Beruflich Dokumente
Kultur Dokumente
SUBJECT: INNOVATION
MANAGEMENT
DOMAIN: ENTREPRENEURSHIP
DEVELOPED BY
DR. VIRENDER KHANNA
HOD, FDDI BUSINESS SCHOOL
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particularly details of any errors, contradictions or unclear statements in the courses. If you have any comments on this course please email them
to manoj.a@fddiindia.com & ashish.chandra@fddiindia.com
This learning guide is developed to provide you the necessary information regarding
the following content coverage and topics –
Learning Activities
3. Accomplish the “Self-check 1” Request the key answer / key to correction from
your teacher or you can request your teacher to check it for you.
5. Accomplish the “Self-check”. Again you can request the key answer / key to
correction from your teacher or you can request your teacher to check it for you.
8. Accomplish the respective “Self-check”. Again you can request the key answer /
key to correction from your teacher or you can request your teacher to check it
for you.
2) Develop advertising strategies and plans and to develop the judgment parameters
required in product management, to evaluate advertising and PR strategies
Introduction
Businesses that are not growing through new product and service introduction are
likely to decline as their existing sales portfolio inevitably matures.
It is not surprising that companies such as Procter & Gamble and General Electric
have actively embraced the management of innovation. Their principal goal is to
drive growth and then to improve shareholder value.
‘Nothing is more central to sustain growth than innovation that leads an industry and
not only product innovations, but innovative design, innovative marketing, innovative
in-store shopping experiences, innovation across the entire business. The
companies and brands that lead innovation are the catalysts for growth.’
The term “Innovation” seems to derive from the Latin novus (Hsu 2005), which
means new or young or novel. For most people “to be innovative” means to be
creative and/or to make something new.
The process of translating an idea or invention into a good or service that creates
value or for which customers will pay.
“Innovation is the introduction of new ideas, goods, services, and practices which are
intended to be useful (though a number of unsuccessful innovations can be found
throughout history). The main driver for innovation is often the courage and energy to
FDDI/ FSBM/IM/2017 Page 7
better the world. An essential element for innovation is its application in a
commercially successful way. Innovation has punctuated and changed human
history (consider the development of electricity, steam engines, motor vehicles,
etc.).”
Invention meaning
Innovation is
Importance of Innovation
Innovation is the process of creating and implementing a new idea. It is the process
of taking useful ideas and converting them into useful products; services or
processes or methods of operation. These useful ideas are the result of creativity,
which is the prerequisite for innovation. Creativity in the ability to combine ideas in a
unique way or to make useful association among ideas. Creativity provides new
ideas for quality improvement in organizations and innovation puts these ideas into
action.
Change and innovation are closely related, even though they are not the same.
Change often involves new and better ideas. The new idea may be the creation of a
new product or process or it can be an idea about how to change completely the way
Types of Innovation:
(i) Technical,
(iii) Administrative.
Technical innovation involves creation of new goods and services. Many technical
innovations occur through research and development efforts intended to satisfy
demanding customers who are always seeking, new, better, faster and/or cheaper
products.
The various types of innovation often go hand in hand. For example, the rapid
development of business to business e-commerce represents process innovation.
But this new process requires many technical innovations in computer hardware and
software. Also as firms began to use business to business e-commerce,
administrative innovation soon followed. Further, implementation of process
Understanding the forces driving technological development and the patterns they
follow can help a manager anticipate, monitor and manage technology more
effectively.
ii. Second, it must be theoretically possible to meet the need using the
knowledge available from basic science.
iv. Fourth, the necessary resources such as finance, skilled labour, time,
space and other resources must be available to develop the
technology.
Product innovations include both new products and new uses for existing products:
New products. These are goods and services that differ significantly in their
characteristics or intended uses from products previously produced by the firm. The
first microprocessors and digital cameras are examples of new products using new
technologies. The first portable MP3 player, which combined existing software
standards with miniaturised hard-drive technology, was a new product combining
existing technologies.
New uses for products. The development of a new use for a product with only
minor changes to its technical specifications is a product innovation. An example is
the introduction of a new detergent using an existing chemical composition that was
previously used as an intermediary for coating production only.
Delivery methods. These concern the logistics of the firm and encompass
equipment, software and techniques to source inputs, allocate supplies within the
firm or deliver final products. An example of a new delivery method is the
introduction of a bar-coded or active RFID (radio frequency identification) goods
tracking system.
Put simply, management innovation changes how managers do what they do. And what do
managers do? Typically, managerial work includes
In a big organization, the only way to change how managers work is to reinvent the
processes that govern that work. Management processes such as strategic planning,
capital budgeting, project management, hiring and promotion, employee
assessment, executive development, internal communications, and knowledge
management are the gears that turn management principles into everyday practices.
They establish the recipes and rituals that govern the work of managers. While
operational innovation focuses on a company’s business processes (procurement,
logistics, customer support, and so on), management innovation targets a company’s
management processes.
Innovation projects can be of different sizes, duration, and complexity levels. The risk
of failure in one or more respects - as overdrawn costs and time, low satisfaction
rate, poor performance, burnt-out team members, etc. -is dependent on many
factors. In figure 1-1 some important factors are shown that will influence the risk
factor and the outcome of a project in general and an innovation project in particular.
