Unit-2

Innovation

• Innovation is the process of taking something that

already exists and improving it, whether it is a product,
a service or even a process. It can be as simple as
making a small change or as complex as completely
overhauling an entire system or creating new marketing
with a new product. But whatever form it takes,
innovation always involves creativity and risk-taking.
Innovation can be a key driver of economic growth, and
companies that can innovate systematically tend to be
more successful than those that do not.
8 Fields of Innovation

• Innovation can be in different forms and outcomes. When we talk about innovation, most
people think of new products while there is a wide array of different innovation outcomes
possible. Here we list the most common
• 1. Product & Product Performance Innovation
• Either a new product is developed or the performance of an existing product is improved.
This kind of innovation is very common in the business world.
• 2. Technology Innovation
• New technologies can be also the basis for many other innovations. The best example was
the Internet, which was itself an innovation but also lead to other innovations in various
fields.
• 3. Business Model Innovation
• Many of the most successful companies in the world managed to innovate their business
model. Using different channels, technologies and new markets can lead to new possible
business models which can create, deliver and capture customer value. Digital ecosystems
are a well-known example of innovation using several technologies and creating a whole
new type of business. Digital Business models pose one of the biggest opportunities for
innovation at the moment.
• 4. Organizational Innovation
• Managing and sharing resources in a new way can also be an innovation. This way
it’s possible to use resources and assets in a completely new way.
• 5. Process Innovation
• Innovation in the processes can improve the efficiency or effectiveness of existing
methods. Possible process innovations involve production, delivery, or customer
interaction.
• 6. Marketing / Sales – New Channel Innovation
• New methods to capture and hold attention from customers. Either through the
use of innovative marketing/sales concepts or the use of new channels for
customer acquisition/sales.
• 7. Network Innovation
• By connecting different groups and stakeholders it might be possible to create
extra value. This type of innovation is very common due to the use of ICT services.
• 8. Customer Engagement / Retention
• Innovative concepts that try to increase the engagement of customers and keep
the retention up. The goal is to have innovative models to keep the customers
“locked-in” or engaged.
The 4 Types of Innovation

• The 4 different types of innovation are

• Incremental Innovation
• Architectural Innovation
• Disruptive Innovation
• Radical Innovation
1. Incremental Innovation

• Existing Technology, Existing Market

• One of the most common forms of innovation that we can
observe. It uses existing technologies within an existing
market. The goal is to improve an existing offering by
adding new features, changes in the design, etc.
• Example
• The best Example for incremental innovation can be seen
in the Smartphone market where the most innovation is
only updating the hardware, improving the design, or
adding some additional features/cameras/sensors, etc.
2. Disruptive Innovation

• New Technology, Existing Market

• Disruptive innovation is mostly associated with applying new technologies,
processes, or disruptive business models to existing industries. Sometimes
new technologies and business models seem, especially in the beginning,
inferior to the existing solutions but after some iterations, they surpass the
existing models and take over the market due to efficiency and/or efficacy
advantages.
• Examples
• Amazon used Internet-Technologies to disrupt the existing industry for
book-shops. They had the existing market for books but changed the way it
was sold, delivered and experienced due to the use of disruptive
technologies. Another example was the iPhone, where existing technologies
in the market (Phones with buttons, keypads, etc.) were replaced with
touch-interface-centered devices combined with intuitive user interfaces.
3. Architectural Innovation

• Existing Technology, New Market

• Architectural innovation is something we see with tech giants like
Amazon, Google, and many more at the moment. They take their
domain expertise, technology, and skills and apply them to a
different market. This way they can open up new markets and
expand their customer base.
• Examples
• Especially digital ecosystem orchestrators like Amazon and Alibaba
use this innovation strategy to enter new markets. They use existing
expertise in building apps, platforms, and their existing customer
base to offer new services and products for different markets. A
recent example for this:
Amazon recently entered the medical care field.
4. Radical Innovation

• New Technology, New Market

• Even it is the stereotypical way most people see
innovation; it is the rarest form of them all. Radical
innovation involves the creation of technologies, services,
and business models that open up entirely new markets.
• Example
• The best example of radical innovation was the invention
of the airplane. This radical new technology opened up a
new form of travel, invented an industry, and a whole new
market.
Idea Generation in Entrepreneurship

