Title: L8 Innovate or Perish
1L8 Innovate or Perish
- EC10 Innovation Commercialisation
- Managing the innovation process and remaining
- Marcus Thompson
- wmt1_at_stir.ac.uk
2L8 Outline Innovate or Perish
- Why Innovate
- Ideas Commercialisation
- The Innovation Process
- Managing Innovation Creativity
31. Why Innovate?
- EC10 Innovation Commercialisation
4Innovation in Smaller Companies
- Small firms produce 55 percent of innovations.
They produce twice as many product innovations
per employee as large firms, including the
employees of firms that do not innovate. This is
also true of significant innovations. - Small firms obtain more patents per sales dollar
and apparently have more discoveries than large
firms, since research has shown that large firms
are more likely to patent a discovery. - Small research and development (RD) firms are
quite research intensive the percentage of
employees that are RD scientists and engineers
are 6.41 percent in small firms and 4.05 percent
in large RD firms. - Large firms receive 26 percent of their research
and development dollars from the federal
government small firms, only 11 percent. - A federal RD dollar to a small firm is more
than four times as likely to be used for basic
research as a federal RD dollar to a large firm.
The Facts about Small Businesses, 1997, Small
Business Administration,
5Policy Approaches to Innovation
- The rate of return on RD expenditures is 26
percent for both small and large firms, but only
14 percent for firms not involved with a
University. The estimated rates of return on
total RD for firms with a university
relationship are 30 percent for large firms and
44 percent for small firms. - Innovations coming from small high-tech firms are
expected to increase in the coming years as a
result of the increase in the. Under the Small
Business Innovation Research (SBIR) program,
federal agencies with large RD budgets must
direct a share of their RD funding to small
firms, the source of 55 percent of innovations
and new technologies. Since the inception of the
SBIR program in FY 1983, almost 4 billion in
competitive federal RD awards have been made to
qualified small business concerns under the
program. - Among the important innovations by U.S. small
firms in the 20th century are the airplane, audio
tape recorder, double-knit fabric, fiber optic
examining equipment, heart valve, optical
scanner, pacemaker, personal computer, soft
contact lenses, and the zipper.
6European Policy Measures
- Europe has a structural trade deficit in high
technology products of over ECU 10million. - It is to hasten the emergence of new
technology-orientated entrepreneurialism in
Europe to optimise the participation of SMEs -
both in research itself and in the exploitation
of its results. Edith Cresson
- Measures being considered
- Tax measures favouring use of stock options
- Transfer of pension rights (across Europe)
- Rapid improvement of system for protection of
knowledge - Facilitation of technology transfer between
University research centres - register of business angels venture capital
network - Rejected - 5 of all public research expenditure
to SMEs
Source EGX111, Role Models For Innovation,
Innovation and Technology Transfer, January 1999
7Consensus?
- The formation and development of high technology
firms have been encouraged by Governments and
other agencies in developed economies. - (Oakey, 1984 Malecki, 1991 Oakey, 1991a, 1991b
Henneberry, 1992 Garnsey and Cannon-Brookes,
1993 Garnsey et al., 1994 Storey and Tether,
1998 Tether and Storey, 1998).
8Why Encourage High-Tech?
- It is assumed that a growing stock of high
technology firms will - Encourage national economic development.
- Make less favoured areas more competitive and
self-reliant. - Broaden the industrial base of regions.
- Improve the competitive capability of industry.
- Create jobs and will be associated with wealth
creation.
9Perceptions of Technology Based SMEs
- For twenty years or more, there has been an
abiding perception, with considerable currency
amongst politicians and policy makers in London,
Brussels and Glasgow, that new and small firms
are an important source - perhaps even the source
- of innovation, new technology and employment
creation. CRIC Project
10SME, Innovation Employment
- Innovative or technology based new and small
firms are more likely to create employment than
similar firms in the general population. - The average rate of employment creation within an
individual innovative or technology based new or
small firm tends to be modest. - The third recurrent finding is that growth
amongst innovative and technology based new and
small firms tends to be concentrated in a few
firms. - The fourth finding is that even amongst the
fastest growing innovative and technology based
new and small firms the absolute number of jobs
created over a decade tends to be modest.
112.Ideas Commercialisation
- EC10
- Innovation Commercialisation
12Choosing a Direction
- Entrepreneurs are managers. They manage more
than just organisations, they manage the creation
of new worlds. This new world offers the
possibility of value being generated and made
available to the ventures stakeholders. This
value can only be created through change - change
in the way things are done, changes in
organisations and change in relationships. - Effective entrepreneurs know where they are
going, and why. They are focused on the
achievements of goals. - The entrepreneurs vision is a picture of the
new world he or she wishes to create. The
picture is a positive one. . He or she is
motivated to make their vision a reality.
