Innovation

This project is

funded by the EU

What is Innovation?

Dr. Innovation BIAT

A group of blind men touch an

elephant to learn what it is like.

Each one feels a different part,

but only one part, such as the

side or the tusk. They then

compare notes and learn that

they are in complete

disagreement.

“The fact is, innovation means different things to different people.” Business Week

Different definitions of Innovation

Innovation is the commercial exploitation of

ideas. Innovation need to combine creative

thoughts with the ability to implement them.

“Innovation is the specific instrument of

entrepreneurship… the act that endows

resources with a new capacity to create wealth.”

Peter Drucker

“Innovation is the creation of something 

that improves the way we live our lives”

Barack Obama quoted in Business Week’s “In” sub section, p. 6, November 2007

“The often unspoken goal of

innovation is to solve a problem”. Wikipedia

“Innovation is simply new technology, i.e. the

systematic application of (new) knowledge to

(new) resources to produce (new) goods or

(new) services”.

Maciej Soltynski

“A new match between a

need and a solution”. Professors Christian Terwiesch and Karl T. Ulrich

The introduction of a new good — that is one

with which consumers are not yet familiar —

or of a new quality of a good.

Joseph Schumpeter

The introduction of an improved or better

method of production, which need by no

means be founded upon a discovery

scientifically new, and can also exist in a

better way of handling a commodity

commercially.

The opening of a new market, that is a market

into which the particular branch of

manufacture of the country in question has

not previously entered, whether or not this

market has existed before.

The conquest of a new source of supply of raw

materials or half-manufactured goods, irrespective

of whether this source already exists or whether it

has first to be created.

Definition SUMMARY

• Market, Profit, Entrepreneurship, Commercialize, Feasible.

• Creativity, idea generation, brainstorming.

• Systematic, process.

• Change, better performance, improve, solve problem, cover a need.

• Technology, science, knowledge, management.

• New: product, process, service, market, raw material, business concept.

To introduce change to products, services, or

processes with added value to the market

through the management of knowledge,

sciences, and technology.

• Product/service innovation (new or upgraded product or services)

• Process innovation (new ways of producing, sourcing or manufacturing)

• Market innovation (new market or new ways of delivering goods and services).

• Business innovation (business model innovation and diversification).

Types of Innovation

Types of Innovation

1-Radical: major changes to an

existing product/process/service.

(eg: iPod, Google Earth, flat screen tv)

Resource intensive + high risk

Types of Innovation

2-Incremental: small changes to an existing

product/process/service.

(eg: pentium III to pentium IV, soap to liquid

soap, washing powder to tablets)

Known resource requirements + lower risk

MSEs

Types of innovation 3-Disruptive Innovation: the introduction of

disruptive business practice which changes

business practice radically.

(eg: email vs. post, Skype vs. telephone, e-

learning vs. traditional learning, digital

photography vs. film photography).

Why innovate?

• Rapidly changing marketplace.

• Shorter and shorter product life cycles (replace

products).

• Realize new market opportunities (new

products).

Why Innovate? • Increase market share (market penetration).

• Diversify into new markets (market

development).

• Reduce costs / increase efficiency.

• Conform to regulation (healthy and safety,

quality, other legislations).

Drucker’s 7 Sources for Innovative Opportunities

1-The Unexpected:

!An unexpected success, an unexpected failure or an unexpected outside event can be a symptom of a unique opportunity.

TSUNAMI

2-The Incongruity: A discrepancy between reality and what everyone assumes it to be, or between what is and what ought to be, can create an innovative opportunity.

Drucker’s 7 Sources for Innovative Opportunities

GOD

When a weak link is evident in a particular process, but people work around it instead of doing something about it, an opportunity is present to the person or company willing to supply the “missing link”.

3 - Process need

Drucker’s 7 Sources for Innovative Opportunities

EAR

4- Changes in industry structure: The opportunity for an innovative product, service or business approach occurs when the underlying foundation of the industry or market shifts.

Drucker’s 7 Sources for Innovative Opportunities

MONOPOLY

Drucker’s 7 Sources for Innovative Opportunities

5- Demographics: Changes in the population’s size, age structure, composition, employment, level of education and income can create innovative opportunities.

RESTAURENT

Changes in perception, mood and meaning- Innovative opportunities can develop when a society’s general assumptions, attitudes and beliefs change.

6-Beliefs change

Drucker’s 7 Sources for Innovative Opportunities

FASHION

Advances in scientific and nonscientific knowledge can create new products and new markets.

