Innovation organizational learning driven business model

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Unique innovation and organizational learning approach to business model. Also provided simple quantitative and qualitative analysis approaches that become the fundamental innovation and creation process model for business performance.

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Innovation organizational learning driven business model

  1. 1. Innovative Learning Organization Business Model D R . C . C . TA N E T A L . ( 2 0 1 3 ) SCHOOL OF MANAGEMENT M A E FA H L U A N G U N I V E R S I T Y
  2. 2. Innovation:  “As the development and implementation of new ideas by people who over time engage in transactions with others within an institutional order.” (van de ven, 1986, p. 590)  “As the successful implementation of creative ideas within an organization.” (Amabile, 1996, p. 1)  Innovation involves various activities aimed at providing value to customers and a satisfactory return to the organization (Ahmed, 1998).  Business organizations view innovation as a means toward achieving and sustaining strategic competitive advantage (Marques and Ferreira, 2009).  Ahmed, P.K. (1998), “Culture and Climate for Innovation,” European Journal of Innovation Management, 1(1), pp. 30-43.  Marques, C.S. and Ferreira, J. (2009), “SME Innovative Capacity, Competitive Advantage and Performance in a Traditional Industrial of Portugal,” Journal of Technology Management & Innovation, 4(4).  Van de ven, A.H. (1986), “Central Problems in the Management of Innovation,” Management Science, 32(5), pp. 590-607. 12/18/2013
  3. 3. Innovation is needed:  The current situation of the environment (e.g. uncertainty, high risk, and volatility) involves that firms need to develop innovation in order to maintain or increase their competitiveness.  The capacity to innovate is among the most important forces that impact business performance (Hurley and Hult, 1998).  Innovativeness provides flexibility for firms to choose different options to satisfy their customers on a sustainable basis so that this will provide a basis for the survival (Banbury and Mitchell, 1995).  Innovativeness is a process of turning opportunities into practical use (Tidd, Bessant & Pavitt, 1997) and being really adopted in practice (Schumpeter, 1934). Banbury, C.M. and Mitchell, W. (1995), “The Effect of Introducing Important Incremental Innovations on Market Share and Business Survival,” Strategic Management Journal, 16, pp. 161-182. Hurley, R. and Hult, G.T.M. (1998), “Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination,” Journal of Marketing, 62(3), pp. 4254. 12/18/2013
  4. 4.  Innovativeness is an iterative process in which firms interact both with customers and suppliers and with knowledge institutions (Freeman, 1987).  Innovation has been recognized as a key element of dynamic efficiency and competition of markets since the work of Schumpeter (1934).  Innovativeness is a competitive instrument essential for firm‟s long-term success and survival (Deshpande, Farley and Webster, 1993). Deshpande, R., Farley, J.U. and Webster, J. (1993), “Corporate Culture, Customer Orientation and Innovativeness in Japanese Firms: A Quadrad Analysis,” Journal of Marketing, 57(1), pp. 22-27. Freeman, C. (1987), Technology Policy and Economic Performance: Lessons from Japan, London: Pinter Publisher. Schumpeter, J.A. (1934), Theory of Economic Development: An Enquiry into Profits, Capital, Interest and the Business Cycle, Harvard. Tidd, J., Bessant, J. and Pavitt, K. (1997), Managing Innovation, Chichester: Wiley. 12/18/2013
  5. 5. Innovation:  The relationship between business growth and innovation is widely understood by executives today as has been written by a number of consultants and business scholars such as Richard Foster (1986), James M. Utterback (1994), Clayton Christensen (1997), and Richard Leifer (2000). These authors agree that incremental innovation can keep the company competitive with current platforms, but only radical innovation can provide a platform for the long-term growth that corporate leaders seek (Foster, 1986; Utterback, 1994; Christensen, 1997; and Leifer, 2000).  Foster, R. (1986), Innovation: The Attack‟s Advantage, New York: Summit Books.  Utterback, J.M. (1994), Mastering the Dynamics of Innovation, Harvard Business School Press, MA.  Christensen, C. (1997), The Innovator‟s Dilemma, Harvard Business School Press, Boston, MA.  Leifer, R. (2000), Radical Innovation, Harvard Business School Press, Boston, MA.  Heskett, J. (1997) Design for Profit, in D. Steenstra (ed.), Design for Profit Report: Proceeding Report of the Design for Profit Seminar, held on 25 June 1997, at the Design Council in London, The University of Warwick Print Service, UK. (1997) 12/18/2013
  6. 6. Innovation:      John Hestkett (1997) proposed 4 design innovation strategies: (1) No change (2) Incremental detail change (3) Radical redefinition of basic concepts (4) Fundamental innovation  According to Heskett (1997), design projects usually begin with business objectives, which fall into one of the 4 innovative strategies, based on market situation, a company‟s willingness to spend and capability to innovate. Company‟s Business Objectives (Purpose) Innovation Strategies 12/18/2013
  7. 7. Innovation Construct: (Stream 2) Process Content Innovation (Stream 1) Purpose (Stream 4)  A typical 2P-2C dimensions to strategic management (CC Tan, 2013) match well with the four research streams in organizational innovations (Lin and Chen, 2007):  Stream 1 – Typology of innovation, i.e. technological innovation, administrative innovation, strategic innovation, and process and product innovation.  Stream 2 – Diffusion of innovation Context  Stream 3 – The antecedents or determinants of organization innovation, i.e. structure, processes (Stream 3) and people influencing the development of new products, etc.  Stream 4 – Utility of innovation, i.e., performance, new improvement and development. 12/18/2013
  8. 8. Content: Types of Innovation  Resource Innovation, Production Innovation, Product and Service Innovation, Demand Innovation Process: Resource Flow Fast Idea Generation  Value-Curve     Idea Conversion Idea Diffusion SLL and DLL Schumpeterian Learning and Newtonian Learning Kolb‟s Experiential Learning Data-Information-Knowledge-Wisdom      The Innovation Infrastructure, HRM and Culture, Structure and Systems, and Policies / Strategies, Objectives, Vision and Mission 12/18/2013 (Context) Purpose: Innovate faster First-to-Market Revenue Stream Cost Structure Long-Term Company‟s Value
  9. 9. Resources:  Within-Units  Cross-Units  External – Competitors, Partners, Customers  Opportunities, Lost Opportunities, Wastes Resource Idea Conversion  Systems of activities to create the value generated Cost Structure Idea Generation Value Curve OL Idea Diffusion  Knowledge spillover  Stimulate spinoffs  CRM/Distribution to deliver value generated Purpose:  Targeted Segments Revenue Stream  ROI (Return on Idea)  Long-Term Shareholder Values  3P (Profit, Planet, People) 12/18/2013
  10. 10. Let‟s Look at the Innovative Learning Organization Model gradually:  How it is formed?  Any theoretical background?  Process Aspect of Innovation: Page 5-18  Purpose Aspect of Innovation: Page 19  Content Aspect of Innovation: Page 20-36.  Contextual Aspect of Innovation: Structure (Day 1), HRM Practices and Systems, and Culture (Previous Section), Culture (Final Examination), Some other Contextual Issues on Innovation in particular, Page 37-40  Conclusion: Page 41-43 12/18/2013
  11. 11. In the academic domain, innovation could be a direct result of seeing the “Patterns” of Relation systematically and holistically: Quantitative Data Analysis Qualitative Data Analysis 12/18/2013
  12. 12. Qualitative Data Analysis  Follows data  information  knowledge  wisdom model  It is not linear – many feedback loop required at every step Selective Coding:  Scan across the entire interview scripts and select relevant chunks discussions that fit into the themes (constructs, variables) and their pattern of relationship. This helps “validates” the theoretical model you proposed in your axial coding step. Axial Coding: Look axially and make connection among themes. External Factors Internal Factors Strategy Performance relative to competitors and the industry Open Coding: Locate themes and assign initial codes to condense the mass of data into categories      Strategy Performance Internal Factors External Factors Order of Fit on Activities Interview Scripts: obtained from your interview Wisdom Showing evidences that knowledge is really applicable to various contexts or cases Knowledge Information Data 12/18/2013 Interview Scripts: obtained from your interview
  13. 13. Quantitative Data Analysis Generalizability – Applicable to wide population Wisdom Theme 2 Analyzing the relationships of the themes – Hypothesis and Theory Confirmation/Rejection Knowledge * * * * * Theme 1 Describing the Themes – Descriptive analysis of the themes involved (where themes could be identified through literature review or / and factor analysis) Information Quantitative survey data Var 1 Var 2 Var 3 Var 4 --- --- --- Var n Data 1 Data 2 … Data 12/18/2013
  14. 14. Quantitative Data Analysis Qualitative Data Analysis:  Literature Review  Interviews, etc. 12/18/2013
  15. 15. For the Process of Innovation:  We will use this simple model to build “absorptive capability” similar to a research process  Innovation is research commercializable. Data Information  Codification  KPIs Tomato Grading:  7 Attributes initially codified:  Weight  Size  Color  Texture  Shape  Hardness  Taste 3 Decision-Scales:  Good, Average, Unacceptable Knowledge  Abstraction  Product Pricing  Strategy Maps Wisdom  Diffusion  Market acceptance Positive correlation:  Size and Weight  Color, Hardness and Taste  From 7 to 4  2 Scales: Acceptable or Unacceptable  Thus, From 37 (2,187) to 24 (16 Selections) 12/18/2013
  16. 16. Data  Codification  KPIs Idea Generation Information Knowledge  Abstraction  Product Pricing  Strategy Maps of KPIs Idea Conversion Wisdom  Diffusion  Market acceptance Idea Diffusion Actually: the Value-Chain Model introduced by:  Hansen, M.T. and Birkinshaw, J. (2007), “The Innovation Value Chain,” Harvard Business Review, June. 12/18/2013
  17. 17. Reflective Observation Data Abstract Conceptualization Active Experimentation Information  Codification Knowledge  Abstraction  Product Pricing Wisdom  Diffusion  Market acceptance Explicit Implicit Concrete Experience  D-I-K-W matches Kolb‟s Experiential Learning Theory (1985) and Boisot‟s (1999) I-Space, Schumpeterian Learning and Newtonian Learning. 12/18/2013
  18. 18. Kolb, D. (1984), Experiential Learning, Englewood Cliffs, NJ: Prentice-Hall. Concrete Experience (Feeling) Accommodating (Feel and Do) CE/AE Diverging (Feeling and Watch) CE/RO Reflective Observation (Watching) Active Experimentation (Doing) Converging (Think and Do) AC/AE Assimilating (Think and Watch) AC/RO Abstract Conceptualization (Thinking) 12/18/2013
  19. 19. Reflective Observation Data Abstract Conceptualization Active Experimentation Information  Codification  Problem Solving Explicit Knowledge  Abstraction  Product Pricing Wisdom  Diffusion  Market acceptance S,W  Strategies Concrete Experience Impacting: Embedded into artifacts, work instructions, behavioral patterns, and technical, organizational rules. Newtonian Learning Schumpeterian Learning Absorption O,T Scanning Implicit  In contrast to N-learning, it sees the S-Learning as continuing its course beyond “Diffusion” (or Region A‟ in the Information-Space), and moving down once more into those un-codified and highly local concrete regions.  Boisot, M.H. (1999), Knowledge Assets: Securing Competitive Advantage in the Information Economy, Oxford: Oxford University Press. 12/18/2013
  20. 20. Data-Information Dimension A‟ Textbook Knowledge Personal Knowledge A Common Sense Un-codified Codified Proprietary Knowledge 12/18/2013
