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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