MAHARANA PRATAP GROUP OF INSTITUTIONS

KOTHI MANDHANA, KANPUR

(Approved by AICTE, New Delhi and Affiliated to Dr. AKTU, Lucknow)

Digital Notes
[Department of Management]
Subject Name : Design Thinking
Subject Code : KMB 106
Course : MBA
Branch : -
Semester : I
Prepared by : Mr. Mayank Tripathi

Reference No./MBA/MT/DT/KMB106/20/1

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 Unit – 1

Innovation & Creativity

1. Meaning of Innovation

Innovation is not just represented by introducing or implementing new ideas or methods. The definition of
innovation can be defined as a process that involves multiple activities to uncover new ways to do things. It
should not be confused with creation since this can be defined as the act of making, inventing, or producing
something. However, new innovations can be realized with creativity. People need to think outside the box in
order to create incremental enhancements.

At this moment, we are positioned in a fast-paced environment where technology is advancing and globalization
is increasing. This means that distances only get shorter, and as a result, competition is increasing, customer
expectations are more demanding, and disruptions in the economy is more likely to occur. For a business or an
organization to realize competitive advantages, it should be able to adapt and innovate the to the changing
trends and new generations. Innovations apply for management and organizations on all levels, sizes and in
operating in all industries.

Innovations create bigger opportunities and are critical for the survival, economic growth, and success of a
company. Innovating helps developing original concepts and is a driver of optimizing operations. Companies
that innovate are able to set the organization in a different paradigm in order to identify new opportunities and
best methods to solve current problems.

In order to realize innovation, leaders should be open-minded and collaborative. Feeling comfortable with
uncertainty and manage changes are behavioral components to innovate. Innovative leaders are curious and are
optimistic since they dare to take risks. No one knows where innovation will bring the organization or
individual.
On the other hand, everyone is an innovator because the innovative ability is in all of us. Since we were born,
we innovate by learning by doing. The pitfall is that school have formatted by proving us knowledge us and has
diminished our ability to innovate, while the ability to innovate is higher valued because innovation cannot be
learned or taught.
However, multiple theories and applicable tools established that support innovation. What are the most known
and used Innovation Management models and methods? What are their success stories and practical tips when
you apply these? These posts are all about great tools and methods that can help you to achieve your goal or
understand certain aspects that come with innovation.

1.1. Types of innovation

Because innovation takes place in varying industries and fields, innovation management often looks different as
well. Few types of innovations are mentioned below:

1. Technological innovation

We already explained how innovation can refer to the development of new services and products on the market
for the public, which answer needs that aren’t being met yet or solve problems that hadn’t been identified

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before. Technological innovation is only aimed at the technological aspects of a product or service, rather than
the whole product or business model.
However, it’s important to note that innovation isn’t just driven by technological developments, although
technology does often play an important role in innovation.

2. Disruptive innovation

In business administration, a disruptive innovation is an innovation that stimulates a new value and market
network, causing established and leading businesses, products, and alliances to be replaced. This term was first
proposed by the American scientist Clayton M. Christensen.
Not all innovations are disruptive, even if they are in fact revolutionary. For instance, the introduction of the car
was not disruptive for the transport industry at first because cars were a luxury, and the market for horse-drawn
carriages wasn’t immediately disrupted.

3. Social innovation

Social innovations are innovations that are intended to respond to changing social needs in society. These
innovations are made with the goal to help general society. Examples include open source methods and
innovations with a social purpose, such as microloans or remote learning.

1.2. Meaning of Creativity

Creativity is a function of knowledge, curiosity, imagination and evaluation.

The greater your knowledge base and level of curiosity, the more ideas, patterns, and combinations you can
achieve, which then correlates to creating new and innovative products and services. But merely having the
knowledge does not guarantee the formation of new patterns.
The bits and pieces must be shaken up and iterated in new ways. Then the ideas must be evaluated and
developed into usable ideas. In other words, there really is a process.

a. Discovery

As the name implies, it’s when you become aware of (or stumble upon) something – you discover it.
For example, there is art called “discovered art”. It might be a rock with a unique shape or a piece of wood with
an interesting pattern.

