1) (j) of the Patents Act, 1970, "invention" includes any new
and useful;
i. art, process, method or manner of manufacture;
ii. machine, apparatus or other article;
iii. substance produced by manufacture, and includes any new and useful improvement
of any of them, and an alleged invention;
The definition of the word "Invention" in the Patents Act, 1970 includes the new product as
well as new process. Therefore, a patent can be applied for the "Product" as well as
"Process" which is new, involving inventive step and capable of industrial application can be
patented in India.
The invention will not be considered new if it has been disclosed to the public in India or
anywhere else in the world by a written or oral description or by use or in any other way
before the filing date of the patent application. The information appearing in magazines,
technical journals, books etc, will also constitute the prior knowledge. If the invention is
already a part of the state of the art, a patent cannot be granted. Examples of such
disclosure are displaying of products in exhibitions, trade fairs, etc. explaining its working,
and similar disclosures in an article or a publication.
It is important to note that any invention which falls into the following categories, is not
patentable: (a) frivolous, (b) obvious, (c) contrary to well established natural laws, (d)
contrary to law, (e) morality, (f) injurious to public health, (g) a mere discovery of a scientific

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principle, (h) the formulation of an abstract theory, (i) a mere discovery of any new property
or new use for a known substance or process, machine or apparatus, (j) a substance
obtained by a mere admixture resulting only in the aggregation of the properties of the
components thereof or a process for producing such substance, (k) a mere arrangement or
rearrangement or duplication of known devices, (l) a method of agriculture or horticulture,
and (m) inventions relating to atomic energy or the inventions which are known or used by
any other person, or used or sold to any person in India or outside India. The application for
the grant of patent can be made by either the inventor or by the assignee or legal
representative of the inventor. In India, the term of the patent is for 20 years. The patent is
renewed every year from the date of patent.
Use of Technology or Invention
While using any technology or invention, the start-up should check and confirm that it does
not violate any patent right of the patentee. If the start-up desires to use any patented
invention or technology, the start-up is required to obtain a license from the patentee.
Enforcement of Patent Rights
It is pertinent to note that the patent infringement proceedings can only be initiated after
grant of patent in India but may include a claim retrospectively from the date of publication
of the application for grant of the patent. Infringement of a patent consists of the
unauthorized making, importing, using, offering for sale or selling any patented invention
within the India. Under the (Indian) Patents Act, 1970 only a civil action can be initiated in a
Court of Law. Like trademarks, the relief which a court may usually grant in a suit for
infringement of patent includes permanent and interim injunction, damages or account of
profits, delivery of the infringing goods for destruction and cost of the legal proceedings.
COPYRIGHT
Copyright means a legal right of an author/artist/originator to commercially exploit his
original work which has been expressed in a tangible form and prevents such work from
being copied or reproduced without his/their consent.
Under the Copyright Act, 1957, the term "work", in which copyright subsists, includes an
artistic work comprising a painting, a sculpture, a drawing (including a diagram, a map, a
chart or plan), an engraving, a photograph, a work of architecture or artistic craftsmanship,
dramatic work (recitation, choreographic work), literary work (including computer

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programmes, tables, compilations and computer databases), musical work (including music
as well as graphical notations), sound recording and cinematographic film.
In the case of original literary, dramatic, musical and artistic works, the duration of copyright
is the lifetime of the author or artist, and 60 years counted from the year following the
death of the author and in the case of cinematograph films, sound recordings, posthumous
publications, anonymous and pseudonymous publications, works of government and works
of international organizations are protected for a period of 60 years which is counted from
the year following the date of first publication.
In order to keep pace with the global requirement of harmonization, the Copyright Act,
1957 has brought the copyright law in India in line with the developments in the information
technology industry, whether it is in the field of satellite broadcasting or computer software
or digital technology.
Registration of Copyright
In India, the registration of copyright is not mandatory as the registration is treated as mere
recordal of a fact. The registration does not create or confer any new right and is not a
prerequisite for initiating action against infringement. The view has been upheld by the
Indian courts in a catena of judgments. Despite the fact that the registration of copyright is
not mandatory in India and is protectable through the International Copyright Order, 1999,
it is advisable to register the copyright as the copyright registration certificate is accepted as
a "proof of ownership" in courts and by police authorities, and acted upon smoothly by
them.
Enforcement of Copyright in India
Any person who uses the original work of the other person without obtaining license from
the owner, infringes the copyright of the owner. The law of copyright in India not only
provides for civil remedies in the form of permanent injunction, damages or accounts of
profits, delivery of the infringing material for destruction and cost of the legal proceedings,
etc, but also makes instances of infringement of copyright, a cognizable offence punishable
with imprisonment for a term which shall not be less than six months but which may extend
to three years, with a fine which shall not be less than INR 50,000 but may extend to INR
200,000
For the second and subsequent offences, there are provisions for enhanced fine and
punishment under the Copyright Act. The (Indian) Copyright Act, 1957 gives power to the

