Chapter - 3: Innovation Concept

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CHAPTER - 3
INNOVATION IN ENTREPRENEURSHIP
Innovation has been one of the concepts which entrepreneurs, managers employees have
heard about most and wanted to know about more in the last years. It is known that in order to
apply it or benefit from it, it is necessary to turn it into a management ability. To apply
innovation executively and permanently succeed in it, it has been expected to reach a
sustainable characteristic. So at first there should be information about innovation and then
ability should be added to it and it should be actualized with the skillful usage of both. That is
the reason why it is crucial to research innovation as a concept before giving information
about it.
Innovation Concept
Innovation is a concept which is a way of thinking, a result that supplies profit to the
entrepreneur and benefit to consumers, meets people's needs, solves problems, starts with
curiosity and intuition, continues with dreams and ends up with turning into a product, service
or social benefit, includes discovery, invention and R&D and consists of creativity and
innovation processes. Lately, this concept, becoming important for humanity, has started to be
discussed and used more. Because it has been perceived as a magic wand, used for the
resolution of problems. Furthermore, it is seen as a matter of fact that habilitated the world
and will supply the fast and intense change later on. Because there is human in the centre of
innovation, it has become more valuable than human, capital, land and technology. The labour
of people based upon brain power has started to increase day by day. Undoubtedly, a
knowledgeable, talented and skilled person has started to be conferred as the most important
source especially for market power and for this reason issues like investment into abilities and
management of them have ranked among the priorities of both public and private sector.
This lecture note translated by Yrd.Doç.Dr.Muhammed Nacar and Ögr.Grv.Nur Emine Koç.
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Innovation concept has shaken all the structures and systems in the world up and down and
started a debate on the subject of permanence and sustainability of these.
When innovation power became this important, countries started to measure their innovation
potential and seeked the answer to this question: How can we increase this? While labour
depending on muscle power supplies industrializm with technology, where labour depending
on brain power is taking the world to have started to be discussed. The principle here is
creativity. Innovation process comes after creativity. With creativity plantation, with
innovation reaping take place. The more you plant, the more crop you get. The more you are
powerful in terms of creativity, the stronger you are in terms of innovation. Creativity always
comes before innovation. Creativity is the raw material of innovation. There is a strong
relationship between these two concepts. The reason why innovation exists is creativity.
Between these two concepts there is the process of inventiveness and it is also after creativity.
There is no inventiveness without creativity. Every creativity does not result wşth innovation
but in every modernity there is creativity. And similarly, not every newness means
innovation. But in every innovation, there is both creativity and newness. Creativity and
inventiveness are the inputs of innovation. Creativity does not change into innovation before
forming into newness. Mostly inventiveness is used instead of innovation but it is not the
valuable consideration.
Now let's put accross innovation perceptibly by relating these concepts. When looked from
entrepreneurial aspect, it is obvious that only creativity, even inventiveness is not enough,
innovation is definitely necessary as well. When we phase the concepts and look towards
businesses and society, by benefiting from the opportunities cyclic environments present for
new products and services, operational processes, distribution and various social benefit
production, it is accepted that creativity is unquestionably necessary.
It is crucial to find a creative business idea while establishing a new business or for a business
established before. Thus, creativity is very important during the first phase. It is the duty of
inventiveness to subtract social benefit, a product, a service from a raw business idea. At the
end of this second phase inventiveness comes up. During inventiveness, product/service is
obtained by selecting from creative ideas. These two phases forms the functions of R&D
(research-development) department for going concerns. If you pay attention, innovation has
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not taken place yet but R&D is working, both creativity and inventiveness maintain their
work. In this case, all the creativity that R&D department make and all the inventiveness it
produce cannot turn into product/service or a benefit that society demands. Something is
missing. If cost is high or raw material is inadequate or there is no technology to be enhanced.
The purchasing power of consumers is not enough or illegal. It has not been listed in the
priorities of consumers yet. It has not been on the market yet because of these kind of
reasons.Even if it has, it is pulled out of the market. Here, innovation has not taken place yet.
If none of these happened, if invention came onto the market and were bought by the
consumers, in other words, changed into a bill of sale, innovation would have taken place.
With innovation, with today's products/services yesterday's problems and needs, with today's
products/services today's problems and needs and with tomorrow's products/services
premeditated and created today, that may change into innovation later, tomorrow's problems
and needs can be satisfied. Or else, the problems and needs of yesterday, today and tomorrow
are satisfied by yesterday's products/services. Innovation proposes resolving this, meeting
problems and needs better and for doing these, presenting different and convenient solutions.
All in al human life becomes easier and quality of life increases. People want and demand to
live a quality life and makes effort for it. This kind of demand becomes both a propellent and
an attractive power for innovation.
We must not forget that, not every creativity and inventiveness efforts result in innovation in
both internal entrepreneurship and economical entrepreneurship (beginning entrepreneurship).
The most valuable things in micro and macro levels both in economical sense and on
company basis are R&D studies result in innovation. Number of patents that R&D department
obtain are not counted as adequate indicators for innovation. Patents that turn into innovation
are more valuable. They are the most valuable things that an entrepreneur or a company
requires. The life of a business widely depends on this. If it cannot be done, either it is going
to fake or buy a patent, turned into innovation or maybe hire it. And the cost of it would be
high and its innovation power would be weak. Otherwise, its sustainability would be at risk.
This situation applies to more or less every business.
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Innovation as a concept is derived from Innovatus meaning "making a new thing", "start using
new methods in social, cultural and executive environment" , "a different and new result" in
Latin.
The difference between innovation and concepts of discovery and invention is that innovation
is the closest concept to the market. Innovation is the last process, result, benefit, value in
terms of its turning into a product or service which is being bought and sold. And it is also a
thing that turns into real demand. Others are before this result. Discovery is the result that
creativity brings. And there is no "creating out of nothing" in discovery. It is making the
unknown known. Innovation starts its trip by discovery and continues with invention.
Discovery becomes beneficial for humanity if turned into an invention. For instance Edison
invented lightbulb after the discovery of electricity. After that, the one that commercialized
electricity as we use today is General Electric (GE). What GE did is innovation.
The creations before innovation are not innovation. They need to be commercialized in order
to become innovations.
After all these, some of the definitions made for innovation are these: According to Oslo
guide that OECD and Eurostat made together, innovation is "application of a process or
product(good or service) that is new or significantly changed, a marketing method or an
organizational method which is new in application, organization or foreign relations".
According to this, Swedish furniture company IKEA made innovation on its business
transaction style, Simit Sarayı and Mado on their mass production and marketing. So,
innovation is not carried out only with products. Innovation can be carried out on every point
and every function of a business.
Another definition: Innovation is a process that starts with discovery, continues with
invention and results in a product that becomes commercial on the continuing market.
According to the CEO of Ford company innovation involves "processes and products that
make human life better than before".
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Innovation is also defined as transformation of an idea into a marketable thing and also
inventiveness which has become commercial. Whichever definition is made, these three
things should be at present in order something to be innovation. The thing made as an
innovation should be authentic, have a definable value, have a value being commercialized,
be different from the new in other words be unique, affect people positively (value) and
become commercial and leave value to the entrepreneur in that.
When we analyse innovation from the point of basic and academical researches, innovation is
undoubtedly a process rises upon the platform of basic researches. It feeds from basic
researches all the time. That is why it develops according to the understanding of "for the
market" rather than " for science" . Although science is for science, the biggest source of
innovation would be its propellent power, science. However, innovation's remaining on the
agenda in recent years shows that there is an increase of science in the market. Especially in
the last years this situation has been observed in EU.
Entrepreneurship and Innovation
By gathering labour, nature and capital together, entrepreneurs that aim to generate social
benefit or product/service which will meet people's needs and solve their problems, think
about getting a different result by combining these distinctions. Today the distinctions in the
things they gather or place on the market has gained more importance. A long process which
is gone through by the human himself from the start with intuitions and dreams and the
conclusion of creativity, inventiveness and innovation is what makes the entrepreneur exist at
all times. If this process never happens, his entrepreneurship is not sustainable. The people
who do this can be an entrepreneur and proceed. Doesn't matter what kind of entrepreneurship
it is, innovation is its heart. In addition, there have been increasing academic discussions
about whether innovation should also be a production factor or not. And again, innovation lies
in the basis of concepts such as new economy, which have been put into words a lot these
days, new generation entrepreneurship and innovative company. Innovation takes place
primarily in management strategies of leaders, CEOs and executives. Successful country,
government and state leaders and various social leaders owe their success to innovation.
When looked at yesterday's or today's outstanding leaders it is obvious that none of them has
imitated one another. Leadership does not come out of imitation anyway. The same thing can
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be mentioned for successful business executives and entrepreneurs as well. New generation
entrepreneurs are the ones that innovate. With imitation, it is impossible for entrepreneurship
to live long. Today's competitive environment necessitates innovation. Thinking the other
way around, if there is no competition, innovation decreases as well.
Competition which is the identifier of the capitalist system also triggers innovation.
Competitive economy that has expanded and growed in density with globalization, seems to
have declared its leadership as a monopolar system to the world because it does not give
chance to live in other economies. To get out of this strongly, it is necessary to stay
supracompetitive or overcome this competition by making differences. In either situation
innovation should be used. New generation entrepreneurs that are going onto market in this
climate should also use it. National economies which has realized the facts see innovation as
the most important element.
Finding new markets and customers for current products and services in order to grow up has
fallen behind now. Now it is crucial to grow up by creating new products and services for
current customers. The best example to this is the product innovations of Apple such as iMac,
iPod, iPhone and iPad. Besides, extensive innovation is necessary for developing companies
in micro level, and economy in macro level by creating new products for new customers. To
do this, reverse innovation is carried out by producing new innovative goods and services
which may go under their purchasing radar, betterments with lowering the costs or innovation
on products which sub-sociocultural status groups could not afford until now. In other words,
as the ones down below the economical pyramid were not seen as the target mass before, now
innovations are carried out for them too. This class that were ignored because they do not
have adequate purchasing power before, have become the biggest and closest target of today's
innovations. Because this class is very crowded. The best example for it is the Tata Nano
automobiles manufactured for sub-groups in India. Similar applications have started to
increase in health technology and services and household goods besides automobiles.
There is no doubt that the other area where innovation takes place is producing goods and
services and presenting options which meet needs or solve today's and tomorrow's problems
better. As known, customers seek functionality and capacity to meet social and emotional
needs in products and services. A product can satisfy all of of these or only one of them.
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Innovations that would be carried out here would be appealing to more than one motive of
customers. There would be new entrepreneurs that come onto market just for this.
Innovation is one of the most important weapons new generation entrepreneurs use.
Enterprises that make differences with their innovations outcompete by getting rewarded by
customers.
Businesses are listed from top the down according to their innovation results not only their
financial tables. Therefore factors that increase innovation capacity such as intellectual capital
are becoming more valuable than others.
Today not making profit by exploitation and heading with industrial era logic, but making
profit by innovation has become a principle.
The speed of innovation is bringing innovation forward. The last innovation emerges by
destroying the one before it and this provides sustainability of new innovation requirement
increasingly. People's knowledge on innovation has increased and in circumstances where
innovation delays, their patience decreases because they expect new innovations in a certain
pace. The increase of demand on this issue has increased innovations as well. It would not be
too wrong to say that in the future, there will be arguments on the meaning of life as well as
world's being meaningless without innovations.
In a world where these kind of changes are expected, it would be impossible for an
entrepreneur to act without innovations.
It is impossible to seperate entrepreneurship from innovation. Because one of them is the

