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Learning objectives
Chapter 2 Innovation
• Innovation as a process rather than a single flash of inspiration;
management with leadership • The difficulties in managing what is an uncertain and risky
and organization process;
• The key themes in thinking about how to manage this process
effectively.

1 2

Size
Innovation is a
journey, not an
Sector

1. Innovation management
event
Search
For profit/not for
profit Stages in the Select
Contingency journey
model – it all Implement
1.1 The concept of innovation management Regulatory
environment
depends
Capture value
• Innovation management is not exclusively associated with Social innovation
Learn and build
products or new ways of doing business in service sector Geography
Managing innovation as
a core business
capability

• Innovation management involves change, particularly process

technological change. Sometimes this involves product, service Innovation Innovation

strategy
life cycle
and process changes Key
• The level of change is an important dimension influences Innovative
organization

Changing Learning to Pro-active

innovation manage linkages
models innovation

Problem of partial
models
Concept of Dynamic
routines capability

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Figure 1.1 Innovation is a complex management

Overview of the innovation process process
1. Not fully understood, for example, unable to predict which
organisations will be the innovators of tomorrow!
2. Needs to be viewed as an internal organisational process
3. Numerous models available
4. Numerous prescriptions available
5. Various classifications:
Revolutionary for example, Driverless cars
Incremental for example, Mobile phones
6. No simple formula

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Figure 1.9
The cyclic model of innovation with 1.2 The role of innovation management
interconnected cycles
• How to become innovative?
• Managing the tension between the need for creativity and
efficiency
• How, then do firms escape from the innovation dilemma?
• What are critical factors for innovation success?

Source: Adapted from: Berkhout, A.J., Hartmann, D. and Trott, P. (2010) Connecting technological capabilities with market needs using a cyclic innovation model,
R&D Management, vol. 40, no. 5, 474–90.

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Some firms seem to be more innovative than others Figure 4.1

• Long-term survival is associated with innovation. Managing the tension between the need for
• Many science- or technology-based companies are often creativity and efficiency
associated with innovation (visible).
For example, Zoom, Tesla, Microsoft and Dyson are regarded of innovative
companies.

How to become innovative?

• The role of research & development (R&D) (Siemens)?
• Can you acquire technology from outside?
• The role of ‘prior knowledge’

€5 billion
every year! But . . .

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How, then do firms escape from the Figure 4.2

innovation dilemma? Pearson’s uncertainty map
Incremental innovation reinforces the capabilities of
established organisations, while radical innovation forces
them to draw on new technical and commercial skills.

Thus the organisation learns that it has dynamic

capabilities.

Firms that have dynamic capabilities, that is, those routines

that relate to the creation of new products and services, are
able to change ‘old’ routines with ‘new’ ones.

Source: Pearson, A.W. (1991) ‘Managing innovation: an uncertainty reduction process’, in Henry, J. and Walker, D. (eds), Managing Innovation, Sage/OU.

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Figure 4.3 Illustration 4.1

Matrix of complexity of Business pioneers in technology
architectural/component knowledge What can we learn from some of the most successful
technology pioneers?

Mark Zuckerberg and Bill Gates both established

their businesses as 19 year olds.

Yet, Huawei was started by a 43-year-old.

Steve Jobs returned to Apple later in his career to

help turnaround the firm into the success it is today.

Young or older knowledge of the industry in which

you want to succeed seems critical.
Source: whiteMocca/Shutterstock

Source: Henderson, R. and Clark, K. (1990) Architectural innovation: the reconfiguration of existing product technologies and the failure of established firms, Administrative Science
Quarterly, vol. 35, no. 1. Reproduced with permission of Johnson at Cornell University.

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Figure 4.4 Figure 4.5

A two-dimensional typology of innovation Innovation stimulus, capacity and
projects performance

Source: D.I. Prajogo and P.K. Ahmed (2006).

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Figure 4.6 1.3 Innovation Management System – ISO

Critical factors for innovation success
56002:2019

Source: van der Panne et al. (2003).

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Innovation Management System – ISO 56002:2019 Chapters in Managing Innovation, 7th edition

Intent
Context of organization
1. What is innovation and why does it matter?
5. Building an innovative organization
1.4 Aspects of innovation management
Leadership 5. Building an innovative organization
Planning 9. Dealing with uncertainty
Support 4. Developing an innovation strategy
Process: 3. Innovation as a core business process
1. Identify opportunities 7. & 8. Sources and search for opportunities
2. Create concepts 10. Creating new products and services
3. Validate concepts 10. Creating new products and services
4. Develop solutions 10. Creating new products and services
5. Deploy solutions 11. Exploring open innovation and collaboration
Performance evaluation 15. Capturing learning and building capability
Improvement 15. Capturing learning and building capability

Value4/11/2024 13. & 14. Creating and capturing value 19

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Table 4.1
Innovation management measurement areas

Source: Adams et al. (2006).