13Making the Vision into Reality
Vision must exist before strategy development and
planning
- The vision provides
- sense of direction.
- defines goals and objectives.
- provides focus when going gets tough.
- gives the venture a moral content and social
priority. - It communicates and attracts venture support.
- It forms the basis of the leadership strategy.
- The vision is constantly refocused
- what is source of value to be created?
- Who will be involved?
- Why will they want to be involved?
- What rewards will they gain?
- What new relations are needed
- What is the potential for self development?
Source Adapted from, Strategic Entrepreneurship,
Wickham, 1998, p107
14Route Adopted
Level of Control
Directorship Form a management team
Licensing Commercial arrangement through which
licensor of IPR allows licensee to develop sell
or use in return for a royalty payment
Assignation Sell rights and transfer the
ownership of the invention and IPR to third party
for lump sum
Joint Venture Partnerships Collaboration with
one or more organisations to exploit IPR.
Includes sharing of costs and revenues
15Innovation Process
- Prepare
- Evaluate the life cycle of existing services and
products. - Set-up is systematic abandonment process.
- Estimate the abandonment revenue gap.
- Set up separate organisation with reporting line,
measures, structures and sufficient resources to
bridge revenue gap. - Conduct systematic, purposeful and organised of
the seven innovation sources (see next slide) - Perform diagnostic analysis of opportunities.
- What do the seven sources mean to the
organisations business processes, channels and
technologies. - Conduct analysis by listening to customers
- Use focus groups to corroborate the analysis (see
Slide 3 for analysis criteria) - Exploit Opportunity
- Conduct pilot tests
- Commercialised in stages
- Allocate resources
- Evaluate and measure success.
Adapted from Drucker, P, Innovation
Entrepreneurship
16Drucker on Sources of Innovation
- Unexpected Occurrences
- Unexpected successes existing management find
counter-intuitive. - Unexpected failures.
- Unexpected out side events.
- Suppliers and customers and competitors.
- Perception-Reality Incongruities.
- Internal misperceptions.
- Conflicting internal reality.
- Customer expectation gaps.
- Dysfunctional or imbalance at critical point in a
business process. - Process Weaknesses.
- Weak links in process.
- Constraints or vulnerability.
- Need to improve.
Adapted from Drucker, P, Innovation
Entrepreneurship
17Drucker on Innovation (2)
- Industry and market changes.
- Competitive strategies.
- Change in players.
- Structure of industry.
- Customer value propositions. Technology and
operations. - Demographic Changes
- Ageing. Shifts in a wealth.
- Urbanisation and globalisation.
- Culture and societal changes (environmental).
- Changes in buyers attitudes.
- Changes in mood and perception.
- Changes in buying habits.
- New scientific and business knowledge.
- Application of old innovations into new areas.
- Expensive innovation with long lead times and
risks.
18Innovation Potential Checklist
- How does it create new value for customers?
- Is price related to value to customer not cost to
produce? - A response to unmet customer needs or problems?
- Does it delivers attributes not products?
- Reasonable speed and access to market?
- Simple and focused and does one thing and
satisfies one need for one group of customers? - Will it obtains a leadership position in the
market quickly? - Not too clever nor too far ahead of market?
- Consistent with an organisations strength and
not too diverse in terms of product?
Adapted from Drucker, P, Innovation
Entrepreneurship
19Adopters of Technology
- Innovators
- Willing to accept risk. Younger and higher
income. Aspirational. - Early Adopter
- Often opinion leaders, caution with risk. High
discretionary income. Highly independent. - Early Majority
- Only willing to accept new ideas when risk is low
- Late Majority
- Sceptical. Place emphasis on word of mouth and
seek security from larger organisations - Laggards
- Traditionalists. Tend to be older from lower
social groups.
