CONCEPT OF INNOVATION

Innovation can be simply defined as a "new idea, creative thoughts, and new imaginations in form
of device or method". However, innovation is often also viewed as the application of better solutions
that meet new requirements, silent needs, or existing market needs. Such innovation takes place through
the provision of moreeffective products, processes, services, technologies, or business models that are
made available to markets, governments and society. The term "innovation" can be defined as
something original and more effective that "breaks into" the market or society. Innovation is related
to, but not the same as, invention, as innovation is more apt to involve the practical implementation of
an invention (i.e. new/improved ability) to make a meaningful impact in the market or society. All
organizations can innovate, including hospitals, universities, and local governments. Innovation
processes usually involve: identifying customer needs, macro and micro trends, developing
competences, and finding financial support for new inventions and at last practically applying those
inventions for better solutions.
Innovation is:
• New stuff
• That adds value
• For various stakeholders
• Can be monetized
• Creates a competitive advantage
• And is sustainable
• Until the advantage deteriorate.
Innovation is the process of turning opportunity into new ideas and of putting these into widely
used practice. It is the management of the entire activities involved in the process of idea generation,
technology development, manufacturing and marketing of a new (or improved) product. The process of
translating an idea or invention into a good or service that creates value or for which customers will
pay. In business, innovation often results when ideas are applied by the company in order to further
satisfy the needs and expectations of the customers. For example, Godin (2008) defines 12 concepts of
innovation which can be described as follows:

A: innovation as process of doing of something new • innovation as imitation; • innovation as invention;

• innovation as discovery;

B: innovation as human abilities to creative activity: innovation as imagination; • innovation as

ingenuity; • innovation as creativity;

C: innovation as change in all spheres of life: • innovation as cultural change; • innovation as social
change; • innovation as organizational change; political change; technological change;
D: innovation as commercialization of new product

IMPORTANCE OF INNOVATION

• Solving problems: Most ideas are actually derived from attempts to solve existing problems. As such,
when you encourage innovation, you are opening doors for solutions to problems both within and
outside your company. If your business provides services, you might realize that your customer do not
have an avenue to share their opinions, complaints, and compliments. The only avenue available could
be the physical office. So, to solve the problem, you could decide to operate a virtual office where
customers’ needs can be attended to within a short time. The customers will be happy and as a result,
your sales will go higher.

• Adapting to change: This is especially evident in the technological world where there are rapid
changes defining the business. Change is inevitable and innovation is the method to not only keep your
business afloat, but also ensure that it remains relevant and profitable. With
the rise in mobile phones, traditional telephone had to find ways to remain relevant. Same case
with your business, when you develop an innovation culture, you remain relevant at all times.
• Maximizing on globalization: With markets all over the world becoming more interlinked, greater
opportunities are emerging in these new markets and with that, new needs and challenges. For instance,
China and India are estimated to be the leading markets, and Africa is predicted to be the next “hot
spot”. Therefore, if your company hopes to tap into this market share, innovation is a must to enable
you to capitalize on the opportunities opening up.
• Facing up the competition: The corporate world is always very competitive, and with many new
companies coming up, the top position in the industry is no longer a reserve of a few. To retain or
establish your company’s cutting edge, you can compete strategically by having a dynamic business
that is able to make strategic and innovative moves and thus cut above the rest.
• Evolving workplace dynamics: The demographics in the work place are constantly changing. With
the new generation that has entered the market place; new trends are also coming up. Innovation is
therefore critical to ensure the smooth running of the company.
• Customers’ changing tastes and preferences: The current customer has a great variety of products
and services available to him and is well informed of his choices than before. The company must
therefore keep itself abreast with these evolving tastes and also forge new ways of satisfying the
customer.
BASIS FOR COMPARISON INVENTION INNOVATION
Invention refers to the Innovation implies the
occurrence of an idea for a implementation of idea for
Meaning
product or process that has product or process for the very
never been made before. first time.
Adding value to something
What is it? Creation of a new product.
already existing.
An original idea and its Practical implementation of
Concept
working in theory. new idea.
Set of marketing, technical and
Skills required Scientific skills
strategic skills.
A need is felt for a product or
Occurs when New idea strikes a scientist. improvement in existing
product.
Combination of various
Concerned with Single product or process.
products and process.
Activities Limited to R & D department. Spread across the organization.

TYPOLOGY OF INNOVATION
Type of innovation Characteristic
A product innovation is the introduction of a product or service
Product or service innovation that is new or significantly improved with respect to its
characteristics or intended uses.
A process innovation is the implementation of a new or
significantly improved production or delivery method. Process
Process innovation innovations can be intended to decrease unit costs of production
or delivery, to increase quality, or to produce or deliver new or
significantly improved products.
A marketing innovation is the implementation of a new marketing
method involving significant changes in product design or
Marketing innovation packaging, product placement, product promotion or pricing.
Marketing innovations are aimed at better addressing customer
needs, opening up new markets, or newly positioning a firm’s
 product on the market, with the objective of increasing the firm’s
sales.
Organizational innovations can be intended to increase a firm’s
performance by reducing administrative costs or transaction
costs, improving workplace satisfaction (and thus .
Organizational innovation of a new organizational firm’s business practices, organizational
innovation is the implementation method in the labor
productivity), gaining access to no tradable assets (such as non-
codified external knowledge) or reducing costs of supplies.

