6 innovation - lecture 1 lecture 2

7/28/2019 6 Innovation - Lecture 1 Lecture 2

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nn vation

Department of Management of Technology


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"Innovation distinguishes betweena leader and a follower."

Apple co-founder Steve Jobs

Innovation is the specific instrument of

entrepreneurship. The act that endows

resources with a new capacity to create

wealth Peter Drucker.


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Current Inventions

IBM researchers successfully store a single bit of data in a group of just

12 iron atoms where current hard disks require over 1 million atoms.

Ultra-high-density computer storage media in future

University of Wyoming scientists unveil genetically modified silkwormscapable of producing large amounts of spidersilk, tensile strength than

steel.High-strength medical sutures and lightweight forms of body

armor

South Korean scientists develop touchscreens that can recognise theexistence and concentration of DNA molecules placed on them

development of smartphones with the ability to diagnose users' medica

conditions

Source - Wikipedia


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Science & Technology

Science creates the basefor technologicaldevelopment which inturn creates new markets

Most of the recenttechnologicalbreakthroughs are basedon earlier scientificdiscoveries

Radical innovationscaptures markets

Technology ScientificDiscovery

When

Nuclear Energy Einstein 1905

Transistors A.H Wilson 1931

Electronics Maxwell 1880

Genetic

Engineering

Watson and

Crick

1952


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Innovation Key terms

Basic Research : Sake of increasing our generalunderstanding of the laws of nature. May not havedirect application

Applied research: Directed towards solving aproblem. Can result in technology development

and application.

Idea generation + Solving a problemInvention

Invention + ImplementationInnovation

Innovation +Diffusion Economic value generation


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Invention: Creation of new idea for product, process or service

Innovation Activity of developing a new element into commercially useful

element A business process which brought inventions to commercial use.

The process of new and improved products, processes material andservices are transferred to market where appropriate

Types of Innovation new product or service

new production process

new organizational or management structure

new behavior of practice

Vs


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Who invented the vacuum cleaner?J. Murray Spengler invented the vacuum cleaner originally called

an electric suction sweeper. But it was W. H. Hoover who had a

good idea of how to market and sell the product.

Who invented the sewing machine?

Elias Howe produced the worlds first sewing machine but it wasIsaac Singer who stole the patent and built a successful business

from it (Singer later was forced to pay Howe a royalty on all

machines made).

Who invented the telegraph?Samuel Morse only invented the telegraph code, all the other

inventions came from others. Morse combined marketing andpolitical skills to secure state funding for development work, and

to spread the concept of communication over vast distances on the

continent of America.

Vs


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Who in vented the TransistorIn 1947 some scientists at the AT&T laboratories created the firsttransistor in the world. patented, but unable to find an application. In1952 AT&T decided to license For $ 25.000. companies like TexasInstruments, Sony and IBM acquired the technology that wouldproduce billions of revenues in the coming years.

First Personal computerXerox, in the famous Palo Alto Research Center (PARC) Xerox was thefirst company in the world to develop a personal computer (years

before Apple or IBM), a graphical oriented monitor, a word processingsoftware, a workstation, a laser printer, a local area network, a hand-held mouse,

Vs


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Dimensions of innovation

There are several types of innovation

Process, product/service, strategy,

which can vary in degree of newness:

Incremental to radical,

and impact:

continuous to discontinuous


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process of developing and releasing a new orintrinsically altered version of a product or serviceinto a market

(Translate) needs and opportunities in the environment Satisfiedneeds and fulfilled opportunitiesCosmetic improvement Toothbrush

Functional improvements Air conditioners,

Radical innovation

Developing existing ideas Ex: Tata Nano

Reposition in the different markets Ex: Ultra sound scanner

Product Vs process Innovation


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implementation of a new or significantly improvedproduction or delivery method. significant changesin techniques, equipment and/or software

Enhancing the ability to produce, IE: Adopt andchange the way products are produced

Ex : Faster, Cheaper , Higher qualityusing IT to automate a process

using a new planning system to get a more effective

manufacturing system

Product Vs process Innovation


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Innovation as standalone elements /componentsCD DVD

Innovation of the total systemNetwork Systems : Wired , Wireless

Digital Cameras

Component Vs Architectural


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Process of Innovation -Funnel

Ideas >>> Innovations

Ideas are of course the seeds of innovation

Innovation process starts with the generation of Ideas

Idea generation also has to be a proper system .


