View
130
Download
0
Category
Tags:
Preview:
Citation preview
Managing Technology and Innovation
• Microsoft• Intel• IBM• GE• 3M• Nokia• Xerox• Sony• Toyota• Adidas
• Amul• Tata• Airtel• Maruti-Suzuki• Pidilite• Shahnaz Husain• IPL• ITC• Parle• Future Group
What is Innovation ?• Creativity is doing something new • Innovation is something new that adds value; • “Invention implies bringing something new into being,
Innovation implies bringing something new into use”.• Innovation is a breakthrough approach or idea that can
be completely new or an enhancement to something that already exists; it is a refreshing perspective that will challenge many who cannot see beyond what their own experience is telling them to think or do.
• Invention + Commercialization = Innovation
What is Innovation ?• The act of introducing a new product, device, method or
material for application to commercial or practical objectives
• The creation of new knowledge that is applied to practical problems
• The new knowledge can be technological or market related– Technological – knowledge of components, linkages between
components, methods, processes, and techniques that go into a product or service.
– Market – knowledge of distribution channels, product applications, customer expectations, preferences, needs, and wants.
Why Innovation?
• Today the two major challenges for businesses and for countries and local regions are:– Responding to Globalism– Fostering and managing innovation and
entrepreneurship• These two challenges are inter-related.
Empires of the Mind
“Empires of the future are empires of the mind”
Winston Churchill
Empires of the Mind
“The winners in these global games (business) will be those who can put together the world’s best design, manufacturing, research, execution, and marketing on the largest scale. Rarely are all of these elements found in one country or on one continent.”Welch,J.F. Jr. “Evolving Industrial Alliances”, The
Bridge, 1987, 17(4),p.10
Empires of the Mind“ Technology is the embodiment of knowledge, an
embodiment of the creations of the mind. Our world economy is increasingly an economy of the mind, an economy that is dominated by knowledge rather than commodities. It includes hardware, that kind of knowledge we normally think of when we say the word technology, but it also includes software knowledge, methodologies, organizational understanding and the mental skills (tacit knowledge) of the workforce.
The global economy, while driven by many forces, is increasingly dominated by technological forces.”
William F. Miller
The World is Flat
According to Thomas Friedman “The world is flat”.
Indeed there are strong forces of deglommeration that are leveling playing fields and facilitating a broader distribution of the factors of production. At the same time there are forces for agglomeration that are giving rise to concentration of activities in clusters and regions.
The Challenge of Globalism• From producer’s market to buyer’s market (from Economy of
Need to Economy of Choice)• Geographical shifts in demand • Shifts in production• New business models• Environmental regulatory changes• Demographic changes affect health and consumption • New regional strengths
– New technology development– New talents– New sources of innovation and entrepreneurship
Why Innovation ?
• The Indian economy has entered a higher growth trajectory and rates of 9% and over may well become the norm.
• If we want to sustain growth, our companies have to reduce business cycles, time to market (quick supply) and ensure quality.
• Most economic growth comes from new technologies and technology related services.
Why Innovation ?
• Innovation can– Result in new products that better satisfy
customer needs– Improve the quality of existing products– Reduce costs
Why Innovation?
• In today’s world, to be a leader in industry you have to be innovative.
• Companies must be able to look forward at the strategy and know how to bring products to market faster than their competitors.
• Innovation is the key. It’s not just about technology; it’s about business strategies as well.
Why Innovation?
• Significant value created for society or business:– Creates new industries– Spurs productivity and economic growth– Fuels wealth creation and profits– Generates high-value, higher-paying jobs– Raises standard of living
Why Innovation?• The returns to innovation for industry have become so
significant that managing innovation, especially managing technology, has become a major concern for companies.
• Technological innovation is the most important driver of competitive advantage in many industries
• The increasing importance of technological innovation is due to(1) Globalization of markets(2) Advent of advanced technologies (CAD, CAM, flexible
manufacturing technologies)(3) Advances in information technology
Creativity and Innovation
• Innovation begins with creativity.– Creativity is the ability to generate new and useful ideas. It
enables individuals and organizations to produce work that is useful and novel.
