Innovation Models Flashcards
What are the 8 factors used to compare innovation models?
Consumer needs Industry stance Source of innovation Drivers of innovation Nature of investment Risk of failure Key concepts Related terms
What is the consumer need for a firm driven innovation?
Unproven
What is the consumer need for a user-led innovation?
Proven in the existence of lead-user innovation
What is the consumer need for a cultural innovation?
Proven, even if cultural
What is the industry stance of a firm-driven innovation?
Proactive
What is the industry stance for a user-led innovation?
Reactive
What is the industry stance for a cultural innovation?
Reactive
What is the source of innovation for firm-driven innovations?
Centralised within firms
eg: Apple iPod
What is the source of innovation for user-led innovations?
Distributed across lead-users
eg: GoPro
eg: Levi commuter jeans
What is the source of innovation for cultural innovations?
Distributed across culture, reassembled by innovators
eg: The Phluid Project
What is the driver of innovation in a firm-driven innovation?
Extrinsic motivation
Profit
Radical social change
What is the driver of innovation in a user-led innovation?
Intrinsic motivation
Fun
Initially non-commercial
What is the driver of innovation in a cultural innovation?
Extrinsic motivation
What is the nature of investment for a firm-driven innovation?
High
Borne solely by firms
What is the nature of investment for a user-led innovation?
Distributed
Exploitative
What is the nature of investment for a cultural innovation?
Minimal
What is the risk of failure for a firm-driven innovation?
High
What is the risk of failure for a user-led innovation?
Low
What is the risk of failure for a cultural innovation?
Low
What are the key concepts involved in firm-driven innovation?
Research and Development
Applied Science
Testing
Commercialisation
What are the key concepts involved in user-led innovation?
Innovation by users
Collaborative evaluation
What are the key concepts involved in cultural innovation?
Cultural orthodoxy Social disruption Ideological opportunity Ideology Myth Cultural codes Source material - media myths, brand assets and subcultures
What terms can be related to firm-driven innovations?
Disruptive innovation
Radical technologies
Linear model
What terms can be related to user-led innovations?
User-led innovation
Bottom up innovation
At what point does innovation from the firm start for a user-led innovation?
Collaborative improvement
For a firm-driven innovation, this would usually be at the start in market research stage, but the lead users have done this already for them.
What are the 3 stages involved in a firm-driven innovation? (Von de Ven, 1995)
Idea invention
- Needs/problems
- Research
Development
- Design
- Commercialise
Adoption/Diffusion
- Marketing
- Distribution
- Promotion
What are the 3 stages involved in a user-led innovation?
Innovation by users
Free revealing followed by collaborative improvement
Peer-to-peer diffusion
What are the advantages of user-led innovation?
Consumer needs are clear and concrete
Users take on costs of testing and development
Risk free
What are the disadvantages of user-led innovation?
Hard to prevent competition doing similar
Reactive models cannot build a big picture like disruptive innovations
Hard to predict
What are the advantages of firm-driven innovation?
First mover advantage (Lieberman and Montgomery, 1988)
Blue ocean strategy (Chan, Kim and mauborgne, 2005)
Organisational memory can mean a failure could used to innovate later down the line
Create and capture a new demand in an uncontested market space
What are the disadvantages of firm-driven innovation?
Costly
No evidence of consumer needs - can be over stated, biased within the industry
Commercialisation treated as a fourth stage which comes too late
Assumes organisations are the sole source of innovation
Lack of identity value of new products and services eg: Harley Davidson
What are the sources of innovative opportunity for firm-driven innovations?
1) PROCESS NEEDS (Peter Drucker)
- Perfect a process that already exists
eg: 1909 Bell Telephone projected the trend for the growth in the American population and number of operators required to handle calls - lead to switchboards requiring automation
2) DEMOGRAPHIC CHANGES
- Baby boomers
- What values, ideals and struggles do these groups face?
eg: Monzo - 20-35s struggling to budget when wages are decreasing and rent prices are increasing
3) NEW SPECIALISED KNOWLEDGE
New forms of scientific or technical knowledge making new forms of living possible
Innovator has to create a want for users to be receptive as the ideals are so radical
eg: iPhone
What are the generic steps for FDM?
Firms look to discover needs to develop new products and services
Conduct research to see if it is feasible through technical and market assessments
Developing prototypes and testing
Commercialise
Why was FDM so popular in post-war 1950s America?