other's reason for being. So without innovation there would not be entrepreneurship and vice
versa. Researches on this matter has shown that the power behind innovations has been the
entrepreneurs in the last 200 years. The common thing in entrepreneurship and innovation is
human. Human that is on the focus point of these world-changing concepts has become more
important and valuable than before. Undoubtedly this human is a creative human. The world
needs creative people more than ever. Societies that notice this before anyone else have been
designing their systems to increase the capacity of creative people and get ahead of everyone
with it.
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Social Change and Innovation
Heraklius says "Nothing is permanent except change". Social change is the change in
institutions that creates society. Economy is a social institution. Economical changes in micro
and macro level are social changes in terms of sociology. Premises that are put forward for
social changes are: Change is natural, constant, necessary, inevitible, can not be prevented and
shows similarities.
Innovation is the result of social change. To understand micro level innovation (business
level) it is necessary to understand macro level economical changes and innovation.
In new world order the source of wealth has been creativity not capital. Because the sources
of creativity have expanded. Advancing globalization has destroyed the economical, cultural,
technological, political, scientifc and sectoral walls and the contact between these has
increased and it also has increased the potential of new combinations for creativity.
Differences, unaware of each other and far from each other until yesterday, have started to
become aware and come closer to each other. Because of that, differences have started to be
discussed and it has been understood that they are wealth. Definitely the tolerance towards
them have increased as well.
Considering the history of humanity, land was in the forefront as the source of income and
production factor in agricultural society. It was very valuable. With the industrial revolution,
labour depending upon muscle power and new invented machines became valuable and power
moved to industrialization. Later on, information showed itself as power. And today in terms
of business, market and economy, innovation emerged as a sociological power. Now the
power is here. The stronger by its innovation capacity, the more powerful his economy.
Countries base their power of income on innovation are specified as powerful, companies
constitute their endorsement with innovation are specified as powerful companies. Besides,
individuals using their innovation capacity individually, are valuable and powerful. This
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situation has changed method and organization of societies and companies. New economy is
the innovation economy, which cannot be managed with traditional methods. Companies that
internalized innovation cannot be managed as before. While innovative companies are
increasing on the market and in the sectors, it is impossible for others to survive. Innovative
companies would dismiss the traditional companies from markets and sectors. Similarly, as
soon as creativity goes into a company, creative ones would dismiss the non-creative ones.
This situation affects the life of products and companies closely. While human life is
increasing which presents market extensity, it shortens the life of products and companies. On
the other hand innovation processes and spans shorten as well. Instead of wealth with muscle
power, wealth with mind power comes to the forefront.
Business are going to include people outside the companies as well as certain people inside it,
and in the creativity process, the source of innovation. The limits of creativity is going to
overflow the company and be eliminated. People that used to produce labour by coming to the
business, will now join the production from a distance without coming to the business. In the
past people avaliable in terms of labour were put to work but now, people that can think and
produce ideas will join production and get a certain amount of added value. While there used
to be a price for labour that works for a specific time, now ideas will have a price as well.
There will be an idea market like labour market. While brain was used less in the past, it will
9the future children have not been stereotyped yet will work in companies by using their
ideas. Therefore, humans of every age, every kind, every race, every belief and every culture
have become more important than before and the object and the subject of innovation.
Innovation in terms of socio-economical status and social stratification will move its
positioning towards different target masses and middle and lower class claiming more labour
is being exploited. Now that this will increase horizontal and vertical social mobility, the
share of wealth will change and young and women entrepreneurship, rare until now, will
increase. Human creativity will become apparent more and people not having used their
creativity before, will start using it and come onto the market. Creativity will continue to
create itself. Innovation in entrepreneurship could not have been represented without knowing
these.
Difficulties of Innovation
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Scott Berkun, participated in Internet Explorer, Windows and MSN projects of Microsoft in
1994-2003 period counts the difficulties of innovation as below:
1. Finding a good idea: You never know where good ideas will come from. So where is
that place? Who supplies the best idea? We cannot say it definitely comes from the
executives or employees in a business, it can come up from anywhere. It is a fact that
the best idea comes out of plentiful ideas. So it is crucial to collect as many ideas as
possible. It doesn't matter if plentiful ideas come up inside or outside the business. If
from child, young or adult, if from man or woman, the best idea comes to light when
many ideas are eliminated.
2. Disappointments: People often get disappointed and demotivated. It is especially