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Figure 4.7 Table 4.3

Technological linkages among different types Organic versus mechanistic organisational
of firms structures

Source: Pavitt, K. (1994) Sectoral patterns of technological change: towards a taxonomy and theory, Research Policy, vol. 13, 343–73. Source: Slevin, D.P. and Covin, J.G. (1990) Juggling entrepreneurial style and organizational structure: how to get your act together, Sloan Management Review, Winter, 43–53.

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Table 4.4 Figure 4.8

Key individual roles within the innovation Paradox of ERP systems and innovation
process organisational requirements

Source: Based on Roberts, E.B. and Fushfield, A.R. (1981) Staffing the innovative technology-based organisation, Sloan Management Review, Spring, 19–34.

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Table 4.5 Table 4.5

Innovation management tools and Innovation management tools and
methodologies (1 of 2) methodologies (2 of 2)

Source: Hidalgo and Albors (2008) and Coombs et al. (1998). Source: Hidalgo and Albors (2008) and Coombs et al. (1998).

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An Innovation Audit
2. Innovation organization
What is the annual level of investment in R&D/ innovation?

Growth targets? 2.1 Concept

What percentage of sales are derived from
products/services introduced in the past three
years?

What model of innovation is used?

What level of time is provided for staff to improve existing

operations and or develop new products/services?

What is the firm’s innovation heritage?

How effectively does the firm tackle the innovation dilemma?

How does the firm incorporate innovation within its operations

processes?

What strategic alliances does the firm have?

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Innovation as a journey 2.2 Characteristics of innovative organisations

• Autonomy of individual
• Professional accountability
• Provision of creative space (scientific freedom)
• Participation in open cross-functional teams
• Richness and diversity of data

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2.3 Components of an innovative organisation The innovative organization

Research shows these factors are associated with good performance:

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The innovative organization

(continued) 2.4 Some activities related to innovation management

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• Searching for trigger ideas.

Innovation needs:
Key
• Selecting from the possibilities the one we are
going to follow through. Influences • Strategy;

stages in • Developing the idea from initial ‘gleam in the

eye’ to a fully-developed reality.
on the • Innovative organization;

the • Managing its diffusion and take up in our

chosen market.
process • Proactive linkages;

process
• Learning and improvement loop.
• Capturing value from the process.

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Key Different
questions versions
• Do we search as well as we could?
• For a start-up entrepreneur the ‘search’ stage is
• How well do we manage the selection and often called ‘opportunity recognition’ – but once they
about how resource acquisition process?
of the have spotted something they think they can exploit
the challenge is of making it happen. They have to

we core
• How well do we implement? acquire resources making various pitches to get
backing and buy-in.
• Do we capture value? Improve our technical and
manage market knowledge for next time? Generate and
protect the gains so they are sustainable? process • Then they have to develop the venture and finally
launch it into their chosen marketplace and capture

innovation • Do we learn from experience? How do we capture

this learning and feed it back into the next time?
model the rewards and also the learning to allow them to do
it again.

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Different • For a new product development team in a

company it is about searching for ideas (maybe in the
Different
versions of R&D lab, maybe via customer survey, maybe some
combination of both). Then they have to secure versions of • For a public service team in a hospital the search
may be for more efficient ways of delivering the
service under resource constraints. Once again an
the process internal resources – pitching for backing against other
competing projects form different teams. Then they
manage the development process, bringing the
the process individual or team has to convince others and secure
resources and the permission to explore, they have to

model product through various stages of prototyping and

simultaneously developing the market and launch
model develop it and then diffuse it as a new method to an
internal market of people in the service who will
adopt the new way. And once again they capture
(continued) plans. Finally launch and, hopefully, widespread
adoption – and capturing the gains in commercial
terms but also in terms of what has been learned for
(continued) value, in terms of efficiency improvement but also in
learning.
next time.

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Variations on a theme

Different
versions of • For the social entrepreneur it is about finding a

the core trigger need, then developing and sharing a vision

around how to meet that need better. Securing
support and buy in is followed by development,
model implementation and hopefully widespread adoption
– and the value is captured in social improvements as

(continued) well as learning.

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Variations on a theme
(continued) Different sectors, different approaches

We can use a process model as a framework reminding ourselves the

reality will vary, for example, by the sector, the size of our enterprise, or
the stage in the industry life-cycle.

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Innovation in the humanitarian world Size as an influence

[Link]
started/innovation-process/

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Different models for ‘steady state’ and

discontinuous innovation

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The problem of partial

Changing models of innovation over time models

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The problem of partial Core abilities in innovation

models (continued)

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Developing innovation
capability Innovation as a journey

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Key questions in the selection phase Key questions in the implementation phase

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3. Innovative leadership spirit

• Dynamic capability – need to update and change our routines in a
changing world.

