Pearson BTEC Unit 8: Innovation and Commercialization Business Report

This report provides a comprehensive overview of innovation and commercialization within a business context. It begins by defining innovation, differentiating it from invention, and illustrating its impact through various business examples, categorized by innovation types. The report then explores how organizational vision, leadership, and culture shape innovation and commercialization. It delves into the 4Ps of innovation, explaining the innovation funnel and its application. Furthermore, the report examines frugal innovation, providing real-world examples, and details the importance of the commercial funnel and New Product Development (NPD) processes. A significant portion of the report is dedicated to building an innovation business case, including strategies for accessing funding. Finally, the report evaluates tools for developing, retaining, and protecting knowledge and intellectual property, offering a holistic understanding of innovation management.

Assignment Front Sheet
Qualification Unit number and title
Pearson BTEC Levels 4 and 5 Higher
Nationals in Business
Unit 8: Innovation and Commercialization
Unit code:
Unit Level: 5
Credit Values:
Student name Assessor name
Date issued Completion date Submitted on
Assignment title Innovation and Commercialization
Word Count
Assignment Front Sheet
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illness)
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Table of Contents
P1. Explain the different context of innovation and differentiate between invention and innovation.......3
P2. Explain how organization vision and leadership and culture shape the innovation and
commercialization.......................................................................................................................................4
P3. Explain the 4Ps of innovation and explain the use of the innovation funnel to examine and shape
innovative ideas...........................................................................................................................................4
4 P’s of Innovation...................................................................................................................................4
P4. Explain developments in frugal innovation and provide examples of how it is used in an
organizational context.................................................................................................................................5
P5. Explain the importance of the commercial funnel and the application of New Product Development
(NPD) processing for commercialization of innovation...............................................................................5
P6. Build an Innovation Business Case for an organization, including ways to access funding....................6
P7. Evaluate the different tools that organizations can use to develop, retain and protect knowledge and
intellectual property....................................................................................................................................6
Bibliography................................................................................................................................................8

Unit 8 Innovation
P1. Explain the different context of innovation and differentiate between invention
and innovation
Definition of innovation
“Innovation is the creation, development and implementation of a new product, process or
service, with the aim of improving efficiency, effectiveness or competitive advantage.” (Hudson,
2014)
Example of business innovation
Business success occurs with –
 creating new products / services / markets
 updating something known so it is exciting again
The following are examples of success through innovation –
1.
1. Technology companies triggering a paradigm shift by
impacting industries
A. Apple – changed music and consumer electronics
B. Uber – changing the taxi business
C. Airbnb – changing the accommodation industry
D. Amazon – changing retailing
1.
2. Technology companies creating new markets / industries
A. Google – with ” Search, etc. ” for a much better online
experience
– changed the Advertising world with Adwords
– impacting the mobile, car, utility, etc. industries
B. Facebook – established the ” social network ” market
C. WhatsApp – established the personal communications market
D. Steam – established the online market for licensing games
1.

3. Companies making something old new again
The following brands have taken familiarity and made it relevant
with modern technology to create a winning product / service –
1. Nest
Nest successfully revolutionized a stagnant thermostat industry
because they took something we all use and asked, “How can we
make this (much) better?” They listened to people’s complaints (ex:
energy use, comfort levels) and went about applying answers to
these problems. When you’re in tune with public demands and you
can create the appropriate solutions, you’ll be successful. — Nicolas
Gremion, Free-eBooks.net
2. Nintendo
Pokemon Go is a world-class example of how Nintendo became
relevant again by simply reinventing itself through a modern game
that activated gamers of all ages and genders. Pokemon Go
incorporates virtual reality elements, gamification, and commerce at
scale in a way that has never been done with such precision. I
believe the reason for the success was well-executed timing.
— Kristopher Jones, LSEO.com
3. Snapchat
Snapchat brought photo sharing forward into the modern age and
brought back a real interest in photos and communicating through
photos. They were successful because they incorporated the social
element and added ways to edit the pictures and add things to them
that made it even more fun for their audience. They also brought
the photo-sharing concept into the digital online age and made it
interactive.
4. Slack
Chat rooms on the internet have always been around, and in the old
days, asking someone for their age/sex/location was just what you
did on them. Slack brought chat rooms back and made them more
productive by highlighting their usefulness for teams. Today you
would be hard-pressed to find a company not using Slack, or at least
someone from the company not active in a Slack community.

5. Polaroid
Polaroid cameras used to be these ugly, old looking things that
resembled View-Masters, and with everything going digital,
Polaroid’s future didn’t seem very promising. But, they’ve found a
way to make their cameras kitschy, cool and popular through unique
branding and an engaging aesthetic. I doubt they’ll ever be seen as
dated again.
6. Unwelcome Greetings
The team behind Unwelcome Greetings knew that traditional
Hallmark cards were boring. At least, among Millennials, they felt
that there was a better way to congratulate a friend or share a
funny meme. And so far their outrageous greeting cards have been
a hit among consumers who prefer to communicate in
memes, emojis and pranks.
7. Dollar Shave Club
Dollar Shave Club made it easier and cheaper to buy razors, and
they did it with style. They were successful, in part, because of their
innovative approach to advertising. But the real key was taking on
an established industry that had been overcharging for generations,
and making the product cheaper and more convenient. Companies
like Casper are doing the same for mattresses.
8. GoPro
GoPro effectively took an old product that everyone has, re-
purposed it, and made a fortune. GoPro is nothing but a good-quality
camera. However, they managed to make it attractive, target a
large niche of passionate customers and create a new category for
themselves. The beauty behind this brand is targeting a group of
people who are tight-knit and large enough to build a sizable
business.
9. Netflix
As one of the cornerstones of the home entertainment industry,
brick-and-mortar DVD rental stores seemed like they’d be around
forever. Then along came Netflix. Not only did the brand reinvent
the delivery of DVDs, they transformed movie rental altogether with
streaming service. The brand’s success has come from not just
embracing change, but seeing it as an opportunity for innovation.