necessary to keep inner motivation alive. Ideas seem to be small or worthless may
become a valuable idea later and small ideas cause bigger ideas to appear. For
finding the best idea, not getting disappointed is necessary.
3. Trying again: In order to find more than one decent and accurate idea, it needs to try
constantly. The chance to catch it for the first time is very weak. You should not give
up by saying "I tried once but could not find the right one". It is necessary to find the
decent, more than one decent and the most decent by trying again. After finding the
right one, it needs not to give up, but to keep looking for some other different ideas. It
is necessary to permit freedom to the ones that make trials on taking risks and provide
confidence for the ones making trials but it is not that easy. Nothing may come up at
the end. It is impossible for the executives choosing to act in definite, guaranteed and
strong situations to supply these kind of environments. Actually they are unaware that
not making mistakes is a mistake and not taking risks is a risk. Edison's employees ask
Edison, "our trials always backfire, when are we going to find the right one?" Edison
answers "we do not find faults in our trials where we could not find the right, we just
learn they are not accurate, these trials take us closer to the right. We cannot find the
right unless we try".
4. Finding customers: If an idea does not solve problems of customers and meet their
needs, in other words, if it is not useful but it has a market and customer buys it, that
means innovation has been carried out. Customer is the focus point of innovation.
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Innovation, marketing, R&D and design work side by side and one within the other.
However it is not always easy. Otherwise ideas cannot be commercialized by turning
into products and services for the market. Therefore an important part of products and
services on the market is pulled out of the market before it is commercialized. In this
case innovation does not occur. In short, ideas do not turn into value. That is why
innovation starts with the customer.
5. Beating rivals: There is competition in innovation. There may be more than one trial
being carried out for the same or similar ideas. The important thing is to come onto
the market before anyone else. On the other hand, there may be ideas left unfinished.
Someone else can take the same idea where it is left and make new trials on it. It is
necessary to combine patience and passion and not give up. Some that starts the race
at the same time from the same place, may leave the race. The ones that keep trying
may win. This situation is not easy for innovation.
6. Difficulties in timing: Victor Hugo says, "Nothing is as powerful as an idea whose

