BUS 304: Social and Political

Environment of Business

Lecture 12: INNOVATION

Virtue Practice: Responsibility

 Innovation: The creation, development
and implementation of a new product,
process or service, with the aim of
improving efficiency, effectiveness or
Innovation competitive advantage is called innovation.
An idea that has been made to work –
David Hussy (The Innovation Challenge)
– Can be a small process change or complex
issue
– May be product or
– Services
It may be divided into two parts:
– Invention; and
– Implementation

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 Creativity (use of imagination to create)
and innovation are essential factors for
Creativity any society to grow and be prosperous.
and It is even more essential for a business
Innovation to succeed.
Creativity and innovation exist in every
entrepreneur to create something or
change something for the betterment
of society.
An entrepreneur is someone who goes
into business to change something, and
takes risks to succeed.
Success cannot come without risk.
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 Entrepreneurs
They have existed throughout
Creativity history:
and
– Andrew Carnegie innovated the
Innovation
creation of steel, which allowed for
the creation of large production of
steel leading to American
Industrial Revolution.
– John D. Rockefeller innovated the
way that oil is produced and
created the largest oil company in
the world.
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 In more modern times, we have:
– Steve Jobs, the inventor of Apple; and
Creativity – Bill Gates, the inventor of Microsoft;
and – Jack Ma (Ailibaba) and Jeff Bezos (Amazon)
Innovation These men have innovated the computer
and retail trade industries and changed the
world
Many environmental factors and hindrances
to creativity and innovation exist.
What makes someone successful in
business is the ability to overcome these
issues or to use them to his advantage –
Creativity/Innovation
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 Google
– Decided to change the way people
Innovation: communicated
Plan to – Democratize information
Change the EBay
World – Wanted to make commerce easier for
everyone
• Once you have computer you can retail like
any other company
– Democratizing commerce
YouTube
– Wanted to democratize access to videos
– Make it possible for people to upload
videos at will and access it
 There is a difference between
making money and making
meaning
The Idea – If you make meaning you change
the world
– And you can make money
If you focus on making money
– You may not make money
– You may not change the world
Changing the world is sustainable
 Education and learning. Education has a lot to
do with one's ability to be creative and
- The learning process enables us to think outside
the box and to think of different methods for doing
Environmental things innovative but not sole of it.
factors in - It is a person's ability to learn and adapt to new
ideas and methods of doing something that
innovation enables them to be creative and innovative.
Finance- Access to money, is an important
environmental factor.
Type of government - A democratic nation is
more willing to foster creativity and innovation in
business than any other type of government.
- This because it improves the society as a whole.
Society - If a society as a whole wants to change
or innovate, it will conduce to change
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 Developing things that upend your industry
– Corporate innovation
Without innovation upstarts can take a big
Corporate company down
Innovation Mouthed mostly than practiced
Just having an innovation department or
arm or team clearly doesn’t guarantee the
sustainability of your business, nor fend off
competitors or adapt to changing markets
and consumers.
Big companies can fall into the trap in which
they enjoy serving existing customers while
new customers and technology are where
the meat is –
– “The Innovator”s Dilema (Clayton Christrnsen)
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 Big corporations are not usually
the heart of innovation.
Corporate They’re good at what they do,
Innovation but moving nimbly and coming to
clear decisions outside of the
normal comfort zone wrecks
havoc on internal teams.

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 Jeffrey H. Dyer, Hal Gregersen, and Clayton M.
Christensen - The Innovator’s DNA – (Harvard Business
Review) shed light on a study on role of genetics in
Are creativity - Not very much
People Researchers put sets of identical and fraternal twins
through tests that measured their creative thinking skills.
Born Results showed that only 25 percent to 40 percent of
Innovators creative performance could be attributed to genetics
alone.
Instead they found that genetics played a much larger role
in general intelligence - about 80 percent of differences in
intelligence were attributed to genetics.
So creativity - and, by extension, innovation, can be
cultivated. Good news for those that want to harness the
power of their employees.
They don’t just have to “work with what they have” in
terms of employee talent; they can build their workplace
into an innovative powerhouse.
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 Teaching/
Learning
Innovation can be learned by:
Innovation – Cultivating a culture of innovation,
– Utilizing learning techniques that
focus on learning-by-doing, and
– Following up with reinforcements

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 Get the right perspective – seeing
things differently and in a better way
Jumping Not sitting on the old curve forever
the Curve or Making minor incremental
changes
– Jump the learning curve – Great
innovation occurs on a new curve not
the old one
– Those who created the Mackintosh
were not trying to make a slightly
better Apple Computer; they wanted
something different and much better
 In the late 1800s/1900s there was
Ice harvesting Business in the US
Deciding – People cut ice blocks from frozen lakes
what to in winter
Become – Innovation was limited to
• Getting more horses to lift them
• Getting Sharper Saws to cut ice
– Wait for the next winter for ice
In the late 1900s you didn’t have to
live in a cold region to cut ice
– The refrigerator has come.
– Freeze water and mass produce ice
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 How do you define yourself
(Company)
Importance Some people define themselves
of self- by what they do:
definition – We Cut Ice – You keep cutting and
harvesting ice
– We Pull Horses – you keep doing it
– If you define yourself as the maker
of refrigerators you will remain
there
– Get on the next curve
• - from Telephone to Internet
 Deep – Functionally deep and wide
Intelligent – you can program your
Innovative car’s maximum speed and monitor
Products what the children watch on TV
Are Powerful –Mackintosh and Windows
Get things done and don’t wait for
perfection
Don’t worry; be Happy (crappy) but
focus on the revolutionary and wait
to curve out the crappiness
 Believe in God – Without God there
will be no Apple today.
• What made Mackintosh successful was
Role of Aldus PageMaker Desk Publishing; Not the
Faith Spreadsheet
• Without Apple the world would have been
a different place
– No Phones with Keypads, Long lasting Batteries
and
– No GPS