– Individual creativity is a function of • Intellectual abilities• Knowledge• Thinking styles• Personality traits• Intrinsic motivation• Environment that provides support & rewards
Creativity and Innovation
• Organizational creativity is a function of– Creativity of individuals within the organization– Social process & contextual factors that shape the
way individuals interact and behave• Structure• Routines• Incentives• Ideas collection systems (suggestion boxes, Intranet)
Importance of Strategic Management of Technological Innovation
• Most innovative ideas do not become successful new products
• Between 33% and 60% of all new products that reach the market fail to make a profit.
• Management has obligation to not only encourage new product development, but also to develop a system to ensure that technology is being used most effectively with the consumer in mind.
Importance of Strategic Management of Technological Innovation
• Improving a firm’s innovation success rate requires:1. An in-depth understanding of the dynamics of
innovation2. A well-crafted innovation strategy3. A well-designed process for implementing the
innovation strategy.
Role of Management
• Encourage new product development– Ensure that technology is being used most
effectively with the consumer in mind.• Environmental Scanning:
– External Scanning• New developments in technology
– Motorola’s intelligence department monitors the latest technology developments introduced at scientific conferences, journals and in trade gossip.
Role of Management
• Impact of Stakeholders on Innovation– to look at customers, suppliers, and distributors, for source
of product and service improvements. – Lead Users
• Lay the foundation• Determine the trends• Identify lead users• Develop the breakthrough
– Market research : to survey current users regarding what they would like in a new product.
– New product experimentation
Role of Management
• Internal Scanning– Has the company developed the resources needed to
try new ideas?– Do the managers allow experimentation with new
products or services?– Does the corporation encourage risk taking and
tolerate mistakes?– Are people more concerned with new ideas or with
defending their turf?– Is it easy to form autonomous project teams?
Role of Management
• Resource Allocation Issues:– R&D Intensity
• Spending on R&D as a percentage of sales revenue• Eg. 11-13% of sales revenue are spent for R&D in
computer software and drug industries.– Time to Market Issues:
• Time from inception to profitability• 60% of patented innovations are generally imitated
within 4 years at 65% of the cost of innovation
Role of Management
• Strategy Formulation:– R&D Strategy
• Leader or follower in terms of technology and market entry
• Source of technology– Develop– Purchase
– Product vs. Process R&D• Product innovations• Process innovations
Sources of Innovation
• Within a company– Unexpected occurrences– Incongruities– Process needs
• Outside a company– Industry and market changes– Demographic changes– Changes in perception– New knowledge
Sources of Innovation
• Unexpected occurrences– Unplanned of unanticipated successes or failures
• Incongruities– Occur when there is gap or difference between
expectation and reality, what is needed and the way business is currently run
• Process needs– Demand from the industry to innovate and answer a
particular need or to sustain in ever-rising competition
Sources of Innovation• Demographic changes
– Trend changes in population because of age, education, occupation, geographic location
• Market changes– Change in consumer attitude, advancement in technology,
industry growth etc.• Knowledge based concepts
– Products of new thinking, new methods, and new knowledge– Require longest time between initiation and market
implementation, because of need for testing and midification
Source 1 : The Unexpected
• The unexpected success• The unexpected failure• The unexpected outside event
The unexpected success• Often the richest opportunities for successful innovation, with
less risky and less arduous • Yet the unexpected success is almost totally neglected• The first thing is to ensure that the unexpected is being seen. It
must be properly featured in the information management obtains and studies
• Management must look at every unexpected success with the questions:1. What would it mean to us if we exploited it?2. Where could it lead us?3. What would we have to do to convert it into an opportunity? 4. How do we go about it?
The unexpected failure• If something fails despite being carefully planned,
designed and conscientiously executed, that failure often bespeaks underlying change, and with it, opportunity
• The assumptions on which a product or service, its design or its marketing strategy, were based may no longer fit reality. Any change like this is an opportunity for innovation
• The unexpected failure demands that you go out look around and listen.
