*Innovation Management -An Introduction

* Recognize the importance of innovation Explain the meaning and nature of innovation management Provide an introduction to a management approach to innovation Appreciate the complex nature of the management of innovation within organizations Describe the changing views of innovation over time Recognize the role of key individuals within the process Recognize the need to view innovation as a management process

Objectives

* The importance of Innovation - For OrganizationsThe ability to change & adapt is essential to survival (Competition fosters this)

Not to innovate is to die

Examples of successful & innovative organizations - Boeing, Glaxo, Mercedes, Ford, Intel, IBM

*Importance of the Innovation -For country Technical Innovation has led to substantial economic benefits for innovative company & country (Example Steam Engine, Iron Boat,Locomotive,Electric light bulb)

Economies are more likely to experience growth due to the development of products such as a computer software or new drug than reduction on prices but it occurs in the bursts

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Neo classical economies is a theory of economic growth that explains how savings, investment and growth respond to population growth and technological change The rate of technological change influences the rate of economic growth but economic growth does not influence technological change . Rather technological change is determined by chance

Continued..

*Innovation should be viewed in an organizational context

The role of other firms as well as the firms functions ( Economics,Org. Behavior, Marketing, R & D, Manufacturing and competition) contribute towards innovation process

General overview of the innovation process

*Figure :General overview of the innovation processThe Firms innovating architecture

Interaction Knowledge and Technology providers

Technology andProducts effectsMICRO ENVIRONMENT MACRO ENVIRONMENT EffectsIndividualsThe Firms functionsOther Firms

* Todays innovations are associated with groups of people, teams & organizations (see table 1.3) Polythene - ICI Boll point pen - Reynolds. Manufacturing process : Float Glass - Pilkington Photocopying - Xerox Personal Computer - Apple Computer Computer Operating System:Windows -Microsoft

*Individuals , who define problems ,have ideas & perform creative linkages & associations also leads to inventions & innovations (This has lead to the development of individuals in the innovation process such as inventor, entrepreneur)Innovation needs to be viewed as a processProducts are the eventual outputs from inventions & The process from new discovery to eventual product is the innovation process

*Entrepreneurship,Innovation & Invention Entrepreneurship is the process whereby an individual or group of individuals use organized efforts to pursue opportunities (to create value & grow by fulfilling wants & needs through innovation & uniqueness)Innovation is not a single action but a total process of interrelated sub processes. It is not just the conception of a new idea, nor the invention of a new devise nor the development of market.The process is all these things acting in an integrated fashion.

*Innovation is concerned with the commercial & practical application of ideas or inventions Innovation=theoretical conception + technical invention + commercial exploitationThe conception of new ideas is the starting point of for innovationThe process of converting intellectual thoughts into a tangible new artifact (usually a product or process) is an invention

*Innovation depends on inventions but inventions need to be harnessed to commercial activities before they can contribute to the growth of an organizationHence Innovation is the management of all the activities involved in the process of idea generation, technology development,manufacturing and marketing of a new ( or improved) product or process or equipment. Sometimes commercial failure makes innovation unsuccessful

*Different types of innovationsThe successful commercialization of the innovation may involve considerably wider organizational changes (technological innovation can be accompanied by additional managerial & organizational changes)

*Topology of innovations table 4 Type of Innovation Example Product innovation The development a new or improved productProcess Innovation The development a new manufacturing processOrganizational innovation A new venture, A new communication system, A new accounting procedure Management Innovation TQM, BPR ,SAP Production innovation Quality Circles, Just-in-time,PPS, MRP-II Commercial/ Marketing innovation New sales Approach Service innovation Web Financial Services

*Technology & ScienceScience can be defined as systematic & formulated knowledge.Technology is knowledge applied to product or production processes.Technology, as an outgrowth of science that fuels the industrial engine.

*Models of InnovationSocial school argues that innovations are the result of a contribution of external social factors & influences such as demographic changes,economic influence & cultural changes.(when the conditions were right innovation would occur)Individualistic school argues that the innovations were the result of unique individual talents (& innovations are born)

*Models Of Innovations(1) Serendipity Historically innovation have highlighted the importance of the unexpected discovery But the role of Serendipity (or luck) is rare One need to have prior knowledge in that particular area

*Models of Innovations(2) Linear Models Conceptual framework of Innovation

Creation of new Knowledge,dominated by universities and large science-based organization Technology Development dominated by organization Consumes express their needs and wants through the consumption of products Science and Technology baseTechnological developmentsNeeds Of the market

*Models of Innovations(2) Linear ModelsThere are two variations A . Technology push

Research & Development Manufacturing Marketing

*A . Technology push Scientist make unexpected discoveries Technology apply them to develop product ideas & Engineers & designers turn them in to prototypes for testing Manufacturers devise ways of producing product to the potential consumer Finally marketing & sales will promote to the consumer In this model the market place was a passive recipient for the fruits of R & D (Applied to few cases like pharmaceutical industry )

*B . Market Pull MarketingResearch & Development Manufacturing

*B . Market Pull In 1970 new studies of actual innovation suggested that the role of marketplace was influential in the innovation process The Market-pull model of innovation (Customer need-driven ) model emphasizes the role of marketing as an initiator of new ideas resulting from close interactions with customers In they are conveyed to R & D for design & engineering & then to manufacturing for production

*Models of Innovations(3) Simultaneous Coupling Models ManufacturingResearch & Development

Marketing

*Models of Innovations(3) Simultaneous Coupling Model The linear model is only able to offer an explanation of where the initial stimulus for innovation was born i.e. where is the trigger for the idea or need was initiated . The simultaneous coupling model as shown in the figure suggests that it is result of the simultaneous coupling of the knowledge within all three functions that will foster innovation (The point of commencement is not known in advance)

*Models of Innovations(4)Interactive Model Interactive model links together the technology push & market-pull models It emphasizes that innovation occur as the result of the interaction of the market place, the science base & the organization capabilities There is no explicit staring point & innovation transpire from wide variety of points At the center of the model are the organizational functions of R & D, engineering & design ,manufacturing & sales Flow of communication is not necessarily linear & there is provision of feedback

*Models of Innovations(4) Interactive Model

*Models of Innovations (4) Interactive Model There are linkages with science base & the marketplace between all functions, not just with R & D or marketing ( For Example Manufacturing department may initiates a design improvement )

The generation of ideas is dependent on input from three basic components: organization capabilities ; the needs of the market place; the science & technology base

*Models of InnovationsTable showing the chronological development of models of innovation Date Model Characteristics1950/60 Technological Push Simple linear sequential process. Emphasis on R & D . Market Pull Simple linear sequential process. Emphasis on Marketing Coupling Model Emphasis on integrating R & D and Marketing1980/90 Interactive Model Combination of Push and Pull

*Innovation as a Management Process

*Innovation Management Framework Interactions of functions inside the organization as well as with external environment are important Scientists and engineers within firm continually interact with fellow scientists in universities and other firms about scientific and technological developments Similarly, the marketing function will need to interact with suppliers, distributors, customers and competitors to ensure market pulse is measured Business planners and senior management communicate with other firms & government ,supplier & customer Knowledge is captured and utilized to develop successful new products

*Innovation Management Framework The Three main functions: marketing, research and manufacturing and business planning are the most influential in the innovation process The knowledge( both Tacit & Explicit ) has to shared and exchanged The organizational heritage ( combination of organizational knowledge base & organizations unique architect ) will influence its future decisions regarding the markets in which it will operate