Chapter 5:
no v ati o n
In
Man ag e m e n t THE INNOVATION
B 1 0 2 0 2
W B PROCESS
Innovation
Manageme
nt
Lesson Outlines
WBB10202
5.1 Process Considerations
5.2 Process Models
Innovation
nt
5.1 Process Considerations
Manageme
WBB10202
Importance Timing and
Type of the Expected Sources
of the
Innovation Time for of Innovation
Innovation
Completion
The
Organizational Organizational The Number
Innovation
Infrastructure Resources of Unknowns
Moment
Innovation
Manageme
nt
Type of Innovation
WBB10202
Incremental Innovation
Radical Innovation
Modular Innovation
Architectural Innovation
Innovation
Manageme
nt
Importance of Innovation
WBB10202
Innovation = Invention +
Implementation/Commercialization.
Management must perceive the
innovation as adding value to the
bottom line.
Should answer “Why we need to
innovate?”
Timing and the Expected
Innovation
Manageme
nt
Time for Completion
WBB10202
requires consideration of the amount of
change that the innovation creates.
Too early means the market may not be
ready to accept the innovation.
Too late may give the competition an
opportunity to gain a greater market
share.
Innovation
Manageme
nt
Sources of Innovation
WBB10202
Unexpected
Industry market
Incongruities Process Needs
and structures
New technology
Demographic Changes in
and scientific
changes public perception
findings
Innovation
Manageme
nt
The Innovation Moment
WBB10202
Why did someone think of an idea
at some specific moment in time
and go on to pursue it?
organizations struggle with finding
ways to motivate people to become
innovators.
Innovation
nt
Organizational Infrastructure
Manageme
WBB10202
Vision
Mission
Objectives
Strategy
Structure
Innovation
Manageme
nt
Organizational Resources
WBB10202
intellectual access to capability
property information
time customers suppliers
plant and financial
equipment reserves
Innovation
Manageme
nt
The Number of Unknowns
WBB10202
Unknowns
technology market
Innovation
nt
5.2 Process Models
Manageme
WBB10202
Roberts and Frohman
Quinn
Van de Ven
Cooper
Innovation
Manageme
nt
Roberts and Frohman
WBB10202
i. Recognition of the opportunity
ii. Idea formulation
iii. Problem solving
iv. Prototype solution
v. Commercial development
vi. Technology utilization and/or
diffusion
Innovation
Manageme
nt
Roberts and Frohman
WBB10202
may fit an organization that is directed
top down
stops after technology utilization.
do not meet the definition of innovation
= invention +
implementation/commercialization
a rational process assumes a stable
economic and competitive system, but
these systems are dynamic.
Innovation
Manageme
nt
Quinn
WBB10202
refers the innovation process as
controlled chaos.
Focus on the mental attitude of the
independent innovator and the
restrictions placed on the corporate
innovator.
Innovation
Manageme
nt
Quinn
WBB10202
Two perspectives of innovation :
Garage innovators
the independent innovators who
begin in the kitchen or garage or
the attic.
Organizational/ corporate innovators
the innovators working in a
corporate bureaucracy.
Innovation
Manageme
nt
Quinn
WBB10202
Characteristic of independent innovators:
Perceive probabilities much higher than others
do
Can live with frustration, ambiguities, and
setbacks
Avoid early planning
Use sweat capital—time is not important
Beg, borrow, and steal—such as by taking a
temporary unauthorized loan
Disregard formal planning tools
Innovation
Manageme
nt
Quinn
WBB10202
Organizational Innovators:
operate in two different areas:
1. those who work on ideas from the
bottom up
2. those who work on innovations
directed from the top down.
Innovation
Manageme
nt
Quinn
WBB10202
Barriers for Organization Innovator
1. Top management isolation
2. Intolerance of fanatics
3. Short time horizon
4. Assessment of all overhead charges
5. Too much rationalism
6. Excessive bureaucracy
7. Inappropriate incentives
Innovation
Manageme
nt
Van de Ven
WBB10202
Proposed 3 periods in the innovation
process:
Initiation
Development Period
Implementation/Termination Period
Innovation
Manageme
nt
Van de Ven
WBB10202
Initiation
time of churning ideas and
attempting to develop them into a
workable concept.