Source Rogers Et al, Diffusion of
Innovation,1962, p162
203. The Innovation Process
- How to Stimulate Innovation
21Sector Innovation
- An industrial sector is defined as technology
according to its overall RD intensity (sum of
direct and indirect). The direct intensity
corresponds to the ratio of RD expenditure to
value added for each sector and country. For
indirect intensity, embodied technology (RD
expenditure) in intermediate and capital goods
purchased on the domestic market or imported was
taken into account. To calculate indirect
intensity, the technical coefficients of
manufacturing industries extracted from
input-output matrices used. (OECD Fact-book
2005)
22Wal-Mart Innovation network
- Evaluation Assessment
- Innovation Development Pre-commercailsiation
- Commercialisation
23Support in Scotland
- Scottish Enterprise (SE)
- (www.scottish-enterprise.com)
- Smart Successful Scotland (SSS)
- (www.scotland.gov.uk)
- Business Gateway
- (www.bgateway.com)
- Technology Venture Scotland (TVS)
(www.technologyscotland.org)
24Sources of On-line Information
- http//thesius.sourceoecd.org/vl4490858/cl12/nw
1/rpsv/factbook/06-02-04.htm - http//www.lancashire.gov.uk/environment/lancashir
eprofile/monitors/techind.asp - http//www.bgateway.com/defaultpage131cd0.aspx?pag
eID790 - http//www.scottishenterprise.com/sedotcom_home/ab
out_se.htm?siblingtoggle1 - http//www.scotland.gov.uk/library5/enterprise/sss
en-02.asp - http//www.technologyscotland.org/defaultpage121c0
.aspx?pageID496 - http//www.scottish-enterprise.com/sedotcom_home/s
ervices-to-business/ideas-and-innovation.htm?sibli
ngtoggle1 - http//www.innovation.stir.ac.uk/innovation_suppor
t.html - http//www.tco.ac.ir/research/48-Seifoddin.pdf
- http//www.scottish-enterprise.com/publications/mo
ct_review.pdf - http//www.scottishenterprise.com/sedotcom_home/ab
out_se/what_we_do/operating-plan.htm
25Exercise Support for Technology
- Based on the web-sites below as your own
independent research, report on support
structures for technology business in Scotland - www.scotland.gov.uk/innovationgrants
- www.atp.nist.gov/eao/gcr02-841/chapt2.htm
- www.gro-scotland.gov.uk/statistics/library/popproj
/03population-projections.html - www.space-time.info/starlab/gartner.html
- www.theherald.co.uk/business/43646.html
264. Creative Innovation
- EC10
- Innovation Commercialisation
27Types of Creativity
- Normative
- Original thinking used to solve known problems
- Exploratory
- Blue Sky to identify opportunities
- Serendipitous Creativity
- Accidental eg post-it
284. Creativity
- Conceptual fluency- the ability to produce many
ideas or solutions in a given situation. - Mental flexibility also known as lateral
problem from an entirely new angle. - Originality usually evidenced by unusual answers
to problems. - - Suspension of Judgment a willingness to defer
judgement of ideas of others. - Impulse acceptance a willingness to react
impulsively to an idea - Attitude towards Authority a willingness to
challenge Majaro (1992)
29Decision Making
- The Prescriptive Approach
- Linear and rational process, starting with where
we are now and then developing new strategies for
the future. - One whose objective has been defined in advanced
and whose main elements have been developed
before the strategy commences. - The Emergent Approach
- A a corporate strategy, which emerges, adapting
to human needs and continuing to develop over
time. It is evolving, incremental and
continuous, and therefore cannot be easily or
usefully summarised in a plan which then requires
to be implemented. - Emergent corporate strategy whose final objective
is unclear and whose elements are developed
during the course of its life as the strategy
proceeds. Lynch, Richard Corporate Strategy,
Second Edition (2000)
30What is a Learning Organization (Team)?
- A Learning Organisation is one in which people at
all levels, individually and collectively, are
continually increasing their capacity to produce
results they really care about. (Senge 1990)
31Why adopt the concept?
- Organisations have increasingly taken an interest
in adopting the learning organisation concept
because of the increasing pressure on
organisations to change with developments in
globalization, changes in customer expectations
and technology driving this trend. - Organisations need to continuously develop
themselves to maintain their competitive
advantage and learning is considered the only way
of obtaining and maintaining a competitive edge. - In the knowledge era, knowledge is regarded as
being more important then financial resources,
market positioning and other corporate assets.
(Marquardt 1996).
32Benefits of Becoming a Learning Organisation
- Learning organizations link individual
performance with organizational performance
setting clear direction for employees and achieve
goal congruence. - provides continuous learning opportunities for
all employees and uses learning to achieve
organizational goals and objectives. - All employees including managers learn from their
experiences rather then being bound by their past
experiences - Learning organizations encourage communication
and innovation by fostering dialogue, making it
safe for people to share ideas and take risks. - Learning organizations seek to learn as much from
its failures as from its successes encouraging
continuous development and improvement. - A learning organization continuously interacts
and responds to its external environment allowing
for better customer focus.
33What do you see?
34(No Transcript)
35The Elephants Legs
36What am I thinking?
37Beauty is in the eye of the beholder
38Dots before your eyes
39Putting a different light on things
40Would you trust this man?
