UNIT 8

Contents
P1 Explain innovation and determine its importance to organizations in comparison with invention....1
Definition of Invention.............................................................................................................................1
Innovation life cycle – different emphasis over time...................................................................................2
New product development and innovation:................................................................................................2
PESTLE Analysis:......................................................................................................................................2
 Political:...................................................................................................................................................2
Economical:.............................................................................................................................................2
Social:......................................................................................................................................................3
Technological:..........................................................................................................................................3
THE IMPORTANCE OF TECHNOLOGY TO INNOVATION:...........................................................................3
Summary:-...............................................................................................................................................3
P2 Explain howorganisational vision, leadership, culture and teamwork can shape innovation
andcommercialisation................................................................................................................................4
M1 Analyze different sources of innovation, and how organizations can foster and develop an
environment and culture of innovation?...................................................................................................5
Lead from the front.................................................................................................................................5
Create a culture of innovation.................................................................................................................5
Build effective teams...............................................................................................................................6
Reward failure.........................................................................................................................................6
Take ownership of client problems.........................................................................................................6
Benchmark against the best....................................................................................................................6
Summary:-...............................................................................................................................................6
In this Task we explain and Analyze different sources of innovation, and how organizations can foster
and develop an environment and culture of innovation.............................................................................6
D1 Critically analyses how innovation is developed, embedded and measured in an organizational
context........................................................................................................................................................7
Purpose...................................................................................................................................................7
Design/methodology...............................................................................................................................7
Findings...................................................................................................................................................7
Practical implications...............................................................................................................................7
Originality/value......................................................................................................................................7
P3 explain the 4Ps of innovation and explain these of the innovation funnel to examine and shape
innovative ideas..........................................................................................................................................7
.................................................................................................................................................................... 8
Summary:-.............................................................................................................................................10
P4 Explain developments in frugal innovation and provide examples of how it is used in an
organizational context..............................................................................................................................10
What is Frugal Innovation?....................................................................................................................10
Why do we need Frugal Innovations?...................................................................................................11
Make something people want...............................................................................................................12
 Not a code word for cheap or outsourcing............................................................................................12
Summary:-.............................................................................................................................................12
P5 Explain the importance of the commercial funnel and the application of New Product Development
(NPD) processing for commercialization of innovation...........................................................................13
P6 Build an Innovation Business Case for an organization, including ways to access funding...............13
The business case for innovation...........................................................................................................13
Approaches to innovation.....................................................................................................................13
Encourage innovation in your business.................................................................................................14
Summary-..............................................................................................................................................14
M4 Build a detailed Innovation Business Case which includes how to measure its overall.......................15
What to keep in mind when measuring innovation?.............................................................................15
Why measuring innovation is worth it?.................................................................................................15
Choose metrics with caution.................................................................................................................15
Innovator's dilemma..............................................................................................................................15
Input metrics vs. output metrics............................................................................................................15
Output metrics......................................................................................................................................16
The Key Types of Innovation Metrics.....................................................................................................16
Summary-..............................................................................................................................................16
D2 Critically evaluate the nature of innovation and the context in which it is developed, providing
evidence-based judgments on how organizations can overcome challenges to develop successful
innovation.................................................................................................................................................16
Overcoming Challenge No. 1: Intellectual Property Issues and Legal Risks...........................................17
Overcoming Challenge No. 2: Processing Ideas Efficiently....................................................................18
Overcoming Challenge No. 3: Establishing an Efficient Internal Structure.........................................18
Summary:-.............................................................................................................................................18
P7 Evaluate the different tools that organizations................................................................................19
Pegboard:..............................................................................................................................................19
Customizable tool foam:........................................................................................................................19
Vinyl shadow board tape.......................................................................................................................19
Summary:-.............................................................................................................................................19
M5 Present supported evidence-based evaluation of these different tools in the context of the wider
business environment...............................................................................................................................19
PESTEL...................................................................................................................................................20
Political..................................................................................................................................................21
 Economic...............................................................................................................................................21
Social.....................................................................................................................................................21
Technological.........................................................................................................................................21
Environmental.......................................................................................................................................21
Legal......................................................................................................................................................22
Summary:-.............................................................................................................................................22
References.................................................................................................................................................22
Bibliography...............................................................................................................................................24
P1 Explain innovation and determine its importance to
organizations in comparison with invention.

Definition of Invention

The term ‘invention’, is defined as the act of creating, designing or discovering a device,
method, process, that has not existed before. In finer terms, it is a novel scientific idea
conceived through research and experimentation that turns into a tangible object. It can be a
new process of producing a product or may be an improvement upon a product or a new
product. Inventions can be patented, as it provides security to the inventor, for intellectual
property rights, and also identifies it as an actual invention. Further, different countries have
different rules for obtaining the patent and the process is also costly. To be patented, the
invention must be novel, have value and non-obvious.[ CITATION Dif201 \l 1033 ]

Innovation and growth is not just about products or solutions, it is also about creating a
transformational change in the way people live, work and play said by Joachimsthaler ( Hidden
in plain sight, Chapter 26).Innovation also has two aspects incremental and radical. Incremental
innovation is a process day to day change to continuous improves quality and productivity
through innovation. Like Telephone, electric lighting. They all depended upon the steady
incremental improvement in a range of associated technologies like glass blowing, bacum
pumping and so on. ‘Incremental innovation is essential to continued pharmaceutical discovery’
[the temple university report]. The vast majority of clinically important drugs developed over
the last 50 years and have resulted from an incremental process, which involved multiple, small
test, successive improvements within a pharmacological [Wertheimer, Levy, AND Connor,
1994]. The pharmaceutical industry must base on incremental innovation, due to incremental
changes’ advantage and radical innovation’s potential risks. Therefore, most of drugs or
medicines are considered to be incremental innovations.

Innovation life cycle – different emphasis over time

Product innovation and Process innovation shows the difference over the time in the
Innovation Life Cycle.LG’S optimums 2x, due for release in March 2010, is being billed as the
world’s first dual core android operated Smartphone. Higher computing power will allow for
faster mobile internet speeds, further opening the door to live streaming of sport and TV
shows, possibly proving attractive for more sophisticated mobile users. [Mintel 2011]Another
illustrative example is Swiss Watch industry. They changed from mechanical to digital watches;
the industry was eventually re-vitalized by positioning the watch as a luxury good.