Factor Sub-Factors
Technology Utilization of technology
Technical skills and education
Technology strategy
The looping arrows indicate feed forward loops to help people working downstream to
anticipate change, and feedback loops from outputs back to inputs, representing lessons
learned now applied to improving results. The arrows are more symbolic than realistic, as
there will ideally be continual interaction between people working in various steps of the
innovation process as they learn and share with others. Although the sequence of steps from
Innovation always begins with a goal in mind. It is many times based on finding the
solution to a problem. Once you have this goal, it should be discussed among
everyone in the problem solving team. This team may consist of you and another
person, a group of people, or may even be all of your organization’s employees. It
may involve others such as your customers (who can provide suggestions and
feedback based on their own experience with your product or service) or other
stakeholders in the business. When you establish the team for this process, make
sure that you have someone representing all the parts of the process from start to
the end.
2. Cooperation
The innovation team should work together so that instead of trying to come up with
an idea separately, they can bounce ideas off one another and create a collaborative
solution. This can include the use of online tools, attendance of events such as trade
shows that can be inspiring and informative, or simply consist of brainstorming
sessions. You might consider having a trained business coach facilitating the
discussions. There are many online tools available for real-time document sharing
that might help teams that are geographically separated to still have intense
cooperation.
3. Combination of ideas
Once the ideas are in, choose the best ones and then consider whether they can be
combined to create an even greater idea. Often, strong ideas will be complementary
to one another and will join well to create an even better result. As you know, the
whole result can be bigger than its individual parts. And for this combination to work
well, you need representatives of all parties involved in the process, because they for
FDDI/ FSBM/IM/2017 Page 20
sure have ideas that people from other departments could not come up with.
Business coaches may be useful here for making sure that all the angles of
innovative aspect are covered.
4. Evaluation of innovation
This is an important and yet all too frequently overlooked aspect of the innovation
management process. When the best ideas have been combined, fine-tuned, and
polished, it is time to subject them to evaluation based on peer reviews. This helps to
ensure that any ideas that have a promising veneer but that are poorly thought out
will be identified before resources, funding and time have been poured into them. It
also helps to select the ideas with the greatest potential from among several that
appear equally capable of being successful. It is cheap to change your innovation at
this stage compared to later stages. Each step you take forward will cost you more…
Once the ideas with the greatest potential have been identified, they can be tested
so that they can be better developed. One of the most common means of testing a
product or service idea is to create a prototype or test group. This allows the team,
as well as customers and investors to have a better look at how the product will
function and what changes can be made to it so that it will be even further improved.
Make sure that the product or service not only raises interest but is able to generate
orders also. If people say that they are interested in it, then ask them if they give you
the order right away.
The ideas that survive the testing process can be further developed and altered until
they are ready to be executed as a part of the business offerings. The execution of
implementation is a step that is unique to your business and, unless your new
product causes you to have to drastically alter the typical way that your go-to-market
strategy functions, then this part of the innovation management process should be
relatively commonplace in your organization. It should be easier for you to move
8. Rethink
The next step in the process is simply to start again, always finding new needs,
inspiration, solutions and taking them through the cycle until they can be offered by
your company. Here are some reflective questions that you can use to evaluate
innovation management process in your organization:
If yes, is it effective?
If no, how do you see that clearly defined innovation management process
could help your organization to achieve goals better?
Are all the people in your organization working together towards great
innovations or do they do things on their own?
Do you always properly evaluate and test your innovations before taking them
to market?
some form of conclusion and validation and economic return, or when they
are abandoned. The map can therefore be a useful, indeed essential tool for
anagers, and throughout this work we have to maintain both concepts in our
minds, the non-linearity of a robust thinking and learning process, and the
linearity of well-run project management process that is one and the same.
The capacity to simultaneously hold two different images of the very same
process is characteristic of the innovation process itself, as we must continue
to hold differing, and perhaps even conflicting interpretations of new and
emerging data, information, and concepts until we gain sufficient knowledge
to be sure of the most effective interpretations.
Innovation management describes the decisions, activities, and practices that move
an idea to realization for the purpose of generating business value. It is managing
the investment in creating new opportunities for generating customer value that are
needed to sustain and grow the business or company.
FDDI/ FSBM/IM/2017 Page 23
Generally, innovation investment focuses on the development of new products,
services, or technologies. However, the types of innovation that can enhance
business results go well beyond these, including changes to a company's business
model. Identifying and making these investments successfully and repeatedly
constitutes the key objective of innovation management.
Those involved with innovating will generally tell you that generating ideas is not the
difficult part of being successful with creation and change. Numerous decisions will
be made that impact the progression and ultimate success of good ideas. These
good ideas need to be related to solving a real business problem or growing an
opportunity. Questions that hint at these decisions include:
How does the proposed change generate value for the customer?
What would be the impact of the innovation on the current business? Could it disrupt
existing profits?
How long will it take for the new concept to be realized and impact the business?
How will the innovation enhance existing or create new barriers to competition?
Is there easy access to the competencies needed to realize the new concept?
Many of the decisions associated with innovation management are common to the
choices associated with a new venture start-up. Conflicts created by some of these
choices points to some of the dilemmas associated with disruptive innovation.
Innovation promotes the need for constant change and renewal, potentially
impacting all areas of a business. Change is often resisted, necessitating appropriate
incentives and rewards to promote needed innovation. Many of the most enduring
innovations have required long term investment and staying power. This must be
addressed as part of the organizational decision making approach if an innovative
environment is to be sustained.
