Before proceeding into details, let me clarify what is the meaning of Innovation. Like the fuzzy word quality, innovation is defined many ways by different people. For me it is " Successful implementation of new and useful idea ". If a new and useful idea is implemented and it has some result then it is called Invention. But when impact is generated through success of invention then we call it innovation. Our Small and Medium Scale Organisations (SMOs) can be either traditional based or innovation driven. Innovation can be of three types. According to Peter Drucker, management expert, "Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service". Japanese organisations are best known for incremental innovation. They follow KAIZEN(continuous improvement) to improve existing products or services. Introduction of silicon chip is an example of radical innovation. P...