lOMoARcPSD|36949089

UNIT II: INNOVATION AND IDEA GENERATION

Learning Outcomes:
At the end of the lesson, students must have:
1. Explained the definition of Innovation;
2. Identified the types of innovation, and A
c 3. Distinguished the principles of quire
innovation. New

Knowledge

What is Innovation?
If we hear the word “Innovation” we usually come up with different
definitions and points of view about it. Innovation is something that
involves developing, creating new concepts and new ideas that will be
useful for the target customers.
Joerg Gemuenden defines Innovation as a process, involving multiple
activities, performed by multiple actors from one or several organizations,
during which new combinations of means and ends, which are new for
creating and adopting unit, are developed or produced, implemented and
transferred to old and new.

Barack Obama quoted in Business Week’s In that Innovation is the

creation of something that improves the way we live our lives. That is the
reason why innovation is changing the lives of the people extremely fast
and the pacing of the development in technology.

Types of Innovation
There are numerous types of innovation. These are as follows:
 1. Sustaining Innovation. Sustaining innovation also knows as
routine innovation happens on an incremental basis, is often a
response to customer and market demands or improvements in
technology. The company obtained feedback from customers about
the product and service rendered to improve and provide greater
value to the customers. Example of this are Apple, Intel and
Amazon.

a. Apple Company which founded

by Steve Jobs, Steve Wozniak, and
Ronald Wayne continue
improving, innovating and
upgrading their products to gain
customer satisfaction and
maintain customer’s trust and
loyalty throughout the years.

b. Intel Corporation is an American

multinational corporation and
technology company headquartered
in Santa Clara California, in Silicon
Valley. Currently, Intel’s innovation in
cloud computing, data center,
Internet of Things, and PC solutions
are powering the smart and
connected digital world we live in.

c. Amazon is probably one of the

biggest ecommerce worldwide. They
intend to sell books before but now,
they are selling more than hundreds of
products globally where they continue
to improve their products and services
in order for their customers to be
satisfied and pleased.

2. Disruptive Innovation. Disruptive innovation refers to the innovation

that transforms expensive or highly sophisticated products or services
—previously accessible to a high-end or more-skilled segment of
consumers—to those that are more affordable and accessible to a
broader population. This transformation disrupts the market by
displacing long-standing, established competitors.

KEY TAKEAWAYS
-Disruptive innovation refers to innovations and technologies
that make expensive or sophisticated products and services
accessible and more affordable to a broader market.
-Disruptive innovation refers to the use of technology that upsets
a structure, as opposed to "disruptive technology", which refers to the
technology itself.
-Amazon, launched as an online bookstore in the mid-1990s, is
an example of disruptive innovation.
 -Disruptive innovation requires enabling technology, an
innovative business model, and a coherent value network.
-Sustaining innovation is the process of innovating to improve
products and services for existing customers.

3. Breakthrough Innovation. Breakthrough innovation according to

IDEA scale is defined as an innovation from inside a company that
pushes something the next level. It is innovation that opens the
company to new markets or changes the way customers interact with
the market of the industry. One great example of breakthrough
innovation is the Apple iPhone, that generated various units of mobile
phones. It is all started on January 29, 2007 when they first released
the iPhone.

4. Basic Research. This type of innovation begins with the discovery of

some new phenomenon. Basic Research is a key-driver to innovation
as it provides information about a certain problem and derive with
possible solutions. Basic Research has many different meanings and
definitions, and alternative terms like “strategic, fundamental,
curiosity-driven, research-controlled, and autonomous only contribute
to making the issue more confusing. The research and development
(R&D) statistics use an intentional definition where basic research
refers to activities that have “no practical application in mind”
(Gulbrandsen).

Basic research is often described as research without any clear

goals, or science to satisfy the curiosity of a lone scientist without
anyone else even realizing that it exists. The goal of basic research
is to collect information about how nature and people are put
together. It’s not important that this knowledge can be used for
anything concrete, the most important thing is that we improve our
understanding,” says Hoffman, 2017.

Principles for Sustainable Innovation

As an investor, you have to be knowledgeable about the principles for a

sustainable innovation. According to the principles in the classic book
“Robert’s Rule of Innovation: A 10-Step Program for Corporate Survival,”
by Robert F. Brands. He then introduces the different principles that could
help startup investors.

1. Inspire. In innovation, there should be a leader who can inspire

others. They need to possess positive attitude, vision and ability to
communicate to that people will be able to acquire what they should
emphasize in innovating products or services.
2. No Risk, No innovation. Most technopreneurs are risk taker
because they are innovating new products or services which they
have no assurance if it will survive in the market. Every business
experiences failure because failure is the best teacher in order to
succeed in the endeavor they embark on.
3. New Product Process. Innovation starts with a vision; an
innovator should understand what they intend to develop for the
 benefit of their consumers and undergo with a structured process
which includes idea generation, evaluation, prototyping, customer
feedback and success metrics.
4. Ownership. The business leader has all the ownership on the new
products and innovations in such a way that he generates the ideas
and develop the appropriate business model.
5. Value Creation. Once there is an innovation, those new products
should have a value and will be serves as a solution to real
customer problems.
6. Accountability. It is a standard that the team members and
leaders have the full responsibilities and obligations in the
innovation. They have the commitment to manufacture quality
products, services and distribution.
7. Training and Coaching. Proper hiring and staffing of the people in
the organization is a must to make sure that they are cautious of
their responsibility and right mindset to perceive the future
innovations. Continuous coaching is necessary to maintain the
attitude and spirit.
8. Idea Management. In building products and rendering quality
products and services, the organization should value the presence
of the customers and sales member in order to have a
brainstorming of what will be the best for the company.
9. Observe and Measure. It is a need to track the results of it is
already and ideal ROI (Return on Investment). That is how the
company will measure their profitability whenever they release new
products to sustain the needs of the company as well.
[Link] Result and Reward. If the company achieve their ROI,
incentives of their employees is one way to motivation. There
several ways to motivate people aside from financial aspects such
as recognition for a job well done.

