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Innovation Management (ISMT 537)

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Innovation Management (ISMT 537) Instructor: J. Christopher Westland, Professor, ISMT Text: Westland, J.C., Global Innovation Strategy, Palgrave / MacMillan 2007 – PowerPoint PPT presentation

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Title: Innovation Management (ISMT 537)


1
Innovation Management (ISMT 537)
  • Instructor J. Christopher Westland, Professor,
    ISMT
  • Text Westland, J.C., Global Innovation Strategy,
    Palgrave / MacMillan 2007
  • Contact
  • Office 852 2358 7643
  • Fax 852 2358 2421
  • Email westland_at_ust.hk
  • URL http//teaching.ust.hk/ismt537s/

2
Organization of Course Materials
3
Schedule
Date Time Topic Innovation Practice Technique

4-Nov-06 930-1315 Ch. 1 Innovation, Globalization and Commoditization Create an Innovation that meets predefined specifications Assumption reversals
1430-1815 Ch. 2 Understanding Innovation Redesign a successful product or service redifferentiate in the market Feature Maps and Feature Segmentation
11-Nov-06 930-1315 Ch. 3 Recognizing the Potential of an Innovation Quiz, Consumption Chain Analyze and Feature Map a particular innovation Quizzing and Mind Maps
1430-1815 Ch. 4 Business Models Design and map a successful business model for commercializing a given innovation Morphological boxes
18-Nov-06 930-1315 Ch. 5 Assessing and Managing Your Capabilities Assess the capabilities of a given firm Identify suitable markets and innovation opportunities Forced Connection
1430-1815 Ch. 6 Adaptive Entry Strategies Take an innovation of your choice to market map activities over the first 5 years Feature Fracitonation
25-Nov-06 930-1315 Ch. 7 Understanding and Managing Creative People Managing when you have an 'Inventor' on your team Brainstorming
1430-1815 Course Wrap-up and Final Examination Course Wrap-up and Final Examination
Format 15-30 min breakout into groups 30 min
presentation and discussion
4
Understanding Innovation
  • And who does it well?

5
Changing the Current Business Model
  • This is the Key to Innovation
  • Innovation Invention Commercialization
  • The Inventions are already there 90 of the time
  • The Commercialization (Business Model) is what is
    new

6
Redesign Keep it Simple
  • The simplest way to change a business model
  • Is to redesign your current products and services
  • Objective for redesign is
  • One that so appeals to your target customers
  • That they feel almost compelled to buy from you

7
The Purpose of a Business is to Create a
Customer -- Peter Drucker
  • Even if you create marvelous inventions
  • Your customers wont care
  • Unless that is exactly what they need
  • Business customers are especially impatient
  • With any product that doesnt help them gain
    competitive advantage

8
Creative Tension Opportunities vs. Capabilities
  • The Innovators Challenge
  • develop products and services
  • That fully utilize the firms core competences
  • And deliver what the customer wants

9
Creative Tension Opportunities vs. Capabilities
  • Samsung is a great example
  • Core competence is Memory Chips
  • Digital televisions, phones and MP3 players were
    markets that were heavy users of Memory Chips
  • Samsung developed these products to take
    advantage of its own core competences

10
Core Competences The Resource View of Firm
Strategy
  • Each company is a collection of capabilities.
  • From resource-based view
  • a firm's unique resources and capabilities
    provide the basis for a product strategy

11
Finding Core Competences
  • To be successful a firms organizational
    structure has to effectively coordinate and
    integrate
  • RD
  • Design Strategy
  • Manufacturing Assets and Competences
  • Marketing

12
The Innovation Process is Holistic
13
Weakness in a Marketing-Centric View
  • Situation Sales force sets product strategy
  • Problems
  • Competences dont support cost effective
    production and distribution
  • RD cant satisfy lead times, product quality
  • Examples
  • Apples Newton
  • Sonys Blue Ray / PSP3

14
Weakness of a Techno-Centric View
  • Situation RD sets product strategy
  • Problems
  • Competences dont support cost effective
    production and distribution
  • There is no market (i.e., no money) for what RD
    wants to make
  • Examples
  • Iridium (Motorola)

15
Weakness of a Competence-Centric View
  • Situation Stick to your knitting
  • Problems
  • There is no motivation to proactively evolve
    firm competences to meet consumer demands
  • RD pursues useless work
  • Potential for disruptive innovations to destroy
    the firm in a very short time period
  • Example
  • Norton sandpaper

16
Weakness of a Product-Centric View
  • Situation Product success deters exploration for
    new product strategies
  • (yet change happens)
  • Problems
  • Competences dont evolve
  • RD focuses on tweaking existing products
  • The reason even smart companies dont survive
    disruptive innovation
  • Example
  • Kodak Film

17
The Attribute or Feature Map
  • Formalizes market position of innovation
  • In a way that allows it to be explored
  • For compatibility with
  • Competences
  • RD
  • Customer needs and current products
  • Competitors and Barriers

18
Assessing Customer Attitudes
  • The Attribute Map
  • Compares your product to those of others

Basic Discriminator Energizer
Positive Nonnegotiable Differentiator Exciter
Negative Tolerable Dissatisfier Enrager
Neutral So What? Parallel
19
Case Study Viagra
  • Build a Better Product
  • By Managing the Consumption Chain

20
Viagra Competences
  • Pfizer developed several new competences in the
    process of bringing Viagra to market
  • List three of them
  • Explain how each of these new competences was
    developed and implemented
  • Explain the marketing significance of each (can
    you put a dollar figure on their value?)

