Section5 Guest

Question 1

Why does innovation matter for society?

Answer 1

• It drives economic development.
• It increases productivity.
• It improves life expectancy.

Question 2

What is the difference between invention and innovation?

Answer 2

• Invention: A new idea or discovery solving a problem.
• Innovation: Turning that invention into widely used practices.

Question 3

What is Schumpeter’s gale of creative destruction?

Answer 3

• Ongoing process that destroys the old and creates the new.
• Introduced by Joseph Schumpeter (1942) to describe how new technologies and business models replace outdated ones.

Question 4

How does innovation affect a firm’s survival and profitability?

Answer 4

• Innovators have lower “death” rates.
• Innovative firms maintain higher profit margins over time.

Question 5

What is Industry 4₀?

Answer 5

• The fourth industrial revolution integrating digitisation,
  IoT, and AI.
• Builds on automation to create smart and connected factories.

Question 6

Why do many organisations struggle with innovation?

and name failure factors

Answer 6

• Only 1 in 20 ideas succeeds.
• Organisation, culture, and lack of proper support often hinder innovation.
• Common failure factors: no climate for innovation, poor commercialisation, wrong idea selection.

Question 7

What is the explore-exploit dilemma?

Answer 7

• Exploit: Focus on current products, efficiency, and short-term gains.
• Explore: Pursue new ideas, risk, and long-term opportunities.
• Ambidexterity: Balancing both at the same time.

Question 8

What does ambidexterity mean for firms?

Answer 8

• Ambidextrous organisations do both exploitation and exploration.
• Leads to sustainable competitive advantage, better short-term performance, and long-term survival.

Question 9

How can firms manage exploit-explore tensions?

Answer 9

• Separation (structural or temporal) so each side can focus.
• High-performing teams that handle both tasks.
• Fostering behavioural change through goals, incentives, role modelling.

Question 10

What is structural ambidexterity?

Answer 10

• Creating a separate unit (e.g. skunk works or a standalone venture) dedicated to exploration.
• Example: Nespresso was established as a separate entity within Nestlé.

Question 11

What is contextual ambidexterity?

and name an example

Answer 11

• Teams or individuals alternate between exploit and explore modes in the same organisational unit.
• Example: Kanban sessions at Toyota for continuous improvement and experimentation.

Question 12

Why are teams crucial for innovation? (2)

Answer 12

• More ideas, synergy, and collective intelligence.
• Diverse skill sets and experiences.
• Examples: Marvel’s blend of experienced inexperience;
  Pixar’s “braintrust” feedback sessions.

Question 13

Which factors encourage behavioural change for innovation?

(6)

Answer 13

• Goals: Ambitious targets.
• Incentives: Financial or non-financial, emphasising collaboration.
• Time: Space to experiment (e.g. Google’s 20% time).
• Role modelling: Leaders demonstrating new behaviours.
• Inspiration: Appealing to values, a compelling vision.
• Training: Building necessary skills.

Question 14

Why do non-financial incentives often work better? (2)

and name examples

Answer 14

• They encourage intrinsic motivation and collaboration.
• Financial incentives can narrow focus and crowd out social behaviours.
• Examples: Social recognition, attractive tasks,
  performance feedback.

Question 15

What are three approaches that ‘serial innovators’ tend to use?

Answer 15

• Separation: Structuring dedicated units or time for exploration.
• Teams: Empowering collaborative, high-trust, cross-functional groups.
• Change Management: Goals, incentives, time, role modelling, inspiration, and training.