2 1 Drucker’s Seven Sources of Innovation Opportunity 7 17

innovation opportunity and Peter Drucker why are we looking at Peter Drucker well he is one of the original founders of the idea of looking at innovation from an opportunity perspective what we're looking at here is opportunity as a recognition of the convergence of forces where the combination hadn't been previously recognized so here you have a picture of Peter Drucker and this is a an elder statesman in the management world who wrote the book in 1985 this book innovation and entrepreneurship is a classic it was published back when innovation was beginning to be an emergent recognized field of study and it this particular book contains an individual chapter for each of the seven sources of innovation opportunity that he identified and the book became a classic why because it identified the connections between innovation opportunity and entrepreneurship and the important thing here is that innovation opportunity and entrepreneurship are all highly related and he put these all together so what is the connection between innovation and entrepreneurship well innovation is a specific function of entrepreneurship and actually must precede it so in order to recognize what an innovation opportunity is first you have to be able to spot it and identify it it's a it's a gap in the marketplace it's a recognition of a need it's a recognition of an opportunity that can be used for people who are customers or users in the marketplace and so in search of that innovation opportunity Drucker suggests the need for a systematic approach and that systematic approach begins by classifying sources of innovation opportunity and opportunity by type and so what we're going to do is we're going to look at various innovation opportunities and try to classify them so that you can recognize them and so once innovation opportunity to recognize entrepreneurs can create that you added resources or they can endow existing resources with enhanced innovation potential so seven sources of innovation opportunity the Drucker identified are listed right here the unexpected event things that you don't expect things that happen that are surprises that aren't planned they just happen incongruity x' things that are like they don't appear to be what they seem but they are opportunities nonetheless process needs these are fairly obvious where some process is working and there is a recognized need to improve that process changes in industry structure we talked earlier about destruction economic destruction and what that does to the marketplace changes in demographics are another one demographics where there are populations that are made up of population factors age distribution economic value all these different components of a of a population really reflect a demographic profile and the way in which these are composed and changed represent possible opportunities changes in perception how we view certain things how we view things like health how we view things like crime how we view things like income levels are all factors that begin to shape our perceptions and those perceptions also trigger certain innovation opportunities and then finally Drucker's last innovation opportunity category with new knowledge which is really generated by scientific breakthroughs technology and creation of new information that leads to an innovation opportunity so not only Drucker but several other researchers have found business researchers have found sources of innovation opportunities and they built off of these original seven but one of them is the translation of an idea from one market to another so there's something that is effective and working as an innovative idea on the west coast let's say in California ultimately makes its way over to the East Coast in New York or Washington or Boston and this has been a common trend of innovative ideas in the u.s. a second one is by analogy borrowing a related idea that is a successful innovation idea in one area and bringing it to another area enabling changes to technological limits we have talked previously about the idea of technology limits and that s-curve where at the flat part of the s-curve that's the limit if you can break through and enable greater limits to that technology that creates an innovation opportunity as well value chain opportunities we're going to look at the value chain and another talk but the the development of a product from a raw material to a finished product is full of value chain added opportunities and in those value chains there are incremental opportunities that are available that can be taken advantage of high growth business areas where there is some business area that is very active and very economically advantageous people look at those and say what can I do to take advantage of an innovation opportunity in those areas because those are the areas that are growing very fast and then finally converging technologies this is where two technologies where they may be related they may be unrelated come together and people see the opportunity to leverage one technology with another to actually improve and take advantage of an innovation opportunity so let's reflect a little bit about innovation opportunities because of the dynamic changes that are always occurring in the business environment most innovations will likely exploit these changes or they will have to exploit these changes and that's why they they occur from duckers perspective systemic innovation means monitoring change and scanning for sources of innovation opportunity it's a very systematic process he says and then third some opportunities lie within the organization itself and some lie beyond the walls of an organization and still others reside in the competitive marketplace and we're going to look at each of these three categories and where innovation opportunities reside

One Comment

  1. Lion King said:

    Much more profound than Peter Thiel’s Zero to One.

    May 22, 2019

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