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Managing Technology and Innovation

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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 4/27/12

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.

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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 interrelated.


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Empires of the Mind


Empires of the future are empires of the mind Winston Churchill

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Empires of the Mind


The winners in these global games (business) will be those who can put together the worlds 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
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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, 4/27/12 organizational understanding and the

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.
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The Challenge of Globalism

From producers market to buyers 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

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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 4/27/12 new technologies and technology

Why Innovation ?

Innovation can

Result in new products that better satisfy customer needs Improve the quality of existing products Reduce costs

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Why Innovation?

In todays 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. Its not just about technology; its about business strategies as well.
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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

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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 4/27/12 technological innovation is due to

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

4/27/12 Intrinsic motivation

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

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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 4/27/12 consumer in mind.

Importance of Strategic Management of Technological Innovation

Importance of Strategic Management of Technological Innovation

Improving a firms innovation success rate requires:


1.

An in-depth understanding of the dynamics of innovation A well-crafted innovation strategy A well-designed process for implementing the innovation strategy.

2.

3.

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Role of Management

Encourage new product development

Ensure that technology is being used most effectively with the consumer in mind. External Scanning

Environmental Scanning:

New developments in technology

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Motorolas 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 4/27/12

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? 4/27/12

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

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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

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Sources of Innovation

Within a company

Unexpected occurrences Incongruities Process needs Industry and market changes Demographic changes Changes in perception knowledge

Outside a company

New 4/27/12

Sources of Innovation

Unexpected occurrences

Unplanned of unanticipated successes or failures Occur when there is gap or difference between expectation and reality, what is needed and the way business is currently run Demand from the industry to innovate

Incongruities

Process needs
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Sources of Innovation

Demographic changes

Trend changes in population because of age, education, occupation, geographic location Change in consumer attitude, advancement in technology, industry growth etc. Products of new thinking, new methods,

Market changes

Knowledge based concepts


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Source 1 : The Unexpected


The unexpected success The unexpected failure The unexpected outside event

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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
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Management must look at every

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 4/27/12 The unexpected failure demands that

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 ones own business But exploiting the unexpected outside event appears to be something that particularly fit the existing enterprise, and a fairly 4/27/12 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

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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.
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Incongruities and demographics may

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

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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 4/27/12 is almost a guarantee of disaster

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 4/27/12 predictably lead to sudden changes

Models of Innovation

Serendipity

Very rare May not be the case always

Chance favours the prepared mind - Loius Pasteur


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Linear Models of Innovation


Technology Push

Marketing Pull

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Linear Models of Innovation

Eg. Pharmaceutical 4/27/12 industry

Simultaneous Coupling Model

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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 4/27/12 of simultaneous coupling knowledge

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 organizations capabilities There is provision for feedback Linkages with science base and marketplace occur between all 4/27/12 functions

Interactive Model
Latest science and technology Advances in society Idea R& D Manufacturi ng Marketin g
TECHNOLOG Y PUSH

Commerc ial product

MARKET PULL

Needs in society And the marketplace

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N = 1, R = G

(Prof. C. K. Prahlad)

Access R Flexibility N = G to 1 resources Quality, Cost and Speed experience Scalability Complexity Innovation Customer arbitrage interfaces Collaborative Scalability networks

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The New House of Innovation


Social architecture of the firm N=1 R=G Flexible and resilient Personaliz Global business ed access to processes cocreated resources and focused experienc and analytics es talent Technical architecture of the firm
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A Framework for Capability Building


Clarity in Business Strategy Social architect ure HR policies and practices Busine ss result(s 4/27/12 ) Busine ss Model( s) Business Processes Technical architect ure ICT architecture and tools

Building Blocks of N = 1 Capabilities


Insights Continuous improvement, strategic redirection Anticipation of customer evolution pathways Consumer behaviour, expectations Capacity to cocoreate with customers Willingness, skills, time Focus on Individual choice Individuals preference, skills 4/27/12

Social Architectu re

Technical Architectu re

Building Blocks of R = G Capabilities


Insights Continuous improvement, strategic redirection Anticipation of demand and resource needs Consumer behaviour, expectations Real-time configuration of resources Capacity, capability, Visibility to processes cost and data Transparency, accuracy, consistency and timeliness

Social Architectu re

Technical Architectu re

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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 4/27/12 processes

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

4/27/12 It may not be particularly new or exceptional

Forms of Innovation

Radical Innovation

Incremental Innovation

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Forms of Innovation

Radical 4/27/12

Incremental

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 4/27/12 system.