10. Adidas
Adidas benefited from people’s increased interest in sports gear that
became athleisure wear. Rapper Kanye West, NHL Pittsburgh
Penguins star Sidney Crosby, and NFL Green Bay Packers
quarterback Aaron Rodgers helped put Adidas back on top. As
Adidas says, “Americans like winners. We needed to not just have
athletes but the best athletes.” (CAIL, 2017)
Types of business innovation
It is remarkable how many people are under the false assumption that companies are either
innovative or not. This is a very polarizing and simplistic perspective that does not take into account
the different types of innovations that companies can and do pursue.
For this post, let’s break down innovation into two dimensions: Technology and Market, which gives
us the following 4 types of innovation:

Incremental Innovation
Incremental Innovation is the most common form of innovation. It utilizes your existing technology
and increases value to the customer (features, design changes, etc.) within your existing market.
Almost all companies engage in incremental innovation in one form or another.
Examples include adding new features to existing products or services or even removing features
(value through simplification). Even small updates to user experience can add value, for example
below is an older version of Constant Contact’s email schedule page:
There is nothing majorly wrong with this page, however it is easy to see that the page title is
“Schedule”, yet there are no schedule settings anywhere to be seen. In fact, in this version, you
have to click on the yellow schedule button on the upper right-hand corner to actually pop up the
schedule settings. In addition, there is a huge empty space on the right side of the page that does
not contribute much value to the user. Below is a more current version of the same page:

This updated version replaces the “Schedule” title with the title of the email campaign. This makes it
easier for the user to see which campaign they are working on. Actual schedule settings have
replaced the awfully huge empty space on the right-hand side, which makes it possible for the big
yellow “Schedule” button to actually schedule. Also, larger sized form fields have been introduced
to allow easy clicking on those elements. All these changes, which may seem as just updates, are
actually small incremental changes focused on adding more value to an existing product. They will
prove to be incrementally innovative if customers have a better experience with the product and are
able to schedule email campaigns much easier.
Disruptive Innovation
Disruptive innovation, also known as stealth innovation, involves applying new technology or
processes to your company’s current market. It is stealthy in nature since newer tech will often be
inferior to existing market technology. This newer technology is often more expensive, has fewer
features, is harder to use, and is not as aesthetically pleasing. It is only after a few iterations that
the newer tech surpasses the old and disrupts all existing companies. By then, it might be too late
for the established companies to quickly compete with the newer technology.
There are quite a few examples of disruptive innovation, one of the more prominent being Apple’s
iPhone disruption of the mobile phone market. Prior to the iPhone, most popular phones relied on
buttons, keypads or scroll wheels for user input. The iPhone was the result of a technological
movement that was years in making, mostly iterated by Palm Treo phones and personal digital
assistants (PDAs). Frequently you will find that it is not the first mover who ends up disrupting the
existing market. In order to disrupt the mobile phone market, Apple had to cobble together an
amazing touch screen that had a simple to use interface, and provide users access to a large
assortment of built-in and third-party mobile applications.

Architectural Innovation
Architectural innovation is simply taking the lessons, skills and overall technology and applying them
within a different market. This innovation is amazing at increasing new customers as long as the
new market is receptive. Most of the time, the risk involved in architectural innovation is low due to
the reliance and reintroduction of proven technology. Though most of the time it requires tweaking
to match the requirements of the new market.
In 1966, NASA’s Ames Research Center attempted to improve the safety of aircraft cushions. They
succeeded by creating a new type of foam, which reacts to the pressure applied to it, yet magically
forms back to its original shape. Originally it was commercially marketed as medical equipment
table pads and sports equipment, before having larger success as use in mattresses. This “slow
spring back foam” technology falls under architectural innovation. It is commonly known as memory
foam.
Radical innovation
Radical innovation is what we think of mostly when considering innovation. It gives birth to new
industries (or swallows existing ones) and involves creating revolutionary technology. The airplane,
for example, was not the first mode of transportation, but it is revolutionary as it allowed
commercialized air travel to develop and prosper.
The four different types of innovation mentioned here – Incremental, Disruptive, Architectural and
Radical – help illustrate the various ways that companies can innovate. There are more ways to
innovate than these four. The important thing is to find the type(s) that suit your company and turn
those into success.
(LOPEZ, 2015)
Definition of invention
Invention is the physical creation of a new concept or idea (innoway, 2018)
P2. Explain how organization vision and leadership and culture shape the innovation
and commercialization
Explain the value and importance of innovation to organizations and how this can be
embedded within the organizational vision, leadership, teamwork and culture at
Essence Drinks

According to McKinsey, 84% of executives say that their future success is dependent on innovation.
Although innovation may sound like a buzzword for some, there are many reasons why companies put a
lot of emphasis on it.
In addition to the fact that innovation allows organizations to stay relevant in the competitive market, it
also plays an important role in economic growth. The ability to resolve critical problems depends on new
innovations and especially developing countries need it more than ever.
We’ve written quite a few posts about innovation management and this time, we’ve decided to take a
closer look at the reasons that make innovation important for an individual organization and the society
at large.

