imt lecture: transforming invention to innovation

Design and Implementation

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Technology Strategy:Technology Strategy:

Transforming Invention to Innovation

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Technology Strategy:Technology Strategy:



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



-- 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


Innovation = the introduction of something new-- ChangeChange




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



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

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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




-- 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


-- ChangeChange



-- Innovation diffusion / adoptionInnovation diffusion / adoption-- Innovation diffusion / adoptionInnovation diffusion / adoption


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


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Technology Strategy:

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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

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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.


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Transforming Invention to InnovationTransforming Invention to Innovation


Conclusion & Final WordsConclusion & Final WordsBurgelmanInnovation

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imt lecture: transforming invention to innovation

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