innovation management in design process jiří vacek department of management, innovations and...

INNOVATION MANAGEMENT IN INNOVATION MANAGEMENT IN DESIGN PROCESSDESIGN PROCESS

JJiříiří Vacek VacekDepartment of management, innovations and projectsDepartment of management, innovations and projects

UWB, Faculty of EconomicsUWB, Faculty of Economics

vacekjvacekj@@kip.zcu.czkip.zcu.cz

MOPP 2005February 10, 2005, Pilsen

10.2.200510.2.2005 MOPP 2005 - Jiří Vacek, KIP FEK UWBMOPP 2005 - Jiří Vacek, KIP FEK UWB 22

Importance of innovationImportance of innovation

innovation is critical to successinnovation is critical to success product life cycle is getting shorter product life cycle is getting shorter

and shorterand shorter new products must me introduced new products must me introduced

ever more frequentlyever more frequently design-push approachdesign-push approach must be must be

changed to market-pullchanged to market-pull


Problems encounteredProblems encountered

most new products are most new products are overengineeredoverengineered

majority of businesses commercialize majority of businesses commercialize less than 20% of promising ideasless than 20% of promising ideas

the biggest barrier is a lack of people the biggest barrier is a lack of people with adequate skillswith adequate skills


Possible solutionsPossible solutions

technological excellence is technological excellence is necessary, however often not necessary, however often not sufficient for the innovation’s successsufficient for the innovation’s success

technical skills must be combined technical skills must be combined with business and managerial oneswith business and managerial ones

information and communication information and communication technologies, can support design technologies, can support design process innovationprocess innovation


Change of the design paradigmChange of the design paradigm

Design process must incorporate Design process must incorporate such disciplines assuch disciplines as• innovation managementinnovation management• team workteam work• creativitycreativity• knowledge managementknowledge management


Design-driven cost reductionDesign-driven cost reduction

FFour cornerstones of the design-driven our cornerstones of the design-driven cost reductioncost reduction::• Process discipline imposed at every stageProcess discipline imposed at every stage • Target setting and transparent monitoringTarget setting and transparent monitoring • CCross-functional organization removing ross-functional organization removing

organizational barriers and fostering organizational barriers and fostering collaboration and creativitycollaboration and creativity

• Management commitment, empowering design Management commitment, empowering design teams to make and implement difficult teams to make and implement difficult decisionsdecisions


Stage-Gate processStage-Gate process

Kill unsuccessful projects in early stages, before they waste significant resources


DISRUPTIVE INNOVATIONDISRUPTIVE INNOVATION Christensen, C.M., “Christensen, C.M., “The Innovator’s DilemmaThe Innovator’s Dilemma”, ”,

Harvard Business School Publishing, Boston MA, Harvard Business School Publishing, Boston MA, 1997 1997

Christensen, C.M., Raynor, M., “Christensen, C.M., Raynor, M., “The Innovator’s The Innovator’s SolutionSolution”, Harvard Business School Publishing, ”, Harvard Business School Publishing, Boston MA, 2003Boston MA, 2003

Even the best managed companies, Even the best managed companies, focused on their best customers and focused on their best customers and most profitable markets, often fail in most profitable markets, often fail in

competition with far less competition with far less technologically sophisticated technologically sophisticated

products. products.


SSustaining ustaining vs.vs.disruptive disruptive innovationinnovation

sustainingsustaining:: focus on better product focus on better product that can be sold with greater marginthat can be sold with greater margin

disruptivedisruptive:: brings to the market brings to the market simpler, more convenient, cheaper simpler, more convenient, cheaper product that at the beginning product that at the beginning appeals to new or unattractive appeals to new or unattractive customerscustomers


The disruptive innovation modelThe disruptive innovation model C

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3


The Up-market Migration of Steel MinimillsThe Up-market Migration of Steel Minimills C

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Innovator's dilemma and solutionInnovator's dilemma and solution

moving up the trajectory into successively moving up the trajectory into successively higher-margin tiers of the market and higher-margin tiers of the market and shedding less-profitable products at the shedding less-profitable products at the low end is something that all good low end is something that all good managers must domanagers must do

innovator’s dilemmainnovator’s dilemma – each company – each company prepares its own disruptionprepares its own disruption

start of the start of the innovator’s solutioninnovator’s solution: the : the company has to be prepared to disrupt company has to be prepared to disrupt itself, before anybody else does ititself, before anybody else does it


New market disruptionNew market disruption products compete with non-consumption. products compete with non-consumption.

• more affordable and simpler to use by new more affordable and simpler to use by new users (PC, transistor radio, desk copiers)users (PC, transistor radio, desk copiers)

• as their performance improves, they become as their performance improves, they become good enough for the mainstream market with good enough for the mainstream market with all the consequencesall the consequences

there has to be sufficient number of less there has to be sufficient number of less skilled or less affluent people who can own skilled or less affluent people who can own and use the technology that was formerly and use the technology that was formerly available only to more skilled or more available only to more skilled or more affluent people, possibly only in affluent people, possibly only in centralized, inconvenient location.centralized, inconvenient location.