Table of contents
 What is innovation and why do we need it?

 Macro perspective: The role of innovation in our society
 The fundamental outcomes of innovation
o Economic growth
o Innovation and the future of jobs
o Increased well-being
o Reduced sickness, poverty and hunger
o Communication and educational accessibility
o Environmental sustainability
 Micro perspective: The importance of innovation for an organization
o Competitive advantage
o Maximize ROI
o Increased productivity
o Positive impact on company culture
 Conclusion
What is innovation and why do we need it?
Innovation, by definition, is the introduction of something new. Without innovation, there isn’t anything
new, and without anything new, there will be no progress. If an organization isn’t making any progress,
it simply cannot stay relevant in the competitive market.
Because organizations are often working with other individual organizations, it can sometimes be
challenging to understand the impacts of innovation on our society at large. There is, however, a lot
more to innovation than just firms looking to achieve competitive advantage.
Innovation really is the core reason for modern existence. Although innovation can have
some undesirable consequences, change is inevitable and in most cases, innovation creates positive
change.
We've decided to look at the outcomes of innovation on macro and micro level:

Macro perspective: The role of innovation in our society
Over the last decades, innovation has become a significant way to combat critical social risks and
threats.
For example, since the Industrial Revolution, energy-driven consumption of fossil fuels has led to a rapid
increase in CO2 emissions, disrupting the global carbon cycle and leading to a planetary warming impact.
Our society revolves around continuous economic growth, which mainly depends on population growth.
The population is shrinking and ageing in the developed counties and is likely to do so in other parts of
the world as well.
Innovation is important to the advancement of society as it solves these kinds of social problems and
enhances society’s capacity to act.
It's responsible for resolving collective problems in a sustainable and efficient way, usually with new
technology. These new technologies, products and services simultaneously meet a social need and lead
to improved capabilities and better use of assets and resources.
In order to be able to solve these kinds of societal problems, private, public and non-profit sectors are
involved.
The fundamental outcomes of innovation
Because innovation has an impact on so many different parts of our society, it would be almost
impossible to go through everything in one post. Therefore, we’ve decided to focus on the most
significant aspects related to the importance of innovation.
In general, the result of innovation should always be improvement. From the society’s perspective, the
fundamental outcomes of innovation are economic growth, increased well-being and communication,
educational accessibility and environmental sustainability.
Economic growth
Technological innovation is considered as a major source of economic growth. Economic growth refers
to the increase in the inflation-adjusted market value of the goods and services produced by
an economy over time. It is conventionally measured as the percent rate of increase in real gross
domestic product, or real GDP.
There’s generally two ways to increase the output of the economy:
 Increase the number of inputs that go to the productive process
 Come up with new ways to get more output from the same number of inputs
The latter describes the essence of innovation quite well. The purpose of innovation is to come up with
new ideas and technologies that increase productivity and generate greater output with the same input.

If we look at the transformation of the US, once a largely agrarian economy that advanced from
emerging nation status in the mid-19th century to an industrial economy by the First Wold War, we can

see that the agricultural innovations and inventions were actually one of the largest factors that helped
bring about the Industrial Revolution.
Vast improvements in agricultural productivity had already previously transformed the way people work
in Europe, releasing farmers for other activities and allowing them to move to the city for industrial
work. The shift from hand-made to machine-made products increased productivity, directly affecting
living standards and growth.
If previously one worker was able to feed only a fraction of their family, it was now possible for one
person to produce more in less time to provide for the entire family.
Innovation and the future of jobs
Technological advancement and increased productivity means major changes for careers today as well.
The world economy could more than double in size by 2050 due to continued technology-driven product
improvements.
According to the new World Economic Forum report, nearly 133 million new jobs may be created by
2022 while 75 million jobs are displaced by AI, automation and robotics.

Source: World Economic Forum - The Future of Jobs Report 2018
Manual, low-skilled jobs and middle-income roles such as accountants, lawyers and insurance clerks are
the ones that will be affected the most over the next decade.
The biggest issue here isn't necessarily that these jobs would disappear completely but the fact
that polarization of the labor force becomes more significant. New skill sets are required in both old and
new occupations.
How and where people work will also continue to change. There will be more demand for experts,
whereas "regular workers" are at risk of having to settle for low-income positions.

Increased well-being
In general, innovation and economic growth increases well-being because living standards rise.
According to the Brookings Institution, average life satisfaction is higher in countries with greater GDP
per capita. Another research also shows that there’s a link between innovation and subjective wellbeing.
However, not all of the benefits of innovation and growth are evenly distributed. Often, a rise in real
GDP means greater income and wealth inequality. Although there isn’t a threshold level for how much
inequality is too much, greater socioeconomic gaps are most likely have some negative consequences.
In theory, income inequality isn't a problem itself except when the concrete purchasing power
decreases. In practice, however, it does have a number of impacts on our society and collective well-
being.
Reduced sickness, poverty and hunger
As already mentioned, developing countries depend on innovation as new digital technologies and
innovative solutions create huge opportunities to fight sickness, poverty and hunger in the poorest
regions of the world.
Developed countries also rely on innovation to be able to solve their own problems related to these
themes.
What comes to reducing hunger, for example, agricultural productivity is critical in the developing
countries where the next population boom is most likely to take place. Smallholder farms in developing
counties play an important role as up to 80% of the food is produced in these communities.

