Design and Implementation
of
Technology Strategy:Technology Strategy:
Transforming Invention to Innovation
2727--JulJul--0909 IMT IMT MMMM--BiztelBiztel 11
Lecture byLecture by::[email protected]@gmail.com
Design and Implementation
of
Technology Strategy:Technology Strategy:
Transforming Invention to Innovation
2727--JulJul--0909 IMT IMT MMMM--BiztelBiztel 22
Definition and ScopeDefinition and ScopeIBM30s
InventionInvention
DefinitionDefinition
-- InventionInvention
-- InnovationInnovation
-- Innovation diffusionInnovation diffusion
-- Innovation as part of Entrepreneurship SoulInnovation as part of Entrepreneurship Soul-- Innovation as part of Entrepreneurship SoulInnovation as part of Entrepreneurship Soul
InventionInvention
DefinitionDefinitionAn invention is an object, process, or technique which displays an element of novelty. -- InventionInvention
-- InnovationInnovation
-- Innovation diffusionInnovation diffusion
-- Innovation as part of Entrepreneurship SoulInnovation as part of Entrepreneurship Soul
novelty.
Inventions may be concepts, physical devices or any other set of things that facilitate an action.
-- Innovation as part of Entrepreneurship SoulInnovation as part of Entrepreneurship SoulThe invention of a new product or process occurs within what could be called the techno-scientific sphere and it can remain there forever.
Inventors
ChangeChange
DefinitionDefinition
Innovation = the introduction of something new-- ChangeChange
-- InventionInvention
-- InnovationInnovation
-- Innovation diffusionInnovation diffusion
Innovation = the introduction of something new
An innovation is an invention that has been put into practice. Innovation occurs when someone uses an invention - or uses existing tools in a new way - to change how things work
-- Innovation diffusionInnovation diffusion
-- Innovation as part of Entrepreneurship SoulInnovation as part of Entrepreneurship Soul
InnovationInnovation
�� „Innovation is the doing of new things or the doing of things that are „Innovation is the doing of new things or the doing of things that are �� „Innovation is the doing of new things or the doing of things that are „Innovation is the doing of new things or the doing of things that are already being done in a new way… Innovation is a process by which already being done in a new way… Innovation is a process by which new products and techniques are introduced into the economic new products and techniques are introduced into the economic system.“(system.“(Schumpeter 1947)Schumpeter 1947)
�� ““the first commercialization of an ideathe first commercialization of an idea” (Fagerberg 2004)” (Fagerberg 2004)�� An innovation is the implementation of a new or significantly improved An innovation is the implementation of a new or significantly improved
product, or process, a new marketing method, or a new organisational product, or process, a new marketing method, or a new organisational method in business practice, workplance organisation or external method in business practice, workplance organisation or external relationsrelations (OECD)(OECD)relationsrelations (OECD)(OECD)
�� Innovation is an invention that has been successfully implementated Innovation is an invention that has been successfully implementated and introduced in the market and introduced in the market
Features of InnovationFeatures of Innovation
�� Novelty:Novelty:
Innovation Innovation is something newis something new•• FunctionFunction•• TechnicTechnic•• Design Design (?)(?)
