The document discusses the concepts of innovation types including incremental, radical, component and architectural innovation. It describes how architectural innovation involves reconfiguring how components are linked together while sustaining core competencies. The document also outlines the technology life cycle from emergence of new technologies and periods of experimentation to the establishment of dominant designs and routines. Managerial implications are discussed around anticipating disruptions, distinguishing between incumbents and new entrants, and configurations of alliances.

1. Invention
Or
Innovation
1m38
Architectural Innovation
Lecture by:
Djadja.Sardjana@gmail.com
http://www.slideshare.net/djadja
23/01/2010 IMT-MMBiztel 1

2. Roadmap of Innovation
Lecture by:
Djadja.Sardjana@gmail.com
http://www.slideshare.net/djadja
23/01/2010 IMT-MMBiztel 2

3. Describing the innovation
• Incremental & radical
Innovation • Component &
Type Architectural
• dominant design
Two main • routines
concepts
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4. Types of Innovation - 1
•Sustaining / Incremental Innovation:
generally small innovations in products and
processes aimed at existing customers.
•Disruptive / Radical Innovation:
significant innovations generally aimed at
unknown or non-existent customers.
23/01/2010 IMT-MMBiztel 4

5. Types of Innovation - 2
Component Innovation:
Making existing
components better.
Architectural
Innovation:
putting existing
components together in
new ways.
23/01/2010 IMT-MMBiztel 5

6. Architecture = Organization
•Structure in mature
organizations tends to
evolve to match product
architectures.
• Architectural Innovation,
therefore, many times
includes elements of
organizational change.
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7. Characterising innovations
Incremental • minor changes on existing product
• exploits the potentials of existing design
innovations • often reinforces the dominance of established firms
• based on a different set of engineering and scientific
Radical principles
• often opens up new markets and potential applications
innovation • create great difficulties to existing firms and leave space for
entry of new firms.
Architectural • changes the way in which components are linked
together while living the basic competencies
innovation untouched
Component • improvement of a component
innovation
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8. Characterising innovations
Impacts on the linkages between components
Impacts on the linkages between components
Impacts on the linkages between components
Core concepts
Linkage between core
Reinforced Overturned
Unchanged Incremental Modular
concepts and
components
innovation innovation
changed Architectural Radical
innovation innovation
Innovations’ impact on components
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9. Characterising innovations
Incremental innovation: Modular innovation:
refines and extends the improvement of a
established design component. Ex : from
Architectural innovation: Radical innovation:
reconfiguration of an establishes new
established system dominant design, a new
set of core design
concept embodied in a
new architecture
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10. Characterising innovations :
Example of Room air fans
Established technology: large electrically powered fans,
monted in the ceiling, with the motor hidden.
Incremental innovation: insulate Modular innovation:
to dampen noise, blade design improvement of a component.
etc.
Architectural innovation: Radical innovation: move to
introduction of portable fans. The central air conditioning
components are the same,
motor, blade, control system and
the architecture is different
23/01/2010 IMT-MMBiztel 10

11. Dominant Design
Conceptual model of
technological change
Technological discontinuity
• Emergence of new technology: period of confusion
Based on • Little agreement about the product, the subsystem
seminal • Great deal of experimentation
works by • Different technological trajectories opened -Ex:
David, Dosi, different technologies for the wheels of cars,
production of electricity power
Sahal
• Different technological trajectories in competition –
Battle of standards. Competition of designs.
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12. Routines
1 2 3
• Established • Co-existence • Organisation
organisations of old and new and linkages
require time to competencies, between
identify an learning functions R&D,
innovation as modes, and production
radical skills etc. can be
questioned
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13. Innovation Implications
Lecture by:
Djadja.Sardjana@gmail.com
http://www.slideshare.net/djadja
23/01/2010 IMT-MMBiztel 13

14. Managerial implications
• Anticipation
Crossing the chasm • Specific marketing mix to address targets
• Possible entries when core concepts & linkages are changed
Distinction incumbents /
• Accumulated competences when core concepts and linkages
new entrants reinforced
Configurations of alliances • Alliances to acquire knowledge and to stimulate innovations
at different stages of the • Alliances to outsource
product life cycle • Alliances to market the technologies
• efficient way to organise and breaking routines can be
Routines necessary
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15. The Technology S-Curve
We all know that new
technologies emerge slowly,
grow quickly (if they catch on)
and then fade away. This
common knowledge has been
described as the technology
S-curve.
Why does it exist?
TIME
23/01/2010 IMT-MMBiztel 15