1. Incremental innovation
Incremental innovation seeks to improve the systems that already exist, making them better, faster
cheaper.

2. Process innovation
Process innovation means the implementation of a new or significantly improved production or delivery
method.

3. Red ocean innovation

Red Oceans refer to the known market space, i.e. all the industries in existence today. In red oceans,
industry boundaries are defined and accepted, and the competitive rules of the game are known.
Companies try to outperform their rivals to grab a greater share of existing demand usually through
marginal changes in offering level and price. As the market space gets crowded, prospects for profits
and growth are reduced. Products become commodities, and cutthroat competition turns the red ocean
bloody.

4. Service innovation
Service Innovation can be defined as “a new or considerably changed service concept, client interaction
channel, service delivery system or technological concept that individually, but
most likely in combination, leads to one or more renewed service functions that are new to the firm.

5. Business model innovation

Business Model Innovation (BMI) refers to the creation, or reinvention, of a business itself. Whereas
innovation is more typically seen in the form of a new product or service offering, a business model
innovation results in an entirely different type of company that competes not only on the value
proposition of its offerings, but aligns its profit formula, resources and processes to enhance that value
proposition, capture new market segments and alienate competitors.

6. Sustainable innovation
Eco-innovation is a term used to describe products and processes that contribute to sustainable
development.

7. Frugal innovation
Frugal Innovation is about doing more with less. Entrepreneurs and innovators in emerging markets
have to devise low cost strategies to either tap or circumvent institutional complexities and resource
limitations to innovate, develop and deliver products and services to low income users with little
purchasing power.

8. Blue ocean innovation

Blue Oceans represent the unknown market space, i.e. all the industries not in existence today. Blue
oceans are defined by untapped market space, demand creation, and the opportunity for highly
profitable growth. In blue oceans, competition is irrelevant because the rules of the game are not
set. Blue oceans can be created by expanding existing industry boundaries or by reconstructing
industry boundaries.

10. Disruptive innovation

A disruptive innovation is an innovation that helps create a new market and value network, and
eventually goes on to disrupt an existing market and value network (over a few years or decades),
displacing an earlier technology. . In a nutshell, disruptive innovation is that when the basis of
competition changes, because of technological shifts or other changes in the marketplace,
companies can find they getting better and better at things people want less and less. When that happens,
innovating your products won’t help — you have to innovate your business model

11. User led innovations

The user is king. It’s a phrase that’s repeated over and over again as a mantra: Companies must become
user-centric. But there’s a problem: It doesn’t work. Here’s the truth: Great brands lead users, not the
other way around.
12. Supply chain innovation
Supply chain innovation is about applying best practices and technological innovations to your own
supply chain in order to reduce such cycle and wait times and other waste (to use a Lean term) in
your in-house processes.

INNOVATION PROCESS
STEP: 1 IDEA GENERATION
This is the first step in an innovation process. It is where you decide on the concept that you want to
develop and come up with reasons why you want to improve the idea. It is important for you to involve
your employees and customers. Involving many knowledgeable people will enable you to get a better
understanding of the market. Besides, it will give you an opportunity to look at the idea in different
angles. At this stage also, experts will also provide many viable ideas. There are five places where you
can draw ideas for your innovation:

• CUSTOMER INNOVATION
As you work on an innovation, remember that you should have your customer in mind. Your customers
should be the inspiration for all innovations. Hence, consider the feedback that they give to come up
with an innovative idea. This is an important source because if you innovate something that does not
meet the needs of the customer, then the innovation is likely to fall. You can get the feedback from the
social media platforms, customer feedback forms, and your employees can report to you what the
customers say.

• EMPLOYEE INNOVATION
Your employees relate with the customers so closely so they know their needs. Moreover, they also get
first hand compliments, complains, and suggestions from the customers. When a customer wants a
service or a product, they explain to your employees so they can keep tabs on what customers want.
Besides, they are in a position to identify products that are irrelevant to the customer. When you
innovate a product, your employees will be important so as to explain how a product is used to the
customers. In contrast, if they do not feel as part of the innovation, they might disregard the product.
As a result, they may never speak well of the product.

• PUBLIC INNOVATION
Public innovation depends on information gathered from the public. The amount of feedback received
through public innovation is a lot so you must have the required expertise and equipment to handle it.
Public innovation produces helpful information but you have to be ready to sieve through the
information to pick what is helpful. As you consider this model, make sure you do not use it before the
others: it could probably be the last model that you employ. If you have the capacity to digest the
information, you could use public innovation.

