A Process to Promote Innovation€¦ · Innovation Process Model Manging innovation isn’t easy, automatic, or universal Global Innovation Index (GII) 2016 rankings 1 Switzerland

Lysann [email protected]@lysannseifert #n1049sussex

A Process to Promote Innovation

mailto:[email protected]

https://twitter.com/nicholasdacre

https://twitter.com/lysannseifert

• Need for an innovation process• Searching for opportunities: sources & strategies• Selecting successful ventures: criteria & methods• Implementing projects: acquiring & organising resources• Creating & capturing value: business model innovation

This session

Linear (wrong!) model

How innovation happens?

Process Success(?)Brilliant Idea

Real (messy!) model

How it really happens…

Research Concept Design Implementation …

Uncertainty, Patterns, Insights Clarity, Focus

Need for an Innovation Process

Innovation = invention * commercialisation

Innovation• isn’t a single event but a complex process• carries risks• needs careful and systematic management• picks up ideas for change and turning them into effective reality

If we understand the nature of this process, we are better prepared to arrive successfully at our value-creating destination.

An (our!) Innovation Process Model

Source: Tidd and Bessant (2014) Strategic Innovation Management, pp. 87, Wiley

SEARCH- How can we find opportunities for innovation? -

SELECT- What are we going to do and why? -

IMPLEMENT- How are we going to make it happen? -

CAPTURE- How are we going to get the benefits from it? -

LEARNING

- Do we have an innovative organisation? -

- Do we have a clear Innovation Strategy? -

1 2 3 4

What we need to pay attention to if we are going to manage innovation well:

Innovation Process Model How Context Affects Innovation Management


Innovation Process Model Manging innovation isn’t easy, automatic, or universal

Global Innovation Index (GII) 2016 rankings

1 Switzerland 66.32 Sweden 63.63 United Kingdom 61.94 USA 61.45 Finland 59.96 Singapore 59.27 Ireland 59.08 Denmark 58.59 Netherlands 58.310 Germany 57.911 Korea, Republic of 57.116 Japan 54.518 France 54.025 China 50.6

https://www.globalinnovationindex.org/userfiles/file/reportpdf/gii-full-report-2016-v1.pdfThe Global Innovation Index (2016), available at:

• The GII ranks world economies according to their innovation capabilities and results

• Using approx. 80 indicators that include measures of:– Human capital development

and research,– Development funding, – University performance,– International dimensions of

patent applications

https://www.globalinnovationindex.org/userfiles/file/reportpdf/gii-full-report-2016-v1.pdf

Innovation Process Model 1. Searching for opportunities: sources & strategies





LEARNING



1 2 3 4

Source: Tidd and Bessant (2014) Strategic Innovation Management, Wiley



1

Exploring alternative future and opening up different

possibilities

Users as innovators

Inspiration – the Archimedes moment

Advertising – uncovering and amplifying latent needs

Need pull – necessity as the mother of invention, and

innovation

Knowledge push – creating opportunity by pushing the frontiers of science forward

Shocks to the system –events which change the world and the way we think about it and to force us to innovate in

new directions

Recombinant innovation –ideas and applications in one

world transferred to a new context

Regulation – changing rules of the game push and pull

innovation in new directions

Accidents – unexpected and surprising things which offer new

directions for innovation

Watching others –innovations arising from

imitating or extending what others do - benchmarking,

reverse engineering, copying

Where do innovations come

from?



• Does the idea fit a business strategy?• Does the idea build on something we know about or where we can get access

to that knowledge easily?• Do we have the skills and resources to take it forward?• How can we build a portfolio of projects which balances the risks and the

potential rewards?

1

Search Strategy Mode of Operation

Sending out scouts Dispatch idea hunters to track down new innovation triggers

Using the web Harness the power of the web, through online communities, and virtual worlds – to detect new trends

Deep diving Study what people actually do

Probe and learn Use prototyping as a mechanism to explore emergent phenomena and act as boundary object to bring key stakeholders into the innovation process

Innovation Process Model 2. Selecting successful ventures: criteria & methods





LEARNING


1 2 3 4




2

SELECT

Possible technological and market

opportunities –What could we do?

Distinctive competencies –

Can we build on our knowledge base?

Fit with overall business –

Do we want to do it?


2

SELECT: Success Factors

Factors affecting new product success:• Significant product advantage• Clear definition of target market • Proficiency of pre-development

SELECT: Services

SELECT: Assessment Methods SELECT: Resources

1 2

43

Factors influencing success of service Innovation: • Comprehensive customer-experience

management• Investment in employee performance• Continuous operational innovation• Brand differentiation

Usefulness of different techniques: Factors influencing success: • Diversity (expertise) of team • Financial resources – assets & access to funding • Supply chain – identifying & working with

strategic partners • Marketing & industry experience• Existence of intellectual property

Berry et al. 2006.