  21. 21. Some pragmatic aspects of “Diffusion” neglected: Specifically about “leading by adoption”:  Diffusion is defined as the process by which an innovation is adopted and gains acceptance by members of a certain community. The four major factors that influence the diffusion process are the innovation itself, how information about the innovation is communicated, time, and the nature of the social system into which the innovation is introduced (Rogers, 1995). Diffusion research, in its simplest form, investigates how these major factors, and a multitude of other factors, interact to facilitate or impede the adoption of a specific product or practice among members of a particular adopter group, including the customers. 12/18/2013
  22. 22. Rogers, E.M. (1995), Diffusion of Innovations, 4th Edition, New York: The Free Press.  The Individual Innovativeness Theory (Rogers, 1995) states that individuals who are predisposed to being innovative will adopt an adoption earlier than those who are less predisposed.  The Figure above shows the bell shaped distribution of Individual Innovativeness and the percentage of potential adapters theorized to fall into each category.  On one extreme of the distribution are the Innovators. Innovators are the risk takers and pioneers who adopt an innovation very early in the diffusion process.  On the other extreme are the Laggards who resist adopting an innovation until rather late in the diffusion process, if ever. 12/18/2013
  23. 23.  Rogers‟ (1995) theory of Rate of Adoption, states that innovations are diffused over time in a pattern that resembles an s-shaped curve.  Rate of adoption theorizes that an innovation goes through a period of slow, gradual growth before experiencing a period of relatively dramatic and rapid growth.  The theory also states that following the period of rapid growth, the innovation‟s rate of adoption will gradually stabilize and eventually decline. 12/18/2013
  24. 24. Perceived attributes:  The Theory of Perceived Attributes (Rogers, 1995) states that potential adopters judge an innovation based on their perceptions in regard to five attributes of the innovation.  These attributes are:  Trialability  Observability  Relative Advantage  Complexity  Compatibility  The theory holds that an innovation will experience an increased rate of diffusion if potential adopters perceive the innovation: 1) Can be tried on a limited basis before adoption, 2) Offers observable results, 3) Has an advantage relative to other innovations (or the status quo), 4) Is not overly complex, and 5) Is compatible with existing practices and values. 12/18/2013
  25. 25. In summary: Process of Innovation in the Literature:  Input-Transformation-Output:  Idea Generation:  Breadth of process – Open innovation system versus closed innovation system (Chesbrough, 2003)  Innovation as a dynamic process that requires creativity input to develop new or improved ideas (Majoro, 1992)  Incorporating customers‟ suggestion for service innovation (Victorino et al. 2005)  Ideas Conversion:  New ways of doing things (Strategic mindset in innovation) (Porter, 1990)  Diffusion:  Adoption of ideas new to the organization (Roger, 1983) 12/18/2013
  26. 26. Purpose:  Innovation is the process of taking creative ideas to “market” or to “usefulness”.  Being an innovative organization, i.e. The word “innovation” is appearing in corporation mission and vision statements and core capability lists.  Better operational performance (Cooper 1998)  Improved business performance (Oke et al. 2007)  Securing worldwide competitiveness (Lin & Chen 2007)  Enhanced ability to offer valued choices to customers (Peter 2003)  Commercialization of invention (Schumpeter, 1942)  Adopting innovation outcomes to drive organizational performance (Roper and Love, 2002)  Create differentiated services (Agarwal et al. 2003)  Different tiers of actions in innovation, as developers, leading by adopting, and following (Chesbrough, 2003) Innovative Organizations 12/18/2013
  27. 27. Content of Innovation: Strategic Management  Organization Innovation (Business Model, Org. Innov. Control Variables) Product-Market Side: Positioning Position Supply Side: Resource Position As long as possible Resources:  Acquire  Exploit  Develop  Absorptive Capacity S, W  Disruptive   Discontinuous   Incremental   Value-Innovation  Making sense through Value-Curve  To create real Value, not to waste and  Strategies.  Technological O, T New Market Rent Generation Value Curves Service Innovation Product Life Cycle Management Demand Innovation Non-Value-Added 12/18/2013
  28. 28. Content:  Schumpeter (1939):  New product (Production-Innovation-Development of completely new products, or changes in existing ones, or combinations of existing products into new ones)  New process (technological process innovation and organizational innovation, e.g., investments in systems, technology, people, culture, new approaches)  New sources of supply  The exploration of new market, and  New ways to organize business New process New source of supply New business models New products New markets 12/18/2013
  29. 29. Content:  Oke et al. 2007: Service innovation (a prototype for service, covering the need of the customer and the design of service, Edvardsson and Olsson, 1996, p. 149), process innovation (i.e. methods of R&D, production, service, administrative operations and CI), and product innovation (gaining wider customer reward through introducing new products featuring more differentiated characteristics)  Four types of product innovations: product-line extension, product improvement, new product for current market served, and new product for an established market in which the business offering the innovation is not typically recognized as a vendor (Salavou and Avlonitis, 2008; Thomas D. Kuczmarski, Kellogg School of Management) 12/18/2013
  30. 30. Content: Different Manifestations:  Tangible and intangible composition (Henard and Dacin, 2010)  Innovation outcome: Innovation as newness to the organization (Drucker, 1999): What is new, how new, new to whom? Often the newness of innovation is depicted on a scale ranging from Incremental to Radical (cf. Dedrick et al. 2007), on which radical stands for paradigmatic technological change impacting on, and changing large parts of the economy.  Cautions: For two reasons, such an approach is not very applicable when doing firm-level research. First, the generation of truly radical innovations is extremely rare; therefore, using this definition would lead to the absence of observations at that end of the scales.  Second, this definition takes an “objective” macro perspective in which external experts have to determine the level of newness of an innovation and its related economic and societal impact, which basically makes it inapplicable when conducting large firm-level research.  Therefore, newness of innovation can be practically defined as “to what extent technologically products are improved versions of products that were already produced by the firm, products that are new to the firm, or products that are new to the firm‟s market.” This somewhat more fine-grained distinction allows for a more detailed analysis. Innovation Inputs:  R&D:  R&D intensity of the firm (% of total workforce engaged in R&D) Innovation Outputs:  Newness 12/18/2013
  31. 31. Content: Different Manifestations:  Breadth of content and why innovation is important –  Innovation plays a key role in product life cycle management – both in extending the lifespan of products and, in some cases, responding to the inevitable demise of others by preparing their replacement (i.e., cf. life-cycle evolution, Westerman et al. 2006)  Innovation can allow you to create or enter new markets – enabling a business to grow even when its primary market is static, i.e. through Modular innovation (Argyres and Bigelow, 2010), or innovation that differentiates businesses from competitors (Buenstorf and Klepper, 2010)  Innovation is about doing things differently, for the commercial gain of the customers or the supplier – or both, i.e. Aldi supermarkets. In management economics terms, successful innovation should give rise to increased added value for the vendor or the purchaser when compared to existing alternatives. 12/18/2013
  32. 32. Incremental Innovation Breakthrough Innovation: Disruptive Discontinuous Innovation Innovation Sustaining Innovation  Types of innovation:  Apparently from now, there are many different types of innovation and also many different ways to talk about it.  For instance, Harvard Professor Clayton Christensen contrasts “disruptive” with “sustaining” innovation, while  Gary Hamel talks about the distinction between “breakthrough” and “incremental” innovation. Incremental or continuous innovation is typical of companies with R&D departments. It delivers gradual improvements like enhancing software, improving battery life, miniaturizing hardware, improving the taste of frozen sea food products, and is a result of spending time on the systems, processes and technologies involved. It‟s about gradual evolution rather than a revolutionary step-change. Ultimately, it enables firms to keep up-todate with the market and, ideally, to edge ahead. This notion has given rise to the term “sustaining innovation.”  Other observers such as Geoffrey Moore prefer to think in terms of “discontinuous” versus “continuous” (or continuing) innovation. 12/18/2013
  33. 33.  Disruptive innovation is commonly associated with Harvard Professor Clayton Christensen. He uses the term “disruptive” because it turns the conventional paradigm of the market on its head, not by improving on competitors‟ offerings, but by actually reducing functionality.  If this sounds like a crazy idea, think about for a moment. How many times from personal experience have we found ourselves faced with an incremental innovation that offered functionality that we couldn‟t actually use. They ability to store 2 million songs instead of one million, perhaps? Or take photographs at eight-megapixel resolution instead of three? Disruptive innovation challenges the commonly-accepted trajectory of rising functionality, i.e. examples: Aldi in the consumer space, and ATMs which provided a very restricted product compared to computer service, and Southwest Airlines in no-frill services business models. 12/18/2013
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  38. 38. In short:  If you‟re looking at a market (or are already part of a market) that contains overserviced customers, then there is likely to be an opportunity for disruptive innovation.  For example, where you can identify an existing market (let‟s say an airline industry) that can be served more relevant to a greater range of customers by being simplified, then it‟s time to consider if there may be an opportunity for disruptive innovation. 12/18/2013
  39. 39. Discontinuous Innovation:  Discontinuous innovation involves a radical seismic shift, a significant leap upwards in functionality.  Products like Skype and iPod are in this category although they are frequently (and incorrectly) described as “disruptive innovations” because they have revolutionarized their markets (or arguably even created new ones). But Skype and iPod are discontinuous rather than disruptive since they offer new features and benefits instead of cutting back on those of their predecessors. 12/18/2013
  40. 40. Transforming Resources Listen to Customers “Demand Innovations”  Because much continuing innovation is about incremental improvement (a smaller computer, faster hard disk, bigger CD player, louder speaker, more convenient food choices etc.), it doesn‟t require a great deal of external stimulus to direct it. Not so for other types of innovation. Successful discontinuous and disruptive innovations tend to follow from some kind of customer insight or customer understanding.  Adrian Slywotzky and Richard Wise, the authors of How to Grow When Markets Don‟t, introduce the notion of “demand innovation” – essentially the idea that there is an inherent customer requirement for innovation, since many customer needs are going unmet 12/18/2013