7- New Knowledge

Drucker’s 7 Sources for Innovative Opportunities

GREEN ENERGY

1-Problem recognition

2-Idea Generation

3-Implementation

4-Market Innovation Process

Problem Recognition begins when a firm

recognizes the need or potential of

introducing market value added change to

create a new product, service, market,

process, raw material, or business concept.

1-Problem Recognition

• When it is a new technology it is called “technology push”.

• When it recognizes a market need that needs to be fulfilled it is called “market pull”..

Problem recognition maybe triggered by

changes mandated by external agencies such

as regulatory bodies.

The stage is complete when a firm

decides that it is economic interest to

solve the problem.

2- Idea Generation “ Creativity and Innovation are normally

complementary activities, since creativity generates the basis of innovation, which, in its development, raises difficulties that must be solved once again, with creativity…it is not possible to conceive innovation without creative ideas, as these are the starting points”

European Commission

Creativity

Innovation

DifficultiesCreativity

Solutions

Link between Innovation

and Creativity

Innovation is implementing new ideas rather

than simply the generation of new ideas,

which we would refer to as creativity.

It is better to have enough ideas for some of them to be

wrong, than to be always right by having no ideas at all.

Think what no one else has thought.

Idea generation tools

Idea generation can play a real role in innovation.

Two idea generation tools are:

• Catch Ball

• Brainstorming

*Catch Ball Simulation

You are a manufacturer of bicycles.

We want to introduce a new product for obese people.

Does anyone have any idea?http://www.youtube.com/watch?v=v4lWnsoEISo

http://www.youtube.com/watch?v=J16aMLwWKuU&feature=related

http://www.youtube.com/watch?v=v4lWnsoEISo

http://www.youtube.com/watch?v=J16aMLwWKuU&feature=related

A Steel Frame: You can't break or crack it, and it supports your weight and ride .

Strong rims and spokes: No warping from heavy weight

Wider tires: They stay pumped and resist breakage due to weight

Wide, metal pedals: Broad and sturdy, strong enough for our weight

A Big, Comfortable Saddle: Wide, well-padded, and comfortable

*(Brainstorming) A group creativity technique designed to

generate ideas in which group members freely

and spontaneously present ideas in a positive

environment in which critical or negative

thinking is suspended.

Brainstorming five key principles

1. Focus: Brainstorming should concentrate on

a particular problem and be bounded by real-

world constraints.

2. Suspended judgment: All judging should be

suspended while ideas are being generated.

Even the wildest ideas should be encouraged.

Brainstorming Principles

3. Personal Safety: Participants should be assured that

unpopular ideas or ideas that threaten the status quo

will not provoke blame.

4. Serial discussion: Limit the discussion to one

conversation at a time and keep it focused on the topic.

5. Build on ideas: try to build on the ideas of others

wherever possible.

Brainstorming Categories

1. Visioning: The visioning approach imagine in

detail, a long term, ideal solutions and the

means of achieving it. Generate several ideas

that constitute the ideal solution then ask

what it would take to make those ideas

happen.

Brainstorming Steps

Brainstorming Categories

2. Modifying: Modifying techniques begin with the

constraints / status Quo with current technology

or conditions – and try to make adaptations.

Brainstorming Categories

3. Experimenting: Experimenting helps you to

systematically combine elements in various

ways and then test the combinations.

Create a matrix of different parameters and

explore new business possibilities.

Simulation (experimenting): Soap Factory

Given the following product factors, what are

the new business possibilities?

Range of products• Regular beauty soap• Traditional beauty soap• Therapeutic soap• Body and face creams• Body and face oils• Perfume essence• Perfume

Raw material

• Olive oil • Coconut oil• Perfume essence• Flowers• Herbs• Honey

Aesthetics

• Cubic• Sphere• Pyramid• Rectangular

Use• Beauty• Therapy• Hygiene• Spa• Aroma • Gift• Decorative

Packaging

• Nylon• Card board• Shape: cube• Color: brown

Manufacturing Processes• Manufacturing Process: 100% hand made

(including routine non-value adding

operations).

• Drying Process: Soap drying racks, or soap

assembled in pyramids (the drying process

takes usually 1 month).

Segments

• Europe• Arab Countries• North America and Canada• Large Families• Women between 15 and 40• Rich consumers ( as a prestige product)• Hospitals• Hotels• Tourists• Loyal consumers

3-Implementation In this phase the technical and financial feasibility are tested:

•Research and development

•CVP Analysis

The Two Divisions of Product Management:

Research and Development:• New product development (NPD).

• Current mix - maintenance and abandonment.

•The Product Life Cycle (P.L.C.)

Research and development output

4- Market

Commercial Products

Paper Grenades Game

This project isfunded by the

EU

Thank you