New product development and innovation:

As the number of consumers and the demand for innovative products grows, ‘a company’s
ability to successfully identify and launch new products’ has become one of the significant key
to success. ‘New Product success is vital to the growth and prosperity of the modern
corporation’ [Cooper, 2009]. The development of new products and processes has enabled
many organizations or firms to continue to grow. There is a wide strategy for organization to
expand their business, new products development relies on innovations and resources and
capabilities. 

PESTLE Analysis:
PEST is one of Tool using to analyze the environment changes, this tool covering political,
economic, social, and technological. In this Dynamism environment, many firms or people need
to increase their capacity for discontinuous innovation in order to catch current state of
environment. The following PEST examines how the external environment changes and how
originations respond to that by using innovation.

Political:
Political change which means a change in government or in government policy also occurs and
shapes the possibility to organizations. Political include government policies, legislation and
foreign influences, particularly from the WTO. For instances, the improvement on the
employment law like wages limited and working hours limited provides help to some low-paid
workers and also help their more understand their own rights in the work. Such the
immigration this policy changes in the UK have positive and negative for UK businesses and the
economy.

Economical:
Economic changes relate to changes in the wider economy, a growing market economy cannot
always stay in equilibrium due to change of economical and other factors. such as people’s
living standards have risen and the demand to products and services also improve, the demand
to new, good, quality products or services also growth. Such as luxuries products competitions
between different organization and brand.

Social:
Social change link to changes in wider society such as changes in lifestyles, consumer’s
behavior. It is not easy to as major social changes has been that many people are working from
home today using Home Pc to communicate with their offices. This changes has been change
the style of traditional work way. This also has led to a reduction in demand for office let,
transport, because there are many people transport by rail, bus or private car. For example,
Primary’s success business comes from meeting these customers’ needs by making clothes with
popular design and sourcing products efficiently and sell these clothes in an ethical and fair way
with reasonable prices.

Technological:
Technological play complementary role in the process of innovation and change for
organizational, improving management, producing high technology product or services
Technological changes relate to the application of new inventions and ideas such as the
development of the media (radio, TV, internet, Newspaper), as these are organizations tools to
explore new areas. Rapid changes in these communication technologies have already made the
world economy more interconnected than past history.

THE IMPORTANCE OF TECHNOLOGY TO INNOVATION:

Technology is one of the main activities that will pull innovation and organizations growth.
Existing product and market can benefit from technology innovation, and also can potential
lead innovation across the organization. Several watch manufactures have incorporated
technology into their designs. For example, Japanese watch vendor Tokyo flash has unveiled a
USB rechargeable watch and Kempner & Strauss has launched a new GSM cell phone
wristwatch featuring a touch screen that can been used to listen and store music, make calls,
text, take photos and to store voice recordings, photos and videos.

“Importantly innovation and competitive success are not simply about high-technology
companies”. Small or Medium size of companies also have successful example through
innovation.

“The skill to spot opportunities and create new ways to exploit them is at the heart of the
innovation process”[ CITATION Def03 \l 1033 ]

Summary:-
In this task we explain Definition of innovation and determine its importance to organizations in
comparison with invention In order to succeed in the fierce competition, organizations
need effective implementation mechanisms to move innovations from idea or
opportunity through to reality. And Furthermore, innovation depends on having a
supporting organizational context which creative ideas can emerge and be effectively
deployed sometimes, some innovation can lead to significant changes in organizations
and even in society.

P2 Explain how organizational vision, leadership, culture and

teamwork can shape innovation and commercialization.
A company vision provide a clear image of working purpose and insight about goals. These
goals clarification encourage to employees for effective work performance on time. In respect
of Amazon Go, managers should clear their vision to attaining futuristic goals. Secondly
leadership power, a good leader faces many challenges with team members and resolve critical
situation smoothly. They understand company's culture and treat people accordingly by
encouraging to teamwork. These aspects are discussing below statements: Organizational
vision: This aspects clear all objectives and futuristic goals to every people who is working in an
organization. Amazon Go has solid vision which is based on deep learning algorithms and
computerized techniques. This allows buying activities without facing public queue and
checkouts to their customers. New sensor fusion technique is fascinating to new customers as
well existing people. Company must know about customer preference and demand so they can
easily think about for further modification in services. Thus, under-stable vision open the doors
for invention and assist to financial growth. Leadership: It is the power of a person which comes
by their personality, knowledge and experience within an organization. Good team player gives
contribution in counselling, coaching, learning support, conflict resolution, strike for employees
rights and so on. In respect of Amazon Go, manager observers to customer's convenience and
makes strategies on services. They always willing for understanding the concept of people’s
need so they can work for innovation. These initiative techniques enable to high profitability
and create a better image in market segment. Culture: This refers to work experience,
assumptions, policies, norms and procedures within an organization. Every company has
different targets along with its policies and beliefs that mandatory for employees. Amazon Go
should follow better working environment which has no discrimination between employees. A
positive atmosphere provides assistance in increasing enthusiasm at working station. So
members will more willingness to give their best performance by supporting to each other in
supportive manner. Collaborative behavior and positivity in working environment lead to
creative idea during employee's performance.   Teamwork: This process involves an agenda of
professionals to accomplishing a target or particular project. Team counts as a part of business
which encourage to people work together by best contribution in all circumstances in company.
Under Amazon Go, managers should follow teamwork strategies for acquiring desired
outcomes. When people collect in a group, several innovative ideas come with best results
which directly contribute for invention. Thus, all functions take shape into innovation and
commercialization by different results. Amazon Go should consider on these activities for
increasing market growth as well as innovation in their grocery stores. Those above aspects
help to attaining selected goals through fascinate more consumers in potential markets.
Developing an environment for Innovation culture: It can be foster through leadership qualities
and working experience of founders who is passionate for optimistic outlook. Amazon Go
should works for employee's interdependency for effective and creative performance.
Managers need pursue on innovative ideas in open environment that happens naturally. This
attention conducts brainstorming techniques for creating unique ideas for supporting new
features. It involves super performing candidates to explore various requirements at a single
place.[ CITATION Inn201 \l 1033 ]

Summary:-

In this task we explain how organizational vision leadership, culture and teamwork can shape
innovation andcommercialisation. Those above aspects help to attaining selected goals through
fascinate more consumers in potential markets. Developing an environment for Innovation
culture: It can be foster through leadership qualities and working experience of founders who is
passionate for optimistic outlook. Amazon Go should works for employee's interdependency for
effective and creative performance.

