INNOVATION MANAGEMENT

Topics in Syllabus
• Invention vs. Innovation
• Innovation Models
Questions in Univ Exams
• Invention vs Innovation
• Incremental vs Radical innovation
• Architectural Vs Modular innovation
• Customer as a source of knowledge
• Important Innovation Models Linear vs non-linear models
• Explain Market Pull and Technology Push Models of
Innovation using examples.
What is Invention?
According to Oxford English Dictionary – Invention means
to create or devise something new. Invention is also
regarded as devising of new ways of attaining given
ends.
Any Invention must satisfy following conditions :
• It results into something new,
• It involves some inventive (new) step &
• It is useful.
What is Invention?
Under section 2(1)(j) of the Patents Act, 1970, an
invention means any new & useful :
• Art, process, method or manner of manufacture
• Machine, apparatus or other article
• Substance produced by manufacture.
It also includes any new & useful improvement of any of
three things mentioned above.
What are not Inventions
Following are not regarded as inventions under the Patents
Act, 1970:
• Mere discovery of an already existing principle.
• Discovery of a scientific principle
• An invention which is frivolous or which claims
anything contrary to well established natural laws.
• Mere discovery of new property or new use of known
substance, process, machine or apparatus; unless it
results in a new product or employs at least one new
reactant
• A substance obtained merely by mixing
What are not Inventions
Contd ….
• A mere arrangement or re-arrangement or
duplication of known devices
• A method of agriculture or horticulture
• Any process for treatment of human beings, plants &
animals to render them free of diseases or to increase
their economic value or that of their products
• An invention, use of which would be contrary to law,
morality or injurious to public health.
Types of Inventions

• Spontaneous / Autonomous Inventions

• Induced Inventions
What is Innovation?
• According to Oxford English Dictionary –
Innovation means introduction of something new.
Thus Innovation can be defined as the introduction of
a new product, service or process into the market
place.
• The National Innovation Initiative (NII) of USA
defines - innovation as the intersection of invention
and insight, leading to the creation of social and
economic value.
What is Innovation?
Contd …
• ‘Innovation is celebration of creativity’,  pronounced
Dr A.P.J. Abdul Kalam, the President of India at 
Third Award Function of NIF (National Innovation
Foundation).
• Many definitions of Innovation
• To sum up…
Innovation = Invention + Commercial Exploitation
Diff between Invention & Innovation
S No Invention Innovation

1 It is the creation of a It is introduction of new

new product, service or product service or
process process into marketplace
2 May not be Results into
commercialized commercialization
3 Invention can be both Innovation is usually
autonomous & induced induced
4 Invention may be for Innovation is usually for
non-economic or economic motive
economic motive
Diff between Invention & Innovation
S No Invention Innovation
5 Activities usually Activities &
restricted to R&D applications spread
center across the organization
6 May bring few Brings organizational
changes in change
organization
7 Precedes innovation Succeeds / follows
invention
8 Invention = Innovation = Invention
Innovation – + commercial
commercial exploitation
exploitation
Components of Innovation
Three Components
• A hardware component – consisting of material or
physical aspects of innovation
• A software component – consisting of information
base that is needed to use the innovation
• An evaluation information component – that is useful
for decisions related to the adoption of the
innovation.
These components form a system to make it user friendly
Types of Innovation
Following categories
• Product, Service & Process innovations
• Open & closed innovations
• Incremental & Radical Innovations
 incremental innovations – sustaining innovations,
evolutionary innovations
 radical innovations – altering innovations,
disruptive innovations – extreme case – business
model innovations
• Disruptive vs sustaining innovations
• Modular & architectural innovations
• Generic & epochal innovations
• Technovation / Technological innovation
Types of Innovation
What is Innovation Process ?
Innovation Process
• It is the process which facilitates innovation.
• The process of innovation involves search & selection,
exploration & synthesis, cycles of divergent thinking &
convergence.
• Innovation process needs support at three levels.
• At the macro level i.e. National Level, Innovation in a
nation directly depends upon national government’s
policies and support.
Innovation Process
Innovation Process
Contd …
• At the next level i.e. Enterprise Level, Innovation in
enterprises depends upon top management’s support and
commitment. It is the top management which sets the
direction and environment for the innovation in an
organization.
• Lastly at the bottom level ie. Individual Level,
Organizations should create mutifunctional teams and
encourage individuals involved in the innovation process.
Innovation largely depends upon actions and motivation
of multifunctional teams and individuals involved in the
innovation process.
• Innovation is largely a responsibility of enterprise
Innovation Process vs Process innovation

S Innovation Process Process innovation

No
1 It is the process which It means development of new
facilities innovation. process / changes in process
design which are used in
providing product / service
2 It may lead to innovations It is one of goals of innovation
in the areas of product, process
service or process
3 e.g. … Activities of multi e.g. … JIT, CAD, CAM, FMS,
functional team for new e-mails, e-CRM
product development
Types of innovation strategies

Innovation strategies can be classed as proactive, active,

reactive and passive (Dodgson et al. 2008).

Proactive
Companies with proactive innovation strategies tend to have
strong research orientation and first-mover advantage, and be a
technology market leader. They access knowledge from a broad
range of sources and take big bets/high risks. Examples include:
Dupont, Apple and Singapore Airlines.
The types of technological innovation used in a proactive
innovation strategy are:
•radical - breakthroughs that change the nature of products and
services
•incremental - the constant technological or process changes
that lead to improved performance of products and services.
Active

Active innovation strategies involve defending existing

technologies and markets while being prepared to respond
quickly once markets and technologies are proven.
Companies using this approach also have broad sources of
knowledge and medium-to-low risk exposure; they tend to
hedge their bets.