• It is equally important to watch out for unexpected event in the supplier’s business, and among the customers
The unexpected outside event
• The unexpected outside event are often more important
• It is a condition of success in exploiting the unexpected event that it must fit the knowledge and expertise of one’s own business
• But exploiting the unexpected outside event appears to be something that particularly fit the existing enterprise, and a fairly sizable one
Source 2: Incongruities
• Incongruous economic realities• The incongruity between reality and the
assumptions about it• The incongruity between reality and the
assumptions about perceived and actual customer values and expectations
Source 3: Process Needs
• Need is a major innovative opportunity• Process need exists within the process of a
business, an industry, or a service• It perfects a process that already exists, replaces
a link that is weak, redesigns an existing old process around newly available knowledge.
• Incongruities and demographics may be the most common causes of a process need
Basic Innovation Criteria of Process Need
• One “week” or ”missing” link• A clear definition of objective• That the specification for the solution can be defined clearly• Widespread realization that “there ought to be a better
way.”• Three important caveats
– The need must be understood– We may have even understood a process and still not have the
knowledge to do the job– The solution must fit the way people do the work and want to do
it
Source 4: Industry and Market Structures
• Industry and market structure sometimes last for many, many years and seem completely stable
• Actually, market and industry structure are quite brittle. One small scratch and they disintegrate, often fast
• When this happens, every member of the industry has to act• To continue to do business as before is almost a guarantee of
disaster• A change in industry structure offers exceptional
opportunities, highly visible and quite predictable to outsiders• But insiders may perceive these same changes primarily as
threats
Source 4: Industry and Market Structures
• The most reliable and the most easily spotted of these indicator is rapid growth of an industry
• By the time an industry growing rapidly have doubled in volume, the way it perceives and services its market is likely to have become inappropriate
• Another development that will predictably lead to sudden changes in industry structure is the convergence of technologies that hitherto were seen as distinctly separate
Models of Innovation
• Serendipity– Very rare – May not be the case always
“Chance favours the prepared mind”- Loius Pasteur
Linear Models of Innovation
Research &
Development
Manufacturing
Marketing
User
Marketing
Research &
Development
Manufacturing
User
Technology Push
Marketing Pull
Linear Models of InnovationTechnology Push Model
Scientists make unexpected discoveries
Technologists apply them to develop product ideas
Engineers and designers turn them into prototypes for testing
Manufacturing devices ways to produce them efficiently
Marketing and sales promotes the products to potential customers
Market Pull Model
Customer needs
Marketing initiates new ideas resulting from close interaction with customers
Conveyed to R&D for design and engineering
Manufacturing produces the product
Eg. Pharmaceutical industry
Simultaneous Coupling Model
Manufacturing
MarketingResearch & Development
Simultaneous Coupling Model• Linear model only tells what drives the downstream efforts
rather than how innovation occurs• Only offers an explanation of where the initial stimulus for
innovation was born, where the trigger for the idea or need was initiated
• Simultaneous coupling model suggests that innovation is the result of simultaneous coupling knowledge within all three functions
• Point of commencement of innovation not known in advance• Innovation comes from the coupling of markets needs and
technological opportunities.
