Abstract
Interest in entrepreneurship and the startup movement has increased a growing debate and research regarding innovation in many avenues, including business models. Many startups, nationally and internationally, are doing exceptionally well, and it is obvious that they are highly inclined towards innovation in various dimensions of their business. Innovation is otherwise also necessary in the changing environment of the contemporary business world. Many startups have designed novel business models for new organizations or reconfigured existing business models. This chapter will focus on the aspects of the requirement of innovation-oriented leadership in business and how it leads to an effective business model. The authors will also discuss the critical role played by innovative approaches in setting up a new business venture. Additionally, the chapter will discuss the stories of successful Indian startups and how innovative leadership contributed towards startups.
TopBackground
Innovation is a word taken from the Latin word innovate, which signifies “into new”. Invention can be defined as doing something new and unique. Innovation is generally applied in the corporate world and commercial organisations. According to Twiss (1989), Innovation is a process that integrates science, technology, economics, and management to generate originality. It lasts from when an idea first appears until it is commercialised via production, exchange, and consumption. To grow, compete, and effectively differentiate themselves in their marketplace, businesses must go through a multi-stage process known as innovation whereby ideas are transformed into new or improved goods, services, or processes (Baregheh et al., 2009).
Further, innovation has been defined as the creation, adoption, assimilation, and exploitation of a novelty with added value in the economic and social spheres; renewal and expansion of the markets for goods and services; innovation of new production techniques; and establishment of new management systems, which is both a process and an outcome (Crossan & Apaydin, 2010). Creativity is described as “the production of novel and useful ideas in any domain” by Professor Teresa Amabile of the Harvard Business School (Jornada, 2006). Barack Obama defined innovation as the act of creating something that enhances the way we live. (Obama, 2007). Rogers (2003), however, sees it as “an idea, practice, or object that is perceived as new by an individual or other unit of adaption”. We can summarise innovation as transforming these ideas into a commercial reality (i.e., testing, measuring, learning & sharing).
Different variables are engaged to initiate innovation, like its transformation in organizations, cost factors, flexibility, efficiency, human scholarly capital, esteem creation, and status (Damle & Krishnamoorthy, 2022). Innovation is not just innovation-driven; additionally, its centre stays in the unique demeanour of individuals who drive the general public's Innovation (NITI Aayog, 2021). As indicated by (Manorama, 2022), a portion of the critical elements that impact advancements are research and Innovation, venture cost, size of the organizations, human resource market, profit, market interest, investment, and the event of deferral when it comes to obtaining licenses. Human resource agility is a critical factor for its impact on the innovative performance of business organizations. (Franco & Landini, 2022).
Key Terms in this Chapter
NITI Aayog: The National Institution for Transforming India, or NITI Aayog, is a crucial policy think tank and governmental entity in India. It was established on January 1, 2015, and it took the position of the Indian Planning Commission. Its goal is to promote sustainable economic and social development. At both the national and state levels, NITI Aayog promotes cooperative federalism by linking the federal government and the several states. Its main duties include developing policies, conducting research and analysis, observing and assessing government programmes, and encouraging entrepreneurship and innovation. By placing a strong emphasis on evidence-based decision-making, encouraging innovation, and aiming to make India more competitive, efficient, and egalitarian, NITI Aayog plays a crucial role in the country's policymaking process. It still plays a crucial role in directing and enabling India's transition in the twenty-first century.
Leadership: The skill and practise of inspiring, motivating, and persuading a group or an individual to work together towards a shared objective or vision is known as leadership. A leader inspires people to do their best work by setting an example, encouraging teamwork, making choices, and accepting accountability for the actions of the group or organisation they are in charge of. Effective decision-making, communication, and the ability to adjust to changing conditions are all necessary for leadership.
Incubation Centre: A startup incubator or incubation centre is a specialised organisation or space created to develop and support entrepreneurs and early-stage enterprises throughout their formative years. These facilities offer a variety of tools, services, and a supportive setting that help businesses grow and develop more quickly. Their primary goal is to assist startup companies in overcoming typical obstacles including obtaining capital, enhancing their business models, and gaining essential mentoring and assistance. Incubation facilities frequently include physical workspace, promoting entrepreneur networking and cooperation. Additionally, they give access to prospective financing sources, important professional mentoring, and various support services, such as training, legal, accounting, and market research. These centres are essential in helping companies navigate the complexity of the business world and eventually achieve sustained success by fostering an ecosystem that encourages innovation and entrepreneurship.