Developing and sharing agricultural innovations such as connecting farmers to information about the
weather, has proven to be an efficient way to help farmers stay in business. Although this is just an
example of how innovation can help people continue producing food, innovation provides endless other
opportunities that can eventually help reduce poverty and hunger around the world.
Communication and educational accessibility
You probably already knew that The World Wide Web celebrates its 30th birthday this year. We’ve
already seen a huge technological revolution during the past decades and continue to do so in the
future.
According to the World Bank Annual Report 2016, even among the poorest 20 percent of the
population, 7 out of 10 households have a mobile phone. This means that more people now have mobile
phones than sanitation or clean water.
Also, the mobile worker population is expected to grow from around 96 million to more than 105 million
by 2020. Innovations in mobile technology such as voice control and augmented reality are enabling
workers in completely new ways.
Technology innovation can also help rural areas thrive and become more sustainable. Although there
are some barriers to technology adoption, such as low income or user capability, more people can
access information an improve their knowledge despite their socio-economic position or demographic
area.
Environmental sustainability
Sustainability and environmental issues, such as climate change, are challenges that require a lot of
work and innovative solutions now and in the future.
Earth suffers as consumerism spreads and puts consumption at the heart of modern economy. Although
consumerism has a positive impact on innovation as a source of economic growth, the rising
consumption of innovative products is often considered as one of the reasons for environmental
deterioration.
Often, politics or other methods aren’t enough to make a change – at least not quick enough. Policy
changes take time to take effect, which is why the long-term survival of our society and nature depends
on new, responsible innovative technologies.
Although new greener technology solutions, such as eco vehicles aren’t necessarily more competitive
alternatives to petrol-powered vehicles just yet, they will definitely offer many advantages for the
future.
Micro perspective: The importance of innovation for an organization
Now that we’ve looked at the role of innovation from the society’s perspective, we can take a closer
look at the importance of innovation for organizations and businesses.
In general, it’s difficult to identify industries where innovation wouldn’t be important. Although certain
industries depend on innovation more than others, innovation and the ability to improve considers
everyone.
Even highly regulated industries, such as taxis and banks aren’t immune to change. Look what Uber has
done to the traditional taxi industry, or how innovation affects financial services.

In general, innovation can deliver significant benefits and is one of the critical skills for achieving success
in any business.
Competitive advantage
Competitive advantage means the necessary advancements in capabilities that provide an edge in
comparison to competitors of the industry. What these are exactly, depends on your business model
and the industry you operate in.
As already mentioned, for organizations the ability to get ahead of the competition is one of the most
significant reasons to innovate. Successful, innovative businesses are able to keep their operations,
services and products relevant to their customers’ needs and changing market conditions.

In fact, according to Deloitte, only 12% of the Fortune 500 companies from 1955 are still in business
and half of the S&P 500 companies will be replaced in the next ten years, which is why it’s important to
be able to quickly respond to external challenges.

Innovation increases your chances to react to changes and discover new opportunities. It can also help
foster competitive advantage as it allows you to build better products and services for your customers.
Maximize ROI
Increased competitive advantage and continuous innovation often has a direct impact on performance
and profitability.
According to Global Innovation 1000, there’s a clear difference in both revenue (11%) and EBITDA (22%)
growth in favor of the more innovative organizations. These numbers show that innovative companies
not only grow faster but are more profitable than the rest.
Although measuring the ROI of innovation might be challenging especially in the beginning or when
talking about disruptive innovations, investing in innovation is often a surer way to improve your
numbers than not innovating at all.
Increased productivity
Economic growth is driven by innovation and technological improvements, which reduce the costs of
production and enable higher output. If we look at this from the perspective of an organization,
different automation solutions decrease manual, repetitive work and release time for more important,
value-creating tasks.
Improved productivity and efficiency makes work more meaningful as less time needs to be spent on
low impact tasks. The more time you’re able to spend on tasks that have a direct impact on your
business, such as improving processes, solving problems or having conversations with your customers,
the more likely you’re able to actually reduce costs, increase turnover and provide your customers with
solutions that truly benefit them.
Positive impact on company culture
Last but not least, innovation also has a positive impact on company culture as it increases the ability to
acquire, create and make the best use of competencies, skills and knowledge.
Innovation practices can help build a culture of continuous learning, growth and personal development.
This type of innovative environment can again motivate people to constantly improve the way they and
their team work.
If you look at history, innovation doesn’t come just from giving people incentives; it comes from creating
environments where their ideas can connect. – Steven Johnson
When the entire organization is supportive and provides the right tools for the employees to succeed in
their jobs, it eventually has a positive effect on how people perceive their jobs.
Conclusion
Generally speaking, the main purpose of innovation is to improve people’s lives. When it comes to
managing a business, innovation is the key for making any kind of progress.
Although your innovation activities aren’t necessarily powerful enough to save the world, you should
focus on improving the things you can affect.