If you have ever purchased a piece of natural stone or wood art, that art was discovered art. Many inventions
start with a discovery.

b. Invention

Alexander Graham Bell invented the telephone. But you have to ask yourself, “Would the telephone have been
invented without Bell?”

The answer is yes. Eventually the telephone would have been invented because the science was there.
It might have taken longer, but it would have happened. So, while invention is higher than discovery, it’s
something that is going to happen. If you don’t invent it, someone else will.
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c. Creation

This is the highest level of creativity.

For example, the stage play, Othello, is genuinely a creation. Elizabethan drama would have gone on without
Shakespeare, but no one else would have written Othello.
Similarly, there are things that only your organisation can create! The key is tapping in to what those things are.

Here’s an example of how this could play out in your company. While at a conference, you might discover a
tool, a technology, or a process that you didn’t know before.

You purchase the tool for your staff, and that discovery helps everyone work better. After some time, that
discovery may also spur an innovative idea of how to apply the discovery differently.

You may then use that innovative idea as an inspiration that yields something never seen before, something
created by your company that helps you and your customers. That’s how the three levels of creativity can work
together. Realise that creativity and innovation are different.
Creativity refers to generating new and novel ideas. Innovation refers to the application of an idea and, in many
cases, is a collaborative enterprise. Innovation is applied creativity.

1.3. Strategies to increase your creativity and innovation

Now that you understand the various levels of creativity, you can implement some strategies that will boost
your company’s ability to create and innovate.

1. Truly creative people have developed their ability to observe and use all of their senses, something
which can get dull over time. Take time to “sharpen the blade” and take everything in.
2. Innovation is based on knowledge. Therefore, you need to continually expand your knowledge base.
Read things you don’t normally read.
3. Your perceptions may limit your reasoning. Be careful about how you’re perceiving things. Defer
judgment.
4. Practise guided imagery so you can “see” a concept come to life.
5. Let your ideas “incubate” by taking a break from them. For example, when I’m working on a big
business project, one of the best things I can do to take a break from it is play my guitar or take a ride on
my motorcycle. It shifts my brain into another place and helps me be more innovative and creative.
6. Experience as much as you can. Exposure puts more ideas into your subconscious. Actively seek out
new experiences to broaden your experience portfolio.
7. Treat patterns as part of the problem. Recognising a new pattern is very useful but be careful not to
become part of it.
8. Redefine the problem completely. One of the lines I’ve been sharing is: “Your problem is not the
problem; there is another problem. When you define the real problem, you can solve it and move on.” If
you had correctly defined the real problem, you would have solved it long ago because all problems
have solutions.
9. Look where others aren’t looking to see what others aren’t seeing.
10. Come up with ideas at the beginning of the innovation process… and then stop. Many times, we come
up with several ideas and start innovating. Then we come up with more ideas and never get a single idea
done. At some point, you have to turn off the idea generation part of the process and really work on the
innovation and execution part to bring a project to life.
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 1.4. Create your own success

The more creative and innovative you and your team members are, the more long-term success you’ll achieve.
So, rather than constantly chasing “the next big idea” in your industry, bring creativity and innovation into what
you’re currently doing.

When you do, you’ll be regarded as an industry innovator – the one your competitors are trying to copy.

2. Difference between Innovation and Creativity

Comparison Chart

BASIS FOR
CREATIVITY INNOVATION
COMPARISON

Meaning Creativity is an act of creating Innovation is the introduction of

new ideas, imaginations and something new and effective into
possibilities. the market.

Process Imaginative Productive

Quantifiable No Yes

Related to Thinking something new Introducing something new

Money Consumption No Yes

Risk No Yes

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2.1. What is Innovation Management?

