GE 493 DEG

1. GE 493 DEG Innovation and Entrepreneurship Practice and Principles. Peter F Drucker

2. The practice of Innovation • Systematic Entrepreneurship • Innovation is the specific tool of Entrepreneurs • It is capable of being presented as a discipline, capable of being learned, capable of being practiced • In US, the entrepreneur is often defined as one who starts his own, new business. Not every one of these represents Entrepreneurship • McDonalds was Entrepreneurship! • JP Morgan did not aim for ownership

3. Purposeful Innovation and the Seven Sources for Innovation Opportunity. • Entrepreneurs shift resources from areas of low productivity and yield to areas of higher productivity and yield. • Systematic innovation therefore consists in the purposeful and organized search • Innovation is an economic or social rather than a technical term. • e.g.textbook

4. The Unexpected • Success • What would it mean to us if we exploited it. E.g. Pharmaceutical Company. • Where could it lead us • Macy’s • what do we have to do to covert it into an innovation. • IBM • how do we go about it • Evening Program for adults • Failure

5. Incongruities • Reality as it is, or as assumed. • Discrepancy, dissonance • Symptom of opportunity to innovate • Steel Mill e.g.

6. Process Need • Opportunity is the source of innovation • E.g. Process Need Innovation • Spread of literacy brought increased magazine, newspaper circulation • Typesetting was the only slow process • Keyboard was invented, to select the right letter from the type font

7. Industry and Market Structures • They always seem to be very stable • Actually, one small scratch and the structure disintegrates fast. • Automobile Story Markets grew so fast during early 19th C. Not a luxury product Rolls Royce – 1904 Ford – mass produced, semi skilled labor, owner repaired.

8. Demographics • Analysis of Demographics begins with population figures. • Age distribution is far more important. • Sears chairman looked into Latin American for potential Markets. • Vacation resorts were designed around the needs of people. • Study the way people like to shop. • For those willing to go out into the field, to look and to listen, changing demographics is both a highly productive and a highly dependable innovative opportunity

9. Changes in Perception • The Glass is Half Full

10. New Knowledge • Super Star of Entrepreneurship. • It gets the publicity, money. • The actual meaning of Entrepreneurship • Longest lead time. (Emergence and application into real world) • They are always convergences of different kinds of knowledge, not all scientific or technological. • Charles Babbage- Father of Computers. Never build a computer since he had no metals and electric power. Even if he did so, the best he could have done is a calculator. There was no logic or program feedback then.

11. Knowledge based innovation requires • Careful Analysis • Clear focus on strategic position.(market-IBM leased computers first) • Learn and Practice Management • Quality means what is technically sophisticated rather than value to customers.(High Tech companies- Knowledge based innovation risks are so high)

12. The Bright Idea • Innovations based on these outnumber everything else. 8 out of 10 Patents belong to this category. • The Zipper, ballpoint pen, tab to open a beer can. • Yet, they are the riskiest and least successful at the same time.

13. Principles of Innovation • The Do’s • Analysis-importance at different times • Conceptual and Perceptual • Look, ask, listen. • Focused, Start small • The Donts • Don’t be too clever • Don’t bring in too many things at once, they will remain as ideas not innovations • Don’t innovate for the future. Do it for the present.