INNOVATION IN ENTREPRENEURSHIP DEFINED
Innovation and entrepreneurship are essential ingredients in building a successful commercial venture. The ways in which these two concepts fuel enterprise are something our faculty never stop exploring.
We explore their unique perspectives on innovation and entrepreneurship, and how our Online MBA helps to cultivate a pioneering business spirit that makes full use of both.
What is innovation?
“It’s the introduction of novelty in a given market or industry, such as new products, services, methods, sources of supply or organisation,” says Fredrik. “At the same time, there’s a strong emphasis on successful commercialisation - that is, an innovation is more than an idea or an invention, it’s the result of taking it to market.”
“The purpose of innovation is to continuously grow and renew an enterprise with new or better products, more efficient processes, or enhanced business models,” adds Walter. “The Innovation course of the Online MBA aims to answer the question - how do we, in business organisations or as entrepreneurs, get to successful innovation?”
It’s clear that innovation and entrepreneurship are closely linked; sometimes the terms are even used interchangeably. But, as two distinct yet interrelated concepts, it can be tricky to pinpoint the exact relationship between them.
Fredrik recalls the 20th century economist Joseph Schumpeter, who said, “necessity may be the mother of invention, but it does not automatically produce innovation,” - hinting at a need for a third element.
“Schumpeter suggested the entrepreneur represents the missing link between invention and innovation”, he explains. “Indeed, an entrepreneur is someone who is willing and able to transform an invention into an innovation.”
Walter adds – “Turning invention into innovation relies on how an entrepreneur positions themselves, gets funding and manages their venture to become successful. Innovation is about the process and organisation needed to generate ideas in any context.”
The ability to innovate in this sense isn’t just a vital component of a thriving business, but can be seen as an essential aspect of entrepreneurship itself.
What does it take to be an innovative entrepreneur?
While many have wondered whether or not innovation and entrepreneurship are skills that can be practiced and learned, our professors trust that they can.
“While entrepreneurs ‘are born’ to a certain extent, research suggests that this only accounts for 40 per cent of entrepreneurial expertise”, says Fredrik. “The good news is that 60 per cent ‘are made’, meaning we can train these skills.”
“Professional innovation management can be taught; it’s a set of processes and good practices like production or financial management”, adds Walter. However, he also believes that there are those more naturally inclined to entrepreneurship in particular.
“Entrepreneurship has more to do with attitude, perseverance and focus. An entrepreneur can be a good innovator but an innovation manager is not necessarily a good entrepreneur.”
Many texts on innovation focus predominantly on large companies like Apple, but Walter is keen to point out that innovation exists within smaller, entrepreneurial businesses too. In the book he co-wrote with fellow innovation expert Philippe Silberzahn, The Balancing Act of Innovation, Walter explores some of the many ‘small jewel’ companies successfully innovating a niche for themselves in their markets, as well as how entrepreneurs can find and exploit their own innovation style. Walter explains in this video.
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WALTER VAN DYCK: Well, Philip and I have been around in the innovation landscape for quite a while now. And we were struck by the fact that most of books off of innovation, they deal with these very known cases like Apple, for example.
And we thought, well, there's a lot of small jewels around that nobody talks about, and for which, I'm sure, that practicing innovation managers can learn a lot. So that's why we gathered a number of practitioners and academics from the school and wrote up these cases, and tried to learn from them to see how innovation can be managed.
Innovation matters because it's essential as a support of competitive the strategy. So every CEO should know how to manage his or her innovation of his or her company. More specifically, we distinguish between sustained innovation and disruptive innovation. So sustained innovation means that you support innovation to thrive your present business. Whereas on the other hand, you also use innovation to get to different type of businesses.
In the book we deal, for example, in the first case for sustained innovation, we deal with Bic, which is a very known company. But it is very good in sustaining itself in a very competitive market. Another example in disruptive innovation, that we have a case where we explain how a small company active in the bedding industry, which is a very mature industry, through innovating together with people from NASA get to more differentiated products.
So that's the main reason why we think you should innovate why innovation matters. And the point is that you have to, in order to do this then, we think that you need to define your own what we call 'innovation style.'
To design or to create your own innovation style we think there's three aspects that you need to consider. The first aspect has to do with the number of different approaches that you want to use in steering innovation or in executing innovation in the company. You can imagine that for small companies, this set of approaches will be very reduced. It will predominantly be based on experimenting and learning from new markets. That's also what we described in one of the cases, like GreenPan.
GreenPan, which introduces a green pan in a very mature industry again, is a very small player. Again, big ones, like Tefal and others. So that's just one approach.
The older you get as a company, the more diverse will be the set of approaches. In cases like we described, like from Alcatel-Lucent or from Belgacom, for example, there you will see that they have a mix of approaches which is more geared towards on one hand, let's say, experimentation. But also on the other hand, more like in disciplined execution.
So next to these sets of approaches, second aspect that you need to consider is the innovation journey that you have to go on. The innovation journey means that anything you do is part of a journey, is part of a path that you are crossing, that you are moving on as a company. People sometimes think that innovation is all about just like a lamp that's lighten. Well, that's not really how it works.
It builds upon your competence that you have built up before. And of course, you have to differentiate on and on. And products and services that you invent, they build upon your previous successes and failures, basically. So its this journey aspect that you need to take into consideration. And it's quite an important one, I'd say.
A third aspect that you then have to look at whilst on the journey, is basically the choice of balance. So what set of approaches are you going to-- so being in one part of your journey, what sort of approaches are you going to use predominately?
The role of technology and digital media in innovation and entrepreneurship
Whether a knack for innovation is instinctive or something that’s refined through practice and experience, one thing that’s always helped grease the wheels of entrepreneurial creativity is technology. “Technology has, throughout history, been a major source of discontinuity —displacing incumbents and replacing them with something faster, bigger and better,” notes Fredrik.
Walter observes that today’s advancing tech, such as big data, IoT and machine learning, is now empowering whole networks of entrepreneurs to develop interconnected ideas.
“Novel technology is and has always been a major source of innovation for entrepreneurs,” he says. “The distinguishing feature of new technology is that it enables open innovation in innovation ecosystems. Philips IoT-enabled light bulbs are now part of a platform that, next to giving light, provides opportunities for others to create software that controls it.”
And what about the influence of digital channels? “It’s difficult to think of a business idea without any digital presence nowadays,” says Fredrik. “However, a digital strategy should always be based on solving a real job for the customer, not just used for its own sake.”
“You can build a perfect entrepreneurial business without a clue about digital though,” argues Walter. “Then again, a lot of digital ideas come to market through strong entrepreneurs, and not because they’re digital.”
Helping entrepreneurs develop innovation-based growth and renewal strategies
Whatever part technology plays in a business enterprise, nothing can substitute the fundamental knowledge and set of skills an entrepreneur will need to be successful. These may be innate and in need of honing, or something new that must be learned, but either way, our Online MBA can help you attain them.
“The Online MBA equips the entrepreneurs of tomorrow with the essential mindset, the critical skills and knowledge in action that it takes to successfully lead for change in a world of ever-increasing pace,” explains Fredrik.
“The tools and mindset necessary to lead an innovative growth and renewal-oriented company,” agrees Walter.
Digging down into the nature of innovation and entrepreneurship on our challenging online programme can help you master these conceptual tools for yourself, enabling you to make a new level of impact within your own career. Find out more by filling in our.