time has come". It is not enough for an idea to be very good. It is also important
whether the time has come for an idea to come onto the market. It means to be a
proper time for an idea to appear on the market. Maybe a good idea has been found
but it is not valuable because its time is not right yet. If an idea is valuable or not
depends on its being commercial, it means people need to buy the product or service
coming out of it in order to solve their problems or meet their needs. The customer
should be ready to buy. In order to find out in what circumstances a customer is ready
to buy is important for innovation. It is necessary for its success. This situation is one
of the most important difficulties of innovation.
7. Pressure of cost: Every innovation creates a cost. It is difficult to identify the cost of
innovation beforehand. You start off but you don't know what you'll encounter. It is
not obvious how much you will gain with the result you get. There is risk in every
condition. For that reason the capital that funds innovation is usually called risk
capital (enterprise capital). There is a lot of risk here because the cost a raw idea
generates before it becomes a marketable product is usually not known and the market
potential cannot be estimated entirely. Not everyone can take this risk. The ones that
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buy compleyed innovations have less risk. As you get further from the marketing
phase, this obscurity and risk increase. Finance of this is provided with angel
investors and risk capital funds. Among idea owners, angel and risk shareholders
there is innovation shareholders. These are sold by making ideas marketable by
investing in them or when close to being marketable. They fill the gap in that point.
The concern for cost increase makes finance difficult. There are ideas that remains
incomplete because of it could not find a fund. On the other hand, high cost of units of
products and services that are ready to come onto the market as result of innovation
may be delayed or given up before coming onto the market because they exceed the
purchasing power of target customers on the market. The understanding which states
that a product or service can definitely become marketable no matter how much unit
cost it has is incorrect. The price should be a purchasable amount for the related
customer. Or else, when this price is not reached, it will be impossible to go onto the
market. And this is the pressure of cost.
8. Pressure of sponsorship and financing: You need to work for the person supplying
innovation finance. Because you need to try to meet expectations of the funders. This
situation limits the freedom of innovation and causes pressure. Or if you want to
remain free, you need to convince the banks. And this is another type of pressure.
Doesn't matter who finances innovation, the existence of intervention and pressure in
terms of both convincing and referral appear as difficulties and obstacles of
innovation.
Other difficulties like these are tried to be removed by creativity and innovation so they
weaken innovations on products, services, processes and distribution channels. Especially the
entrepreneurs in countries where there aren't any financing, consciousness, regulations and
organizations on this matter, have more difficulties in financing innovation. In this case, they
either give up on innovations or use most of their creativity on this matter so as a result they
do not have enough creative energy left for innovation. In other words creativity is used for
financing not innovation.
Misconceptions About Innovation
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Perceiving some rumors about innovation as true may lead to failure. As well as everything
else there are also misknown facts about innovation arising great interest for the last years. To
achieve success, these facts should be sorted out of the right ones. By this way, the truth about
innovation would come in sight and it would be easier to reach the right information. The
myths and urban legends about innovation or misknown facts about innovation are these:
1. Innovation and R&D are the same things.
Innovation is much more than R&D, a part of innovation. Innovation and R&D are not the
same thing. Creativity and inventions are carried out in R&D but not all of the inventions can
be turned into innovation. There isn't necessarily R&D in every innovation, the change of an
idea into a commercial product, service, organization, marketing, process or social benefit. In
R&D however, there is only a change of idea into a product. Service R&D, organization,
marketing and process R&D are not matters of discussion. But their innovation is greatly
mentioned such as process innovation, marketing innovation, service innovation, business
model innovation. However R&D contributes to innovation including everyone in a business
but only the ones in the department concern R&D. Innovation includes all the functions in a
business. R&D is already a function itself. Innovation is for all the newness of the business.
R&D feeds only from the creative ideas in that department. Innovation is open for all the
employees' ideas and even the ideas of outsiders. (Open innovation) R&D activities are turned
into entrepreneurship and innovation, in other words, economical and social benefit. R&D of
a business can buy many patents but if it cannot turn them into marketable products, it means
it is not successful in terms of innovation.
2. Innovation only produces economical and social benefit.
Innovation is carried out in order to solve problems or meet requirements. But sometimes it
can create problems itself. If the amounts of problems it creates and solves are the same, the
benefit it produces is a waste. This means it is necessary to pay attention to the problems it
creates not only the ones it solves but also to destroy the problems it creates as well.
Customers are usually careful about this. For example, a medication used for an illness may
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have strong side effects. We often hear this on the market. In fact sometimes these kind of
medications are withdrawn from the market.
3. Innovation has only one target: profit.
Innovation doesn't have only one target but many. Customers expect new and fast solutions to
their problems and you respond to that but you may not make as much profit as you expect.
But you may become the place where talented manpower look forward to work because
customer dependency, market share, stock value and brand value increases and reputation
advances. You can become competitively strong. There is no profit in short term but in long
term, value of businesses can increase.
Some executives aim short term betterments in order to show their shareholders that they are
successful. Because of that, they may reject innovations. And business may profit in short
term but in long term, it may not gain value.
4. Start ups should be perfect in innovation.
It is not true as well. The important thing is to start, to take the road. The people taking the
road for something usually have found something. For instance, a project is started called
Space Elevator. While this project advances, various discoveries and inventions are carried
out in order to be used for different purposes. No special creativity needs to start, not being
magical. The important thing is to start and carry on with patience and passion. There will be
progress after the first step.
5. Only big companies can carry out innovations.
Small businesses say "innovation is not out job" but the situation is not like that. Small
businesses tend to make innovations more both bureaucratically and hierarchically. There
may be no need for big funds for innovation, having been carried out in every sector in every
scale. The saying " who are we to innovate" is wrong. A small business can have small
innovation which may develop later.
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Processes of Innovation
Processes of creativity and processes of innovation are parallel. The occurance of the idea
necessary for innovation forms the basis of creativity processes. The change of an idea into a
marketable product is demanded from innovation processes. The innovation process may be
seen as entrepreneurship process. There may be other processes in the literature and
application. Sometimes the processes are detailed, sometimes combined. Every process takes
the idea closer to innovation. Ideas go through all the processes and form innovations.
Besides, various processes may be followed for different innovations. There is not much risk
in creativity, but in innovation. The ones that calculate risks carefully, predict the lump and
return of the new innovation and control risks instead of running from them, continue
processes of innovation and get results. A lot of individuals and companies may quit during
the first process of innovation. To tell the truth, creativity processes apply to innovation as
well. Because there would be no innovation without creativity. Processes of creativity are the
first steps of innovation. Creativity is an energy or power for innovation. It is the fuel of
processes. Not every creativity results in innovation but there is creativity in every innovation,
putting the ideas into practice. Creativity generates ideas.
Today four basic processes are found sufficient for innovation.
1. Gathering ideas
2. Managing ideas
3. Selecting ideas with success potential.
4. Application
1. Gathering ideas
The first process of innovation is to search for and find ideas. It's the process where creativity
is used in entrepreneurship and innovation. A lot of ideas are found in this process. Because
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the best idea comes out of plentiful ideas, unimproved raw ideas. An idea may trigger another
idea. The important thing is to protect the idea without criticizing or touching upon it. This
process requires that. And when considered from the procreator of the idea's view, giving
importance on the idea, prevents idea from preservation causing other ideas to show up.
Today companies that can produce and gather ideas can be successful in innovation. On the
other hand, there are still business which cannot understand the importance of an idea. These
will not survive for long. Idea is the raw material of innovation. Businesses with abundant raw
material succeed in innovation fabrication. The idea's being important has made people in
businesses more important as well. Businesses have begun a quest to make employees
produce more ideas. Not being satisfied with it, rivals have got into a flap to find ideas from
other sectors, customers, suppliers, employees' family members and even everyone in the
society and created various platforms for it. Especially with broad usage of digital
communication, businesses provide ideas by reaching creative people through blogs, websites
and social media platforms. Open innovation platforms some of which have appeared in our
country today increase production of ideas in digital environments. Besides, businesses set
various websites where they can listen to their shareholders and create value together.
Moreover, companies encourage their employees on this subject and guarantee different
matters such as fear of creating bad ideas, being ridiculed because of bad outlook, fear of
losing jobs. Even if the ideas are useless, employees know that they will not be punished, so
they do not hide their ideas and just come up with them. According to Richard Farson, "great
leaders rise among the ones who experienced failure". Today ideas have become more
important than capital. For instance, IKEA have created the market of furniture and home
accesories with low price and design. And Starbucks have become a pioneer of a brand new
formation by turning regular coffee into an experience. And it has done this with creative
ideas.
Ideas can be old as well. There is no such thing that newly created idea is good for innovation
and old one is not. New ideas and innovations can be created by combining old ideas. With
the combination of two old ideas or one old and one new ideas, another idea and innovation
can be created. For instance, fax machine was invented by combining telephone and
photocopy machine. There is a Chinese proverb "I have a horse, a car, so I have three things".
The third thing is the horse carriage.
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We can apply ideas from other sectors to our sector as well. This is called cross pollination or
cross semination.
Nature can be an inspiration source as an idea source. The important thing here is not where
or from whom ideas are coming but the idea itself. Searching for ideas constantly for
innovations has increased the demand in ideas. The value of demanded ideas have increased
as well. The most valuable thing today is idea. So in idea creation there is;
- Inner source usage