The desire to create long term competitive advantage will often lead to intellectual
property and innovation being closely connected. As a result, innovation processes
When both innovation and business objectives are equally valued, broadly promoted
and fully communicated, a culture naturally exists that fosters alignment of the two.
In this culture, top-down business objectives are communicated
There are several ways to naturally bring these two camps together. Jointly
developing technology/product and business roadmaps encourages discussion and
debate, forging linkages that guide actions. Internal business and technology fairs
highlight near term successes while raising visibility to long-term opportunities.
It was highlighted previously that the organization must make key decisions as it
begins to examine technology and innovation. We believe from our experiences that
the key element in these decisions is whether those processes are focused internally
or externally. For example, if a firm chooses to purchase technology, it must focus on
issues such as the integration of the technology and the nature of the firm that
produced the technology. In contrast, if the focus is on the creation of technology,
then how the firm encourages innovation internally through structure and
compensation becomes more important.
As noted earlier, a strategic model will be employed to analyze the topics. Therefore,
planning, implementation, and evaluation and control will be used to examine
internal innovation and external acquisition of technology.
But innovation takes place in a changing world. New technologies emerge, new
markets appear, financial, legal, social rules change. So organizations not only have
to innovate to survive and grow but also need to innovate in the ways they approach
this problem of managing the process. For example, at the beginning of this century
the Internet was still in its infancy and we had only just begun to see its potential role
in changing the way innovation. happened. Now we are in a world where increasingly
products and services are delivered in virtual space and where markets are
increasingly focused around social networks and communities.
The potential for information flow across this world is huge: Facebook with over one
billion members would qualify as the world’s third largest country by population! All of
these changes have an impact on what we can do in our search, select and
implement process, and so organizations have had to learn new tricks to take on
board these new challenges.
The idea of ‘dynamic capability’ – learning and building capability not just to organize
and manage innovation but also to step back and review.
Sources of innovation
There are several sources of innovation. It can occur as a result of a focus effort by a
range of different agents, by chance, or as a result of a major system failure.
The robotics engineer Joseph F. Engelberger asserts that innovations require only
three things:
1. A recognized need,
3. Financial support
Basic Research: This is the type of work done at universities and some R&D labs.
There isn’t a clearly defined outcome. The point is to discover more about how things
work.
It would be tough to argue that people like Einstein or Watson and Crick weren’t
innovative. They revolutionized their fields. Moreover, basic research pays huge
dividends in the long term and it’s difficult to imagine our modern world without
discoveries which seemed useless at the time.
Sustaining Innovation: This is the type of innovation that Apple excels at, where
there is a clearly defined problem and a reasonably good understanding of how to
solve it.
When Steve Jobs first envisioned the iPod, it was simply a device that allowed you to
put “1000 songs in your pocket.” That meant you needed to have a certain amount
FDDI/ FSBM/IM/2017 Page 33
of memory fit into certain dimensions. Those were difficult problems that took a few
years to solve, but it was pretty clear what was involved and who was capable of
solving them.
Transistors and the discovery of the structure of DNA are both good examples of
breakthrough innovation.
For instance, when Steve Jobs wanted a mouse for the Macintosh computer,
he went to IDEO with clear technical specifications knowing that they had the right
skills to produce what he wanted.
There is also a growing trend toward corporate innovation labs, which work closely
with start-ups to perform ongoing “test and learn” programs that help identify
promising new technologies before they are fully mature.
One way companies have started to attack the problem is through open innovation,
either through internal programs like P&G’s connect and develop or through external
platforms such as Innocentive. As Jonah Lehrer points out in his book Imagine ,
answers to tough questions often come from professionals working outside their
chosen field.
Finally, some companies build multidisciplinary teams and set them up in a separate
unit to pursue a particular innovation, like IBM did when they created the PC. This is
rare, but can be the only viable option when breakthrough innovation is crucial to the
future of a business.
Most organizations (sometimes even whole industries) have a tendency to settle into
an orbit that has been successful in the past, that is fairly predictable and one that
minimizes uncertainties. The more settled an orbit, the greater the desire to cling on
to it – the greater is the gravity – gravity that will prevent a move into the next orbit.
Orbit-Shift approach to innovation works ‘Ideal Future Ecosystem Back’. This is very
different from the usual ‘Current Ecosystem Forward’ approach. Working ecosystem
back involves much more than just tweaking the current ecosystem. It involves
Rogers proposes that four main elements influence the spread of a new idea: the
innovation itself, communication channels, time, and a social system. This process
relies heavily on human capital. The innovation must be widely adopted in order to
self-sustain. Within the rate of adoption, there is a point at which an innovation
reaches critical mass.
The categories of adopters are innovators, early adopters, early majority, late
majority, and laggards.[2]Diffusion manifests itself in different ways and is highly
subject to the type of adopters and innovation-decision process. The criterion for the
adopter categorization is innovativeness, defined as the degree to which an
individual adopts a new idea.
Within the adoption curve at some point the innovation reaches critical mass. This is
when the number of individual adopters ensures that the innovation is self-
sustaining.
Adoption is an individual process detailing the series of stages one undergoes from
first hearing about a product to finally adopting it. Diffusion signifies a group
phenomenon, which suggests how an innovation spreads.