  41. 41. Note: Service innovation:  Kotler (2006) – market offerings include products together with services. As such, market offering can be treated as service innovation.  Services are different from products in four ways (Zeithami et al. 1985):  Intangibility – Services cannot be inventoried, cannot be patented, cannot be readily displayed or communicated. Pricing is difficult.  Heterogeneity – Service delivery and customer satisfaction depend on employee actions. Service quality depends on many uncontrolled factors. There is no sure knowledge that the service delivered matches what was planned and promoted.  Simultaneous production and consumption – Customers participate in and affect the transaction; customers affect each other; employees affect the service outcome; decentralization may be essential; mass production is difficult.  Perishability – It is difficult to synchronize supply and demand with services, and services cannot be returned or resold. Zeithaml, A., Parasuraman, A. and Leonard, L.B. (1985), “Problems and Strategies in Services Marketing,” Journal of Marketing, 49, pp. 33-46. 12/18/2013
  42. 42. Note: Technological innovation:  Refers to a process in which enterprises apply innovated knowledge, new technology and new processes, and adopts new modes of production and management to improve product quality, develop new product, and provide new services to capture the market and realize market value (Liu and Tang, 2010).  Technological innovation is the integration of technology, knowledge, and the market, a complex process, which includes conception development, promotion and application of new technologies (Liu and Tang, 2010).  Radical or incremental technological innovation (Dedrick et al. 2007):  Breakthrough that change the nature of products and services  Minor changes to existing products, which cumulatively improve the performance of products and services. time Technological innovation Competitiveness Competitive advantage 12/18/2013
  43. 43. Note: Organization innovation:  Organization innovation pertains to all parts of the organization, optimizing organization structure by promoting corporate culture (Laforet and Tann, 2006), i.e., and to all aspects of its operations, which bring improvement and development to the performance of the organization (Damanpour, 1992).  Three organization innovation characteristics (Salavou et al. 2004):  Internal strategy-driven characteristics: Market orientation, learning, technological policy of the company.  External competition-related characteristics: Refer to the type of business and barriers to business (In essence, the business models)  Control variables: Refer to firm size, firm age, market share, capital ownership, administrative intensity, product categories. Internal strategy-driven OI External competitionrelated OI Control Variables = Value-Creation 12/18/2013
  44. 44. Context:  Infrastructural information technology systems as catalyst to the development and adoption of innovation (Thong and Yap, 1996)  Individuals, groups, and organizational levels – Favorable personality traits, employee involvement, operational excellence and competitiveness (Kavoos 2007; Oke et al. 2007).  HRM Strategies, Systems, and Practices (CC Tan, 2013)  Market orientation culture (Dilani et al. 2007)  Leadership, team support, the process of innovation as the contextual factors (Shone, 1985)  Team members support each other Innovative Organizations 12/18/2013
  45. 45. Contextual:  In discussing the personnel of an innovative organization, the social scientists considered such matters as personal and job security, educational processes, decision-making criteria, and group norms, among others (Dr. Becker, University of Chicago).  They agreed that psychological and job security are both necessary for creativity. Only a man who is personally secure can deviate from the group solution and suggest the novel approach. 12/18/2013
  46. 46. Contextual:  Diversity of educational upbringing is thought to be positively related to innovation in the following way (Dr. Becker, University of Chicago):  If the members of a decision-making group in an organization all had been exposed to the same educational discipline they would tend to consider the same sorts of alternatives as possible solutions.  The “far-out” idea has much less chance of inclusion or survival in the set of possible solutions than it would have if the members had been educated in diverse disciplines – disciplines which might utilize different approaches to problem solving.  Increasing the probability of accepting an innovative solution by diversifying the backgrounds of group members seemingly affects all kinds of organizational innovation equally. Diversity of backgrounds of group members Better innovative outcomes 12/18/2013
  47. 47. Contextual: (Dr. Becker, University of Chicago):  Perhaps related to the individual‟s education, but more probably a personality factor, is the kind of decision-making criteria he employs.  See also CC Tan (2013, HRM Modules, Thanapoom Thongsamoot et al. 2013 ThirdYear Student Project, Accepted for the 29th National Graduate Research Conference, 2013, Mae Fah Luang University).  One of the social scientists thought it crucial to innovation whether an individual uses abstract or concrete decision-making criteria. The scientist asserted that there is a tendency to decide in favor of the alternative which can be supported by objective, countable, quantifiable attributes. Alternatives supported by abstract criteria dealing with the unverifiable and the future tend to be disregarded. If, as he argued, there is a general preference for the concrete over the abstract, then surely that preference will bias decisions against innovation. Here, perhaps we can make a useful distinction (ibid, p. 4-5).  Almost all decisions in the product and marketing areas could be based on abstract criteria, while some of the decisions in the process area only can be based on concrete criteria (i.e. what kind of punch process to use). Thus, increasing the use of abstract decision-making criteria will lead to greater product and marketing innovation relative to process innovation (ibid, p. 5). 12/18/2013
  48. 48. In summary: Well-managed process and systems of innovation:  Technological level – Laboratory for experimentation, IT, FMS  Operational level – functional innovation to achieve competitive priorities, i.e., cost, quality, delivery (speed and dependability), flexibility, innovativeness in market offering (both products and services)  Organizational level – strategic and administrative (SHRM enabled), culture, PMS (Performance Measurement Systems) and OL (Organizational Learning)  Individual and group levels – team structure, problems-solving, brainstorming, focus group  External level – business incubator systems / market knowledge sourcing, communities of practice, market competition intensity and industry clusters.  At root level – SKA (Skill, Knowledge, and Attitude) Levels: Individuals, Groups, and Organizational Levels.  Products-services-process-systems-structure (and 7S innovation) 12/18/2013
  49. 49. Structure Hard S: Strategy Systems Shared Values Skills Soft S: Styles Skills 12/18/2013
  50. 50.  In general, the best organizational designs are adaptive, self-correcting, and become more robust over time. The resilient organizational model comes closest to this ideal by incorporating the healthiest parts of the innovative organization‟s building blocks.  They combine an aligned structure, logical and streamlined and innovative decision rights, appropriate motivators, and rapid flow of information. These characteristics allow an innovation organization to make quick, effective trade-offs between priorities, integrating elements from diverse functions, extended past the boundaries of the firm itself to suppliers, customers, and partners. 12/18/2013
  51. 51. Matches with the Componential Theory of Creativity of Professor Teresa M. Amabile, Harvard Business School since 1983 at individual creativity level, extended to organizational level in 1988: Amabile, T. M. (1983), Social Psychology of Creativity: A Componential Conceptualization, Journal of Personality and Social Psychology, 45, pp. 997-1013. Amabile, T.M. (1988), A Model of Creativity and Innovation in Organizations, in B.M. Staw and L.L. Cummings (Eds.), Research in Organizational Behavior, 10, pp. 123-167, Greenwich, CT: JAI Press. Amabile, T.M. (1996), Creativity in Context, Boulder, CO: Westview Press. Amabile, T.M. and Mueller, J.S. (2008), Studying Creativity, Its Processes, and Its Antecedents: An Exploration of the Componential Theory of Creativity, in J. Zhou and C. E. Shalley (Eds.), Handbook of Organizational Creativity, pp. 33-64, New York: Lawrence Erlbaum. 12/18/2013
  52. 52. Componential Theory of Creativity:  In this theory, four components are necessary for any creative response:  Three components within the individual – domain-relevant skills, creativityrelevant processes, and intrinsic-task motivation, and one component outside the individual – the social environment in which the individual is working (Amabile, 1983).  Domain-relevant skills: Expertise in the relevant domain or domains (Content Expertise)  Creativity-relevant processes: Cognitive and personality processes conducive to novel thinking  Intrinsic task motivation and social (surrounding) environment: Contextual and Purposive factors. Specifically, intrinsic motivation is to engage in the activity, out of interest, enjoyment, or a personal sense of challenge.  Extended to “Within-Organization Components” and “External Environment.” (Amabile, 1988)  Parallel to our “Innovative OL” driven Business Model (CC Tan et al. 2013): Context-Content-Process-Purpose (2C-2P). 12/18/2013
  53. 53. Purpose: Creativity must be appropriate to the task to be completed or the problem to be solved. That is, it must be “valuable, correct, feasible, or somehow fitting to a particular goal.” The theory of creativity specifies that creativity requires a confluence of all components; creativity should be highest when an intrinsically motivated person with high domain expertise and high skill in creative thinking works in an environment high in supports for creativity (Amabile, 1983, 1988, 1996; Amabile and Mueller, 2008). 12/18/2013
  54. 54. Creativity-Relevant Processes: Creativity-relevant processes (originally called creativity-relevant skills) include a Cognitive Style and Personality Characteristics that are conducive to Independence, Risk-Taking, and Taking New Perspectives on Problems, as well as a Disciplined Work Style (“Conscientiousness”) and Skills in Generating Ideas. These cognitive processes include the ability to use Wide, Flexible Categories for Synthesizing Information (“Open to Experience and Reflective Observation”) and the ability to break out of Perceptual and Performance Scripts (“Reflective Observation”). The personality processes include Self-Discipline and a Tolerance for Ambiguity. Dr. CC Tan (2013): Kolb‟s Experiential Learning Styles + Personality Traits for a new Definition on HRD, implications for Team and Individual Performance. 12/18/2013
  55. 55. Task-Motivation: Intrinsic task motivation is passion: The motivation to undertake a task or solve a problem because it is interesting, involving, personally challenging, or satisfying – rather than undertaking it out of the extrinsic motivation arising from contracted-for rewards, surveillance, competition, evaluation, or requirements to do something in a certain way. A central tenet of the componential theory is the intrinsic motivation principle of creativity. People are most creative when they feel motivated primarily by the interest, enjoyment, satisfaction, and challenge of the work itself – and not by extrinsic motivators. Purpose Contextual Feedback 12/18/2013