Start-Ups: Start-ups are recently founded businesses or projects that stand out for innovation and entrepreneurship. They are frequently in the early phases of growth and frequently concentrate on developing and providing cutting-edge goods, services, or solutions to meet particular market demands. Start-ups are renowned for their adaptability, willingness to take calculated risks, and pursuit of quick development and scalability, sometimes to upend established markets or delivering ground-breaking innovations.
Micro, Small, and Medium Enterprises (MSMEs) in Indian Context: According to the most recent definition in the Indian context, MSMEs constitute the foundation of India's economic landscape. These companies are categorised according to their size, investment in equipment, and yearly revenue. The most recent amendment, which will take effect on July 1, 2020, has changed the criterion. Micro-enterprises are defined as those having an annual turnover of up to INR 5 crore and an investment in plant, machinery, or equipment up to INR 1 crore. Small businesses must invest up to INR 10 crore and have an annual revenue of up to INR 50 crore, whereas medium-sized businesses must invest up to INR 50 crore and have an annual revenue of up to INR 250 crore.
Centralised and Decentralised Leadership: Two unique methods of allocating power and decision-making within an organisation or group are centralization and decentralisation of leadership. A key characteristic of centralised leadership is the concentration of authority at the highest levels, which a single leader or a small group frequently controls. With the help of this model's top-down decision-making process, policies may be implemented effectively and consistently. While it clarifies the hierarchy, when decision-makers are overworked or unavailable, it can cause bottlenecks.
Start-Ups in Indian Context: Start-ups are newly formed businesses or organisations created in India to deliver novel goods, services, or solutions. These businesses frequently combine innovation and technology to meet certain market demands. Due to a developing entrepreneurial environment, government assistance, and a rising emphasis on industries including technology, e-commerce, healthcare, and finance, Indian start-ups have become more well-known in recent years. These start-ups stand out due to their potential for quick expansion, pursuit of innovative business strategies, and a vibrant rivalry-filled environment. To encourage the development of start-ups and promote entrepreneurship in the nation, the Indian government has implemented several programmes and laws.
Innovation-Oriented Leadership: A leadership approach known as “innovation-oriented leadership” strongly emphasises promoting and advancing innovation inside a company. It entails leading and inspiring teams to develop and use fresh ideas, approaches, and solutions to enhance goods, services, processes, and overall performance. Leaders focused on innovation frequently promote innovation, risk-taking, and a culture of ongoing learning and adaptation. They highly value transparent communication, teamwork, and investigating cutting-edge strategies to meet opportunities and difficulties. This leadership style is crucial for organisations to remain competitive and adjust to quickly changing circumstances.
Micro, Small, and Medium Enterprises (MSMEs): Micro, Small and Medium-Sized Enterprises (MSMEs) play a significant role in the corporate landscape in many economies. These businesses are often grouped according to size, asset investment, and yearly turnover. The smallest of these, micro firms, are distinguished by their very small workforces and little capital expenditures on machinery or equipment. On the other hand, small businesses are bigger, more diverse, have higher investments, and a broader market reach. The middle ground is occupied by medium-sized businesses, who make more significant investments and have more complicated business models. MSMEs may have different definitions and requirements in different nations, but their importance as generators of jobs and economic activity is universal.
Innovation: Innovation is the process of introducing new and novel ideas, approaches, solutions, or technology that improve or revolutionise different facets of business, society, or daily life. To address issues and satisfy changing demands, it entails using unconventional thinking, taking calculated risks, and putting creative ideas into practise. Innovation is a major force behind development and expansion across many industries.
Valley of Death: “Valley of Death” refers to a crucial stage in a startup's journey when it faces significant obstacles, usually about obtaining the capital required for survival and development. This period often occurs between the early-stage seed investment that businesses obtain from founders, angel investors, or friends and family and the next financing rounds involving venture capitalists or institutional investors. The Valley of Death is a dangerous time characterised by several unique difficulties. Startups are known for being high-risk businesses that frequently operate with little to no income and have under-developed goods or services.