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Process of Innovation

Source :The Innovation Master Plan ByLangdon Morris

Strategic Thinking : Where innovations potential to providestrategic advantage

Portfolio Management & Metrics: Evaluation and feasibility

Research Current knowledge and discern the gapsInsight Right value proposition, result of examination and development

Innovation Development Design, engineering, prototyping, andtesting

Market DevelopmentBrand identification

Implementation/ Selling

Ideas are indeed the seeds of innovation


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Ex : Alternative Energy Sources

Process of Innovation

Source :The Innovation Master Plan ByLangdon Morris


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Rate of Innovation for both product and processfollows a general pattern over time

Innovation for product and process innovationshares important unique relationship

Highest during the formative period / Fluid phase(Experimental , product design and functions )

Transitional phase Product innovation

Process Innovation

Pattern of Innovation


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Pattern of Innovation

Innovation dropsDominant Design


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Dominant DesignProduct variety give way to standard design proven bestfor market needs

Accepted standards , Legal , regulatory

Specific Phase

Industries focus on cost volume and capacity

Product and process innovation minor incremental

Dominant Design


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process by which an innovation is communicatedthrough certain channels over time

Diffusion of Technology


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Technology Push Vs Market Pull Contd

Technology pushImplies that a new invention is pushed through Researchand Development, production and sales to the marketwithout proper consideration of whether or not it satisfiesa user need.Ex:Electronic engineering have enabled smaller, smarter electroniccomponents to be fitted into everyday products

Market pullIn contrast, an innovation based upon market needs hasbeen developed by the R&DEx: increasing demand for greener products and therefore products such asrecycling bins, reusable carrier bags, hybrid cars, low energy light bulbs havebeen developed as a consequence


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Technology Push & Market Pull

Ex1 :A123 Systems, a battery maker came up with a high powerdensity, low-cost battery developed in the lab of MIT ProfessorYet-Ming Chiang,

Ex2 :Alternative Fuel

Both tech-push and market-pull is required for successfulinnovation. IE : well-defined problem to solve and a well-formedsolution that addresses the problem


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ill-fated COMET jet passenger airliner, arevolution in its day, plagued with technologyproblems whose ultimate solutions enabledBoeing, untarnished by the pioneering COMETfailures, to win the world market for passenger

jets.

Concorde is another example of a technology

before its time. Ultimately supersonic passengertransport will become commonplace, but not tothe benefit of the Concorde pioneers.

Technology Push & Market Pull


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Main features of Innovators

-ReferenceQuestion

ActionAssociating Steve Jobs @

Observing Scott Cook @

Experimenting Jeff Bezos @

Questioning Michael Dell @Networking Mike" Lazaridis @

Creative Idea / Smart Idea


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in Reverse Innovation

Innovation in the Developing markets toattract developed markets

Portable Ultra Sound machine 350,000 15,000

ECG Machine 10000$ Portable 500$

Economical Cars

Size of the Consumer base (5Billion Vs 2Billion)

Economic recessions 2008-2009

Different Market Segments


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Questions ???


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Next Lesson of

Why Innovation at the Firm level Stages of Innovation

Managing the Innovation

Tools of Innovation

Innovation in developing Countries

Innovation at Macro Level


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Why Innovate ..??

Surviving in the market and conquer New technological opportunities

Demand for increasing variety / customization

Demand for frequent product innovation

Increasing regulation

Shorter technology life cycles


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Idea Generation Sources

Tapping the idea from the customers Learning from Lead Users - Ex Corporate users

Understanding market dynamics Ex Mobiles

Perceptual map :Visual comparison of customer perceptions Benchmarking

Forecasting Technological

Developing links Suppliers ,Universities ,R&D firms,Other users & producers ,trade associations, Internationalbodies


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Why?? Manage Innovation

In order to introduce products and processesin consistent and continuing

Exploring wide range of options

Using formal Product/Process development procedures

Integrative organizational management practices Product /process focus rather that functional


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Core abilities in Mgt of inovatn

Market Surveillance : Searching environment for technicalmarketing and economical signals