Don’t be afraid of disrupting

communities and polarizing them
– Innovation will do that
– It is a creative process birthing
something new
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1. TheThe
work environment
Creative
2. Traits
Process
3. The four step creative process

4. Brainstorming

5. Divergent thinking
 • The size of the creative team is
critical; Not unwieldy
The
environment
• Think about where you come up
that supports with your more creative ideas
creativity…. – Office
– At a retreat
• A passion for what you are doing
with genuine respect for other
peoples’ ideas
• Traits
Simplyofbelieving you’re creative
Creative
– Curiosity
People
– Confidence
– Courage
– Constancy
• They understand the creative process itself
The 4-step
1. Preparation
Creative
2. Incubation
Process
3. Inspiration

4. Verification
Preparation
Gather data
1. Subject-specific data or
2. Divergent data
• Be prepared to act
Inspiration
– Innovation cannot happen until an idea is operationalized
– Act on the new idea
• Avoid delay – Be decisive
– Some events are time-sensitive
– Delay may be dangerous
• Don’t waste a good idea
– An idea is nothing until it is given a chance
– Dreams die fast unless the dreamer gives them life
BUS 304: Social and Political
Environment of Business

Lecture 13: INNOVATION

- Sources
Virtue Practice: Responsibility
 SOURCES OF INNOVATIVE OPPORTUNITY
(Drucker–1)

1) The unexpected
APPROACHES TO
INNOVATION 2) Incongruity
- Drucker’s Sources 3) Process need
4) Industry/market structure
5) Demographics
6) Perception
7) New knowledge
 Internal
– Unexpected success rarely discussed
– Incongruity between expectation and
Peter actual event
Drucker’s – Inadequacy in the business process
7 Areas to – Change in industry or market structure
find External
Innovation – Demographic change
– Change in perception due to economic
change
– Changes in awareness due to
education/new knowledge

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 SOURCES OF INNOVATIVE OPPORTUNITY
(Drucker–2)

1) THE UNEXPECTED
APPROACHAES -Innovations can take place unexpectedly. They can happen
TO by chance. Someone might just stumble upon a new idea or
INNAAOVATION product. 
The product, process, etc. for which there were no great
expectations yet it did very well;
- The product process, etc. for which there was every reason
to expect success yet it failed;
- An unanticipated market opens up.
2) INCONGRUITY
When the need is incongruent with the supply, innovation
might be born. In an attempt to resolve the existing
incongruities people might innovate.
Increase in cars and shortage of parking spaces 
APPROACHES TO INNOVATION
CONCEPTS
SOURCES OF INNOVATIVE OPPORTUNITY
(Drucker–3)

3) PROCESS NEED
Needs always set us thinking. Innovation is based upon
bright ideas.-Microscopes came out of need to see deeper
perfecting a process that already exist, replacing a link that is
weak, redesigning a process around new knowledge, making
possible a process by supplying the missing link – .
4) INDUSTRY/MARKET STRUCTURE
An existing market structure can also give rise to chances for
innovation. This is how Google came about
Rapid growth of an industry; viability of the traditional market
definition and segmentation; convergence of technologies;
the way business is done is changing rapidly.
APPROACHES TO INNOVATION
CONCEPTS
SOURCES OF INNOVATIVE OPPORTUNITY

5) DEMOGRAPHICS
Changes in the population and lifestyles can
spur innovation; its size, composition,
employment, educational status, age structure,
income, etc. E-cigarettes came to reduce the
risk
6) PERCEPTION
When a change in perception takes place, the
facts do not change, but their meaning does –
Healthy eating, Fat people and thin people
 APPROACHES TO INNOVATION
CONCEPTS
SOURCES OF INNOVATIVE OPPORTUNITY
(Drucker–5)

7) NEW KNOWLEDGE
Nano technology, Bio-technology, the knowledge is
not necessarily scientific or technical;
Amongst history-making innovations, knowledge-
based innovations rank high.

CHARACTERISTICS OF KNOWLEDGE-BASED
INNOVATIONS -1) The longest lead time of all
innovations (e.g., 25-30 years) – 2)Almost always based
on the convergence of several different kinds of
knowledge
 Innovation as a process is the creation of an
idea; Creative thoughts directed to solving
challenges
The use or application of a new idea to solve
existing problem
Conclusion Anybody can be creative if they think outside
the box
It does not matter if they didn’t have
university degrees
Education may help creativity but not its basis
There can be some other sources of
innovation also apart from the ones Drucker
discussed.
– Innovation can be born out of passion or
adventure or even of a hobby.
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 Innovation is about process and
relationships comprehensively
and equitably focused on
Innovation understanding the problems and
issues of stakeholders
… …then designing solutions and
testing them, with an eye on
learning and adaption,
…and, once sufficiently tested,
implementing and evaluating the
solution before scaling it up
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 Wrong Corporate Culture
– Can be positive or a hindrance
Lack of consistency or follow up
Challenges
Very little budgetary attention
Little time for employees
Low adoption rate
Much focus on profit
No formal attention at all is paid
Lack of innovation-friendly
environment
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to Clap

Thank You for Listening