Interactive Model
• Links together technology push and market pull models
• Innovation occurs as the result of interaction of the marketplace, the science base and the organization’s capabilities
• There is provision for feedback• Linkages with science base and marketplace
occur between all functions
Interactive ModelLatest science and technology
Advances in society
Needs in society
And the marketplace
Idea R & D Manufacturing Marketing Commercial product
TECHNOLOGY PUSH
MARKET PULL
N = 1, R = G (Prof. C. K. Prahlad)
N = 1• Flexibility• Quality, Cost and
experience• Complexity• Customer interfaces• Scalability
R = G• Access to resources• Speed• Scalability• Innovation arbitrage• Collaborative networks
R = GGlobal
access to resources and talent
N = 1Personalized
cocreated experiences
The New House of Innovation
Social architecture of the firm
Technical architecture of the firm
Flexible and resilient business
processes and focused analytics
A Framework for Capability Building
Clarity in Business Strategy
HR policies and practices
ICT architecture and tools
Technical architecture
Business Processes
Social architecture
Business Model(s)
Business result(s)
Building Blocks of N = 1 Capabilities
Social Architecture
Technical Architecture
Focus on Individual choiceIndividual’s preference, skills
Capacity to cocoreate with customersWillingness, skills, time
Anticipation of customer evolution pathwaysConsumer behaviour, expectations
InsightsContinuous improvement, strategic redirection
Building Blocks of R = G Capabilities
Social Architecture
Technical Architecture
Visibility to processes and dataTransparency, accuracy, consistency and timeliness
Real-time configuration of resourcesCapacity, capability, cost
Anticipation of demand and resource needsConsumer behaviour, expectations
InsightsContinuous improvement, strategic redirection
Models of Innovation Types• Product innovation vs. Process innovation
– Product innovations are embodied in the outputs of a firm – its goods and services
– Process innovations are often oriented toward improving the effectiveness or efficiency of producing or marketing goods or services (e.g., reducing defect rates).
– New product innovations and process innovations often occur in tandem:
• New processes may enable the manufacture of new products• New products may enable the development of new processes• A product innovation for one firm may simultaneously be a
process innovation for another
Models of Innovation Types• Radical innovation vs. Incremental innovation
– Radical innovation • An innovation that is very new and different from existing products and
processes.• The most radical innovations
– Are risky – they embody new knowledge, producers and customers– May be relative and may change over time or with respect to different
observers.
– Incremental innovation• An innovation that makes a relatively minor change from (or adjustment
to) existing products and processes• It may not be particularly new or exceptional• It might have been previously known to the firm or industry
Forms of Innovation
• Radical Innovation
• Incremental Innovation
Forms of Innovation
Radical Innovation Incremental Innovation
Models of Innovation Types• Architectural vs. Component Innovation
– Most products and processes are made up of a hierarchically nested system of components.
– Component Innovation• An innovation to one or more components that does not significantly
affect the overall configuration of the system.– Architectural Innovation
• An innovation that changes the overall design of a system or the way its components interact with each other.
– Knowledge about a component is required to initiate or adopt a component innovation
– To initiate and adopt an architectural innovation typically requires the architectural knowledge about how the components link and integrate to form the whole system.
Levels of Innovation in the Organization
1. Product innovation2. Process Innovation3. Technology innovation4. Organizational innovation5. Management Innovation6. Marketing innovation7. Business innovation8. Service Innovation
Innovation in the Organization
• Product innovation – Technology developments that are oriented
towards creation of products with higher performance, smaller size, lower price and better features
– Today, with the emphasis on environmental issues gaining ground, developments aimed at generation of products, which are environmentally friendly, efficient in terms of energy usage, safe to operate etc.
Innovation in the Organization• Product innovation can further be sub-
divided into four categories:– Incremental innovation:
• This refers to those efforts directed towards extending existing product concepts and is essential for strengthening the competitiveness of products.
• This form of innovation takes place continuously in any organization, has low risk and a high degree of certainty.
– Technical innovation: • Such innovation contributes less towards market
creation, but leads to an entirely novel product based on developments in respect of existing technology.
Innovation in the Organization– Application innovation:
• This is development of products guided by the customer's views.
• Eg. Walkman and Camcorder.– Radical innovation:
• This involves creation of both technology and market. It involves generation of new product concepts, convincing world markets and creation of new business concepts.
• Examples are the television, personal computer, VCR and such others. These are high-risk innovations involving long term R&D efforts.
Value oftechnology
asperceived
by themarket
High
Applicationinnovation
Radicalinnovation
Low
Incrementalinnovation
Technicalinnovation
Low High
Technology creation effort
Innovation in the Organization• Technology Innovation
– Evolutional (Incremental)• When the progress is continuous, there are significant
changes in a short period of time and the efforts required towards technical innovation are considerable.
