ENT | 7

Entrepreneurship Part 7 - Sources of Innovation

Hey there and welcome back to part 7 of the series of entrepreneurship.

Today we will have a talk about sources of innvation, according to Peter Ducker there are four areas of opportunities within industries and organizations:

1. Incongruities
   occur whenever a gap exists between expectations and reality

2. Industry and market changes
   emerge as the result of continual shifts in the marketplace, caused by changes in customer attitudes, advances in technology or industry growth

3. Unexpected occurrences
   are productive sources of innovation because most people dismiss, disregard or even resent them

4. Process needs
   arise whenever a demand arises to innovate as a way of answering a particular need

If you look at the social environment of an organization you will have additional sources of innovation such as:

1. New knowledge
   can create innovations that differ in their predictability as well as in the changes they pose to entrepreneurs. Innovations in bioscience or nanotechnology are cases in point

2. Perceptual changes
   open up new opportunities when members of a community change their interpretation of facts and figures

3. Demographic changes
   are the most reliable changes, providing precise pictures of future ager and population structures

There are different trends an organization should permanently monitor, to recognize relevant developments that can be a source of innovation.

All upfront goes the TECHNOLOGY, which technologies are relevant for the company in the future? Concerning MARKET and CUSTOMERS, are there changes in customer needs and tastes that imply risks or opportunities for the organization? How can information about customer needs be collected? And finally what about COMPETITION? Which innovation is to be expected on the market? Are there any new products, services or processes introduced in the market by competitors and if so, are they successful?

The KANO Model describing the relationship between customer satisfaction and the fulfillment of requirement features.

Want to learn more about the KANO model read here.

When thinking about creativity typically you will be able to divide them into three main components:

1. Creative Thinking Skills
   How do people approach problems?

2. Knowledge
   Everything a person knows and can do

3. Motivation
   What people actually do

Next step is to look at some creativity techniques:

Problem reversal

• State the problem in reverse (change a positive statement into a negative one)

• Figure out what everybody else is not doing

• Change the direction or location of perspective

Forced analogy

• Take a fixed element, such as a product or the idea of a product

• Force it, to take the attributes of another unrelated element

• This should form a free flow of associations

Attribute listing

• List all major attributes of a product, object or idea

• For each of the attributes, list ways each of these attributes could be changed, e.g. CASE > is made out of PLASTIC > can be made out of METAL

Mind maps/concept maps

Brainstorming

But in the end you can’t force creativity, when looking on the distribution of when ideas develop we see that only 24% are developed while working and 76% are developed outside the company:

Where do ideas develop - operations insider

Based on this you might think about what factors are then influencing creativity? Well here are some examples:

Encouragement of creativity
Creativity can be enhanced through:

• Encouragement of risk-taking and of idea generation

• Valuing innovation throughout all management levels

• Perceived supervisor support

• Fair and supportive evaluations and so on

Autonomy
Is creativity fostered when teams have a high autonomy in daily work and a sense of ownership and control over their own work and ideas.

Resources
Resource allocation is directly related to creativity levels of a project.

Pressures
Pressures can support creativity when it is perceived as arising from the urgent, intellectual, challenging nature of a problem, but it can also undermine creativity, when it reaches an undesirable high level.

Mental Blocks
Creativity can be impeded by various mental blocks such as prejudice or functional fixation.

ENT | 6

Entrepreneurship Part 6 - Creativity and ENT

You didn’t come this far to only come this far! Welcome back to part 6 of the series of entrepreneurship.

In part 6 of the series entrepreneurship we will have a look on creativity, innovation and entrepreneurship. By that we’ll go through the three components of creativity, use some techniques of creativity, define and explain the sources of innovation, discuss different types of innovation and in the end explain the links between creativity, innovation and entrepreneurship.

The best way to have a good idea is to have lots of ideas

Linus Pauling (Winner of Peace and Chemistry Nobel Price)

The process of entrepreneurship starts with ideas for new services, products, business models or organizations - both in startups as well as existing organizations. Therefore different concepts of creativity and innovation are intrinsically tied to each other and some minds say that they cannot exist without the other.

Before we continue we want to define the three keywords in this section and what our understanding is of them:

Innovation
is generally understood as the successful introduction of a new thing or method which is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes or services (Luecke&Katz | 2003).

Creativity
”is the process through which invention occurs - the enabling process by which something new comes into existence.”

Innovation Management
is the discipline of managing processes in innovation, in order to respond to external or internal opportunities and using creative efforts to introduce new ideas, processes or products (Kelley&Kranzburg | 1978)

Idea classification matrix (cf. Neck 2010)

Using this approach we can say that creativity is in general defined as coming up with new ideas and innovation is implementing those. (cf Goddard 2008). But also when you goole the term innovation is often used to refer to the entire process by which an organization generates creative new ideas and converts them into products, services or business models where customers are willing to pay for. Having an idea is always the starting point of an innovation no matter if you have it by yourself or in a team workshop.

Looking on Innovation we have to separate them into different types of innovation:

Service/Product Innovation
Introducing new services or products or a combination of both

Process Innovation
Just think about SMED and the EMIPS methodology (eliminate, minimize, integrate, parallelize and synchronize).

Social Innovation
New developments to get rid of social unacceptable conditions.

Structural/Organizational Innovation
Organizational development that supports all value adding activities of an organization.

Last but not least we differentiate between incremental and disruptive innovation. Those can be described as followed and are relevant for product-, process- or service-innovation:

Incremental Innovation

• Steady improvements

• Based on sustaining technologies

• Obedience to cultural routines and norms

• Can be rapidly implemented

• Immediate gains

• Develop customer loyalty

Disruptive Innovation

• Fundamental rethinking

• Based on disruptive technologies

• Experimentation and play/make believe

• Needs to be nurtured for long periods

• Worse initial performance, potential big gains

• Create new markets