strategic issues in managing technology & innovation

8/3/2019 Strategic Issues in Managing Technology & Innovation

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Strategic Issues in ManagingStrategic Issues in Managing

Technology and InnovationTechnology and Innovation

Prof. Rushen Chahal


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Executive fear over loss of innovation


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Technology and Innovation

The Role of Management

Innovation Management of technology

Research conducted by Forbes, Ernst & Young,

Wharton Business School found that innovation isthe most important driver of corporate value


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How generate an overall enthusiasm for

innovative behavior and risk taking?

One way is to include innovation incorporations mission statement:

At&T: We believe innovation is engine thatkeep us vital and growing.

Gillette: We will invest in and master the keytechnologies vital to category success.

Hallmark: We believe that creativity andquality in our concept, products andservices are essential to our success.


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Key questions of innovative

management (Gary Hamel)

Old management Innovative management

How to do things with perfect

replicability, at ever-increasing scale and steadily

increasing efficiency?

How do you get people toserve the organizations

goals?

How do you build

organizations that are asnimble as change itself?

How do you buildorganizations that merit the

gifts of creativity and passion

and initiative?


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Role of management

The key to success for Sony, and toeverything in business, science, andtechnology for that matter, is never to followthe others

Akio Morita,

Chairman of Sony Corporation


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Role of management

Management has obligation to not only encouragenew product development, but also to develop a

system to ensure that technology is being usedmost effectively with the consumer in mind.

Between 33% and 60% of all new products thatreach the market fail to make a profit.


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Environmental Scanning

External Scanning

New developments in technology

Motorolas intelligence department monitors thelatest technology developments introduced at

scientific conferences, journals and in tradegossip.


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Impact of Stakeholders on Innovation tolook at customers, suppliers, and distributors, forsource of product and service improvements.

Lead Users Process Lay the foundation

Determine the trends

Identify lead users Develop the breakthrough


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Impact of Stakeholders on Innovation

Market Research - to survey current usersregarding what they would like in a new

product.

New Product Acquisition instead of usinglead users and market research to test the

potential of innovative products, somecompanies are using speed and flexibility togain market information.


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Strategic Innovation by Costas Markides

Strategic innovation occurs when acompany identifies gaps in the industrypositioning map, decidesto fillthem, andthe gaps growto become the new massmarket.Gaps are:

New emerging customer segment or existingcustomer segments that other competitors haveneglected

New emerging customer needs or existingcustomer needs not served well by othercompetitors

New ways of producing, delivering, or distributingexisting or new products or services to existing ornew customer segments


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Internal Scanning Has the company developed the resources

needed to try new ideas?

Do the managers allow experimentation withnew products or services?

Does the corporation risk taking and toleratemistakes?

Are people more concerned with new ideas or

with defending their turf? Is it easy to form autonomous project teams?


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Resource Allocation Issues R&D intensity companys spending on R&D

as a percentage of sales revenue. Forexample, 11-13% of sales revenue are spentfor R&D in computer software and drugindustries.

Time to market issues is an important as 60%

of patented innovations are generally imitatedwithin 4 years at 65% of the cost of innovation.


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Technology Sourcing

Outsourcing Technology

Low significant to competitive advantage

Supplier has proprietary technology

Suppliers better and/or cheaper

Strategy based on design not development

Requires special expertise

Requires new people and resources


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Technological Competence

Absorptive capacityis a firms ability tovalue, assimilate, and utilize new externalknowledge.

Those corporations that do purchase aninnovative technology must have thetechnological competence to make gooduse of it.


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Categories of Innovation


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Product/Market Evolution Portfolio Matrix


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Stages of new product development


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Innovative Organizations

Positive attitude toward change

Decentralized decision making Informal structure

Interconnectedness

Organizational slack

Large size System openness


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Designs for Corporate entrepreneurship


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Evaluation and Control

Index of R&D effectiveness is calculatedby dividing the percentage of total revenuespent on R&D into new product by

profitability, which is expressed aspercentage.

When applying to 45 large electronics

manufactures, only 9 companies scored 1.0or higher, indicating that only 20% received apositive payback from their R&D spending.


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How to make a firm more

innovative Change yourculture be more playful and

entrepreneurial.

Change yourattitudes be more risk-taking andmore welcoming of change.

Change yourprocesses make your strategy

process democratic.

Change your incentives allow people toexperiment and dont punish failure.

strategic issues in managing technology & innovation

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