Introduction to Innovation
Innovation has captivated the minds of many. We start with Schumpeter’s definition – Innovation is characterized by new (re)combinations of products, processes, services, markets & organizations. It’s an interesting formulation because Schumpeter looks at Innovation holistically. If we attempt to summarize classical literature on Innovation covering the broadest set of terms it would be:
- There are essentially 5 categories of Innovation – Product, Process, Services, Business Model and Management.
- Further which there are 2 types – Radical and Incremental, &, Open and Closed.
Once the categories and types are chosen, typically the route taken is the “exploration & exploitation”. The ultimate idea is to “design” the categories and types of innovation to these ways of innovation.
To think of where Innovation begins? It happens at 3 levels:
- Internal (inside the organization),
- Alongside the extended enterprise (at the fringe with the help of suppliers, partners, competitors etc – all those enabling the functioning of the organization) and,
- the entire ecosystem (investors, regulations, associations, university etc who influence the markets and hence the organization, forcing companies to innovate).
This is important because innovation is an outside-in and inside-out activity! Innovation can happen anywhere, and so what should organizations do in this case? Ideapoke has the answers here – being open about closed innovation and not being closed about open innovation is just the first step!