Examples include Microsoft, Dell and British Airways.

These companies use mainly incremental innovation with

in-house applied research and development.
Reactive

The reactive innovation strategy is used by companies:

•which are followers
•have a focus on operations
•take a wait-and-see approach
•look for low-risk opportunities.

They copy proven innovation and use entirely

incremental innovators. An example is Ryanair, a budget
airline which has successfully copied the no-frills service
model of Southwest Airlines.
Passive

Companies with passive innovation strategies wait until

their customers demand a change in their products or
services.
Examples include automotive supply companies as they
wait for their customers to demand changes to
specification before implementing these
Innovation Process Models
1. Linear Model
• 1.a. Technology Push Model
• 1.b. Market Pull Model
2. Flexible Innovation Process Model
Linear Innovation Process Models
1. Linear Model
• Under this model, product or service concept is
frozen at early stage so as to minimize risk.
• In this model, innovation process in enterprises
involves series of sequential phases / steps
arranged in such manner that the preceding
phase must be cleared before moving to next /
succeeding phase.
• Thus project must pass through a gate with the
permission of a gatekeeper before moving to next /
succeeding phase.
Linear Innovation Process Models
1. Linear Model … Contd ….
• Criteria for passing through each gate and the person at
each gate (gate keeper) are defined beforehand.
• The gatekeeper examines whethere stated objectives for
the preceding phase have been properly met or not &
whether desired development has taken place at the
preceding phase or not?
Linear Innovation Process Models
Linear model figure:
Linear Innovation Process Models
Linear model works well only when
• Time required to innovate is shorter than rate of change in
environment
• Quality, reliability & safety requirements are critical
• Safe and suitable for a first time beginner
This model is generally followed for incremental
Innovation. It is linear in the sense that here innovation
process is tightly controlled and directed from the
beginning itself towards set targets / goals and inputs are
controlled to attain desired targets / goals.
Linear Innovation Process Models
Weakness / Limitations of the linear model are
• Low gatekeeper knowledge may lead to poor judgements,
delayed evaluation or rejection of good projects
• Slow & serial process as it is step by step approach, thus time
consuming
• Concept frozen too early, however customer needs / market
requirements may undergo change subsequently at later stage
• Focused on control through gates, not on customer
• Long review preparation time
• Narrow criteria for evaluation which may be rigid
• More focus on attaining target / maturity, less focus on learning
Linear Innovation Process Models
Common types of linear model are
• 1.a. Technology push model
• 1.b. Market pull model
Linear Innovation Process Models
1.a. Technology Push model
• It is the first generation linear model .
• Under this model, technology is regarded as key driver of
innovation.
• Whenever a new / improved technology emerges, it leads
to innovations of new products, services or processes.
• Technology Push innovation involves series of sequential
steps i.e. Fundamental research (Basic science),
Application Research, Design, Engineering,
Manufacturing, Marketing & Sales.
Linear Innovation Process Models
Contd…. Technology Push model
• User / Consumer is treated as passive recipient of output
i.e. it is presumed that if a new / improved product or
service, based on new technology, is developed without
getting feedback / consulting consumer / user and it is
offered to consumer / user, he will accept the new product
or service.
• Thus the model ignores the consumer needs and market
requirements.
Linear Innovation Process Models
1.b. Market Pull linear model
• This is the second generation linear model.
• It includes and integrates user needs in the innovation
process.
• Here consumer needs / market requirements are regarded as
the key driver of innovation process.
• Market Pull innovation involves series of sequential steps i.e:
Assessing consumer needs / market requirements, Concept
/idea generation, Refining idea to atleast meet consumer
needs, Design, Engineering, Manufacturing, Test marketing
& Sales.
• Some examples are : Market Pull Innovations In
Phones,UPS, Invertors
Flexible Innovation Process Models
2. Flexible Innovation Process Model
• Initially, Innovation was deemed to be linear / directed /
palnned activity.
• Now innovation is regarded also as non-linear and ideas /
improvements can emerge from any source and at any
stage of innovation process.
• The combination of linear & non linearity approaches
have led to emergence of Third Generation models which
reflect complexity of real innovation process.
• These models include Technology Push + Market Pull
combination, R&D + Marketing, Cyclical Model etc.

• 
Flexible Innovation Process Models
Contd … Flexible Innovation Process Model
• The models attempt to explain the radical innovation
process in rapidly changing business environment. 
• In these models, phases are over lapped i.e. development
in more than one phase can continue at the same point of
time.
• No design is locked down earlier than absolute necessary
so as not to miss a newly emerging technology or new
opportunity.
Flexible Innovation Process Models
Flexible Innovation Process Model
Flexible Innovation Process Models
Contd … Flexible Innovation Process Model
• According to Cycling Model, innovation is cyclical in the
sense that it is driven by the product improvement cycle.
• This cycle often begins with customer needs.; which keep
on changing. Also an enterprises may be working for new
product development simultaneously. Thus there are
cycles of innovation.
Flexible Innovation Process Models
Contd … Flexible Innovation Process Model
• The process of technological innovation involves complex
relationships amongst set of key variables like –
Inventions, Innovations, Diffusion Paths and Investment
Activity.
• The complex relations between these variables form a non-
linear system with its underlying ramifications which can
lead to unexpected & possible chaotic results.
• Thus proper interaction & integration between R&D,
Manufacturing, Marketing & Other Corporate Functions
helps in proper management of Innovation process.
Flexible Innovation Process Models
Contd … Flexible Innovation Process Model
Flexible Innovation Process Models
a. Advantages
• Continuous interaction with market
• User needs oriented
• More chances of acceptance of product etc
• Less risk of failure & resultant after-effects
b. Disadvantages
• Chaotic in nature
• May become directionless