Post war consumer culture saw rise of cultural engineering
Marketers sold people the life they should lead
Marketing used shared interests to bind people together (Baritz, 1989)
People trusted organisations to care for them therefore corporations had the power to shape consumers desires, ideals and preferences
Why is FDM now a by-product of its era?
FDM denied people the freedom to choose - contradiction of having freedom which was picked up by critics and consumers alike (White, 1956, Mills 1953).
Death of cultural engineering and emergence of a branding steeped in postmodernism
People wanted to consumer brands that had identity value in search of their own sovereignty
eg: VW Beetle
Given that FDM is a by-product of its era, why is firm-driven innovation still utilised today and under which circumstances?
1) Where there are ASYMMETRIES in key resources, knowledge, expertise and capital between the industry and consumers
Firms stockpile knowledge through patents, draw on expertise and maintain market power
eg: Automotive industry
eg: Pharmaceutical industry
eg: Tech industry
2) Where organisations EXPLOIT consumer dependencies and lack of substitutes
Unable to use others without substantial switching costs - they are locked in (Schumpeter, 1934)
eg: Apple having iMessage, iCloud, Mac etc
eg: Google
Costs endured include search costs, loyalty cost and dependence on complementary products and services (Harrison et al, 2012)
At what point of the product life cycle does user-led innovation occur?
Gap between need recognition and organisations taking advantage
Firms are involved after lead-users product prototypes to meet their own needs and wants
When should firms jump in to improve and commercialise products?
After the lead user has created a prototype, collaborated with others to improve the overall product.
Who are lead users?
Innovators who solve their own needs at private expense
Often circulate innovations with others desiring the same need fulfilment
Are at the leading edge of important trends
Serve as a market signal that innovation has sufficient market demand now and in the future
Using the Levis commuter series example, why was this innovation so successful?
Range including: Waistband flex Nanosphere technology 3M reflective tape Waterproof No crotch blow out
Lead users did all the innovation for Levis
What is the nature of diffusion of user-led innovation?
Organic
Community driven
What is the nature of diffusion of firm-driven innovation?
Firm led
Marketing driven
What social, cultural and historical forces have fuelled the emergence of a user-led innovation process?
Internet
Technology
Value
Barrier to entry - reduced
Communities - online
Globalisation - ideas across boundaries
Platforms - app stores
Crowd funding
Legal system
Influencer culture
How are consumers an underlying factor explaining the rise of user-led innovation?
Consumers
- Desire identity and symbolic benefits
People engage in non-commercial innovation to reduce reliance on the market place
Similar values animate craft consumerism (Campbell, 2005)
Deprofessionalisation in work one’s leisure pursuits (Campbell 2005)
Democratisation of skills and knowledge via the internet (von Hippel, 2005)
Excessive consumerism sees people turn to building their own products to create goods with identity value and not faceless commodities
How are firms an underlying factor explaining the rise in user-led innovation?
Firms want to develop products that meet many user needs so leave minor unmet needs unmet, therefore gives space for users to innovate.
Improved education and vocational training by firms has resulted in consumers becoming skilled (Ritzer and Jurgenson, 2010)
Firms are embracing this idea of innovation, providing users with resources and toolkits to facilitate innovation (Thomke and von Hippel, 2011)
Who do Schreir and Prugl (2008) believe lead users are?
Users with
High levels of specific knowledge
High levels of use experience
Who does Kratzer et al (2016) believe lead users are?
Users who
Occupy positions between different groups of users
Use social network analysis tools to identify users that influence flow of communication
How can you identify lead user innovation?
1) Observe through building digital platforms
2) Ethnography
3) Pyramiding to explore activity at the leading edge of lead-user innovation
What is an example of lead users coming together?
LEGO
Robotic lego toys 1998 for kids
70% of customers turned out to be 18+
Major universes built their curriculum around windstorm technology
Adult fans shared hacks through Lugnet and program the robots in ways that Lego had not originally intended
Lego created a marketplace for users to share hacks and monitor their popularity. They would license the most successful and sell them.
What is pyramiding? (User-led innovation)
Networking through pyramids of expertise to identify lead users and experts.
Starts within the target market before looking to other experts in the field
eg: ABS came through speaking to racing car drivers feathering brakes. Went to Boeing to mimic the technology, they were at the leading edge.
What is an example of where pyramiding has been successful?
ABS - learnt from Boeing to transfer to racing car driving
Professional cycling motor homes - learnt from formula 1
What is cultural innovation?
A brand that delivers an innovative, cultural expression.
What is a cultural expression?