Failed diffusion does not mean that the technology was adopted by no one. Rather,
failed diffusion often refers to diffusion that does not reach or approach 100%
adoption due to its own weaknesses, competition from other innovations, or simply a
lack of awareness
Both positive and negative outcomes are possible when an individual or organization
chooses to adopt a particular innovation. Rogers states that this area needs further
research because of the biased positive attitude that is associated with innovation
Rogers lists three categories for consequences: desirable vs. undesirable, direct vs.
indirect, and anticipated vs. unanticipated.
In contrast Wejnert details two categories: public vs. private and benefits vs. costs.
Public consequences comprise the impact of an innovation on those other than the
actor, while private consequences refer to the impact on the actor. Public
consequences usually involve collective actors, such as countries, states,
organizations or social movements. The results are usually concerned with issues of
societal well-being. Private consequences usually involve individuals or small
collective entities, such as a community. The innovations are usually concerned with
the improvement of quality of life or the reform of organizational or social structures
Benefits of an innovation obviously are the positive consequences, while the costs
are the negative. Costs may be monetary or nonmonetary, direct or indirect. Direct
costs are usually related to financial uncertainty and the economic state of the actor.
The primary reason for this dismal record of implementing strategic plans is the lack
of processes and systems that connect the strategic business plans to the objectives
and execution in functional areas across the entire organization. Many strategic
plans require new ideas, innovation planning, and portfolio optimization for
implementation to achieve the desired results.
Additionally, the definition and management of the strategic plans is usually a once-
a-year event, making it difficult to adapt to changes in business, market or
competitive conditions. What business leaders and planners need is a way to
collaboratively define, align and maintain innovation targets, strategies, and
initiatives to support sustained business success.
That’s why, the tools and capabilities to develop and define coherent strategic plans
that are connected through and across your organization. And when things change,
you can easily make adjustments that are systematically communicated through your
organizational structure, either top-down, or bottom-up. Innovation planning drives
your strategic business objectives into strategic operational and execution plans in
your organization.
STRATEGIC INNOVATION
Strategic innovation is all about identifying key strategies to take care of the
following:
Unlike management innovation, which takes care of all external factors and
implications (e.g. impact on stakeholders), strategic innovation only has internal
implications.
Proper strategizing and implementation will ensure that the product or service is
successful, and the company brings in profits.
Pillar 1: Competency
Every organization has a finite set of core competencies – its strengths. However,
these core competencies may not always be in tune with market requirements. At
this juncture, it is important to differentiate between employee competency and
organizational competency. While employee competency is the skill sets that
employees of an organization possess, organizational competency takes on a much
FDDI/ FSBM/IM/2017 Page 49
broader meaning. Organizational competency is the capability of the organization as
a whole to perform in core areas. Organizational competency takes into account the
capability of the organization, not only to coordinate the activities of its various
divisions and departments, but also to perform the following tasks:
Pillar 2: Strategy
Pillar 3: Management
The efficient delegation is the other important step to solving a problem. It is not
always possible for an organization to solve all its problems internally. It then
becomes essential to approach another entity that is well-placed to solve that
problem. A classic example is Dell Inc. The company is much different from its
competitors in that it assembles computers instead of manufacturing them. As such,
to mold itself into one of the major players in its segment over a short period of time,
Dell has successfully forged strong business relationships with a wide array of
reputed component manufacturers.
There are many innovation processes out there, but all encompass the following
steps:
5. Implement quickly and then scale iteratively, openly, and collaboratively to the
right product and market fit.
6. Champion innovative products and services in order to minimize the time the
ecosystem has to climb the learning curve to understand the benefit. This isn’t
about sales; it includes the internal organization, suppliers, partners, and
customers—the entire ecosystem.
MODELS OF INNOVATION
Traditional Phase Gate Model: Under this model, product or services concept is
frozen at early stage so as to minimize risk. Also innovation process in enterprise
involves series of sequential phases/steps arranged in such a manner that the
FDDI/ FSBM/IM/2017 Page 52
preceding phase must be cleared before moving to next phase. Thus a project must
pass through a gate with the permission of gatekeeper before moving to the next
succeeding phase.
Criteria for passing through each gate, and the person at each gate are defined
beforehand. The gatekeeper examines whether the stated objectives for preceding
phase have been properly met or not and whether desired development has taken
place at the preceding phase or not?
In the period mid 1960s- Early 1970s emerges the second-generation Innovation
model, referred to as the” market pull “model of innovation. According to this simple
sequential model, the market was the source of new ideas for directing R&D, which
had a reactive role in the process. The stages of the "market pull” model are: Market
need—Development—Manufacturing—Sales. The linear models of innovation
supported numerous criticisms concerning the linearity of the models. These models
ignore the many feedbacks and loops that occur between the different "stages" of
the process Shortcomings and failures that occur at various stages may lead to a
reconsideration of earlier steps and this may result in an innovation.
Identify the information channels, thereby increasing the interaction and re-use of
knowledge. Note that this is different from identifying information per se. Capturing
information channels implies recognizing and enlisting all the possible channels
through which information flows within the organization. For example, discussion
forums, group email aliases, workshops, chatting networks etc.
Increase the information flow, thereby increasing the intellectual capital; As more
information channels are identified and brought to surface, more and more
employees will use them to converse, exchange information, seek and learn, share
ideas and work in close collaboration (there is empirical evidence to show that
sharing and creating information increases an organization‟s capacity to innovate).
All the mature organizations today face challenges in managing innovation.
