Text of School of Business OPEN Innovation Anne Sigismund Huff University of Ireland Maynooth
School of Business OPEN Innovation Anne Sigismund Huff University of Ireland Maynooth
S CHOOL OF B USINESS 2 AGENDA Define Innovation Sources of innovation Three interesting trends Open innovation User and customer innovation Service innovation Managements contribution to Disruptive Innovation Incremental Innovation
School of Business What is an innovation? Why is it important?
S CHOOL OF B USINESS 4 Invention* . 2. U.S. Patent Law. a new, useful process, machine, improvement, etc., that did not exist previously and that is recognized as the product of some unique intuition or genius, as distinguished from ordinary mechanical skill or craftsmanship.genius *invention. (n.d.). Dictionary.com Unabridged. Retrieved October 09, 2011, from Dictionary.com website: http://dictionary.reference.com/browse/inventionhttp://dictionary.reference.com/browse/invention
S CHOOL OF B USINESS 5 Innovation* Although the term is broadly used, innovation generally refers to the creation of better or more effective products, processes, technologies, or ideas that are accepted by marketsproductsprocesses technologiesideas * http://en.wikipedia.org/wiki/Innovation, accessed Oct. 9, 2011http://en.wikipedia.org/wiki/Innovation
S CHOOL OF B USINESS 6 Anne Sigismund Huff Multiples Levels of Innovation Network Innovation Corporate Innovation Organizational Innovation Functional Innovation Individual Innovation
S CHOOL OF B USINESS 7 IT IS NOT EASY TO BRING SOMETHING NEW TO MARKET
S CHOOL OF B USINESS 8
9 Of 197 products brought to market 124 immediate failures 54 lose money 17 mediocre results ONLY 11 successful (11/1919 =.006%) BIG ISSUE: How to generate enough quality ideas to reach market success
S CHOOL OF B USINESS 10 2nd big issue -- Diffusion The Classic S-Curve Time Degree of Technological Assimilation
S CHOOL OF B USINESS 11 PROBLEM SOLUTION HOW I GOT FROM ONE TO THE OTHER
S CHOOL OF B USINESS 12 Figure 2.3: Thomas Lackner (Siemens) The Most Important Innovation Strategies and their Positioning along the Technology Lifecycle* Pace-setting technologies: Determine tomorrows competitiveness Key technologies: Determine todays competitiveness Basic technologies: Basic competence for todays business New technologies: Discontinuity New rules of the game Maturity Time First mover The early bird catches the worm (American saying) Fast follower The early bird catches the worm but the second mouse gets the cheese (G. Keillor) Trendsetter If youre in control of wormholes and mouse- traps, you get both the worms and the cheese Siemens AG. All rights reserved *From Huff et al. (forthcoming) Leading Open Innovation. MIT Press.
S CHOOL OF B USINESS 13 Different Foci of Innovation Look forward: Invention & Innovation first mover and fast follower Look backward: Expand markets, develop products performance by implementation Look outside: Suppliers & other stakeholders (those who care, especially customers YOU) Look inside: Products/services/experiences, processes, structures from those close to delivery
S CHOOL OF B USINESS 14 3 rd issue: disruption of the status quo Incremental innovation close to current markets, close to current products Radical (disruptive) innovation Farther from current skills and current markets
S CHOOL OF B USINESS 15 Figure 2.2: Thomas Lackner Different Paths from Innovation to the Market* Existing New Technology Market iPod - iPhone LED MRI ICE 1-3 Easy to use Attractive design New imaging technology Other diagnostic possibilities Brighter Lower power consumption Incremental improvement IV III III Siemens AG. All rights reserved *From Huff et al. (forthcoming) Leading Open Innovation. MIT Press.
School of Business Where do ideas come from? Who develops them?
