Managing innovation ch2

11/27/2014

By Sayed Eltaweel 1

Managing Innovation

Chapter2:Innovation as a core business

processBy Sayed Eltaweel

[email protected] By Sayed Eltaweel

Outlines:Outlines:

2.1 Introduction

2.2 Variations on a theme

2.3 Evolving models of the process

2.4 Can we manage innovation?

2.5 Learning to manage innovation

2.6 Measuring innovation success

2.7 Success routines in innovation management

2.8 Beyond the steady state

2 By Sayed Eltaweel

mailto:[email protected]

11/27/2014

By Sayed Eltaweel 2

• "The enterprise that does not innovate ages and declines. And in a period of rapid change such as the present the decline will be fast." - Peter Drucker

• “Creativity is thinking up new things. Innovation is doing new things.” — Theodore Levitt

• “To live a creative life, we must lose our fear of being wrong.” — Joseph Chilton Pierce

Quotes:Quotes:

3 By Sayed Eltaweel

22..1 1 Introduction Introduction • The challenge facing any organization is to try and find

ways of managing the innovation process to provide a good solution to the problem of renewal.

• Innovation Management is a learned capability, So each organization must find its own particular solution and develop this in its own context.

4 By Sayed Eltaweel

11/27/2014

By Sayed Eltaweel 3

22..2 2 Innovation Variations Innovation Variations

Innovations vary widely, in scale, nature, degree of novelty and so on – the same applies for innovating organizations.

5 By Sayed Eltaweel

22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d

• Services and innovations

Service innovations are often much easier to imitate and the competitive advantages that they offer can quickly be competed away because there are fewer barriers.

6 By Sayed Eltaweel

11/27/2014

By Sayed Eltaweel 4

22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • The extended organizations ( outsourcing) and

innovationOutsourcing is one of the significant developments in business

innovation.

The underlying business model of outsourcing is being able to do something more efficiently than the client.

Outsourcing companies try to move from providing outsourced processes toward offering or co-evolve with a client – new products and services.

The challenge for outsourcing organizations is how can they develop their capabilities for carrying out processes more effectively ( Cheaper, faster, higher quality, etc.)

7 By Sayed Eltaweel

22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • Not for profit and Public–sector innovation Nonprofit organizations use innovation to help them Compete

against the challenges of , delivering healthcare, education, law and order.

Public -sector innovations is contested amongst a diverse range of stakeholders.

Public -sector innovations has different and often conflicting drivers, and the rewards and incentives may be absent or different.

8 By Sayed Eltaweel

11/27/2014

By Sayed Eltaweel 5

22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • Organization size and Innovation.Regard innovation Smaller organizations possess a range of

advantages over big ones, but at the same time has a range of limitations.

9 By Sayed Eltaweel

22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • Organization size and Innovation.

10 By Sayed Eltaweel

11/27/2014

By Sayed Eltaweel 6

22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • Project-based Organization and Innovation. For many enterprises one of the challenge is moving towards

project-based organizations, which implies a lot of innovation in transfer or in projects execution.


22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • Networks and systems and Innovation. Organizations need to shift their way of thinking from that of a

single enterprise to more of a network and system view, so they need to include other players – customers and suppliers, competing firms, collaborators and beyond.


11/27/2014

By Sayed Eltaweel 7

22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • Local, Regional, and national innovations. Effective innovation management has a big challenge in case

of regional innovation-led clusters.


22..2 2 Innovation VariationsInnovation Variations-- Cont’d Cont’d • Degree of novelty innovation (Organization uses do

better/ do different innovations).Organizations use More of the same improvement innovation require different approaches than the organizations that uses radical innovation.


11/27/2014

By Sayed Eltaweel 8

22..3 3 Evolving models of the innovation process Evolving models of the innovation process

If innovation is process so we need to have a clear and shared understanding of what that process involves and how it operates.Product innovation model– Booz, Allen and Hamilton

Extended view of this model ---- Robert Cooper’s

Design centered innovation model ---- British Standard ( BS 7000

Product Development Management Association (PDMA) –the innovation process is not so simple as in the linear model.


22..3 3 Evolving models of the innovation process Evolving models of the innovation process -- Cont’dCont’d

Van de ven and colleagues explored limitations for the simple model of the process:Shocks trigger innovations – change happens when people or organizations reach s threshold of opportunity or dissatisfaction.

Ideas proliferate – after starting out in a single direction, the process proliferates into multiple, divergent progressions.

Setbacks frequently arise, plans are overoptimistic, commitments escalate, mistakes accumulate and vicious cycles can develop.

Restructuring of the innovating unit often occurs through external intervention, personal changes or other unexpected events.


11/27/2014

By Sayed Eltaweel 9

Van de Ven and colleagues explored limitations for the simple model of the process – Cont’d:Top management plays a key role in sponsoring – but also in criticizing and shaping – innovation.

Success criteria shift over time, differ between groups and make innovation a political process.