It indicates that the conversion from one type to the other (i.e. tacit-to-explicit and
vice versa) gives the most added value. Thus, knowledge once in explicit form can
be more easily distributed, but then it does need converting and assimilating into
another person's tacit knowledge for application in a different context.
The key to knowledge creation lies in the mobilization and conversion of tacit
knowledge". How organizational knowledge is created through processes in the
knowledge spiral shown below:
INNOVATION PLANNING
Scholars who have studied factors contributing to the success of innovations have
emphasized the need for a high degree of ‘discipline’ during the innovation planning
process. Successful innovations are the result of well informed purposeful disciplined
Innovation planning needs to accommodate inputs from various specialty areas such
as market research, engineering, design, business management, branding, finance
and strategy. Tools that can be used across specialty areas and commonly
understood by diverse specialist team members should take precedence.
Research objective and approach: The first objective of this research is to model a
disciplined ‘innovation planning process’ that could be commonly understood by
team members belonging to various specialty areas. The Second objective is to
model an innovation planning toolkit consisting of a set of tools that teams can
collaboratively use during the innovation planning process.
The model generated for the innovation planning process has eight modes
These m odes are briefly described below and are shown on the map in figure1.
Pertinent characteristics of each of these modes are included in the descriptions
below:
Even though these modes are numbered, it should not suggest strict linearity. This is
because, in real life team members move from mode to mode frequently in no
particular order depending on the specific goals at any given time.
Innovation planning activities start with an initial intent, a rough goal, a hypothesis, a
gut feeling, or some form of initial prompt. For example, a product innovation such as
a portable MP3 player starts with the initial intent of supporting people’s desires to
have control over their music collection and listen to digital quality music anywhere.
Trends in digital music technologies, people’s changing preferences in interacting
with media and companies’ evolving business focus on music market segments, all
contribute to establishing the innovation intent here. In this mode, innovators need to
be in an active sensing mode to focus on opportunities and thereby pragmatically
generate their initial innovation intent. Three primary activities characterize this mode
-see changes, diagnose conditions, and form initial strategies. Innovation team’s
primary focus is to see the ‘changes’ impacting people’s lives and understand how
companies respond to these changes. They see comprehensive views of trends in
areas such as business technology, culture and policy and try to uncover potential
opportunities for innovation. Continuous diagnosis of conditions both internal and
external to the company is another key activity in this mode. Just as doctors
diagnose patients, here innovation teams determine the conditions of the company,
its competitors, partners and industry through a series of inquiries measurements
and evaluations. Initial strategies are then formed that reinforce the innovation intent.
Some key tools that support the activities in this mode are described below
Observing people in their own environments during their normal routines and
settings reveals a richer set of insights about their needs, especially their unmet
needs, than what can be gained from traditional market research such as focus
groups, questionnaires, or interviews. Truly novel innovations emerge from
uncovering needs people did not even know they had and questions researchers did
not even knowhow to ask. Developing a deep understanding of people’s unmet and
unexplored needs can challenge industry assumptions and lead to major shifts in
companies’ innovation strategies.
User camera study Tools to help people capture on their own, their
activities, environments and objects and share their
subjective experiences with researchers.
Experience map Tools to map out and tell stories about peoples’
holistic experiences with products, environments,
messages and services.
3. Know context, look at the big picture and learn about opportunities
While in this mode, innovation teams study the contexts within which innovations
need to fit. Contextual research usually looks at entities like companies, competitors,
industries, networks, markets, financial models, technologies, processes, products,
services, brands and channels. Focusing on the ‘state of the art’ knowledge about
each of these entities is valuable in this mode. To promote collaboration, innovators
organize their research findings under commonly understood categories like
business, technology and design. The overall goal is to focus on the most relevant
information, recognize possible opportunity areas and determine the right principles
on which to reliably build innovations.
The main focus in this mode is to analyze the research data generated from the
previously described three modes-Sense Intent, Know People and Know Context.
Innovators look at the research data in multiple ways so that important relationships,
patterns and insights can be evolved. They use a variety of data-organizing and
sorting tools to uncover defensible general patterns. For example, analysis of
peoples’ daily activities using sorting tools reveals activity grouping patterns and the
priorities people assign to them. By analyzing the ‘problems’ faced by people in their
daily lives patterns about their unmet needs emerge. Similarly, analyses of
contextual data would show patterns that are important to consider about
companies, their offerings or any other contextual aspect. High level framing-up of all
the insights and patterns that emerge from multiple analyses of data is at the core of
this mode.
Equally valuable as the insights themselves, is the ‘link’ that can be established
between insights and concepts. To make this link, insights are often turned into
‘principles’. Principles are pre-determined policies or modes of action that are used
to drive concepts. A second option is to turn insights into ‘criteria’, standards or rules
on which ideas can be based. Sometimes the insights are simply stated as needs
that are to be fulfilled, as ‘need statements’. A more powerful way to create this link
is through new ‘frameworks’ a set of assumptions that supports a way of viewing
User Data Analysis Tools to help sort, organize and analyze the
List Sorting Tools to sort lists based on relations, create clusters and
show patterns in diagrams like matrix, Venn, map, net,
tree or profile.
There are four main activities teams engage in - concept exploration, organization,
evaluation and systemization. During concept exploration, focusing on the right
ideas is key – ideas that are driven by the insights-- even if there are only a few,
unlike the large quantities of ideas that traditional brainstorming processes seek.