S CHOOL OF B USINESS 17 YOU are an important innovator Young Energy and enthusiasm Less influenced by the past Todays and tomorrows consumer University trained Increasingly important cutoff for employment (and thus consumption) Helpful frameworks and tools to address new situations
S CHOOL OF B USINESS 18 1.Hold your mobile phone 2.Think individually of new hardware features (not available now) that you would like your phone to have 3.Quickly list these ideas one at a time going around the group with no comments except clarifications 4.Encourage new ideas to emerge 5.Each person vote on 3 that you like best 6.Report on winner(s) Possible group exercise
S CHOOL OF B USINESS 19 Why group? New ideas will come to you as you hear what other are thinking of [ A myth that inventions spring fully formed from one persons mind] Why strangers? Innovative solutions often come from varied & unexpected sources Why mobile phone? A product most of you use and care about Mobile phone hardware and apps still changing (clear room for innovation) Why hold your phone? More ideas in context
S CHOOL OF B USINESS 20 Why think individually before discussion? Groups tend to head quickly in one direction One or two people tend to dominate Social loafing is too easy Why list all ideas before development or evaluation? Basic brainstorming: do not evaluate too soon Make sure all are involved (otherwise ideas from high status tend to have too much weight) Finding from research: best ideas build on others
S CHOOL OF B USINESS 21 Why vote on three? Helps separate idea from the proposer Maintains a large idea pool (dont fall in love too soon) Why report on winners to a larger group? Again, keep the pool large Expect further building on ideas from others Research shows that a winning idea is often generated late in the innovation process
S CHOOL OF B USINESS 22 You can train yourself to be a better innovator Learn about and use creativity techniques (web) Analyze new product/services/experiences on the market Anticipate innovations Predict outcomes Keep up with the news and think about innovation at different levels - Economies Governments - Industries Companies - Public organizations - Individuals Groups (e.g. sports enthusiasts)
S CHOOL OF B USINESS 23 Even more important! Learn how to work effectively in groups (inventions often first developed by one, innovation to market almost always involves many) Become a student of organizations, especially your organizations Continually improve your communication skills Learn how to make things HAPPEN Lean toward action (ALL GOOD CAREER ADVICE IN GENERAL especially important in an era that is emphasizing innovation)
S CHOOL OF B USINESS 24 BUT (as we will discuss) invention and innovation are not always welcome
S CHOOL OF B USINESS 25 Disruptive innovators tend to be Wild ducks with a divergent point of view though at the same time success comes especially to those who are socially connected Dissatisfied with the status quo but aware of how it works Persistent, able to learn from negative experience Supported by someone who listens and believes but also challenges A partner/friend A co-worker A leader
S CHOOL OF B USINESS 26 Anne Sigismund Huff NIH not invented here Not surprisingly, innovations are often resisted
S CHOOL OF B USINESS 27 Figure 4.6: Rudi Grger A Small List of Arguments used to Slow the Change Process* We tried that before This place is different It costs too much Thats beyond our responsibility Were all too busy to do that Thats not my job Its too radical a change We dont have the time Theres not enough help Our place is too small for it It isnt practical for operating people The folks will never buy it The union will scream Weve never done it before Its against regulations It runs up overhead We dont have the auhtority Thats too ivory-tower-like Lets get back to reality Thats not our problem Why change it? Its still working okay Its hopelessly complex You are right, but... Youre two years ahead of your time We dont have the personnel It isnt in the budget Its a good thought, but impractical Lets give it more thought Top management would never go for it. Lets put it in writing Wed lose money in the long run Its never been tried before Lets shelve it for the time being Lets form a commitee Has anyone else ever tried this? What are you really saying is... Maybe that will work in your department, but it wont in mine The executive committee will never... Dont you think we should look into that further before we act? Lets all sleep on it It wont pay for itself. I know a fellow who tried this way What would the president say? *From Huff et al. (forthcoming) Leading Open Innovation. MIT Press.
School of Business New innovations for generating innovations?
S CHOOL OF B USINESS 29 Three interesting developments 1.Open innovation Within the organization With selected communities Open to an unrestricted audience User / customer innovation Service i