21
Viagra Marketing
  • In what ways is Pfizers marketing challenge
    different than Toyotas (for example)
  • List two of them
  • Explain how each of these can be managed
  • Explain how each difference influences customer
    demand

22
Design Innovations
  • Landmark Designs from years past

23
Henry Dreyfuss Form follows function
24
Streamlining Its first uses applications were
practical
25
Loewys Streamlining
26
McCormick-Deering Creamer before and after
Loewys 1945 redesign to streamline, and
eliminate fragile parts
27
Streamlining Household Appliances (Loewy)
28
Transformation Functioning invention to
Marketable product
29
Which is Faster?
30
Utility Human Interface
31
Lessons from 3M and Norton
  • A study in Innovation Contrasts
  • Case Study from Jim Collins Jerry Porras, Built
    to Last, 1997

32
Success from Failure
  • Detailed plans fail, because circumstances
    inevitably change
  • Military theorist Karl von Clausewitz
  • 3M began life as a failure (1904)
  • Its corundum (e.g.,rubies and sapphires) mining
    operations failed
  • It moved to abrasives to develop a use for all
    its low-grade grit
  • William McKnights Strategy
  • Diversify products
  • Develop the lab to do so.

33
Norton
  • Same industry
  • same time period as 3M
  • Financially stronger
  • Took the conservative approach
  • Of only servicing successful customers and
    products

34
Comparison of history 3M Norton
35
Culture
  • 3Ms culture of innovation transcended McKnight,
    Okie, Drew and Carlton
  • Consider the Mechanisms that define the culture

36
3M and Norton
  • Lessons Learned
  • 3M has come up with many management innovations
    to make its technology company work
  • Mechanisms The Ticking Clock that continues to
    operate despite management / personnel changes

37
Management Innovation "Give it a tryand quick!"
  • When in doubt, vary, change, solve the problem,
    seize the opportunity, experiment, try something
    new (consistent, of course, with the core
    ideology)
  • even if you can't predict precisely how things
    will turn out
  • Do something. If one thing fails, try another.
    Fix. Try. Do. Adjust. Move. Act. No matter what,
    don't sit still.

38
Management Innovation "Accept that mistakes will
be made"
  • You can't tell ahead of time which variations
    will prove to be favorable
  • You have to accept mistakes and failures
  • Darwin's key phrase "Multiply, vary, let the
    strongest live, and the weakest die."
  • In order to have healthy evolution,
  • you have to try enough experiments (multiply) of
    different types (vary),
  • keep the ones that work (let the strongest live),
    and
  • discard the ones that dont (let the weakest
    die).
  • Failures are valuable in certain ways.... You can
    learn from success, but you have to work at it
  • A visionary company tolerates mistakes (but only
    where you learn from them)

39
Management Innovation "Take small steps."
  • It's easier to tolerate failed experiments when
    they are just thatexperiments, not massive
    corporate failures.
  • small incremental steps can form the basis of
    significant strategic shifts.
  • If you want to create a major strategic shift in
    a company, you might try becoming an "incremental
    revolutionary"
  • harnessing the power of small, visible successes
  • to influence overall corporate strategy.

40
Management Innovation Give people the room they
need."
  • A key step that enabled unplanned variation.
  • When you give people a lot of room to act, you
    can't predict precisely what they'll do
  • This is good.
  • Visionary companies decentralized more and
    provided greater operational autonomy than the
    comparison companies in twelve out of eighteen of
    Porros and Collins cases. (Five were
    indistinguishable.)
  • Corollary Allow people to be persistent.

41
Management Innovation Leadership tone
  • Managers often underestimate the importance
  • of building lasting mechanisms to translate
    objectives into results
  • They erroneously think that if they just set the
    right "leadership tone,"
  • people will experiment and try new things.

42
Management Innovation 3Ms Ticking Clock
43
Some Questions How could you improve 3M?
  • 3M seems to be quite lenient with managers whose
    projects fail to meet ROI targets.
  • Can you think of a way to prevent 3Ms product
    failures and keep generating profitable products?
  • What would such a strategy look like?

44
Some Questions
  • 3Ms relaxed environment is likely to attract
    freeloaders and deadwood to their staff.
  • How should 3M manage these problem employees?
  • Is there a Human Resources strategy that can
    prevent the accumulation of non-performing
    employees in a relaxed, self-motivating work
    environment like 3Ms?

45
Innovation Workout
  • Quiz, Consumption Chain Analyze and Feature Map
    an Innovation
  • Quizzing and Mind Maps
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