Keeping concepts organized under useful categories and hierarchies adds to the
efficiency of the exploration. More iteration of concepts with frequent evaluations
makes the concepts more robust. Moreover, exploring concepts happens at many
levels. There is ‘micro’ exploration to conceive point concepts that solve specific
functions, such as ‘pushing a button’. There is ‘macro’ exploration that builds
system level concepts by integrating point concepts into a whole Switching back
and forth between micro and macro explorations is beneficial for integrating
concepts as a system.
Concept matrix map: Tools to explore concepts in a matrix or map, space with
two dimensions defining the concept space.
Scenario plan: Tools to create future scenarios and build stories using
the explored concepts.
6. Make Plans- Make road-maps for the future through actionable plans
To make the concepts actionable, innovation teams develop a working plan. These
plans ensure that the concepts are in alignment with the research findings and the
Teams apply principles learned in the previous modes to make strategic plans that
include innovations like products, communications, services, systems, organizational
processes, environments and brands. Compelling stories are made part of these
plans to clearly explain to stakeholders, both the initiatives and the effects.
Teams also create implementation plans that communicate to the stakeholders the
necessary steps to implement the concepts, the required resources, and the returns.
The plan along with the concepts that the teams propose clearly identifies the
changes needed in the company to create new offerings. Plans also include
roadmaps that show the speculated progression of innovations in distinct phases.
Tactical Plan: Tools to plan the tactical steps needed to realize the
concepts
In this mode, the major focus is on the conceptual design of the prototype.
Teams also focus on meaningful evaluation criteria for each of the iteration
cycles. These evaluation criteria are created based on the innovation intent
and the insights framed earlier.
Pilot and launch plan: Tools to plan pilots and launches based on
feedback from earlier prototype iterations.
Conclusion
The immediate next steps planned for continued research include refining the
prescribed model testing tools on different types of innovation planning projects,
conceiving new tools as additions to the tool kit, evaluating the effects these tools
have on teamwork, and ultimately measuring the resultant innovation success rates.
Perhaps one of the biggest myths about innovation is the idea of the "lone"
innovator, who works on ideas in the lab or office, without assistance or support. In
this myth the innovator or inventor has a flash of insight, generates and manages
ideas completely on his or her own, and fights the bureaucracy to overcome all odds
to produce a commercially viable product. While these stories about individual
innovators overcoming all odds are enjoyable, they are rarely true. In fact, most, if
FDDI/ FSBM/IM/2017 Page 69
not all, ideas that become new products or services require the involvement of a
significant number of people from a wide array of business functions—sales,
marketing, legal, manufacturing, and distribution, to name a few. The complexity
inherent in developing, testing, and commercializing a new product demands a broad
perspective and a diverse set of skills.
In each of these phases, there are a number of steps to complete the phase
successfully. Further, each phase has a number of tools and techniques that must
be mastered in order to produce effective results. To implement those tools and
While innovation is consistently ranked as one of the most important capabilities, few
firms have well-defined innovation processes or capabilities. Other important
business processes, such as receiving customer orders or accepting payment for
customer orders, are well-defined processes honed over years or decades. Yet
innovation is still relegated in many firms to an ad hoc process developed by the
innovator or innovation team, purpose-built for the task at hand, and rarely reused or
repeated. No other important process is conducted in such an ad hoc manner.
Innovation needs and deserves the same definition and process that other important
functions benefit from.
Defining and developing an innovation process, however, only makes sense if the
process will be repeated. If an innovation initiative is a "once and done" event,
developing a new innovation process specifically for a discrete, one-time initiative will
not be worth the effort. Since few firms think of innovation as a business discipline
that can be sustained over time, it doesn’t seem useful to construct a consistent,
repeatable innovation process, especially one that encompasses all of the tasks and
phases identified above.
Transition Points
Further, many innovation programs falter at important transition points within defined
processes. Perhaps the most important transition point is between idea selection and
product development. History is replete with examples of organizations that
generated hundreds of great ideas that were never developed or implemented.
Ideas that are valuable to an innovation team and solve customers’ needs may not
receive the appropriate ranking or prioritization from an overworked product manager
with a long list of priorities. This issue must be solved by integrating the product
While some factors (compensation, metrics, and processes, for example) are the
outcome of intentional, careful decisions and specific actions, other factors
influencing innovation are often derived over time or they are an artifact of the history
of the organization, its position in the market, and its strategic focus. For example,
many firms adopt the strategic position of "fast follower," discussed earlier, intending
to enter new markets or create new products once those markets or product spaces
have been validated by a competitor.
Far too frequently, many firms settle for such a "reactive" approach to innovation,
using it as a tool to respond to changes in market conditions and in response to new
entrants or new offerings, rather than using innovation in a proactive way to open
new markets or address unmet opportunities.
Firefighting
Most entrepreneurial and smaller firms want to change the world, and they are
constantly trying to influence the dynamics of the market in significant ways. Over
time, as the firms age and settle into a comfortable zone and the expectations shift.
As firms mature they seek to protect their markets and drive out costs and
inefficiencies. Companies also become more defensive about their markets and
prefer to react to changes rather than create changes. In fact, many firms in an
industry try to codify the status quo, locking in existing rules and expectations and
locking out new entrants. When the market inevitably shifts, most of these firms are
"Firms need to downplay the "heroism" of fighting fires and instead reward managers
who spot problems before they occur."
