Managing Innovation and Fostering Corporate Entrepreneurship

1. Managing Innovationand Fostering CorporateEntrepreneurship

3. Example: Getting to ‘Aha’ There are “five disciplines” for creating what customers want Identify important customer needs Create solutions that fill those needs Build innovation teams Empower "innovation champions" who keep the effort on track Align the entire enterprise around creating value for customers

4. Types of Innovation Product innovation Efforts to create product designs Applications of technology to develop new products for end users More radical and common during early stages of an industry’s life cycle Associated with differentiation strategies

5. Types of Innovation Process innovations Improving efficiency of an organizational process Manufacturing systems and operations More likely to occur in later stages of an industry’s life cycle Associated with cost leader strategies

6. Types of Innovation Radical innovation Fundamental changes and breakthroughs Evoke major departures from existing practices Can be highly disruptive Can transform or revolutionize a whole industry

7. Types of Innovation Incremental innovation Enhance existing practices Small improvements in products and processes Evolutionary applications within existing paradigms

8. Types of Innovation Sustaining innovations extend sales in an existing market, usually by enabling new products or services to be sold at higher margins. Disruptive innovations overturn markets by providing an altogether new approach to meeting customer needs.

9. Experience versus Initiative Deciding who will lead an innovation project Senior managers have experience and credibility and tend to be more risk averse Midlevel employees may be the innovators themselves and have more enthusiasm

10. Incremental versus Preemptive Launch Incremental launch Less risky Requires few resources Can undermine the project’s credibility if too tentative Large-scale launch Requires more resources Can effectively preempt a competitive response

11. Managing the Pace of Innovation Incremental innovation May be six months to two years May use a milestone approach driven by goals and deadlines Radical innovation Typically long term – 10 years or more Often involves open-ended experimentation and time-consuming mistakes

12. Corporate Entrepreneurship Corporate entrepreneurship the creation of new value for a corporation, through investments that create either new sources of competitive advantage or renewal of the value proposition.

13. Rules for Fostering Innovation

14. Entrepreneurial Culture Culture of entrepreneurship Search for venture opportunities permeates every part of the organization Strategic leaders and the culture generate a strong impetus to innovate, take risks and seek out new venture opportunities

15. Product Champions Product (or project) champions Bring entrepreneurial ideas forward Identify what kind of market exists for the product or service Find resources to support the venture Promote the venture concept to upper management New project must pass two critical stages Project definition Project impetus New project must pass two critical stages Project definition Project impetus

16. Dimensions of EntrepreneurialOrientation