INNOVATION & KM

D o d i e T

r i ca h y o n o ( d t r i c

a h y o n o @ y a h o o . co m

Institut Manajemen Telkom 2013

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Creativity....in general, this is the production of new

ideas or combining old ideas in a new way. It is also

the main driver for innovation.

Innovation....this is the transformation of a new idea into a new product or service, or an improvement in organization

or process.

‘the spark of innovation is not in what we do, but in how we do it.’

Tom Kelly, author of The Art of Innovation (2001)

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ACCORDING TO SCHUMPETER (1934)

Innovation is the introduction of new elements or a new combination of

elements in the production or delivery of manufactured an service products.

New product/serviceNew processNew organization/managementNew delivery/distributionNew marketNew raw material

ProductProcessManagement

Principles of Innovation (Peter F. Drucker)Purposeful, systematic innovation begins with the analysis of the

sources of new opportunity. Because innovation is both conceptual and perceptual, would-be

innovators must also go out and look, ask, and listen. … They look at figures. They look at people. … Then they go out and look at

potential users to study their expectations, their values, and their needs.To be effective, an innovation has to be simple, and it has to be

focused. It should do only one thing; otherwise it confuses people. … Indeed, the greatest praise an innovation can receive is for people to say, “This is obvious! Why didn’t I think of it? It’s so simple!” Even the innovation that creates new users and new

market should be directed toward a specific, clear, and carefully designed application.

…… the successful innovation aims from the beginning to become

the standard setter, to determine the direction of a new technology or a new industry, to create the business that is--and remains--

ahead of the pack.…, innovation is work rather than genius. It requires knowledge. It often requires ingenuity. And it requires focus. There are clearly

people who are more talented as innovators than others, but their talents lie in well-defined areas.

The opportunities exist in such areas:• Unexpected occurrences• Incongruities• Process needs• Industry & market changes• Demographic changes• Changes in perception• New knowledge

S O U R C E S O F I N N O VAT I O N ( P E T E R F. D R U C K E R )M O S T I N N O VAT I O N S , H O W E V E R , E S P E C I A L LY T H E S U C C E S S F U L O N E S , R E S U LT F R O M A C O N S C I O U S , P U R P O S E F U L S E A RC H F O R I N N O VAT I O N O P P O RT U N I T I E S , W H I C H A R E F O U N D I N O N LY A F E W S I T U AT I O N S .

Within a companyor industry

In social & intellectualenvironment

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Inno-vatio

n

Paradigm (mental model)

Position

Product (service)Process

Innovation Space (Tidd, Besssant, & Pavitt, 2005)

Incremental...radical Incremental...radical

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DEGREE OF NEWNESS

RadicalIncrementalImitative Really New

Discontinuous

Market

Technology (R&D)

Incremental Radical

New Architectural Innovation

Major product innovation

Existing Incremental innovation

Major process innovation

TYPES OF INNOVATION

Product versus Process Innovation Product innovations are embodied in the outputs of an

organization – its goods or services. Process innovations are innovations in the way an

organization conducts its business, such as in techniques of producing or marketing goods or services.

Product innovations can enable process innovations and vice versa.

What is a product innovation for one organization might be a process innovation for anotherE.g., UPS creates a new distribution service (product innovation) that enables its customers to distribute their goods more widely or more easily (process innovation) 14

TYPES OF INNOVATIONRadical versus Incremental Innovation

The radicalness of an innovation is the degree to which it is new and different from previously existing products and processes.

Incremental innovations may involve only a minor change from (or adjustment to) existing practices.

The radicalness of an innovation is relative; it may change over time or with respect to different observers.E.g., digital photography a more radical innovation for Kodak than for Sony.

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TYPES OF INNOVATIONCompetence-Enhancing versus Competence-Destroying Innovation

Competence-enhancing innovations build on the firm’s existing knowledge baseE.g., Intel’s Pentium 4 built on the technology for Pentium III.

Competence-destroying innovations renders a firm’s existing competencies obsolete.E.g., electronic calculators rendered Keuffel & Esser’s slide rule expertise obsolete.

Whether an innovation is competence enhancing or competence destroying depends on the perspective of a particular firm. 16

TYPES OF INNOVATIONArchitectural versus Component Innovation

A component innovation (or modular innovation) entails changes to one or more components of a product system without significantly affecting the overall design.E.g., adding gel-filled material to a bicycle seat

An architectural innovation entails changing the overall design of the system or the way components interact.E.g., transition from high-wheel bicycle to safety bicycle.