Novel• Segmentation• Focus groups• Lead users• Market trials• Scenarios(ranked, 5=critical; n=50 projects

Routine3.42 4.504.50 4.004.43 3.674.00 3.703.75 2.80

Source: Tidd & Bodley, 2002 ‘The affect of project novelty on the new product development process’, R&D Management, 32(2), 127-138.

Song et al. 2008, ‘Success factors in new ventures: a meta-analysis’, Journal of Product Innovation Management, 25, 7-27.


2

• 94% firms fail to innovate or grow• 85% of new ideas never reach a market• 60% of R&D projects are market failures• 40% of consumer products & services fail• 20% of business products & services fail• 6% of firms innovate & grow

Innovative organizations are typically twice as successful as non-innovators, in terms of profit, growth and employment

Innovation has an inherent variability, but its rate of success can be improved through management:

Innovation Process Model 3. Implementing projects: acquiring and organising resources





LEARNING



1 2 3 4



3Quality Function Deployment= aims to translate customer requirements into real products & services

• Identify and group customer requirements• Rank or weight according to importance• Translate into measurable characteristics• Establish correlations between requirements & technical response• Benchmark against competitor offerings

Source: Hauser and Clausing (1988)

Correlation matrix for options

Design options

Matrix of relationships between customer requirements and

design options

Technical assessment

Financial assessment

Competitor assessment

and customer perceptions

Customer requirements

in order of preference

QFD matrix


3New Service Development

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00Customer Focus

Strategy FormulationPlanned Opportunism

Clear Strategic Objectives

Core Business Competencies

Core Technology Competencies

Design Reviews

Design Standards

Market Assessment

Requirements Management

Documentation

Cross-functionality

Development Planning

Co-LocationLife Cycle Responsibility

Team BoundariesExternal PartneringProject Orientation

Ambidexterity

Organic Structure

Market Analysis

Process Control

Analytical Methods

Electronic Data Interchange

Information Systems

Flexible Manufacturing

Voice of Customer

Design Controls

Voice of SupplierIntegration

Agility

Best-in-ClassCompany A

• This chart provides a comprehensive view of product development improvement opportunities.

• For example, Company Alpha is doing relatively well in use of design documentation, cross-functionality, and development planning, but is significantly below BIC in most other areas.

Strengths

Source: Tidd & Hull, 2006. (n=108 service businesses); Hull & Storey (2016)

Innovation Process Model 4. Creating & capturing value: business model innovation





LEARNING



1 2 3 4



4How does Volkswagen capture value?


Source: J. Tidd (2012) From Knowledge Management to Strategic Competence (Imperial College Press, 3rd edition); J. Bessant & J. Tidd (2011) Innovation and Entrepreneurship (Wiley, 2nd edition); J. Tidd, & J. Bessant (2013) Managing Innovation: Integrating technological, market & organizational change (Wiley, 5th edition); S. Isaksen & J. Tidd (2006) Meeting the Innovation Challenge: Leadership for Transformation and Growth (Wiley).

4Facts’ about the relationship between innovation and performance

• New products are associated with higher value-added values • Returns from use of new technology are higher than from its generation• Returns from process innovation are typically four times those from product

innovation• Management & organisation typically account for 15-50% of variance

Learning to Manage Innovation





LEARNING

1 2 3 4


à Finding behaviour pattern (routines) which work

à Process of regular review and reconfiguration is at the of innovation management – “dynamic capability”

Conclusions and implications from research & practice:

• Management and the ability to learn matter in translating innovation into value• Innovation needs: Clear strategic leadership and direction, plus the commitment of

resources to make this happen • The structure and climate of an organisation should enable people to deploy their

creativity and share their knowledge to bring about change• Success flows from active search & exploitation of external opportunities, combined

with strong internal capabilities---• Too much emphasis on the generation of new technology or products• Greater focus on a wider range of innovation e.g. positional & paradigm innovation

has potential to improve returns from innovation

Sources: J. Tidd (2012) From Knowledge Management to Strategic Competence (Imperial College Press, 3rd edition);J. Tidd, & J. Bessant (2013) Managing Innovation: Integrating technological, market & organizational change (Wiley, 5th edition); J. Bessant & J. Tidd

(2015) Innovation and Entrepreneurship (Wiley, 3rd edition).

Conclusion

Documents

A Process to Promote Innovation€¦ · Innovation Process Model Manging innovation isn’t easy, automatic, or universal Global Innovation Index (GII) 2016 rankings 1 Switzerland