  56. 56. The Social Environment:  The outside component is the Work Environment or, more generally, the Social Environment.  This includes the “Extrinsic Motivators” that have been shown to undermine “Intrinsic Motivation”, as well as a number of other factors in the Environment that can serve as “Obstacles” or as “Stimulants” to “Intrinsic Motivation and Creativity.”  Research in organizational settings has revealed a number of work environment factors that can block creativity, such as norms of harshly criticizing new ideas, political-problems within the organization, an emphasis on the status quo, a conservative, low-risk attitude among top management (Uncertainty Avoidance), and excessive time pressure. Intrinsic Motivation: The Inner/States-of-Mind / Personal Environment Extrinsic Motivation: Social Environment 12/18/2013
  57. 57. The Social Environment: Other factors can stimulate creativity, such as a sense of positive challenge in the work; work teams that are collaborative, diversely skilled, and idea-focused; freedom in carrying out the work; supervisors who encourage the development of new ideas; top management that supports innovation through a clearly articulated creativity-encouraging vision and through appropriate recognition for creative work; mechanisms for developing new ideas; and norms of actively sharing ideas across the organization (Diffusion). Foster Cross-Pollination of Ideas. When there is a high degree of psychological safety, where people spout “wacky” ideas without fear of ridicule. Moreover, a range of resources facilitates experimentation. 12/18/2013
  58. 58. Environment:  Social-organizational environment, i.e. work environment  Physical environment  Economic environment, i.e. economic fluctuations  And other outside factors, i.e. consumer preferences 12/18/2013
  59. 59. Iteration:  The creative process often recur iteratively until a creative outcome has been attained.  If rewards or other motivators are presented in a controlling fashion, leading people to feel that they are being bribed or dictated to, the undermining effects are likely to occur.  However, if rewards confirm people‟s competence (for example, by recognizing the value their work), or enable them to become more deeply involved in work they are excited about (for example, by giving them more resources to do the work effectively), intrinsic motivation and creativity might actually be enhanced. This process is termed “motivational synergy.” (Amabile, 1993). 12/18/2013
  60. 60.  The theory of creativity is applicable at multi-levels, encompassing creativity in single individuals, teams, and entire organizations.  The componential theory‟s basic elements, and the creative process it describes, are similar in the aggregate to other theories of creativity in both psychology and organizational studies, although with different emphases and somewhat different proposed mechanisms.  At their core, all contemporary scholarly theories of creativity rely on the definition of creativity as a combination of novelty and appropriateness. Most theories describe a process by which an individual produces creative ideas, and most (but not all) include both skill and motivational elements. Some include the social environment. 12/18/2013
  61. 61. Creativity:  Novelty + Appropriateness Successful implementation of the creative ideas within an organization, that are valued by customers and the markets in large-scale. 12/18/2013
  62. 62. Innovative Organizational Learning driven Business Model: Double-Loop Learning: Purpose Content Context Process Explicit: Schumpeterian Learning Resources Idea Generation Idea Conversion Diffusion Performance Absorption Scanning Implicit: Newtonian Learning Impacting 12/18/2013
  63. 63. Six P‟s of Creativity: The aspect or facet of creativity emphasized:  Traditionally the 4Ps (Rhodes, 1961; Runco, 2004) + More recently the Six Ps (e.g., Runco, 2007)  Process  Product  Person (or Personality)  Place (or Press)  Persuasion (Simonton, 1990)  Potential (Runco, 2003)  Rhodes, M. (1961), An Analysis of Creativity, Phi Delta Kappan, 42, pp. 305-310.  Runco, M.A. (2003), Education for Creative Potential, Scandinavian Journal of Education, 47, pp. 317-324.  Runco, M.A. (2004), Everyone has Creative Potential, in R.J. Sternberg, E.L. Grigorenko, and J.L. Singer (Eds.), Creativity: From Potential to Realization, pp. 21-30, Washington, DC: American Psychological Association.  Runco, M.A. (2007), Creativity: Theories and Themes: Research, Development, and Practice, New York: Academic Press.  Simonton, D.K. (2007), Creative Life Cycles in Literature: Poets versus Novelists or Conceptualists versus Experimentalist? Psychology of Aesthetics, Creativity, and the Arts, 1, pp. 133-139. 12/18/2013
  64. 64. Theories of Creativity: Persuasion Place and Person Explicit: Implicit: Process Product Performance Potential 12/18/2013
  65. 65. Process theories:  Typically specify different stages of processing (Wallas, 1926). Some key issues in the study of the creative process include the extent to which creative thinking involves the same basic cognitive mechanisms as non-creative thinking, the relative roles of conscious versus unconscious processes, the relative contributions of chance or stochastic processes versus more controlled and guided processes, and the nature and reliability of evaluative processes during the process of creation. Products:  Probably the most objective approach to creativity focuses on products: Works of art, inventions, publications, musical compositions, and so on.  Products can usually be counted, thus permitting considerable quantitative objectivity, and they are often available for viewing or judging, so inter-rater reliability can be readily determined – two substantial advantage.  A down side is that when studying a product, little can be directly said about the process leading to it or the creator‟s personality. Inferences are thus necessary to inform the creative process or person.  Wallas, G. (1926), The Art of Thought, New York: Harbourt Brace and World. 12/18/2013
  66. 66. Person (Personality):  Several traits cut across creative potential. These include intrinsic motivation, wide interests, openness to experience, and autonomy (Helson, 1972). Place (Press: Press from Pressure):  Place or press factor is especially useful in defining such interactions between persons and environments.  There are individual differences in terms of preferred environments, but again also general tendencies.  Creativity tends to flourish when there are opportunities for exploration and independent work, and when originality is supported and valued (Amabile, 1990).  Amabile, T.M. (1990), Within you, Without you: The Social Psychology of Creativity and Beyond. In M.A. Runco and R.S. Albert (Eds.), Theories of Creativity, pp. 61-91, Newbury Park, CA: Sage.  Helson, R. (1972), “Personality of Women with Imaginative and Artistic Interests: The Role of Masculinity, Originality, and Other Characteristics n their Creativity,” Journal of Creative Behavior, 6, pp. 295-300. 12/18/2013
  67. 67. Persuasion:  Creative people change the way others think, so they must then be persuasive to be recognized as creative. The notion of creativity as persuasion shares assumptions with the social perspective (Amabile, 1990) and Csikszentmihalyi‟s (1988) systems model. In the last of these, persusive individuals are the ones who are likely to influence the direction taken by a domain. Performances and Potentials:  Runco (2008) recently suggested to add creative performances versus creative potentials.  The former is divided into products and persuasion theories, and any other perspectives that focuses on manifest, unambiguously creative behavior. The latter is divided into creative personality and places, and any other perspective that appreciates yet-unfulfilled possibilities and subjective processes.  Csikszentmihalyi, M. (1988), Society, Culture, and Person: A Systems View of Creativity, in R.J. Sternberg (Ed.), The Nature of Creativity: Contemporary Psychological Perspectives, pp. 325-328, New York: Cambridge University Press.  Runco, M.A. (2008), “Creativity and Education,” New Horizons in Education, 56, pp. 107115. 12/18/2013
  68. 68. Theories of Creativity:  The claim usually worded “moderation in all things” applies to many aspects of creativity.  For instance:  Autonomy is good or creativity and its development, but too much autonomy, and there may be no direction, no focus (Albert & Runco, 1989). The same can be said about competition, challenges, constraints, attention, experience, and many other potential influences on creativity (Runco, 2001).  Albert, R.S. and Runco, M.A. (1989), “Independence and Cognitive Ability in Gifted and Exceptionally Gifted Boys,” Journal of Youth and Adolescence, 18, pp. 221-230.  Runco, M.A. (2001), Creativity as Optimal Human Functioning, in J.M. Bloom (Ed.), Promoting Creativity across the Lifespan, pp. 17-44, Washington, DC: Child Welfare League of America. 12/18/2013
  69. 69. Innovative Organizational Learning driven Business Model: Double-Loop Learning: Purpose Applicable as a Policy Learning Model: Content Context Process Explicit: Schumpeterian Learning: Data Information Value-Curve SSC Knowledge DSC Wisdom LTV: Rev. Streams - Cost Discovery Resources Dream, Design Destiny Co-Research Envision, Engage Unfreeze Idea Generation Co-Development Transform Move Idea Conversion Distribution Refreeze Refreeze Scanning Diffusion User Zones. Grass-Root Participation and Involvement. Social Entrepreneurship, Internalization Implicit: Newtonian Learning: Impacting 12/18/2013 Performance Innovation Absorption
  70. 70. Use of Appreciative Inquiry (Participatory Action Research) as an approach to leverage organizational cultural capital which could add value in terms of the potential to deliver a competitive advantage. AI approach has the potential to enhance an organization‟s human, social, and psychological capital (Luthans & Youssef, 2004). This indicates that the discovery of cultural capital could yield far greater returns over and above leveraging the organization‟s inner strengths, if an appreciative methodology is adopted. Spill-Over: Human capital (tacit knowledge) Leverage organization ‟s cultural capital through AI Psychological capital, i.e. hope, confidence, and optimism. Potential Outcome: Competitive Advantage Social capital (networking) 12/18/2013
  71. 71. Luthans, F. and Yussef, C.M. (2004), “Human, Social, and now Positive Psychological Capital Management: Investing in People for Competitive Advantage,” Organizational Dynamics, 33(2), pp. 143-160. 12/18/2013
  72. 72. The 4-D Appreciative Inquiry Cycle: Cooperrider, D.L., Whitney, D. and Stavros, J.M. (2003), Appreciative Inquiry Handbook, Bedford Heights, OH: Lakeshore. Cooperrider‟s doctoral dissertation titled “Appreciative Inquiry: Toward a Methodology for Understanding and Enhancing Organizational Innovation,” was completed in 1986, at Case Western Reserve University, Ohio. In 1987, Cooperrider and Srivastva used the term Appreciative Inquiry for the first time in a professional publication: “Appreciative Inquiry in Organizational Life,” (Magruder Watkins & Mohr, 2001). Cooperrider, D.L. and Srivastva, S. (1987), Appreciative Inquiry in Organizational Life, London: JAI Press Inc. Magruder, W.J. and Mohr, B.J. (2001), Appreciative Inquiry: Change at the Speed of Imagination, San Francisco: Jossey-Bass. 12/18/2013