M1 Analyze different sources of innovation, and how organizations

can foster and develop an environment and culture of innovation?
The last recession taught smart companies a valuable lesson– while poorly managed companies
bunkered down in survival mode, innovative companies seized the opportunity and took the
hibernating companies’ market share. Consumers are pushing small and large companies to
deliver more affordable, better, and exciting products and services. There is no more room for
mediocrity in our globalized market place. Here are seven simple steps to foster a culture of
innovation in your organization.

 Lead from the front

Innovation starts with the leadership qualities of the founder or CEO. Founders and CEOs of
innovative organizations have to be passionate about their work, display a positive and
optimistic outlook, have a real drive and clear vision, be forward thinking, and above all
embrace change. Leaders and from the top-down or across the board, they play a primary role
in fostering innovative organizations. Innovation is the high-performance mantra of business
leaders.

Create a culture of innovation.

People perform best when they are driven by inspiration and encouraged to push their
boundaries and think outside the box. But employees cannot do this when they are being
micromanaged. Employees need to feel independent enough to own their innovative
thinking and to pursue the ideas they are passionate about. In fact, if management effectively
fosters a creative and open environment, innovation will happen naturally.
A single value creating idea might require hundreds of dud ideas. When the entire organization
brainstorms, the process of refining suggestions towards a single idea happens phenomenally
quicker versus when only key staff is involved in the process. By creating a strong organizational
culture, you devolve power down to every employee to innovate.

Build effective teams

The super-performing team has become the holy grail of the business world. Various key
requirements need to be in place. Some of these include dependability between team
members, effective structure and clarity of objectives; real meaning in the work the team does,
as well believing in the long term results of the team’s efforts. Teams also need to create a real
sense of psychological safety where open and honest communication can prevail. 

Reward failure

One of the most powerful tools for promoting employee creativity and innovation is
recognition. People want to be recognized and rewarded for their ideas and initiatives, and it is
a practice that can have tremendous payoff for the organization. One reason employees often
don’t express their ideas is that they don’t want to rock the boat. They don’t want to be a
failure if something doesn’t work out. Tolerate mistakes and expect failure, and reward lessons
learned. Ideas don’t always work the first time.

Take ownership of client problems

Innovative organizations encourage staff to take ownership of problems presented by clients.

So often client problems are seen as a headache– left in the hands of “customer service.”  The
truth is that every customer problem or complaint presents the organization with a
phenomenal opportunity to showcase real customer service and highlight vast improvements in
product or service design and delivery. Lessons learnt from customer problems should be
shared with each employee in the organization in order to get the maximum learning value
from the exercise.

Benchmark against the best

How do entrepreneurs know they are innovative? Your business does not trade in a vacuum–
you and your organization are part of a larger business eco system consisting of other
competitor, clients, and industry partners. If you are not the leader within your industry or
niche market, it’s important to determine who the leader is and ensure that your strategies and
tactics will enable you to take the top spot. Refrain from vanity metrics that create a feel good
factor instead of real organization value.[ CITATION Sev20 \l 1033 ]
Summary:-

In this Task we explain and Analyze different sources of innovation, and how organizations can
foster and develop an environment and culture of innovation. While poorly managed
companies bunkered down in survival mode, innovative companies seized the opportunity and
took the hibernating companies’ market share. Consumers are pushing small and large
companies to deliver more affordable, better, and exciting products and services. There is no
more room for mediocrity in our globalized market place.

D1 Critically analyses how innovation is developed, embedded and

measured in an organizational context.
Purpose
Academic and practitioner interest has focused on innovation as a method of competitive
differentiation and as a way to create customer value. However, less attention has been
devoted to developing a measure of innovation culture. The purpose of this paper is to develop
an empirically‐based comprehensive instrument for measuring an organization's innovation
culture.
Design/methodology
This paper describes a procedure which explicates the innovation culture construct, and
proposes a multi‐item measure of innovation culture predicated on exploratory factor analysis.
These descriptors were derived from extant literature, key informant interviews, and a survey
of over 282 employees from the financial services industry.

Findings
Findings suggest that an innovation culture scale may best be represented through a structure
that consists of seven factors identified as innovation propensity, organizational constituency,
organizational learning, creativity and empowerment, market orientation, value orientation,
and implementation context.
Practical implications
The seven‐factor model can be used both descriptively and diagnostically. Among other things,
it presents a practical way to measure an organization's innovation culture, and could initially
be used to establish a baseline level of innovation culture. From there, it could be used as a
metric to chart the organization's efforts as it moves to engender innovation.
Originality/value
More effort should be devoted to developing measures to assess innovation culture specifically.
This model presents an innovation culture construct that is complimentary to work that has
preceded it. The findings combined with the suggestions provide an alternative perspective as a
measure of innovation and extends a basic framework for further investigation.[ CITATION
Eme20 \l 1033 ]
P3 explain the 4Ps of innovation and explain these of the innovation
funnel to examine and shape innovative ideas.
In the previous articles we were talking about innovation and have concluded that it could be
stimulated, or managed. We also talked about what is innovation, and how it can be stimulated.
Now we will see how can we observe and analyze any organization, from the innovation point
of view.

Communicating with people

the problem is that innovation could be applied everywhere. Anything could be improved
(made better). Innovation management is a multi-disciplinary field, and it covers every aspect of
the company-organization it is applied to. How can you narrow your focus and look at the
specific areas of your organization.

Innovation mix

you have all heard about marketing mix or, 4 P’s of marketing
(Product, Price, Place, Promotion). They were invented so you can narrow your investigation on
to a specific area of your organization. There are also 4 P’s of innovation. They are
(Product, Process, Position and Paradigm). Let’s go at each of them and see what they mean.
Better yet, let’s take a virtual case study and look at them in real situation.

Let’s take a simple example, something everybody can relate to easily. How about a small
bakery. Wherever you live, you can visualize the bakery you stop by every day. Also, let’s take
one more parallel example. How about your local municipality offices, or to be more precise,
the office where you go to get your birth certificate? Let’s call them from now on ‘bakery’ and
‘birth certificate’.

