“… innovation is an effect in economy and society, a change in the behavior of customers, of teachers, of farmers, of eye surgeons—of people in general. Or it is a change in a process—that is, in how people work and produce something. Innovation therefore always has to be close to the market, focused on the market, indeed market-driven”.
Drucker, Peter F. – Innovation and Entrepreneurship HarperCollins e-books. Kindle Edition.
Types of innovation: Regardless of the source of a novel-idea, maximum focus is required on a current marketopportunity, and the novel-idea must focus on a single purpose. To be successful the developed novel-idea must achieve market leadership; otherwise it will represent an opportunity for competitors.
- “Flash of genius” – rare, cannot be taught, seldom results in exploitable novel-idea.
- Exploitive – supply side – e.g. advances in machine-learningand Crispr(a game-changing genetic engineering technique) opened the door to innovative opportunity. i.e. Find a problem to solve using advanced technology.
- Requires an advanced understanding of the technology.
- Analysis of novel-ideas require in depth review of the market opportunity as creating a new market can be fraught with difficulty.
- Purposeful, systematic – demand side – find a problem, or hole in existing markets, to solve.
- Continuous analysis and study to identify opportunities on a timely basis should be policy in all enterprises.
- “At all levels, Schumpeter’s litmus test is whether the players are pursuing innovation and bringing about creative destruction. If they are, then the program is Schumpeterian. If they are not, it isn’t”.
Thomas K. McCraw – Prophet of Innovation. The Belknap Press of Harvard University Press
- “Systematic innovation … consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation”.
Drucker, Peter F. – Innovationand Entrepreneurship(p. 35). HarperCollins e-books. Kindle Edition.
- “Good ideas are not conjured out of thin air; they are built out of a collection of existing parts, the composition of which expands (and, occasionally, contracts) over time”.
Johnson, Steven. Where Good Ideas Come From Penguin Publishing Group. Kindle Edition.
- “Clarity and alignment in the organization must surround the selected innovation strategy; it must fit the business situation and be clear throughout the organization. … it must be measured and recognized, with proper rewards linked to performance”.
Davila, Epstein, Shelton– Making Innovation Work, Updated Edition. Pearson Education Inc. Publishing as FT Press
- Light Bulb Moment – the evidence strongly suggests that to spend time trying to dream up a commercially viable bright idea is probably time wasted. For example, only a small percentage of patented inventions result in a commercial success. An invention, however, may spark a novel-idea that utilizes the invention to create a new product or service.
On the other hand, time spent systematically searching for bright ideas can prove fruitful. Interestingly, where the research is being conducted, at a given time, may provide information that intersects with prior research and bring forth a bright idea in the prior research. Our brains never go to sleep. The brain is always active in both the foreground and the background. Continuous systematic searching for novel-ideas increases the likelihood of such an intersection occurring.
- Entrenoveurial Research – Entrenoveurs manage the innovation process. “Innovation is the specific instrument of [entrenovation]. It is the act that endows resources with a new capacity to create wealth. Innovation, indeed, creates a resource. There is no such thing as a “resource” until man finds a use for something in nature and thus endows it with economic value”.
Drucker, Peter F. Innovation and Entrepreneurship(p. 30). HarperCollins e-books. Kindle Edition.
Drucker goes on to describe seven principle sources of innovation that can result in the discovery of novel-ideas that could be commercially viable.
Four of Drucker’s sources lie within the enterprise, or industry, and are basically symptoms:
- The unexpected—the unexpected success, the unexpected failure, the unexpected outside event;
- The incongruity—between reality as it is and reality as it is assumed to be or as it “ought to be”
- Innovation based on process need;
- Changes in industry structure
The remaining three sources lie outside the enterprise or industry:
- Demographics (population changes);
- Changes in perception, mood, and meaning;
- New knowledge, both scientific and non-scientific.
He highlights that successful entrenoveurs do not wait until “the muse kisses them” … rather they go to work searching for novel-ideas.
- Staff – in an enterprise, the people who are employed by the organization are a great source of ideas that can be tapped if the avenue to make suggestions is kept open, and a meaningful reward for successful suggestions is available. After all, the people who are using the systems or equipment are the ones who are most likely to identify new beneficial processes; and to recognize possible improvements to existing processes. The internally generated ideas must be given a full hearing and involve the person(s) who contributed the suggestion.
The foregoing sources are not the only areas of research. They do, however, provide a good set of sources around which a systematic research model could be established.