Serves as a compass point and linchpin of identity, providing users with symbolic rather than functional value.
It helps to communicate and signal value to others, helping us to express identity
What product categories are appropriate to provide identity value?
Clothing
Cars
Food
Drinks
What are the three elements of cultural expressions?
Ideology
Myth
Cultural codes
What is an ideology?
A particular point of view on a major cultural construct that has become widely shared and taken for granted, naturalised by a segment of society as truth
eg: Jack Daniels and Marlboro capitalising on the ideology working class, frontier masculinity
What is a myth?
Instructive stories that impart ideology. The ideology is only comprehensible when it is embedded in a myth.
eg: Jack Daniels men uphold frontier ideals of masculinity with whiskey making in a hillbilly subculture which romanticised untouched Tennesse backwards. This world was untouched by industrialisation and the post war ideology of the organisation man.
What are cultural codes?
For a myth to resonate it must be composed using codes. Cultural codes provide a shorthand for consumers to easily understand and experience the emded meanings.
Texts, sounds, symbols, colours, smells - a palette for the brand to express their myth.
eg: Jack Daniels using men in worn denim and manual techniques making it clear there is a preference for old time craftsmanship.
When do cultural expressions become highly valued?
When they break the cultural orthodoxy
What is a cultural orthodoxy?
The cultural expressions articulated by your competition
Firms unintentionally compete with one another on similar terms (Institutional isomorphism)
eg: for the Phluid Project, prescriptive binary apparel
What is a red ocean?
When all competitors are trying to say they do something better than competitors
eg: These trainers make you run faster
Leads to imitation and trying to compete through differential USPs
What is a blue ocean?
Improved spaces for value propositions for a brand, whether they are created by new technology or by mixing and matching value propositions across categories
eg: Whiskey firms all thought consumers wanted whiskey to reflect sophistication, Jack Daniels utilised a blue oceans space with a cultural perspective, rather than a better mousetraps perspective to innovate their brand.
What are social disruptions?
Events in society that create consumer demand for new cultural expressions
Social disruptions provide ideological opportunities which cultural expressions can exploit.
Industries do not live in a vacuum, things happen that transform our lives to create new demands.
Where do social disruptions originate?
Political, social, economic, environmental and cultural events.
What is the Phluid Project case for cultural innovation?
Cultural orthodoxy: Prescriptive binary apparel
Social disruption:
Intensification of right-wing philosophies
Ideological opportunity:
Non-prescriptive identity exploration and expression
Ideology: Androgynous personhood
Myth: Out and proud identity
Cultural codes: Labelless store, spectrum of colours
Source material:
LGBT+ subculture
Out and proud media myth
What are the stages of cultural strategy model?
1) Mapping the cultural orthodoxy
2) Identifying the social disruption
3) Unearth ideological opportunity
4) Cull source material
5) Craft the cultural strategy
How do we map the cultural orthodoxy?
Discourse analysis
The study of patterns of meaning, their assumptions and broader ideological relationships (Thompson and Hirshman, 1995)
How do we identify the social disruption?
Sociological analyses
eg: Think Tanks showing macrotrends
How do we unearth the ideological opportunity?
Identity project interview
Ethnography
How do we find source material?
Literary analysis
Brand genealogy
Ethnographic research methods
Media analysis
How do brands use mission statements to reveal the value of their cultural innovation?
We champion…
This is what we stand for…
eg: Clearblue
We champion a body-positive feminist view of reproduction and women’s health. We celebrate women’s bodies: sex as playful and fun
Under what circumstances do we use cultural innovation?
When markets are saturated in terms of product/service development
eg: Beer industry
Your competitor imitate one another in terms of the expression
eg: Bud Light as the party beer vs. Corona and Spring Break
When the market is dominated by engineer focused functionality
When social shifts occur and ideological opportunities emerge
eg: Subway
Why was nike a successful cultural innovation?
Ideology: Combative solo willpower
Motivation myth: ‘Just Do It’.
When times were tough, showing people they are up for the challenge if they harness their combative solo will power to win
Cultural codes: Weiden using adverts to nail the vernacular of each discriminated sports subculture.
Eg: the ghetto appropriating the public housing crisis and beat up basketball courts,
Latin slums (Ronaldo and World Cup)
When do better mousetrap models work?
In markets where functionality is important
When there is significant variance in functionality across brands
When functionality is easy for consumers to evaluate
eg: Kitchen knives, bicycles
What is symbolic value?
