5 - Innovation Processes Flashcards
What is required to sustain competitive advantage in organizations?
Organizations must continually innovate to create new products, services, and processes.
What drives customer acquisition and growth?
Successful innovation.
What can happen to a company’s value proposition without innovation?
It can be imitated, leading to competition solely on price.
What are the four important processes in managing innovation?
- Identify opportunities for new products and services
- Manage the research and development portfolio
- Design and develop new products and services
- Bring the new products and services to market
What sources can generate ideas for new products?
- Internal research and development
- External sources such as research laboratories, universities, suppliers, and customers
Why should organizations not be too inwardly focused in their search for new ideas?
They can miss valuable insights from external sources.
What do leading-edge customers provide for companies?
Ideas for new products and capabilities.
What should companies ask customers for regarding product innovation?
The outcomes they want, not specific features.
What is the objective of managing the research and development portfolio?
To decide which projects to fund, defer, or kill.
What are the five types of projects in managing the R&D portfolio?
- Basic research and advanced development projects
- Breakthrough development projects
- Platform development projects
- Derivative development projects
- Alliance projects
What characterizes a breakthrough development project?
It creates entirely new products based on new applications of science and technology.
What is a platform development project?
It develops the next generation of products in a given category.
What is the main goal of derivative development projects?
To enhance specific features of the platform product for targeted market segments.
What does an alliance project enable a company to do?
Acquire a new product or process from another firm.
What is the first stage in the design and development process?
Concept development.
What does the product planning stage involve?
Testing the product concept through model building and financial planning.
What do the design-build-test cycles in product development achieve?
They modify product design and production processes to meet performance characteristics.
What does the stage-gate model provide in product development?
Discipline to review projects and allocate resources efficiently.
What phases are involved in clinical trials for pharmaceuticals?
- Phase I: Safety and dosage
- Phase II: Clinical effects
- Phase III: Extensive testing against control groups
What is the cost range for Phase III trials in drug development?
$20 to $70 million.
What model do software companies traditionally follow for development?
The structured waterfall process.
What is the recent trend in software development processes?
An iterative approach incorporating changing customer requirements.
What two key processes did Microsoft use in developing Office 2000?
- Milestones
- Daily Builds
What is the milestone process in software development?
A process where development work is broken into stages, enabling testing throughout rather than deferring it until the final product.
Each milestone encompasses design, coding, and testing of a subset of functionality.
How does the milestone process differ from the waterfall approach?
The milestone process allows for ongoing testing during development, while the waterfall approach defers testing until after all coding is completed.
What happens if features prove difficult to implement for a planned milestone?
The feature is either deferred to a later milestone or eliminated entirely.
In the milestone process, what must engineers adhere to?
A targeted and inflexible final shipping date.
What is the daily build process?
A process where programmers check out code daily, submit their work, and a special team tests the product overnight.
What is the purpose of testing in the daily build process?
To ensure that additions work well with existing design and to identify bugs for programmers to address.
What must be achieved before revisions to the program are accepted?
A sufficiently low level of ‘bugginess’.
What is the goal of the product development cycle’s conclusion?
To release the product for initial ramp-up into commercial production.
What is pilot production in the context of product development?
The process of finalizing specifications for production by building components on prototype equipment and testing the finished product.
What is validated during pilot production?
Whether new manufacturing processes can produce the product at commercial volume levels that meet standards.
What are the objectives for product launch?
Rapid launch, effective production, and effective marketing of new products.
What measures can indicate effective production of new products?
Manufacturing cost, number of redesign cycles, and consumer satisfaction.
What are the two components of a value proposition in innovation?
- Specific performance attributes of products/services. 2. Timeliness of availability to customers.
Why is being first-to-market important for companies?
It can lead to revenue and margin growth, as being late may be more costly than cost overruns.
What is an example of extending products into new markets?
Pharmaceutical firms finding new uses for drugs that have already been approved.
What is a core competency in relation to innovation?
Leveraging product excellence into new applications and market segments.
What are some financial objectives from innovation?
Revenue growth from existing and new customers, and managing life-cycle costs.
What does the term ‘bugginess’ refer to?
The level of bugs in the code that must be sufficiently low before accepting revisions.
What is the significance of teamwork in innovation?
Critical for successful innovation projects, involving both internal and external collaboration.
What role does information technology play in product development?
Enhances communication, enables rapid product introduction, and allows for advanced simulation and testing.
What is the ‘not-invented-here’ syndrome?
A tendency to derogate advances made by external scientists and engineers.
What is the importance of organizational culture in innovation?
It should emphasize innovation and change as core values to foster effective processes.
What are the sample measures for achieving deep functional expertise?
Percent of R&D employees with access to advanced modeling tools and effective project management leadership.
What is the goal of using technology for rapid product launch?
To expedite the handoff from design to manufacturing and enable quick production of new products.
What is one of the key objectives for innovation processes?
Identify opportunities for new products and services.
What should all organizations strive for regarding innovation?
To have at least one innovation objective on their strategy maps.
What is the main goal of Saatchi & Saatchi?
To be revered as the hothouse for world-changing creative ideas that transform clients’ businesses, brands, and reputations.
What is the financial target for Saatchi & Saatchi’s incremental growth?
30 percent bottom-line margins and doubling earnings per share.
What does PIC stand for in the context of Saatchi & Saatchi’s strategy?
Permanently Infatuated Clients.
List the three strategic themes defined by Saatchi & Saatchi.
- Operational excellence
- Customer management
- Innovation
What type of agency has the greatest potential for creating transformational ideas?
Lead agency.
What is the purpose of the Balanced Scorecard (BSC) in Saatchi & Saatchi?
To help achieve financial targets and manage intangible assets.
True or False: Client retention is considered a poor indicator of financial health at Saatchi & Saatchi.
False.
Fill in the blank: The equation used by Saatchi & Saatchi to emphasize the impact of nonfinancial perspectives is A (People and Culture) + B (Internal Processes) + C (Client) = _______.
D (Financial).
What is one of Saatchi & Saatchi’s core goals within the internal business process theme?
Creating Big, Fabulous Ideas (BFIs).
What is the purpose of the annual health check created by CFO Bill Cochrane?
To enforce fiscal accountability and eliminate inefficiencies.
What does the ‘challenge brief’ process entail?
Defining the client’s need with only the four key team leaders before committing resources.
What phrase reflects the people and culture perspective at Saatchi & Saatchi?
One Team, One Dream.
What was the increase in shareholder value for Saatchi & Saatchi from 1997 to 2000?
$2 billion, quintupled shareholder value.
What structural change did Saatchi & Saatchi implement in its agencies?
Reorganized from a geographic structure to one based on local mission.
What is the major impact of working smarter across the network according to Saatchi & Saatchi?
Better resource allocation and access to organizational expertise.
What is a key indicator of research output mentioned in the notes?
The number of patents and patent citations.
Who crafted the strategic plan called ‘The Way Ahead’ at Saatchi & Saatchi?
CEO Kevin Roberts.
What is the primary focus of the customer management theme?
Excelling at account management and focusing on business development.