Small improvements eventually lead to bigger and better ideas that may one day become revolutionary.
In the meantime, however, you’re responsible for finding ways to make improvements in your own
sphere of influence.
Often, getting started is the hardest part as there are many ways to approach innovation. Our suggestion
is to simultaneously work on developing your personal skills and business related aspects. You should,
however, start small and pick your focus as it's impossible to achieve everything at once. (Kylliäinen,
2019)
Vison
Every new business or organization begins with an idea. Behind the idea is a vision of what the
organization could be if they have the right structure, the right leadership, adequate funding, and a
group of people that believe in the vision. The vision speaks to the organization’s purpose and why it’s
important for the organization to exist.
All types of organizations, including for-profit companies, nonprofits, charities, and other groups use
vision statements to guide them with their important work. They need to be clear on what role the
vision will serve in the organization. So, what is a vision statement?
Defining the Strategic and Organizational Vision
Every vision starts with a visionary leader who is able to create mental and verbal pictures of desirable
future states. It’s also important for visionary leaders to share their vision with their partners including
customers, suppliers, and employees.
The board of directors needs to understand the importance of taking sufficient time to define the
mission, vision, and values statements. The vision statement is the basis for everything else they do.
Employees look to the vision statement for long-term direction.
Corporations exist to make a profit and work in the best interests of their shareholders. Beyond that,
many companies are interested in many other things as well. A long-term approach to business means
that the company desires to serve like-minded customers. A vision statement caters to the
characteristics and lifestyle of the customers they serve as well as the market conditions.
Writing a vision statement is part of the strategic vision planning process. It takes planning, time, and
consideration. It’s important for boards of directors to give the process of writing their vision statements
the adequate time because it’s a critical step in building a business. In simple terms, a vision statement is
a written document that describes where an organization is going and what it will look like when it gets
there.

A vision statement can be short or long. The length of the vision statement can be telling about the
company. A vision statement describes the company’s purpose, what the company is striving for, and
what it wants to achieve.
Most writers of vision statements find that it’s a rewarding and inspiring process. It gives them the
chance to articulate the characteristics that influence the organization’s strategy. Writing the vision
statement should be a somewhat challenging process because it has a bearing on many other parts of
the business.
A vision statement is something that’s meant to be shared and proud of. The vision communicates your
organization’s value and its commitment to achieving its goals.
You should be proud to share your vision statement boldly on your website, on your letterhead, on your
invoices and other documents, and in other prominent places. Some corporations have their vision
statements placed on the company vehicles and on the walls of their offices so that the company creates
a culture of around the vision statement. Employees, customers, and vendors should all be familiar with
and respectful of your vision statement.
The risk of not writing a clear vision statement is that it gives your company the potential to veer off
course. Without a vision statement, it becomes easy to veer off course. Everyone in the company can so
easily lose focus of the goals and priorities.
Let’s use a tire shop as an example of a company that doesn’t have a clearly written vision statement.
Over time, the tire shop is losing money, so they open up an auto repair shop to bring more customers
into the store, hoping that they will be inspired to purchase tires while they’re waiting for their repairs.
Over time, the repair shop becomes so busy that management starts to take resources away from the
tire shop to support the repair shop. These decisions have a domino effect on the tire shop causing them
to stop offering quality tires to offset the cost. Management was also forced to lay off higher-paid
employees with minimum wage employees and opted not to train them as well in their products. If
they’d had a defined vision statement for the tire shop, and used it to make business decisions, they
may have opted to solve problems in a different way.
Why Is a Vision Statement Important?
A vision statement isn’t just an exercise. It defines the core reason for a company’s existence and makes
work more meaningful. A vision statement usually helps to attract and engage passionate, like-minded
employees, one of the main purposes of a vision statement. Companies can more easily build an
appropriate organizational vision culture around the vision statement and work towards strengthening
the culture. A corporate vision statement gives everyone clarity around the big picture which sets the
stage for improved decision-making and targeting the right customers. (Eisenstein, 2019)

Leadership
The company CEO, army general, political party leader, school superintendent, department head, team
coach – these are but a few examples representing one of the fundamental components of
organizational leadership. Inside of every organization, there must be a person responsible for directing
or guiding the group.
According to Jessica Dihn and her co-authors in a 2013 article for "The Leadership Quarterly," the role of
the leader is "to structure the way that the inputs of others are combined to produce organizational
outputs." But what distinguishes an organizational leader (OL) from, say, a functional manager or an
executive with other leadership qualities?
The key difference is that organization leaders combine business
understanding with their roles as “future visionaries and forward-thinkers who lead broad initiatives
using integrity and ethics,” according to Dr. Linda Ellington, faculty lead for organizational leadership at
Southern New Hampshire University (SNHU). Organizational leadership, then, is a management
approach in which leaders help set strategic goals for the organization while motivating individuals
within the group to successfully carry out assignments in service to those goals.
“You have to be people-oriented,” said Dr. Lowell (Chris) Matthews, associate professor of
organizational leadership at SNHU. “Organizational leadership is about leading and managing individuals
toward achieving a strategic organizational goal. So, an OL is a change-agent, someone who sees the big
picture but also understands the processes or steps to making change happen.”
Learning Organizational Leadership Skills and Mindsets
“If your goal is to influence people and impact the organization at the highest level possible, then you
want to learn about organizational leadership,” said Deborah Gogliettino, faculty lead for human
resources at SNHU.
It’s one thing to learn about a subject. But can the essential skills and mindsets of organizational
leadership be learned? According to Ellington, these include:
 Problem-solving and decision-making
 Communicating (especially listening) effectively
 Relationship- and team-building (including developing leadership potential in others)
 Identifying future innovations and opportunities
 Understanding your business environment and operations
 Using integrity and ethics
 Thinking strategically, system-wide, and holistically
 Spreading the organization’s vision and inspiring others to share in that vision