�� Implementation:Implementation:Innovation Innovation is introduced into is introduced into marketmarketInnovation Innovation is introduced into is introduced into marketmarket
�� Modification:Modification:A A innovation should cause a change/improvementinnovation should cause a change/improvement
InnovatorInnovator
�� To be able to turn an invention into an To be able to turn an invention into an
innovation, a firm normally needs to combin e innovation, a firm normally needs to combin e
several types of knowledge, capabilities, skills several types of knowledge, capabilities, skills
and resourcesand resources
�� An An innovator is the person or organizational unit innovator is the person or organizational unit �� An An innovator is the person or organizational unit innovator is the person or organizational unit
responsible for combining the factors necessaryresponsible for combining the factors necessary
InnovatorsInnovatorsApple vsMicrosoft
5m
And this is not And this is not InnovationInnovation
�� Ceasing to use a process, a marketing method or an Ceasing to use a process, a marketing method or an
organisation method, or to market a productorganisation method, or to market a product
�� Simple capital replacement or extensionSimple capital replacement or extension
�� Changes resulting purely from factor pricesChanges resulting purely from factor prices
�� CustomisationCustomisation
�� Regular seasonal and other cyclical changesRegular seasonal and other cyclical changes
InventionInvention
DefinitionDefinition
-- InventionInvention
-- InnovationInnovation
-- Innovation diffusion / adoptionInnovation diffusion / adoption
-- EntrepreneurshipEntrepreneurship
Is The spreading of innovationsnew ideas and technology through society
-- EntrepreneurshipEntrepreneurship new ideas and technology through society
Diffusion of innovationDiffusion of innovation�� Everett Rogers: Diffusion of Innovations (1962)Everett Rogers: Diffusion of Innovations (1962)�� „„An An innovationinnovation is an idea perceived as new by the is an idea perceived as new by the
individual. individual. individual. individual. Diffusion Diffusion is the process by which an innovation is the process by which an innovation spreads… spreads… AdoptionAdoption is the decision to continue full use of an is the decision to continue full use of an innovation.innovation.” ”
�� 5 Adopters‘ categories:5 Adopters‘ categories:�� Innovators (2,5%)Innovators (2,5%)�� Innovators (2,5%)Innovators (2,5%)�� Early adopters (13,5%)Early adopters (13,5%)�� Early majority (34%)Early majority (34%)�� Late majority (34%)Late majority (34%)�� Laggards (16%)Laggards (16%) Diffusion
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DiffusionDiffusion
�� The spread of a new product or process The spread of a new product or process
throughout society or markets throughout society or markets
�� Important process that enables an Important process that enables an
innovation to contribute to economic innovation to contribute to economic
growth and welfaregrowth and welfaregrowth and welfaregrowth and welfare
�� Focus on adoption of innovations Focus on adoption of innovations
�� Macro perspectiveMacro perspective
Innovation Diffusion
ChangeChange
DefinitionDefinition
-- ChangeChange
-- InventionInvention
-- InnovationInnovation
-- Innovation diffusion / adoptionInnovation diffusion / adoption-- Innovation diffusion / adoptionInnovation diffusion / adoption
-- Innovation as part of Entrepreneurship SoulInnovation as part of Entrepreneurship Soul
Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities.
Innovation as part of Innovation as part of Entrepreneurship SoulEntrepreneurship Soul
�� “Entrepreneurial spirit” to innovate (Schumpeter)“Entrepreneurial spirit” to innovate (Schumpeter)
�� Entrepreneurship as risk taking (Knight, Drucker, Hart, Entrepreneurship as risk taking (Knight, Drucker, Hart,
Stevenson and Dial)Stevenson and Dial)
�� An entrepreneur is a person who undertakes and An entrepreneur is a person who undertakes and
operates a new enterprise or venture, and assumes operates a new enterprise or venture, and assumes
some accountability for the inherent riskssome accountability for the inherent risks
�� Entrepreneurship = starting a new businessesEntrepreneurship = starting a new businesses
Design and Implementation
of
Technology Strategy:
BMW1m05
Technology Strategy:
Transforming Invention to Innovation
2727--JulJul--0909 IMT IMT MMMM--BiztelBiztel 1818
Success and Failure Success and Failure
80s: Success and Failure in new Product Development
Philiform - Philips
Innovators and Followers Innovators and Followers ((TeeceTeece))
Success FailureSuccess Failure
Follower
Innovator
IBMpersonal computer
KODAKinstant photography
DUPONT EMIInnovator DUPONTteflon
EMIscanner
Innovators and FollowersInnovators and Followers
Likely failureApply with the dominant design?
noLikely failure
Look for a partner
Likely failure
dominant design?
Supplementing resources available?
Can the intellectual property be protected?
no
no
property be protected?
Likely to succeed
Success Factor Grading0 2 4 6 8 10 12 14
Superior product
Strong market orientation
International orientation
More predevelopment
Number of responses1 Not so important
2 Fairly important
3 Very important
More predevelopment
Sharp and early product definition
Properly executed launch
Organisational structure and climate
Top management support
Technological and Marketing synergy
Aim at attractive markets
Sharper project selection
Project control / Quality of execution
The resources must be in place
Speed
Success Factors
Speed
Stage gate system
Protection of intellectual property
Dominant design
Secure access to Complementary assets
Consumer Innovator / Lead users
Learning
Non-product advantage
Cassette Deck
Development time: two years.
The competitor develops a new deck in just half a year.
Now what?
