Lesson 1, Topic 1
In Progress

1.3. Apply principles and practices of innovation to the development and growth of a new venture.

ryanrori December 22, 2020

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3.1            Innovative thinking is applied to generate new products that the business can make and/or new services it can provide for greater profitability and/or viability.

3.2 Innovative thinking is applied to generate alternative ways the business can run its operations to cut costs and increase income. 

The fundamental organisational challenge when implementing innovation is to change individuals’ behaviour. Implementation is the critical gateway between the decision to adopt an innovation and the successful routine use of that innovation within the organisation.

Implementing innovative ideas involves the following four steps:

  • Gain acceptance for your idea
  • Execute your implementation plan
  • Develop an implementation plan
  • Improve your implementation plan

We shall now take a look at each of these steps.

Step 1: Gain acceptance for your idea

This step is about convincing colleagues or customers of the worth of the proposed changes and adapting the solutions and plans to make them fit real-life situations and conditions. You must gain acceptance for your idea by showing them how a particular solution benefits them and how possible problems with the solution can be minimised.

Hierarchies create problems in that people at every level have the power to say no. You have to get to the person who can say yes. The following tips can help you to get there.

  • Find an ally, not only inside but also outside the company. If your idea is languishing on your boss’s desk, take it to another department or division within the company that might pursue it. Or persuade trusted customers – who really do get listened to – to ask the company why it can’t supply just what you are proposing. Include their requests for your product, their research showing that there’s a market for it, and their testimonials in your written proposal to top management.
  • Never ask for a decision any larger than you need to proceed to the next step. The larger the decision you ask for, the more threatening it is to whoever has to make the call. Rather than trying to sell a full-blown but untested idea, sell the simpler notion of getting a small amount of money to check out whether it can fly. Take it step-by-step.
  • Under commit and over perform. If you think that you can reach R2 million in sales by the end of year one, but can get approval by promising to reach R 1 million, then commit to the R I million but reach for the R2 million.
  • Avoid premature publicity. Premature internal publicity leads to jealousy and often to early disappointment. Premature external publicity just advertises your venture to competitors.
  • Recognise your own weaknesses. If you’re good at marketing but terrible at finance, go higher up and get somebody on your development team who’s an expert at finance.
  • Acquire the necessary writing and verbal skills. You have to be able to crystallise your idea in a memo, spelling out your vision in a dramatic way.
  • Answer the questions:
    • Why is the idea good?
    • How does it fit in with our corporate strategy?
    • Is it worth the risk and cost?
    • What resources and skills do we need?
  • Take care in presenting your ideas. KT Conner (Couger 1995: 313) developed a series of six steps to be followed in selling an idea to a specific individual or group
    • Explain the idea and its rationale.
    • Explain the benefits and limitations.
    • Explain the impact on the listener.
    • Ask for reactions and concerns and respond empathetically.
    • Ask for input for resolving these concerns.
    • Agree on the next steps to take.

Whatever you do, be prepared to be unpopular. When asked how you identify the entrepreneurs in a company, business philosopher Peter Drucker responded: “Look for the troublemakers.” As George Bernard Shaw put it: “All progress is the result of the efforts of unreasonable men.”

Step 2: Develop an implementation plan

If an implementation plan is properly devised, the decision maker will be much more confident about proceeding with the idea.

The best way to do this is first to be divergent and then convergent in your thinking. (Divergent thinking is thinking in different directions or searching for a variety of answers, while convergent thinking is used to identify the most useful or appropriate answer.)

What new problems might this idea create? Eg: Our image will change to that of a ‘copycat’.

What possible difficulties might you encounter with this idea? Eg: We may lack the necessary technical expertise.

Who might be negatively affected by this idea?  Eg: Our relationship with our competitors might be affected.

How might you introduce this idea? Eg: At our next meeting with our stakeholders.

When might be the best time to introduce this idea? Eg: After showing our stakeholders the benefits of this new strategy.

Let’s diverge further. Without making any judgements, quickly list at least ten simple steps that need to be followed to get the ball rolling in your Student Workbook. (Hint: make sure that each one starts with an action verb and is simple, clear and specific.)

For example:

I.   Develop a new marketing campaign.

2.  Appoint the necessary technical expertise.

3.  Improve our information systems.

4.  Sell our idea to our stakeholders.

Now it’s time to converge.

From this list of possible actions, circle the one that you believe you should do first. On the action plan provided in your Student Workbook, write down

  • what will be done,
  • how it will be done,
  • by whom,
  • by when and
  • where.

You are likely to think of further action steps that should be carried out either just before or just after your first step. In either case, complete an action plan for each.

MY ACTION PLAN

What will be done? eg: Selling our idea to our stakeholders

How will it be done? eg: A well-prepared presentation focusing on the benefits

By whom? eg: Koos Coetzee, the managing director

By when? eg: The next meeting of stakeholders

Where? eg: At a Conference Centre

You now have a plan for implementing your innovative idea.

