Understand Innovation in 5 Minutes

Slide 1: INNOVATION . . . an introduction © Brokenbulbs.com

Slide 2: What can you learn from this? • What innovation is • Why it’s important • The types of innovation • The degrees of innovation © Brokenbulbs.com

Slide 3: What is innovation? Hundreds of similar definitions can be found in the literature. Here is the one I like to use: “Innovation is the profitable implementation of ideas.” © Brokenbulbs.com

Slide 4: An innovation can increase profits on the value side (customers value an innovation enough to pay more for it) . . . © Brokenbulbs.com

Slide 5: . . . or the cost-cutting side (the company produces a product offering in a more efficient way). © Brokenbulbs.com

Slide 6: Either way, value is created for the firm and the consumer. $ © Brokenbulbs.com

Slide 7: An invention is different from an innovation at any particular time in that it doesn’t have commercial value but . . . © Brokenbulbs.com

Slide 8: . . . it may have in future. © Brokenbulbs.com

Slide 9: Think of invention as the laying of an egg, innovation as the laying and hatching. © Brokenbulbs.com

Slide 10: There is no shortage of ideas and inventions in the world. The challenge is to introduce these successfully to a market. © Brokenbulbs.com

Slide 11: Only then can the idea/invention be called an innovation. © Brokenbulbs.com

Slide 12: In other words, innovation requires interplay between a product offering (technology) and a market. © Brokenbulbs.com

Slide 13: A market can be inside or outside the firm’s physical walls. © Brokenbulbs.com

Slide 14: Why is innovation important? © Brokenbulbs.com

Slide 15: Innovation reduces waste and environmental damage. © Brokenbulbs.com

Slide 16: Innovation creates growth, increases productivity, and economic wealth (avoids stagnation). © Brokenbulbs.com

Slide 17: Innovation provides better goods and services at a cheaper price – higher standard of living. © Brokenbulbs.com

Slide 18: More interesting work for employees. © Brokenbulbs.com

Slide 19: Old strategies get replicated and, consequently, margins get squeezed. © Brokenbulbs.com

Slide 20: Survival! Source: United Kingdom Dept. Trade and Industry © Brokenbulbs.com

Slide 21: What are the types of innovation? © Brokenbulbs.com

Slide 22: Numerous types . . . © Brokenbulbs.com

Slide 23: . . . but all these labels just describe where something new, better or different occurs. © Brokenbulbs.com

Slide 24: BROADLY: © Brokenbulbs.com

Slide 25: Product Process Service Business model Value Market © Brokenbulbs.com

Slide 26: . . . and many more, depending on level of detail. Basically, innovation can occur anywhere in the firm’s business by anyone. © Brokenbulbs.com

Slide 27: Note! There is another type that needs to be considered separately. This is “disruptive innovation,” a term coined by Clayton Christensen. This type of innovation refers to a firm’s strategy relative to other firms. © Brokenbulbs.com

Slide 28: The degrees of innovation. © Brokenbulbs.com

Slide 29: Once again, many labels . . . © Brokenbulbs.com

Slide 30: . . . however, they all describe the degree of change required by the innovating firm and/or the market. © Brokenbulbs.com

Slide 31: Incremental (sometimes called “continuous” or “evolutionary” or “small”) © Brokenbulbs.com

Slide 32: Semi-radical © Brokenbulbs.com

Slide 33: Radical (sometimes called “discontinuous” or “revolutionary” or “big”) © Brokenbulbs.com

Slide 34: Incremental and radical innovations need to be managed differently. © Brokenbulbs.com

Slide 35: Here’s a quote: "He who innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new." Niccolo Machiaveli, The Prince © Brokenbulbs.com