5.2: Innovation

5.2
Innovation
Essential Idea: There are many different types of innovation, which is not to be confused with inventions - innovation is a product that is effectively communicated and introduced to the market. Innovation can be described as the creation of new devices, objects, ideas, or procedures useful in completing human objectives. The process of invention is invariably preceded by one or more discoveries that help the inventor solve the problem at hand.

Invention and Innovation
The act or the business of putting an invention in the marketplace and making it a success. The products that we consider as innovative should make a real difference.

Innovation is the process of discovering a principle; a technical advance in a particular field often resulting in a novel product. For example, credit for invention has frequently been claimed for someone who conceived an idea, but the inventor is the person who not only had the idea but also worked out the method of putting it into practice. The innovator is the one that revolutionizes the market by introducing something new.

Categories of Innovation
Reasons why few inventions become innovations
For an innovation to occur, something more than the generation of a creative idea is required. The idea must be put into action to a genuine difference to the human condition, resulting in the improvement of a product, a system, or environmental change. an innovation is a useful application of invention or discovery.

The idea must be put into action and be diffused into the market place.

Diffusion: The market diffusion process describes how an innovation spreads through a market. It is the process by which a new idea or new product is accepted by the market. 


Marketability
Low product demand or not readily saleable

Financial support
There is little financial backing from the organization or from outside sources

Marketing 
Advertising, shipping, storing and selling

Need 
Whether there is good reason or demand for the product eg. energy devices

Price
Value for money, cost compared to its usefulness

Resistance to change
Does the product challenge routine or feeling of comfort

Risk 
Is there a level of uncertainty about the financial/time investment in relation to the function and performance of the innovation?

Sustaining Innovation
Sustaining ideas have to do with improving the current product by developing generations 2,3,4,5, and so on until the product reaches the end of its life cycle. Normally large companies are very good at creating sustaining innovations because their resources, business processes, and cultures are setup in a way to enable sustaining efforts.

1. Feature fixes/Additions
Most next generation products will come with a handful of fixes and/or new features that address previous gripes with the first generation products.

2. Cost Reductions
As sales volumes grow for a product, the cost of purchasing raw materials for that product decline in addition to design enhancement that simplify the product or enable it to use less expensive materials.

2. Product Line Expansions 
At launch, most new products don't have a full suite of products to meet each end-user segment's needs and as a fix for that companies will fill out their product line by offering additional sizes, colors, etc.

Quality of the product will increase 

Sustaining: Incremental value gain over existing solutions available to users.

Disruptive Innovation
Disruptive innovations are the sort of big ideas that many of us have in mind when we think about an innovation. They are called disruptive because they disrupt the current market behavior, rendering existing solutions obsolete, transforming value propositions, and bringing previously marginal customers and companies into the center of attention. 

The iPod, which radically changed the way we listen to music, is one success of disruptive innovation and isn't about winning a technology race, but about delivering innovations aimed at a set of customers whose needs are being ignored by industry leaders. A disruptive innovation trades off performance along one dimension for performance along another, such as simplicity, convenience, ability to customize, or price.

Disruptive innovation attempts to consist of off-the-shelf components put together in a product architecture that was often simpler than prior approaches.

Process Innovation
A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment, and/or software.

Process innovations change the way that products are built, and can also focus on the processes through which products are created or delivered (for example, for a relief setting). It is about making the process efficient and convenient, helping businesses arrive at the best ideas for commercialization.

Architectural Innovation
Architectural innovation is the distinction between the product as a whole, the products in its parts, and its components. Architectural innovation changes the outside of the product/the house of the product whilst keeping the inside the same. It reconfigures the linkages between the components of established products in new ways while leaving the core design elements untouched.

Innovations that change the architecture a product without changing its components.

Architectural innovation destroys the usefulness of a firm's architectural knowledge but preserves the usefulness of its knowledge about the product's components. A component is defined as a physically distinct portion of the product that embodies a core design concept and performs a well-defined function.

Modular Innovation
Modular innovation is where you maintain the architecture of a product and modify the modules within the product. For instance, adding more interfaces to enhance the functionality/features to a smart phone so that each product is customized for its individual users. 

Configurational Innovation
Configuration design is a kind of innovation where a fixed set of predefined components that can be connected in predefined ways is given, and an assembly of components selected from this fixed set is sought that satisfies a set of requirements and obeys a set of constraints.

The associated design configuration problem consists of the following three constituent tasks:
1. Selection of components,
2. Allocation of components,
3. Interfacing of components (design of the ways the components interface/connect with each other)

Innovation Strategies for Markets: Diffusion and Suppression
Diffusion of innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread through cultures. Diffusion takes place once the product, system, or service is adopted. Adoption of an innovation runs through a hierarchy of groups of potential users.

Diffusion occurs through a five-step decision making process. It occurs through a series of communication channels over a period of time among the members of a similar social system. Rogers five stages of diffusion are:

• knowledge 
• persuasion
• decision
• implementation
• confirmation

The stages by which a person adopts an innovation, and whereby diffusion is accomplished, include awareness of the need for an innovation, decision to adopt (or reject) the innovation, initial use of the innovation to test it, and continued use of the innovation. 

Suppression or delayed adoption of an innovation in the early years of its availability when it may compete with a dominant design. There are factors that can delay widespread sales , including the companies that are currently providing technology and products that might be threatened by a newcomer, like telegraph companies faced with the telephone.