Step 3: Improving the plan

After developing an implementation plan, it is important to check its validity.

This will take additional time, but significantly increases the probability of success. Sidney Parnes has developed the following twenty-four point check list to determine whether the plan can be improved.

In what ways might I improve the plan?

  1. to make it more effective?
    1. to increase its potential payoff?
    1. to make it more practical, workable?
    1. to make it better serve my objective?
    1. to make it more pleasing to me and others?
    1. to make it more acceptable to me and others?
    1. to reap more benefits from it?
    1. to make it less costly?
    1. to make it more morally or legally acceptable?
    1. to get more rewards and recognition from it?
    1. to require fewer resources?
    1. to enrich its by-products?
    1. to increase its appeal?
    1. to gain more encouragement from others?
    1. to mitigate problems it might cause?
    1. to salvage more if it should fail?
    1. to make it easier to implement?
    1. to make it easier to follow up?
    1. to lessen risks or results of failure?
    1. to give me more confidence in its working?
    1. to make it more timely?
    1. to add fringe benefits?
    1. to make it easier to test?
    1. to enable taking first steps more easily?

Step 4: Executing the implementation plan

Now that you are sure that you have a good plan, you must take action by following each step in the implementation plan.

Innovation is not just another way of developing new products and services or breathing life into existing ones. It involves much more. Innovation is the single best way in which to leapfrog competition by ensuring constant change in products and/or processes.

When organisations adopt innovations they do so with high expectations, anticipating improvements in organisational productivity and performance. However the adoption of an innovation does not ensure its implementation. The organisational challenge is to create the necessary conditions in which to utilise the innovation and to develop a workable plan for its implementation. Only then will an organisation be likely to achieve the intended benefits of the innovation.

3.3  Innovative thinking is applied to generate ways in which the business can generate more employment opportunities without putting the business at risk. 

Human labour is the most important part of the small business, because its influence   determines how well the other factors are utilised.  Without people your business will not exist. A variety of viewpoints often allows for creative yet appropriate solutions.

3.4            Innovate thinking is used to generate ways in which the skills needs of employees can be addressed without risking the venture. 

Skills or needs of employees should first be identified. Constant contact with employees is essential. Expectation of evaluation and punishment tends to undermine creativity.  Intrinsic motivation fosters creativity, while extrinsic reward tends to be detrimental to creativity. Freedom and independence combined with greater democracy contributes to a creative business climate. A supportive working environment contributes to the fulfilment of creative potential and it includes a high level of employee responsibility for the initiation of new activities. Discussing ideas with other individuals, even with those who know little about the subject helps the process. Sometimes a question that initially seemed simple, can lead to new discoveries and new approaches to old problems. Although some people are born with a gift of being creative, it is possible for anyone to develop and improve his creative abilities.

Formal training does not necessarily guarantee success in a small business. Skills can be gained from working experience.

“In today’s fast changing world, it is not so much, what you know anymore that counts, because often what you know is old. It is how fast you learn. That skill is priceless.”

                                                                           Robert Kiyosaki

3.5            Innovative thinking is applied to find ways to minimise the impact of opposition firms on the venture.

It is often surprising how little most small business people know about their competition. The small business owner must identify competitors and study them carefully. Once you know your opposition you can use a series of techniques to stimulate creativity in your venture eg.

SCAMP.

Substitute

This means to use one object instead of another. For example, Sylvan Goldman, owner of two supermarket chains in 1937, noticed his customers struggling with heavy shopping baskets. INSTEAD of baskets, he came up with the idea of the shopping cart. Today there are millions of shopping carts in the world!

Combine

Combining two objects, materials or talents can lead to a whole new business idea. In the mid 1880’s George Eastman developed a strong, lightweight cellulose film. He combined this with the idea of a lightweight camera to use with the film. This combination made Kodak the world leader in photography within ten years.

Adapt

To adapt is to change in some way. An object could be made to look sound or smell or taste or feel better. That is why it is so important to know you opposition and their products. In 1893, a Denver man, whose name is no longer known, developed a process for compressing dried wheat fibres into biscuits. John and Will Kellogg adapted this process to produce breakfast cereal. (Kelloggs Corn Flakes) You know what happened from there!

Magnify/minimize

This means to make bigger and smaller. The enlargement of the small food store into a big supermarket is an example of the success of magnification! The pocket calculator, mini cell phone and lap top computer are examples of making successful products smaller which led to even greater success.

Put to another use

Asking the question “What else could this product do?” can lead to a very successful or environmentaly friendly business. For example, Goodyear Tyre Company has a pollution free heating plant that uses tyres as its only fuel.

Using each of the above techniques in different ways will help you to generate a range of different ideas and come up with better products or services than your competitors. Always remember the words of Michael Crisp: ”Often simple ideas are the best……”

You can also use brainstorming  which is a creative means of generating a large number of ideas from a group of people in a short time. It is used by big and small companies to find ways to solve problems.