- Interdivisional source usage
- Outsource usage
These can be used seperately, both or all together.
2. Managing ideas
Valuable ideas should be managed as well as other sources in businesses. And ideas should be
managed as the risks and stresses are managed in a business. Idea management can be seen as
reaching innovation by creating ideas in accordance with the target and managing all the
processes. Ideas that cannot be managed well become wasted and not properly reclaimed. In
idea management, idea search and selection are processed seperately. Various platforms can
be created for this.
Idea management is a part of innovation management. For innovation management, ideas

should be managed first. What is important here is how to create the best and most ideas. It is
obtained by creativity method. How can these ideas go into the innovation system and be
developed and evaluated by going through different processes? How we obtain an output, in
other words, a product or a service by using various inputs and production factors and manage
it, the idea should be managed the same way?
If the idea cannot be managed, we cannot find the most valuable idea we search for. Ideas can
disappear without going into the system. And motivation of the idea owners whose ideas are
ignored, decrease. Because inner motivation is usually used for creativity, keeping this
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sensitive motivation strong may become easier with idea management. So presenting trainings
that reveal creativity for idea production, creating environments that boost and trigger
creativity, motivating employees for idea creativity, forming various systems and platforms to
process and evaluate revealed ideas can be seen as the parts of idea management. A good idea
management would simplify innovation's work and increase its success. Or else, the lack of
idea management or bad management would harm innovation or prevent its success.
3. Selecting ideas with success potential.
Products from all the companies do not have adequate time, capital or power in order to apply
all the ideas. Ideas would be definitely eliminated. Ideas with success potential would be
found and the others would not be appled. The aim here is to find the best idea for innovation.
Required ideas should be proper to business' strategical area. Some ideas may not be
appropriate for the company but for another company. Or they may not be appropriate today
but tomorrow. These ideas can be protected by industrial or intellectual proprietary rights or
sold through getting their patent or rented. Which idea to choose depends on our company's
innovation policy.
Various elimination methods are used for idea selection. Some of them are not even worth
thinking. Some of them goes until feasibility and eliminated in that period or move on. Even
feasible ideas may be eliminated. It may be necessary to choose the best one among the most
feasible ones resulted positively. Although some ideas pass feasibility and are designed, they
may not be selected. The requisite idea for innovation is the one that creates the future. Ideas
can be developed in this process as well.
Usually 10% of the ideas are seen as worth trying. A part of these change into innovations.
However, very few of them come onto the market and stay there.
Companies that can innovate have been able to focus on right ideas and right risk reward
balance.
Princeton Creative Research Center predicates following standarts on for evaluating business
ideas.
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- Do you consider all the positive and negative aspects of the business idea?
- Is your business idea original or adaptation?
- Is the long term return going to be enough? (However, cash flow can not be predicted
for certain)
- Is the short term return enough? Is risk reasonable?
- Are the needs that your business idea will meet or the problems it will solve evaluated
precisely?
- Do your business idea have limits?
- Does your business idea create problems?
- Can the product or service your business idea presents find a market? Can it be
bought? How much of it would someone buy?
- Is the business idea going to meet today's need or tomorrow's?
- How fast the business idea can become real?
- Is it in accordance with your business' strategical area?
These questions asked to the business idea in order. These questions can be increased. Some
other questions might be added.
Undoubtedly feasibility is a selection process but not all ideas are feasible. This is a big loss
of resource. Because of this, filtering is performed before feasibility. It is necessary not to
forget that the best idea comes out of plentiful ideas and it is crucial to make the right choice
to fing it.
4. Application (Appearance on the Market, Assessment, Evaluation, Learning, Recall)
Selected idea is embodied as a prototype, studied, and it has become a product or a service.
Actually invention is born. It awaits to appear on the market. The process that seperates
innovation and invention is this process. Not every invention is an innovation. The invention
that has appeared and accepted on the market has become an innovation. That means not
every invention that comes onto the market, becomes an innovation. Because very few of the
products and services that appear on the market, stay there for long. Others are pulled out of
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the market because of the fact that they have not gained much recognition. These ones are
pulled out because they could not be innovative.
In this process, the performance of the products and services that have been released are
measured and evaluated. And then decision is made upon whether to pull them out of the
market or not. Meanwhile, prospective performance estimations are carried out as well. There
is no doubt that alterations can be made on the idea even during this process. Because there
would be things to learn in this process. And we would be using them during application.
Innovation is actually rising and healhily survival of a product and service. This kind of
product and service presents high financial performance, increased brand and share value and
profit to the entrepreneur that innovates and benefit to the customer.
Before products and services appear on the market, raw ideas go through various processes.
Eliminations, feasibilities, business plans and action plans are carried out to make the ideas
ready for the market appearance. Ideas that go through these tests deserve to go onto the
market. Some others leave in the beginning or during the pace. The ones that can complete the
pace and appear on the maket and stay there deserve innovation.
All these processes teach entrepreneurs and practitioners a lot. This is an application. It is to
embody and launch an idea on the real market. Of course there would be mistakes. The ones
that do not do this act, would not make mistakes as well. The important thing is to see
mistakes as a value on the road while going to accuracy. We cannot find the right immediately
if we do not make mistakes. Sometimes the best things we learn are the ones we learn with
our mistakes. Mistakes are our road signs on the road to accuracy. Those signs take us to the
right one. The culture of mistakes which businesses and entrepreneurs are supposed to
possess,is the thing that enables them to carry out innovations. In these situations, making
mistakes is considered as a mistake as well. The thing to take into account is not to make the
same mistake again and calculating the risk the mistake may cause. All these are learned
through the way to innovation. By experiencing these and with increased learning, the power
to innovate would increase, too.
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The inventions created in R&D always follows this road while going onto the market.
Sometimes none of the inventions that R&D releases or the patents it gets may not appear on
the market. Then innovation is zero. So even though R&D works, innovation is not complete.
That is the difference between R&D and innovation. Although most of the companies have
R&D studies, they have low innovation performance.
Kinds of Innovation
When you speak of innovation, innovation on the product and service comes to mind
immediately. Yet there are many kinds of innovations. If they are grouped, a table shapes as
below;
Radical Innovation-Stepwise Innovation
These are radical, important and high level innovations besides betterments on the
technologies that businesses use on the products and services they sell, their business
transaction styles, marketing methods and various business applications. The inventiveness
level in this innovation is high.
Radical innovations usually generates a new category. After that, products and services show
up in that category which are slightly different than each other. These are stepwise and
incremental innovation. Examples of radical and incremental innovations are highly common
in information and communication technologies. A strong radical innovation would increase
the upcoming stepwise innovation.
Radical innovations do not appear as often as stepwise innovations. But stepwise innovations
that are to show up after radical innovations may appear frequently. The innovations carried
out on levels apart from radical innovations are stepwise innovations. For instance, electrical
car is a radical innovation but a new car model is a stepwise innovation. Online marketing is a
radical innovation. Selling flowers by online marketing is a stepwise innovation. So the level
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and extent of invention shows if the innovation is radical or stepwise(incremental). iPhone of