Low-end disruptionLow-end disruption

focuses on the low end of the mainstream focuses on the low end of the mainstream market (minimills, discount retail stores, market (minimills, discount retail stores, Korean car makers)Korean car makers)

there are customers happy to purchase a there are customers happy to purchase a cheaper product with less (but good cheaper product with less (but good enough) performanceenough) performance

it is possible to create a business model it is possible to create a business model making money at lower price per unit sold. making money at lower price per unit sold.


OPEN INNOVATIONOPEN INNOVATION

Chesbrough, H., “Chesbrough, H., “Open InnovationOpen Innovation”, ”, Harvard Business School Publishing, Harvard Business School Publishing, Boston MA, 2003Boston MA, 2003

Closed innovationClosed innovation - requires control - requires control Open innovationOpen innovation

• companies use external as well as internal companies use external as well as internal ideas and both external and internal ways to ideas and both external and internal ways to marketmarket

• internal ideas can be taken to the market internal ideas can be taken to the market through external channels to generate through external channels to generate additional value additional value


Product architectureProduct architecture

Hierarchy of connections Hierarchy of connections between disparate functions between disparate functions

within a systemwithin a system


Interdependent ArchitectureInterdependent Architecture

System

Component A

Component B

Component C


Interdependent ArchitectureInterdependent Architecture

changing one component requires changing one component requires changes in all other parts of the changes in all other parts of the system, because the relationships system, because the relationships between the parts are not clearly between the parts are not clearly understoodunderstood

can be best managed through can be best managed through internal processes internal processes


Modular ArchitectureModular Architecture

System

Component A

Component B

Component C


Modular ArchitectureModular Architecture

components could change without causing components could change without causing any change in other componentsany change in other components

modular design enables to assemble modular design enables to assemble system more easily, from “plug and play” system more easily, from “plug and play” components whose interfaces are well components whose interfaces are well understoodunderstood

modular architecture makes it easy for modular architecture makes it easy for many companies to innovate components many companies to innovate components without worrying about possible impact on without worrying about possible impact on other parts of the systemother parts of the system


IMPLICATIONS FOR NPDIMPLICATIONS FOR NPD extended circle of company extended circle of company stakeholdersstakeholders

- customers, NGOs, local and regional - customers, NGOs, local and regional governmentsgovernments

not only superior quality, but also not only superior quality, but also environmentally friendly, aesthetically environmentally friendly, aesthetically appealing new productsappealing new products

designed for Xdesigned for X, where X can be quite , where X can be quite large and multi-faceted setlarge and multi-faceted set

after-sale serviceafter-sale service plays an increasing plays an increasing role – and brings increased turnover and role – and brings increased turnover and profitprofit


Life-long learningLife-long learning

The engineers of tomorrow must be The engineers of tomorrow must be able to solve problems that have not able to solve problems that have not been even formulated during their been even formulated during their studiesstudies

life-long learning becomes necessarylife-long learning becomes necessary


WhatWhat to do to do

look for unsatisfied needs, new ways look for unsatisfied needs, new ways of delivering value to their customersof delivering value to their customers

create new business models for new create new business models for new productsproducts

technological and business technological and business intelligence intelligence

competently work with intellectual competently work with intellectual property property


AcknowledgementAcknowledgement

The work summarized in the paper was The work summarized in the paper was performed with financial support of the performed with financial support of the Czech Ministry of Education, Youth and Czech Ministry of Education, Youth and Sports Research project Sports Research project

MSM 232100006 - “Research and MSM 232100006 - “Research and Development of Innovations, Design, Development of Innovations, Design, Technology and Material Engineering of Technology and Material Engineering of Machinery Products”. Machinery Products”.


ContactsContacts

Jiří VacekJiří Vacek University of West Bohemia, Faculty of University of West Bohemia, Faculty of

Economics, Department of management, Economics, Department of management, innovations and projectsinnovations and projects

Husova 11, Plzeň, 306 14, Czech RepublicHusova 11, Plzeň, 306 14, Czech Republic Tel.: +420-377633204, fax: +420-Tel.: +420-377633204, fax: +420-

377633202377633202 e-mail: e-mail: vacekj@[email protected] web: web: http://www.kip.zcu.czhttp://www.kip.zcu.cz, , http://www.http://www.fekfek

..zcuzcu..czcz


THANK YOU THANK YOU

FOR YOUR ATTENTIONFOR YOUR ATTENTION

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innovation management in design process jiří vacek department of management, innovations and...

Documents

design paradigm design

kip fek uwb

success innovation

empowering design teams

designpush approach

designdriven cost reduction

projects uwb

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