• An idea signals the beginning of the entire innovation

process. It is important to induce changes that are
necessary for an organization’s improvement. Without
ideas, nothing navigates an innovation strategy, and no
value for either the company or the market can be
generated.
• Idea generation involves making, initiating, and disseminating
theoretical, palpable, and perceptible ideas.
Idea generation techniques
1. Mind Mapping
• Mind mapping involves linking different information or ideas
together. It helps people gain a better understanding of a subject’s
intricacy.
• In mind maps, thoughts are written down and connections are
established between them. Lines and curves are drawn to illustrate its
association, and a chain of relationships is made.
• In making mind maps, a problem, a word, or a phrase is written in the middle,
and everything that comes to mind, or is related to it (particularly potential
solutions, causes, effects, etc.), is positioned around its corners, surrounding
the keywords in the middle.
• This structure allows participants to understand the idea as a whole,
identify blind spots, and incorporate their insights and opinions from
time to time.
• To perform this task more efficiently, mind mapping software solutions are
used. With it, the entire process becomes conveniently digitized. The entire
process is done faster, and communication over concepts is a lot easier to
2. Storyboarding
• Creating a storyboard is another way of creatively introducing
data and information. Words, quotes, pictures, and other
necessary information are obtained from either the participants or
by doing research.
• The information gathered is then visually manipulated into a
specific order or format in an effort to identify if
connections among these pieces of information can be made
to narrate a story or communicate a general idea.
• As the story is further refined and modified to achieve its
purpose, the final story illustrates how an organization’s ideas work
alongside each other to solve a particular problem or accomplish
innovation.
• A story is then formed to see how these ideas work
alongside each other — an effort made to identify if
connections among this information can be made possible.
3. SCAMPER
• The SCAMPER technique involves seven actions to
implement critical thinking by refining existing
concepts, ideas, and processes in solving
problems to come up with favorable solutions.
• These seven actions help organizations spark
thoughts and generate ideas through different
approaches that encourage people to think about ways
of creating new products, concepts, ideas, and
processes by improving existing ones.
SCAMPER stands for:

• Substitute: The substitution method includes replacing a fragment of your product, concept,
or process with a specific alternative to acquire a greater end result.
• Combine: This method examines ideas that can be integrated for a more impactful and
effective solution.
• Adapt: Adaptation refers to the evaluation of current processes to identify which parts are in
need of improvements and extensive attention.
• Modify: To modify an idea means to thoroughly analyze problems and opportunities to
achieve progress in every aspect of the business, especially in innovating products and
services.
• Put to another use: This technique centers around utilizing ideas and existing solutions in
other areas other than its current purpose, including a review of its possible benefits, once
implemented on other parts of the business.
• Eliminate: Elimination refers to the removal of one or more parts of a concept to see if it gives
a better outcome.
• Reverse: To reverse means to backpedal on interchangeable components of an idea, a
concept, or a process.
4. Idea Challenge
• An idea challenge focuses on giving out time-limited challenges that respond to a
problem or an opportunity by generating creative solutions and other innovative
ways around a specific theme.
• It enables companies to devise questions and problems to collect insights from a
particular set of participants. However, before setting it up, it is important to clearly
understand the results to expect, and what to do with the information obtained.
The things to consider when organizing an idea challenge are the following:
• Theme
• Participants
• Responsibilities
• Prize
• Time
• Channels
This method is an open innovation tactic that will enable you to gather ideas from a
large group of people. Fortunately, organizing an innovation challenge is easier than
you think even if there are some aspects that make it a bit hard to mana
5. Role Playing
• From the name of the technique itself, role-playing takes
on scenarios through various perspectives. It includes
acting out situations that are observed during the
research phase of the innovation process.
• It works for both team-based and user-end idea generation
processes.
• Just like other role plays, people play the persona of a likely user
or any other person whose experience relates to the session’s
objectives (a service provider, a client, or anybody from the upper
management).
• It aims to perceive how a certain persona may think, feel, and
react towards a certain idea.
• In comparison to other idea generation methods, role-playing
enables natural, realistic, and unconstrained responses. It creates
numerous scenarios that can withdraw diverse ideas from
different participants.
6. Reverse Thinking
• Reverse thinking is a method that strives to come
up with ideas that aren’t normally done. It provides
unconventional solutions that avoid and identify
possible mistakes pertaining to the implementation
of ideas collected via research.
• With this kind of approach, knowing and understanding
the DONTs in every situation is just as essential as
knowing the DOs.
• Reverse thinking also entertains the opposite of logical
responses when solving problems. It may seem confusing
at first but the production of ideas for the negative side of
things might surprisingly come in handy at some point.
7. Brainwriting
• Brainwriting is an excellent way to encourage creativity,
share new ideas, and generate innovative solutions.
• In brainwriting, those who are too shy or reluctant
to speak are given the chance to air out their
insights. Participants are asked to write their ideas
on solving specific problems or handling
opportunities on sheets of paper for a few minutes.
8. Thinking Hats
• The thinking hats technique makes use of six different personas
that participants are ought to live in a role play.
These roles are:
• Optimism
• Emotion
• Creativity
• Management
• The Problem
• The Devil’s Advocate
• It’s still like role-play, but with clear and definite scopes for each person
to act and tackle. These roles come up with ways in which groups can
approach innovation and react to ideas in a cohesive and comprehensive
manner.
• Although these roles establish boundaries on how participants may
take on situations, it pushes everybody in the room to think harder
at the same time.
9. Analogical Thinking
• Analogical thinking solves problems by thinking
laterally.
• As analogy by itself means comparing two things by
their known similarities, this technique focuses on
applying information gathered from previous problems in
dealing with present circumstances with the same
context.
• It utilizes ideas, concepts, and processes that are
pre-validated, which might make it a little unideal
for companies because of how common and
unchallenging it is to do.
10. Social Listening
• Social listening includes the feedback of customers
in generating innovative ideas. It taps into a
company’s communication lines with its users,
seeking out their opinions with regards to their
products and services.
• This technique is utilized by brands to track, analyze,
and respond to conversations about their business on
social media.
• It is a vital part of audience research that involves
monitoring keywords, rival companies, and other related
information on various media channels.
• As social media monitoring focuses on metrics,
social listening zeroes in on applying data obtained
from the feedback, feelings, and opinions of a
specific target market.