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IMT Lecture: Transforming Invention To Innovation


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IMT Lecture: Transforming Invention To Innovation

  1. 1. Design and Implementation of Technology Strategy: Transforming Invention to Innovation Lecture by: by: 27-Jul-09 27-Jul- IMT MM-Biztel MM- 1
  2. 2. Design and Implementation of Technology Strategy: Transforming Invention to Innovation Definition and Scope IBM 30s 27-Jul-09 27-Jul- IMT MM-Biztel MM- 2
  3. 3. Definition - Invention - Innovation - Innovation diffusion - Innovation as part of Entrepreneurship Soul
  4. 4. Definition An invention is an object, process, or technique which displays an element of novelty. - Invention Inventions may be concepts, physical - Innovation devices or any other set of things that facilitate an action. - Innovation diffusion - Innovation as part of Entrepreneurship Soul The invention of a new product or process occurs within what could be called the techno-scientific sphere and it can remain there forever.
  5. 5. Inventors
  6. 6. Definition Innovation = the introduction of something new - Change - Invention An innovation is an invention that has been put into practice. Innovation occurs when someone uses an - Innovation invention - or uses existing tools in a new way - to change how things work - Innovation diffusion - Innovation as part of Entrepreneurship Soul
  7. 7. Innovation „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 new products and techniques are introduced into the economic system.“(Schumpeter system.“(Schumpeter 1947) “the first commercialization of an idea” (Fagerberg 2004) idea” An innovation is the implementation of a new or significantly improved product, or process, a new marketing method, or a new organisational method in business practice, workplance organisation or external relations (OECD) Innovation is an invention that has been successfully implementated and introduced in the market
  8. 8. Features of Innovation Novelty: Innovation is something new • Function • Technic • Design (?) Implementation: Innovation is introduced into market Modification: A innovation should cause a change/improvement
  9. 9. Innovator To be able to turn an invention into an innovation, a firm normally needs to combin e several types of knowledge, capabilities, skills and resources An innovator is the person or organizational unit responsible for combining the factors necessary
  10. 10. Innovators Apple vs Microsoft 5m
  11. 11. And this is not Innovation Ceasing to use a process, a marketing method or an organisation method, or to market a product Simple capital replacement or extension Changes resulting purely from factor prices Customisation Regular seasonal and other cyclical changes
  12. 12. Definition - Invention - Innovation - Innovation diffusion / adoption Is The spreading of innovations new ideas and technology through society - Entrepreneurship
  13. 13. Diffusion of innovation Everett Rogers: Diffusion of Innovations (1962) „An innovation is an idea perceived as new by the individual. Diffusion is the process by which an innovation spreads… Adoption is the decision to continue full use of an innovation.” innovation.” 5 Adopters‘ categories: Innovators (2,5%) Early adopters (13,5%) Early majority (34%) Late majority (34%) Laggards (16%) Diffusion 3m57
  14. 14. Diffusion The spread of a new product or process throughout society or markets Important process that enables an innovation to contribute to economic growth and welfare Focus on adoption of innovations Macro perspective
  15. 15. Innovation Diffusion
  16. 16. Definition - Change - Invention - Innovation - Innovation diffusion / adoption - Innovation as part of Entrepreneurship Soul Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities.
  17. 17. Innovation as part of Entrepreneurship Soul “Entrepreneurial spirit” to innovate (Schumpeter) Entrepreneurship as risk taking (Knight, Drucker, Hart, Stevenson and Dial) An entrepreneur is a person who undertakes and operates a new enterprise or venture, and assumes some accountability for the inherent risks Entrepreneurship = starting a new businesses
  18. 18. Design and Implementation of Technology Strategy: Transforming Invention to Innovation BMW 1m05 Success and Failure 27-Jul-09 27-Jul- IMT MM-Biztel MM- 18
  19. 19. 80s: Success and Failure in new Product Development Philiform - Philips
  20. 20. Innovators and Followers (Teece) Teece) Success Failure Follower IBM KODAK personal computer instant photography DUPONT EMI Innovator teflon scanner
  21. 21. Innovators and Followers Apply with the no Likely failure dominant design? Supplementing no Look for a partner resources available? Can the intellectual no Likely failure property be protected? Likely to succeed
  22. 22. Success Factor Grading 1 Not so important Number of responses 2 Fairly important 0 2 4 6 8 10 12 14 3 Very important Superior product Strong market orientation International orientation More predevelopment Sharp and early product definition Properly executed launch Organisational structure and climate Top management support Success Factors Technological and Marketing synergy Aim at attractive markets Sharper project selection Project control / Quality of execution The resources must be in place Speed Stage gate system Protection of intellectual property Dominant design Secure access to Complementary assets Consumer Innovator / Lead users Learning Non-product advantage
  23. 23. Cassette Deck Development time: two years. The competitor develops a new deck in just half a year. Now what?
  24. 24. Solutions: • Concurrent Engineering • Modular design and Platform design • Marketeers and Engineers work together in an early stage • Rapid prototyping
  25. 25. Stage- Stage-Gate according to Cooper
  26. 26. portfolio management
  27. 27. Cooperation in the network economy R&D, complementary Access to knowledge 1. Access to knowledge technology, share know how market knowledge, Access to new markets 2. Access to new markets local party required scale, Efficiency 3. Efficiency specialised partner Clients do do not want 4. Clients not want satisfy a need, products, but tailored products, but tailored not a demand solutions solutions
  28. 28. Managing Diversity • from ‘gold seeking’ to synergy with market, product/application, technology • PLUS operations fit • PLUS cultural, human, strategic fit soft aspects • yet complementary in competencies!
  29. 29. 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.
  30. 30. Leadership Creative 9 Learning and will to climate organization 10 innovate 1 Customer 8 focus High involvement in 10 factors for Joe Tidd et al., Managing Appropriate structure innovation Innovation, Wiley, 2008 and 2 7 an innovative on, Chapter 11: Building the Innovative Organization Organization Key Extensive 6 3 individuals communication 5 4 Stretching Effective team individual capabilities 27-Jul-09 27-Jul- IMT MM-Biztel MM- 31
  31. 31. Some useful books: Conceptual (C), Instrumental (In), Reader (R) 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. 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.
  32. 32. Design and Implementation of Technology Strategy: Transforming Invention to Innovation Conclusion & Final Words Burgelman Innovation 3m42 27-Jul-09 27-Jul- IMT MM-Biztel MM- 33