Innovation management refers to the active organising, monitoring, and carrying out of activities, processes,
and policy which leads to creating substantial new value for the company and its customers. This is done by
creatively changing one or more dimensions of the company system.

Innovation is a very popular term that is used both appropriately and inappropriately, depending on the
situation. This article discusses what innovation management exactly entails. The term innovation is derived
from the Latin word innovare, which translates as renewal. From an economic perspective, innovation is
something new that offers advantages or value for an organisation, or for society. The term management is often
used in business and represents the controlling of tasks and process, and the coordination of activities to achieve
objectives. Together, innovation management can be defined as follows: the systematic promotion of renewal
and innovation in an organisation through planning, organising, management, and monitoring.
In practice this can be the development of new products and services to gain new or existing market share.
Drastically updating existing products and services in order to distinguish these from what the competition
offers is also innovation. At a smaller, internal company scale, innovation means the improving of internal
processes to strengthen the company or lower costs, and the development of new business models in order to
create and exploit revenue streams.

2.2. Innovation management and its organisational innovation aspects

It can be quite challenging to understand what innovation management means for organisations in reality. In
order to clarify this, the section below divides innovation management into four aspects that generally apply to
innovations in the private sector.

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 Figure 1: Organisational Aspects

Capacities

Capacity in relation to innovation is a term that’s used in order to describe the capacities and means that an
organisation needs to create and manage innovations. Innovation is highly dependent on people, so capacities
mainly refer to the human side of innovations. It primarily refers to the skills of both teams and individuals,
unique insights, knowledge, and practical skills of the people working at the organisation. However, it also
includes areas such as information capital and tacit knowledge, as well as financial capital. All these aspects are
needed to create innovations.

Structure

The difference between structure and capacities is that structure enables the effective use of the capacities. In
practice this generally relates to the organisational structure, internal and external processes, and the
infrastructure within the organisation. Innovation management can only be implemented effectively if the
organisation is set up correctly, for instance regarding the flow of capital and information. It’s also important
that decision-making authority is assigned to the right players. This is crucial to not fall behind compared to the
competition due to decisions taking too long because of a slow hierarchy.

Organisational Culture

Another important part of innovation management within an organisation is the organisational culture.
Structures make the effective use of capacities possible; the company culture makes it possible to recruit the
right capacities in terms of people.
With the right open and pro-innovation culture, chances are better that the organisation will be able to attract
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and retain talented employees. A pro-innovation culture encourages specific beneficial behaviour and
discourages unwanted behaviour. Some aspects of an open and pro-innovation culture are:

 Emphasising the necessity of constantly coming up with new ways to become better, faster, or more
effective
 Appreciating speed, learning, and experimentation
 Taking failure as a normal part of business operations to create something new. There shouldn’t be any
fear of making mistakes
 Encourage freedom and responsibility

Strategy

Innovation management and strategy are closely related because innovation is simply one of the ways in
which strategic objectives can be achieved. Naturally, there are also examples of innovations happening by
accident, but these are rare. It’s more common for innovations to be a goal and based on the strategy. In
practice, organisations should allow for sufficient freedom to innovate, but also keep in mind practical
limitations such as strategic focus and available resources.

Innovation networks and key players

Innovations aren’t just made by a single organisation, which might be interpreted from the section above.
Countless parties work together in order to innovate. One of the reasons is that different parties can have a
significant interest in a specific innovation. Different players working together for innovation is also called
collaborative innovation.

Pros of innovation networks

Businesses that work together to be able to innovate more effectively benefit from that collaboration because
they gain access to new capacities and additional knowledge, making them more competitive. This speeds up
the innovation process. Partnerships enable small business such as startups to work together with other, major
players that complement them. That way they can benefit from the different perspectives and levels of
experience. Larger companies benefit from collaborations with smaller organisations because it speeds up their
innovation process, shortens the time needed to enter the market with new innovations, and overcomes the
negative aspects of bureaucracy and inflexible procedures.