Solutions:
• Concurrent Engineering
• Modular design and Platform design
• Marketeers and Engineers work together in an early stage
• Rapid prototyping• Rapid prototyping
StageStage--Gate Gate according to Cooperaccording to Cooper
portfolio management
R&D, complementary technology,
share know how
Cooperation in the network economy
1. Access to knowledgeAccess to knowledge
market knowledge, local party required
scale, specialised partner
share know how
2. Access to new markets
3. Efficiency
Access to new markets
Efficiency specialised partner
satisfy a need, not a demand
3. Efficiency
4. Clients do not want products, but tailored solutions
Efficiency
Clients do not want products, but tailored solutions
Managing Diversity
• from ‘gold seeking’ to synergy with market, product/application, technologymarket, product/application, technology
• PLUS operations fit
soft aspects• PLUS cultural, human, strategic fit
• yet complementary in competencies!
a. An innovative company should create an
How to make a company more innovative?
a. An innovative company should create an environment of learning and experimenting, rather than planning.
b. HQ should facilitate the initiatives from BUs, rather than direct BUs.
c. Venturing is not ‘just’ for getting new business, but more and more to create new options.
d. Key to getting knowledge and strengthening own competencies are strategic alliances.
e. Business teams which strongly disagree (yet believe in a common objective) are more innovative than a too well structured set up.
1
Leadership and will to innovate
8Customer focus
9Creative climate 10
Learning organization
6 3
2
Appropriate structure
Key individualsExtensive
communication
10 factors for 10 factors for an innovative an innovative OrganizationOrganization
7
High involvement in
innovation
Joe Tidd et al., Managing Innovation, Wiley, 2008 and
on, Chapter 11: Building the Innovative Organization
2727--JulJul--0909 IMT MMIMT MM--BiztelBiztel3131
5
6
4Effective team
Stretching individual
capabilities
communication
1. Brian Twiss, Managing Technological Innovation, Pitman, Longman, London, 1974, 1980, 1986 and 1992. C, In.
2. Preston G. Smith and Donald G. Reinertsen, Developing Products in Half the Time, New Rules, New Tools, New York, Van Nostrand Reinhold, 1991. Second ed. in 1998. In.
3. Steven C. Wheelwright and Kim B. Clark, Revolutionizing Product Development, Quantum Leaps in Speed, Efficiency, and Quality, New York, The Free Press, 1992. In.
4. Gary Hamel and C.K. Prahalad, Competing for the Future, Breakthrough Strategies for seizing control of your industry and creating the markets of tomorrow, Harvard Business School Press, 1994. C.
Some useful books: Conceptual (C), Instrumental (In), Reader (R)
industry and creating the markets of tomorrow, Harvard Business School Press, 1994. C.
5. Stewart Bray, Total Innovation, How to Develop the Products that your Customers want, Pitman Publ./Pearson, London, 1995. In.
6. Robert A. Burgelman et al. The Strategic Management of Technology and Innovation, 2nd ed., Irwin, 2007. C, R.
7. Robert A. Burgelman , Modesto A. Maidique and Steven C. Wheelwright, Strategic Management of Technology and Innovation, second ed., Irwin, 2008. C, R.
8. R. G. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Portfolio Management for New Products, Hamilton, Ontario, McMaster University, 1997. In.
9. Joe Tidd et al., Managing Innovation, Integrating Technological, Market and Organizational Change, Wiley, 1997. Second ed. 2001. C.
10. Robert G. Cooper: Winning at New Products, Accelerating the Process from Idea to Launch, Addison-Wesley, 1993. Third ed. in 2001. In.
11. V.K. Narayanan, Managing Technology and Innovation for Competitive Advantage, Prentice-Hall, 2001. C.
12. Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Boston, MA, Harvard Business School Press, 2003. C.
13. David Probert et al., Bringing Technology and Innovation into the Boardroom, Strategy, Innovation and Competences for Business Value, European Institute for Technology and Innovation Management/Palgrave/MacMillan, 2004. C, R.
14. Melissa A. Schilling: Strategic Management of Technological Innovation, McGraw-Hill/Irwin, New York, 2005. C.
Design and Implementation
of
Technology Strategy:
Transforming Invention to InnovationTransforming Invention to Innovation
2727--JulJul--0909 IMT IMT MMMM--BiztelBiztel 3333
Conclusion & Final WordsConclusion & Final WordsBurgelmanInnovation
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