Innovation, Creativity and SuccessFelix J. Heunks

Quiz

• Which of these is NOT a type of an innovation?

• Process Innovation• Product Innovation• Programme Innovation• Service Innovation• Social Innovation

• Which of these does NOT define Innovation?

• The successful implementation of a creation

• Act of conceiving or imagining something original and generation of new ideas.

• The conception of a new idea, transformed into an invention and exploited as much as possible.

• Doing new things.

• Which of these is NOT listed as one of the top innovative companies?

• Groupon• Boeing• Netflix• Zynga• Douglas Aircraft

Flow Of Presentation

• Introduction• Innovation and Creativity as Success

factors• Innovation, creativity and Personality• Institutional aspects of Innovation• An empirical check of the hypotheses• Conclusions

Introduction

• Innovation – The successful implementation of a creation (Heunks and Roos,1992)

• “Innovation is the process of change that creates and grows wealth.” (Roger More, 2010)

• “Innovation is the implementation of something new.”

• “Creativity is the capability or act of conceiving something original or unusual.”

• “Invention is the creation of something that has never been made before and is recognized as the product of some unique insight.”

Innovation and Creativity as Success factors• Hypothesis 1

The success of a small firm, measured by its growth, increasing productivity and profits, depends on its innovation.

Innovation Process

Searching•Framing the

inquiry•Facilitating

creativity•Identifying

Opportunities•Hunting and

Gathering ideas

Exploring•Investigating

Ideas•Selecting

promising ideas

•Experimenting to narrow the field

•Validating Ideas

Committing•Preparing a

business plan•Influencing

Stakeholders•Making

decisions•Allocating

resources

Realizing•Sustaining

high performing team

•Managing Process

•Managing Political Issues

•Timely Results

Optimizing•Assessing

value created•Realizing

Maximum Value

•Improving the innovation process

Hypothesis 2

• Younger firms are less innovative than older ones.

• New ideas are more relevant after a firm’s birth or start up stage.

• Reliance Industries V/s Bombay Dyeing• Boeing V/s Douglas Aircraft• Marriott V/s Howard Johnson's• Merck V/s Pfizer

Hypothesis 3

• Innovation and success of a small firm depend on creativity, particularly after start up stage.

Innovation, creativity and Personality

• If creativity as a matter of divergent thinking has to result in innovation, it has to be followed by convergent thinking

Hypothesis 4

• Innovation depends on a combination of flexibility and control

Characteristics of Creative people

• Have knowledge of their specialty• Be extravert, sensitive to problems and

highly motivated• Be independent, persistent, self confident

and skeptical• Take risks, be open to new ideas and

tolerate ambiguity• Be flexible in combining things and

synthesize information

Characteristics of Innovative Entrepreneurs• Have high level of knowledge• Sociable, embrace challenges and be energetic• Independent, persistent, self confident and

optimistic• Take calculated risks and be open to new ideas• Be flexible and creative• Desire responsibility, need achievement, value

money and have a future orientation• Be a dynamic leader, take initiative and have

organizing skills

Hypothesis 5

• Creativity and Innovation tend to share some personal backgrounds, like a high level of education, extraversion, acceptance of challenges, a need for independence, self confidence, risk taking and flexibility.

Hypothesis 6

• Innovation has some specific personal backgrounds, particularly a future orientation and leadership affinities.

Institutional aspects of innovation

• Innovation is the characteristic of an organization, its members and its context.

• Innovation is the successful implementation of a creation

•Institutional factors fostering innovation areAvailability of qualified personnelExternal informationExternal cooperationExternal capital

Hypothesis 7

• Innovation depends on the availability of external capital, information, cooperation and qualified personnel.

Depending on the emphasis being laid on either development or efficiency firms tend to be innovative or positional type.

Rizzoni found 6 types of small firms depending on their orientation towards technological innovations.1-2 traditional firms3-4 cooperating firms5-6 technology based firms

Comparison of small and large firms

According to Hyvarinen: Large firms excel in all kind of resources and knowledge, small firms tend to excel in flexibility and to know how to use creativity.

Large firms have material advantage and small firms have behavioral advantage

Hypothesis 8

• Innovation in small firms profits their flexibility and creativity, and in larger firms more from the availability of resources like external capital and qualified personnel.

According to Arrow less costly and more original innovations will come from small firms and those involving higher development costs but less radical departures in principle will come from larger firms.

Hypothesis 9

• Innovation in small firms emphasizes new products and processes whereas innovation in larger firms emphasizes more R&D

An empirical check of hypotheses

• Hypotheses 1 :- It proves that product innovation hardly contributes to these aspect of success.

• Hypotheses 2:- Firms age does not co relate with any kind of innovation.

• Hypotheses 3:- The growth is not particularly stimulated by such an attitude.

• Hypotheses 4:- Is supported as far R&D innovation is significantly related to combination of flexibility and control

• Hypotheses 5:- Is supported by the fact that innovation and creativity are more or less related risk taking and flexibility.

• Hypotheses 6:- Innovation is increased more than creativity by entrepreneur’s future orientation and by his wish for leadership.

• Hypotheses 7:- Innovation depends on cooperation with other firms and on the availability of external capital, but this regards mainly marketing innovation.

• Hypotheses 8:- Support small firm profits from flexibility and creativity and larger firms from resources like capital and qualified personnel.

• Hypotheses 9:- Supports small firms on product and process innovation and larger firm on R&D.

Conclusion

• Hypothesis 1 Small firms - Process innovation. Medium firms - R&D Innovation.• Hypothesis 2 There is no correlation between innovation and

age of the firm. However it is found that innovation usually starts early in the firm’s lifecycle.

• Hypothesis 3 The role of creativity for innovation and success

increases during firm’s life cycle. This is mainly to compensate bureaucracy and stagnation.

• Hypothesis 4 R&D innovation is stimulated by flexibility.

In case of small firms it is stimulated by a mix of flexibility and control

• Hypothesis 5 Creativity and innovation only share risk as

a personal background.

• Hypothesis 6 Innovation tends to have some specific

personal backgrounds like level of education, self-confidence, future orientation and leadership affinity. Similarly creativity has specific backgrounds too like acceptance of challenges and entrepreneurship.

• Hypothesis 7 Marketing innovation is fostered by co-

operation with other firms and availability of external capital. External information stimulates process and R&D innovation.

• Hypothesis 8 Innovation in small firms depends more on

entrepreneur's characteristics like future orientation, leadership etc

• Hypothesis 9 Medium and large scale firms show higher

levels of innovation than small firms.

Interpretation of Results

• Small firms show relatively less tendency to innovate when compared to that of large firms.

• Innovation does not depend on the age of the firm.

• Flexibility and Control are necessary to foster innovation.

• The ‘opportunity’ factor correlates fairly strongly with innovation rather than the ‘desire’ factor. This means that adequately running a firm depends more on opportunities and not on the sheer desire to run a firm.

Thank You!