Presentation on theme: "Develop New Capabilities Create Revolutionary Change Improve Core Businesses Exploit Strategic Advantages Categories of Innovation Limited Unlimited Strategic."— Presentation transcript:
Develop New Capabilities Create Revolutionary Change Improve Core Businesses Exploit Strategic Advantages Categories of Innovation Limited Unlimited Strategic Scope 1 3 2 4 Existing New Organizational Capabilities
Incremental Innovation Modular Innovation Architectural Innovation Radical Innovation A Typology of Innovation Based on the Reconfiguration of Existing Technologies ( Henderson & Clark, 1990:12 ) Changed Unchanged Linkages between Core Concepts and Components Reinforced Overturned Core Concepts
High Low High Increasing Novelty Extent of New or improved Functionality and/or Performance Extent of Benefit to User/Adopter Novelty as a Combination of User Benefit and Embedded Characteristics Source: Conway & Steward, 2009:19.
Wide Narrow Low High Increasing Radicalness Novelty Pervasiveness Radicalness as a Combination of Pervasiveness and Novelty Source: Conway & Steward, 2009:21.
The Origins and Sources of Innovation: a substantial number of the key inputs into the idea generation and problem- solving activities are derived from external sources (i.e. those are external to the innovating team and innovating organization); informal intra- and inter-organizational networks spanning team, functional, and organizational boundaries provide an important conduit for the sourcing of such internal inputs; a diverse range of external sources are employed in the innovation process, including users, suppliers, and universities, with users playing a particularly important role. This allows the innovator to ‘couple’ signals from both the technology base and marketplace; external sources complement rather than substitute indigenous innovative activities; and successful innovation projects are often ‘sponsored’ or ‘championed’ by one or more senior managers. Source: Conway & Steward: 2009:25-26.
Internal scientific and technical knowledge Technical issues and problems Technical solutions External market needs External scientific and technical knowledge The Flow of Activities in the “Technology Push” Model Source: Burgelman, Christensen, and Wheelwright, 2009:732. 12 3 1 2 5 4
Internal scientific and technical knowledge Technical issues and problems Technical solutions External market needs External scientific and technical knowledge The Flow of Activities in the “Need Pull” Model Source: Burgelman, Christensen, and Wheelwright, 2009:734. 32 4 3 2 1 5
Successful innovations They were moderately new to the market. They were based on tried-and-tested technology. They saved money, met customers’ needs, and supported existing practices. From the perspective of the innovating organization, success might be evaluated in relation to a number of dimensions (Conway & Steward, 2009:24): financial criteria – e.g. the level of profit or turnover generated by the innovation or the speed of the return on investment (ROI); market criteria – e.g. the rate of adoption of the innovation, or market penetration; technical criteria – e.g. the ‘elegance’ of the engineering design or improvement in perform- ance and functionality; strategic criteria – e.g. the building or sustaining competitive advantage through the develop- ment of superior product or service offerings, or the building of technical competences or capabilities; or process criteria – e.g. the compression of the time taken from idea conception to market launch. ….. the real test of innovation success is not a one-off success in the short-term but sustained growth through continuous invention and adaptation. It is relatively simple to succeed once with lucky combination of new ideas and receptive market at the right time – but it is quite another thing to repeat that performance consist- ently (Tidd, Bessant, and Pavitt, 2001:49). Unsuccessful innovations They were based on cutting-edge or untested technology. They followed a “me-too” approach. They were created with no clearly defined solution in mind.
Environmental Scanning External Scanning Technological developments - focus on scanning the periphery for new product ideas - locate part of a company’s R&D or manufacturing in those locations making strong impact on product development Stakeholders, especially customers, suppliers, and distributors - lead users - market research - new product experimentation and acquisition Internal Scanning 1.Has the company developed the resources needed to try new ideas? 2.Do the managers allow experimentation with the new products or services? 3.Does the corporation encourage risk-taking and tolerate mistakes? 4.Are people more concerned with new ideas or with defending their turf? 5.Is it easy to form autonomous project teams?
Outsourcing technology may be appropriate when: The technology is of low significance to competitive advantage. The supplier has proprietary technology. The supplier’s technology is better and/or cheaper and reasonably easy to integrate into the current system. The company’s strategy is based on system design, marketing, distribution, and service – not on development and manufacturing. The technology development process requires special expertise. The technology development process requires new people and new resources.
Thirteen “Best Practices” For Improving R&D 1.Corporate and business unit strategies are well defined and clearly commun- icated. 2.Core technologies are defined and communicated to R&D. 3.Investments are made in developing multinational R&D capabilities to tap ideas throughout the world. 4.Funding for basic research comes from corporate sources to ensure a long-term focus; funding for development comes from business units to ensure account- ability. 5.Basic and applied research are performed either at a central facility or at a small number of labs, each focused on a particular discipline of science or technology. Development work is usually performed at business unit sites. 6.Formal, cross-functional teams are created for basic, applied, and develop- mental projects. 7.Formal mechanisms exist for regular interaction among scientists, and between R&D and other functions. 8.Analytical tools are used for selecting projects as well as for ongoing project evaluation. 9.The transfer of technology to business units is the most important measure of R&D performance
10.Effective measures of career development are in place at all levels of R&D. 11.Recruiting of new people is from diverse universities and from other companies when specific experience or skills are required that would take a long time to develop internally. 12.Some basic research is performed internally, but there are also many university and third-party relationships. 13. Formal mechanisms are used for monitoring external technological develop- ments.