Provide concrete direction and motivation acting as symbolic anchors for question of identity, purpose, aspiration and value.
What is social value?
Stake out social identities based upon key social categories such as social class, gender, race and ethnicity. They convey status, solidarity and community.
How is the McLaren buggy a user-led innovation?
On a trip to the US with his grandchildren in 1960 he was struck by the difficulties his daughter was having in taking her child’s pushchair on board the plane. Owen Finlay Maclaren used his knowledge of lightweight load-bearing airplane structures to create a new type of folding stroller.
He saw the connection between the mechanisms used in retractable undercarriages of Spitfire aircrafts and his daughter’s problem and began working on the idea.
Where previous strollers folded in half, Maclaren’s patented frame folded in half and in on itself – like an umbrella – smaller and lighter than any product that came before. The one-step umbrella-fold design allowed busy parents to quickly fold the stroller with one hand, while holding the baby in the other - forever changing the world of baby transport.
In 1965 the first Maclaren buggy was launched.
Affectionately branded and trademarked as Baby Buggy®, the name has become the popular eponym to describe the entire category of umbrella folding strollers all over the world, similar to Hoover for vacuum cleaners, Kleenex for tissues, or Google for online search.
A design so revolutionary and timeless it has been recognised as a design icon and is treasured in the permanent collection of the Museum of Modern Art in New York (MoMA) and the Design Museum in London, as well as in book references in Phaidon Design Classics, Dyson Icons of Design, and Century Makers as “one of the hundred most clever inventions that have changed our lives over the past century”.
Maclaren caters to the sophisticated and knowledgeable parent, discerning in style and conscious of the need for quality and safety. Indeed, our brand tagline is “What a mother wants, What a baby needs”.
How could Maclaren be seen as cultural innovation?
Cultural orthodoxy: Spacious, leisurely travel for your baby
Social disruption: Changing family structures and routines.
Increase in mobility of middle classes, holidaying and air travel.
- 1950s golden age of air travel no longer existed. Flying became more accessible and not as glamorous as before. People could travel with no ID cards and decide to board a flight half an hour before take off.
No screenings required until 1973.
- With the publishing of “The Feminine Mystique” by Betty Friedan in 1963, many women began to leave the role of housewife and start careers of their own. “The Feminine Mystique” chronicled the lives of women who were unhappy and unfulfilled in their traditional roles and encouraged women to seek more. This attitude, along with a changing culture, changed the nature of the typical family. Women began to enter the work force, and, as a result, demanded their husbands assist them more with housework and child care.
Ideological opportunity: Smarter, mobile strollers which allowed more convenience and mobility in taking care of children and completing household activities such as shopping.
Ideology: Post-Modern Parenthood
Myth: What mother wants, what baby needs myth
- Parents with two children, need one hand to open the buggy, one to hold the child.
- Need easier ways to care
- Women back in the work force
- Easy to fit in the back of cars
Cultural codes: Umbrella design, functional engineering
What are cyclors in the America’s Cup an example of?
User led innovation
Used combination of artificial intelligence and pyramiding to transfer knowledge to create cyclors.
In the 2017 America Cup campaign, the Kiwis placed “huge value” on simulation, sailing the boat virtually on a huge computer screen without it touching the water to test resources without huge time and cost constraints.
On the AI simulation, skipper Glenn Ashby moved the wing with an X-box controller – a gadget that transferred to the real boat and became known as Team NZ’s ‘secret weapon’. It was familiar and functional.
The cyclor technology was introduced by British-born Bernasconi who brought the idea from his six-year career working as a vehicle dynamics engineer with the McLaren Formula One Racing team.
Simon van Velthooven - Olympic bronze cycling medalist used to push the boundaries and give an extra competitive edge.
Now cyclors have been ruled out, with rules stating hands must be used on pedals.
Explain how DairyNZ used user-led innovation to fix irrigation issues in farming.
IRRIGATION SYSTEMS are essential for dairy farming. The uniqueness and harsh conditions of New Zealand dairying increase the need for firms to harness innovations created by farmers.
There are instances where lead-users – innovative farmers – install unique configurations of existing irrigation equipment to increase efficiency. Industry organisation DairyNZ understands the importance of these user-created configurations.
Rather than ignore innovative practices and compete with lead-users to devise better irrigation systems, DairyNZ decided instead to work closely with them to develop best practices that could be adopted by the wider dairy-farming community – a process that perfectly illustrates user innovation.
How is the Nintendo Wii an example of a firm-led innovation?