• Of the ways we do things round here – our routines – for innovation:

Dynamic • Which should we do more of?

capability
• Which should we do less of, or even stop?

• Which new things do we need to learn to do to add to our

repertoire?

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Characteristic traits of
Innovation leadership
good leaders
• bright, alert and intelligent;
• seek responsibility and take charge;
• skillful in their task domain;
• administratively and socially competent;
• energetic, active and resilient;
Reviews of research on leadership and performance suggest leadership directly • good communicators.
influences:

• Around 15% of the differences found in performance of businesses; BUT

• Contributes around an additional 35% through the choice of business strategy;

• So directly and indirectly leadership can account for half of the variance in
There is no brief and universal list of enduring traits that
performance observed across organizations. all good leaders must possess under all conditions.

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Key factors for leaders to Key factors for leaders to

focus on focus on (continued)
A review of twenty-seven empirical studies of the 2. When forming teams, some heterogeneity is
relationships between leadership and innovation necessary to promote innovation. However, if the
investigated when and how leadership influences team is too heterogeneous, tensions may arise, when
innovation, identified six factors leaders should focus on: heterogeneity is too low, more directive leadership is
required to promote team reflection, for example, by
1. Upper management should establish an innovation encouraging discussion and disagreement.
policy that is promoted throughout the organization.
It is necessary that the organization through its 3. Leaders should promote a team climate of emotional
leaders communicate to employees that innovative safety, respect, and joy through emotional support
behavior will be rewarded. and shared decision-making.

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Key factors for leaders to

Creative style
focus on (continued)
4. Individuals and teams have autonomy and space Kirton’s ‘adaptors and innovators’ spectrum:
for idea generation and creative problem solving. • Adaptors characteristically produce a sufficiency of ideas
based closely on existing agreed definitions of a problem and
its likely solutions, but stretching the solutions. These ideas
5. Time limits for idea creation and problem solutions help to improve and 'do better'.
should be set, particularly in the implementation phases
• Innovators are more likely to reconstruct the problem,
challenge the assumptions and to emerge with a much less
6. Finally, team leaders, who have the expertise, expected solution which very probably is also at first less
acceptable. Innovators are less concerned with doing things
should engage closely in the evaluation of innovative
better than with doing things differently.
activities.

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Collective and social Collective and social aspects

aspects of innovation of innovation (continued)

• ‘It takes five years to develop a new car in this country. Heck, we won World • The power of team working
War 2 in four years...’

• Ross Perot’s critical comment on the state of the US car industry in the late • Lew Varaldi, project manager of Ford’s Team Taurus
1980s captured some of the frustration with existing ways of designing and project put it, ‘... it’s amazing the dedication and
building cars. commitment you get from people...we will never go
back to the old ways because we know so much about
what they can bring to the party...’

• Groups are not necessarily teams….

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Key factors in high

High involvement innovation performance teams
Key elements in effective high-performance team
working include:

• clearly defined tasks and objectives;

• effective team leadership;
• good balance of team roles and match to individual
behavioural style;
• effective conflict resolution mechanisms within the
group;
• continuing liaison with external organization.

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Tuckman’s model of team Advantages and

development disadvantages of groups

Teams typically go through four stages of development:

•‘forming,
•storming,
•norming,
•performing’.

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Advantages and
High performing teams
disadvantages of groups
Based on Tidd and Isaksen research, high performing
characteristics are:
• a clear, common and elevating goal;
• results-driven structure;
• competent team members;
• unified commitment.

Collaborative climate:
• standards of excellence;
• external support and recognition;
Source: S. Isaksen and J. Tidd (2006) Meeting the Innovation Challenge, John Wiley & • principled leadership.
Sons, Ltd, Chichester

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High performing teams ‘Tripwires’ undermining

(continued) team effectiveness
Based on Tidd and Isaksen research, appropriate use of
the team:
• group versus team;
• ends versus means;
• participation in decision making; • structured freedom;
• team spirit; • support structures and systems;
• embracing appropriate change. • assumed competence.

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Context and climate Climate factors influencing

innovation
• Climate is defined as the recurring patterns of
behaviour, attitudes and feelings that characterize life in
the organization.
• Objectively shared perceptions that characterize life
within a defined work unit or in the larger organization.
• Climate is distinct from culture in that it is more
observable at a surface level within the organization and
more amenable to change and improvement efforts.
Source: Derived for Scott Isaksen and Joe Tidd (2006) Meeting the Innovation
Challenge (Wiley).
• Culture refers to the deeper and more enduring values,
norms and beliefs within the organization.

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