Chapter 10 - Innovation and change Flashcards
How might organizations become more creative and use innovation to promote change?
- examine their existing business model in order to make the most of their current capabilities and capacity in the form of line extensions and expansions
- explore many prototypes, with an open mind to feedback and reconfiguration along the way
- be concerned about strategic business design and create a unique network of business activities that not only deliver value to the user, but also competitive advantage and profit to the company
Organizational innovation
the successful implementation of creative ideas in organizations
Creativity
the production of novel and useful ideas
Organizational change
a difference in the form, quality, or condition of an organization over time
Innovation can take many forms
- can refer to changes in an organization as a whole, to specific products or to business processes
Two programs the Government of Canada funds
- Achieving excellence: investing in people, knowledge and opportunity
- Knowledge matters: skills and learning for Canadians
Technology cycle
cycle that begins with the “birth” of a new technology and ends when that technology reaches its limits and is replaced by a newer, substantially better technology
S-curve pattern of innovation
a pattern of technological innovation characterized by slow initial progress, then rapid progress, and then again by slow progress as a technology matures and reaches its limits
Technology cycles and technological innovation don’t
necessarily mean “high technology”. Broaden your perspective by considering advances or changes in knowledge, tools, and techniques
Innovation streams
patterns of innovation over time that can create sustainable competitive advantage
Companies that want to sustain a competitive advantage must
understand and protect themselves from the strategic threats of innovations
Innovation streams have two steps
it starts with “technological discontinuity” and is followed by an “era of ferment”
Technological discontinuity
scientific advance or unique combination of existing technologies that creates a significant breakthrough in performance or function
Era of ferment
phase of a technology cycle characterized by technological substitution and design competition
Technological substitution
purchase of new technologies to replace older ones
Design competition
competition between old and new technologies to establish a new technological standard or dominant design
Dominant design
a new technological design or process that becomes the accepted market standard
Incremental change
the phase of a technology cycle in which companies innovate by lowering costs and improving the functioning and performance of the dominant technological design
To successfully manage innovation streams, companies need to be good at two things:
- managing innovation during discontinuous change
- managing innovation during incremental change
Experiential approach to innovation
an approach to innovation that assumes a highly uncertain environment and uses intuition, flexible options, and hands-on experience to reduce uncertainty and accelerate learning and understanding
Experiential approach to innovation uses five parts:
- design iterations
- testing
- milestones
- multifunctional teams
- powerful leaders
Design iterations - Experiential approach
a cycle of repetition in which a company tests a prototype of a new product or service, improves on that design, and then builds and tests the improved prototype
Testing - Experiential approach
systematic comparison of different product designs or design iterations
Testing overcomes
- uncertainty and improves understanding
- the more prototypes you build, the more likely you will learn what does and doesn’t work
- designers and engineers are less likely to “fall in love” with a particular prototype, instead they will become more concerned with improving the product or technology
- testing speeds up and improves the innovation process
- testing two different prototypes against each other quickly makes product design strengths and weaknesses apparent
- testing uncovers errors early in the design process when they are easiest to correct
- testing accelerates learning and understanding by forcing engineers and product designers to examine hard data about product performance
Milestones - Experiential approach
formal project review points used to assess progress and performance
Multifunctional teams - Experiential approach
work teams composed of people from different departments
Multifunctional teams accelerate
- learning and understanding by mixing and integrating technical, marketing, and manufacturing activities.
- innovation through early identification of problems that would typically not have been identified until much later by involving all key departments in development from the start
Powerful leaders - Experiential approach
- provide vision, discipline, and motivation to keep the innovation process focused, on time, and on target
- are able to get resources when they are needed, are typically more experienced, have high status in the company, and are held directly responsible for product success or failure
- can get innovation-related projects done nine months faster than leaders with little power or influence
Compression approach can be used
- during periods of incremental change, in which the focus is on systematically improving the performance and lowering the cost of the dominant technological design
Compression approach to innovation
an approach to innovation that assumes that incremental innovation can be planned using a series of steps, and that compressing those steps can speed innovation
Generational change
change based on incremental improvements to a dominant technological design such that the improved technology is fully backward compatible with the older technology
Ways to shorten development time
- supplier involvement
- simply shorten the time of individual steps in the innovation process
- sometimes multiple development steps can be performed at the same time
Change forces
forces that produce differences in the form, quality, or condition of an organization over time