Product

so how would you innovate your product if you are running a bakery? First that comes to mind
is that you would try new baked products, new ingredients, new shapes, colors and so on. That
sounds ok, and if these new products are selling well, you got yourself real innovation. But like
with its brother ‘Marketing P’, with ‘Innovation P’, there are many other aspects we can look at.
Here we can also improve on packaging, delivery methods, freshness of the product, and so on.
So is with anything related to your bakery’s products that could be improved (made better).
Now let’s think about ‘birth certificates’. Yes, they have a product which is a printed sheet of
paper, but the essence of this ‘product’ is the service, you as citizen, are provided. Of course
they can change the look of the certificate and make it prettier, more colorful and stylish, but is
that where product innovation is hidden? As a citizen-customer you would probably be more
interested in other aspects, like product delivery speed (waiting in lines), quality of service
(smiling clerks), and hours of operation (24 hours???). Any changes, or new ideas applied in
these areas would definitely make you a happy citizen, and qualify these new ideas as
innovations.
Even at this first example, you can see the importance of making everybody in the organization
part of this, so called, innovation culture. In short, you need everybody to innovate. Why?
Because in the bakery only the sales clerks are in direct communication with the customer. In
today’s economy happy customer is the synonym for profitability, and there is no way around
it. So when making questionnaires for your employees, make sure your first question is: “What
can you personally do, or improve, to have our customers smiling, when waking out of the store
with our baked products”.

Needless to say, the same applies to the municipality office. What is the main goal of any
elected official, anywhere in the World? To be elected again and again. The smiling citizens are
the same method of gaining profitability for the municipality, as are for the bakery.

Process

What are the processes in the bakery? We can think of preparing the doe, baking and so on. But
there are many other processes, like all the processes connected with supplying, selling,
recruiting, and even accounting. Here you can see that 4 P’s of innovation are not strictly
differentiated. A lots of the issues on ‘product innovation’ we discussed earlier, are itself a
processes, so we can talk about them here too. So, ‘process innovation’ is anything we can do
to improve processes in our organization, so they are quicker, more efficient, or cheaper. All in
all, its any new ideas that applied to the existing processes result in increased profitability. It
also means innovating new processes to add to, or replace, the existing ones.

What about ‘birth certificates’ municipality? I am sure you would like to go there and look into
their processes (running with the speed of bureaucracy). For any organization, to run efficiently,
its about all external and internal processes. How they communicate between themselves, with
their clients, how are they managed, or what about their decision making processes, and so on?

Position

you may consider ‘position’ similar to ‘promotion’ in marketing mix, but it is not. Position is
related to our own perception. It is a psychological category, and promotion is just one of the
processes in the organization that affects this aspect of the innovation. Lets look at the bakery.
What is the perception their customers have about them? What about their employees, or
business partners, or subcontractors? Do they pay their bills on time, or their employee
salaries? So many things could affect people’s perception. Today, on the global marketplace,
position is everything. What makes the organization profitable is not how good its products or
services are, but what their customers perceive about them. Again its all about smiles on the
faces of your satisfied customers.

Same applies to municipality example. Happy citizens-customers are also happy voters.
Paradigm

This is somewhat specific innovation category. It concerns the change (sometimes radical) in
the way something is done in the organization. It could be anything. For the bakery it may be in
the way the products are sold, from off the counter, to catering system, or to selling on the
Internet. On-line bakery, can you imagine! Again, to be an innovation, it has to be profitable.
Radical changes don’t necessarily mean better business. Shifting your product selection to
vegetarian diet wouldn’t work well in the neighborhood full of meat eaters.

As per municipalities, they can also innovate by shifting the paradigm in the way they do
‘businesses. They may use Internet to enable on-line application for birth certificates and even
payment for services. Document delivery may be worked out over the post office. Can you
imagine getting your birth certificate over your computer instead of standing in long lines.

Don’t forget that these ‘Innovation P’s’ are not narrow categories. Their borders are foggy and
intertwined. Company or organization can use some of them, or all of them at the same time.
Improving the processes could result in better products. Better products would result in better
position. What is important is that all of them have one single purpose, to make you and your
organization better, more efficient, and at the end more profitable. [ CITATION
VEZ20 \l 1033 ].
Summary:-
First that comes to mind is that you would try new baked products, new ingredients, new
shapes, colors and so on. That sounds ok, and if these new products are selling well, you got
yourself real innovation. But like with its brother ‘Marketing P’, with ‘Innovation P’, there are
many other aspects we can look at. Here we can also improve on packaging, delivery methods,
freshness of the product, and so on. So is with anything related to your bakery’s products that
could be improved (made better).Now let’s think about ‘birth certificates’. Yes, they have a
product which is a printed sheet of paper, but the essence of this ‘product’ is the service, you as
citizen, are provided.

P4 Explain developments in frugal innovation and provide examples

of how it is used in an organizational context.
What is Frugal Innovation?
Carlos Ghosh, Chairman and CEO of the Renault-Nissan Alliance, coined the term “frugal
engineering” in 2006. He was impressed by Indian engineers’ ability to cost-effectively and
quickly innovate under severe resource constraints. Frugal Innovation is a concept that urges
businesses to respond to limitations in resources; whether financial, material or institutional,
and turn these constraints into innovative ideas and practical solutions. For example: A product
or service that results from Frugal Innovation principles should be priced at a 50-70% lower cost
than the current alternative and should have at least 70-80% of the functionality, while not
compromising on quality.

In simple words, Frugal Innovations can be created using the above processes like Circular &
Sharing Economies, Open Innovation, Maker Movement and Inclusive Business.
To really benefit from frugal innovations, we need to emphasize good quality solutions that are
accessible and affordable created with:
Design thinking at the product/service level,
Systems thinking at the macro level,
New ways of product design & development,
Leveraging modern technologies to deliver low cost solution
Innovative business models to make solutions accessible (e.g.: Product as a service etc.)

Why do we need Frugal Innovations?

