CREATIVE DESTRUCTIONS

LARGE FIRM VS START UP INNOVATION

CO-CREATION AND OPEN INNOVATION
DEVELOPING AN INNOVATION
STRATEGY
INNOVATION ENVIRONMENT
SOURCES OF INNOVATION
INNOVATION PLATFORMS

By- yachana sharma

asst. professor
Innovation process
Creative destructions
  Out With the Old, In With the New
 The constant product and process innovation mechanism through which new
manufacturing units replace old or traditional ones is known as creative destruction.
 In other words, creative destruction is the deterioration of long-standing habits,
methods, goods, or services, followed by more inventive, disruptive ones.
 The creative destruction process accounts for more than half of all productivity
increase over the long-term. During downturns, restructuring generally drops at
business cycle frequency, adding a major cost to downturns.
 In essence, the creative destruction hypothesis states that long-standing structures
and assumptions must be eliminated in order to free up resources and energy for
innovation. Economic progress, according to Schumpeter, is the natural outcome of
market forces and is fuelled by the desire to make a profit.
 For e.g.- traditional watches replaced by smart watches, tablets and kindles replacing
conventional printed books.
Large Firm versus Start-up
Innovation
 There has been huge argument among the people that whether the innovation emerges from
large corporate organisations or the most of the innovative ideas comes from small start-ups.
However, the answer of this question shows that innovation that can be found both in large
businesses and small start-ups but 'the-process of innovation varies greatly between these two.
 Because of the resources at their disposal, large corporations are able to develop massive R&D
capabilities. For example. the massive laboratories that many pharmaceutical firms operate.
However, such organisations may be particularly risk adverse, particularly when it comes to
radical innovation. They also work in regulatory settings that discourage risk taking: new
pharmaceutical products must go through years of clinical testing before being approved by
regulators.
 Large, well-resourced organisations can acquire innovation by merging or acquiring inventive
new and small businesses. This allows them to incorporate innovations into their product line-
up and innovators into their organisations. They have the resources to continuously examine the
surroundings for acquisition or imitation possibilities.
 As compared to large corporate businesses, Small, new knowledge based technology
businesses will be better equipped to take risks. “which are inherent to innovation. Innovation
is frequently easier to control outside the established firms.
INNOVATION ENVIRONMENTS
 Ideas people and businesses come together in innovation environment. New firms emerge
from the Intersections of several sectors in innovation environment. It involves the co-
development approaches and innovation services.
 Some Innovation settings are so-called regional development objects, which are investment
items for the constructed urban environment. New solutions and enterprises can be developed
and evaluated in other innovation settings
 The amount of group and individual interactions, the presence and dedication of leadership to
innovation, as well as the organisation's culture, may all contribute to the innovation
environment.
 Key management levels and individuals must be committed to creating an environment and
culture that encourages creativity, be engaged, and promote the ability to promote change in
nimble, agile, and flexible ways in response to changing market and customer conditions in
order to promote innovation and its environment.
 The environment you create with your team is a key component of innovation. As a leader,
you must commit to practicing innovation and be persistent doing it. It is human nature to
take the path of least resistance or stick to doing what we know. Making innovative thinking
part of your team culture is the only way to achieve breakthroughs.
Steps To Creating an Innovative Environment:

 Role Model: Ask powerful questions, engage in creative thinking and use tools and
exercises to get people “out of the box”.
 Dish Out Recognition: Recognize the right things including when mistakes move
you to another level.
 Make it Safe to Explore: Let it be okay to explore new or even crazy ideas. Talk
about what is “beyond” possible and what you can see or the resources you
currently have.
 Provide Time & Resources: Give people the time and space to be innovative and
they will. Provide spaces, technology or outside resources for people to innovate.
 Always Search For The Second Right Answer: Get in the habit of always
searching for the 2nd and 3rd right answer. Never stop at the first right answer. This
is what limits innovative thinking.
 Make It a Goal or Strategy: Make innovation an expectation or a way that you do
business.
Co-Creation
 Co-creation is when businesses include outsiders
in the ideation and development process. Most
companies keep new products and processes strictly
internal; some even work hard to keep them secret.
But co-creation lets companies collaborate outside
the business to gather fresh ideas and break from
their own status quo. They acknowledge that they
don’t have all the answers in-house, and they make it
easy for others to bring the answers to them. 
 The collaborative process of creating new value
together with external experts and stakeholders.
 For e.g. Take a look at Nike Air, putting an airbag
within the shoes was inspired by a NASA engineer
who experimented with innovation within astronaut
helmets for space exploration.
Types of Co-creation
 There are four types of co-creation, based on two axes: openness (who can join)
and ownership (who is the owner of the outcome).
1. Crowd sourcing: Where an initiator invites “everyone” to contribute ideas
towards the challenge he or she has. It can be an open call for concepts, designs,
ideas, solutions... The initiator “owns” the outcomes.. 
2. Community co-creation: Where communities (groups of people who share an
interest, identity, or benefit) contribute towards a shared purpose. Everyone
within the community (could be everyone) benefits from the outcome. Think
Wikipedia - the world’s information database, run and filled by individuals.
3. Coalitions: Where groups of selected individuals/organizations join forces to
realize a shared goal that none of them could achieve individually. Outcomes are
owned/shared by all contributors. Here you could think of espresso where they
partner with coffee machine manufacturers. 
4. Expert co-creation: Where specific experts are handpicked to synthesize per-
spectives and solve an initiator’s challenge. Interactions between participants are
generally deeper than in Crowd Sourcing cases, and the outcomes are “owned”
solely by the initiator.
Open Innovation
 Open innovation is a business practice to source ideas and solutions from a broad diversity of
individuals and organizations to drive innovation.
 Open Innovation is a new type of innovation emphasis the firms to rethink their leadership
roles, which reflect the performance outcomes of their business strategy.
 In other words, open innovation can be defined as the use of purposeful information inflows
and outflows to accelerate internal innovation and increase markets for external application of
invention, respectively.
 When it comes to technology advancement, the Open Innovation paradigm implies that
companies may and should employ both internal and external ideas, as well as internal and
external pathways to market. Internal and external ideas are used in Open Innovation processes
to create structures and systems.
 Advantages of Open Innovation:
1. Cost Involved In conducting research and development can be reduced.
2. Helps in increasing Productivity.
3. Facilitates the involvement of customers in the entire development
process.
4. Facilitate marketers to conducting accurate research and reaching
potential customers effectively.
5. Helps in improving the planning and delivering project
performance.
 Disadvantages of Open Innovation:
1. Increases the risk of disclosure of confidential information.
2. Increases the chances of losing competitive advantage as a result of
disclosure of information not meant to be shared.
3. Monitoring innovation and impact of contributors over the projects
become more complex.
4. Increase dependence on the external knowledge.
INNOVATION STRATEGY
The development of product is widely influenced by the
innovation. A company's innovation strategy is a plan for
encouraging technological or service advances ,generally
by spending money in research and development practices.
As compared to other business strategy, predicting steps,
time and impact of innovation strategies is quite complex.
The allocation of resources in order to meet the goals of
business for innovation, delivering value and steps in
building competitive edge can be determined by the
innovative strategies.
 “A detailed plan and an innovation mission that aims at
developing new value for which customers pay willingly is
defined as business's an innovation strategy.”
Drivers of innovation strategies
Developing an Innovation strategy

1)Determine Objectives and Strategic Approach:

An innovation strategy should support the goals of the business and vice versa. For
example, Olay's winning ambition is to become a major skincare brand that dominates its
target markets and distribution channels
2)Know the Market Competitors and Customers:
Marketers requires innovation to identify and fulfill the needs of the customer, along with
the competition.
3) Define the Value Proposition: marketers should emphasis on developing the value for
which either customers are willing to pay or that saves time and money of their customers.
4) Assess and Develop Core Capabilities: Marketers need to consider the factors such as
R&D, culture, behaviors, values, knowledge, and skills when assessing and developing the
set of capabilities.
5) Establish the Innovation Techniques & Systems: Marketers should identify the type of
system needed and what innovation techniques are required to link the innovation
infrastructure together. Marketers are also required to identify the system that help and
support in measuring the outcome of innovation strategy.
Sources of innovation
Innovation platforms
 An innovation platform is a tool for building and growing ideas. However, an
innovation platform also refers to a technical solution where you can build things
fast and prototype tools.
 A space for learning and change is defined as innovation platforms.
 According to Peter Drucker, innovation platform can be developed on the basis of
following questions:
1)what is our business?
2) Who are our customers?
3) How do we create value for those customers?
 Types of Innovation Platforms
1) Technical Open Innovation Platforms: One of the biggest changes in the way in
which companies approach innovation has been the growth of a technology-
based open innovation platform. one of the biggest open innovation examples is
Linux, an operating software that competes with Microsoft and Apple, which are
developed in the closed innovation policy platform. Therefore, the biggest benefit
of open-source software is that the software is continuously tested by programmers
with 100 percent transparency.
2)Idea Management Platform: This is an idea-sharing platform
where people can come together and share their thoughts on the idea
management process. So, the goal of an innovation management
platform is to help companies come together, gather ideas from their
employees, and evaluate each idea individually. 
 Benefits of Innovation Platform:

 Innovation platforms facilitate effective communication and develop

mutual trust and vision among the stakeholders.

 Innovation Platform fosters motivation and a sense of ownership

over the solutions they build.

 It facilitates businesses in identifying the obstacles in the way of

innovation and required corrective measures.

 Innovation platforms enable members define their responsibilities, react to
unanticipated changes, and organise themselves by enhancing ideas,
communication, learning, and exposure to new individuals.
 Innovation platforms provide new ideas that address social issues, foster
social connections, and foster new partnerships.
THANK YOU