Innovation and Culture Revision Session

1.Define Innovation 2.Define Organisational Culture 3.What are the key drivers for innovation? 4.How can an organisation encourage innovation? 5.Why do some firms spend more on innovation than others?

1. Define Innovation Innovation is the process and outcome of creating something new, which is also of value. Innovation involves the whole process from opportunity identification, ideation or invention to development, prototyping, production marketing and sales, while entrepreneurship only needs to involve commercialization (Schumpeter). –a new product, –a new process, –opening of new market, –new way of organizing the business –new sources of supply

2. Define Organisational Culture Organisational culture is the basic assumptions and beliefs that are shared by members of an organisation, that operate unconsciously and define in a basic taken-for- granted fashion an organisation’s view of itself and its environment. A system of meaning shared by the organization’s members

2. Define Organisational Culture?

3.What are the key drivers for innovation? –Financial pressures to reduce costs, increase efficiency, do more with less, etc –Increased competition –Shorter product life cycles –Stricter regulation –Industry and community needs for sustainable development –Demographic, social and maket changes –Rising customer expectations regarding service and quality –Changing economy –Greater availability of potentially useful technologies coupled with a need to exceed the competition in these technologies

4.How can an organisation encourage innovation? Rewards – financial? Promotion Training Empowerment – free time Ensure support of management Ensure support of board of directors Changing Organisational Culture Changing Organisational Structure Long term perspective Encourage risk - allow failures

5. Why do some firms spend more on innovation than others? The amount of innovation spend will depend on the industry and the cost of innovation. For example pharmaceutical companies can spend hundreds of millions and time developing a new drug; as the costs associated with research are huge. Dependent on – Nature of industry – Costs associated

Examples Google/Apple John Lewis – for staff Ikea? Process based? Formula 1 cars Process innovation – Tesco Clubcard/delivery Oil Industry, Car Industry Kaizen –continuous improvement: Toyota/Motorola Sony vs. Nintendo