The UK Innovation organization, NESTA, gives a great summary of why we need Frugal
Innovation in UK and Europe:
Lackluster growth and cutting funds to reduce debt in developed economies will increase
demands for frugal products and services and frugal innovation processes.
Environmental constraints around climate, energy, water and other resources will increase
demand for more frugal models of production and consumption.
New technology platforms are drastically reducing the cost of some forms of innovation,
creating huge, new opportunities for frugal innovators.
Caring for rapidly ageing societies will require completely new approaches to health and social
care, including radically rethinking business models and value chains that are apparent in some
examples of successful frugal innovation.
Today’s fastest growing markets are in developing and emerging economies where demand for
frugal products and services is high.
The Directorate-General for Research and Innovation (DG R&I) at the European Commission has
commissioned Fraunhofer ISI and Nesta UK to write a report on "Study on frugal innovation and
 reengineering of traditional techniques." The report was published in April 2017 and was
released at the InnoFrugal 2017 conference by Ms Doris Schorecker, Head of Strategy, DG The
prevailing approach in European firms is on cutting edge technology development that is
geared towards expensive solutions. On the other hand, current European frugal inspired
products are driven by altruistic motivation. The ingenuity is about combining and mobilizing
for frugal innovations. For example: using open innovation models that already exist in Europe
or finding technologies that can constitute relevant platforms for the design of future frugal
solutions.

 The challenges are also visible: Even though clear trends point towards greater demand
for frugal solutions in Europe, customers are still hesitant about choosing frugal solutions due
to the negative image associated with “buying affordably”. Other challenges include previous
failures by smaller firms in launching some types of technology-based frugal solutions.
Make something people want
This sentence became the motto of Y-Combinatory seed accelerator particularly adapted to
Nordic companies going to developing countries and trying to sell their products and services.
To make them winners, in addition to effective marketing, the product or service should be
affordable, functional, good quality, and accessible.

Not a code word for cheap or outsourcing

Frugal innovation is not a code word for cheap or outsourcing. It is about learning how to
innovate under resource constraints and turn adversity into growth opportunities by delivering
solutions that can be termed “affordable excellence.” Of course, this is not easy and that is
where the challenge can bring out the human ingenuity.

To mainstream frugal innovation thinking and get individuals and organizations to change their
mindsets & add new skillsets; we started our non-profit, The Nordic Frugal Innovation Society,
in December 2013. We are pursuing activities such as training, workshops and especially our
annual conference InnoFrugal. It will be held in Helsinki for the 4th time from May 7-8, 2018
along with other editions in UK (InnoFrugal UK - March 27, 2018) and USA (InnoFrugal USA -
Date TBC in 2018).Is your business ready to take the next step - to innovate and create
sustainable economic growth that leads to reduced inequalities - while also helping realize
sustainable United Nations’ development goals?[ CITATION Fru201 \l 1033 ].

Summary:-
Innovation is a concept that urges businesses to respond to limitations in resources; whether
financial, material or institutional, and turn these constraints into innovative ideas and practical
solutions. On the other hand, current European frugal inspired products are driven by altruistic
motivation. The ingenuity is about combining and mobilizing for frugal innovations. For
example: using open innovation models that already exist in Europe or finding technologies that
can constitute relevant platforms for the design of future frugal solutions.
 P5 Explain the importance of the commercial funnel and the
application of New Product Development (NPD) processing for
commercialization of innovation.

P6 Build an Innovation Business Case for an organization, including

ways to access funding.
The successful exploitation of new ideas is crucial to a business being able to improve its
processes, bring new and improved products and services to market, increase its efficiency and,
most importantly, improve its profitability.
Marketplaces - whether local, regional, national or global - are becoming highly competitive.
Competition has increased as a result of wider access to new technologies and the increased
trading and knowledge-sharing opportunities offered by the Internet.

The business case for innovation

It is important to be clear about the difference between invention and innovation. Invention is a
new idea. Innovation is the commercial application and successful exploitation of the idea.

Fundamentally, innovation means introducing something new into your business. This could be:
 improving or replacing business processes to increase efficiency and productivity, or to
enable the business to extend the range or quality of existing products and/or services
 developing entirely new and improved products and services - often to meet rapidly
changing customer or consumer demands or needs
 adding value to existing products, services or markets to differentiate the business from
its competitors and increase the perceived value to the customers and markets
Innovation can mean a single major breakthrough – e.g. a totally new product or service.
However, it can also be a series of small, incremental changes.

Whatever form it takes, innovation is a creative process. The ideas may come from:

Approaches to innovation
Innovation in your business can mean introducing new or improved products, services or
processes. Analyze the marketplace there’s no point considering innovation in a vacuum. To
move your business forward, study your marketplace and understand how innovation can add
value to your customers. For more information on analyzing your marketplace, see the page in
this guide on planning innovation. Identify opportunities for innovation

You can identify opportunities for innovation by adapting your product or service to the way
your marketplace is changing. For example, if you're a specialist hamburger manufacturer, you
might consider lowering the fat content in your burgers to appeal to the health-conscious
 consumer. You could also develop your business by identifying a completely new product. For
example, you could start producing vegetarian as well as meat burgers. You could innovate by
introducing new technology, techniques or working practices - perhaps using
better processes to give a more consistent quality of product.

Encourage innovation in your business

There are many sources you can use to help generate new ideas for the business.

Suppliers, business partners and business network contacts can all make valuable contributions
to the creative process, as well as providing support and encouragement.

Your employees are also a vital asset in generating innovative ideas.

To get the most from them, you need to create an innovative environment and encourage
creative thinking.

Steps to promote innovation

 Make sure you have processes and events to capture ideas. For example, you could set
up suggestion boxes around the workplace or hold regular workshops or occasional company
away days to brainstorm ideas.
 Create a supportive atmosphere in which people feel free to express their ideas without
the risk of criticism or ridicule.
 Encourage risk taking and experimentation - don't penalize people who try new ideas
that fail.
 Promote openness between individuals and teams. Good ideas and knowledge in one
part of your business should be shared with others. Teamwork, newsletters and intranets can
all help your people share information and encourage innovation.
 Stress that people at all levels of the business share responsibility for innovation, so
everybody feels involved in taking the business forward. The fewer the layers of management
or decision making in your organization, the more people feel their ideas matter.
 Reward innovation and celebrate success. Appropriate incentives can play a significant
role in encouraging staff to think creatively.
 Look for imagination and creativity when recruiting new employees. Remember that
innovative thinkers aren't always those with the most impressive list of qualifications. [ CITATION
Use201 \l 1033 ]
Summary-
Marketplaces - whether local, regional, national or global - are becoming highly competitive.
Competition has increased as a result of wider access to new technologies and the increased
trading and knowledge-sharing opportunities offered by the Internet.
M4 Build a detailed Innovation Business Case which includes how to
measure its overall.
What to keep in mind when measuring innovation?

Choosing the correct KPIs for measuring innovation is necessary because you usually tend to
get what you measure. Your goals and KPIs direct your efforts and actions towards them and
help people to adapt their behavior as well as take action to reach those goals.

