Strategic Management of Technology-based Innovation


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Basic Strategies on Managing Technology-based Innovation Every Manager Should Know

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Strategic Management of Technology-based Innovation

  1. 1. Strategic Management of 12/8/2012Technology-based Presented by: SB Satorre Innovation TM 721 – Managerial Economics --------------------------------------------------------------------- Ms. Sheryl B. Satorre 1
  2. 2. Innovation 12/8/2012“the process whereby new and improvedproducts, processes, materials, and services Presented by: SB Satorreare developed and transferred to a plantand/or market where they are appropriate” -David Rubenstein, Co-Founder The Carlyle Group 2
  3. 3. Types of Innovation1. Product Innovation Developing a new product 12/8/2012 It is concerned with increasing the revenue. Presented by: SB Satorre2. Process Innovation  improving the processes employed to produce or deliver the product, and to make it more efficient or productive It is concerned with reducing the costs. 3
  4. 4. Innovation Matrix Customer neednew 12/8/2012 Market Radical Breakthrough Innovation Presented by: SB Satorre Incremental Technology Innovation Breakthrough 4old Technology new
  5. 5. Innovation Matrix + examples Customer need Air-conditionernew Hand sanitizer Cellphone 12/8/2012 Likas papaya soap Disposable diapers SUVs Electric coffee maker Paper shredder Instant photography Presented by: SB Satorre remote control Post-it-notes Airplanes > Superbody Propeller planes > jet planes Airbus Laser hair treatment new Gillete razor Radio tubes > Transistor>IC Solid > Liquid soap 5old Technology new
  6. 6. Why are theseRadical Innovations?  Air-conditioner  Instant 12/8/2012  Cellular phone photography  Digital camera  Microwave oven Presented by: SB Satorre  DVD  MP3  Disposable diapers  PDAs  Electric coffee  PCs maker  TV  Elevator  The web 6
  7. 7. Effect of Innovations•“Sustaining innovation” 12/8/2012 Presented by: SB Satorre•“Disruptive innovation” 7
  8. 8. Sustaining Innovation  improves the performance of existing products along values of mainstream 12/8/2012 customers Presented by: SB Satorre  hardly results in the downfall of established companies 8
  9. 9. Disruptive Innovation  will often have characteristics that traditional customer segments may not want, at least 12/8/2012 initially Presented by: SB Satorre  appear as inferior or riskier vs. existing products  eventually changes consumer behavior and preferences, and industry hierarchy 9
  10. 10. Adoption Curve Presented by: SB Satorre 12/8/201210
  11. 11. Presented by: SB Satorre 12/8/201211
  12. 12. Strategic Management ofTechnology-based Innovationinvolves: 12/8/2012 Presented by: SB Satorre EVALUATION AND PLANNING IMPLEMENTATION CONTROL 12
  13. 13. Planning for Innovation Determine the • Summarizes what the business is about Vision 12/8/2012 Set the • Summarizes the firm’s vision itself, its values, Presented by: SB Satorre and what it values Mission Establish Goals • Establishes how the firm will carry out its mission and Objectives • Delineates the specific operational activities the Set Strategy firm will undertake to achieve its goals and 13 objectives
  14. 14. Innovation Concerns for Different Levels of StrategyStrategic Coordinate entire organization; Exploit new technologies; Assess external factors; Maximize returns; Determine which technologies and units to emphasize 12/8/2012 process.Business Coordination and implementation of Presented by: SB Satorre innovation of individual business unit; Manage product and technical innovation; Ensure cost-effectiveness of that unit and relevant technologies.Operational Manage change at operational level; Provide training; Assist marketing; Control costs; Supply technical support. 14 Levels of Strategy and their Innovation Concerns
  15. 15. Factors to be considered whenPlanning for Innovation1. Creativity Adventuring 12/8/2012 Confronting Presented by: SB Satorre Portfolio of Skills2. Organization-wide issues Communication Reward System Organizational Assumptions 153. Political issues
  16. 16. Managerial Guidelines: Planningfor Innovation1. Recognize that innovative individuals exist 12/8/2012 throughout the organization.2. Periodically reconsider how work is being Presented by: SB Satorre accomplished.3. Encourage “turning the prism” to put a new light on problems.4. Ask employees what their biggest aggravations are.5. Train people to recognize their creative abilities and participate in the planning innovation. 16
  17. 17. Guiding Questions: Planning forInnovation1. As the planning process begins, have the firm’s current activities been examined to determine 12/8/2012 whether they are providing leverage for the firm to maintain a sustainable competitive advantage? Presented by: SB Satorre2. In the planning process, are concepts being developed that provide an immediate measurable and discernible competitive advantage?3. Does the process of innovation add to the firm’s value for shareholders and other stakeholders? How? If not, can the planning process be changed to ensure that it does? 17
