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College aantekeningen Essentials of Science, Business & Innovation (X_420566)
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All ESBI course notes (Chap 1-16).
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Innovation and EntrepreneurshipPart I Entrepreneurial Goals and Context
Chap 1. The Innovation Imperative
Leerdoelen:
- wat is innovatie en entrepreneurship en hoe belangrijk is dit voor overleving en groei?
- Innovatie als een proces eerder dan een flits van inspiratie
- De moeilijkheden in managen, wat is een onzeker en risicovol proces
- De hoofdthema's bij het nadenken over een doeltreffend beheer van dit proces
Innovation Matters
Innovation does make a huge difference to organizations of all shapes and sizes. Innovation is also
strongly associated with growth. Survival and growth poses a problem for established playes but a
opportunity for newcomers. It is all about entrepreneurship. The skill to spot opportunities and
create new ways to exploit them is at the heart of the innovation process. Entrepreneurs are risk-
takers, but they calculate the costs of taking a bright idea forward against the potential gains if they
succeed in doing somenthing different. There is plenty of scope for innovation and entrepreneurship.
Innovation is about:
- Identifying or creating opportunities; the ability to see connections, to spot opportunities and
to take advantage of them.
- New ways of serving existing markets; it is not just about opening up new markets, but is can
also offer new ways of serving established and mature ones.
- Growing new markets; the ability to spot where and how new markets can be created and
grown.
- Rethinking services; the opportunities for new entrants and radical change are greatest in the
service sector
- Meeting social needs; it offers huge challenges – and opportunities – for the public sector.
- Improving operations – doing what we do but better;
Innovation and Entrepreneurship
Innovation matters – but it does not happen automatically. It is driven by entrepreneurship.
Entrepreneurship = a potent mixture of vision, passion, energy, enthusiasm, insight, judgement and
plain hard work wich enables good ideas to become reality.
Joseph Schumpeter: entrepreneurs will seek to use technological innovation – a new product/service
or a new process for making it – to get strategic advantage. (‘monopoly profits’) Schumpeter talks of
a process of ‘creative destruction’, where there is a constant search to create something new which
simultaneously destroys the old rules and the establishes ones – all driven by the search for new
sources of profits.
Internal entrepreneurs/ intrapreneurs/working in corporate entrepreneurship/working in corporate
venture departments = provide the drive, energy and vision to take risky new ideas forward withinn
that context. It is focused on improving conditions or enabling change in the wider social sphere or in
the direction of environmental sustainablity (social entrepreneurship).
,Three core concepts:
Innovation: as a process which can be organized and managed, wheter in a start-up venture
or in renewing a 100-year-old business
Entrepreneurship: as the motive power to drive this process through the efforts of
passionate individuals, engaged teams and focused networks
Creating value: as the purpose for innovation, wheter expressed in finnancial terms,
employment or growth, sustainability or improvement of social welfare.
Innovation isn’t easy
New ventures often fail, but it is the ventures which are failures rather than the people who
launched them. Succesful entrepreneurs recognize that failure is an intrinsic part of the process.
The ‘not invented here’ problem: one problem for successful companies occurs when the very things
which helped them achieve success- their ‘core competencies’ – become the things which mke it
hard to see or accept the need for change. The new idea is recognized as good but in some way not
suited to the business.
Organizations need entrepreneurship at all stages in their lifecycle, from start-up to longlived
survival. The ability to recognize opportunities, pull resources together in creative ways, implement
good ideas and capture the value from them are core skills.
Managing innovation and entrepreneurship
Innovation is the successful exploration of new ideas. Innovation does not necessarily imply the
commercialization of only a major advance in the technological state of the art (radical innovation)
but it includes also the utilization of even small-scale changes in technological know-how
(incremental innovation or improvement).
Experience of the ‘100 year’ club members of firms like Philips, we can see that much of their
longevity is down to having developed a capacity to innovate on a continuing basis.
Individuals are serial entrepreneurs.
Successful innovators:
- Explore and understand different dimensions of innovation (ways in which we can change
things)
- Manage innovation as a process
- Create conditions to enable them to repeat the innovation trick (building capability)
- Focus this capability to move their organizations forward (innovation strategy)
- Build dynamic capability (the ability to rest and adapt their approaches in the face of a
changing environment)
Dimensions of innovation: What van we change?
Dimension Type of change
Product Changes in the things (product/services) an
organization offers
Process Changes in ways these offerings are created and
, delivered
Position Changes in the context into which the
product/services are introduced
Paradigm Changes in the underlying mental models which
frame what the organization does
Examples of paradigm innovation: ‘servitization’, ownership to rental, offline to online, mass
customization to co-creation, experience innovation. Paradigm innovation can be triggered by many
different things: new technologies, the emergence of new markets with different value expectations,
new legal rules of the game, new environmental conditions, etc.
Innovation-> from incremental to radical, and to components and systems
A process model for innovation and entrepreneurship
Innovation is an extended sequence of activities. These are the four key steps:
1. Recognizing the opportunity: if we are going to pick up these trigger signals then we need to
develop some pretty extensive antennae for searching and scanning around us – and that
includes some capability for looking into the future.
2. Finding the resources: it is about strategic choices, does the idea fit a business strategy, does
it build on something we know about and do we have the skills and resources to take it
forward?
3. Developing the idea: first implementation phase and than balance creativity. Process follows
some kind of S-curve shape.
4. Capturig value: we could capture valuable learning about how to build our innovation
capability
Innovation needs:
- Clear strategic leadership and direction-> plus the commitment of resources.
- An innovative organization-> in which the structure and climate enables people to deploy
their creativity and share their knowlegde to bring about change.
- Proactive links-> across boundaries inside the organization and to the many external
agencies who can play a part in the innovationprocess: suppliers, customers, sources of
finance, skilled resources and of knowledge, etc.
How can we make change happen?
Every organization needs to aim for the most appropriate solution for its particular circumstances.
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