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Organisational Innovation - Organisational Theory and Design

Mairaj Nadeem is a student of MS Management Sciences. He made that presentation and presented in class.

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Organisational Innovation - Organisational Theory and Design

  1. 1. Organizational Innovation
  2. 2. Mairaj Nadeem
  3. 3. In business and economics, innovation is the catalyst to growth
  4. 4. ORGANIZATION  A social unit of people that is structured and managed to meet a need or to pursue collective goals.  An organization or organization is an entity comprising multiple people, such as an institution or an association, that has a collective goal and is linked to an external environment.
  5. 5. Innovation  Innovation is simply the process of creating and implementing a new idea or ideas.  Three main types of innovation exist:  Process Innovation  Technical Innovation  Administrative Innovation
  6. 6. Process Innovation  Process innovation is achieved through the creation of a new means of producing, selling, and/or distributing an existing product or service.  Some examples are:  Supply Chain Mgt  E-commerce
  7. 7. Technical Innovation  Technical innovation is simply the creation of a new product or service.  Some examples:  A new line of automobiles  The introduction of cellular telephones
  8. 8. Administrative Innovation  Administrative innovation is the creation of a new organization design which better supports the creation, production and delivery of services or products.  An example is:  Virtual Teams: any task-focused group that meets w/out all members being in the same room or even working at the same time.
  9. 9. Christensen (1997) Incremental innovation in terms of: ‘a change that builds on a firm’s expertise in component technology within an established architecture.’ Incremental innovation is a series of small improvements or upgrades made to a company's existing products, services, processes or methods. The changes implemented through incremental innovation are usually focused on improving an existing product's development efficiency, productivity and competitive differentiation.
  10. 10. Example of Incremental Innovation
  11. 11. Henderson and Clark’s (1990) terms: ‘Radical innovation establishes a new dominant design, and hence a new set of core design concepts embodied in components that are linked together in a new architecture.’
  12. 12. Examples of Radical Innovation In late November 2004, Dixons, a major UK electrical retailer, announced that they would no longer stock VCRs (video cassette recorders) because these have been outmoded by DVDs (digital versatile disks) and digital hard- disk storage products. In services, we are currently seeing the decline of photographic film development and printing services, as photographers switch to digital cameras and home printers. The postal service for letters and cards is being replaced by e-mail and mobile telephone communications.
  13. 13.  S-Curve is a measure of the speed of adoption of an innovation.  First used by in 1903 by Gabriel Tarde, who first plotted the S-shaped diffusion curve.  This process has been proposed as the standard life cycle of innovations can be described using the S-Curve
  14. 14. Adoption and S-Curve
  15. 15. Stages for S-Curve Startup Growth - Scale Maturation - Compete Decline - Transition
  16. 16. Challenges • Startup Survival, market validation, funding • Scale Increasing market, expanding to new geography, increased manufacturing, hiring • Compete Increased number of competitors, lower margins, heads down • Transition Compromises to stay alive, staff layoffs
  17. 17. Double S-Curve Model
  18. 18. Where Do Ideas Come From? • Great ideas do not necessarily come from tech-focused research. They’re often derived by studying demographic, geo-political, societal, economic and other global dynamics • Brainstorming for ideas does not often work
  19. 19. Features or Sustaining Innovations  Continuing to add features to one product is not the same as innovation  It really just slightly modifies the one single s-curve. (i.e. different models of Honda Cars)  a sustaining innovation does not create new markets or value networks but rather only evolves existing ones with better value, allowing the firms within to compete against each other's sustaining improvements. Sustaining innovations may be either "discontinuous" or "continuous"
  20. 20. 3 Horizon Growth  Horizon 1 – current business  Horizon 2 – related business  Horizon 3 – completely new business  Alchemy of Growth  Simple type of portfolio management  Great starting point  Teaches about the differences of innovation
  21. 21. Disruptive Innovation A disruptive innovation is an innovation  that creates a new market and value network  and eventually disrupts an existing market and  value network, displacing established market  leading firms, products and alliances.
  22. 22. Disruptive Innovation
  23. 23. Examples of Disruptive Innovation Innovation Disrupted Market Details of Disruption Digital photography Chemical based photography First examples of digital cameras were very poor quality and laughed at LCD CRT LCD were first monochromatic and low resolution Wikipedia Traditional encyclopedias Encyclopedia Britannica ended print production in 2012 LED lights Light bulbs Initial LED lights were only strong enough to be indicators, now replacing most lighting
  24. 24. Role of Culture & Leadership  There is no innovation without leadership  Innovation is a collaborative activity  No single person can manage the innovation for an  organization  Innovation often happens outside of normal process  Essential roles for managers  Promoting an attitude and expectation of  innovation  Instituting policies and strategies that makes  innovation real   enabling innovation while engaging in dedicated  obstacle obliteration   Remove obstacles for staff