Levels of Innovation in the Organization


1. 2. 3. 4. 5. 6. 7. 8.

Product innovation Process Innovation Technology innovation Organizational innovation Management Innovation Marketing innovation Business innovation Service Innovation

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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.

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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. Such innovation contributes less towards market creation, but leads to an entirely novel product based on developments in

Technical innovation:

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Innovation in the Organization

Application innovation:

This is development of products guided by the customer's views. Eg. Walkman and Camcorder. 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.

Radical innovation:

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Value of technolo High gy as perceive d by the market


Low

Application Radical innovation innovation Incrementa Technical l innovation innovation

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Low

High

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 lowtransmission-loss-optical cables is an example of such innovation. Evolutional limit pushing innovations can lead to either:

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i) explosive technology, in other words technology, which expands domains, (eg. Space research, deep-sea exploration, genetic

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.

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Innovation in the Organization

Process Innovation

New manufacturing process New distribution process Eg. E-commerce

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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 4/27/12 the conventional approach where the units

Innovation and Marketing Strategy Degree of differentiation


Low Competitive emphasis placed on.. Innovation stimulated by.. Predominant type of innovation Product line Production process 4/27/12 Cost reduction Product/service variation

High
Functional product performance

Pressure to reduce costs, improve quality

Opportunities created Information on by external technical user needs capability

Incremental Major process Frequent major product & process innovations required changes in innovation by rising volume product/service Undifferentiated Includes at least one Diverse often standard productsstable or dominant including custom design designs Efficient, often Becoming more rigid Flexible capital intensive & defined Experiment & & rigid 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.

4/27/12 Judicial use of acquisitions and joint ventures.

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 4/27/12 technologies and those that employ

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

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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". 4/27/12

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, 4/27/12 development or marketing; should be achieved.

Innovation Process

Idea Evaluati on

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?

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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,

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10 ways to invent winning products


10 ways to invent winning products 1 Respect Usability Hartmunt Essilingers innovation lessons A love for users and focus on usability is a timeless formula for success If it isnt somehow good for the world, its not going to be good for business Innovation is dependant on wise investment. Innovators need to learn how to get it, and how to spend it

Doing good is good business Invest wisely in Innovation

4 5

Resources + Talent + Innovation is equal parts resources, Luck talent and luck Dont just create innovative products. Create a corporate

Foster a creative 4/27/12 culture

10 ways to invent winning products


10 ways to invent winning products 6 Strategy comes before design Hartmunt Essilingers innovation lessons Lead with strategy. Support with design. As businesses adapt to meet new market needs and opportunities, strategy must lead, design must contribute Obsess about details. The worlds best brands have customer base that will settle for nothing less than the best Anticipate whats next. Work with the present to design the future

Pay attention to detail Predict the future

8 9

Balance passion Designers must think like business people and and business goals create like artists. They must understand the business model, its goals, and its financial capabilities, limitations and expectations Think beyond a product or service. Envision how it lives at home, at work, in peoples minds

10 Understand how products live 4/27/12

Organic Structures

Resources availability

Structural Factors to Foster Innovation


inter-unit communication
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Commitment from top

Open systems focus

Acceptance of ambiguity

Tolerance of the impractical

Characteristics of Innovative Low external control Organization


Focus on ends
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Tolerance of risk

