Managing Innovation

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  • 1. M.Sc. Irma Bejarano 24.04.2012
  • 2. Objectives • Why Management Innovation Maters? o Global Tendencies and Benefits o Which are the most innovative countries and companies. • What is Management Innovation? o Concept and Implications o Types of innovations o Modes of innovations • How to become a Manager Innovator? o The innovation Challenge o The innovation process
  • 3. 1.- Why Managing Innovation Matters?
  • 4. Which are the most innovative countries? 1 US 2 Germany 3 UK 4 Japan 5 France 6 Switzerland 7 Singapore 8 Canada Global Innovation Index (GII) 1 Policies 2 Human Capacity 3 Infrastructure 4 Technological Sophistication 5 Markets and Capital 1 Knowledge 2 Competitiveness 3 Wealth
  • 5. This countries are also the most rich? 1 US 2 Germany 3 UK 4 Japan 5 France 6 Switzerland 7 Singapore 8 Canada YES or NOT?
  • 6. Which are the leading innovative companies? Most Innovative Companies Ranking Most Known for its Innovative….. 1 Apple Products (52%) 2 Google Customer Experience (26%) 3 Toyota Motor Processes (36%) 4 General Electric Process (43%) 5 Microsoft Products (26%) 6 Tata Group Products (58%) 7 Nintendo Products (63%) Business Week & BCG Ranking (04-07)  2,950 senior executives  3 yr stock returns  revenue growth  margin growth
  • 7. This companies are also the most rich? Most Innovative Companies Ranking 1 Apple 2 Google 3 Toyota Motor 4 General Electric 5 Microsoft 6 Tata Group 7 Nintendo  Business Week & BCG Ranking (04-07): 19% increase their revenue.  Innovaro: Sustainable growth in their price per share in the last seven years YES or NOT?
  • 8. Managing Innovation= Economic Progress • The world economic progress has been lead by key innovations and inventions. Changed the way do business. Joseph Schumpter, The “Godfather of Innovation studies" • Entrepreneurship + innovation: capitalism and economic progress.
  • 9. 2.-What is Managing innovation?  Successful exploitation of new ideas  leading to the creation of a new product and service.  It is more that just generating good ideas  it is the process of growing them into practical use and bringing them to the market.
  • 10. Managing Innovation: Change Managing innovation in a company involves organizational changes:  Traditional management principles, processes and practices.  Alters the way the work of management is performed: • Setting goals • laying out plans • Motivating and aligning efforts • Coordinating activities, etc
  • 11. The 4p’s of Innovation Process Product Position Business Model INNOVATION (incremental……radical) (incremental……radica l) (incremental……radical)(incremental……radical)
  • 12. Exercise: Types of Innovation Nissan Leaf A1: Product Innovation E1: A2: Process Innovation E2: A3: Position E3: A4: Business Model Innovation E4: 1 2 3 4
  • 13. Modes of Innovation 1 2 Incremental Innovation Quantum Innovation 3 Disruptive Innovation Clayton Christensen
  • 14. Exercise: Modes of Innovation A1: Quantum Innovation A2: Incremental Innovation A3: Quantum Innovation A5: Disruptive Innovation 1 2 3 A1: A2: A3: A4: A5: A4: Incremental Innovation
  • 15. 3.- How to Become a Manager Innovator?
  • 16. The Innovation Challenge “The best innovators aren’t lone geniuses. They are people how can take an idea that is obvious in one context The best companies have learnt to systematize that process” (Hagardon, Sutton 1990) and apply it in not-so-obvious ways to a different context.
  • 17. The Innovation Challenge  Out of the box thinking, change in management orthodoxies.  Part of the core business process.  Process that generates innovations continually.  Have a clear structure, be organized and managed.  Innovative organization infrastructure.  Design a clear innovation strategy.
  • 18. The Innovative Organization  Culture of focused creativity, leadership and motivation.  Entrepreneurial talent.  Multifunctional talented team-works.  Information-knowledge infrastructure.  R&D procedures and infrastructure.  Project portfolio management. .
  • 19. Which functional areas contribute to the process? Marketing R&D Operations Human Resources Finance • Identify customer’s needs. • Dev. concepts and products. • Pricing and positioning strategies. • Launch of products. • Development of novel products aligned with customer needs. • Process re- engineering • ROI Calculations and pricing strategies. • Hiring, developing and motivating HR. • Development of a culture of innovation
  • 20. Ideas “filtered out” Ideas Capturing the Benefits Rejected concepts Ideas coming from open innovation Screening and selection of ideas Idea Generation Concepts … Implementa tion- Bring to the maket Projects… MARKET • New product • New services • New Process • New Business Processes Rejected Projects • Company • Society • World Ideas… Value Generation…
  • 21. • Changes begins, looking for customer pains. • Where companies look for inspiration • Find what triggers the innovation process • Soft management, creative part. • Spontaneous, unexpected, accidents. • Formal methodologies or techniques
  • 22. Knowledge Pull Existing technology or a defined service and tries to find a market for it. Knowledge Push Creation of a new technology or service for an identified market. Users as Innovators Techniques as innovation blitz and focus groups to get close to customers. Recombinant Innovation Transferring or combining old ideas or products in new context or mkts.
  • 23. MKT Research • Cross Functional Teams: R&D, MKT • Creativity Techniques:  Creativity Sessions  Brainstorming  Innovation Blitz  Morphology Charts • Full Description of the products/services  Principal Characteristics  Features, Scopes  Competitive Advantage  Target market  Differentiations offer  Initial Price  Commercialization Strategy • R&D • Physical Products • MKT Methodologies:  Interviews  Surveys online  Testing prototypes with end customers  Focus groups  QDF • Investment • ROI • Mkt size potentia • Viability • Design Procedur • Quantitative Screening of a large number of ideas
  • 24. Project Assessment & Selection Product Development Product Commercialization • Portfolio management  Selection and rejection of projects  Business Attractiveness  Risk  Cumulative Cost • Physical products • Design of products • Manufacturing procedures • Testing • Launching • Marketing • Commercializing
  • 25. • The ultimate purpose of innovation: create value.  Commercial success  Market share  Cost reduction  Knowledge generation  Customer’s lifestyles improvement  Positive changes in society, patents, etc • They are reflected in:  Bottom line  Specific KPI’s  Economic development: price/earning ratio
  • 26. Conclusion “We have reached the end of incrementalism Only those companies that are capable of creating industry revolutions will prosper in the new economy.” -Gary Hamel