  73. 73. AI‟s theoretical origins are grounded in the following eight principles (Whitney and Trosten-Bloom, 2003):  The constructionist principle: Words create worlds. Through language and conversations, reality is co-created. “Constructionism is an approach to human science and practice which replaces the individual with the relationship as the locus of knowledge, and thus is built around a keen appreciation of the power of language and discourse of all types.  The principle of simultaneity: Inquiry and change are simultaneous events. Discoveries are made by asking questions that invite storytelling and the sharing of peak experience from which a desired future is envisioned and socially created.  The poetic principle. Unlike a machine, an organization is considered an open book of which its story is constantly co-authored. Furthermore, like a well-written piece of poetry, an organization is open to endless interpretation.  Whitney, D. and Trosten-Bloom, A. (2003), The Power of Appreciative Inquiry, San Francisco: Berrett-Koehler. 12/18/2013
  74. 74. AI‟s theoretical origins are grounded in the following eight principles (Whitney and Trosten-Bloom, 2003):  The anticipatory principle: A positive image inspires positive action. A workforce‟s collective imagination of a desired future is a positive source of energy and motivation behind everyday actions. Cooperrider and Whitney (2003) stated that the artful creation of positive imagery on a collective basis might be the most prolific thing any inquiry could do.  The positive principle: Building and sustaining momentum for change requires large amounts of positive effects and social bonding. The more positively the questions are framed, the longer lasting and successful the change effort (Cooperrider & Whitney, 2003).  The wholeness principle: Wholeness brings out the best in people, relationships, communities, and organizations, while inviting people to focus on higher ground. Wholeness fosters the understanding and acceptance of individual differences.  Cooperrider, D.L. and Whitney, D. (2003), Social Construction: Appreciative Inquiry, London: SAGE. 12/18/2013
  75. 75. AI‟s theoretical origins are grounded in the following eight principles (Whitney and Trosten-Bloom, 2003):  The enactment principle: Be the change you want to see. This principle suggests that positive change is realized as images and visions of a desired future are enacted in the present.  The free choice principle: Free choice is an essential element of being human while fostering performance. Thriving organizations are characterized by employees who are free to choose their terms of contribution, which in turn generate enthusiasm and commitment.  Cooperrider, D.L. and Whitney, D. (2003), Social Construction: Appreciative Inquiry, London: SAGE. 12/18/2013
  76. 76. A brief outline and summary of each phase of the AI‟s 4D-Cycle (Magruder Watkins and Mohr, 2001; Cooperrider et al. 2003): Appreciative Inquiry (AI) is a form of participatory action research is uniquely oriented toward the creation of productive outcomes. Action research is a democratic and datadriven form of inquiry: Phase 1: Topic Choice  Human systems grow in the direction of what they choose to study.  The AI interview questions are framed around topics people want to see grow and flourish in their organization  Use of AI as a method to leverage cultural capital, and to explore the opportunity of initiating systems wide AI intervention  The questions are unconditionally positive.  The participation and data collection strategies are decided upon  The project management structure is developed. 12/18/2013
  77. 77. Phase 2: Discovery:  The AI interviews are conducted to identify the life-giving forces at the core of the organization.  These life-giving forces and structures that are present when the organization is functioning at its best, begin to surface through storytelling and the sharing of peak experiences, values, and wishes for the organization.  Hope grows and organizational capacity is enriched. Phase 3: Dream  Practical – through storytelling, participants create a shared and desired image of their future that is grounded in the organization‟s positive past.  Generative – the mind naturally begins to wonder and envisions new possibilities by amplifying the organization‟s positive core. 12/18/2013
  78. 78. Phase 4: Design  The organization‟s social architecture, wherein the exceptional becomes everyday and ordinary, is crafted in the form of an inspirational statement or a provocative proposition wherein the organization‟s cultural capital is reflected.  This phase requires in-depth dialogue about the best structure and processes to support the new systems. Phase 5: Destiny  Through continuous learning, innovation and creativity, the organization evolves to enhance and sustain its positive core (cultural capital) by breathing life into its provocative proposition.  Changes never thought possible are democratically mobilized as individuals and business units commit to a course of positive action. 12/18/2013
  79. 79. The workshop commenced with a 30-minute interview experience between pairs (five pairs in total). Each participant had 15 minutes to interview his or her partner using the standard AI interview protocol (Cooperrider et al., 2003): 1. Describe a high point experience in your organization, a time when you felt most alive and engaged. 2. Without being modest, what is it that you value most about yourself, your work, and your organization? 3. What are the core factors that give life to your organization, without which the organization would cease to exist? 4. What three wishes do you have now to enhance the health and vitality of your organization? Having experienced the power of asking the unconditional positive question, a small discussion followed after which the group unanimously embraced the idea of a system-wide AI and an agreement was made to involve the whole organization. 12/18/2013
  80. 80. Topic Choice: Leveraging organizational culture capital Discovery (Workshop One):  Presentation;  AI overview and brief introduction to action research  Topic: Leveraging organizational culture capital in relation to the 4-D cycle  Brainstorming:  What do you think is this organization‟s positive core?  AI – an alternative approach (from problem solving) to discovering the organization‟s positive core  One-to-one interviews:  Participants debriefed and invited to attend the second workshop.  Their thoughts on the AI interview protocol?  Data capturing:  Interview guides collected and stored by the researcher for further content analysis 12/18/2013
  81. 81. Discovery (cont.) and dream – Workshop Two:  Storytelling and theme analysis:  Participants share peak experience stories in smaller groups and identify underlying themes  Feedback:  Sub-groups share selected stories and emerging themes with larger group.  Discovering cultural capital:  Participants prioritize the most important themes (cultural capital)  Images of the future:  Leveraging organizational cultural capital: What could be; images shared.  Painting Exercise:  Creating a common vision for the future through art  Explanations of each artwork.  Homework:  How business units could leverage cultural capital? 12/18/2013
  82. 82. Design:  Overview (4-D Cycle, Topic Choice, and Cultural Capital)  Facilitated group process to co-construct the organization‟s social architecture:  Definition and guidelines on writing a provocative proposition  Individual provocative proposition‟s integrated.  Discussion:  Operationalizing the provocative proposition  “Selling” the provocative proposition to the organization. Destiny (Workshop Three):  Overview (4-D cycle, topic choice, cultural capital, selected outcome)  Provocative proposition shared with the group  Small group discussions:  How to leverage the organization‟s cultural capital embedded within the provocative proposition  Business units share commitments with the larger group. 12/18/2013
  83. 83. Example: Theme One: A culture of humanity and teamwork “We are innovative, creative, hard working people who work as a team.” Theme Two: Continuous Learning “I was given the opportunity to exploit my ability in designing the X programme. This also gave me insight into a different field. I was excited as it was something new, a learning curve that had to be and was conquered. Theme Three: Continuous flow of communication “A peak experience for me was the monthly staff meetings the company used to have. Although a newsletter and the intranet have now taken its place, I enjoyed the personal experience and richness of information that was coming straight from the director. Being kept in the loop was a high point for me.” Theme Four: Creative freedom “When I was running the X department, I was able to use all my abilities to make the department work. I felt I was given the opportunity to help myself, and the freedom t run the department with available resources. 12/18/2013
  84. 84. Example: Theme Five: Open Style of management “The work taught me independence; to take responsibility for my decisions, and broadened my knowledge base.” Theme Six: Developing people through trust “I was surprised at the amount of development I could do in such a short space of time. Others were supportive, gave me positive feedback, trusted me, and relied on my decisions – which made me aware of my abilities. I worked very hard. I immersed myself in the job.” Theme Seven: Staff support “A high point for me was when I started a project which worked ! I had to market and educate people on the programme … I was excited. I received a lot of support and encouragement. I worked hard on the programme, and it was a big success.” 12/18/2013
  85. 85. Example: The organization‟s provocative proposition: We are young, hip, and fresh. Through the fostering and nurturing of strategic values, we are a formidable force. Our management and staff believe in creating a culture of continuous learning and development through trust. This culture allows for the creative freedom to achieve long-term goals. Our cornerstone is progress through communication, providing a humanistic environment by communicating through teamwork. Business Unit – Development: We are committed to sharing technology and ideas to improve work performance in each department. From the company, we request you to share with us those areas with which you are struggling. Maybe we could help in terms of available technology that no one in the company, besides the development team, is aware of. We will also place a suggestion box on the intranet. 12/18/2013
  86. 86. Purpose:  Social Entrepreneurship (Ellis et al. 2012):  Health  Livelihood Development, i.e. welfare outcomes.  Education: Build human capital  Capitalize full economic and social integration  Long-term improvements in technological, social and environmental indicators.  Enhance long-term systems efficiency.  Scanning:  Identifying constraints  Potential entry points for development intervention  Risk management issues – across the entire value innovation chain, i.e. production risk, technology risk, and market risk.  Diffusion:  Rationale for diffusion – monetary (i.e. buyer needs, cost reduction, higher market price, and reduced production risk) versus non-monetary drivers (i.e. peer pressure, protection of the environment).  Ellis, W., Ratanawaraha, A., Diskul, D. and Chandrachai, A. (2012), “Social Entrepreneurship as Mechanism for Agro-Innovation: Evidence from Doi Tung Development Project, Thailand,” International Journal of Business and Social Science, 3(23), pp. 138-151. 12/18/2013
  87. 87. Envision: Enable service assets and readiness  Assess service opportunity  Formulate service strategy Engage: Plan service availability  Develop service concept  Develop service catalogue Transform: Implement service support  Develop services  Manage service delivery Optimize: Continual service improvement  Manage service metrics  Improve service delivery  Optimize service capacity Envision Engage and Transform Optimize Uhl and Gollenia (2012) Uhl, A. and Gollenia, L.A. (2012), A Handbook of Business Transformation Management Methodology, Gower Publishing Limited. 12/18/2013