A true innovator will identify these emerging issues and create new products or
services to forestall change or to influence the change to favor their products or
solution. Innovators are proactive, establishing new markets, identifying and meeting
emerging needs well before the "fast followers" or laggards. Innovators force their
competitors to become firefighters, which expend their energy and resources to stay
abreast of the latest products, simply hoping to keep pace with the innovators. Trend
Spotting. Any firm can invest a small amount of money and resources into trend
spotting. Trend spotting involves identifying changes that are occurring in
technologies, economies, demographics, and other fields that will influence future
markets. Trends may suggest that the demographic nature of a country is shifting,
becoming older and more homogeneous; that economic growth is slowing; or that
new technologies will dramatically change the way people interact with each other.
Trends are easily spotted if people are alert to what happens in their markets and
economies.
INNOVATION-IMPLEMENTATION
FDDI/ FSBM/IM/2017 Page 74
The implementation stage
When the performance gap has been detected and initiation has taken place – that
is, a concrete plan has been made of how to bridge the gap – then the more tangible
part of the innovation process will start; this is the major part of the innovation
process. We do note that a proper and well thought-out initiation stage will speed up
the implementation stage considerably. The ideas generated in the initiation stage
have to be implemented and therefore ‘important others’ need to be convinced. This
stage involves ‘a process of organizational change which directly affects the
technical and social systems of an organization.
During the implementation stage a new process, product or idea will be implemented
within the organization. Thus, at this point in the innovation process the innovation
can be seen as coming from outside and it is implemented in the organization. In
fact, the implementation stage is what discriminates invention from innovation.
Whereas invention does not involve the actual use of the new product or idea,
innovation does. The applicability and actual application of the new concept is
essential to the innovation process. Thus, innovation is partly defined in terms of its
actual use and application for the target group or market. Elaboration on this thought
can cause confusion, as at the starting point of the innovation process, it is not clear
whether the process will be successful or not. However, it is perfectly well accepted
to talk about an innovation process that resulted in failure, thus without actual
adoption.
Without proper communication between these parties a chain reaction can be set, in
particular when a sequential party has to rely on the information supply generated by
a first party to which that information is seemingly worthless. So end users do not
necessarily directly benefit from the innovation tool even though they might
acknowledge that the implementation of this software tool has great benefits for
other units within the organization, for instance the personnel department that save a
great amount of time when information is supplied digitally. One of the ways to aid
the end-users is to offer them training to learn to work in a new way. However, the
relationship between training and learning is not always that clear. There is a tension
field between the individual and the organization as a crucial factor in the relation
between learning and training. “Training cannot be assumed to produce learning, nor
is learning always an integral part of training, partly because even when training may
result in some learning, the organization may not provide the necessary
infrastructure to support such learning after the training has been completed. ...
individuals have different expectations from training interventions ... and are
frequently unable to utilize the knowledge gained from training courses due to factors
such as the relevance to their current job, the extent to which training is perceived to
be relevant or practical, and whether it is provided at the right time and through the
right methods.”
CONCURRENT ENGINEERING
Concurrent Engineering is not a quick fix for a company's problems and it's not just a
way to improve Engineering performance. It's a business strategy that addresses
important company resources. The major objective this business strategy aims to
achieve is improved product development performance. Concurrent Engineering is a
In traditional serial development, the product is first completely defined by the design
engineering department, after which the manufacturing process is defined by the
manufacturing engineering department, etc. Usually this is a slow, costly and low-
quality approach, leading to a lot of engineering changes, production problems,
product introduction delays, and a product that is less competitive than desired.
Multidisciplinary groups acting together early in the workflow can take informed and
agreed decisions relating to product, process, cost and quality issues. They can
make trade-offs between design features, part manufacturability, assembly
requirements, material needs, reliability issues, serviceability requirements, and cost
and time constraints. Differences are more easily reconciled early in design.
Getting the design correct at the start of the development process will reduce
downstream difficulties in the workflow. The need for expensive engineering changes
later in the cycle will be reduced. Concurrent Engineering aims to reduce the number
of redesigns, especially those resulting from post-design input from support groups.
By involving these groups in the initial design, fewer iterations will be needed. The
major iterations that do occur will occur before the design becomes final. The overall
time taken to design and manufacture a new product can be substantially reduced if
the two activities are carried out together rather than in series. The reductions in
design cycle time that result from Concurrent Engineering invariably reduce total
product cost.
Develop metrics
Concurrent Engineering is a business strategy, not a quick fix. It will take many years
to implement. If management doesn't have the time or budget to go through the
above steps, then it is unlikely that Concurrent Engineering will be implemented.
No training in teamwork
Believing innovation is critical to your business is not equal to being innovative. Too
often, organizations under invest in developing a robust innovation capability that
lasts for decades and transforms the organization. Within each organization, there
are levers that can be pulled to institutionalize innovation, change mind sets and
combine with the appropriate tools to create innovation success.
Implementing this capability includes removing the barriers and instilling new
behaviors that change the culture and embeds innovation in the organizational
fabric. Creating change comes from innovating in new ways and communicating the
results, not the other way round.