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police authorities to register the Complaint (First Information Report, i.e., FIR) and act on its
own to arrest the accused, search the premises of the accused and seize the infringing
material without any intervention of the court.
INDUSTRIAL DESIGNS
As per the definition given under Section 2(d) of the Designs Act, 2000, "design" means only
the features of shape configuration patterns or ornament applied to any article by any
industrial process or means whether manual mechanical or chemical separate or combined
which in the finished article appeal to and are judged solely by the eye. However, "design"
does not include any mode or principle of construction or anything which is in substance a
mere mechanical device and does not include any trademark as defined under the TM Act
or any artistic work as defined under the Copyright Act, 1957. The total period of validity of
registration of an Industrial Design under the (Indian) Designs Act, 2000 is 15 years.
Features of shape, configuration, pattern, ornament or composition of lines or colours
applied to any article, whether in two dimensional or three dimensional or in both forms,
can be registered under the (Indian) Designs Act, 2000. However, functionality aspects of a
design are not protected under the (Indian) Designs Act, 2000, as the same are subject
matter of patents.
Design of an article is not registrable in India, if it:
• is not new or original;
• has been disclosed to the public anywhere in India or in any other country by
publication in tangible form or by use in any other way prior to the filing date or
priority date of the application;
• is not significantly distinguishable from known designs or combination of known
designs; or
• comprises or contains scandalous or obscene matter.
Enforcement of Design Rights in India
The (Indian) Designs Act, 2000, only provides for civil remedies. Besides injunction,
monetary compensation is recoverable by the proprietor of the design either as contract
debt or damages. An action for infringement of design can only be initiated after the
registration of the design, however, an action for passing-off is maintainable in case of
unregistered design.

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TRADE SECRETS
Trade secrets includes any confidential business information which provides an enterprise a
competitive edge over others. Trade secrets encompass manufacturing or industrial secrets
and commercial secrets, formula, practice, process, design, instrument, pattern, commercial
method, or compilation of information which is not generally known or reasonably
ascertainable by other.
The unauthorized use of such information by persons other than the holder is regarded as
an unfair practice and a violation of the trade secret. There are no specific statutes under
the Indian law for the protection of trade secrets and the same are protectable under the
common law rights.
STRATEGIES FOR PROTECTION AND EXPLOITATION OF IPR FOR STARTUPS
1.Make Intellectual Property protection a priority:
Start-ups cannot afford the complete protection available under the intellectual property
regime. The first step for any startup is to evaluate and prioritize the IP Rights involved in its
business. Depending upon the type of industry involved, IP Rights play an important role.
Failure to identify or prioritize IP Rights, is likely to create problems for startup's business,
especially during negotiations with future investors or exiting its business. Sometimes IP
Rights are the only asset available with a startup.
2.Register Intellectual Property Rights:
It is important to note that certain IP Rights like patents and designs are required to be
registered before claiming any protection under the respective statutes. On the other hand,
certain IP Rights like trademark and copyright need not be mandatorily registered for
protection under. Nevertheless, a registered IP Right carries a greater value and acts as
evidence of use of the IP Rights before courts as well as enforcement agencies;
3.Due Diligence of IP Rights:
For any startup, it is indispensable that it does not violate IP Rights of any other person. This
will ensure safety from unwarranted litigation or legal action which can thwart its business
activities. This makes it even more important for startups to make careful IP decisions in the
initial phase and conduct proper due diligence of IP Rights, which it is using or intends to
use.

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4.Implement clear and effective policies and strategies for protection of IP Rights:
It is in the long term interest of startups to have an Intellectual Property Policy for
management of various IP rights which may be presently owned, created or acquired in
future by startups. The aim of such a policy is to ensure that there are no inter-se dispute
between the promoters of the startups, which remains till date to be one of the main
concerns for failure of startups.
5.Agreements related to Intellectual Property:
It is pertinent to note that having proper documentation in the form of agreements like
non-disclosure agreements, agreements with employees or independent contractors, can
make all the difference between the success and failure of startups. Usually, intellectual
property is created either by the founders or some key employee or a third party. The
intellectual property so created, must be protected through a proper agreement between
the founder or key employee or a third party, as the case may be and the startup. If the
agreement, with founders or employees or a third party, , under which a novel idea was/is
created, is overlooked, it could create bottlenecks later after such idea becomes successful.
Accordingly, the startups need to ensure that anything created on behalf of the startup,
belongs to the startup and not the Employee or a third party. Further, it is advisable to enter
into elaborate assignments, licensing or user agreements, and care should be taken to make
provisions for all post termination IP Right issues.

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