Innovation involves learning, but many of its outcomes are due to other events that occur as the innovation develops –making learning often superstitious in nature



1960s



11/27/2014

By Sayed Eltaweel 10





11/27/2014


22..4 4 Can we manage innovation? Can we manage innovation?

• At first glance it might appear that it is impossible to manage something so complex and uncertain.

• But it is possible to find an underlying pattern of success, and some firms and even individuals appear to have learned ways of responding and managing innovation.

• Managing is about creating conditions within which an organization can successfully resolve multiple challenges under high levels of uncertainty.


22..4 4 Can we manage innovation?Can we manage innovation?--Cont’d Cont’d

• One indicator of managing innovation comes from the experiences of organizations that has survived for an extended period of time.

• Success in innovations appears to depend upon two key ingredients: Technical Resources (People, equipments, knowledge,..)

The capabilities to manage these resources.


11/27/2014



• Organizations create what is called Routines or “ the way we do things around here” over time as a result of mastering specific behaviors when facing challenges.

• These routines can be a form of policy, 3M developed the 15% policy, in which employees are enabled to work on their own curiosity-driven agenda for up to 15% of their time.

• “How we manage innovation around here” is one of the routines that differentiate organizations.



• Fashion statements versus behavioral change in organizations. Advanced Manufacturing technology – AMT

Total Quality Management – TQM

Business process reengineering – BPR

Benchmarking best practices

Quality Circles

Networking/Clustering

Knowledge Management

Open Innovation24 By Sayed Eltaweel

11/27/2014


• Successful innovation management routines are not easy to acquire. Because they represent what a particular firm has learned over time, through a process of trial and error.

• So each firm has to find its own way of doing things ( develop its own routines)

• The core capabilities can become core rigidities – when the “ way we do things around here” becomes inappropriate, and when the organization is too committed to the old ways.

22..5 5 Learning to manage innovationLearning to manage innovation


22..5 5 Learning to manage Learning to manage innovationinnovation--Cont’dCont’d


11/27/2014




Firm Ch’s

A Firms Unaware about the need for innovation

B Firms Aware about the need for change, but are unclear About how to go about the process, as their resourcesAre limited and lack key skills and experience.

C Firms Have well-developed sense for changeAnd highly capable in implementing new projects and take a strategic approach to the process of continuous innovation.

D Firms Operate at the international knowledge Frontier and take a creative and proactive approach to exploiting technological and market knowledge for competitive advantage and do so via extensive and diverse works net

Type of firms regarding innovation capability



11/27/2014




• Success relates to the overall innovation process and its ability to contribute consistently to growth.

• Many successful inventions fail to become successful innovations.

22..6 6 Measuring innovation success Measuring innovation success


11/27/2014


• Although innovations varies enormously – by scale, type, sector, etc. But there are two key points: Innovation is a process, not a single event, and needs to

be managed accordingly. The influences on the process can be manipulated to

affect the outcomes- that is, the process can be managed.

22..7 7 Successful innovation managementSuccessful innovation management


Research highlights two critical points:1. The concept of success routines, which are learned

over time and through experience. How firms selects and manage projects How firms coordinates the input of different functions. How firms links up with customers

2. Innovation needs to managing in an integrated way. Firms with strength in R&D and the generation of the

technological innovation- but which lack the abilities to relate these to marketplace or end-users.

22..7 7 Successful innovation Successful innovation managementmanagement--CCont’dont’d


11/27/2014


• A number of models for auditing innovation have been developed in recent years, which provide a framework against which to assess performance in innovation management.

22..7 7 Success routines in innovation management Success routines in innovation management


Success in Innovation Management process model requires:• Search:

Well developed mechanisms for identifying, processing and selecting information from turbulent environment.

22..7 7 Success routines in innovation management Success routines in innovation management ––Cont’dCont’d


11/27/2014


Success in Innovation Management process model requires:• Selection:Firms select one option of the various market and technological opportunities, and the choice must fit with the overall business strategy of the firm, and build upon established areas of technical and marketing competence.The important thing here is to insure that there is a good fit between what the firm currently knows about and the proposed changes it wants to make.



Success in Innovation Management process model requires:• Implementing:• In this phase the firm turns the potential ideas into some kind of

reality , for example a new product or service, a change in process , a shift in business model.

• This phase has three core elements: Acquiring the needed knowledge Executing the project successfully Launching and sustaining the innovation



11/27/2014


Success in Innovation Management process model requires:• Capture:• The purpose of innovations must be to capture some kind of

value from them – be it commercial success, market share, cost reduction or – as in social innovation – changing the world.

• Technological, and capabilities and routines Learning are also extra captures of innovation management process.



• we can observe some of the basic elements of the complementary routines associated with successful innovation management under discontinues conditions.

• These tend to be linked with highly flexible behavior involving agility, tolerance for ambiguity and uncertainty, emphasis on fast learning through quick failure – very much characteristics that are often found in small entrepreneurial firms.

22..8 8 Beyond the steady stateBeyond the steady state


11/27/2014




11/27/2014


THE ENDTHE END