Outcomes
Engaged employees and innovation teams who have the skills to innovate
Figure 3-1: The process of birth of innovation until it is removed from sales
Discoveries in figure 3-1 are often the result of research in physics, medicine,
chemistry and biology. Such discoveries transformed into possible technological
solutions are in general seen as a technology push. The origin of a new product can
also be the result of development done by an inventor. Independent of source,
innovative development is needed to make a commercial product. From when the
products have been sold and taken in use, reengineering takes place to ensure that
the market need for the products is cultivated as long as the products are not
regarded as old-fashioned by the market. Reengineering is, in general, easy to plan
and the returns on investments can be calculated, which is often the opposite to the
situation where innovative development is concerned. The PLC varies from about 6
months for games to 20 or more years for some mechanical products.
When the innovation push results in sales taking off and the establishment of a
market need, it is important in the production process to develop and follow strict
rules in order to minimize uncertainty, and to avoid disturbances and negative
chaotic situations. However a strong market tendency is to get ever more individually
designed/composed products. Thus the market pushes the industrial process to be
increasingly flexible, which means an unstable and heterogeneous situation for the
industry.
Figure 3-3: In a sustainable enterprise, processes and innovation projects live side
by side with each other while change projects and improvement projects live totally
or partly inside the process
Figure 3-4: Knowledge and know-how is generated due to many factors of which
some important ones are shown in the figure. Solutions in the figure are e.g. models,
prototypes, manufactured products, etc.
As figure 3-4 shows, one important way to extend ones own knowledge is to collect
and process information from other people through communication with them.
Common for all information is that it can – and is – manipulated to be what is should
be - for good or bad reasons - wants it to be. Also reality is constructed from our
thoughts of reality and there is no reality until that reality is perceived. Instead, reality
FDDI/ FSBM/IM/2017 Page 88
depends upon our choices of what and how we choose to observe. These choices,
in turn, depend upon our minds or, more specifically, the content of our thoughts and
our mood, intentions, interest, our expectations, our desire for continuity, etc.
Knowledge management has become a well known term. But the real challenge
facing most companies is that of faster innovation. Creating the system within which
ideas are created and applied is more than management. It is a matter of strategy
and leadership. That's where Knowledge Innovation comes to the force. Innovation
embodies the concept that innovation is the one competence needed for the future. It
addresses all the fundamental management dimensions in the process of innovation
- the creation and conversion of ideas into viable commercial products in addition to
building a foundation for future sustainable growth. It recognizes that knowledge is
the core component of innovation - not technology or finances per se. Nurturing and
managing the flow of knowledge may be the most distinctive competence of the
decade. Knowledge and creativity are now the major driving forces behind
pioneering companies that are achieving competitive edge crucial to competing in
today‟s economy. Innovative Knowledge Management: Concepts for Organizational
Creativity and Collaborative Design provides a valuable resource for promoting
current academic discourse on Innovation in knowledge-intensive organizations and
contexts. A defining collection of field advancements, this Premier Reference Source
creatively showcases wide-ranging issues relevant to the use of knowledge
management. This paper explore about the links between knowledge management
and innovation.
Diffusion of innovation:
1. First knowledge
2. Forming an attitude
Once innovation occurs, innovations may be spread from the innovator to other
individuals and groups. This process has been proposed that the life cycle of
innovations can be described using the‟s-curve' or diffusion curve. The s-curve maps
growth of revenue or productivity against time. In the early stage of a particular
innovation, growth is relatively slow as the new product establishes itself. At some
point customers begin to demand and the product growth increases more rapidly.
New incremental innovations or changes to the product allow growth to continue.
Towards the end of its lifecycle, growth slows and may even begin to decline. In the
later stages, no amount of new investment in that product will yield a normal rate of
return The s-curve derives from an assumption that new products are likely to have
"product life"—i.e., a start-up phase, a rapid increase in revenue and eventual
decline. In fact the great majority of innovations never gets off the bottom of the
curve, and never produces normal returns.
Innovative companies will typically be working on new innovations that will eventually
replace older ones. Successive s-curves will come along to replace older ones and
continue to drive growth upwards. In the figure above the first curve shows a current
technology. The second shows an emerging technology that currently yields lower
growth but will eventually overtake current technology and lead to even greater
levels of growth. The length of life will depend on many factors.
Companies have a fairly predictable life cycle. They start with an innovation, search
for a repeatable business model, build the infrastructure for a company, then grow by
efficiently executing the model. Over time, innovations outside the company
FDDI/ FSBM/IM/2017 Page 90
(demographic, cultural, new technologies, etc.) outpace an existing company’s
business model. The company loses customers, then revenues and profits decline
and it eventually gets acquired or goes out of business.
Over 15 years ago, Clayton Christensen observed that there are two types of
innovative strategies for a large company – sustaining and disruptive innovation. He
believed that large companies handle sustaining innovation – evolutionary changes
in their markets, products, etc. valued by their existing customers – fairly well. But
most large companies find it hard to deal with disruptive innovation – radical shifts in
technology, customers, regulatory changes, etc, that create new markets.
If we use our “startup to large company,” diagram, we can see that sustaining
innovations occur within a large company’s existing management structures.
This type of organization is best for finding new niches in existing markets or creating
entirely new markets. Why? Disruptive innovation in a large company is attempting
to solve two simultaneous unknowns: the customer/market is unknown, and the
product feature set is unknown. Just like a startup.
Q2. Elaborate on the different models of innovation? Briefly mention on the three
pillars?
1. What is innovation?
7. Illustrate with examples how companies build products and brands through
sustainable innovations?
9. Chart the course of an invention of the 20th century – and illustrate how