41(No Transcript)
42Read these allow as fast as you can
43The Process of Idea Generation
1.The Need
2. Collect Information
3. Analyse and validate data
4. Develop coping Strategy
5. Implement Strategy
44The Moral of the Story
- If the princess thinks the same as everyone else
she would never have lived happily ever after . .
and the prince would have remained a frog.
45Team Creativity
- It follows, then, that one common way managers
kill creativity is by assembling homogeneous
teams. The lure to do so is great. Homogeneous
teams often reach solutions more quickly and
with less friction along the way. These teams
often report high morale, too. But homogeneous
teams do little to enhance expertise and creative
thinking. Everyone comes to the table with a
similar mind-set. They leave with the same. - Amabile, T, How to Kill Creativity, HBR, Sept
- Oct 1998, pp 77 - 85,
46How to Kill Creativity in Marketing Workgroups
- When leadership becomes dominance
- When questioning becomes accusation
- When assertiveness becomes aggression
- When myopia becomes focus
- When opportunities become problems
- When arrogance becomes confidence
- When structures become strictures
- When inclusion becomes exclusion
- When rules become constraints
- When support becomes ownership
- When capabilities become impediments
- When experience becomes intolerance
- When collaboration becomes fragmentation
- When identity becomes an excuse
47Creating the synergistic team
- There is no scientific formula to guarantee that
synergism will result. - LEAVE YOUR EGO BEHIND.
- The team project is most important. It's OK to
feel honoured to be named as a special team
member, but be committed to the work and to
working together with other members. - COMMUNICATE WELL.
- Keep others informed of your progress. Be honest
about what you can do and what you have
accomplished. - CO-OPERATE WITH THE TEAM LEADER.
- Just as too many cooks spoil the stew, more than
one leader can lead to misdirected efforts. Be
careful to do what you are assigned. Feel free to
express your own ideas, but let the leader decide
if they can be used now. - RELAX AND BE OPEN TO NEW IDEAS.
- Small groups create a good setting for trying new
techniques, so leave your reluctance behind. - GET ENTHUSIASTIC, AND GIVE A LITTLE EXTRA.
- That means caring a little more, thinking a
little harder, making a little greater effort.
48Sheet 1
Old Clothes
Lots of people have clothes that they have grown
out of. How would you use unwanted clothes?
Think the Impossible! You can use bits of things
or combine them. You can change shape, colour
size.
49Things Can Make Money
Sheet 2
Combine with other things
R E S O U R S E
Use To Provide A Service
Use As A Substitute For
Alter Size Shape Colour?
Package Differently
Recycle Or Reuse
Use for other People
Use Bits Or Parts
50Sheet 3
SLEEPERS
51Sheet 4
People Want Things!
Want But Doesnt Exist
Out of date or style
Seen but cant find it
People Or Interest Groups
Not easy to use
Quality not good enough
Its too expensive
52Sheet 5
Problems Worksheet
53Problems Means Opportunities
Sheet 7
54Sheet 8
Skills Mean Business
What Products?
What Products?
Which Business?
Which People?
For Business
For People
Provide a Service
Your Skill
?
Making Things
For Business
For People
Which Businesses?
Which People?
What Products?
What Products?
55Assessment Checkbox
Sheet 10
56Sheet 11
Is There a Market for Your Idea?
- Do you know who the customers will be?
- What will they pay?
- Roughly how many customers do you need to
break-even? - Do you know about the competition?
- For what reasons will people use you rather than
them? - Do you think you will be able to attract in more
customers each season? - Can you prevent other people copying your idea,
locally?
57Sheet 12
Can You Provide What the Customer Wants?
Have you got the skills to promote your
business? Could you make or provide the amount
and quality of products or service that the
customer wants? Do you know how much you will
charge? If you need people to help you provide
your product or service, do you know who those
people are? Do you know how much money you will
require? Do you have access to the money and
other resources? How much do you still need to
get?
58Sheet 13
Can You Get Your Idea in Front of Customers?
Action Points
- Do you know who will buy this from you?
- How will they find out about you?
- Do you know of anyone who already sells to these
customer groups? - Are there any local outlets that would help you
sell the service or idea? - Can you get the names of customers from any
sources?
59Sheet 14
What Resources Support Do You (still) Need?
- Do you have the option of buying an existing
business or can you form an alliance? - Could you lease or hire equipment, premises etc.
locally rather than buy? - Who will help you get sales going e.g.
promotional material, selling? - Can you set targets and prepare first-cut
financial projections? - What information do you still need to prepare a
(Business) Plan?
60Creativity Marketing
- "But the truth is that the winning strategies are
smart, innovative and original, and break the
rules, and most times there is someone somewhere
who has seen through conventions and traditional
assumptions to create a new business idea"
Piercy 2002, p 269