• The improvement in transmission loss by a factor of fifty, in 10 years, through low-transmission-loss-optical cables is an example of such innovation.
• Evolutional limit pushing innovations can lead to either:– i) explosive technology, in other words technology, which
expands domains, (eg. Space research, deep-sea exploration, genetic manipulation), or
– ii) implosive technology, in other words technology which enriches domains (eg. microelectronics, composite materials, chemical analysis).
Innovation in the Organization• Technology Innovation
– Revolutional (Radical)• Where the technological progress is discontinuous. • These generally remain as inventions or discoveries
until their potential is unsheathed. • These occur quite rarely, roughly once in fifty to
hundred years, and these can completely change the foundation or structure of industry and society.
• Eg. Penicillin, the practical application of nuclear energy and description of the structure of DNA.
Innovation in the Organization• Process Innovation
– New manufacturing process– New distribution process– Eg. E-commerce
Innovation in the Organization• Market Innovation
– In today's competitive situation, innovation in the marketplace is not solely dependent on inputs from any single source.
– It is preferable that products are developed by working together with customers to create goods that receive high acclaim.
– Ensure that adequate exchange of opinion and discussion takes place regarding product prices and distribution channels between R&D and Marketing units.
– An integrated marketing approach in which the manufacturer, buyer and seller function in a unified manner, is more beneficial compared to the conventional approach where the units operate independent of each other.
Innovation and Marketing StrategyDegree of differentiation
Low HighCompetitive emphasis placed on..
Cost reduction Product/service variation
Functional product performance
Innovation stimulated by..
Pressure to reduce costs, improve quality
Opportunities created by external technical capability
Information on user needs
Predominant type of innovation
Incremental product & process innovation
Major process innovations required by rising volume
Frequent major changes in product/service
Productline
Undifferentiated standard products
Includes at least one stable or dominant design
Diverse often including custom designs
Production process
Efficient, often capital intensive & rigid
Becoming more rigid & defined
Flexible Experiment & change frequently
Innovation in the Organization• Business Innovation: Lowering risk of innovation
– Innovation that fundamentally transforms the way a business works or drives revenue.
– Diversification: An organization must invest the income of existing businesses in new business development when the former is still growing steadily in its late growth period rather than be caught unawares in the mature period or beyond, when business is likely to become stagnant.
– Also, in order to venture into any new area it would first of all be essential to be sure of the core technology or generic technology, so that related business areas come into scope easily, and existing resources can easily adapt to the new developments. This would also enable usage of the same marketing resources for both the existing as well as new business.
– Judicial use of acquisitions and joint ventures.– Selection of right personnel, providing appropriate leadership, use of
the brand name and identification of idle assets are some of the important measures involved in the management of business innovation.
Innovation in the Organization
• Business Innovation: Balancing the Portfolio– High-risk, high return and low-risk, low return
innovations– Discrete, dynamic and continuous innovations– Product/service and market innovations– Short and long-to-market innovations– Innovations that employ new technologies and
those that employ existing technologies
Innovation in the Organization
• Business Innovation– Strategic innovation occurs when a company
identifies gaps in the industry positioning map, decides to fill them, and the gaps grow to become the new mass market.
• New emerging customer segment or existing customer segments that other competitors have neglected
• New emerging customer needs or existing customer needs not served well by other competitors
• New ways of producing, delivering, or distributing existing or new products or services to existing or new customer segments
Innovation in the Organization• Organizational Innovation
– Eg. a new venture division, a new internal communication system, a new accounting procedure
– The tacit and intangible knowledge present in each individual employee becomes the collective knowledge bank of an organization only if structured and managed effectively.
– A 'Learning Organization', where "people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, collective aspiration is set free and where people are continually learning how to learn together".
– Should provide for both "slack innovation" which takes place only when the need for innovation is created, and also for "distress innovation“ which occurs in a crisis situation.
