Managing Innovation

Managing Innovation

1. The Innovation Process (Tidd & Bessant 2005)

   • Search
     • Environmental Scanning; within firm and broader market
   • Select
     • decide what the innovation is going to respond to
   • Implement
     • Taking the idea into action
       • Acquire: work out the knowledge resource; what do we have? what do we need? - Execute: extensive problem solving under conditions of uncertainty; what can we stabilise and what is out of our control? - Launch: managing the process of initial adoption - Sustain: adoption and use in the long term; re-innovation
   • Learn: learning enterprises have (but may not always take) the opportunity to learn from progressing through this cycle so that they can build their knowledge base and can improve the ways in which the process is managed.
     • Time: entire process takes time
       • Context: the circumstances, firm or product characteristics will lead to different solutions - The context of the innovation is defined in the search section - For example: medicines and pharmaceuticals require R&D driven solutions, while a FMCG firm, require a quick market presence to take advantage of first mover advantage – the risks of getting this product wrong are low

2. innovation Context (Shavinina 2003)

   • Size of the Firm
     • Smaller organisations usually possess a range of advantages -Agility, flexibility, adaptability Speed of decision making, x Resource limitations: materials, expertise, assets, equipment… Large firms barriers usually internal, lack of motivation and communication (Vossen 1998)
   • Industry Sector
     • Where does your product/company fit in the global scene? - NPD in FMCG driven by market intelligence (Gillete, P&G, Nivea…) - Pharmaceuticals: driven by R&D (Johnson & Johnson) - Retail: process driven. Innovation expected to be higher & continuous in high tech sectors with high % of R&D eg IT bio-tech vs low tech sectors eg glass, woodworkingMay also be related to industry life cycle opportunites may differ between these stages
   • National, Regional or local contexts
     • - National and regional systems of innovation varies widely - Actors: government, financial institutions, education, labour market, science & infrastructure - Actors represent the context within which the organisation operates their innovation process; they have a big influence on what can be done and how. regional resource deficits and problems of national innovation system of country, cultural factors also affect perception of barriers (Shane,1995), local industrial structure, local institutions and regional policies and regulations affect inno
   • Type of Innovation
     • Type of innovation: Incremental or radical, degree of novelty of the innovation is related to the level of difficulty to innovate, the barrier is the perceived level of difficulty by the innovation actor (Tidd et all 1997). Type(product, process or social innocation) and characteristics & complexity determine the difficulties the firm finds producing or adapting inno to its needs. Increasing complexity increasing problems of communication/process management
   • Business Cycle
     • Different phases of the business cycle of the economy: recession and growth differentiated availability of resources and investment climate, variation also attributed to different extent of government interference in the economy in each of these phases

3. Better and Different

   • Do better: a steady state in which innovation happens but within a defined envelope around which our ‘good practice’ routines can operate → incremental change
   • Do different: the rules of the game have shifted (due to major technological, market or political shifts) and where managing innovation is much more a process of exploration and co-evolution under conditions of high uncertainty → discontinuous/radical innovation
     • - Need to search for trigger signals – the difference is that they need to explore in much less familiar places and deploy peripheral vision to pick up weak signals early enough to move - They need to make strategic choices about what they will do – they will often have vague and incomplete information and the decision-making involved will thus be much more risky - Implementation will require much higher levels of flexibility around projects – monitoring and review may need to take place against more flexible criteria than might be applied to ‘do better’ innovation types
   • 5th Generation of Innovation Process
     • Systems integrations and extensive networking, flexible and customised response, continuous innovation • Systems approach: highlights this divide between ‘steady state’ do better type innovation where you exploit opportunities through efficiencies and discontinuous radical innovation where you exploit opportunities by doing things differently • This holistic perspective helps us frame the issues which need managing – therefore, if a concept or dimension is not included in our mental model of the innovation process, we will not anticipate its management

4. Failure

   • Inability of firms to correctly define and interpret their context that leads them to make incorrect decisions about strategic action and marketing activities
     • Ring Tone Industry
       • Massive rise followed by a decline - Market grew five times in siege and between 2000 and 2005 driven by fads (Crazy Frog)
     • Sinclair C5
       • - Pedal-assisted tricycle that required no license — hounded by press as a dangerous joke - Only 12000 units ever produced — commercial disaster - They used strong R&D capabilities for a need that did not exist - Currently the same technology is being used in Segways

5. Partial Views on Innovation,(Tidd &Bessant 2001) If innovation is only seen as..

   • Strong R&D Capacity
     • Technology which fails to meet user needs and may not be accepted
   • Province of specialst
     • Lack of involvement of others and lack of key knowledge and experience input from other perspectives in the R&D lab
   • Understanding and meeting customer needs
     • Lack of technical progression, learning to inability to gain competitive edge
   • Advances along the technology frontier
     • Producing products or services which the market does not want or designing process which do not meet the needs of the user and whose implementation is resisted
       • Emergence of the walkman products within sony took place despite strong marketing input to suggest there was no demand for this kind of product