managing innovation
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M.Sc. Irma Bejarano24.04.2012
Managing
Innovation
Objectives• Why Management Innovation Maters?
o Global Tendencies and Benefits o Which are the most innovative countries and companies.
• What is Management Innovation?o Concept and Implications o Types of innovations o Modes of innovations
• How to become a Manager Innovator?o The innovation Challenge o The innovation process
1.- Why Managing Innovation Matters?
Which are the most innovative countries?
1 US
2 Germany
3 UK
4 Japan
5 France
6 Switzerland
7 Singapore
8 Canada
Global Innovation Index (GII)
1 Policies
2 Human Capacity
3 Infrastructure
4 Technological
Sophistication
5 Markets and Capital
1 Knowledge
2 Competitiveness
3 Wealth
This countries are also the most rich?
1 US
2 Germany
3 UK
4 Japan
5 France
6 Switzerland
7 Singapore
8 Canada
YES or NOT?
Which are the leading innovative companies?
Most Innovative Companies Ranking
Most Known for its Innovative…..
1 Apple Products (52%)
2 Google Customer Experience (26%)
3 Toyota Motor Processes (36%)
4 General Electric
Process (43%)
5 Microsoft Products (26%)
6 Tata Group Products (58%)
7 Nintendo Products (63%)
Business Week & BCG
Ranking (04-07)2,950 senior
executives3 yr stock returns revenue growth margin growth
This companies are also the most rich?
Most Innovative Companies Ranking
1 Apple
2 Google
3 Toyota Motor
4 General Electric
5 Microsoft
6 Tata Group
7 Nintendo
Business Week & BCG
Ranking (04-07): 19%
increase their revenue.Innovaro: Sustainable
growth in their price per
share in the last seven years
YES or NOT?
Managing Innovation= Economic Progress
• The world economic progress has been lead by key innovations and inventions. Changed the way do business.
Joseph Schumpter,
The “Godfather of Innovation studies"
• Entrepreneurship + innovation: capitalism and economic progress.
2.-What is Managing innovation?
Successful exploitation of new ideas
leading to the creation of a new product and service.
It is more that just generating good ideas
it is the process of growing them into practical use and bringing them to the market.
Managing Innovation: Change
Managing innovation in a company involves organizational changes:
Traditional management principles, processes and practices.
Alters the way the work of management is performed:• Setting goals • laying out plans• Motivating and aligning efforts• Coordinating activities, etc
The 4p’s of Innovation
Process
Product
Position
BusinessModel
INNOVATION
(incremental……radical) (incremental……radical)
(in
crem
enta
l……
rad
ical
)(i
ncr
emen
tal…
…ra
dic
al)
Exercise: Types of Innovation
Nissan Leaf
A1: ProductInnovation
E1:
A2: ProcessInnovation
E2:
A3: Position
E3:
A4: Business
ModelInnovation
E4:
1 2
3 4
Modes of Innovation
1
2
Incremental Innovation
Modest step-by-step advances
Quantum Innovation
Major improvement of an existing technology that
replaced another one
3
Disruptive Innovation
Help to create a new market and value network eventually displacing an
earlier technology
ClaytonChristensen
Exercise: Modes of Innovation
A1: Quantum
Innovation
A2: Incremental Innovation
A3: Quantum
Innovation
A5: DisruptiveInnovation
1 2 3
A1:
A2:
A3:
A4: A5:
A4: Incremental Innovation
3.- How to Become a Manager Innovator?
The Innovation Challenge
“The best innovators aren’t lone geniuses.
They are people how can take an idea that is obvious in one context
The best companies have learnt to systematize that process”
(Hagardon, Sutton 1990)
and apply it in not-so-obvious ways to a different context.
The Innovation Challenge
Out of the box thinking, change in management
orthodoxies.
Part of the core business process.
Process that generates innovations continually.
Have a clear structure, be organized and managed.
Innovative organization infrastructure.
Design a clear innovation strategy.
The Innovative Organization
Culture of focused creativity, leadership and motivation.
Entrepreneurial talent.
Multifunctional talented team-works.
Information-knowledge infrastructure.
R&D procedures and infrastructure.
Project portfolio management.
.
Which functional areas contribute to the process?
Marketing R&D
Operations Human Resources
Finance
• Identify customer’s needs.
• Dev. concepts and products.
• Pricing and positioning strategies.
• Launch of products.
• Development of novel products aligned with customer needs.
• Process re-engineering
• ROI Calculations and pricing strategies.
• Hiring, developing and motivating HR.
• Development of a culture of innovation
The Innovation Process
Ideas “filtered out”
Ideas
Capturing the
Benefits
Rejected concepts
Ideas coming from open innovation
Screening and
selection of ideas
Idea Generation
Concepts…
Implementation-
Bring to the maket
Projects…MARKET • New product
• New services• New Process• New Business Processes
Rejected Projects
• Company • Society • World
Ideas… Value Generation…
1.- Idea Generation• Changes begins, looking for customer pains.
• Where companies look for inspiration
• Find what triggers the innovation process
• Soft management, creative part.
• Spontaneous, unexpected, accidents.
• Formal methodologies or techniques
1.- Idea GenerationKnowledge Pull
Existing technology or a defined service and tries to find a market for it.
Knowledge Push
Creation of a new technology or service for an identified market.
Users as InnovatorsTechniques as innovation blitz
and focus groups to get close to customers.
Recombinant Innovation
Transferring or combining old ideas or products in new context or mkts.
2.- Screening and Selection of Ideas
Idea Selection Process
Creation of New
Concepts
Prototyping Testing Concepts
Analysis
MKT Research
•Cross Functional Teams: R&D, MKT•Creativity Techniques:
Creativity Sessions
Brainstorming Innovation Blitz Morphology
Charts
•Full Description of the products/services
Principal Characteristics Features, Scopes Competitive Advantage Target market Differentiations offer Initial Price Commercialization Strategy
•R&D•Physical Products
•MKT Methodologies: Interviews Surveys online Testing
prototypes with end customers
Focus groups QDF
•Investment •ROI •Mkt size potential •Viability•Design Procedures
•Quantitative
• Screening of a large number of ideas
2.- Screening and Selection of Ideas
3.- Implementation
Project Assessment &
Selection
Product Development
Product Commercializatio
n
•Portfolio management
Selection and rejection of projects
Business Attractiveness
Risk Cumulative Cost
•Physical products•Design of products •Manufacturing procedures
• Testing • Launching • Marketing • Commercializing
4.- Capturing the Benefits
• The ultimate purpose of innovation: create value. Commercial success Market share Cost reduction Knowledge generation Customer’s lifestyles improvement Positive changes in society, patents, etc
• They are reflected in: Bottom line Specific KPI’s Economic development: price/earning ratio
Conclusion“We have reached the end of incrementalism
Only those companies that are capable of creating industry revolutions
will prosper in the new economy.”
-Gary Hamel
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