Innovation in the Organization• Management Innovation
– Strategies like 'Kaizen', which propagates continuous improvement in all units in all areas of operation and 'continuous risk-taking‘ are interesting variations of measures aimed at creating such an environment.
– It is also essential for the top management to be closely involved in such measures to ensure that concerned personnel feel sufficiently motivated and resources deployed are effectively utilized. Top management also needs to identify a vision that each employee in the organization can identify oneself with.
– In respect of internal organizational linkages to promote innovation, management styles need be introduced depending upon several factors like the size, history, culture, field of operation.
– Importantly, integration between the various functional departments whether they relate to technology, development or marketing; should be achieved.
Innovation Process
Idea Genera
tion
Opportunity
Recognition
Development
Commercia
lisation
Idea Evaluation
•Will the idea work?•Does the team have know-how to make it work?•Does the idea represent value for customers?•Is the idea congruous with company strategy?•Is the idea cost effective?
Process of Innovation•The Innovation process can be depicted as a series of funnels each getting progressively smaller. •Typically sixty ideas into the top funnel only produces just one innovation. •The funnels are labeled as the four phases in the process - idea generation, idea screening, feasibility and implementation.
10 ways to invent winning products10 ways to invent winning products
Hartmunt Essilinger’s innovation lessons
1 Respect Usability A love for users and focus on usability is a timeless formula for success
2 Doing good is good business
If it isn’t somehow good for the world, it’s not going to be good for business
3 Invest wisely in Innovation Innovation is dependant on wise investment. Innovators need to learn how to get it, and how to spend it
4 Resources + Talent + Luck Innovation is equal parts resources, talent and luck
5 Foster a creative culture Don’t just create innovative products. Create a corporate culture of innovation. Wrap your people and process in it
10 ways to invent winning products10 ways to invent winning products
Hartmunt Essilinger’s innovation lessons
6 Strategy comes before design
Lead with strategy. Support with design. As businesses adapt to meet new market needs and opportunities, strategy must lead, design must contribute
7 Pay attention to detail Obsess about details. The world’s best brands have customer base that will settle for nothing less than the best
8 Predict the future Anticipate what’s next. Work with the present to design the future
9 Balance passion and business goals
Designers must think like business people and create like artists. They must understand the business model, its goals, and its financial capabilities, limitations and expectations
10 Understand how products live
Think beyond a product or service. Envision how it lives – at home, at work, in people’s minds
Commitment from top
inter-unit communication
Resourcesavailability
Organic Structures
Structural Factors to Foster
Innovation
Characteristics of
Innovative Organization
Tolerance of the impractical
Tolerance of risk
Focus on ends
Open systems focus
Acceptance of ambiguity
Tolerance of conflict
Low external control
Organizational Characteristics that Support Creativity and Innovation
• Risk taking is acceptable to management• Employees have access to knowledge sources• Innovators are rewarded• New ideas and new ways of doing things are
welcomed• Information is free flowing• Good ideas are supported by executive
patrons
Organizational Characteristics that Facilitate Innovation Process
Organizational requirement CharacteristicsGrowth orientation A commitment to long-term growth rather than short-term profitVigilance The ability of the organization to be aware of its threats and
opportunities
Commitment to technology The willingness to invest in the long-term development of technology
Acceptance of risks The willingness to include risky opportunities in a balanced portfolio
Cross-functional co-operation Mutual respect among individuals and a willingness to work together across functions
Receptivity The ability to be aware of, to identify and to take effective advantage of externally developed technology
Slack An ability to manage the innovation dilemma and provide room for creativity
Adaptability A readiness to accept changeDiverse range of skills A combination of specialization and diversity of knowledge and
skills
How to be an Innovative Organization
• Create a Strategic Vision• Establish Innovation as a Priority• Create Organizational Structures that Promote
Collaboration• Establish Processes to Convert Ideas to Innovations• Allocate Resources• Train Workforce on Creativity Tools• Measure & Communicate Results• Recognize Creative Behavior• Reward Innovative Results
How to be an Innovative Organization
• Innovative, Entrepreneurial Culture– Positive attitude toward change– Decentralized decision making– Complexity– Informal structure– Interconnectedness– Organizational slack– System openness
Propagating a Virtuous Circle of Innovation
Organization’s reputation for innovation
Attraction of creative people
Organizational encouragement of
creativity and innovation
Development of innovative products
Willingness to accept new ideas
Motivates people and reduces frustration
High morale and retention of creative people
How to generate an overall enthusiasm for innovative behavior and risk taking?
