The Innovation Advantage

Integrating Innovation Into StrategyDonna C. L. Prestwood & Paul A. Schumann, Jr.

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Outline

• Introduction• Definition of Innovation• Types of Innovation• Strategy & Innovation• Innovation Tools• Break• Recap• Factors of Innovation• Innovation Strategies• InnoVantage Perspective• Guidelines for Successful Strategic Innovation

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Characteristics of the New Economy

• Creativity• Informatization• Knowledge management• Continuous, integrated

education• Innovation• Digitization

• Mass customization• Virtualization• Interactive integration• Disintermediation• Immediacy• Glocalization

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Information Technologies

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Key Information Technologies

• Computer• Internet• Telecommunications• Image• Software systems

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Innovation

• The basic function of business• The basis of all competitive advantage• The means by which enterprises anticipate and fill customer needs• The way in which enterprises utilize technology• Endows resources with a new capacity to create wealth or creates a

new resource• Results from the enterprise’s way of implementing new ideas, of

turning the creative concepts of its members into realities• Can cause change or exploit change

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Strategic Innovation

• Strategic innovation is the purposeful and organized search for changes, and the systematic analysis of the opportunities and threats such changes might offer for the creation of wealth.

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Examples of Innovation

• What are some examples of innovation?• Discussion

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Types of Innovation

• Nature– Product– Process– Procedure

• Class– Incremental– Distinctive– Breakthrough

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Nature of Innovation

• Product– Things interacting with things– Customer function or form

• Process– People interacting with things– Way product is developed, produced, provided, etc.

• Procedure– People interacting with people– How products and processes are integrated into the enterprise

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Class of Innovation

Breakthrough

Distinctive

Incremental

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The S-Curve and Innovation

Incremental Time

Prod

uct iv

ity

Incremental

Incremental

Incremental

Distinctive

Distinctive

Breakthrough

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InnoVantage Grid

Product

Process

Procedure

Incremen

tal

Distincti

ve

Breakthrou

gh

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Personal Computer History

• What is the innovation history of the PC?• Discussion

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PC (1970s): Researchers & Hobbyists

IncrementalDistinctive

Breakthrough

Product

Process

Procedure

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PC (1981 - 1986):Market Development

IncrementalDistinctive

Breakthrough

Product

Process

Procedure

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PC (1987 - 1993):Cloning

IncrementalDistinctive

Breakthrough

Product

Process

Procedure

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PC (1993 - 1995):Market Expansion

IncrementalDistinctive

Breakthrough

Product

Process

Procedure

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PC (1995 - ?):Windows on the World

IncrementalDistinctive

Breakthrough

Product

Process

Procedure

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Innovation Tools

• What are some tools or techniques that encourage innovation?

• Discussion

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TQM

IncrementalDistinctive

Breakthrough

Product

Process

Procedure

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JIT

IncrementalDistinctive

Breakthrough

Product

Process

Procedure

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Reengineering

Product

Process

ProcedureIncremental

Distinctive

Breakthrough

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Innovation Factors

• What are the factors of an enterprise or its market that affect innovation?

• Discussion

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Strategy

• Manner in which an enterprise intends to gain a competitive advantage

• Describes actions aimed directly at altering the strength of the enterprise relative to its competitors

• Allows the enterprise to gain relative advantage through measures competitors find hard to follow

• Requires application and interaction of identification, analysis and synthesis

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Innovation Strategies

• Customer driven• Competition driven• Technology driven• Stakeholder driven (external & internal)• Project driven• Resource driven• Culture driven

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The Glocal Vantage Point

Market

Stakeholders EnterpriseCapability

EnterpriseCapacity

Strategy

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The Market

CustomersCompetitors Technologies

Social Political

Economic

Demographic

Scientific

Opportunity Threat

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Driving Forces for Change

Organization

Social

Political

Economic

DemographicScientific

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Customers, Competition & Technology

• Customers– Present– Identified potential– Unidentified potential

• Competition– Direct– Indirect– Structural

• Technology– Direct– Supportive– Enabling

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Stakeholders

• Stockholders• Employees• Customers• Suppliers• Strategic partners• Communities

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Enterprise

• Projects• Resources

– Capital– People– Strategic relationships– Facilities, equipment & land– Intellectual property

• Culture

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Guidelines for Strategic Innovation

• Define the “window of opportunity’• Delineate the market• Delight customers• Anticipate competition• Forecast technology• Appraise resources & capabilities• Assess stakeholders• Incorporate the purpose and culture of the enterprise

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Glocal Vantage, Inc.

• PO Box 161475• Austin, TX 78716• (512) 632-6586• paul.schumann@glocalvantage.com• www.glocalvantage.com• http://incollaboration.com• Twitter: innovant2003

Paul Schumann

• Futurist and innovation consultant• Application of web 2.0 to market & strategic intelligence

systems• Web 2.0 tools & technologies• Application of web 2.0 to democratic processes• Broad perspectives on the future• Services

– Strategic market research & technology forecasting– Intelligence systems consulting– Seminars, webinars & presentations

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This work is licensed under the Creative Commons Attribution

license. You may distribute, remix, tweak, and build upon this work,

even commercially, as long as you credit me for the original creation as Paul Schumann, Glocal Vantage

Inc, www.glocalvantage.com.

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