Apple company may be considered as a radical innovation at first release. Then the
betterments such as models of 4-5 can be named as stepwise innovations. A strong radical
innovation would increase the upcoming stepwise innovation.
Disruptive Innovation
This innovation is also called paradigm-shifting innovation. As known, innovation is carried

out to solve people's problems and meet their needs. Up to now, there are a lot of unsolved
problems and unsatisfied needs. Or there are slightly solved or satisfied ones. Disruptive
innovation touch on these needs and problems and they are released on the market in a better,
easy and cheap way. The solutions before this goes to junk. Or completely unsolved ones
become solvable. The understanding of unsolvable, irreparable problems because of various
reasons change, the routines are broken and taboos are broken. These innovations succeed in
breaking all of these. For this reason it is called disruptive innovation.
Entrepreneurs do not only try to solve today's problems of consumers. They try to solve
yesterday's unsolved or slightly solved problems with today's disruptive innovations. Besides,
they try to solve old problems with today's products and today's problems with today's
products and tomorrow's problems with tomorrow's products. Disruptive innovation is usually
related to solving yesterday's problems.
Problems, not addressed or untouched for long years because considered unsolvable in any
way, are removed with disruptive innovations. That is why process in disruptive innovation
begins with finding the problems and identifiying the present solutions to them. After that
questions such as how to solve these problems better, how to remove obstacles to the
solutions are asked and the problem is tried to be solved by re-identifying the problem.
For people that have less than 5 dolars of daily income, live in places without electricity,
constitutes 80% of houses in total in India, a new product named ChokuKool meaning "small
chillness" in Hindu, was released which takes the place of a refrigerator, sold for 69 dollars
and weighs less than 4,5 kilos and works with 12 volt external battery. This product was
demanded a lot. Similarly, TataNano car, produced by Indian Tata company for the people
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below the economical pyramid in their own country and sold for around 2000 dollars, is the
best example to disruptive innovation.
Closed Innovation
For this kind of innovation, the business only uses its inner sources. How creative human
resource you have as a business, how much capital you have, how better you hide yourself, if
your ideas and creations do not get out and you make great effort for it, if you try to resemble
the ones outside, if you hide what you do even among the organization, the innovation you
make is closed innovation.
As known, the best idea comes out of plentiful ideas. In this situation, the quantity of ideas in
closed innovation would be limited to what organization produces. The opportunity to create
exceptional ideas for innovation would decrease.
Besides you'll turn only some of the information and patents you get with the research and
development carried out during closed innovation into innovations because not all of them are
appropriate for your business' strategical targets and you will keep the others inactive without
sharing with anyone in case some day you will use them, most of which would be contained
in the patents. For this reason in closed innovation, businesses will release what they have
created on their own and the number of the released ones will be very few.
In closed innovation, most of the things that businesses create wil have missing pieces.
Because it cannot get it from outside, it will be undeveloped and remain incomplete. And this
will cause a lot of ideas to go to junk.
Organizations that are able to gather creativities, train and motivate their employees on this
matter, especially manages and turns innovations into corporate culture will be more
successful at closed innovations compared to others. Because they do not share anything on
this subject, the businesses and their employees and even the society will have less
consciousness and awareness.
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Because of the fact that privacy is the basis to these innovation applications, there are less
imitations or they are late if any. Innovation applications having been carried out closed until
yesterday, are being applied openly today as well.
Open Innovation
The increase, spread, cheapening and access to knowledge after 2000, the oppportunity to
benefit from outside information have risen. So open innovation applications have increased
because open innovation conditions have developed. In this kind of innovation, while getting
inputs from outside, in other words, outside the business, innovation outputs can be given to
outside at the same time. While getting creative idea as an innovation input, patent and project
can be given to outside. Moreover, companies sell inventions and patents they have created
but not applied themselves and get a big innovation income.P&G company that is very good
at open innovation applications spent 1,8 billion dollars on R&D and employed 8000
researchers and turned 10% of its inventions to innovations and utilized the rest as patent
income. A new area of income was created as a result of open innovation. Undoubtedly they
should have gotten patents and inventions from outside whose strategy they found useful but
which they could not produce themselves. In the last years inventive companies have been
doing this a lot. Now, number of businesses carry out all the innovations as open innovations
by getting ideas from outside or with project cooperations. In order to be more inventive, they
have been innovating by buying small companies especially ones that create inventions.
Companies are not obsessed anymore with producing their own innovations does not matter
open or not. They can buy whichever they find useful. One of the reasons why they buy
businesses are these. These developments have created the innovation market not having been
much expressed before. Besides, the understanding have gained recognition which states that
if you cannot produce innovations, you can buy them and you can get someone outside to do
this. With the development of open innovation, these have become widespread as well.
Entrepreneurs do not have to carry out innovations. As they produce goods that meet
consumers' needs and solve their problems by supplying production factors from their market,
they can also buy innovation from outside in the same way. They can supply from other
sources.
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In open innovation applications, companies benefit from power of outer companies or other
individuals and organizations' by cooperating with them. Then they acquire different and
better innovations besides innovations produced with limited sources. This situation reflects
to markets as well. In the last years, increase in global and national innovations, decrease in
the life of products and services, increase in varieties and change of business models have
started to be seen. Today, both innovation cooperations and macro level competition have
started to be experienced simultaneously. In this kind of environment, while companies try to
be different than their rivals, they also aim to carry out innovations that are difficult to be
imitated by rivals.
In open innovation, we benefit from outside talents as well. The possibility to catch very
valuable innovations increases because the variety and quantity of creative ideas necessary for
innovation increase as well. Our innovation sources will grow stronger because it can find the
pieces of ideas outside, too. Besides, innovation cost and capacity will increase. The
opportunity to gain income with our new inventions and patents we have not used yet will rise
as well.
Global companies that carried out closed innovations until the last ten years such as IBM,
Starbucks and Procter&Gamble have started to share their researches adopting open
innovations with their partners, suppliers, consumers and university students.
In 2010, Nike revealed and shared more than 400 patent secrets. So they cleared the way of
others to add on their researches and create new values. They are the one that benefited from
this most.
In closed innovation, ideas only connect to the ideas of a narrow group inside the company
while they connect to many ideas of different kinds in open innovation. By this way, there
would be opportunity for ideas to circulate and combine with other ideas. Sometimes they
open up the pool of ideas to everyone and ask them to contribute.
Innovation guru Jeffrey Philips indicates that, the demands and behaviours of consumers have
changed and these increasing changes have led companies that are trying to adapt to find new
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ideas, USA and EU companies have started to buy these ideas they need from outside in the
last years and open innovation has become the most important trend.
It is not important where the idea is coming from or where it is going. The important thing for
an idea is to connect to another idea. No idea can develop or feed itself. It also needs other
ideas. Appearance of technological developments that bring ideas together have made
connection easy and this have triggered open innovation. P&G have formed a connect-
develop platform for open innovation.
Reverse Innovation
Meaning of reverse innovation is making product study for the social economical pyramids
lower side instead of uppersides. This term was firstly used in the literature by Viyaj
Govindarajan. Thus far, innovations were made for pyramids upper or middle sides. Now,
innovations are made for the pyramids lower sides too. Besides, this innovations are done and
marketed in the same place. As mentioned before, especially for the regions developing and
having crowded populity with weak purchasing powers, affordable priced products and
services which solve the problems and satisfy the needs of region people is called open
innovation. Founding of portable and cheap ultrasound for health diagnosis services,
invention of battery operated freezer being used as refrigerator, creation and innovation of
portable, light and cheap purification unit, again in India innovation of small and cheap car
called TataNano’s innovation can be seen as examples of reverse innovation. Goal here is to
find low cost products in low income countries and selling those products in big numbers and
global markets.
According to reverse innovations name father Viyaj Govindarajan, for this type of innovation
a local team should be created. Because people who know their own problems can make their
own innovations better.
Operational Innovation
Operational innovation is as important as other innovation types. It gives answer to the

