INNOVATION & BUSINESS PERFORMANCE - [Year] - Analysis and Report

This report provides a comprehensive analysis of innovation and its impact on business performance. It begins by defining business performance and innovation, exploring various innovation theories and models, including the Innovator's Dilemma, Jobs-to-be-done, and the diffusion theory. The report then delves into adoption patterns, examining how new products are introduced and accepted in the market, using examples like Tesla's electric cars. It also discusses the environmental factors influencing innovation, encompassing both internal and external elements. The core of the report focuses on measuring innovation, including techniques like ROI and organizational capability metrics, as well as monitoring methods. It also addresses the risks and failures associated with innovation, such as cost overruns and poor market analysis. Finally, it explores the legal and ethical issues involved, emphasizing the importance of privacy and data governance in technological advancements. The report concludes by providing a detailed overview of the critical aspects of innovation management and its implications for organizational success.

[Year]
INNOVATION & BUSINESS PERFORMANCE
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Table of Contents
1. Business Performance and Innovation...................................................................................2
1.1 Business Performance......................................................................................................2
1.2 Innovation........................................................................................................................2
1.3 Theories and Model of Innovation...................................................................................4
1.4 Adoption Patterns.............................................................................................................4
2. Measuring Innovation............................................................................................................6
2.1 Measurement and monitoring Techniques.......................................................................6
2.2 Risks and Failures in Innovation......................................................................................6
2.3 Legal and Ethical issues involved in Innovation..............................................................7
References..................................................................................................................................9

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1. Business Performance and Innovation
1.1 Business Performance
The performance of the organisation in respect of the set goals and strategies is defined as the
performance of the organisation or the business performance. Management plays an
important role in determining and improving business performance (Muijs, 2011). The
organisation’s management ensures that the employees within the organisation are guided
and monitored by effective leaders and the organisational goals and objectives are being
effectively communicated to the employees of the organisation. To ensure that the
organisation’s performance can be improved, management focus on establishing a culture
that promotes continuous improvement within the organisation (Rašula, et al., 2012).
Business performance can be measured by analysing the performance using control charts or
balanced scorecard which includes different elements that contribute towards the success of
the organisation. analysing the factors results in identifying the performance of the
organisation, analysing the cost and profit aspect of the organisation, customer feedback and
the market share of the organisation (Zairi, 2012).
1.2 Innovation
Innovation is required in an organisation to improve the performance of the organisation.
innovation within the organisation can be in the form of introducing a new product or service,
upgrading an existing product or service or making any changes in working of the
organisation (Nicolás & Cerdán, 2011).
Innovation life cycle starts from Idea Creation, which includes basic research activities, then
proceeds towards selection of idea, or the decision to invest in a project, the next stage in the
lifecycle of the innovation is focusing on product development within the organisation and

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ends with introducing the product within the market and influencing the customers to buy
the product (Meier, 2019).
The innovation within the organisation results in improvement of business performance, by
introducing new methods of production and delivery, also the innovation within the
organisation contributes to the economic development of the organisation. Innovation
enhances the internal capabilities of the organisation, as the innovation in products or service
strengthen the firm’s position within the industry, and provide the organisation with new and
improved technologies that contribute to organisational success (O'Cass & Ngo, 2013).
Innovation within the industry is becoming a major factor that defines the success of the
organisation, the current within the industry regarding implementing the innovations within
the organisation, in present industry scenario organisations are focused on developing plans
which provide a guide to the organisation through which they can effectively implement
innovation within the organisation. the trends followed by the organisations include focusing
on long-term strategy development while implementing innovation within the organisational
activities, organisations are re-shaping their policies to ensure that the innovation is being
effectively applied within the organisation and will contribute towards organisational growth
(Castroa, et al., 2011).
Innovation in industries can be identified by analysing the business process of various
companies such as Uber, changing the cab industry, from offline to online cab booking
services, online shopping websites such as Amazon is focusing on bringing innovative
changes in the shopping experience of its customers, online streaming platform such as
Netflix, Amazon Prime, are changing the public experience of watching movies and tv shows
(Moore, 2019).

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1.3 Theories and Model of Innovation
The innovation theories are important to be used by the organisation to achieve efficiency
within the organisation. theories of innovation are; Innovator’s Dilemma, the theory focuses
on the fact that implementing innovation within the industry requires time to be a success and
during the process, the innovator should have the patience. Jobs-to-be-done is another
theoretical framework of innovation, which focuses on the idea that the main job that is
required to be done remains the same irrespective of the changes or innovation within the
product or the service. So, the management should focus on strengthening the core activities
of the organisation to achieve success through innovation (Ulwick, 2017). The diffusion
theory of innovation defines the process through which the innovation is communicated
within the organisation using interpersonal channels and media (Lee, et al., 2011).
The innovation models contribute towards providing a conceptual framework through which
the organisation can implement changes and achieve the innovation goals and objectives. The
linear model of innovation provides the organisation an effective innovation process which
involves various steps defined in such a manner that the preceding phase gets completed
before moving on to the next phase, also before moving on to next phase the preceding phase
results are being analysed to find out whether the desired results have been achieved or not.
The linear model was focused more on technological changes but later shifted on to the
market and consumer requirements. The modern innovation model followed by the
organisations is the flexible model, which does not specify an approach for innovation, it is
focused on implementing the changes as per the business and market requirements (Bohle, et
al., 2012).

