Understanding Innovation

What does progress look like?

 Creative Destruction
• "process of industrial mutation that continuously revolutionizes the
economic structure from within, incessantly destroying the old one,
incessantly creating a new one.” (Joseph Schumpeter, 1942)

• Creative destruction describes the deliberate dismantling of

established processes in order to make way for improved methods of
production.
Defining Innovation
• An innovation is the new or improved product or process that differs
significantly from the previous products and/or processes and that
has been made available to potential users (products) or brought into
use by the unit (process).
Types of Innovation
Architectural innovation
Architectural innovation
• Architectural innovation occurs when new products or services use
existing technology to create new markets and/or new consumers that
did not purchase that item before.
• For example, the smart watch used existing cell phone technology and
was repackaged into a watch. This opened up a new market of
purchasers by repackaging an existing technology.
• Although ride-sharing, geolocation and freelance workers already
existed in the market. These were combined to form uber which is an
example of architectural innovation.
Incremental innovation
Incremental Innovation
• Incremental innovation occurs when the innovation uses existing
technology to improve a product or service that addresses the
existing market.
• For example each new version of Apple’s iPhone that comes out is
typically incremental innovation. iPhone features such as the camera
and processor are tweaked to make an improvement over the
previous model.
Disruptive innovation
Disruptive Innovation
• Disruptive innovation occurs when a new product or service engages the
existing market with a new technology.

• Disruptive innovations occur when firms introduce offerings that are so

unique and superior that they threaten to replace traditional approaches.

• For example: Digital cameras disrupted the photography industry by

eliminating the cost of getting film developed.
• Netflix is a disruptive innovation because it changed the way to access
entertainment content.
Radical innovation
Radical Innovation
• Innovation that uses new technology to reach new consumers is radical
innovation.

• Radical innovation replaces the existing system or process with something

entirely new.

• For example, internet can be considered as a radical innovation as it has

altered the way we generate and access information.
• The development of Artificial intelligence can also be considered as radical
innovation as it would lead to a profound shift across various business
sectors.
Types of Innovation: (subject of innovation)

• Product

• Process

• Business model
Product innovation

• Product innovation is the creation and subsequent

introduction of a good or service that is either new, or an
improved version of previous goods or services. Drivers
may be
• technological advancements,
• changes in customer requirements,
• or outdated product design
Process innovation
• Process is the combination of facilities, skills, and technologies used
to produce, deliver, and support a product or provide a service.

• A process innovation is the implementation of a new or significantly

improved production or delivery method. This includes significant
changes in techniques, equipment and/or software.
Business model innovation

Business model innovation is the art of enhancing advantage and value

creation by making changes both to an organization's value
proposition to customers and to its underlying operating model.
 Innovation Process
Idea Generation-
• Freedom of exploration
• New thoughts and concepts

Advocacy And Screening –

• Evaluation of the feasibility of a business idea with its potential problems and benefits.

Experimentation –
• Testing the sustainability of ideas for an organization at a specific time.

Commercialization –
• Market value for an idea and its impact.

Diffusion And Implementation –

• Acceptance of an innovative idea
• Receiving feedback, indicators for success metrics, and other benchmarks enable the organization to stimulate the innovation
process.
Perceptual Mapping