“People are not empty vessels,” Ellington said. “They have unique experiences, talents and knowledge.”
And if they have the drive, commitment and passion to learn about organizational leadership, “we can
teach them those OL skills and mindsets while also sprinkling in the business understanding,” she said.
Of course, some people learn organizational leadership skills through real-world experiences. Yet the
benefit of an education, either at the undergraduate or graduate level, is the chance to study theories
about motivation, strategy and leadership, and then put those theories into practice without the same
level of risk.
“After all, the practice is when you make mistakes – and we all make mistakes,” said Ellington. “The
difference is that in an education setting, no one is going to get fired or lose their company or go into
debt. We provide a safe sandbox or playground for our students to try simulations and develop
confidence in their abilities.”
Ideally, theory and practice go hand in hand. “The analogy that I use for my students is that of a medical
doctor who goes to medical school and obtains their degree,” said Matthews. “They know the theory,
but until they start practicing medicine with patients, the theory only gets you so far.” Conversely, of
course, patients generally want a doctor who also has the theoretical training, not just medical
knowledge that comes from learning “by doing.”
Organizational Leadership Jobs and Careers
“A person with a degree in organizational leadership can be
expected to fill a management or leadership role in an organization that has to constantly be prepared
for change,” said Matthews. “These roles may be in human resources or more supervisory positions that
are industry-specific. The good thing about OL is that it’s needed for all types of organizations.”
These include organizations, businesses, and enterprises in the:
 Public and private sectors
 For-profit and not-for-profit realms
 Centralized and decentralized institutions
 New start-ups and global conglomerates
As a result, it’s possible for organizational leaders “to work in places that fit who they are in terms of
their core values,” said Gogliettino.
The other potential benefit of work in this field is with regard to compensation. According to the U.S.
Bureau of Labor Statistics, the “median annual wage for management occupations was $104,280 in May
2018, which was the highest wage of all the major occupational groups.”

While some jobs have “organizational leader” in the title, more
often than not, OL isn’t the title on your employee ID, according to Ellington. Instead, she said, “it’s the
mindset, the talent, the love of people and the courage and desire to drive and influence change. An OL
has the ability to look wider and deeper, and to bring an advanced skillset to (a) company’s decision-
making and strategic thinking.”
“The OL is that person who is going to be in a position of influence,” Gogliettino said. “That can be an HR
person or someone in benefit) s, it could be an administrator for a not-for-profit or a small business
owner. There are lots of titles for which a person could be the OL. The real question is: Does this job or
position help the organization move forward?”
Looking ahead, Gogliettino said the job and career prospects in organizational leadership are “constant
and long-term. There is always going to be a need for skilled organizational leaders – today, tomorrow,
and afterward. Organizations will always embrace someone who can bring a vision, especially one of
growth and sustainability. That’s a trend I don’t ever see going away." (Tokar, 2020)
Culture and teamwork
Creating a culture of teamwork is not the same as team building. However, if you’ve developed strong
teams that produce solid results, you have the foundation for a teamwork culture. An organization that
seeks to develop productive, high-performing teams first needs to cultivate a culture that’s positive and
open with an environment rich in creativity and challenges. This kind of a culture can help to attract top
talent and retain employees who thrive at teamwork.
When teamwork becomes an intrinsic part of your organization’s culture, everyone benefits—the
company, employees and your customers.
What is Teamwork Culture?
A successful culture of teamwork can be characterized as an environment marked by the shared belief
that the organization can move forward most effectively when collaboration and cooperation are at the
heart of thinking, planning and decision making.
This kind of culture results in companies where each member of the organization—from executive
leadership to management to frontline staff—are engaged, productive and loyal. If that’s the type of
culture you’d like to create in your organization, consider these five attributes shared by companies
where teamwork is the key to success:

1. Empowerment: Teams are encouraged to be self-reliant and empowered to make their own
decisions.
2. High Expectations: Teams are given important assignments and projects, not just low-level tasks.
3. Support: Teams with the talent and ability to produce results are supported by management
with the time, budget, people and other resources needed to do their jobs.
4. Encouragement: Teams are encouraged to work independently, and employees are encouraged
to form their own informal teams to solve problems.
5. Training: Teams have the proper training for their own positions as well as cross-training
opportunities. This makes teams more nimble and increases appreciation and understanding
among colleagues.
Creating a teamwork culture is easier when teamwork is promoted, sponsored and supported from the
top of the organization.
Why is Teamwork Important in the Workplace?
Having this shared belief in collaboration and cooperation, which a culture of teamwork can help to
foster, provides your organization with not only a unifying focus, but also a unified approach to how
work gets done. Every individual, team and department know they will be expected to work together to
complete tasks and accomplish goals.
Some of the benefits of creating and fostering this teamwork culture include:
 Employees who contribute to well-oiled teams are happy and engaged; care more about their
companies, their co-workers and their jobs; and are far more productive than those in an
individualist environment.
 Companies with a team-oriented culture enjoy higher levels of employee retention; the
decreased investment in recruiting and training strengthens the bottom line.
 Ultimately, strong teams work harder, improving themselves and the organization, which is why
so many organizations emphasize strategies to hone their development.
To put it simply, creating a culture of teamwork in your organization just makes business sense.
Building a Culture of Teamwork
Building an environment conducive to teamwork is a process requiring a plan and specific activities to
support collaboration. Some of these activities that can help take your company in a more collaborative
direction and serve as the building blocks for a culture of teamwork include setting organizational-wide
goals, measuring productivity and progress towards goals and modeling collaborative conflict resolution.
Goal Setting
The plan itself must set goals for building individual, team and management expectations for work and
performance. It must identify events, rewards or incentives to solidify support of teamwork culture. In
turn, each employee needs to fully understand the company’s goals and vision, as well as their role in
getting there. The plan and the end objective must therefore be communicated openly and frequently
with employees.
Measuring Productivity
Setting goals creates common ground and increases productivity, as individuals and teams align and
collaborate to achieve the larger organizational goals. Measuring productivity is the only way to ensure
the concept works – especially when emphasizing teamwork company-wide. Progress against the plan
should be monitored and measured. Also, employee feedback on how the plan is proceeding is an
important measurement that can’t be neglected. Likewise, measuring individual employee and then
team productivity and finally organizational performance—i.e. increased sales, higher production, cost
reduction, new customers added or other relevant metrics—can help gauge the impact of teamwork
culture on employee progress and the company’s bottom line.

Modeling Conflict Resolution
Senior management is responsible for more than just communicating the value and need for a culture of
teamwork. They need to be models for the kinds of collaborative behaviors they want to see take hold,
even when circumstances might make it expedient to slip back into a more individualistic mode. This
temptation is most likely to arise when conflicts happen, whether that be between individuals within a
team or between teams. Setting the expectation that members need to work out conflicts as much as
possible, without retreating into departmental silos or “pulling rank” and escalating situations up the
chain of command, is teamwork in action. It is an organizational direction that must be set from the top
for this culture shift to take hold.
Growing a Culture of Teamwork
Successfully growing a culture like this requires setting up a system that demonstrates and recognizes
contributions and performance on individual and group levels. It requires establishing an understanding
of the consequences, ensuring employees take responsibility and accountability for team achievements.
Recognizing and rewarding individual and team performance are important. Your system should ensure
that people who contribute to teamwork success reap a tangible reward for their contribution to the
company’s increased success.
Human resources and talent management teams play a crucial role in implementing the systems and
processes that maintain and grow organizational culture. By recruiting, hiring, and training top talent
that fits your culture of teamwork, human resources and talent management help to continually shape
the direction of company culture.
For example, training and development managers can provide teams with best practices and systematic
ways to collaboratively trouble shoot and solve real work issues, improve interpersonal communications
and hold productive meetings that review projects and work processes that are mutually owned across
the organization. Implementing benefits and rewards, such as sponsoring sports teams, organizing
quarterly company-wide celebrations or lunchtime potlucks, can help bring all the individuals and teams
within your organization closer together.
As remote work becomes more prevalent, due to necessity and employee expectations, bringing your
people together is even more critical and challenging. Team-building activities, even if it’s a happy hour
over Zoom, go a long way toward reinforcing the behaviors that build a collaborative team culture. The
most effective are those that are seamlessly incorporated into the larger teamwork effort and are
practiced every day.
Making Your Culture of Teamwork a Success
A culture of teamwork is one that companies of all sizes and in all sectors should seek to create within
their organizations. A well-conceived plan, embraced and championed by senior management,
combined with consistent and clear communications about the objectives and outcomes, and a rational
system of rewards can form its basis and lead to greater business success.
(michiganstateuniversityonline, 2020)

P3. Explain the 4Ps of innovation and explain the use of the innovation funnel to
examine and shape innovative ideas
Explain the 4Ps of innovation and how this supports capability and management of
innovation. Advise Essence Drinks which form of innovation they should engage in.
After covering the basics, we can finally dive into the details of the 4 P’s of Innovation Space. This
concept was developed by Tidd and Bessant and first published in 2005. The recap of their findings can
be seen in fig. 1:
Fig. 1: The 4 P of
Innovation (Tidd&Bessant 2013)
The 4P’s
The 4 P’s of Innovation as described by Tidd and Bessant are product, process, position, and paradigm
and defined as following:
Product innovation is the first thing that comes to mind when talking about innovation and conveys the
changes in the things (products/services) which an organisation offers.

Process innovation, on the other hand, refers to changes in the way things are created and delivered.
Position innovation is the change in the context in which the products/services are introduced or in
other words where the target of the offering lies and what the story told about it is.
Paradigm innovation, in particular, is the change in the underlying mental models which frame what the
organisation does or alternatively how the company frames what it does.
The dividing line between these is often blurred and innovation in one dimension often bring changes to
the others
Paradigm:
BIC was founded as a manufacturer of ballpoint pens. After several breakthroughs and aggressive
marketing campaigns the company started to dominate the market for cheap, yet reliable ball pens.
Image Source
After looking at their company from a completely different angle the decision makers realised that their
company could also be seen as a disposable plastic products company and shifted their paradigm
accordingly.
Product:
They started to expand their range of products to include disposable lighters and razors where they
could reuse some of the materials that provided a good grip on their ball pens.
Process:
BIC pressed for cheaper prices for their newly added product lines and thus innovated the
manufacturing and distributing process.
Position:
Furthermore, BIC decided to target specific age and gender groups with different products such as
female and male razors or cigarette pocket lighters and the BIC Megalighter for BBQ and kitchen use
(Egypt Innovate, 2016; Funding Universe, 2016)
Table 1: Examples of innovations mapped on the 4P’s model (Tidd&Bessant 2013) (David, 2016)
Innovation funnel
The innovation funnel is a mechanism that means a continuous stream of innovative ideas and
prototypes can be screened for viability. Often also called a “funnel management process”, it’s a popular