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1.4 Adoption Patterns
Adoption pattern defines how the new product will be introduced within the market and the
market will respond to the product. The innovation adoption curve defined by Roger
classifies the type of adaptors into various categories, to explain that every adaptor has a
different pattern in respect for an innovation adaption. The types of adaptors include,
Innovators, one who have introduced innovation, Early adaptors, those who like to try out
new ideas, and are also opinion creators within the industry, Early majority, the next class
include the market adaptors, they effectively analyse the reviews of the product and decide to
invest within the product, Late majority, the class of late majority includes population that is
more concerned about utilising its resources, it spends on the resources after it is being tested
effectively. Laggards are last class in the adoption pattern, and their introduction in adoption
pattern signifies that the product has entered the decline stage as they are the people who
believe in adopting traditional or old innovations that are widely accepted. Such patterns help
to analyse the impact of innovation within the market and to understand whether the
innovation has met the needs and requirements of the society or not. The innovation in car
technology by Tesla, from fuel-driven cars to battery-operated cars, the innovation is at the
stage of early adopters and is moving slowly towards the stage of early majority (Everett,
2016).
The environment of an organisation is defined as the market in which it is operating and the
factors that are included within the organisation’s environment. Environmental factors of an
organisation include the internal and external factors such as the management policies, the
employees, the customers of the organisation, labour market, legal and governmental issues.
Such factors influence the working and the decisions of the organisation. The environmental
factors that affect the innovation within the organisation include the factors such as internal
management policy, as the interest of the internal management in implementing the

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innovation within the organisation is important, the attitude of employees towards the
innovation within the organisation. market-related factors, that decide whether the innovation
will success within the industry or not. Societal and public opinions for the innovations
(OECD & Eurostat, 2018).
2. Measuring Innovation
2.1 Measurement and monitoring Techniques
Innovation within an organisation can be effectively measured through metrics that would
include ROI, Organisational capability measures and leadership as an element of the formed
metrics. As the ROI will define the investment and the return on the investment, and the other
factors will help in analysing and measuring the impact of innovation on the organisation
(Drucker, 2018). Monitoring of Innovation within the organisation can be done through
analysing the firm’s operating culture, including the firm’s goals, market presence, and the
product Nd services offered, assessing firm’s capabilities and how the changes due to
innovation has affected the working, to monitor the impact of innovation, the organisation
can focus upon the opportunities from implementing the innovation within the organisation
(Deloitte, 2016). To improve the measurement and monitoring of innovation, the organisation
should focus on internal factors and the employees along with analysing the external factors
and success for innovation.
2.2 Risks and Failures in Innovation
Implementing innovation within an organisation is a task which involves the effort of every
element of the management. Due to which there are several risks involved within the
implementation process, such as the cost related risks, due to lack of accuracy in estimating
the budgets, or due to any delay in project completion, safety and quality risks, any

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communication gap in the implementation process, risk in innovation also involves analysing
the societal and cultural reasons for implementing innovations (Bowers & Khorakian, 2014).
The risks within the innovation implementation can be managed by ensuring that a correct
model or method has been used to measure and manage the risk, identifying the limitations
before implementing the innovation within the organisation, effectively analyse and consider
the financial needs and requirements, and always be prepared for any unexpected situation
while implementing the innovation, so that the impact of any risk can be minimised (Harward
Business Review, 2013).
The innovation leads to failure in the case the risks are not administered effectively and
necessary steps are not taken. There are various other measures due to which the innovation
fails includes, the setting of unrealistic expectation regarding the success of innovation, poor
estimation of allocated resources, poor clarification regarding the innovation concept and
outcomes among the employees and the main issue is the lack of proper management of the
entire process. The failure of innovation is a result of lack of proper market analysis, for
example, the SPOT watch by Microsoft was a failure as due to high price and incompetent
battery life, also there were not enough coverage areas available for the product, due to which
the product innovation failed (Mentor, 2013).
2.3 Legal and Ethical issues involved in Innovation
The innovations are both useful as well as harmful for the society depending upon its use.
While introducing new technologies or product the inventors should keep in mind various
legal and ethical factors that would affect the implementation of innovation within the
industry. The legal issues that may impact innovation are the privacy issues in technological
advancements, copyright and patent laws that governs the right of the trademark and the
authenticity of the innovation. Also, along with identifying the legal aspects, ethical issues

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are required to be identified, as a business performing ethically gets the support of the society
and achieves success within the industry, such as ensuring that the innovation will not lead
the society towards any negative impact, or will not have harm to the society, the information
provided in respect of the innovation are confidential and original as of nature. Such issues
need to be analysed and monitored while implementing innovation as such issues will fail
innovation and will also harm the organisation’s image in the industry. Innovations in
technology have resulted in an increased risk of privacy and data governance, which is
required to be maintained to promote legal and ethical innovation (Forbes, 2019).

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Bowers, J. & Khorakian, A., 2014. Integrating risk management in the innovation project.
European Journal of Innovation, 17(1), pp. 25-40.
Castroa, L. M., Sanchezb, A. M. & Urbina-Criado, M. O.-D., 2011. Innovation in services
industries: current and future trends. The Service Industries Journal, 31(1), pp. 7-20.
Deloitte, 2016. Innovation monitoring. [Online]
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Harward Business Review, 2013. Innovation Risk: How to Make Smarter Decisions. [Online]
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