questions of how to make our production practices and operations. It is a type of innovation
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that creates the best quality and lowest cost. It is essential that this should be sustainable.
While operational innovation should be done by small improvements there should be
significant leaps too. It is required that while having the best productivity, in the meantime
constant searches should be kept on. Results should not only reflect as a profit for the
establisment but also it should reflect the customer as a plus value in operational innovation.
Best example shown by Bilal Kaafarani and Jane Stevenson is Michael Dell’s success story
about home computers. In 1980’s Dell was travelling home by home to sell his product and he
changed the shop selled computer market and standed up to big companies in sector.
Operationally, Dell, with his success in supply chain and logistics combined computer tools as
it was never done before. Besides, he made his productions by the customers technical
requests. Also, he took of mediators and lowered the cost and shared this low cost with
customers.
Marketing (Market) Innovation
Marketing innovation is a type of innovation that includes all the funcstions of establishment.
Innovations regarding researches and studies on acknowledging customers, understanding
market, before creating the establishment, are called marketing innovations. Designing of
products and services according to customers requests, needs and problems is a type of
marketing innovation. If design does not work according to market, proper designs for market
cannot be done or marketing of design and its trading could become difficult. Policies
following the market, monitors the customers, guesses change before they occur and show
reflexes with proactive attitude is marketing innovation. Also, innovations for product and
services is marketing innovation too. Because, products and services are created for customers
needs, requests and problems.
Innovation for pricing is marketing innovation. Presenting a product or service which can be
affordable for consumer and giving price according to customers purchasing power is
marketing innovation.
Changes in distribution channel and benefiting these changes establishment and customer
wise is marketing innovation.
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Innovation done in companies reputation and brand is marketing innovation. Whether you do
all types of innovations in other functions except for marketing and if you do not do
innovations in marketing, you could face with problems about commercialization. In other
words, all the other innovation effords end up with fail.
If we try to combine all those informations and try to get a conclusion; marketing innovation
is a type of innovation that done on the ways of understanding the requests, needs and
problems of customers and produces and presents values and earns profit from it.
Work Model Innovation
Whether it is a new or a settled establishment, if the establishment is still working then it has a
work model. But most of the entrepreuners do not have work models consciously. Work
model is a story that shows how the establishment works. Designing a new work model
resembles to create a new story. This story is based on general value chain.
Work model can be seen as a management logic that consists of presenting the product/service
on requested time and place, with a price that can be paid by specific customer, by using
production factors to create value for the customers. Work model is not work process model.
Work model is a term that related with all the commercialized value producing activities. It is
like a secret of a profitable establishment. Inferences such as how they end up with this result,
what should we do to get similar results, help to understand what is work model. Work model
is a system that is designed for making profit. Undoubtedly it can be imitated. From this
aspect it is different from strategy, which involves performing and action. Work model is
about how the work works as a system. It is a designing action combining different works in
establishment. Work model is about creativity. Because in creativity, different pieces are
combined in different ways. When it is asked what work model means for an establishment,
the answer is thought this way.
Establishments should firstly analyze their customers and try to understand their everchanging
needs and problems and according to it, they should create products and services. They should
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find ways to convey their products and services with customers. While doing that they should
differentiate. This is about strategy. Working model comes in when it is not about product.
For working model this questions should be asked and answers give us the working model;
Customer
- Who will be my customer?
- For which customers I should provide product/service?
- Which customer group would get me profit?
- For which customer group I can produce benefits?
Value Producing
- Which value I should create for customer?
- What should be my profit model?
Differentiation (Strategic Case)

- How can I prevent rivalry?
- How can I maintain my profit?
- Why my customers are buying from me?
- What is my differency?
- What is the differency of my provided value?
Extent
- Which services I should make (establishment wise)?
- Which services I should get it done out of establishment?
All this means: Who is the customer, what kind of problem customer has, which kind of value
we will provide to solve this problem? What is our value differency from others and why
should customer by from us, what is our differency? This is the first part. Secondly, as an
organization how we create this value? Which operations should be done, what kind of
processes we will have, how can we produce it? Thirdly, what kind of sources (Capital,
technology, products, facilities, equipments, intelligence, channels, cooperations, brands;
different social and labor force) do we need? How do we get them? Fourth one, after all, how
can we make profit from it? (Profit formula). This four parted system works in harmony.
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Innovations explaining parts of work models is work model innovation. One innovation made
in one of the model parts will effect whole the others and a harmony work should be made.
This work can be small reformations and also can be a radical change. Then all the work
model innovations success possibility will rise. Because model will give a warning for
success.
Work model and establishment strategy is sometimes used instead of each other. While
creating a work model rivalry is not taken into account. If the company that has made a work
model faces with rivalry then strategy involves. In order to prevent rivalry, the key is strategy.
For a competitive strategy the key is to be different. Being different is leaded by work model
innovation. Succesful establishments have work models even though they may not really
think of it. If unsuccesful establishments could not create the work model sufficiently in the
beginning, their innovations would not help them to become succesful.
Managing Innovation
Nowadays people without innovation management skills can never be a manager. That is why
innovation management is essential. Successful companies are successful because their
managers can manage innovations well. However, one of the main important things of
innovation which is creativy should be carried well too. Creative people are hard to manage
because they do not wish to be managed. Creative people are different. Then management of
differences come up. Traditional organizations employ similar kind of people. Because they
can be managed easier. Differencies are richness but hard to manage.
Explaining innovation management culture is possible with certain principles.
- For innovation management there should be an exciting vision. In order to bring out
the passion and excitement of establishments employers and keep it alive, employers
should be explained the big picture after the innovation has been done. It is also
required that employers should look into the same way and focus on same result. It
means that for innovation management a motivation is needed. This can be obtained
by an exciting vision.
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- In innovation management, leadership coming after is more beneficial. If leaders go

upfront and followed by the others, creative should be the leader. However, if the
leaders refrain, let the employers show off, indicate the goals and let employees get to
the goal free minded, it will be more beneficial leadership. But, leader should not
change the goals too often.
- In innovation management, organization should be inclusive. Innovation should not be

seen as only research-development. It should include all the organization. Even in
open innovation, it should be spreaded to all out of organization partners. In contrary,
in the establishment creating an innovation center and employing limited amount of
employers and creating an organization is not likely to succeed. Because other
employees, not in this center see each other as outsiders of innovation. People, in the
center of innovation may also think that innovation is only for them and their
motivation decreases. In innovation, even from security guard to managers everybody
should be the part of it. All the employees should share the same excitement for
innovation.
- Organizating in innovation management should not be hierarchical. In a hierarchical

structure when top management bosses over to workers a lot, innovation efforts would
not end up successfully. Biggest enemies of innovation is hierarchical and burocratic
structures.
- In innovation management there should not be high walls between functions.