Why measuring innovation is worth it?

Measuring innovation is only worth it with a set of metrics that help you to move your business
forward. This might not always be straightforward to figure out, so many organizations tend to
measure what’s easy – not what’s important – instead. It’s easy to pick out a couple of simple
KPIs without thinking whether they will actually be useful for your business in the long run.

Choose metrics with caution

While some metrics are more straightforward than others, some of them can be quite
ambiguous. The latter types of metrics, along with the too simplistic metrics we already talked
about, should be approached with caution, as they often lead to undesirable results down the
road.

As mentioned, KPIs have a huge impact on behaviour, which is why it's important to try to
analyze how your KPIs drive your employees' behavior. Although some metrics may seem great
at first, the results down the road might not be what you wanted to achieve. Therefore, you
shouldn't be afraid to change your metrics as you learn how the organization responds to them.

Innovator's dilemma

Another thing to keep in mind when measuring innovation is Clayton Christensen’s

concept Innovator's Dilemma that was introduced in 1997 with his book that bears the same
name. In his concept, the core of the dilemma is that in the early stages of innovation, and
specifically the disruptive kind, new innovation is usually inferior to existing products and
services on the market because it's measured with the same metrics and value drivers as the
existing products.

Input metrics vs. output metrics

As already mentioned, the main role of innovation metrics is to make sure you’re doing enough
of the right activities to reach your goals.

They are typically divided into two different categories: input metrics and output metrics. In
other words, “what goes in to your innovation process and what comes out of it”.
Here are some examples of input metrics:

o R&D spend as a percentage of sales

o The number of innovation projects started
o The number of new ideas in the pipeline
o Number of new employees in R&D

Output metrics

The other end of the spectrum is output metrics, which is a term that is used to refer to your
returns, or “The R in ROI”. In other words, output metrics measure the results your innovation
investments have yielded. As such, they indicate if your investments are actually turning into
something useful.

The Key Types of Innovation Metrics

We usually like to divide innovation metrics into five different categories, each of which
can have both input and output metrics.

The first four of the five categories represent each of the different aspects of innovation
management, whereas the remaining one focuses on business and product related
metrics.[ CITATION Vii20 \l 1033 ]

Summary-
As mentioned, KPIs have a huge impact on behavior, which is why it's important to try to
analyze how your KPIs drive your employees' behavior. Although some metrics may seem great
at first, the results down the road might not be what you wanted to achieve. Therefore, you
shouldn't be afraid to change your metrics as you learn how the organization responds to them

D2 Critically evaluate the nature of innovation and the context in

which it is developed, providing evidence-based judgments on how
organizations can overcome challenges to develop successful
innovation
Before any organization can reap the economic benefits of open innovation, it must overcome a
number of legal, operational and cultural challenges. In this article Peter von Dyck addresses
the top three obstacles to open innovation: managing intellectual property issues and other
legal risks, processing ideas quickly and establishing an efficient internal structure.

In an effort to create new products more efficiently and effectively, many companies are
regularly and in a formalized way encouraging ideas from outside sources. These external
sources include individuals and organizations, such as customers and vendors. To do this, the
past few years have seen some of the world’s largest multinational companies — from P&G to
IBM and 3M — implementing “open innovation” programs. In fact, it’s believed that about one
third of the world’s largest corporations employ some form of unsolicited idea process primarily
because the benefits include: a greater diversity of ideas; lower research and development
costs; and a better stocked pipeline of new products.

However, before any organization can reap the economic benefits of open innovation, it must
overcome a number of legal, operational and cultural challenges.

The top three obstacles to the successful implementation of open innovation programs are:

1. Managing intellectual property issues and other legal risks

2. Processing ideas quickly, efficiently
3. Establishing an efficient internal structure

Open innovation programs are doomed to fail if these obstacles are not addressed and
overcome early in the process.

Overcoming Challenge No. 1: Intellectual Property Issues and Legal Risks

Intellectual property is generally considered the most problematic and complex issue facing
companies instituting open innovation programs. The potential for dispute over intellectual
property rights can forestall the development of innovations submitted by outside sources. The
fact that organizations need enough information to make a decision on innovations, inventions
and ideas submitted, while being cognizant of legal and confidentiality issues is a real Catch-
22.The intellectual property issue is most pressing in patent-centric industries, such as high
tech, aerospace, pharmaceuticals and medical devices. The fact that organizations need enough
information to make a decision on innovations, inventions and ideas submitted, while being
cognizant of legal and confidentiality issues is a real Catch-22. Individuals and organizations
submitting ideas face the same issue: seeking help in commercializing an idea requires
inventors to submit their technology to a company through an open innovation program. The
inventor wants to provide enough information to facilitate the company’s understanding of the
technology — and, most notably, its value — while protecting key information vital to a
successful patent. Legal risks include the potential for future disputes over the ownership of
submitted IP, especially if the received intellectual property is very similar to existing internal
research. With this in mind, it’s vital that a company’s open innovation program be designed to
accept the proper information. The key to success is controlling the amount and type of
information submitted to assuage the small innovator’s apprehensions and limit the receiving
company’s litigation risk. Companies implementing open innovation programs can control the
costs and potential liabilities by using an automated system to guide submitters on what to
disclose, what not to disclose and how to disclose information. It also documents the history of
communications between corporation and inventor, which is critically important to preclude
downstream litigation.

Since the America Invents Act went into full effect in March 2013, protecting the submitter’s
intellectual property has become even more vital, and can build the receiving company’s
reputation as an organization that respects the innovator and is not trying to take advantage of
the information submitted.

Overcoming Challenge No. 2: Processing Ideas Efficiently

One measure of open innovation success is the quantity of ideas submitted. However, this
success creates a big challenge when the sheer volume of ideas hinders the process of
reviewing and making decisions in a timely manner. Without a strategy, disorganization can
easily ensue and lead many receiving companies to set aside or completely abandon open
innovation efforts. The solution: A structured screening process that allows for all solicited and
unsolicited idea submissions to be filtered and managed and for quality ideas to be acted upon
quickly and efficiently. A filtration process runs most effectively when the open innovation team
develops and automates a strong set of criteria to sort through submissions, which makes open
innovation programs even more efficient and effective.

