Innovation Managment

March 15th 2017

Why models matter?

Comments

The case “Carbon Paper”

Comments

The case “Carbon Paper”

Stencil duplicator

Why Models Matter

The way in which we think about how the process works is important

If we simplify it to a linear model we lose sight of important interaction between

elements

5

Two competing philosophy

Management Management ArchetypesArchetypes

Steady-state DiscontinuousInnovation

Established set of rules

Specific pathways exist to define the Innovation

space

Developing close and strong ties

No clear rules of the game

Multiple parallel possible trajectories

Heterogeneous population and

emphasis on weak ties

Doing what we do but better Do different

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Different types of Entrepreneurs

Types Types ofof

entrepreneursentrepreneurs

Darwinians“success”

Communitarians“contribution”

Missionaries“change the world”

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Rothewells’s five generations of innovation models

First-second: need pull and technology push “necessity becomes mother of inventions”

Third: interactions among phases and back loops

Fourth: integration – upstream – downstream – linkages

Fifth: extensive networking and customized response

Lesson learned

Avoiding partial view of innovation

Examples of partial view:

Innovation is not only:

R&D – technology push Specialization vs searching for other perspectives Customer needs Frontiers of technology For large firms Breakthroughs changes vs incremental innovation The result of key creative individuals Strategically targeted projects vs serendipity Internally vs externally generated ...

There are some risks….

Innovation is a management

question

Choice of strategy (& luck) are more important than industry:

choice of industry 8.35% choice of strategy 46.4% parent company 0.8% unexplained (e.g. luck) 44.5%

There are some risks….

Lesson learned

ContextFirm’s characteristics

Firm’s capabilities matter!!!

Innovation & Context

impact of innovation on performance depends on contingency & configuration, not industry

effect of R&D depends on market share

effect of patents depends on firm size

effect of new products depends on market maturity

Different sectors have different priorities and characteristics (scale–intensive, science-intensive)

The role of National systems of innovation Role played by external agencies such as

regulators Degree of novelty Life cycle (new technology industry vs mature

firms)

Innovation & Context

Firm’s characteristicsThe firm’s size matters

Small firms have some advantages...- speed of decision making- informal culture - quality communications- shared vision

- flexibility…

… and disadvantages

- Lack of formal systems for control- lack of access to resources- lack of key skills…

Firm’s characteristicsThe firm’s size matters

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Managing innovationsCore capabilities

Managing Innovation core capabilities

recognizing

aligning

acquiring

generating

choosing

executing

implementing

learning

developing the organization

18© 2009 John Wiley & Sons Ltd.www.managing-innovation.com

Managing innovationsCore capabilities

Conclusions:

Relationships between R&D, patents, new products and performance are strongest at the industry and sector level

At the firm level management and strategy can make a difference

Too much emphasis on technological innovation, process improvement and product differentiation produces low returns

Conclusions:

Greater focus on a wider range of innovation has potential to improve returns from innovation

(Re) combination and integration of different types of innovation

role of international alliances ans corporate venturing to help identify, create and exploit new businesses and services

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In 1880, Thomas Edison said that the phonograph was of no commercial value.

In 1920 Robert Milliken, Nobel Prize winner in physics said: "There is no likelihood man can ever tap into the power of the atom."

In 1927 Harry Warner, Warner Brothers Pictures said (in reference to the desirability of adding a sound track to silent movies): "Who the hell wants to hear actors talk?"

Unbelievable, but true

In 1943 Thomas Watson, Chairman of IBM said: "I think

there is a world market for about 5 computers"

In 1977, Ken Olsen, President of Digital Equipment Company said: "There is no reason for an individual to

have a computer in their home".

Unbelievable, but true