What is Innovation?
Long definition Successful innovation is the creation and
implementation of new processes, products, services and methods of delivery which result in significant improvements in outcome efficiency, effectiveness or quality.
Short definition Ideas that work.
Outline
Why Innovate? National Innovation System Innovation in Your Firm Barriers to Innovation IS and Innovation Developing IS
Why Innovate?
Product’s total valueto the customer
Replicable value(competitors canreproduce this value)
Unique value(competitors can’treproduce this value)
Compete on Replicable Value
This is cost competition A race to the bottom (price)
Competition based on production and distribution processes
Attractive strategy when you have natural cost advantages
But: A competitor beats you on cost, even just a little Demand for the class of products changes
Compete on Unique Value
Your price can reflect the value that only you can add
Value-added can compensate for cost disadvantages
Example: IBM
Sources of Unique Value
Legal protection Patents State monopolies
Market domination Monopoly
Product perceptions Innovation
Expiration, new technology
Political trends
Vulnerabilities
Legal action, privatization, new tech
Counter promotion (e.g., generics)
Must be continuous
Innovation lets you offer customers real value that others cannot replicate.
Outline
Why Innovate? National Innovation System Innovation in Your Firm Barriers to Innovation IS and Innovation Developing IS
Steven W. Popper and Caroline S. Wagner, New Foundations for Growth: The U.S. Innovation System Today and Tomorrow - An Executive Summary, 2001
National Innovation System
A nation with innovative companies: Generates more economic value for its
citizens Don’t need to pay starvation wages to compete
Will be less vulnerable to international competition Innovation barriers replace trade barriers
Innovation needs support from both the public and private sectors
Government Policies
Resource availability Natural resources Education and training Basic research (from universities and others) General policies encouraging innovation
E.g., tax credit for research expenses Focused policies in growth areas Data – access to government databases
Government Policies
Regulatory and budgetary environment Intellectual property protection National standards Infrastructure, e.g., Wireless Oakland Partnerships, e.g., university/industry Encourage innovation in the public sector Measure national performance
Government Policies
Communications Coordination within the public sector
Agencies should work together to encourage innovation
Promotion to the general public E.g., why they should expect continual training
Promote nation’s support for innovation to companies in other nations
National Innovation System
The bottom line:
Nations can encourage or discourage innovation within their borders.
This can affect the quality of its citizens’ lives.
Outline
Why Innovate? National Innovation System Innovation in Your Firm Barriers to Innovation IS and Innovation Developing IS
Geoff Mulgan and David Albury, Innovation In the Public Sector, 2003
Generating Possibilities
How can we stimulate and support ideas for innovation? Only about half of all innovations are top
down Pay attention to users, frontline staff and middle
managers Exploit employee diversity Constant scanning – part of many jobs Work backwards from goals Create time and space Breaking the rules Competition between employee teams
Incubating and Prototyping
What mechanisms help develop promising ideas and manage attendant risks? Good ideas are easily killed by existing
bureaucratic procedures Select innovations for development, and give them
some slack Prototyping and piloting Incubators – separate organizations Modeling and simulation Involve end users
Replicating and Scaling Up
How can we promote the rapid and effective diffusion of successful innovation? Incentives Opinion leaders Use project management methods
Analyzing and Learning
How should we evaluate what works and what doesn’t to promote continuous learning and improvement? Metrics for success Peer and user involvement in identifying
lessons Identify inhibitors
Outline
Why Innovate? National Innovation System Innovation in Your Firm Barriers to Innovation IS and Innovation Developing IS
Outline
Why Innovate? National Innovation System Innovation in Your Firm Barriers to Innovation IS and Innovation Developing IS
Geoff Mulgan and David Albury, Innovation In the Public Sector, 2003
Innovation and IS
Change Resources
PeopleProcesses
ProductsIS
PeopleProcesses
ProductsIS
Things Being Changed
IS help changeoccur
IS are changed
Generating Possibilities
KM – gather and disseminate information about the industry, products, processes, etc.
Easy access to information sources Research papers, databases, …
Virtual communities Can be global
Gathering feedback from customers, frontline staff, etc. Surveys, “Contact us” forms, Web usage
data, …
But…
IS can obscure work processes Processes are out of sight Few people know enough about them to
generate ideas for improvement
Email not as rich as face-to-face
Incubating and Prototyping
What mechanisms help develop promising ideas and manage attendant risks? Simulation software helps people evaluate
and improve ideas Some software models can serve as
prototypes E.g., ATMs Evaluate users’ responses
Easier communication with potential end users
Replicating and Scaling Up
How can we promote the rapid and effective diffusion of successful innovation? Monitor use of innovations Communication Project management tools
But … IS can be costly and time consuming to change Resistance to deskilling and other effects of IS
Analyzing and Learning
How should we evaluate what works and what doesn’t? Automate measurement Make project data available to all Communication
Outline
Why Innovate? National Innovation System Innovation in Your Firm Barriers to Innovation IS and Innovation Developing IS
Prototyping Technology
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