approach used by many companies to decide what ideas are realistic and which aren’t. Strategies and
action plans can then be finalised.
At the heart of the innovation funnel is the idea that large numbers of innovative projects, including
those that are in their very early infancy, are scrutinised and refined. Think of it like a physical funnel,
where there are loads of different innovative ideas floating around at the top, and far fewer lower
down. Only the best, most viable ideas will remain whilst the others are filtered out. As well as working
out viability, it’s a great way of prioritising objectives.
The thinking behind the innovation funnel is that unlimited brainstorming can be put in the top, and out
the bottom comes more valid ideas. It relies on input from individuals right across the organisation, as
well as external customers and suppliers.
What are the different stages of an innovation funnel?
Below are the main parts of the typical innovation funnel in more detail:
Stage 1: Opportunity assessment
This is where the organisation examines customer and market data and other information to analyse
what opportunities there are for a new product or product line.
Stage 2: Insights-based ideation
If an idea comes up that is in keeping with the company’s overall R&D strategy, the next step is to work
out how this opportunity could be capitalised. There’s a fair amount of brain storming and customer
insight needed here, as well as market research involving target audiences, crowdsourcing and focus
groups. At this stage many companies will also look to see what R&D grants may be open to them as
well.
Stage 3: Conceptualisation
This is the stage where the best, most viable ideas are mocked up as prototypes ready for testing.
Several mock-ups are likely to be made for the same product, as different upgrades and iterations are
considered.
Stage 4: Evaluation and benchmarking
Now is the time to test out the prototypes on the relevant consumer groups. Based on the feedback,
further opportunity is created for the product to be tweaked and re-tested.
Stage 5: Plough on or cut it loose?
After testing has been done and all the feedback collaborated, only at this stage will it be clear if the
product really is likely to fly. This is the time to make a decision, either to plough further money and
resource into the product or actually to abandon it altogether. When making these considerations,
executives and R&D teams will need to factor in manufacturing costs, marketing and advertising costs
and other expenditure required.
It’s at this point we strongly recommend companies consider claiming R&D Tax Credits to help with the
cost. The eligible projects and costs are incredibly varied, with many claims totalling tens of thousands
of pounds and the scheme is open to UK companies of any size and in any sector. Find out more about
R&D Tax Credits.
Stage 6: Launch
Now it’s time to launch the winning product onto the market! The innovative idea has become a reality.

Are all innovation funnels the same?
No. Whilst what we’ve described is the most traditional type of innovation funnel, there is some
variation. Technology innovation for example relies more heavily on agile development and open
development. But in general terms, the traditional innovation funnel is popular because it’s simple and
adaptable across different industries.
However, it’s worth pointing out that the funnel-type process isn’t perfect. Indeed it has often criticised
for getting rid of ideas too early on, and only moving on the ‘safer’ ones to the next stage, thereby
stifling creativity. But in this dog-eat-dog world where resources are stretched and every area of product
development must bring about maximum returns, the innovation funnel model is by enlarge standing
the test of time. (Dowsett, 2020)
P4. Explain developments in frugal innovation and provide examples of how it is used
in an organizational context.
Definition of Frugal Innovation
Frugal innovation or frugal engineering is the process of reducing the complexity and cost of a good and
its production. Usually this refers to removing nonessential features from a durable good, such as a car
or phone, in order to sell it in developing countries. Designing products for such countries may also call
for an increase in durability[1] and, when selling the products, reliance on
unconventional distribution channels.[2] When trying to sell to so-called "overlooked consumers", firms
hope volume will offset razor-thin profit margins.[2] Globalization[3] and rising incomes in developing
countries may also drive frugal innovation.[4] Such services and products need not be of inferior quality
but must be provided cheaply.[5] While frugal innovation has been associated with good-enough
performance, in some sectors such as in healthcare, frugal innovation must offer maximum performance
without compromising on qualit (wikipedia, 2021)
Discuss the approaches that Amazon Go can take to process innovative ideas, including
the innovation funnel and frugal innovation. Explain the steps Amazon Go should go
through to derive a new and innovative drink

P5. Explain the importance of the commercial funnel and the application of New
Product Development (NPD) processing for commercialization of innovation.
Commercialization
Importance of commercialization
How help commercial funnel in development of new product
Identify the solution to the problem using the commercial funnel to highlight strategic
capability meeting the following guidelines
Matching goals to funding resources and ways to access funding
Assessment of risk

Value analysis applying frugal innovation
P6. Build an Innovation Business Case for an organization, including ways to access
funding.
P7. Evaluate the different tools that organizations can use to develop, retain and
protect knowledge and intellectual property
Evaluate different tools Essence Drinks can use to develop, retain and protect the
knowledge and intellectual property rights of a new drink

Bibliography
There are no sources in the current document.