Innovation
Manageme
nt
Van de Ven
WBB10202
Commonalties occur in the initiation period:
The process has a gestation period that may
last several years.
Some internal or external trigger usually
shocks the individual or the organization into
recognizing some significant opportunity or
dissatisfaction.
Plans are developed and submitted to those
who control the resources.
Innovation
Manageme
nt
Van de Ven
WBB10202
Development Period
i. The initial idea proliferates into many
ideas and activities (divergent, parallel,
and convergent paths).
ii. Setbacks and mistakes are part of the
process.
iii. Changing criteria for success create
additional problems between the doers
and the resource controllers.
Innovation
Manageme
nt
Van de Ven
WBB10202
Development Period (cont.)
iv. The lack of full-time personnel
assignments results in experiences
that range from euphoria to pain.
v. Major problems usually require
resolution by managers or by external
sources funding the program.
Innovation
Manageme
nt
Van de Ven
WBB10202
Development Period (cont.)
v. Innovation units develop relationships
with other organizational units.
vi. Innovators often involved in activities
with competitors, suppliers, and
government agencies to create a
supportive infrastructure for
implementation.
Innovation
Manageme
nt
Van de Ven
WBB10202
Implementation/Termination Period
Innovations stop when they are
implemented or when the flow of
resources has been limited in such a
way that prevents continuing the
activities.
The success or failure is acknowledged
and generally affects the careers of the
innovation participants.
Innovation
nt
Cooper
Manageme
WBB10202
Introduce the stage-gate
system for moving product
innovation to the marketplace
more rapidly.
Innovation
Manageme
nt
Cooper
WBB10202
Stage gate
a decision point on whether a project
is proceeding as planned and a go,
no-go or hold decision is made.
intended to identify one or more
essential breakthroughs that make
continuation of the project feasible.
Innovation
Manageme
nt
Cooper
WBB10202
Innovation
nt
Cooper
Manageme
WBB10202
Stage 0 - Discovery:
Activities designed to discover
opportunities and to generate new
product ideas.
Innovation
nt
Cooper
Manageme
WBB10202
Stage 1 - Scoping:
A quick and inexpensive assessment
of the technical merits of the project
and its market prospects.
Innovation
nt
Cooper
Manageme
WBB10202
Stage 2 - Build Business Case:
This is the critical homework stage -
the one that makes or breaks the
project. Technical, marketing and
business feasibility are accessed
resulting in a business case which has
three main components: product and
project definition; project justification;
and project plan.
Innovation
nt
Cooper
Manageme
WBB10202
Stage 3 - Development:
Plans are translated into concrete
deliverables. The actual design and
development of the new product
occurs, the manufacturing or
operations plan is mapped out, the
marketing launch and operating plans
are developed, and the test plans for
the next stage are defined.
Innovation
nt
Cooper
Manageme
WBB10202
Stage 4 - Testing and Validation:
The purpose of this stage is to provide
validation of the entire project: the
product itself, the
production/manufacturing process,
customer acceptance, and the
economics of the project.
Innovation
nt
Cooper
Manageme
WBB10202
Stage 5 - Launch:
Full commercialization of the product -
the beginning of full production and
commercial launch.
Models of the Innovation Process
Innovation
nt
Manageme
WBB10202
Technology Push
Basic Design &
Science Engineering
Manufacturing Marketing Sales
Driven by development of science & technology
Models of the Innovation Process
Innovation
nt
Manageme
WBB10202
Demand Pull
Market Need Development Manufacturing Sales
Driven by market requirement or demand
Models of the Innovation Process
Innovation
nt
Manageme
WBB10202
Coupling
New Need of society & the marketplace
Need
Idea Research, Prototype Manufacturing Marketing
Generation design & production & Sales Marketplace
development
New State of the art in technology and production
Technology
Driven by market requirement or demand
Innovation
Models of the Innovation Process
nt
Manageme
WBB10202
Integrated
New product development process
Marketing
Research & Development
Product Development
Product Engineering
Part Manufacture (supplier)
Manufacture
Marketing Joint group meetings (engineers/managers) Launch