• One way is to include innovation in corporation’s mission statement:
– At&T: We believe innovation is engine that keep us vital and growing….
– Gillette: We will invest in and master the key technologies vital to category success.
– Hallmark: We believe that creativity and quality – in our concept, products and services – are essential to our success.
Stages of Innovativeness
1. Background – random problem-solving, occasional winners, no strategic impact
2. Structured – formal problem-solving process, training, idea management and reward system
3. Goal-oriented – bottom-line impact, formal strategic goals, measuring performance
4. Proactive – empowered staff to internally directed innovation, high levels of experimentation
5. Strategic – dominant culture, systematic problem approach, all levels of organisation involved
Barriers to Innovation• Regard new ideas with suspicion• Enforce cumbersome approval mechanisms• Pit departments & individuals against each other• Express criticism without praise• Treat problem identification as a sign of failure• Control everything carefully• Plan reorganisation in secret• Keep tight control over information• Delegate unpleasant duties to inferiors• Assume you know everything about the business
Ways to Kill Good Ideas1. It’s against company policy.2. It doesn’t fit the system.3. It will never be approved.4. The timing just isn’t right.5. Anyone else tried it?6. It didn’t work before.7. It’s too wild.8. We’re not ready for that. 9. Costs too much / Isn’t in the budget.10. Will not work in our department/ company/ industry.11. I will think about it, put it in writing and get back to me.12. Let’s form a committee.
Key individual roles within the Innovation process
Key Individual Role
Technical Innovator Expert in 1 or 2 fields. Generates new ideas and sees new and different ways of doing things. Also referred to as the ‘mad scientist’.
Technical / Commercial Scanner
Acquires vast amount of information from outside the organization, often through networking. This may include market and technical information
Gatekeeper Keeps informed of related developments that occur outside the organization through journals, conferences, colleagues and other companies, and passes it on to colleagues. Serves as an information resource for others in organization.
Product Champion Sells new ideas to others in the organization. Acquires resources. Aggressive in championing his or her cause. Takes risks.
Project Leader Provides the team with leadership and motivation. Plans and organizes the project. Ensures that administrative requirements are met. Provides necessary co-ordination among team members. Sees that the project moves forward effectively. Balances project goals with organizational needs.
Sponsor Provides access to power base within the organization, a senior person. Buffers project team from unnecessary organizational constraints. Helps project team to get what it needs from other parts of the organization. Provides legitimacy and organizational confidence in the project.
Traits of an Innovation Leader
• Create an external focus– define success in market terms
• Be a clear thinker– simplify strategy into specific actions, make decisions and
communicate priorities• Have imagination and courage
– take risks on people and ideas• Energize teams through inclusiveness
– connect with people, build both loyalty and commitment• Develop expertise in a function or domain
– use depth as a source of confidence to drive change
Enhancing Organizational Creativity
• Right organizational environment can encourage people to develop & cultivate them
• Ensuring that workers have the FREEDOM and the INCENTIVE to be creative is one of the best ways to achieve innovation
Enhancing Organizational Creativity
• The leader's job is not only to be the source of ideas but to encourage and champion ideas.
• Leaders must tap the imagination of employees at all ranks and ask inspiring questions.
• They also need to help their organizations incorporate diverse perspectives, which spur creative insights, and facilitate creative collaboration by, for instance, harnessing new technologies.
Enhancing Organizational Creativity
• Drawing on the Right Minds– The first priority of leadership is to engage the
right people, at the right times, to the right degree in creative work.
