15. Innovation Management Flashcards
What are the two modes of the bimodal practice of managing innovation within an organization?
- Mode 1 - predictable, improving and renovating in more well-understood areas.
- Mode 2 - exploratory, experimenting to solve new problems.
SO you have to balance both “normal” operational projects and at the same time aim for innovations that actually contribute to competitive advantage
4 reasons/pressure to innovate:
- Achieve competitive adv.
- High wages in the West call for differentiation (product innovation)
- Tech progress create business opportunities
- Networked organizations create new structure and roles
What are the three classical types of innovation?
- Product innovation - bringing a new product to the market with new technological component
- Process innovation - doing things in a new way but still producing the same thing, in order to lower cost of production
- Organizational innovation - new ways of relating to customers or new way of capturing value (BMI).
How is innovation linked to strategy? (the matrix with sources of competitive advantage vs scope of competition)
It is linked in 3-4 boxes in the matrix in this way:
1. Low cost + industry scope = cost leadership. If this is your strategy you should focus on for ex process innovations to reach economies of scale.
2. Differentiation + industry scope = differentiation. Here you can focus on high quality products to differentiate yourself from competitors.
3-4. Segment focus - both in low cost and differentiation the focus is on a niche market. Learn your customers well and match their specific needs.
Simplified model of innovation. 4 stages:
- 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 gonna get the benefits from it?
This requires a clear innovation strategy and an innovative organization.
Describe what it means to be ‘caught in the daily business’:
It means that you focus too much on today’s problem in two ways:
- Caught by yourself - too much to take care of to solve today’s issues.
- Caught by your customers - you listen too much to the customers, and they might not be able to express their needs and they are often conservative and want things to be as they always have been. Customers don’t like radical innovations at first.
What are some of the challenges for a large company when it comes to innovations, compared to start-ups?
- You have more to loose as you already have a steady profit flow.
- Have to protect the current position in the market that you have worked hard for
- It is hard to distribute resources away from current production to innovative processes
- New ideas can threaten implemented procedures and roles
- formal instead of informal structures make it hard, governance/decision-m can be slow
- Caught up by today’s customers and employees might lose contact with customers if re-organize them to innovation teams
How does the product life cycle look like and what makes it hard to innovative when considering this cycle?
The product life cycle accelerate fast in the beginning and then matures at a stable level before it starts to decline - the hard thing is to start new innovation processes while the product is still on its run-up. Employees within the org have hard to understand the need for innovation at this stage.
4 challenges for innovation projects:
- Success of project is difficult to predict (and in fact, few succeed).
- Projects are risky for management careers - can damage reputation if it fails
- Hard to find the right employees and mix in the team and what to do with them when project is finished?
- Courage to stop failing high potential projects is needed
Overview of the digital innovation triangle
We have three corners:
- Distributed innovations
- Combinatorial innovations
- Digital tech platforms
Two things that are important here is convergence and generativity (build something new out of existing base)
What does convergence and generatively mean in the digital innovation sphere?
- Convergence: bringing previously separate components together (ex Google Home).
- Generativity: Digital tech becomes inherently dynamic and malleable
What is a digital technology platform?
Building block, providing an essential function to a tech system - which acts as a foundation upon which other firms can develop complementary products, techs or services.
Combinatorial innovation =
Combining existing features/modules with embedded digital capabilities to create something new.
Ex 3 existing modules brought together can create a new product
Distributed innovation =
novel forms of organizing to harness innovation outside of the org. Ex online communities like Linkedin, open innovation or innovation challenges/contests where people send in their proposals.
Difference between classical and modern way of organizing innovation ?
Classical is to have an R&D department that is separated and often lacks the business insights. Modern way is to use inter-disciplinary teams
