Systematic Innovation

Peter Drucker described systematic innovation as the process of monitoring seven sources for an innovative opportunity.

The first four sources are internal within the organization:

  • The unexpected events – the unexpected success and the unexpected failure;
  • Incongruity — between reality as it is and reality as it is assumed to be or as it “ought to be”;
  • Innovation based on process need;
  • Changes in industry structure or market structure, especially those that catch everyone unawares in the organization.

The other three external sources involve changes outside the organization or industry:

  • Demographics – population changes or some other macro factors;
  • Changes in perception, mood, and meaning;
  • New Knowledge – both scientific and nonscientific

Drucker observed, “Successful entrepreneurs do not wait until the “the Muse kisses them” and gives them a bright idea; they go to work.”

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