Tolerance of conflict

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

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Organizational requirement

Organizational Characteristics that Facilitate Innovation Process


Characteristics A commitment to long-term growth rather than shortterm profit The ability of the organization to be aware of its threats and opportunities The willingness to invest in the long-term development of technology The willingness to include risky opportunities in a balanced portfolio Mutual respect among individuals and a willingness to work together across functions The ability to be aware of, to identify and to take effective advantage of externally developed technology An ability to manage the innovation dilemma and provide room for creativity A readiness to accept change A combination of specialization and diversity of

Growth orientation Vigilance Commitment to technology Acceptance of risks Cross-functional cooperation Receptivity

Slack Adaptability 4/27/12

Diverse range of 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 4/27/12 Creative Behavior

How to be an Innovative Organization

Innovative, Entrepreneurial Culture


Positive attitude toward change Decentralized decision making Complexity Informal structure Interconnectedness Organizational slack System openness

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Propagating a Virtuous Circle of Innovation


Organizations reputation for innovation High morale and retention of creative people Motivates people and reduces frustration Attraction of creative people Organizational encouragement of creativity and innovation Development of innovative products

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How to generate an overall enthusiasm for innovative behavior and risk taking?

One way is to include innovation in corporations 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 4/27/12

Stages of Innovativeness
1.

Background random problemsolving, occasional winners, no strategic impact Structured formal problem-solving process, training, idea management and reward system Goal-oriented bottom-line impact, formal strategic goals, measuring performance Proactive empowered staff to

2.

3.

4.

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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

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Ways to Kill Good Ideas


1. 2. 3. 4. 5. 6. 7.

Its against company policy. It doesnt fit the system. It will never be approved. The timing just isnt right. Anyone else tried it? It didnt work before. Its too wild. Were not ready for that.

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Key individual roles within the Innovation process


Key Individual Technical Innovator Technical / Commercial Scanner Gatekeeper Role 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. Acquires vast amount of information from outside the organization, often through networking. This may include market and technical information 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. Provides access to power base within the organization, a senior person. Buffers project team from unnecessary organizational

Sponsor 4/27/12

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


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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

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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 4/27/12 insights, and facilitate creative

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. One of the best ways to communicate the expectation of creativity is to give employees permission to be creative

Expecting Creativity

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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 4/27/12

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 4/27/12

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 creativity by rewarding it

Rewarding Creativity
Encourage 4/27/12

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. is caught as much as it is

Modeling Creative Behavior


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Corporate Entrepreneurship

Intrapreneurship

Internal innovation or venturing Transformation of organizations Strategic renewal

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Designs for Corporate Entrepreneurship

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Challenges of Innovation

Seeds versus weeds

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

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Challenges of Innovation

Experience versus initiative

Deciding who will lead an innovation project

Senior managers
Have Tend

experience and credibility to be more risk averse

Midlevel employees
May

be the innovators themselves have more enthusiasm

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May

Challenges of Innovation

Internal versus external staffing

Innovation projects need competent staffs to succeed

People drawn from inside the firm


May

have greater social capital the organizations culture and routines not be able to think outside the box

Know May

People drawn from outside the firm


Are

costly to recruit, hire, train have difficulty building relationships

May 4/27/12

Challenges of Innovation

Building capabilities versus collaborating

Innovation projects often require building new sets of skills

Firms can seek help


Other

departments

Partner

with other companies that bring resources and experience

Partnerships
Create

dependencies and inhibit internal skills development benefits of innovation may create conflict

4/27/12 Sharing

Collaborating with Innovation Partners

Innovation often requires collaborating with others who possess complementary knowledge and skills Partners can come from several sources

Other personnel within the department Personnel within the firm but from another department Partners outside the firm Non-business sources, including research universities and the federal government

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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.
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Challenges of Innovation

Incremental versus preemptive launch

Companies must manage the timing and scale of new innovation projects

Incremental launch
Less

risky few resources as a market test

Requires Serves Can

undermine the projects credibility if too tentative

Large-scale launch
more resources

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Managing the Pace of Innovation

Firms need to regulate the pace of innovation

Incremental innovation
May May

be six months to two years

use a milestone approach driven by goals and deadlines

Radical innovation
Typically Often

long term 10 years or more

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involves open-ended experimentation and time-consuming mistakes

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