Strategic Fit : Overall compatibility with business strategy

Current Technology base :Transferring opportunities

Internal R&D Coupling environment signals ,internal resource and

external technology

Managing the development projects

Process change /Commercializing new product

Continuous learning


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Recognizing searching environment for triggering innovation

opportunities

Aligning Ensuring a good fit between the overall

business strategy and proposed change

Choosing Selecting most suitable response to the

environmental triggers



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Acquiring

Transferring knowledge from outside sources

Generating Having ability to create some aspects of technology in

house

Executing Managing development project for new product or

process

Implementing Managing introduction of change

Learning Evaluating the innovation process and identifying lessons

for innovations in future



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Managing Innovation

Understand the change : Customers ,Technology ,Demographics,Competition

Change the Mindset : New Expertise

Current Employees

Managing the change

PMS

Collaboration- Willingness to change

Tolerance of failure Culture


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Activities Mgt of inovatn

Locating R&D activities Allocating funds for R&D

Organization and HR Management

Managing risk and uncertainty

Supplying critical materials and parts

Speeding up innovation cycle

R&D commercialization


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Important factors -Commercializationof inovatn

Opportunity Protection

Business Plan

Building the team and securing capital

Execution

Feasibility studies Financial,

Social,

Market,

Environment, etc


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Stages of Innovation

Basic Research Research for the sake of increasing knowledge base

Applied research Research directed toward solving one or more societys

problems Ex : Research conducted to find a cure for AIDS

Systematically builds knowledge on the previous knowledge

Results in technological development and implementation

Technology DevelopmentHuman activity that converts knowledge and ideas intophysical hardware software and or service.


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Technology Implementation Set of activities that are related in introducing the product to

the marketplace

Production Set of activities associated with the widespread conversion of

design concepts or ideas in to product and services Research

Involves manufacturing production control, logistics anddistribution

MarketingSet of activities ensures consumers embrace the technologyInvolves market assessment distribution strategy promotionand measuring consumers behavior.


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Proliferation

The strategy and the related activities that ensures thewidespread use of the technology and its dominance in themarketplace

Proliferation depends on methods of exploiting the technologyand on the practice used for marketing the technology

Ex: Microsoft bundling Internet explorer with windows, Java

Technology Enhancement Set of activities involved with the maintenance of the

competitive edge for the technology

Involves Improving the ,developing new generations or new

applications for the technology , improving quality and meetingcustomers special needs .

Increase the life cycle of the technology Ex:- VB.net


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Managing and Fostering Innovation

Invention-Innovation-Diffusion Time Lags reduce the time lag between discovery and

innovation, or between invention and

innovation, or lengthen the diffusion time

lag for competitors.

Trading Trade Secrets

reduce the risks and gain the benefits

Cooperative Inter-firm Agreements

Competitor cooperation:

Producer/user relationships


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Managing and Fostering Innovation

Technology transfer International technology transfer

Transfers from government (and

universities) to industry

Inter-firm technology transfer (between

different firms)

Intra-firm technology transfer (within the

same firm)


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Project Implementation in Innovations

Problems Time and cost overruns

Poor inter-departmental communication

Competing priorities

Over-engineering

Lack of design-for-manufacture

Failure to meet user needs

Effectiveness and efficiency depends on Organizational context

Teams

Tools


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Organizational Context

Shared vision and leadership Appropriate organization structure

Creative climate

Training and development High involvement in innovation

External focused

Extensive communication

Learning organization


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Project Team Include a diverse range of functions in

project teams.

Involve customers and suppliers in thedevelopment process.

Match team structure to project type. Match team leader attributes to type of

team.

Establish mission, charter, and contractbook for project team.


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Tools for Effective R&D Quality function deployment

Concurrent engineering : Cross-functional

teams

CAD/CAM

Stage gate process

Rapid prototyping.


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QFD


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Concurrent Engineering


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CAD/CAM

Using computer system for both designing

and manufacturing

CAD component CAM component

Speed up the product development process


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Rapid Prototyping

Special equipment used to automatic

construction of physical objects using solid

freeform fabrication

Uses the virtual designs of CAD


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Modularity

Creating the architecture by decomposing

overall functionality in to interrelated

functional modules

Shorten the time to market

Faster introduction of products

Decentralized R&D

Lower Cost Greater product variety

Reduced service requirements


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Stage Gate Process


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External Links for the Innovation

External Links

Strategic

Completiveadvantage

Marketexpansion

Extendedproduct portfolio

Established

Standards

Tactical Cost Time , Risk


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External Links

Horizontal

ComplementaryTechnologies

Market know how

Vertical Cost reduction


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Access complementary Technologies

Identify innovations

Resource innovations

Reduce Cost of technological development

Reduce Risk of technological development

Reduce Time of technological development


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Firm Level -Drivers of Innovation

Capabilities of the organization

Technical Resources People

Equipment Knowledge & Skills

Funds

Culture


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Questions ..???

6 innovation - lecture 1 lecture 2

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