  88. 88. Envision:  Envision is formulated via service strategy in identifying service innovation opportunities that contributes to the business values.  In this stage, the market spaces that the service will thrive in to deliver business value must be evaluated and formulated as overall strategy.  The scope of envision is understood as “the process of translating business vision and strategy into effective enterprise change, by creating, communicating, and improving the key requirements, principles, and models that describe the enterprise‟s future stage and enable its evolution (Uhl and Gollenia, 2012).  This stage needs to prepare the organization to build the service assets that will enable the capability development in the later stages, as a necessary for service innovation delivery. 12/18/2013
  89. 89. Engage:  Engage is enabled via Develop Service Concept, Service Catalogue, and Plan for Service Availability.  In developing a clear understanding of what is the innovation concept that is required, why it is required, how it is to be achieved and measured, and who is responsible. This stage starts out with involvement and collaboration throughout middle management and employees in generating and brainstorming ideas.  Innovative ideas are coming from uncovering employees‟ ideas and voices of customers such as open innovation, and lead user innovation.  In this stage, the idea generation methods and design of experiments are using for developing the concept. Such methods that widely used and recommended are Brainstorming, Brain-writing, TRIZ, Cognitive Modeling, Perceptual Mapping, Scenario Analysis, Morphologic Analysis, Divergent and Tangent Thinking, Concept Screening, Feasibility Determination, Ethnography, Excursion and Empathic Design.  The methods in evaluating the service innovation concepts are Balanced Scorecard, Benchmarking, Best Practice, Concept Testing and Value Analysis. The concept evaluation is aimed at providing a list of plausible service innovation concepts that is valuable for both business organizations and customer values, and implementable with the organization capabilities.  The service availability plan is then a part of the development to summarize the performance capacity of all services in reflections of the current and future needs of the business. 12/18/2013
  90. 90. Transform:  Transform is implemented via Develop Services, Manage Service Delivery, and Implement Service Support.  In this stage, the organization builds its capabilities through developing new business processes and enhancing employee competencies to enable service delivery, collaborating for value co-creation, and driving service-value networks i.e. service systems.  With the clearly defined service concept in prior stage, the service development could be implemented with a focus on the customer-centricity, aimed at converting the efforts in each service delivery to increase the customer relationships and tangiblize as a long-term customer values. 12/18/2013
  91. 91. Optimize:  Optimize is emphasized via Manage Service Metrics, Improve Service Delivery, and Optimize Service Capability.  The goal is to optimize the performance of service delivery and reducing overall costs caused by poorly managed services.  In value-based competitive paradigm, service optimization requires a clearly defined and measured service performance metrics as elements of customer value.  By having service standards and reliable metrics, the business organizations can optimize all the dynamic elements needed to deliver service value.  Well-defined, value-based service measures can enable an organization to evaluate the return on investment of existing services and to calculate the expected return from new service designs and new service innovation.  Service value optimization goes beyond tracking the discrete customer-centric metrics and finding an ideal balance among the many other dynamic variables in the value equation. It requires the ability to access, integrate, and analyze information across multiple business functions – creating a holistic view of service delivery across different sales and service channels – to assess and optimize customer value – to mobilize resources around specific service demands and dynamically predict customer value before committing resources. 12/18/2013
  92. 92. Adoption:  New technologies are favored if they:  (a) Have zero or low capital requirement  (b) Can be readily adopted by unskilled farmers with a low level of risk  © Can create social / environmental, as well as, individual benefits (Ellis et al. 2012) 12/18/2013
  93. 93.  We are not necessarily advocating for the development of such models into grand unifying theories, although such efforts might be inspired.  Rather, we are suggesting that scholars better situate their theories in the broader theoretical and empirical landscape of the domain, acknowledging and, when possible, incorporating the plurality of perspectives that have taken root and flourished.  At the very least, this requires that scholars acknowledge the contested nature of their own theoretical assumptions and perspectives. By doing so, they may discover areas of overlap between seemingly contested positions, which not only advance the standing of their own theoretical perspectives, but also enrich our broader knowledge of creativity.  Inclusive-systems-based theoretical context for innovation  Value-curve is the center-stage for actors and participators, e.g. grassroots innovation and adoption of new technologies or approaches. 12/18/2013
  94. 94. New idea:  Is a thought about something new or unique Invention:  Making that idea real is an invention Innovation:  Innovation is an invention that has a socioeconomic effect.  Innovation changes the way people live (Williams, 1999) 12/18/2013
  95. 95. Chayutsahakij, P., Human Centered Design Innovation, Department of Industrial Design, School of Architecture, Chulalongkorn University, Bangkok 10330, Thailand. Williams, A. (1999), Creativity, Invention and Innovation, Australia: Allen & Unwin. 12/18/2013
  96. 96.  User information is an important source of new product ideas (of what should be designed), which has the potential to redirect a company‟s technology capabilities toward an entirely revolutionary innovation (Chayutsahakij , Chulalongkorn Unviersity) User Research Zone 12/18/2013
  97. 97. User Research Zone Scanning: Useful ways to Establish Value-Curves for New Products, New Markets, or New Technology, or Mixture of all these and Known Technology, Known Market, etc.:  Key to innovative design is an understanding of the “users”.  In the past, directions for design development were based on “Marketing Research,” which limits innovation to its evolutionary form.  Because traditional marketing research builds upon opinions of current experience and already present technologies, it is generally unhelpful for design that is “not tied to a familiar consumer paradigm.”  Recently, a few forward thinking companies started deriving their design direction from user research, which helps uncover unarticulated or emerging user needs. 12/18/2013
  98. 98. User Research Characteristics:  The user research characteristics semantic is developed by Jay Melican‟s (2000). Research Characteristics: Semantic Scales: 1. 2. 3. 4. 5. 6. 7. Predesign During Generative Open-ended Conceptual Cultural Social/Group Immerse Observe Listen Experience Tactile Visual Phase of application Research aim Research structure Analytic perspective Generalization Mode of collection Media of delivery Post-Design Evaluative Prepared Perceptual Individual Participate Verbal Melican, J. (2000), Describing User-Centered Designing: How Design Teams Apply User Research Data in Creative Problem Solving, doctoral dissertation, Institute of Design-Illinois Institute of Technology, Chicago. 12/18/2013
  99. 99. Investigation Models:  The investigation Model Semantic used in the study is developed based on Beyer and Holtzblatt‟s (1998) five models of user-behavior analytic perspective, in combination with other analytic approaches including Spradley‟s (1980) dimensions, Pena‟s (1969) framework for information gathering, Owen (1989), and Chayutsahakij‟s (2001) analysis matrix.  The seven investigation models used in this study are:  Flow model  Activity model  Sequence model  Ergonomics model  Artifact model  Physical model  Cultural model 12/18/2013
  100. 100. Investigation Models: Semantic Scales 1. 2. 3. 4. 5. 6. 7. Not related Not related Not related Not related Not related Not related Not related Flow Model Activity Model Sequence Model Ergonomics Model Artifact Model Physical Model Cultural Model Related Related Related Related Related Related Related 12/18/2013 Critical Critical Critical Critical Critical Critical Critical
  101. 101. Flow Model:  Takes into account the interaction between key stakeholders. It explains people‟s roles and helps define how people communicate to get a job done. Activity Model:  Activity model helps better understand recognizable patterns of activities people do in everyday life and / or around the design system. Sequential Model:  Sequential model helps better understand work task order over time and the steps people take for a purpose. Ergonomics:  Ergonomics model takes into account the physical, cognitive, social, and organizational factors in order to make design compatible with the users‟ needs, abilities, and limitations. Physical Model:  Physical model helps better understand the physical context of the potential user and the product or service. 12/18/2013
  102. 102. Cultural Model:  The cultural model helps define expectations, desires, values, and the whole approach people take in their context.  The essentialness of the investigation models are compared on the semantic scales ranging from “not related” on the left end, to “related” in the middle, and to “critical” on the right end. 12/18/2013
  103. 103. Example: Customer Category New Technology Known Technology New Market Known Market 12/18/2013
  104. 104. Investigation Models: 1. Flow Model 2. Activity Model 3. Sequence Model 4. Ergonomics Model 5. Artifact Model 6. Physical Model 7. Cultural Model NTNM NTKM KTNM KTKM Research Characteristics: 1. Phase of Application 2. Research Aim 3. Research Structure 4. Analytic Perspective 5. Generalization 6. Mode of Collection 7. Media of Delivery 12/18/2013
  105. 105. NTNM:  The critical objective of user research for NTNM design innovation is to match the unarticulated needs of users with technological possibilities.  User research is usually conducted as a “Pre-Design Service” to support “Design Decisions” at the strategic level. Designers and design researchers apply user information in generating new project definition for a new context of use and/ore new mission. In order to do so, it is essential to understand the users‟ experience holistically by encompassing psychological, physiological, cultural, and social forces.  User research for NTNM situation begins with questions developed based mainly five investigation models:  Flow model to investigate key stakeholders, who they are, what they do, and how they interact with each other, in order to restructure the flow process and to create opportunities for new product functionality.  Activity model to better understand recognizable patterns of activities people do in everyday life and/or around the design system in order to restructure consumer segmentation.  Artifact model to better understand how people select, create, use, and modify things in order to identify hidden intents that might be undetected and unsupported previously.  Physical model to investigate the physical context of the potential user and the product or service in order to define both the constraints imposed by the physical environment and the structure people create within the constraints for their purposes.  Cultural model to better understand the common aspects of culture that pertain within and across user groups, and to define expectations, desires, values, and the whole approach people take in their context. 12/18/2013
