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8/8/2019 Chapter 8 Introduction to Innovation-edit
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INTRODUCTIONTO
INNOVATION
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Types of InnovationTypes of Innovation
Process InnovationProcess Innovation involves the
implementation of a new or
significantly improved production or
delivery method.
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Types of InnovationTypes of Innovation
Product InnovationProduct Innovation, involves the introduction of
a new good or service that is new or substantially
improved. This might include improvements infunctional characteristics, technical abilities, ease
of use, or any other dimension.
Service InnovationService Innovation, is similar to product
innovation except that the innovation relates to
services rather than to products
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Tools and techniques
The tools and techniques most commonly used in process improvement are:
Problem solving methodology, such as DRIVE Force field analysis Cause & effect diagrams Cause and Effect Diagram with the Addition of Cards
Brainstorming Lateral Thinking Six Thinking Hat SWOT Heterogeneous Groups Bench Marking Financial Intensive Provocation Architecture and Physical Layout Provocation
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DRIVE APPROACH
Definethe scope of the problem the criteria by which success will bemeasured and agree the deliverables and success factors
Review the current situation, understand the background, identify andcollect information, including performance, identify problem areas,
improvements and quick wins
Identifyimprovements or solutions to the problem, required changes toenable and sustain the improvements
Verify check that the improvements will bring about benefits that meet
the defined success criteria, priorities and pilot the improvements
Execute plan the implementation of the solutions and improvements,agree and implement them, plan a review, gather feedback and review
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Force Field Analysis
Force Field Analysis is a technique for identifying forces whichmay help or hinder achieving a change or improvement. Byassessing the forces that prevent making the change, plans canbe developed to overcome them. It is also important to identifythose forces that will help with the change.
Example the need to install POS system in food beverage
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Fishbone Diagram
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Fishbone orIshikawa Diagram
It is also a useful technique for opening up thinking inproblem solving.
The effect or problem being investigated is shown atthe end of a horizontal arrow;
Potential causes are then shown as labeled arrowsentering the main cause arrow
Each arrow may have other arrows entering it as the
principal causes or factors are reduced to their sub-
causes; Brainstorming can be effectively used to generate
the causes and sub-causes
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PRACTICAL FISHBONE
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Cause and Effect Diagram with the
Addition of Cards
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SWOT Analysis
SWOT analysis is a powerful tool for understanding yourStrengths and Weaknesses and for looking at the Opportunitiesand Threats you face.
It helps you to uncover opportunities that you are well placed totake advantage of. By uncovering the weaknesses of yourbusiness, you can manage and eliminate threats that wouldotherwise catch you unaware.
More than this, by looking at yourself and your competitorsusing the SWOT framework, you can start to craft a strategy thathelps you to distinguish yourself from your competitors, so that
you can compete successfully in your market
The SWOT analysis helps the business to focus on its strengths,minimize threats and take the greatest possible advantage ofopportunities available to your business.
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S = STRENGTH
Strengths in your company means theresources that the company has andthese include the physical assets like
plants and machinery, raw materials,funds and the human resources, the sizeof the market; and the intangibleresources like the skills, capabilities,
knowledge and experience of the peoplein the organization
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W = WEAKNESS
Weaknesses refer to what the
organization does not have but they are
needed for the successful operation of
the business.
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O = OPPORTUNITY
Opportunities refer to the markets
available in other places, the
technological changes that your
organization would like to have and theavailability of sources for the supply of
inputs.
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T = THREATHS
Threats relate very much to the
competitors, new entrants and substitute
producers in the external environment
and they compete with your company forthe same market.
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Heterogeneous Groups
Forming heterogeneous groups can enhance creativitybecause a diverse group brings various viewpoints tothe problem at hand. Key diversity factors includeprofessional discipline, job experiences and a variety
of demographic factors. Diverse groups encouragediverse thinking, which is the essence of creativity. Aculturally diverse group can be effective at developingcreative marketing ideas to appeal to a particularcultural group.
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Financial Incentives
In work settings, financial incentives are
likely to spur imaginative thinking. Such
incentives might include paying
employees for useful suggestions,paying scientists royalties for patents
that become commercially useful.
The 5 Ss
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Architecture and Physical Layout
Many companies restructure space to fire up
creativity, harness energy and enhance the
flow of knowledge and ideas. Any
configuration of the physical environment thatdecreases barriers to divergence, incubation
and convergence is likely to stimulate the flow
of creative thinking. The reasoning is that
creative thinking is more likely to be enhancedby cubicles rather than corner offices, by
elevators rather than escalators and by
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Four basic layout types
Fixed-position layoutservice restaurant
Cell layout buffet
Line
layoutcafeteria
Cool room
Freezer Vegetable preparationGrill
Preparation
Oven
Functional layout kitchen
Main coursebuffet
Starter
buffet
Desser
t
buffet
Service line
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The 5 Ss
Sort (Seiri) = Eliminate what is not needed and keep whatis needed.
Straighten (Seiton) = Position things in such a way that theycan be
easily reached whenever they are needed.
Shine (Seiso) = Keep things clean and tidy; no refuse or dirt in thework area.
Standardize (Seiketsu) = Maintain cleanliness and order
perpetual neatness.
Sustain (Shitsuke) = Develop a commitment and pride in keepingto standards.
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Provocation is an important lateral thinking technique that helps
to generate original starting points for creative thinking.
To use provocation, make a deliberately stupid comment relating
to the problem you are thinking about.
Then suspend judgment, and use the statement as the starting
point for generating ideas.
Often this approach will help you to generate completely new
concepts.
Provocation
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Provocation
Example:
The owner of a video-hire shop is looking at new ideas for
business to compete with the Internet. She starts with the
provocation 'Customers should not pay to borrow videos'.
The shop would need other revenue. Perhaps the owner couldsell advertising in the shop, or sell popcorn, sweets, bottles ofwine or pizzas to people borrowing films. This would make hershop a one-stop 'Night at home' shop. Perhaps it would only lendvideos to people who had absorbed a 30-second commercial, orcompleted a market research questionnaire.