SEPT 2015 © Dr X.N. IRAKI

My expectations Roko vs. global Think Act/Implement

▪ Roko- Roko ▪ Roko- Global▪ Global- Global▪ Global- Roko

Rote learning Applications

Creativity, unconventionality ▪ Safaricom/Mathare Valley/Bottom of

pyramid/journey to Mars▪ MBA-class; Smoking, Hotels, games,

Residence, friends, cars Entrepreneurship InnovationsNEXT Page….The happy Valley

year M F ALL

1960 45 49 47

1970 50 55 53

1980 56 60 58

1990 57 61 59

2000 51 54 52

2011 58 61 60

Research is about getting new ideas before others, not recycling tired ideas

What do you read? economist?

What do you watch? news versus comedy/movies

Who do you associate with? what do you share-5am in the morning!this is what will differentiate you all after

school!

Chapter 1

Innovation management:an introduction

1. Introduction

2. Product and process innovations

3. Typology of innovations

4. Different schools of thought

5. Models of understanding of innovation management

6. Implications for developing products and services

7. Summary and review

Theories and modelsof innovation management

• Innovation management is not exclusivelyassociated with products

• New ways of doing business in service sector• Innovation management involves change,

particularly technological change• Sometimes this involves product, service and

process changes• The level of change is an important dimension

Introduction

• Pfizer’s Sildenfil – aka Viagra:

The fastest selling human drug

• Gore Associates’ Gore-Tex:

the versatile polymer polytetrafluoroethylene (PTFE)

• Dyson’s vacuum cleaner:

Revolutionised a very stable mature industry

Other examples?

Product technology advantages

• Enterprise Resource Planning (ERP) business software; virtually all large firms have installed it.

• SAP, Oracle, Baan and PeopleSoft. • SAP has over 20,000 products installed worldwide

and Oracle has installed databasesin nearly every one of the world’s top 500 companies.

• Moreover, it has changed the way they work (Gartner, 2002).

• How has ERP Changed the way firms work?

Process technologies

Type of innovation ExampleProduct innovation The development of a new or improved productProcess innovation The development of a new manufacturing

process such as Pilkington’s float glass processOrganisational innovation A new venture division, a new internal

communication system; Management innovation TQM (total quality management) systems, BPR

(business process re-engineering); introduction of SAPR3

Production innovations Quality circles, JIT manufacturing system, new production planning software, e.g. MRP II, new inspection system

Commercial/marketing innovations New financing arrangements, new sales approach, e.g. direct marketing

Service innovations ebay; Internet banking, etc.

Typology of innovations

The lone inventor/mad professor.

But, such views lead to misunderstanding. Science does not equal innovation. Innovation is much more than science, e.g. scientific discoveries pre-date commercial products by many years.

Popular view of innovation:

1. Market-based view of innovation;market conditions provide the context which facilitateor constrain the extent of firm innovation activity (Slater & Narver, 1994; Porter, 1980, 1985).

2. Resource-based view of the firm; a firm’s own resources provide a much more stable context in which to develop its innovation activity, and to shape its markets in accordance to its own view (Tidd et al., 2001; Shavinina, L.V. (ed.) (2003); Patel, P. and Pavitt, K. 2000).

3. SerendipityInnovation is all due to luck and good fortune

Three key schools of thought:

1950/60s Technology push Simple linear sequential process. Emphasis on

R&D. The market is a receptacle for the fruits

of R&D.

1970s Market-pull Simple linear sequential process. Emphasis on

marketing. The market is the source for

directing R&D. R&D has a reactive role.

1980s Coupling model Sequential, but with feedback loops.

Combinations of push and pull.

1980/90s Interactive model Emphasis on integrating R&D and marketing.

1990s/00 Network models Emphasis on external linkages

Table showing the chronological development of models of innovation

Research anddevelopment

Manufacturing Marketing User

Technology push

Research anddevelopment

ManufacturingMarketing User

Market pull

Linear models of innovation management

Manufacturing

MarketingResearch and development

Coupling model of innovation management

Science and

technology base

Needs of

the marketdevelopments

Technological

Creation of new knowledge

dominated by universities and

large science-based organisations

Technology development-

dominated by organisationsthe consumption of products

Consumers express their

needs and wants through

Conceptual framework

EXTERNAL INPUTS:societal needs;competitors;supplier partnerships;distributors;customers;strategic alliances.

EXTERNAL INPUTS:scientific and technological development;competitors;suppliers;customers;university departments.

Organisation and business strategy

Mar

ketin

g

EXTERNAL INPUTS:macro factorsROIcosts;competition.

Organisation’s knowledge base

accumulates knowledge

over time

Research and technology

Innovation management framework

New productsSource: Trott, 2005

Innovative firm Explanation for innovative capability

Apple Innovative chief executive

Google Scientific freedom for employees

Samsung Speed of product development

Procter & Gamble Utilisation of external sources of technology

IBM Share patents with collaborators

BMW Design

Starbucks In-depth understanding of customers and their cultures

Toyota Close co-operation with suppliers

Explanations for innovative capability

• Role of the market is important• Role of technology is important• It’s a cross functional process• Role of external linkages and networks are important• Skills and knowledge are acquired over time and firms

develop competencies

Useful references:

Patel, P. and Pavitt, K. (2000) ‘How technological competencies help define the core (not the boundaries) of the firm’, in

Dosi, G., Nelson, R. and Winter, S. G. (eds) The Nature and Dynamics of Organisational Capabilities, Oxford University Press, Oxford.

Shavinina, L.V. ( ed.) (2003) The international handbook on Innovation, Pergamon, Oxford.

Tidd, J., Bessant, J. and Pavitt, K. (2001) Managing Innovation, 2nd edn, John Wiley & Sons, Chichester.

Implications for developingproducts and services

Any questions?

Thanks for listeningI hope you enjoy the unit.