Industrial innovation trends

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Industrial innovation trends

Marko TorkkeliProfessor, Technology and Business

InnovationsKouvola Research Unit Prikaatintie 9FI-45100 Kouvolawww.kouvola.lut.fiwww.openinnovation.fi

Overview

Technology proves to be importantCreation of new ideasNew Product DevelopmentSuccess and Failure of New ProductsStrategic AlliancesThe Innovative, Open CompanyQuick Scan

70s

80s

90s

00s

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History of Management ScienceDaft & Marcic, Understanding Management, Thomson

Ansoff (1965):

Corporate Strategy

MBA’s: Finance,

Law and Marketing

1970:

Technological

Forecasting and

the Club of Rome

Mid 70s: Creativity, basis for e.g. ISPIM

Envisioning the ‘home computer of the future’ in 2004 by RAND Corp. in the fifties.

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Philiform - Philips

80s: Success and Failure in new Product Development

Innovators and Followers (Teece)

Success Failure

Follower

Innovator

IBMpersonal computer

KODAKinstant photography

DUPONTteflon

EMIscanner

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Innovators and Followers

Likely failure

Look for a partner

Likely failure

Apply with the dominant design?

Supplementing resources available?

Can the intellectual property be protected?

Likely to succeed

no

no

no

Success Factor Grading

0 2 4 6 8 10 12 14

Superior product

Strong market orientation

International orientation

More predevelopment

Sharp and early product definition

Properly executed launch

Organisational structure and climate

Top management support

Technological and Marketing synergy

Aim at attractive markets

Sharper project selection

Project control / Quality of execution

The resources must be in place

Speed

Stage gate system

Protection of intellectual property

Dominant design

Secure access to Complementary assets

Consumer Innovator / Lead users

Learning

Non-product advantage

Su

ccess

Fact

ors

Number of responses1 Not so important2 Fairly important3 Very important

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Cassette Deck

Development time: two years.

The competitor develops a new deck in just half a year.

Now what?

Solutions:

• Concurrent Engineering

• Modular design and Platform design

• Marketeers and Engineers work together in anearly stage

• Rapid prototyping

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Stage-Gate according to Cooper

Criteria for selection at the Gates

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portfolio management

market knowledge, local party required

scale, specialised partner

satisfy a need, not a demand

R&D, complementarytechnology,

share know how

Cooperation in the network economy

2. Access to new markets

3. Efficiency

4. Clients do not want products, but tailoredsolutions

1. Access to knowledge

Access to new markets

Efficiency

Clients do not want products, but tailoredsolutions

Access to knowledge

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Managing Diversity

• from ‘gold seeking’ to synergy with market, product/application, technology

soft aspects

• PLUS operations fit

• PLUS cultural, human, strategic fit

• yet complementary in competencies!

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a. An innovative company should create an environment of learning and experimenting, rather than planning.

b. HQ should facilitate the initiatives from BUs, rather than direct BUs.

c. Venturing is not ‘just’ for getting new business, but more and more to create new options.

d. Key to getting knowledge and strengthening own competencies are strategic alliances.

e. Business teams which strongly disagree (yet believe in a common objective) are more innovative than a too well structured set up.

How to make a company more innovative?

10 factors for an innovative organisation

• Leadership and will to innovate• Appropriate structure• Key individuals• Effective team• Streaching individual capabilities• Extensive communication• High involvement in innovation• Customer focus• Creative climate• Learning organisation

Joe Tidd et al., Managing Innovation, Wiley, 1997 and on, Chapter 11: Building the Innovative Organization.

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Copyright Arie Nagel, Netherlands


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1. Brian Twiss, Managing Technological Innovation, Pitman, Longman, London, 1974, 1980, 1986 and 1992. C, In.

2. Preston G. Smith and Donald G. Reinertsen, Developing Products in Half the Time, New Rules, New Tools, New York, Van Nostrand Reinhold, 1991. Second ed. in 1998. In.

3. Steven C. Wheelwright and Kim B. Clark, Revolutionizing Product Development, Quantum Leaps in Speed, Efficiency, and Quality, New York, The Free Press, 1992. In.

4. Gary Hamel and C.K. Prahalad, Competing for the Future, Breakthrough Strategies for seizing control of your industry and creating the markets of tomorrow, Harvard Business School Press, 1994. C.

5. Stewart Bray, Total Innovation, How to Develop the Products that your Customers want, Pitman Publ./Pearson, London, 1995. In.

6. Robert A. Burgelman et al. The Strategic Management of Technology and Innovation, 2nd ed., Irwin, 1996. C, R.

7. Robert A. Burgelman , Modesto A. Maidique and Steven C. Wheelwright, Strategic Management of Technology and Innovation, second ed., Irwin, 2001. C, R.

8. R. G. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Portfolio Management for New Products, Hamilton, Ontario, McMaster University, 1997. In.

9. Joe Tidd et al., Managing Innovation, Integrating Technological, Market and Organizational Change, Wiley, 1997. Second ed. 2001. C.

10. Robert G. Cooper: Winning at New Products, Accelerating the Process from Idea to Launch, Addison-Wesley, 1993. Third ed. in 2001. In.

11. V.K. Narayanan, Managing Technology and Innovation for Competitive Advantage, Prentice-Hall, 2001. C.

12. Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Boston, MA, Harvard Business School Press, 2003. C.

13. David Probert et al., Bringing Technology and Innovation into the Boardroom, Strategy, Innovation and Competences for Business Value, European Institute for Technology and Innovation Management/Palgrave/MacMillan, 2004. C, R.

14. Melissa A. Schilling: Strategic Management of Technological Innovation, McGraw-Hill/Irwin, New York, 2005. C.

Some useful books: Conceptual (C), Instrumental (In), Reader (R)