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SIEN6006
Entrepreneurship
Module 3
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Today’s agenda
•A Closer Look at Innovation
•Guest speaker: Chris Stevenson, GHD
•Recap of innovation material
•Looking forward to Module 4
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Our guest speaker
Chris Stevenson
Manager at GHD Digital
Innovation and
entrepreneurship
‘Innovation is the specific tool of
entrepreneurs, the means by which
they exploit change as an opportunity
for a different business or service. It is
capable of being presented as a
discipline, capable of being learned,
capable of being practised’
- (Peter Drucker)
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(Simple) process model of innovation
Tidd & Bessant (2018)
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Search
Research and
Development?
Market research?
Government
regulation?
Bright ideas?
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Search
Tidd & Bessant (2018)
‘Established’ Research &
Development: e.g.,
engineering
Less established Research
& Development: small
business
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Search & select: more traditional frameworks
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Select
Possible market and
technological opportunities –
what could we do?
Can we build on our
knowledge base?
Do we want to do it – does it
fit with our overall business?
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Select
• What are our customers’ needs?
→ Understand customer requirements and preferences
• Who / what are our competitors and what are they doing /
not doing?
→ Understand the competition
• What are we doing right now?
→ Understand our own business processes
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Implement
How will we execute the
project?
How will we manage our
resources?*
How will we sustain the
innovation?
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Challenges in growing a venture
• Establishing a product-
market fit
• Social systems
• Leadership for growth
Having an innovation
strategy
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Capture
Commercial or social value?
Protect from competitors?
How can we learn from our
innovation process?
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(Simple) process model of innovation
Tidd & Bessant (2018)
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The scope for innovation
Tidd & Bessant (2018)
Dimension Type of change
‘Product’
Changes in the things
(products/services) which an
organization offers
‘Process’
Changes in the ways in which these
offerings are created and delivered
‘Position’
Changes in the context into which the
products/services are introduced
‘Paradigm’
Changes in the underlying mental
models which frame what the
organization does
Dimensions of innovation: what can we change?
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Aspects of innovation
– Incremental (or routine)
– Disruptive
– Radical
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Routine (or Incremental) Innovation
– Builds on a company’s existing resources and capabilities
– Fits with its existing business model
→ Fits with existing customer base.
What capabilities, or company strengths, are
Apple leveraging in these incremental steps?
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Radical Innovation
– Based on introducing technological breakthroughs
– These breakthroughs shift how an industry operates
– Focuses on the long-term impact to an industry
– Core competencies: new tech resources/capabilities
– Better, more appealing products
– Radical innovations can originate in completely different
industries to the one they succeed in
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-
• In 2012, a tractor company began
equipping their tractors with
sensors, so farmers could track
and monitor their yields
• They knew the potential of big
data and decided to leverage the
technology for their bottom line
Radical Innovation: Example
“Radical innovation focuses on long-term impact and may involve displacing current
products, altering the relationship between customers and suppliers, and creating
completely new product categories.”
Hopp et al, 2018
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Disruptive Innovation
– Phrase introduced by Bower & Christensen (1995):
– innovations, changes, processes that challenge
the status quo (and dominant design) of an
industry and have the potential to completely
upset the make-up of the industry
– AKA disruptive innovation / disruptive change
– Requires a new business model, but not
necessarily a technological breakthrough
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Characteristics of Disruptive Innovations
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Characteristics of Disruptive Innovations
Different package of performance attributes (not valued, initially, by
existing, mainstream customers)
Disruptive technology inferior on key performance attributes but
improving at a rapid rate, eventually catching up with mainstream
customer preferences
→Mainstream customers often see disruptive technologies as too
risky, or not relevant to their needs.
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Diffusion of Innovations
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Disruptive technology: examples
3D printing disrupts manufacturing
Collaborative commerce disrupts
hospitality, e-commerce, retail
https://www.youtube.com/watch?v=w3qt04mYIno
Manufacture locally
Low-cost production
Speeds up production
Lowers prototyping costs/time
Makes new designs possible
How?
Consumers get what they need from each
other
Pay for access to goods and services
rather than owning them
How?
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In summary
• Innovation is about growth – about recognising opportunities for doing
something new and implementing those ideas to create some kind of value. It
could be business growth, it could be social change.
• Innovation is also a survival imperative. If an organisation doesn't change
what it offers the world and the ways in which it creates and delivers those
offerings it could well be in trouble.
• And innovation contributes to competitive success in many different ways – it’s
a strategic resource.
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In summary
• Innovation doesn’t happen simply because we hope it will – it’s a complex
process which carries risks and needs careful and systematic management.
• Innovation isn’t a single event, like the light bulb going off above a cartoon
character’s head. It’s an extended process of picking up on ideas for change and
turning them through into effective reality.
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Module 4 – Entrepreneurship and Individuals
• Understand the premise of psychological approaches to entrepreneurship
• Apply the ‘Big Five’ personality and ‘Managerial Mindsets’ models.
• Review: Canvas content (released on Thursday); required readings
• Lecture: Guest speaker details to be announced on Canvas
• Reflection and preparation for our next Workshop: Detailed on Canvas