Overcoming Challenge No. 3: Establishing an Efficient Internal Structure

Like all great ideas, the devil is in the details. Companies can’t merely launch an open
innovation program and expect great ideas to start making their way up the product
development pipeline. Without an internal structure in place, there’s no organized mechanism
for accepting and acting upon solicited and/or unsolicited submissions, let alone monitoring the
program and benchmarking performance.

An open innovation program with a strong internal structure is one that:

1. effectively solicits ideas;

2. reviews ideas in a timely manner;
3. makes decisions whether or not to pursue the submission just as efficiently; and
4. Communicates regularly with the innovator on the status of the submission.

The benefits are having an internal structure — typically a combination of people and
technology — help ensure that the best ideas are pushed up the chain and help protect against
IP litigation. According to a 2012 Forrester Research study, a majority of firms that have
implemented open innovation programs have created teams of between three to five people to
administer and implement their program.[ CITATION Inn202 \l 1033 ]

Summary:-

The potential for dispute over intellectual property rights can forestall the development of
innovations submitted by outside sources. The fact that organizations need enough information
to make a decision on innovations, inventions and ideas submitted, while being cognizant of
legal and confidentiality issues is a real Catch-22.The intellectual property issue is most pressing
in patent-centric industries, such as high tech, aerospace, pharmaceuticals and medical devices.
The fact that organizations need enough information to make a decision on innovations,
inventions and ideas submitted.
P7 Evaluate the different tools that organizations.
At Creative Safety Supply we offer a variety of solutions when it comes to organizing tools in the
workplace. A workplace could use one of these strategies or a combination of a few for an
effective tool organization strategy. Having effective tool organization strategies in the
workplace will help to reduce wastes, save time, and keep workers safe. The following are some
ideas to get you started in organizing a workbench, a toolbox, a tool chest, or any area in your
facility:

Pegboard:
 Pegboards have been around for decades and are still extremely useful to this day. While
commonly used in garages, pegboards provide a number of advantages in the workplace.
Pegboards give you the option to completely customize the set up with hooks, pegs, shelves,
and bins, or a combination of all four! The accessories guarantee nearly any type of tool can be
stored and every tool will be easily visible from many places in facility. Shadow vinyl tape is also
an excellent addition to pegboards.

Customizable tool foam: Our closed-cell tool foam adds organization to existing drawers,
toolboxes, and tool chests. Using a utility knife or hot knife, cut out the shapes of tools to be
placed in the foam insert. Tool foam can be ordered in sheets and a two-color system can be
implemented for a shadow box effect.
Vinyl shadow board tape: Shadow board tape comes in a variety of colors to customize your tool
organization efforts. Vinyl shadow board tape can be used on pegboards, inside drawers of a toolbox, in a
cabinet, or other places you’re utilizing tool organization.[ CITATION All201 \l 1033 ].

Summary:-
These strategies or a combination of a few for an effective tool organization strategy. Having
effective tool organization strategies in the workplace will help to reduce wastes, save time,
and keep workers safe. The following are some ideas to get you started in organizing a
workbench, a toolbox, a tool chest, or any area in your facility: Using a utility knife or hot knife,
cut out the shapes of tools to be placed in the foam insert. Tool foam can be ordered in sheets
and a two-color system can be implemented for a shadow box effect.

M5 Present supported evidence-based evaluation of these different tools

in the context of the wider business environment.
The environment is always changing, and this is just as true for the business environment as it is
for the physical world around us. Managers try to avoid being “taken by surprise” by
unexpected events that would impact their organizations through an ongoing process
called environmental scanning. Environmental scanning is a high-level, broad-based process of
gathering, analyzing, and dispensing information for purpose of developing strategies or tactics.
The process entails getting both factual data and qualitative opinions. Organizations also scan
when they are considering whether to enter a particular industry.
PESTEL

You may wonder just how you go about analyzing the total external environment that would
affect your company. A commonly used management tool is called PESTEL. PESTEL is an
organizing framework that allows decision makers to understand and make connections with a
mass of information. (You may sometimes see the name of this tool written as PESTLE or even
just PEST in older sources.)

A PESTEL analysis examines six key macro-environmental factors in order to understand their

interactions with the organization.

Political

Political issues are a function of how much the government intrudes or is involved in an
organization’s operations. In particular, it looks at taxation and tariffs, regulations, political
stability, and elections. For example, Google and other Internet providers have financial, legal,
and ethical issues relating to operating in countries like China or Iran, where repressive
governments want to control the flow of information. In another example, Google was slapped
with a $2.7 billion fine by the European Union for antitrust abuses (Google can appeal this
decision with the European Court of Justice). Finally, the CEO of Apple is awaiting changes in
the tax law before bringing almost $250 billion in foreign reserves back to the United States.
Often, decision makers for these organizations must choose between making money or
suppressing information critical of the repressive regimes.

Economic

Economic factors start with indicators for the U.S. economy as a whole. These are growth,
employment, inflation, and interest rates. Companies with foreign operations will worry about
exchange rates. These factors are important in long-range forecasts for revenue and expenses.
Businesses in the financial industry may pull back from aggressive strategies in times of rising
interest rates.

Social

Society and culture have great impacts on the business environment. These factors include
demographics like population growth, age distribution, and attitudes toward safety and health
consciousness. For example, rising rates of obesity have forced management to look closely at
marketing campaigns in giant food corporations such as Nestle and Kraft Foods.

Technological
Technology facts include research and development (R&D), automation and robotics, and
technology incentives. The rate of technological change in the business environment is
staggering. A term often paired with technology is disruption, a description for innovations that
completely change the cast of leading competitors in an industry. Many organizations not only
scan the technological environment but also monitor closely for new and disruptive processes.
Walt Disney and Alphabet (Google’s parent corporation) are both investing heavily to become
leaders in virtual reality. They are betting billions that augmented reality will have the power to
disrupt the gaming and entertainment industries.
Environmental

Weather, climate change, air quality, and natural disasters are all environmental factors. Some
industries are especially at risk from changes in the natural environment, including
manufacturing, agriculture, tourism and travel, and sports and entertainment. Many pollution
regulations limiting water and air pollution have been passed that affect the operation of
businesses. Today, the impact of climate control is being debated in Congress, and
organizations in many industries are concerned how this latest environmental threat will affect
their operations. Recently, Shell Oil spent more than $7 billion exploring parts of the Arctic
Circle for oil—a venture that was not possible before global warming increased drilling access in
the area. They have since cancelled this initiative due to a lack of results, as well as strong
international protests that it may cause further damage to an environmentally sensitive
location.