• Expecting Creativity– One of the best ways to communicate the
expectation of creativity is to give employees permission to be creative
Enhancing Organizational Creativity
• Encouraging Curiosity– Entrepreneurs and their employees constantly
should ask “what if…” questions and to take a “maybe we could…” attitude
– Doing so breaks out the assumptions that limit creativity
• Tolerance of Failure– Creativity requires chances and managers must
remove employees’ fear of failure
Enhancing Organizational Creativity
• Viewing Problems as Challenges– Every problem offers the opportunity for INNOVATION– Instead of the Entrepreneur fix all the problems, let the
employees take part in finding the solutions (empowerment)• Providing Creativity Training
– Everyone has the capacity to be creative, but developing that creativity requires training
– Training: books, seminars, workshops, professional meetings
– helps everyone learn to tap their creativity
Enhancing Organizational Creativity
• Providing Support– Entrepreneurs must give employees the tools and the
resources they need to be creative– Entrepreneurs should remember that creativity often
requires nonwork phases, and allowing employees time to “daydream”
• Rewarding Creativity– Encourage creativity by rewarding it when it occurs– Financial rewards– Non-monetary – more powerful
Enhancing Organizational Creativity
• Enhance diversity– Get people with different backgrounds and expertise to work
together.– Encourage individuals to gain diverse experiences that will
increase their creativity.– Open up the organization to outside creative contributors.
• Modeling Creative Behavior– Creativity is “caught” as much as it is “taught”– Entrepreneurs set examples of creative behavior, taking
chances, and challenging the status quo, will soon find their employees doing the same
Corporate Entrepreneurship
• “Intrapreneurship”• Internal innovation or venturing• Transformation of organizations• Strategic renewal
Designs for Corporate Entrepreneurship
Challenges of Innovation
• Deciding the merits of innovative ideas– Seeds – likely to bear fruit– Weeds – should be cast aside
• Dilemma • Some innovation projects require considerable
level of investment before merit can be determined
Seeds versus weeds
Challenges of Innovation
Deciding who will lead an innovation projectSenior managers
Have experience and credibilityTend to be more risk averse
Midlevel employeesMay be the innovators themselvesMay have more enthusiasm
Experience versus initiative
Challenges of Innovation
Innovation projects need competent staffs to succeedPeople drawn from inside the firm
May have greater social capitalKnow the organization’s culture and routines May not be able to think outside the box
People drawn from outside the firmAre costly to recruit, hire, trainMay have difficulty building relationships
Internal versus external staffing
Challenges of Innovation
Innovation projects often require building new sets of skillsFirms can seek help
Other departmentsPartner with other companies that bring
resources and experiencePartnerships
Create dependencies and inhibit internal skills development
Sharing benefits of innovation may create conflict
Building capabilities versus
collaborating
Collaborating with Innovation Partners
Innovation often requires collaborating with others who possess complementary knowledge and skills
Partners can come from several sourcesOther personnel within the departmentPersonnel within the firm but from another
departmentPartners outside the firmNon-business sources, including research
universities and the federal government
Open Innovation Drives Creativity • Open Innovation means looking outside your
organization for partners, suppliers and customers for new and innovative ideas
• Open innovation has also been stimulated by decreasing time frames during which companies can command premium prices from proprietary technologies.
• As activities that relate to innovation become increasingly global and open and so draw the public and private sectors into complex networks of partnerships, these activities also tend to concentrate where the ecosystem is most supportive.
Challenges of Innovation
Companies must manage the timing and scale of new innovation projectsIncremental launch
Less riskyRequires few resourcesServes as a market testCan undermine the project’s credibility if too
tentativeLarge-scale launch
Requires more resourcesCan effectively preempt a competitive
response
Incremental versus preemptive launch
Managing the Pace of Innovation
Firms need to regulate the pace of innovationIncremental innovation
May be six months to two yearsMay use a milestone approach driven by
goals and deadlinesRadical innovation
Typically long term – 10 years or moreOften involves open-ended experimentation
and time-consuming mistakesStrict timelines unrealistic
Recommended