16. The Adoption Curve Luddites
Geoffrey Moore has attributed the
S-curve to the technology adoption
life cycle where techies and
visionaries are early adopters,
pragmatists make up the bulk of
users, and luddites fill out the tail
Pragmatists
of the distribution.
Visionaries
TIME
23/01/2010 IMT-MMBiztel 16

17. The Chasm
Moore has also described the “chasm”
in the adoption life cycle. He proposes
that many new technologies do not
make it across the chasm between
visionaries and pragmatists. They fall
into the chasm. The technology S-curve
with the chasm might look like:
TIME
23/01/2010 IMT-MMBiztel 17

18. Technology Cycle Cycle
Technology
Technological Selection
Disruption
Era of Ferment Dominant Disruption #2
Design (destroys existing
competence)
TIME
23/01/2010 IMT-MMBiztel 18

19. Innovation & Technology Cycle
Disruptive Innovation Component,
Architectural,
Product Innovation
Sustaining and
Design Competition
Process
Community-driven
Innovation
technology change
What do we make? How do we make
it (better)?
TIME
23/01/2010 IMT-MMBiztel 19

20. Other Differences
Research Operational Systems
Prototypes Product Families
Custom developments Predictability
Network building Partnerships
Uncertainty
Standards
Network Effects
Value = f(N2)
(non-compliance
cost increases
with time)
TIME
23/01/2010 IMT-MMBiztel 20

21. Lessons for Technology Managers
• First mover advantage may not be so critical
– sustaining technologies the first mover does not necessarily have advantage
Due to:
• Customer linkages of incumbents
• Deep pockets in incumbents
– disruptive technologies - first mover advantage critical. Due to
• steepness of learning curve in these technologies
• Persistent “rational” behavior of incumbents
• Market forecasting is impossible
– assume that the initial market will not be the eventual one
• e.g Kittyhawk micro hard drive (eventual market cameras, MP3s)
• Honda motorcycles (dirt bikes rather than “tourers”)
– product offering must be flexible to allow to meet changing market
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22. Changing dimension of
competition over product lifecycle
• Windermere Associates Model states that
customer needs move down dimensions
below as each need is satisfied:
– Technical performance
– Reliability
– Convenience, and then lastly
– Price
• Any one of these steps could signal move to
new “value network” and represent a
disruptive technology 22

23. Technical dimension A
Time
Convenience dimension
Time
Technical dimension B
Price dimension
Time
Time
Reliability dimension
Time
over product life-cycle
Impact of changing competition
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24. Examples
• Portable/notebook computer
– preoccupation with sustaining technologies by IBM, Compaq, Dell to make
faster desktops
– Make “rational” decisions to invest in new technologies to be able to get
better margins by selling “top-of-the-range”
– New entrants (e.g. Zenith, Toshiba) produce portables that are less powerful,
poorer monitor, less storage space, but are lighter!
– Mainstream manufacturers only wake up later
• PDAs
– preoccupation with sustaining technologies by IBM, Compaq, Dell to make
faster notebooks
– Make “rational” decisions to invest in new technologies to be able to get
better margins by selling “top-of-the-range”
– New entrants (e.g. 3Com) produce portable diaries that are less powerful,
poorer monitor, less storage space, but fit in a pocket!
– Mainstream manufacturers only wake up later
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25. More Examples
• “OEM” Software -> Shrink Wrap Software
• Mainframe -> IBM PC
• Cessna -> Micro light Aircraft
• Email -> SMS
• Professional Printing -> DTP & Inkjet
• Pathologists -> Home pregnancy testing
• MSOffice -> MSWorks
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26. Trajectories you know
“random access file” – ca. 1953
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27. Trajectories you know
“random access file” – ca. 1973
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28. Trajectories you know
180MB, 3.5” – ca. 1993
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29. Trajectories you know
120GB, 3.5” – ca.
2002
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30. Trajectories you know
20GB, 1.75” – ca. 2002
Back to Orbit
Innovation
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