Legal

Legal factors include discrimination laws, consumer protection laws, and employment, health,
and safety policies. Antitrust, piracy and copyright laws, as well as immigration issues are also
of growing importance in the business environment. All of these factors affect how
organizations operate, their costs, and the demand for products. For example, after the
collapse of Enron, the government passed the Sarbanes-Oxley Act in 2002. This legislation
completely changed accounting and reporting requirements for corporations. These businesses
have had to implement rigorous procedures to ensure compliance with the new regulations.
[ CITATION Com201 \l 1033 ].

Summary:-

In another example, Google was slapped with a $2.7 billion fine by the European Union for
antitrust abuses (Google can appeal this decision with the European Court of Justice). Finally,
the CEO of Apple is awaiting changes in the tax law before bringing almost $250 billion in
foreign reserves back to the United States. Often, decision makers for these organizations must
choose between making money or suppressing information critical of the repressive regimes. .
Companies with foreign operations will worry about exchange rates. These factors are
important in long-range forecasts for revenue and expenses. Businesses in the financial industry
may pull back from aggressive strategies in times of rising interest rates.

References
Anon., 2003. Definition Of Innovation And Its Importance Business Essay. [Online]
Available at: https://www.ukessays.com/essays/business/definition-of-innovation-and-its-importance-
business-essay.php
[Accessed 21 Sep 2020].

Anon., 2020. Common Frameworks for Evaluating the Business Environment. [Online]
Available at: https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/common-
frameworks-for-evaluating-the-business-environment/
[Accessed 21 oct 2020].

Anon., 2020. Difference Between Invention and Innovation. [Online]

Available at: https://keydifferences.com/difference-between-invention-and-innovation.html
[Accessed 21 Sep 2020].

Anon., 2020. Frugal Innovation for Sustainable Growth and Development. [Online]
Available at: https://open-ecosystem.org/articles/frugal-innovation-sustainable-growth-and-
development
[Accessed 22 sep 2020].

Anon., 2020. Innovation and Commercialisation for Organisation. [Online]

Available at: https://www.assignmentprime.com/free-samples/innovation-and-commercialisation-for-
the-organisation
[Accessed 21 Sep 2020].

Anon., 2020. Seven Ways To Foster Innovation In Your Company. [Online]

Available at: https://www.entrepreneur.com/article/282664
[Accessed 21 Sep 2020].

Anon., 2020. Use innovation to grow your business. [Online]

Available at: https://www.infoentrepreneurs.org/en/guides/use-innovation-to-grow-your-business/
[Accessed 23 Sep 2020].

d.o.o., V., 2020. VEZA d.o.o.. [Online]

Available at: https://www.veza.biz/eng/4Pinnovation.html
[Accessed 22 Sep 2020].

Limited, E. P., 2020. Measuring innovation culture in organizations: The development of a generalized
innovation culture construct using exploratory factor analysis. [Online]
Available at: https://www.emerald.com/insight/content/doi/10.1108/14601060810911156/full/html
[Accessed 22 Aug 2020].

Reserved., A. R., 2020. What are different types of tool organization?. [Online]
Available at: https://www.creativesafetysupply.com/qa/tool-organization/different-types-of-tool-
organization
[Accessed 21 oct 2020].

Reserved, I. |. A. R., 2020. Overcoming the Challenges to Successful Open Innovation. [Online]
Available at: https://innovationmanagement.se/2015/03/03/overcoming-the-challenges-to-successful-
open-innovation/
[Accessed 21 oct 2020].

Viima, 2020. Measuring Innovation – The Definitive Guide to Innovation Management KPIs. [Online]
Available at: https://www.viima.com/blog/how-to-measure-innovation-kpis
[Accessed 24 sep 2020].

Bibliography
Anon., 2003. Definition Of Innovation And Its Importance Business Essay. [Online]
Available at: https://www.ukessays.com/essays/business/definition-of-innovation-and-its-importance-
business-essay.php
[Accessed 21 Sep 2020].

Anon., 2020. Common Frameworks for Evaluating the Business Environment. [Online]
Available at: https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/common-
frameworks-for-evaluating-the-business-environment/
[Accessed 21 oct 2020].

Anon., 2020. Difference Between Invention and Innovation. [Online]

Available at: https://keydifferences.com/difference-between-invention-and-innovation.html
[Accessed 21 Sep 2020].

Anon., 2020. Frugal Innovation for Sustainable Growth and Development. [Online]
Available at: https://open-ecosystem.org/articles/frugal-innovation-sustainable-growth-and-
development
[Accessed 22 sep 2020].

Anon., 2020. Innovation and Commercialisation for Organisation. [Online]

Available at: https://www.assignmentprime.com/free-samples/innovation-and-commercialisation-for-
the-organisation
[Accessed 21 Sep 2020].

Anon., 2020. Seven Ways To Foster Innovation In Your Company. [Online]

Available at: https://www.entrepreneur.com/article/282664
[Accessed 21 Sep 2020].

Anon., 2020. Use innovation to grow your business. [Online]

Available at: https://www.infoentrepreneurs.org/en/guides/use-innovation-to-grow-your-business/
[Accessed 23 Sep 2020].

d.o.o., V., 2020. VEZA d.o.o.. [Online]

Available at: https://www.veza.biz/eng/4Pinnovation.html
[Accessed 22 Sep 2020].
Limited, E. P., 2020. Measuring innovation culture in organizations: The development of a generalized
innovation culture construct using exploratory factor analysis. [Online]
Available at: https://www.emerald.com/insight/content/doi/10.1108/14601060810911156/full/html
[Accessed 22 Aug 2020].

Reserved., A. R., 2020. What are different types of tool organization?. [Online]
Available at: https://www.creativesafetysupply.com/qa/tool-organization/different-types-of-tool-
organization
[Accessed 21 oct 2020].

Reserved, I. |. A. R., 2020. Overcoming the Challenges to Successful Open Innovation. [Online]
Available at: https://innovationmanagement.se/2015/03/03/overcoming-the-challenges-to-successful-
open-innovation/
[Accessed 21 oct 2020].

Viima, 2020. Measuring Innovation – The Definitive Guide to Innovation Management KPIs. [Online]
Available at: https://www.viima.com/blog/how-to-measure-innovation-kpis
[Accessed 24 sep 2020].