Organization structure should be made where employers and functions can interact
with each other and cooperations and horizontal relations are increased. In innovation
employers, in different functions interaction is more important then employers, in
same functions. This situation creates the differency in organizations. Differencies
creates richness.
- In order to manage innovation beneficial, creating people centered organization is

important. As it is well known, for innovation creativity is essential. Creativity comes
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from people, managing the innovation, should know that each person is important for
the organization and should let each person to know that they are important.
- Managers, supporting and easing the innovation should create a common language,
trust and equal culture. Employers’ relationship with each other and employer-
managers relationship will increase the chance of innovation success.
- In innovation management, for success, proper places should be created in order to

gather informations, ideas and power sharing.
- Networks increasing the relationship and communication of employers should be

increased. This networks should be open from inside to outside and outside to inside.
- In innovation management, organization must have life long education. Organization

should be everlearning.
- In innovation management, there should be different platforms gathering the ideas of

people from outside and inside and those ideas without vanishing, should gain and
grow in this platforms. In order to understand how can it be done easily, simulation
and scenario technics should be used to design.
- Employers, creating ideas must be informed about what happened to their ideas.
Because not answering or answering lately, may make them think that their ideas are
ignored and it decreases their motivation about innovation. Also when there is no
announcement or rewards employees might have the same feeling.
- In innovation management, for different innovations there are different processes,

created. One process routine cannot be succesful in all innovations.
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- Idea platforms created in innovation management should be open for all the people
creating new ideas. Because ideas made may trigger other ideas. This situation may
lead to more creative ideas.
- In innovation management, company and customer value created by innovation should

be explained clearly.
- In innovation management, innovation resistance should be managed well.
- In innovation management, innovation should be added to organization culture and

innovation and management should become perpetual.
- In innovation management, innovation should be in every cells of organization.
- In innovation management, innovation should be measured often. Because you cannot

manage innovation without measuring.
SELF-ASSESSMENT QUESTIONS
1.Which of the following innovation types ideas is limited to organizations idea producing?
a) Operational innovation
b) Devastating innovation
c) Close innovation
d) Business model innovation
e) Reverse innovation
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2. In which following phase creativity is used in innovation?
a) Managing ideas
b) Idea gathering
c) Picking potentially succesful ideas
d) Implementation
e) Budgetting
3. Which of the innovation type cooperates outer establishment companies or individuals and
organizations to gather innovation sources and powers?
a) Radical innovation
b) Operational innovation
c) Open innovation
d) Business model innovation
e) Close innovation
4. Which of the following answer describes finding a new solution to a problem and having
commercial success from it?
a) Production
b) Innovation
c) Creativity
d) Invention
e) Marketing
5. In order to realise innovation which of the following property is NOT needed?
a) Originality
b) Having definable value
c) Can be commercialized
d) Different
e) Should be brought out by imitating
6. Which of the following definition is wrong about innovation term?
a) In order to provide permanent success innovation should be sustainable

b) Innovation term meets consumers needs and solves their problems
c) For innovation creativity is not needed
d) Innovation starts with curiosity and intuition
e) Innovation includes discovery, invention, research and development
f)
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7. Which of the following is NOT a difficulty of innovation?
a) Finding a good idea

b) Making mistake
c) Calculating cost
d) Correct timing
e) Catching customer
8. Which of the following is NOT wrongly known fact about innovation?
a) Innovation and research and development are same things

b) Innovation only provides social and economical benefits
c) Innovation requires long time
d) Only goal of innovation is profit
e) Only large establishments can do innovation
9. Which of the following definition describes the difference between innovation and research
and development?
a) Research and development can not be reclaimed as a part of innovation

b) Every finding of research and development turns into innovation
c) Research and development may not take place in every innovation
d) Innovation includes everybody in establishment, however research and
development only consists of its own department
e) Research and development is a process that includes innovation
10. Which of the following correctly lists innovation processes?
a) Managing ideas-gathering ideas-picking ideas with potential success-implementing

b) Gathering ideas-managing ideas-picking ideas with potential success-
implementing
c) Picking ideas with potential success-implementing-managing ideas-gathering ideas
d) Gathering ideas-implementing-picking ideas with potential success-managing
ideas
e) Gathering ideas-picking ideas with potential success-managing ideas and
implementing
ANSWERS OF SELF-ASSESSMENT QUESTIONS
1.c, 2.c, 3.c, 4.b, 5.c, 6.c, 7.b, 8.c, 9.d, 10.b

Chapter - 3: Innovation Concept

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Chapter - 3: Innovation Concept

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ENTREPRENEURSHIP

Entrepreneurship and Innovation

It is impossible to seperate entrepreneurship from innovation. Because one of them is the

Social Change and Innovation

2. Disappointments: People often get disappointed and demotivated. It is especially

6. Difficulties in timing: Victor Hugo says, "Nothing is as powerful as an idea whose

Misconceptions About Innovation

1. Innovation and R&D are the same things.

2. Innovation only produces economical and social benefit.

3. Innovation has only one target: profit.

4. Start ups should be perfect in innovation.

5. Only big companies can carry out innovations.

- Inner source usage

These can be used seperately, both or all together.

Idea management is a part of innovation management. For innovation management, ideas

3. Selecting ideas with success potential.

4. Application (Appearance on the Market, Assessment, Evaluation, Learning, Recall)

Radical Innovation-Stepwise Innovation

and extent of invention shows if the innovation is radical or stepwise(incremental). iPhone of

This innovation is also called paradigm-shifting innovation. As known, innovation is carried

Operational innovation is as important as other innovation types. It gives answer to the

Marketing (Market) Innovation

Work Model Innovation

Differentiation (Strategic Case)

Explaining innovation management culture is possible with certain principles.

- In innovation management, leadership coming after is more beneficial. If leaders go

- In innovation management, organization should be inclusive. Innovation should not be

- Organizating in innovation management should not be hierarchical. In a hierarchical

- In innovation management there should not be high walls between functions.

- In order to manage innovation beneficial, creating people centered organization is

- In innovation management, for success, proper places should be created in order to

- Networks increasing the relationship and communication of employers should be

- In innovation management, organization must have life long education. Organization

- In innovation management, there should be different platforms gathering the ideas of

- In innovation management, for different innovations there are different processes,

- In innovation management, company and customer value created by innovation should

- In innovation management, innovation resistance should be managed well.

- In innovation management, innovation should be added to organization culture and

- In innovation management, innovation should be in every cells of organization.

- In innovation management, innovation should be measured often. Because you cannot

2. In which following phase creativity is used in innovation?

5. In order to realise innovation which of the following property is NOT needed?

6. Which of the following definition is wrong about innovation term?

a) In order to provide permanent success innovation should be sustainable

7. Which of the following is NOT a difficulty of innovation?

a) Finding a good idea

8. Which of the following is NOT wrongly known fact about innovation?

a) Innovation and research and development are same things

a) Research and development can not be reclaimed as a part of innovation

10. Which of the following correctly lists innovation processes?

a) Managing ideas-gathering ideas-picking ideas with potential success-implementing

ANSWERS OF SELF-ASSESSMENT QUESTIONS

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