To summarize Innovation Management

Innovation is a popular phrase that’s used for many things, not always correctly. The explanation that most
closely defines the essence of the word is: the systematic promotion of renewal and innovation in an
organisation through planning, organising, management, and monitoring. Gurus like Philip
Kotler and Nadler and Tushman are big names in the field of innovation.
There are different types of innovations. The most familiar ones tend to come from technological industries.
That’s because these innovations are broadly used. Technological innovations can also be disruptive. That
happens when new innovations put existing companies and products out of business. Social innovations also
tend to be well known. They resolve a social issue or encourage social growth.
Different companies are often working on innovations in so-called innovation networks. Companies collaborate
on innovations because they have a shared interest or can complement each other. Collaboration with a bigger
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innovator can be particularly valuable for smaller businesses. In turn, large companies can avoid long
bureaucratic processes and shorten the time needed to enter the market.

2.3. Dynamics of Creative Thinking

The aim of thinking differently about creativity in the way we have outlined in this article is to recognize that
creativity is not only about generating novel ideas, it often requires many and varied other types of creative acts
and combinations to see a novel idea emerge or morph into a valuable outcome. Thus, we hope that the kind of
thinking advocated here – multiple, dynamic, and focused on groups rather than an individual of the "creative
type" – also shifts our thinking about creativity into a closer orbit with the practical outcomes of creativity
(Figure 4). And, in this way, it makes it easier to think from the outcome back to the idea, rather than from what
is assumed to be the start of a creative process forward. We have become so enamoured with the creativity
myths surrounding the flamboyant creative genius and the lightbulb flash of inspiration, that we never fully get
past what should just be the initial steps in our modelling, missing the multiplicity, the emergence, and the
group dynamics that contribute to valuable creative outcomes.

Most creative outcomes come from a combination or recombination of different modes and capabilities; most
creative outcomes emerge through turning thoughts into action, doing and active iteration, trying and failing,
and learning and recalibrating, and getting closer; and most creative outcomes come from groups, not
individuals. And, we believe that we could do well to consider this further through "squaring" our
understanding of creative dynamics, as we have sought to do in the final iteration of our matrix, as we seek to
further develop our knowledge of creativity in organizations.

3. What Is Design Thinking?

Design Thinking is a solution-focused, problem-solving methodology that helps companies, and individuals
alike to get a desired outcome on an inner problem, or to work forward on a future plan. Design Thinking
allows for the user of the system to have a more structured plan for understanding innovation and to grow more
as a company.

As Roger Martin, author of Design of Business, Put it:

“Design-thinking firms stand apart in their willingness to engage in the task of continuously redesigning their
business…to create advances in both innovation and efficiency — the combination that produces the most
powerful competitive edge.”

4. What are the 5 Stages of Design Thinking?

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The 5-stage model was originally proposed by the Hasso-Plattner Institute of Design at Stanford, and it is
continually used by individuals and firms to better innovate their selves. The 5-stage model are as follow:
Empathize (learn about the audience for whom you are designing), Define (construct a point of view that is
based on user needs and insights), Ideate (brainstorm and come up with creative solutions), Prototype (build a
representation of one or more of your ideas to show to others), and Test (return to your original user group and
testing your ideas for feedback).

Empathize

The first stage of Design Thinking is called Empathize. This stage is meant to get a better understand of the
problem that you wish to conquer. This includes: consulting experts of the matter, engaging farther into the
issue to better understand the problem at hand, as well as working the issue though as a group to have a deeper
comprehension of everything that is involved with the problem.

The Empathy stage allows for Design Thinkers to gain insight into the needs regarding the issue along with
setting aside their personal assumptions regarding it. A substantial amount of information is gathered during the
Empathize stage and is carried on to the next few stages to help define the problem and understand how to deal
with it.