• PARTNER/SUPPLIER INNOVATION
You can share your thoughts and opinions with your partners and suppliers. Opening up to them helps
them improve on the goods and services they supply. A good example is wedding planners who
outsource companies to provide flowers. The wedding company may have realized that the flowers
wither after a short time and they look unattractive. By sharing this information with the flower
company, they can brainstorm on ways to keep the flowers looking fresh for a longer time. This
innovation helps your supplier and your business. On your side, you are able to supply high quality and
more improved good and services.
COMPITITOR INNOVATION
This is a very challenging but very efficient when it takes place. As a fact, competitors are very careful
with the information they share but with a good strategy, you can learn a lot from your competitors.
This can only happen when you admit that there are other competent people outside your company.
However, it does not mean that your employees are not competent enough, they are competent, but
listening from others can give you a different point of view concerning a matter.
STEP: 2 ADVOCACY AND SCREENING
Not every idea that is generated is worth implementing, for that reason; you must screen all the ideas
presented. When screening, ensure you measure the benefits and risks of each idea to determine its
viability. Any idea that has a futuristic approach should be chosen for the next stage. Moreover,
participants in this stage develop the idea to enhance it. If an idea is not considered ideal, make sure
you communicate the reasons to the person who had suggested the idea. This is important especially if
the person who shared the idea is an employee so that you encourage them to suggest more ideas even
if it is in the future. For a company that wants to instill an innovation culture, you should take three
steps at this stage;
Ensure the evaluation and screening process takes place in a transparent way

• Create a number of avenues for employees to receive feedback and advocacy

• As an organization, you should understand that evaluating an innovative idea is a difficult assignment
STEP: 3 EXPERIMENTATION
At this stage, the idea is tested using a pilot test. The test takes place within a targeted market. As you
test your product, remember you want to know if the customers will accept it, if the price is acceptable,
and if they like the innovation. The aim is to test if the idea is ideal and suitable for the company at a
particular time. Therefore, if an idea is too complex for the organization or it’s a premature idea, then
it should not be implemented. You should set aside premature ideas in your idea bank for a later date.
So, even if you realize that your idea has been accepted in the market and the price is affordable, you
might want to hold back until you are sure the time is right to release it in the market. It is only through
the experimentation stage that you can get this information. So, do not assume your idea is beyond
reproach to the extent that the market cannot reject it. However, note that experimentation can be a
continuous process or a one-time activity. In some instances, the experimentation stage generates new
ideas. You can generate new ideas from this stage by considering the feasibility of the original idea and
by analyzing the information from the results. Give the participating team enough time to experiment
and analyze the results from the experimentation. It is at this stage where you apply for intellectual
rights protection.

STEP: 4 COMMERCIALISATION
When you get to this stage, just know the product is ready for the market. The major work at this stage
is to persuade your target audience that the innovation is good for them. To do this, explain how the
innovation will be of use to them, when it will be used, and demonstrate the benefits of the innovation
using the prototypes. Be very specific about the idea in regards to any information that could attract
customers to your idea.
STEP: 5 DIFFUSION AND IMPLEMENTATION
Diffusion and implementation are two different stages: diffusion is where the company accepts the
innovation and implementation is setting up everything that is needed to develop and utilize or produce
the innovative idea. Knowledge brokers are used to diffuse the idea in an organization. The knowledge
brokers communicate the specification about the idea and its usability. This information helps your
employees to understand the idea in a deeper way. After they understand it, then they implement the
idea. Diffusion and implementation requires access to production files, logistics, and market routes
amongst others. For the idea to succeed, work in collaboration with industries and businesses, get into
partnership and subcontract management to ensure the innovation is fully implemented. The feedback
that you receive at this stage can be used to come up with future ideas.

ASSUMPTIONS AND BARRIERS TO INNOVATION :The 4 Assumptions of Innovation are:

1. Innovation as it is currently practiced is good enough. 2. Innovation is for executives. 3. Innovation
is for practitioners. 4. “Innovation Planning” is an oxymoron.

BARRIERS OF INNOVATION
KEY OBSTACLES TO INNOVATION
Obstacles that will need to be addressed if you expect to establish a sustainable culture of innovation:
1. Lack of a shared vision, purpose and/or strategy 2. Short-term thinking/focus 3. Lack of time,
resources or staff 4. Lack of “spec time” to develop new ideas and opportunities 5. Innovation not
articulated as a company-wide commitment 6. Lack of ownership by senior leaders 7. Leadership
expects payoff sooner than is realistic 8. Lack of a systematic innovation process 9. Management
incentives are not structured to reward innovation 10. No reward and recognition programs. 11.
Constantly shifting priorities 12. Belief that innovation is inherently risky 13. Internal process focus
rather than external customer focus 14. Inadequate understanding of customers 15. Focus on successes
of the past rather than the challenges of the future 16. Unwillingness to change in the absence of a
burning platform 17. Unwillingness to acknowledge and learn from past “failures” 18. Politics – efforts
to sustain the status quo to support entrenched interests 19. Rewarding crisis management rather than
crisis prevention 20. Hierarchy – over-management and review of new ideas 21. Micromanagement
22. Under-funding of new ideas in the name of sustaining current efforts 23. Fear that criticizing current
practices and commitments is a high-risk activity 24. Risk aversion 25. Addiction to left-brained,
analytical thinking 26. Absence of user-friendly idea management processes 27. Innovation not part of
the performance review process. 28. Lack of skillful brainstorm facilitation. 29. No creative thinking
training.