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Innovation
Lecture 6
Lecture 6:
DESCRIPTION & OVERVIEW
The objective of this class session is to explore the impact and role of innovation on organizational performance and as a source of
strategic renewal and high-performance. Innovation is a fascinating and challenging subject that is often under-appreciated in
traditional strategic planning methods. Likewise the process and management of innovation also represents a key challenge for the
management of organizations and strategists alike.
This session will discuss numerous important topics related to innovation as a strategic pillar, and explore pertinent questions such as:
• What is the definition of innovation?
• Why are some organizations great at innovation and others find the process to be a constant struggle?
• How do great performing companies innovate?
• What is the role and influence of leadership on innovation?
• What types of personal qualities and characteristics are required to support innovation?
• What is the importance of organizational learning in innovation?
• What is the influence of environment on innovation?
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Lecture 6:
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Lecture 6:
CONCEPT DISCUSSION & QUESTIONS
1. Consider various examples of discontinuous and incremental innovations and discuss their
impact on their industries and market dynamics? In what ways and to what extent did/do
these events drive change and new competitive rules? What is the longevity in terms of
strategic implications of each type of innovation?
2. Discuss the criticality of concepts such as collaboration, external partnerships, coopetition, etc.,
to innovation and product development efforts. How do these support or relate to high
performance and strategic renewal?
3. Discuss the relationship between innovation and the remaining pillars of strategic renewal.
Specifically, to what extent is innovation enabled or affected by IT, knowledge and leadership?
4. Assess the value of innovation, its risks, potential for marketspace dominance and competitive
leadership relative to each of the six strategic choices for competing? How do companies
manage/leverage innovation for high performance (discuss some real life examples)?
5. What are the various sources of innovation? What actions must leaders take to continuous
ensure presence and nourishment of such sources?
6. What are the traditional impediments to innovation efforts? How can organizations eliminate
such “holdups”?
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Lecture 6:
LECTURE SUMMARY
The capability to innovate is critical to an organization’s survival and sustained competitiveness. High-
performers emphasize innovation and actively seek innovative people. Innovation is absolutely essential
to any business strategy, as it can completely alter traditional strategies and introduce new competitive
models.
Some of the signs of high-performance innovators include:
• Presence of creative people
• Established methods for identifying different types and sources of innovations
• Formal and informal methods to sponsor, manage and measure sources, levels and impacts of
innovation
• Leadership which constantly extols and challenges the organization to be innovative
• Extensive external collaboration initiatives
• Methods and means to commercialize innovation and translate it into growth, revenues and a
distinct competitive advantage
• Extensive knowledge sharing and development
• Appropriate technologies and methods to facilitate innovation and innovative thought processes
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Peter Drucker
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Defining Innovation…
… is a highly subjective area, as it is subject to individual interpretation and
opinion. Therefore, there are many different interpretations and conclusions
with regard to innovation:
“Innovation is implementation of
“… changes in something, the creativity. Creativity is simply the
introduction of new things.” production of novel, appropriate
ideas in any realm of human activity
(Scribner’s Dictionary) and is the first step of innovation.”
(Teresa M. Amabile)
“… something new”
“… combination of new things and
(Tom Davenport) markets.”
(Joseph Schumpeter)
(James Higgins)
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Defining Innovation…
High-Performance organizations define innovation with reference to
creativity and the generation of new opportunities, products and
performance… thus, their (H-P’s) working definition of innovation is:
Key Implications
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Value Type of
Generating Process to
Outcomes Innovation
INNOVATION:
Discontinuous & Incremental
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Sources of Innovation
There are three sources of innovation:
1. Autonomous
External or internal
Incremental or discontinuous
Can occur in a number of forms and often comes from outside the
company/industry (e.g. Post-It, Glide dental floss, Microsoft, Apple
Computer…)
2. Systemic
Indigenous to an organization
Results from a planned and formally managed process with anticipated &
monitored outcomes
Entail complex organizational interactions and alignments of among a
number of factors
3. Collaborative
Occurs at a group or interorganizational level with a clear goal to engage
in innovation
Supported by common interest and/or the need to share resources, risk,
talent, competencies…
Can lead to both incremental and discontinuous results
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Impediments to Innovation
Many factors influence an organization’s ability to innovate. There are
three common impediments:
Technology Impediments
Measurement Impediments
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Impediments Enablers
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Dynamics of Innovation
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Leading Innovation…
Five Common Characteristics of Successful Innovators:
1. Innovation has been institutionalized as a way of life.
2. Leaderships foster innovation and build creative environments.
3. Hire, nurture and covet innovative people.
4. Recognize and reward creativity.
5. Are not tied to preconceived outcomes, nor attached to a
predetermined answer – they let answers and outcomes evolve.
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Leadership
Environment
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
1. LINEAR
2. CHAIN-LINKED
3. TOTAL PROCESS
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Key Qualities:
Highly sequential activities and decision-making
High level of separation and departmentalization – limits
interaction
Many formal steps and approval points
Requires lower cultural and individual changes
Asynchronous and formal communications flow
Slower decisions
Low to minimal collaboration – compartmentalizes the process
into isolated fragments
Low to minimal external party involvement – limits
participation of the market
Subject to “re-start” when parameters change
Attracts structured individuals with preference for certainty
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
1A
Market
Assessment
Project
Business Proof of Design Frozen
Plan Concept Design
1B
Technical
Feasibility
Go Go
No No
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Piloting
Mfg.
Final
Ready for Launch
Production
Market
Version
Verification Validation
Mktg.
1-year
Go follow-up
No
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
Learning + K
Discovery/ New/Updated
Concepts/Facts
New Ideas Product/Concepts
Integration + Assimilation
Evaluation + s
Final Product +
Product Launch
Innovation
©2000, Michael A. Mische
MOR 559 – Strategic Renewal University of Southern California
“You need to make creativity the norm and the lack of creativity the
exception, as opposed to trying to take the company and say, ‘Well, we’re
going to be creative this week.’”
Innovation
©2000, Michael A. Mische