Define
The second stage of Design Thinking is called Define. During this stage in the Design Thinking process you are
putting together all the information you gained during the Empathize step. Essentially, you will analyze your data
and put them in order to better concrete the problems that your team has defined to this point.

The Define stage will help your team gather great ideas and be able to understand how to use them effectively.
From here, you and your team will start to progress into the third stage of Design thinking, Ideate.

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 Figure 2: 5 Stages of Design Thinking

Ideate

The third stage of Design Thinking is called Ideate. During this stage, Design thinkers start to use the
information from the previous stages to generate logical ideas. From here, your team will start to make ideas
that may be “out of the box” or perhaps just ideas that may normally skipped over when not all of information is
presented. This stage allows for an alternative way to solve normalized problems.
By the end of this phase, your team should have a few ideas to solve the problem. It’s important during this
phase that your team should generate a lot of ideas just so you have many to choose from when starting the next
phase in the Design Thinking process, Prototype.

Prototype
The fourth stage of Design Thinking is called Prototype. During this stage the team will work on creating a
number of inexpensive products with specific features. This allows for the Design Thinkers to investigate
possible solutions to the problems that were identified the earlier stages of the Design Thinking process. With
each new prototype, the team investigates a different aspects of the problem and explores how each of the
prototypes would fix the problem.

By the end of this stage, the Design Thinkers should have a better understanding of the constraints the are
apparent of the prototype. This is also allow for the team to the problems that would be created by each
prototype, and how they could fix the prototype to make the prototype inherently better. From here, the team
should be ready to move on to the final step of the Design Thinking process, Test.

Test
The fifth and final stage of Design Thinking is called Test. During this stage Design Thinkers test their
prototypes made in stage four. They test their prototypes to see how well they solve/handle the problem that they
initially analyzed in stages one and two. Even during this step, the team can and will make alterations and
refinements in order to make the product more polished for their needs.
With this process, it allows for your team to go back to previous stages and revise their information to get the
best outcomes for their end product. Essentially, the team can continue to do this until they are either solve their
problem, or until they are satisfied with their product.

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 Figure 3. Design Thinking

In Conclusion

To wrap things up, Design Thinking is a flexible process that is solution-focused to help solve problems that
everyday people have issues with.

We all are designers!!!

https://www.youtube.com/watch?v=GYkb6vfKMI4

5. How to Successfully Drive Innovation in Organisations?

Innovation Capabilities

We have identified four key capabilities that truly innovative organisations do well.

Strategy – a clearly defined innovation strategy which guides decisions, and an explicit innovation ambition
from the Board and Top Management.

People – people are innovative, have a strong capability to innovate, and have innovation tools and innovation
metrics.

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Process – deep market and customer insights, constantly uncovering and understanding today's and tomorrow's
customer needs, collaborate well with partners and leading-edge customers.

Culture – encouraged to think big, dream big and take calculated strategic risks. Great at making innovation
investments, funding is easily available for new innovative projects, and have the time and freedom to innovate.

A large body of innovation research points to the importance of these four capabilities. They might sound
straightforward and relatively simple, but careful consideration of what each of them actually involves helps in
building innovation capability.

Figure 4: Four Innovation Capabilities

A. Innovation as a Strategy

Innovation means different things to different people and is industry and sector context specific. For example,
an innovation in the health sector will differ from an innovation that relates to the use of solar technology. In the
former, people’s health is at risk if the innovation’s downstream impacts are poorly understood, while in the
latter, failure would be an inconvenience, or even seen as a major political issue in the rapidly evolving
industry.

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With each industry or sector’s landscape changing more rapidly than it has ever been, there is not only an
opportunity but also a need, to be involved and ahead of the disruption curve and the new industry operating
norms.

Our innovation research identified the major innovation strategies organisations are employing to address future
threats to their organisation or industry/sector. Two of the top three innovation strategies are responding to
customers changing demands; improving the customer experience and developing new products and services.

