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Module 2 Innovation As A Core Business Process

This document discusses innovation as a core business process. It outlines the different phases of the innovation process including searching, selecting, implementing, and learning. It also discusses how context affects innovation and evolving models of the innovation process from linear to interactive networks. Thomas Edison is provided as an example of realizing innovation requires making inventions work technically and commercially.

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Bruno Saturn
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100 views33 pages

Module 2 Innovation As A Core Business Process

This document discusses innovation as a core business process. It outlines the different phases of the innovation process including searching, selecting, implementing, and learning. It also discusses how context affects innovation and evolving models of the innovation process from linear to interactive networks. Thomas Edison is provided as an example of realizing innovation requires making inventions work technically and commercially.

Uploaded by

Bruno Saturn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Module 2

INNOVATION AS A CORE BUSINESS PROCESS


 Evolving models of the innovation process
 Can we manage innovation? Introducing the concepts
of Organizational Routines or Capabilities
 Specify the different phases of the innovation process
 How context affects innovation
 Over 1000 patents
 Inventions like:
 Electric Bulb
 35mm Cinema Film
 Even the Electric Chair
 He realized that the real challenge in innovation was not
inventing, but making it work technically and commercially.
After inventing the electric bulb, Edison Corp. developed the
infrastructure for electricity generation and distribution,
including designing lamp stands, switches and wiring.
 Worth of Edison’s business empire in 1920 = $ 21.6 B
 Hence, Innovation is not simply coming up with new ideas; it
is the process of growing them into practical use.
 The process involves:
 Searching: Scanning the environment (internal & external) for,
and processing signals about, threats and opportunities for
change
 Selecting: Deciding which of these signals to respond to.
 Implementing: Translating the potential into something new and
launching it in an internal or external market. This involves:
▪ Acquiring the knowledge to innovate
▪ Executing the project under uncertainty
▪ Launching the innovation and managing initial adoption
▪ Sustaining adoption or re-innovating as necessary
 Learning to innovate better in the future
THE INNOVATION MANAGEMENT
PROCESS
First generation (50’s-60’s): Need PULL & Technology PUSH “Linear model”

DESIGN & MANU-


R&D MARKETING SALES
ENGINEERING FACTURING

Second generation (mid 60’s-70’s): Demand PULL

MARKET MARKETING MANU-


R&D SALES
NEEDS DEPT. FACTURING
Research

Knowledge

D K K K
I S

Potential Invent and/or Detailed Redesign Distribute


market produce design and and and
analytic test product market
design

D : Direct link to and from research from problems in invention and design
I : Support of scientific research by instruments, machines, tools
S : Support of research in sciences underlying the product areas
Marketing

R&D
Product
development
Components
manufacture
Product
manufacture
marketing

R&D
Product
development
Components
manufacture
Product
manufacture Reduced time to market
University

Financial R&T
System Centres

Suppliers INDUSTRY Users

Government
 Relevance of external sources of knowledge
“firms do not innovate in isolation”
 Related to Innovation System concept
 Focus on networking
 Still strong emphasis on R&D and formal
knowledge (ICT)
“Revolve around knowledge and learning”
 Networks embrace all knowledge types, not
only R&D.
 Most innovative firm is the one that learns
fastest
 It is the use of knowledge that makes the
competitive difference, and creates the
advantage
Innovation can come:
 From the market (demand pull - 2nd)
 From the “R&D department” (tech push - 1st )
 From any department (interactive – 3rd)
 From process reinvention (integrated – 4th)
 From external sources of information (networks -
5th)
 From intangible assets (6th)
Radical product
Market Incremental

R&D Networks Intellectual processes

Capital
 The majority of failures are due to some
weakness in the way the innovation process is
managed.
 Technical resources (people, equipment,
knowledge, money, etc.)
 Capabilities in the organization to manage them
 Organizational routines or capabilities are “the
way we do things around here (in this organization)”
as a result of repetition and reinforcement

 Routines are firm-specific and must be learned.

 “To manage” innovation means to create an


organisation where routines can be learned as to
cope with the complexity and uncertainty of the
innovation process
 Searching –looking for threats and opportunities for change
within and outside of the organisation.
 Technological opportunity
 Changing requirements on the part of the market

 Selecting – deciding (strategically from how the enterprise


can develop and taking into account risk) what to respond to.
 Flow of opportunities
 Current technological competence
 Fit with the current organizational competence
 Fit with how we want to change
 Implement – turn potential ideas into a new product or
service, a change in process.
 Acquiring – to combine new and existing knowledge
(available within and outside the organization) to offer a
solution to the problem
 Executing – to turn knowledge into a developed
innovation and a prepared market ready for final launch
 Launching – to manage the initial adoption
 Sustaining – to manage the long term use
 Cope with uncertainty about:
 Technological feasibility
 Market demand
 Competitor behaviour
 Regulatory and other influences
 Replaced by knowledge accumulated →
technology & market research
 Learning – to learn from progressing through
this cycle so that they can build their
knowledge base and can improve the ways in
which the process is managed.
 Restart the cycle
 Failure – why?
 Refine, improvement → next generation
 Learning about technology, routines &
organization
SCAN
 Definition:
 Detecting signals in the environment about potential
change (market niches, technology development, etc)
 Activities
 Scanning environment for technological, market,
regulatory and other signals
 Collect and filter signal from background noise
 Scan forward in time
 Process signals into relevant information for decision
making
FOCUS
 Definition:
 Selection of the various market and technological
opportunities.
 Inputs:
 (1) the flow of signals coming from the previous
phase
 (2) the current technological base of the firm
 (3) the fit with the overall business strategy.
RESOURCE
 Definition:
 Combining new and existing knowledge to offer a solution
to the problem.
 Activities:
 Invent in-house through R&D activities
 Create the conditions for creativity
 Use existing knowledge in-house
 Technology transfer and knowledge transfer
 Licensing..etc
IMPLEMENT
 Definition:
 Close interaction between marketing related activities and
technical activities to develop the idea into a marketable
product or service.
 Activities:
 Develop to maturity
 Technical development
 Development of the market
 Launch
 After-sales support
LEARN
 Definition
 Analysing the failures and success to input the
innovation process
 Activities:
 Continuous improvement
 Knowledge and IC management
“Innovation is a risky process....but also a mandatory
one”. Success depends of a variety of:
 Internal factors
 Good management
 Core competencies
 Clear innovation strategy
 Right technology
 External factors
 Links with market and suppliers
 Learning from competitors
 Institutional support: financing, human capital, etc
 New products, processes and services account for an
increasing share of sales
 Lower prices

 Better-performing products

 Better features for certain users (niche)

 ½ of resources devoted to the development of new products


go to unsuccessful projects
 35% of products launched fail commercially

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