BUS2001_Session_02_slides_v3_LMS

Session Overview

• Course: BUS2001 Analyse and Ideate

• Session: Innovation, Creativity, and their Importance in Business

Innovation

• Definition of Innovation:

  • Can manifest in various forms such as:

    • New products or services

    • Combinations of existing ideas

    • Improved interaction methods

  • Often aimed at solving problems, which can be broadly defined.

What is Innovation?

• Complex Definitional Landscape:

  • Multiple interpretations exist, including:

    • As an outcome

    • As a process

    • As a mindset

  • Key elements include:

    • Disruption of established norms

    • Generation and utilization of new ideas

    • Converting ideas into practical applications

• Example Product:

  • Apple iPod:

    • Unique value proposition based on storage, design, usability, and affordability.

    • First portable device for an entire music library.

Notable Definitions of Innovation

• Barack Obama: "Innovation is the creation of something that improves our lives."

• Peter Drucker: "Innovation is change that creates a new performance dimension."

• Government of New Zealand: "Innovation involves creating, developing, and implementing new products, services, or processes to boost efficiency and competitive edge."

• UK Dept. of Innovation and Skills: "Innovation is the successful exploitation of new ideas."

Examples of Innovations

• Netflix: Revolutionized home streaming, making video rental obsolete.

• OpenAI: Brought accessible large-language model AI to consumers.

• Raspberry Pi: Affordable single-board computer for diverse applications.

• World of Warcraft: Innovated online gaming accessibility through reduced requirements.

Difference Between Creativity and Innovation

• Creativity:

  • Ability to produce new, valuable ideas across various activities.

• Innovation:

  • Process of bringing those ideas into commercial reality through testing and learning.

Unique Value Proposition (UVP)

• Consumer's Value Perception:

  • Buyers evaluate products based on perceived value relative to needs and price.

  • A product's UVP differentiates it from competitors.

    • Examples comparing two products can illustrate unique advantages.

Understanding Value

• Components of Value:

  • Tied to transaction costs and customer perceptions.

  • Encompasses relational and experiential aspects surrounding buyer-seller interactions.

• Value Onion:

  • Represents layers of perceived value: Economic, Relational, Experiential.

Addressing Value in Business

• Key Questions for Value Proposition:

  • What customers?

  • Which needs?

  • What pricing strategy? (premium or discount)

  • Which products, features, and services?

Identifying Unique Value Propositions Activity

• Develop concise descriptions for UVPs of popular products/services, e.g., Apple AirPods, Amazon Prime, Uber.

Innovation and Value Propositions

• Innovation has the potential to redefine a firm's value propositions, causing disruptions in existing markets.

• Innovations can be in product features or business models.

Major Types of Innovation

• Business Model Innovation

• Incremental vs. Disruptive Innovation

• Reverse Innovation

  • Developing innovative products primarily for emerging markets.

Reverse Innovation Case Study

• Example: LifeStraw, developed for regions lacking clean water, later adapted for developed markets.

Liberating Innovation in Organizations

• Organizational culture significantly influences innovation capacity.

  • Strategies include:

    • Google’s 20% personal project time.

    • Lego’s fan design submission program.

    • Toyota’s Kaizen continuous improvement model.

Barriers to Innovation

• Common Barriers:

  • Lack of communication

  • Risk aversion due to financial pressures

  • Bureaucratic structures inhibiting creativity.

Strategies to Liberate Innovation

1. Engage Leadership to Lead Change.

2. Communicate and Encourage Breakdown of Barriers.

3. Mobilize Employees for Ownership.

Conclusion on Innovation

• Josh Linkner: "Innovation is essential for leaders and teams; it can no longer be optional."

Benefits of Creativity in Business

• Highlights the significant advantages creativity brings to business strategy and innovation.