DEVELOPING CREATIVITY

AND UNDERSTANDING
INNOVATION
TOPIC 4
 INNOVATION & ENTREPRENEURSHIP
“ Innovation is the specific tool of entrepreneurs,
the means by which they exploit change as an
opportunity for a different business or service. It
is capable of being presented as a discipline,
capable of being learned, capable of being
practiced”
- Peter Drucker (1985) Innovation &
Entrepreneurship
 cont…
 Driven by entrepreneurship – a potent mixture of
vision, passion, energy, enthusiasm, judgment, &
plain hard work which enables goods ideas to
become a reality.
 Output of individuals, whether acting alone or
embedded within organizations.
 Entrepreneur need innovation to produce
something to be offered, to growth and to survive
and innovation always exist from entrepreneur.
Entrepreneurship drives innovation
 Three core concepts in Bessant & Tidd
(2007) books
 Innovation
As a process which can be organized and managed,
whether in start up venture or in renewing a 100 year old
biz.
 Entrepreneurship

As the motive power to drive this process via the effort of

passionate individuals, engaged teams & focus networks.
 Creating value

As the purpose for innovation, whether expressed in

financial terms, employment or growth
 Managing Innovation
 Recognizing the opportunity.
• Entrepreneur must able to spot opportunity from a forest of
possibilities.
• Sources of opportunities.
• Changes in behavior of customer, government, competitors
and etc..
 Finding resources.
• Making it happen is critical and need time, money,
knowledge or support from other and etc.
• Must evaluate whether the idea is workable – has
commercialization value.
 Cont…
 Developing venture.
• Plan accordingly on how the idea can be produced and
delivered to targeted people.
• There is no guarantee that people in the market will accept
the product/service.
 Creating value.
• Able to recognize types of value that we want to generate
form the product or service.- wealth, self satisfaction, social
value or etc,
• How we can capture those value from it.
• How we can recover the efforts that we put in it in order to
make it happen.
 CASE - ZARA
Things have moved on somewhat since then. Industria de Diseno Textil – Inditex
– the holding company which he established – is now worth around US$8 billion
and has just opened its two-thousandth store in Hong Kong. Active in nearly 70
countries this textile and clothing business has 8 key brand groups, each targeted
at particular segments or product types – for example, ‘Pull and Bear’ for
children, ‘Massimo Dutti’ for older men and women or ‘Oysho’ in lingerie. Best
known of these is ‘Zara’ – a global brand with strong design and fashion identity
running through both the clothes and the stores in which they are sold. Its clothes
combine stylish designs with a strong link to current high fashion themes with
moderate prices. As Lotte Freddie, fashion editor of the Danish dail y newspaper
Berlingske Tidende, commented, ‘If you want a classic, Italianate look in tune
with current styles and at a reasonable price go to Zara.’ Zara’s successful growth
is not simply a matter of low cost or of standardization but rather of innovation.
ZARA’s INNOVATION
 Managing Innovation
 Success in innovation is about having
capabilities to manage them.
 In order to succeed we need to:
I. Understand what we are trying to manage.
II. Understand the key message about what
makes for successful management of the
innovation process.
III. Have a clear sense of purpose and direction.
IV. Recognize that is a moving target.
 Types of innovation
(Kuratko & Hodgett 2007)
 Invention – novel & untried
 Extension – expansion/different
application of current idea
 Duplication – replication of an existing
products/creative touch to improve the
concept to beat the competition
 Synthesis – combination of existing
concepts into new formulation.
 Innovation in action
Type Description Examples
Invention Totally new product, Wright brothers
service & process Thomas Edison
Alexander Graham Bell
Extension New use or different Ray Kroc – Mc Donalds
application of existing
product
Duplication Creative replication of an WalMart –department
existing concept stores
Synthesis Combination of existing Fred Smith - FEDEX
concepts into new
formulation or use
 UNDERSTANDING THE INNOVATION
PROCESS
(Bessant & Tidd 2015)

 Innovation can take many forms but they can be reduced

to four dimensions of change:
1. Product innovation – changes in the things which an
organization offers.
2. Process innovation – changes in the ways in which they
are created & delivered.
3. Position innovation – changes in the context in which
the products/services are introduced (repositioning the
perception).
4. Paradigm innovation – changes in the underlying
mental models which frame what the organization does.
Product Innovation - new car design
Process innovation – changes in
manufacturing methods
Position innovation – soft drinks to
healthy drinks
Paradigm innovation – shift to low cost
airlines
 From Incremental to Radical Innovation.
 Incremental
• A series of small improvements to an existing product or product
line that usually helps maintain or improve its competitive
position over time.
• Incremental innovation is regularly used within the high
technology business by companies that need to continue to
improve their products to include new features increasingly
desired by consumers.
• Business leaders often assert high overall innovation failure
rates, varying anywhere between 70 to 98%. Contending with
this level of failure makes incremental changes look attractive
when considering the risk associated with innovation
investments.
 Cont…
 Radical
sometime referred to as breakthrough,
discontinuous or disruptive innovations that
provide something new to the world that we live
in by uprooting industry conventions and by
significantly changing customer expectations in
a positive way. Ultimately, they often end up
replacing existing methods / technologies.
Cont…
We can change things at the level of
components or a whole system
A Model of Innovation
& Entrepreneurship
 The Context of Success in Innovation
 Clear strategic, leadership & direction &
commitment of resources
 Structure & climate which enables people to deploy
their creativity & share their knowledge to bring out
change.
 Proactive links across boundaries inside the
organization and to the many external agencies who
can play a part in the innovation process (eg:
suppliers, customers, sources of finance, skilled
resources, knowledge etc)
END OF TOPIC 4
THANK YOU….