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
Engage Leadership to Lead Change.
Communicate and Encourage Breakdown of Barriers.
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.