  106. 106. NTNM:  The NTNM design innovation usually arises from holistic understanding about users through conceptual analytic perspective.  Immersion and observation techniques provide the holistic understanding about users and holds the greatest potential benefit for addressing problems with new technological capacity that are not tied to a familiar consumer paradigm.  It is critical that research is open enough to capture user‟s experience holistically, and put together the studies of many users associated with the same community to describe cultural norms.  It is important to note that traditional participatory and interview techniques such as userparticipatory design, focus group, and customer interviews are reported not useful for NTNM innovation since users are so accustomed to current conditions and do not think to ask for a new solution even if they have real needs that could be addressed.  User information for NTNM innovation is presented both in verbal and diagrammatic formats, mixed with visual media, including video or photographic imagery.  In addition, user information is also delivered in the form of direct experience by engaging team members or clients in the field study. 12/18/2013
  107. 107. NTKM (New Technology and Known Market):  The critical objective of user research for NTKM design innovation is to identify design scope and directions based on the “Emerging Needs” for new technology and / or functionality.  Designers apply user information in generating new product definition “What to design?” and / or “What kinds of components should be in the system? (for systems design).  User research for NTKM innovation is conducted to increase understanding of the users in the market, uncover unmet needs useful for restructuring product processes, and to help inform the direction iteratively in the late design process.  User research begins with “Research Questions” developed based mainly on “Flow Model” and “Sequence Model.” Flow model is used to investigate key stakeholders in order to restructure the flow process and to create opportunities for new product functionality.  Sequence model shows the detail structure of tasks that need to be supported, suppressed, or replaced which helps identify the emerging needs for new technology and/ore new functionality.  In addition, Research Questions are sometimes developed based on “Activity Model” and “Physical Model.”  As NTKM innovation deals with existing users in the market, the research supporting NTKM innovation is focused on the “activity around the design system” rather than on “the everydaylife activity level.” 12/18/2013
  108. 108. NTKM:  Research supporting NTKM innovation is usually semi-structured, asking a few openended questions such as “Why are you doing that?”  Or researchers may carry a list of questions to prompt the observation, for example, “What problem is the user encountering?  Most researchers develop an understanding of behaviors typical to a social group or an organizational group to which that individual belongs with a procedural analytic perspective.  As designing a new class of product or service changes the way people live or perform in the market, and there is no existing product to use a guideline. The direction of design needs to be developed through detailed understanding of the existing process / activity in the prospective context in order to define the “intent” that people are trying to achieve. This is usually done by gathering data on people achieving their intent with current tools and looking at how people perform, interact with the tools, and whatever else is available to help them do what they need to do in order to identify problems. 12/18/2013
  109. 109. NTKM:  Similar to NTNM situation, traditional participatory and interview techniques are reported not useful to NTKM innovation, while immersion and observation are usually employed as they hold the greatest potential benefit for addressing the problems with new technological capacity that is not tied to a familiar consumer paradigm.  And the user information is usually presented in verbal and diagrammatic formats mixed with visual media, including video or photographic imagery. 12/18/2013
  110. 110. KTNM:  The critical objective of user research for KTNM design innovation is to identify design scope and directions based on the potential new market / new context of use for the existing technology.  Designers and design researchers apply user information “generatively” in decisionmaking about “new context of use and new market,” “What is the potential new context of use?”, “Who are the target users?”, “For what market?”, “What does technology mean to them?”, etc.  User research plays an important role in the decision on re-branding and re-positioning which are related to visual communication and design language to communicate the knowledge technology to the new market. Searching for a new market, user research is used in combination with (or prior to) marketing research. 12/18/2013
  111. 111. KTNM:  User research for KTNM situation begins with questions developed based on 4 investigation models: Activity Model, Artifact Model, Physical Model, and Cultural Model.  User research for KTNM innovation is open-ended, and usually captures the users‟ experience and life styles.  The important questions for use research in KTNM situation include:  What does the product, service, or technology mean to users?  What circumstances prompt people to use the product or service?  Does the customer turn to the offering when and in the way the company expected? If not, there may be opportunity to explore.  By interacting with the user‟s environment: how could the new technology product or service fit into the user‟s system? The research usually puts together the studies of many users associated with the same community to describe cultural norms with focus on a conceptual perspective. 12/18/2013
  112. 112. KTNM:  User research for KTNM innovation provides both an in-depth understanding of how people behave, and also uncover the reason, the meaning, the emotion, and the motivation behind what people do.  Research supporting KTNM innovation is usually ethnographically oriented, aiming at understanding people in their natural social and cultural context by spending a significant amount of time with them.  The user-participatory modes of data collection are also used, as the participants can refer to an existing product class as a foundation on which to formulate their opinions for the KTNM innovation.  As KTNM innovation emphasizes symbolic meaning aspects of design, user information is usually presented essentially in visual form, and deliverables are enhanced with the inclusion of artifacts collected in the research process. 12/18/2013
  113. 113. KTKM:  User research for KTKM innovation is usually done after the decision about the project definition “What to design” is made.  Designers and design researchers only have opportunities to contribute in decisionmaking about new design criteria and/or new solution. However, user research for KTKM innovation is not only conducted for “Post-Design Evaluation” but is also used during “the Iterative Design Process,” to set “design goals with both Utility and Aesthetic/Symbolic Aspects.”  It is important to note that the 2 aspects of design goals are derived from different approaches with different inquiry bases. Thus, user research supporting 1) Utility Development, and 2) Design Language Development (where the concern is on symbolic meaning) are separately further discussed.  User research for utility development provides direction for design criteria, with the goal to make the product and service More Efficient. It provides directions for: “What should the design do? What are the problems to be eliminated? How can the product or service be improved or made more effective? In what way could it be better than the present or previous situation?” 12/18/2013
  114. 114. KTKM:  User research for KTKM utility development begins with Research Questions developed based on Sequence Model, Physical Model, and Ergonomics Model which helps deriving design direction compatible with Needs, Abilities, and Limitations of People.  In addition, Research Questions are also developed based on cultural model and artifact model focusing on the existing objects used in the system.  A research in this situation is conducted in order to identify problems to eliminate and unmet need of users to be fulfilled by design, the research is usually done with a procedural physical setting.  Research techniques used for KTKM utility development is usually a combination of ergonomic oriented research, empathetic design, and user-participatory design.  In addition, prototyping techniques are also used iteratively during design and for the evaluation of design solutions, in order for participants to better understand the design and formulate their opinions for utility development.  As KTKM innovation deals with a “Known” product in the Marketplace, competitive products are already established. User research is also done by gathering data on the basic practice of the market / competitors, and using existing customer feedback channels to help set Design Scopes and Direction. 12/18/2013
  115. 115. KTKM:  User information for KTKM innovation is presented in verbal and diagrammatic formats mixed with visual media.  In the case of user participatory design, user data is also given in the form of tactile presentation, which involves the use of prototypes constructed by subjects.  Prototyping is very useful to classify the concept of the new product or service for the design team, communicate the concept within and beyond the team, and stimulate reaction among potential users. 12/18/2013
  116. 116. KTKM:  User research for KTKM innovation provides direction for design solution of “How the design should look and feel?” and “What it should mean?”, etc.  In this situation, user information is applied in decision making on branding and brand identity in relation to the look and feel of the product, visual communication, packaging, retail environment, etc.  It is critical that designers / design researchers understand the intangible attributes of the products or services, and address influencers in the user‟s culture. Thus, research is conducted to focus on a conceptual perspective, concentrating on understanding users‟ beliefs and attitudes toward a product, service, or situation in order to uncover the motivations and expectations behind the behaviors that users display.  User research for KTKM design language development begins with questions developed based mainly on 4 investigation models: Activity Model, Artifact Model, Physical Model, and Cultural Model to define expectations, desires, values, and the whole approach people take in their context. In addition, Flow Model are sometimes also investigated in order to better understand key stakeholders and to better communiciate with them. 12/18/2013
  117. 117. KTKM:  User research for KTKM design language development is usually semi-structured (is prepared and developed based on hypotheses for preference testing) and is ethnographically oriented.  In addition, the user-participatory design techniques and prototyping techniques are also used iteratively during design and for the evaluation of design solutions, in order for participants to better understand the design and be able to formulate their opinions for design language development of how the design should look and feel.  User information is usually presented essentially in visual form.  Deliverables are also enhanced with the inclusion of artifacts collected in the research process.  Prototyping is also a very useful data delivery technique to communicate within the design team and to stimulate reaction among potential users. 12/18/2013
