INNOVATION & STAGES OF SUCCESSFUL INNOVATION:

INNOVATION:
Innovation is the specific instrument of entrepreneurs, the means by which they exploit change as
an opportunity for a different business or a different service. As a dimension of corporate
entrepreneurship, innovation is a firm’s commitment to creating and introducing products,
production processes, and organizational systems (Covin and Slevin, 1991; Lumpkin and Dess,
1996; Zahra, 1996). Innovation is the process that provides added value and novelty to the firm
and its suppliers and customers through the development of new procedures, solutions, products
and services as well as new methods of commercialization.
Innovation can lead to competitive advantage and provide a basis for firm growth (Hitt, Hoskisson,
and Kim, 1997). Innovative firms develop strong, positive market reputations. They engage in
opportunity exploration which includes behaviour such as looking for ways to improve current
products, services or processes, or trying to think about current work processes, products or
services in alternative ways.
PHASES IN SUCCESSFUL INNOVATION:
Desouza, Dombrowski, Awazu, Baloh, Papagari, Kim, and Jha, (2007) identify the following five
essential phases of successful innovation:

Idea Generation & Advocacy and

Commercialisation Diffusion and

1. Idea Generation and Mobilization: This phase is the starting point for new ideas.
Successful idea generation should be stimulated by the pressure to compete and by the
freedom to explore. Once a new idea is generated, it is conveyed to the mobilization phase,
wherein the idea travels to a different physical or logical location. Because most inventors
are not also marketers, a new idea often needs someone other than its originator to move it
along. This phase is crucially important to the progression of a new idea, and omitting it
can delay or even sabotage the innovation process (Desouza et al., 2007).
2. Advocacy and Screening: According to the authors, this phase is the period for weighing
an idea’s costs and benefits. Advocacy and screening have to take place simultaneously to
weed out ideas that lack potential without allowing stakeholders to reject ideas impulsively
solely on the basis of their novelty. Firms will have more success when the evaluation
 process is transparent and standardized, because employees feel more comfortable
contributing when they could anticipate how their ideas would be judged.
3. Experimentation: The experimentation phase assesses the sustainability of ideas for a
particular firm at a particular time – and in a particular environment. In this phase, it is
essential to determine who the customer will be and what he or she will use the innovation
for. With that in mind, the firm might discover that although someone has a great idea, it
is ahead of its time or just not right for a particular market. However, it is important not to
interpret these kinds of discoveries as failures – they could actually be the catalysts of new
and better ideas (Desouza et al., (2007).
4. Commercialization: In this phase, the firm should look to its customers to verify that
innovation actually solves their problems and then should analyse the costs and benefits of
rolling out the innovation. According to the Desouza et al (2007), an invention is only
considered an innovation once it has been commercialized. Therefore, the
commercialization phase is a significant one similar to advocacy in that it takes the right
people to progress the idea to the next developmental phase.
5. Diffusion and Implementation: According to the authors, diffusion is the process of
gaining final, company overall acceptance of an innovation. Implementation is the process
of setting up the structures, maintenance and resources needed to produce it.
TYPES OF INNOVATION:
According to Hamel (1997) in Dess and Lumpkin (2005), innovations come in different forms:
1. Technological innovativeness primarily comprises research and engineering efforts aimed
at developing new products and processes.
2. Products-market innovativeness consists of market research, products design, and
innovations in advertising and promotion.
3. Administrative innovativeness is concerned with novelty in management systems, control
techniques, and organizational structure.
Innovation can also be classified in terms of whether it is incremental, modular, architectural
or radical (Henderson and Clark, 1990 in Hager, 2006):
1. Incremental Innovation: This comprises relatively small modifications to pre-existing
solutions (Scheepers, 2007). In the view of Henderson and Clark (1990) in Hager (2006),
this type of innovation improves and extends an established design. Improvement takes
place in individual components, but the basic core design concepts and the linkage between
them remain the same. An example is faster spinning hard drives.
2. Modular Innovation: This kind of innovation changes the core design of one or more
components but does not change the entire product architecture. This type of innovation
requires new knowledge for one or more components, but the architectural knowledge
remains the same. A good example is the digital phone which replaced the analog phone,
without changing the phone itself (Henderson and Clark, 1990 in Hager, 2006).
3. Architectural Innovation: The essence of this type of innovation is the reconfiguration of
an established system to link together components and parts in a new way (Henderson and
 Clark, 1990 in Hager, 2006). According to the authors, architectural innovation does not
mean that the components remain unchanged but they are changed in a manner that there
are new ways of linkage between the components. The change is so small that the core
concept behind the changed component is the same, and the associated scientific and
engineering knowledge remain the same. An example is the technologies where
architectural innovations reduced the size of the hard drives from 14-inches diameter disks
to diameter of 3.5-inches, and from 2.5-inches to 1.8-inches.
4. Radical Innovation: This type of innovation brings about a new dominant design and
consequently, a new set of core design concepts embodied in components that are linked
together in a new architecture (Hager, 2006). Radical innovation leads to new solutions
that address customer needs (Morris and Kuratko, 2002 in Scheepers, 2007).
5. Disruptive Innovation: Gets a great deal of attention, particularly in the press, because
markets appear as if from nowhere, creating massive new sources of wealth. It tends to
have its roots in technological discontinuities, such as the one that enabled Motorola’s rise
to prominence with the first generation of cell phones.
6. Product Innovation: Takes established offers in established markets to the next level, as
when Intel releases a new processor or Toyota a new car. The focus can be on performance
increase, cost reduction, usability improvement or any other product enhancement.
7. Process Innovation: Makes processes for established offers in established markets more
effective or efficient. Examples include Dell’s streamlining of its PC supply chain and
order fulfillment systems.
8. Experiential Innovation: Makes surface modifications that improve customer’s
experience of established products or processes. These can take the form of delighters
(“You’ve got mail!”), satisfiers (superior line management at Disneyland), or reassures
(package tracking from FedEx).
9. Marketing Innovation: Improves customer-touching processes be they marketing
communications or consumer transactions
10. Business Model Innovation: Reframes an established value proposition to the customer
or a company’s established role in the value chain or both. Examples include IBM’s shift
to on demand computing, and Apple’s expansion into consumer retailing.