Figure 5: Objectives Driving Innovation

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Organisations typically adopt one of three approaches:

 Innovation is managed on an ad hoc basis.

 Innovation is managed as part of the leadership team's agenda.
 Innovation is managed as part of the leadership team's agenda. It is resourced and is integrated as a core
business process.

Checklist:

 Does our organisation have an innovation strategy that clearly defines what the organisation wants to
achieve?
 Does our innovation strategy include priorities based on strategic objectives responding to the major
industry and sector shifts and the changing needs and requirements?
 Does our organisation allocate a budget and resources for innovation in its strategic plan?
 Does our organisation have a balanced portfolio of short-term and longer-term innovation initiatives?

It is clear that there will be an enormous period of disruption and opportunity ahead, where innovators are
combining technologies and new business models in different ways to drive innovation and opportunities.

The impacts of disruption have a significant way to play out over the next 5 to 10 years. Organisations will not
be able to stand still. Organisations doing what they do now will not sustain them in the future. Innovation is not
an option; the question is how do organisations respond, develop their innovation capability and move forward.

B. People

Innovation requires individuals who have a mindset which is comfortable dealing with uncertainty and
ambiguity. These individuals love to explore, learn, create and test opportunities. They view roadblocks as
learning opportunities to reshape or pivot their innovation.

Highly-innovative organisations are encouraging their people to innovation, without implementing disruptive
change programs. The practical starting point to improve an organisation's chances of stimulating and sustaining
innovation is amongst the organisation's people.

The leadership team is ultimately responsible for driving innovation and manage it formally as part of the
organisation’s strategy. Holding the leadership team accountable for encouraging innovation makes a big
difference through formal innovation targets or metrics. In this way, innovation can be not only be encouraged
but can also be managed, tracked and measured as a core element in an organisation’s strategic initiatives.

Checklist:

 Are our people equipped with a strong capability to innovate?

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  Do our people have the innovation tools and innovation metrics?
 Are our people innovative?
 Does our organisation have specific innovation targets, outcomes, and metrics?
 Are our people are given a voice/forum to express their innovative ideas and have input into
opportunities?

C. The Innovation Process

Innovation entails using the right processes and the most appropriate toolkit that promotes exploration, discovery and fast
experimentation. However, the innovation process also involves scaling up and embedding the innovation into the
organisation to achieve growth and long-term sustainability.

The Innovation process journey can be described in phases;

Figure 6: Innovation Process Journey

The four Innovation Phases are:

 Opportunity Identification – Ideation, finding great ideas, concept development;

 Opportunity Development – Market research, strategy development, developing, testing and piloting those ideas
into the new product, service, program or business;
 Scaling Up – Launching the innovation, testing and validating that systems and processes are ready to scale;
 Growth – Delivering the innovation at scale, driving growth so that the innovation is sustainable and merges
successfully into the organisation.
Checklist:
 Do we have a defined process for managing our innovations?
 Are we discovering deep market and customer insights?
 Are we constantly uncovering and understanding today’s and tomorrow’s customer needs?
 Are we collaborating well with our partners and leading-edge customer?

D. Culture
The cultural part of innovation is key. Innovation results from iterative experimental learning. Innovation
requires an empowering work environment. To facilitate increased innovation, one needs to enable and drive
innovative behaviours by aligning culture, structure, leadership behaviours, measurements and rewards.

Highly-innovative organisations are fostering an innovation culture based on trust among its people. In such a
culture, people understand that their ideas are embraced, resources are committed, and they are equipped with
the innovation tools and techniques to work collaboratively as a team. Promoting and encouraging innovation
behaviours such as ideation, developing, testing, and validating are key motivators to facilitate innovation.

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Checklist:

 Are we encouraged to think big, dream big and take calculated strategic risk?
 Are we great at making innovation investments?
 Does our organisation provide funding which is easily available for new innovative projects?
 Do we have the time and freedom to innovate?

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