  118. 118. Innovation: NTNM NTKM KTNM KTKM Utility KTKM Design L Investigation Models: Flow Activity Physical Cultural Flow Sequence Activity Artifact Physical Cultural Sequence Ergonomics Physical Activity Artifact Physical Cultural Phase of Application: Pre-design Research Aim: Generative Pre-Design During-D Generative During D Post-D Evaluative Research Structure: Analytic Perspective: Unstructured Somewhat Conceptual Cultural level Immerse Observe Listen Visual Verbal Tactile Experience Pre-design During-Design Somewhat Generative Semi-Structured Procedural Unstructured Conceptual Semi-S Procedural During D Post-D Somewhat Generative Semi-S Conceptual Social Level Immerse Observe Listen Visual Verbal Experience Cultural Level Participate Observe Listen Visual Verbal Tactile Social L Observe Listen Social L Observe Listen Visual Verbal Experience Visual Verbal Generalization: Mode of Collection: Media of Delivery: 12/18/2013
  119. 119. Beyer, H. and Holtzblatt, K. (1998), Contextual Design: Defining CustomerCentered Systems, Morgan Kaufmann Publishers, San Francisco. Chayutsahakij, P. (2001), “Value-Framing: Enhances Design Team‟s Internal and External Affective Performance,” Proceedings of the International Conference on Affective Human Factors Design, Asian Academic Press, London. Owen, C.L. (1989), Structured Planning: A Method for Developing Design Concepts, CAD/CAM, Robotics and Factories of the Future, Springer-Verlag, Berlin, Vol. 1, pp. 3-9. Pena, W.M. (1987), Problem Solving: An Architectural Programming Primer, AIA, Houston. Spradley, J.P. (1980), Participant Observation, Harcourt Brace Jovanovich Inc., Orlando. 12/18/2013
  120. 120.  Co-Creation at the FrontEnd: A Systematic Process for Radical Innovation 12/18/2013
  121. 121. Front-End Co-Creation: Transforming Resources:  Front-End Co-Creation Ideas Generation  Within the innovation process, the most significant action is at the front-end where companies try to identify opportunities, obtaining and maximizing the benefits of internal and external ideas that lead to new concept offerings (Shan and Zhang, 2009)  Co-creation is important – the open innovation sources. Via the method of co-creation, innovating with users has expanded its territory to include other groups such as “Experts” and “All Stakeholders within the Value Chain” (Sanders and Stapper, 2008). Pichyangkul, C., Nuttavuthisit, K. and Israsena P. (2012), “Co-Creation at the Front-End: A Systematic Process for Radical Innovation,” International Journal of Innovation, Management and Technology, 3(2), pp. 121-127. Sanders, E.B.N. and Stapper, P.J. (2008), “Co-Creation and the New Landscape of Design,” CoDesign, Vol. 4, pp. 5-18. Shan, W. and Zhang, Q. (2009), “Extension Theory and Its Application in Evaluation of Independent Innovation Capability,” Kybernetes, 38, pp. 457-467. 12/18/2013
  122. 122. Front-End Co-Creation / Preparation:  Before a concrete idea enters into the formal new product development stage, this predevelopment phase, namely, front-end of innovation, must be thoroughly researched and managed.  Studies have shown that companies can improve the value and success probability of such opportunities if the front-end of innovation is managed efficiently and effectively. (Liao et al. 2009)  Nevertheless, unwise management of the process may result in poor definition of customer requirements and unfeasible product concept (Heng, 2011).  Hence, there have been many attempts to structure the front-end of innovation for more productive results. Among these is “user innovation,” which aims to integrate users‟ ideas into the innovation process (Gassman, Enkel & Chesbrough, 2010) Gassman, O., Enkel, E. and Chesbrough, H. (2010), “The Future of Open Innovation,” R and D Management, Vol. 40, pp. 213-221. Heng, T. (2011), “The Empirical Analysis of Enterprise Scientific and Technological Innovation Capability,” Energy Procedia, 5, pp. 1258-1263. Laio, S.H. et al. (2009), “Imbalance between Market Orientation and Innovation Capability: an Empirical Study on Taiwan, IEEE. 12/18/2013
  123. 123. Front-End Co-Creation / Preparation:  “User Innovation” has been applied and is most effective within the context of incremental innovation (Lettl, Herstatt & Gemuenden, 2008), which represents modified development based on a company‟s existing expertise in technological core concepts and within known system linkages (Christensen, 1997).  While companies may be able to rely on these minor enhancements for a while, they need to be prepared for any disruptive changes based on entirely new knowledge and technology that will finally emerge as a cycle of Radical Innovation (Smith, 2006). Christensen, C. (1997), The Innovator‟s Dilemma: When New Technologies Cause Great Firms to Fail, Boston, MA: Harvard Business Press. Lettl, C., Herstatt, C. and Gemuenden, H.G. (2008), “Exploring how lead users develop Radical Innovation: Opportunity Recognition and Exploitation in the Field of Medical Equipment Technology,” IEEE Transactions on Engineering Management, 55, pp. 219-233. Smith,D. (2006), Exploring Innovation, New York, NY: McGraw-Hill Education, Chapters 1-3. 12/18/2013
  124. 124. Front-End Co-Creation / Preparation:  There have been many arguments as to whether or not the user innovation approach can be beneficial during this front-end development of radical innovation.  Some argue that users may be caught in today‟s context and not capable of generating tomorrow‟s needs or solutions (Hamel and Prahalad, 1994). Thus, by innovating with users, companies may end up with minor-enhanced offerings that do not create sufficient impact to sustain long-term corporate vision (Smith, 2006).  Additionally, users, in general, lack the ability to understand and foresee highly sophisticated technology fields (O‟Connor and Veryzer, 2001), while the disruptive technology derived from an entirely new knowledge platform is essential in order to shift away from the existing paradigm and enter into the development of radical innovation (Anderson and Tushman, 1990). Anderson, P. and Tushman, M. (1990), “Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change,” Administrative Science Quarterly, Vol. 35, pp. 604633. Hamel, G. and Prahalad, C.K. (1994), Computing for the Future, Boston, MA: Harvard Business Press. O‟Connor, G.C. and Veryzer, R. (2001), “The Nature of Market Visioning for Technology-based Radical Innovation,” Journal of Product Innovation Management, Vol. 12/18/2013 231-246. 18, pp.
  125. 125. Front-End Co-Creation:  Here, users no longer perform “Passive Roles” as “Research Subjects” but “are Actively Involved in the Creative Process of Innovation with the help of Other Stakeholders as well as Providing Idea Generative Techniques.” (Prahalad and Ramaswamy, 2004).  The right mix of people is encouraged to trigger learning behavior and team performance. According to van der Vegt and Bunderson (2005), moderate diversity of social category, such as age, gender, ethnicity, and level of expertise, is recommended in order to utilize different perspectives.  The brainstorming sessions can be used to trigger an individual‟s new ideas or build on the ideas of others while focusing on a specific topic without criticizing other people‟s ideas. Transformed Resources:  Perspectives Ideas Generation Prahalad, C.K. and Ramaswamy, V. (2004), “Co-Creation Experiences: The Next Practice in Value Creation,” Journal of Interactive Marketing, Vol. 18, pp. 5-14. Van der Vegt, G.S. and Bunderson, J.S. (2005), “Learning and Performance in Multidisciplinary Teams: The Importance of Collective Team Identification,” The Academy of Management Journal, Vol. 48, pp. 532-547. 12/18/2013
  126. 126. Front-End Co-Innovation Sources:  There is consensus that advanced knowledge from experts is crucial to anticipate radical opportunity recognition (Kendall et al. 1992).  Thus, it is important to involve experts of different categories to explore promising future technologies and investigate the possible impact of social changes.  For example (Pichyangkul, Nuttavuthisit & Israsena, 2012):  The use of dishwashing detergent involves cutlery and coating substances. Therefore, expert opinion from material scientists and chemists is extremely valuable.  For the mobile companies, in-depth interview with professors who specialize in digital media and content is crucial to uncover future changes.  A sociologist or environmentalist can be of significant help when the companies search for future behavioral shift in beverage drinking. Companies may also want to convene material scientists and dig into the frontier of materials technology to produce beverage cans. Kendall, J.E., Kendall, K.E., Smithson, S. and Angell, I.O. (1992), “SEER: A Divergent Methodology applied to Forecasting the Future Roles of the Systems Analyst,” Human Systems Management, Vol. 11, pp. 123-135. 12/18/2013
  127. 127. Front-End Co-Innovation Sources:  Apart from experts who can provide highly sophisticated future trends, understanding users‟ unmet needs is crucial.  Thus users‟ characteristics may be very important factor to consider.  According to Herstatt (2002), if the ideas are to improve existing product performance, gathering input from “normal users or typical users” is adequate to identify new needs. However, some companies may turn to lead users who are a group of users facing new needs ahead of today‟s markets and strongly benefiting from innovations that provide solutions to those near future needs (Luthje and Herstatt, 2004) Herstatt, C. (2002), “Search Fields for Radical Innovations involving Market Research,” International Journal of Entrepreneurship and Innovation Management, Vol. 2, pp. 473484. Luthje, C. and Herstatt, C. (2004), “The Lead User Method: An Outline of Empirical Findings and Issues for Future Research,” R and D Management, Vol. 34, pp. 553-567. 12/18/2013
  128. 128. Front-End Co-Innovation Sources:  Given the different types of users, Schuurman et al. (2010) proposed user typologies based on the use-diffusion model, and debated that users who possess “a certain degree of rate of use and variety of use” can influence the “ideation process.” Schuurman, D., Moor, K.D., Marez, L.D. and Evens, T. (2010), “Investigating User Typologies and their Relevance within a Living Lab-Research Approach for ICT Innovation,” in Proc. Of the 43rd Hawaii International Conf. on Systems Sciences, Hawaii. 12/18/2013
  129. 129. Front-End Co-Innovation Sources:  The study by Rogers (2003) regarding diffusion of innovation model also reflects the unique characteristics of users based on rate of adoption. They are innovators, early adopters, early majority, late majority, and laggards depended upon how fast the users adopt certain products.  However, there have been no empirical investigations of whether these groups of users can provide useful input for Radical Innovation Process. Rogers, E. (2003), Diffusion of Innovations, New York, NY: The Free Press. 12/18/2013
  130. 130. Front-End Co-Innovation Sources:  Extreme users, in general, are those who reside at the extreme edge of any aspect of research in question: the poorest versus the richest, the tallest versus the smallest, or the oldest versus the youngest, etc. They may represent consumers who live in extreme conditions, at the border of society, excluded from everyday normality, who cannot afford to pay for a certain product or service, or those who choose not to consume it. 12/18/2013
  131. 131.  A look at Southwest Airline‟s strategic profile (next Graph) illustrates how these 3 qualities underlie the company‟s effective strategy in reinventing the short-haul airline industry in value innovation. Southwest Airlines created a blue ocean by breaking the trade-off customers had to make between the speed of airplane and the economy and flexibility of car transport. To achieve this, Southwest offered high-speed transport with frequent and flexible departures at prices attractive to the mass of buyers.
  132. 132. Ratan Tata:  Break wealth barrier  < USD 2,500  Profit Formula  Cost Structure Hilti:  Moving to a contract management program required shifting assets from customers‟ balance sheets to its own and generating revenue through a lease/subscription model.

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