Innovation Management Case Study

Introduction

In defining innovation, there is a need to distinguish the subtle difference between an “invention” and “innovation.” According to Merriam-Webster On-Line Dictionary, invention is “a device, contrivance, or process originated after study and experiment”.¹ However, the same source defines innovation as “the introduction (emphasis is ours) of something new, a new idea, method, or device.” Schumpeter (1996, p. 81-86) describes innovation as a process of creative destruction which is continuously revolutionizing macro level markets and structures. The widespread sub-categorization of the innovation process into the consecutive phases of invention, innovation, as well as diffusion and imitation can also be attributed to Schumpeter (1939, p. 84-102; Milling and Maier, 1996, p. 17). The invention phase is characterized by the discovery of a previously unknown solution to a problem. In form of an innovation, the invention is economically used for the first time during the innovation phase. In the subsequent diffusion and imitation phase, the innovation spreads through the market, thereby increasingly realizing the potential technological progress (Milling and Maier, 1996, p. 17-18).

On a micro level, innovations diffuse between actors of a social system or an organization through an existing or emerging set of relationships (Allen, 1977, p. 234-265; Roger, 2003, p. 5). Rogers (2003, p. 5-6) defines diffusion in the standard work Diffusion of Innovations as a process by which information is exchanged over certain communication channels between members of a social system. He differentiates between the five stages knowledge, persuasion, decision, implementation, and confirmation. The knowledge stage is initiated by the first encounter with the innovation and ends after a general understanding of the innovation has been acquired. In the following persuasion stage, an affirmative or negative attitude towards the innovation emerges. Next, decision stage, the innovation is at least partially tested before it is decided whether the innovation will be adopted or disregarded. In case of a positive adoption decision, the innovation will be used for the first time during the implementation stage. Within the final confirmation stage, the adoption decision is continuously challenged and where appropriate revoked based on newly acquired information about the innovation (Roger, 2003, p. 168-169). Within an organizational context, the innovation process is subdivided into two main processes: the initiation process and the implementation process (Zaltman, Duncan, and Holbeck, 1973). Thus, innovation is the first appearance or use of a particular practice. It is the commercially successful exploitation of ideas. This definition associates innovation with a tangible outcome. Successful innovation is about creating value (Baporikar, 2015a).