Understand Innovation - @WisnuDewobroto

What can you learn from this?

• What innovation is

• Why it’s important

• The types of innovation

• The degrees of innovation

What is innovation?

Hundreds of similar definitions can be

found in the literature. Here is the one I use, adapted from various

sources:

“Innovation is the profitable implementation

of ideas.”

An innovation can increase profits on the value side (customers value an

innovation enough to pay more for it) . . .

. . . or the cost side (the company produces a product offering in a more efficient way).

©

Why is innovation important?

Innovation reduces waste and environmental damage.

Innovation creates growth, increases productivity, and economic wealth

(avoids stagnation).

Innovation provides better goods and services at a cheaper price –

higher standard of living.

©

More interesting work for employees.

©

What are the types of innovation?

Numerous types . . .

. . . but all these labels just describe where something new, better or

different occurs.

Product

Process

Service

Business model

Value

Market

. . . and many more, depending on level of detail. Basically, innovation can occur anywhere in the firm’s business by anyone. We all have

great potential!

The degrees of innovation.

Once again, many labels . . .

©

. . . however, they all describe the degree of change required by the

innovating firm and/or the market.

©

Incremental (sometimes called “continuous” or “evolutionary” or

“small”)

Semi-radical

Radical (sometimes called “discontinuous” or “revolutionary”

or “big”)

Incremental and radical innovations need to be managed differently.

"Innovation distinguishes between a leader and a follower."