  18. 18. Guiding Questions: Planning forInnovation4. Do employees feel encouraged about their importance in the innovation activities of the firm, 12/8/2012 particularly the planning process?5. Have the leaders of innovation been identified at all Presented by: SB Satorre levels of the organization? Are these individuals involved in the planning process?6. Does the result of the planning process indicate what needs to be done next, who needs to do it, and when it needs to be done?7. How are “newness” and “failure” handled by the firm? 18
  19. 19. Implementation in Innovation Leadership• Install supportive Engagement systems and policies • Build a knowledge-• Create mechanisms for based culture innovation 12/8/2012 • Training and• Allocate ample development resources to critical • Mentoring  What to do now versus activities Presented by: SB Satorre later?  What is the timing, human resources, and existing platforms that are necessary or useful? Extension  What should be delegated Alignment • Develop and share and to whom?• Tie rewards to lessons learned achievement • Monitor• Build “fit” organizational• Build a capable competencies 19 organization • Look for other opportunities
  20. 20. Managerial Guidelines:Implementation of 12/8/2012Innovation Presented by: SB Satorre 20
  21. 21. Checklist for Innovation Implementation Vision Leadership• Does the team have a clearly • Is excellence of central importance to articulated vision, mission, or set of the team? objectives? • How does the manager monitor and• Is the vision (objectives) clearly stated? improve performance levels?• Did everyone participated in creating it • Are all team members committed to 12/8/2012 (them)? excellence?• Is this vision (objectives) attainable? • Does the leader encourage open idea exchanges? Presented by: SB Satorre Processes Resources• Do team members share information • Does management support new ideas? fully? • Do team members support new ideas• Do all team members participate by giving time, cooperation, and decision making? resources?• Are team members comfortable • Does the team leader offer practical proposing new ideas? help and resources for the• Are team members able to challenge development of new ideas? standard practice? • What happens when a new idea fails? 21• Is there a climate of trust within the group?
  22. 22. Evaluation and Control inInnovation 12/8/2012 Establish Objectives (control) Presented by: SB Satorre inadequate Compare Take Establish Measure Performance Corrective Standards Performance to Standards Action (control) (evaluation) (evaluation) (control) adequate Do nothing or Reinforce 22 actions (control)
  23. 23. Managerial Guidelines:Evaluation and Control inInnovation 12/8/20121. A balance among various approaches in evaluation and control. Presented by: SB Satorre2. Involvement of top management.3. A focus on the ends.4. Objectives should be specific and understood.5. Feedback is an integral part of the innovation 23 process; it is not a one-year occurrence.
  24. 24. Guiding Questions: Evaluationand Control in Innovation1. Is the evaluation and control process future oriented? 12/8/20122. Are costs and benefits being properly weighed against each other? Presented by: SB Satorre3. Are a number of innovative ideas being generated?4. Is the proper amount of funding available to the best potential projects?5. Are the product and process features that are being implemented appropriate and necessary?6. Do the people in the organization “feel good” about what the expectations, rewards, and outcomes are? 24
  25. 25. 12/8/2012 Presented by: SB Satorre 25 The World’s 50 MostInnovative Companies 2012
  26. 26. Most Innovative Company 2012 Presented by: SB Satorre 12/8/201226
  27. 27. Steve Jobs’ 7 Principles of Innovation1. Do what you love. 12/8/20122. Put a dent in the universe.3. Connect things to spark your Presented by: SB Satorre creativity.4. Say no to 1,000 things.5. Create insanely different experiences.6. Master the message.7. Sell dreams, not products. 27
  28. 28. "When all think alike, 12/8/2012then no one is thinking." Presented by: SB Satorre --Walter Lippman (American public intellectual writer, reporter, and political commentator) 28
  29. 29. Thank you  Presented by: SB Satorre 12/8/201229
  30. 30. Sources:1. Bruton, Grarry D. and Maragaret A. White. Strategic Management of Technology and Innovation. Canada: South- Western CENGAGE Learning, 2011.2. Posadas, Dennis. Rice & Chips: technopreneurship and innovation in Asia. Singapore: Prentice Hall, 2007. 12/8/20123. Gonzales, Federico C. Technopreneurship Basics.4. Gallo, Carmine. What makes Steve ‘Steve’? Forbes Online Presented by: SB Satorre Magazine. December 5, 2012 makes-steve-steve/5. Greeley, Matthew. Innovation Essentials: 10 Basic Principles of Innovation - Everyone Should Know. Customer Think. December 3, 2012 basic_principles_of_innovation_everyone_should_know6. The World’s 50 Most Innovative Companies 2012. Fast Company. December 1, 2012 30 innovative-companies/2012/full-list