One of the most important sources of growth opportunities is Innovation.

Among the most important sources of new ideas is newer technology. A recent study by Boston Consultancy Group found that 73% of those large global companies have increased their spending on innovation.

 Define quality & customer value- company personnel should have a clear definition of what quality means in the job, department, and in the company. Develop a Customer Orientation- customer value is what the customer says it is. Usually less then 20% company employees come in contact of external customers, while the other 80% serve internal customers. Focus on the companys business processes- break down every minute step in the process of providing the companys products or services, and look at the ways to improve it.

 Develop customer and supplier partnershiporganizations have a destructive tendency to view suppliers and even customers adversarily. It is better to understand horizontal flow of a business. Take a preventive approach- many organizations reward fire fighters not fire preventers and identify errors after the work is done. Management instead should be awarding prevention oriented and seeking to eliminate non-value-added work as CCC21* does quite well at Toyota.
In 2000 Toyota launched its Construction of Cost Competitiveness for the 21st Century (CCC21) streamlining initiative, which has helped it save nearly $10 billion over five years. CCC21 targeted about 180 key parts for 30% price cuts across the board.

 Adopt an error-free attitude- error free should

become each individuals performance standard, with managers taking every opportunity to demonstrate and communicate the importance of this Six Sigma imperative. Get the facts first- accuracy of measurements required to build error free operations & business.

Encourage every manager & employee to participate. Create an atmosphere of total involvementquality management cannot be a job of few managers. Strive for continuous improvements.

 Produce fundamental changes by evoking major departures from existing practices. These breakthrough innovations usually occur because of technological changes. They tend to be highly disruptive and can transform a company or even revolutionize a whole industry. They may lead to products or processes that can be patented, giving a firm a strong competitive advantage.
Apples innovation with iPod and iTunes is a breakthrough innovation.

 Incremental innovations, are continuations to existing technologies or practices. They involve extension of products that are already in the market. Incremental innovations are more evolutionary in nature. Both suppliers and customers know about the products and their values. Incremental innovations generally substitute existing products.

 Another distinction that is often used when in Innovation is between:

Process Innovation, Product Innovation.

Product Innovation: refers to efforts to create

product designs and applications of technology to develop new products for end users.
Product innovations are more radical and are more common during the earlier stages if Industrys life cycle. As an industry matures, there are fewer opportunities for newness.

 Process Innovation: is typically associated with

improving the efficiency of an organizational process, especially manufacturing systems and operations. By new technologies, firms often can improve material utilization, shorten cycle time, and increase quality. Process innovations are more likely to occur in the later stages of Industrys life cycle, as companies seek ways to remain viable in markets where demand has flattened out and competition is more intense.

 Product innovations that fail are based on cutting edge or untested technologies, followed by metoo approach. Technology risk Market risk Time of the launch Breakthrough Innovation.

 Joint ventures- with other firms that have an interest in

the possible innovation share. E.g., Toyota negotiating with GM to share their hybrid vehicle technology.

Cooperation with lead users- is used by both type of

innovators. e.g., Nike test new shoes with inner-city street gangs.

Do it yourself- innovation allows a company to work

directly with existing customers or expected customers. E.g., BMW working with 1000 customers on innovative ideas in I-C-E.

 Acquiring innovation- larger companies wisely bring

innovation into their firm while mitigating the risk/reward trade-off in the process. E.g., CISCO as a dominant player in buying smaller org.

Outsourcing Innovation- Nokia, Samsung,

Motorola- cell phone giants get proposed newproduct designs prototypes from HTC, Flextronics & Cellon etc.

 This is a process of bringing together creative and innovative ideas and actions with the management and organizational skills. Necessary to mobilize the appropriate people, money, and operating resources to meet an identifiable need and create wealth in the process.

High

Creativity & Innovativ eness

Inventor

Entrepreneur

Promoter

Administrator

Low

High

Management Skills & Business Know-How

 Inventors- are exceptional for their technical

talents, insights, and creativity. But their creations & inventions often are unsuccessful in becoming commercial due to lack or market knowledge.

Administrator- develop strong management skills,

specific business know-how, and the ability to organize people.

Promoters- clever at devising schemes or programs

to push a product or service, but aimed more at a quick pay-off than a profitable, business building endeavor for longer run.

 Entrepreneur, has that unusual combination of talent: strength in both creativity and management. In a new venture, these strengths enable the entrepreneur to conceive and launch a new business as well as make it grow and succeed.

 Firms that want to engage in successful corporate entrepreneurship need to have an entrepreneurial orientation (EO). EO refers to the strategy making practices that businesses use in identifying and launching corporate ventures. An EO has five dimensions that permeate the decision making styles and practices of the firms members. These are autonomy, innovativeness, proactiveness, competitive aggressiveness, and risk taking.

 Autonomy: refers to willingness to act

independently in order to carry forward an entrepreneurial vision or opportunity.
In the context of corporate entrepreneurship, autonomous work units are often used to leverage existing strengths in new arenas, identify opportunities that are beyond the orgs current capabilities, and encourage development of new ventures or improved business practices.

Innovativeness: willingness to introduce novelty

through experimentation and creative processes aimed at developing new products and services as well as new processes.

 Here the focus is on innovativeness firms attitude towards innovation and willingness to innovate.

Pro-activeness: a forward-looking perspective characteristics of a market place leader that has the foresight to seize opportunities in anticipation of future demand.
Proactive organizations monitor trends, identify the future needs of existing customers, and anticipate changes in demand or emerging problems that can lead to new venture opportunities. Proactiveness is effective at creating competitive advantage. The benefits gained by the firms that are first to enter new markets establish brand identity, implement administrative techniques, or adopt new operating technologies in an industry is called first mover advantage.

 Competitive aggressiveness: an intense effort

to outperform industry rivals characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace.
Companies with an aggressive orientation are willing to do battle with competitors. They might slash prices and sacrifice profitability to gain the market share or spend aggressively to obtain manufacturing capacity. Unlike innovativeness & proactiveness, which tend to focus on market opportunities, competitive aggressiveness is directed towards competition.

 Risk taking: making decisions and taking action without certain knowledge of probable outcomes; some undertaking may also involve making substantial resource commitments in the process of venturing forward.
Three types of risks that organizations and their executives face are:
Business risk venturing into unknown without knowing the probability of success. Financial risk company borrow heavily or commit a large portion of its resources in order to grow. Personal risk risks that en executive assumes in taking a stand in favor of a strategic course of action.