Idea Presentation
Presentation is a big challenge to everyone because we never know if
the audience will listen to you and if they are interested about your topic.
That is why in every presentation, the presenter must be fully prepared
and knows what is the topic thoroughly. Here are ten (10) incredible
presentation ideas that will inspire your audience authored by Annie Pilon
to Small Business Trends:

1. Storytelling Presentation. If you are presenting, make sure that it

is not only about the facts of your product or service but rather you
can tell a story where they will be interested to listen and focus too.

2. Musical Presentation. It will be more inspired to try to set some

captivating tune that will help your presentation to stand out in
order to be remembered by prospective clients.

3. Video Presentation. It is desirable to make presentations that will

have both visuals and audio content to make it as a video. It is more
appealing to the audience or clients as they can envision what your
products or services is all about.
 4. Photo-Only Presentation. If you will use the Photo-Only
presentation, this is to make your audience or clients prone form
reading slides word for word. The photos or images must be related
to what you are presenting.

5. Immersive Presentation. Most conferences, seminars and start-

ups usually use the immersive presentation where they encourage
their audience to get involve on discussions, games and open
forum.

6. Question Presentation. It is preferably advisable to ask questions

to your audience in order for you to know if they are interested and
make them involved in your presentation and you can have an idea
if they understand your products and services offered.

7. Demonstrative Presentation. If you are selling a specific product,

the demonstrative presentation is the best way to promote.

8. Humorous Presentation. A speaker with a great humor will make

the presentation livelier because the audience will become active in
the discussion. However, the speaker should be careful of using
jokes to some clients to avoid misunderstanding.

9. Animated Presentation. The animated presentation is a one way

of demonstrating the product instead of using a video. You can film
the product in a 3D style where the audience can visualize the
entire interface of the product.

[Link] Presentation. This is not a techy presentation that you

need computers because you will use visual aids to make a creative
presentation.

Idea Selection

An innovative leader will encounter challenges in selecting the best ideas

among the list of different innovative process introduced by Michael Puts:

Step 1. Rough Selection

In the first step, the chaff has to be separated from the wheat, i.e., the
ideas without potential have to be selected quickly. For this purpose, an
“ABC analysis” can be used, where ideas were divided into three classes:
• A- ideas, those that are absolutely necessary for further processing
• B-ideas, are those where you disagree about good or bad and are
uncertain
• C-ideas, those that have no value and are to be rejected

The A-ideas are definitely going into the next round, the B-ideas are
discussed and it is decided together per idea whether the idea will
be adopted. C-ideas are no longer considered.
Step 2. Fine Selection
In the next step, the sifted ideas are further selected. The methods of
“dots gluing” has proven its worth. Each participant receives five sticky
points and can distribute them to their own favorites. If you count the
points together you get a ranking.
If there are less than ten ideas, the rating method can also be used. Each
participant gives each idea between 0 and 5 points. The points are also
added up and you get a ranking and a priority.

Step 3. Detailed Analysis

In the detailed analysis, ideas are qualitatively analyzed and evaluated on

the basis of criteria. For product ideas, for example, these are: customer
benefit; differentiation potential and competitive factor; and technical and
economic feasibility. In this process step, additional information is
collected in the ideas, which is then analyzed and concretized in detail.

Customer Needs
One of the top priorities in business is to meet the demands and needs of
the customer. As it is said, “Always satisfy your customer and he will keep
you in business”.

Myths about Customer Needs

1. Customers have latent needs; needs they don’t even know they
have.
2. Customers struggle to articulate their needs.
3. Customers’ needs change quickly overtime.
4. Customers won’t know what they want until they see it.
5. It is possible to ever know all the customers’ needs.

Market Research and Validation

An innovative leader should conduct market research and validation to
justify needs of the customers. Quality measurement that demands the
data gathered during surveys, interviews and market research.

Market validation is the process of determining whether your product is of

interest to a given target market. Market validation involves a series of
customer interviews with people in your target market, and it almost
always takes place before you have made significant investment in your
product/concept (Semick, 2016).

The Decision-Making Process

Decision making is an enormous task because the success of the business

relies on its process to come up with a great solution. Various methods,
models and processes can be considered to make decision:

Steps in Decision-Making Process

1. Problem or Need Recognition. As an innovative leader you must
identify the different problems or need recognition of the customer.
The needs of the customers are the basis or foundation of creating
or producing a new product or services in the market. By assessing
the needs of the customer, an innovative leader can generate
excellent ideas for innovation.
2. Information Search. When the problems occurs, there should have a
solution. To develop a solution, an innovative leader should be
resourceful in such a way that he or she can think of bright ideas.
Information search of products and services that will satisfy the
needs and wants of the customers.
3. Evaluation of Alternatives. In determining the needs and wants of
the consumer, the innovative leader should provide different
choices of products. Customers will begin to seek out the best deals
as they will compare the details of the product, read many reviews if
the product is poor or excellent and probably compare prices of
which is more affordable.
4. Selection Stage. After a thorough research and evaluation of the
alternatives, an innovative leader should select the best ideas that
will be used in the decision-making.
5. Evaluation and Decision. The goal for every marketer is not for a
one-time customer but a repeating lifetime customer. One bad
experience of buyer’s remorse and your branding perception could
be tarnished forever (Flekel 2013). This process depends on the
evaluation of the various assessment done for decision-making.