Most architectural innovations require changes in the underlying components also. 17

A FRAMEWORK FOR INNOVATIONCORE CONCEPTS AND COMPETENCIES

HO

W L

INK

ED

INCREMENTAL MODULAR INNOVATION

ARCHITECTURAL INNOVATION

RECONFIGURATIONOF COMPONENTS

NEW INTERACTIONSAND LINKAGES

RADICAL INNOVATION

Reinforced Overturned

Unc

hang

edC

hang

ed

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THREE DIMENSION OF INNOVATIVENESS

Innovation ManagementEncourage Implementati

onProfitCompetitiv

e Advantage

Creativity

Human/talentWikicapita

lCulture

Incentives Financ

e System

R&DNetworks

Value added

LearningLearning Learning

From Ideas to Profit

Beware of the bounded mentality! “While innovation can occur by serendipity, sustainable innovation from which

collaborative and competitive advantage emerges, needs a systematic and effective management approach based on knowledge and learning” (De

Sousa, 2006: 398)

There are core rigidities to consider........

So,...we are learning and at the same time ....unlearning.

Knowledge Management is an Organizational Capability that allows an

individual (knowledge worker) within a firm to add value by creating, capturing, and

leveraging knowledge objects.

VC (individual w KM) > VC (individual w/o KM)

Unlike other resources that get depleted with use and

follow

the law of diminishing returns, the knowledge bank gets

constantly renewed and enriched with use by

knowledge worker.

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THE D, I, K, W QUARTETData as everyone knows is discrete content and does not make much sense by itself.

Information is processed and collated data.

Knowledge is highly contextualized information enriched with individual interpretation and expertise. Knowledge lives in its context.

Wisdom is in different realm altogether with profundity born out of intuition and deep insight being the key pre-requisites.

DATA INFORMATION KNOWLEDGE

Add Value by: Transformed by:AnalysisCorrelatingSummarizing

ContextualisationExperienceInterpretationDiscussion

KEY PROCESSES OF KNOWLEDGE MANAGEMENT

Knowledge Generation includes:

Knowledge acquisitionKnowledge synthesisKnowledge creation

Knowledge Storage (or K-codification) includes:

Determining the knowledge typology

Knowledge captureMaintaining the knowledge

basesCreating knowledge maps

Knowledge Utilisation includes:

Knowledge dissemination and sharing

Knowledge Store Knowledge UtilisationKnowledge Generation

Knowledge Spiral

Knowledge Typology

Tacit Knowledge Explicit Knowledge experiental & localized available in some in people heads documented formThe other classification are: • General or Context Specific Knowledge • Individual or collective knowledge • declarative (knowledge about), procedural (know

how), causal (know why), conditional (know when), & relational (know with)

• process, factual, catalog, & cultural

Database Info-base Knowledge-bases

K-Bases: Information + Inter-relationship + Context Infobase + Advanced search capabilities

Knowledge Transfer

Tacit/Individual

Tacit/Group

Explicit/Individual

Explicit/Group

Articulation

Combination

Internalization

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THE JANUSIAN ORGANIZATION

Finds way to satisfy existing customers

Actively explores unmet or unknown consumer needs

Hires the best and brightest people it can find

Finds new ways to motivate, retain, and

develop peopleContinuously improves its processes, products and

services

Invents fundamentally new processes, products and

servicesFocuses on day-to-day operational excellence

Focusses on long-term future strategies

Creates a climate in which innitiatives can be taken to

do things better

Creates a climate in which things can be done

differently

A MODEL FOR CREATIVE LEADERSHIP

Focu

s on

Ta

sks

Focus on People

CHANGE

Leading on the edge of chaos

Leadership practices and

strategies

Management

competencies

Management Concerns.....Concerns of the new business

Concerns of the mainstream business

Innovation ControlRisk taking PredictabilityMarket acceptance

Operating efficiency

Sustainability Profit margins

Integrated view of organizational innovation

Creativity in OrganizationIndividual Team

Organizational Innovativeness

Capacity to

innovate

Competitive advantage and performance

Structural and process characteristics

Organizational Innovation

Feedback & Reinforcement

Organizational Learning Capability

Emotional Dynamics

Other cultural aspects

Cultural/climate characteristics

Creative Environment

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