Innovative motion sensor control different to the Xbox and Playstation
Did not make an incremental change to the existing GameCube to target experienced gamers, it created simple games for non-gamers and the whole family to enjoy. It made gaming a group activity that was reminiscent of the party atmosphere physical games like Charades and Twister bore.
Advantages:
Created something consumers did not know they wanted
Targeted a new demographic, women married with children wanting them to have an active gaming experience
Disadvantages:
High cost of innovation
Why is Ella’s Kitchen an example of successful user led innovation?
Lead user: Paul Lindsey had daughter Ella in 1999.
Need recognition: Had trouble weaning daughter
Pyramiding:
Nine years at Nickelodeon taught him knowledge of marketing to children and more important their parents. Noted the importance of milestones in children’s lives which served as the foundation of Ella’s Kitchen ‘Kid’s First’ philosophy with a meaning to put healthy eating at the forefront as well as provide landmarks in their food experience.
Saw how television was being seen as the demon in leading the obesity crisis. Lead to question the complexities of the obesity crisis.
Knowledge of accountancy meant he knew how to grow the business without fear of collapse. Used invoice financing to make money to repay innovation debts.
User-led: Made collaborative improvements to the brand through ‘Besties’ in the Parent Pulse community where other parents can suggest methods to improve weaning.
Lead to the development of Melty Sticks - an alternative to breadsticks that are healthier.
What were the drawbacks of Ella’s Kitchen innovating in the way it did?
Large financial risk to Paul and family - had to remortgage their home to pay for the initial production
Provided an alternative, not a new radical market
Fails to provide identity value, only functional value
Because the lead user was innovative in this instance, does not mean they will continue to be a future leader (Trott, 2013)
What are the benefits of Ella’s Kitchen innovating in the way it did?
Need was known - risk of failure low
Users helped in collaborative improvement
Intrinsic motivation keeps the company going
Lead-user Paul was at the edge of innovation, gained first mover advantage (Chan et al 2004)
KLINE AND ROSENBURG 1986
Initiating an innovation is derived from a design improvement rather than new research
FURNAS
Firms and research organisations will not have the monopoly and new ideas of improvements
BALCONI (2010)
Linear does not mean sequential with no form of feedback
Linear can be self enforcing, simultaneous and interconnected
KLINE (1985)
Chain linked model
Activities occur simultaneously with continuous feedback
BALCONI (2010) - What does he note?
They say: Sole firms innovate alongside others
Scientists interact beyond their firm and to other academics and researchers in the field
I say: I agree with this notion. However Balconi over looks the importance of user interaction to improve products and services.
EG: FourSquare employed lead users to identify issues with the app which lead to unbundling the product and developing two separate apps to better serve each need.
BELZ and BAUMBACH (2010)
They say: Netnography is a valuable source of finding lead users
I say: I agree (Phluid Project) however feel other methods such as ethnography or identity project interviews can also be valuable
VERYZER (2003)
They say: User insights can be misleading
eg: Xerox and iBM listened too closely to customers which resulted in failures (CHRISTENSEN, 1997)
I say: I agree however only if they listen too closely. Still need to leave room for innovation by the firm to bring something refreshing that consumers may not have thought of
DAY (1999)
They say:
Dichotomy between leading or following customers
Technology push cannot be balanced by market pull
eg: Apple as a tech push
eg: Ella’s Kitchen as a market pull
I say:
Yes there can. Cyclical Innovation Models believe we must blend the two. Firms never completely ignore the need of the market when trying to push new tech.
eg: Google Wave tried to push new technology by recognising the demand for social media and this failed HOWEVER Apple pushed new touch screen technologies and applied it to pre-existing market demand
KOHLBACHER (2015)
They say: Demographic changes are giving rise to innovative products and services for the elderly
eg: Elderly and Student living
I say: Some demographic changes can be hard to predict
YE and KANKANHALLI (2018)
They say: Toolkits for lead user ness positively affect user’s innovation quantity
I say: Not necessarily quality innovation?
ANDRIOPOLOUS and LEWIS (2010)
They say: Combining approaches (ambidexterity) is hard to execute but has been found to be beneficial
eg:
I say: There always has to be a predominant source and driver of the innovation.
eg: using lead users to compliment technological innovations such as Maclaren’s daughter testing the product
eg: using existing firm innovated technologies to launch your user led innovation such as printing, bottling, distribution technologies in the aggregate marketing system in Ella’s Kitchen to develop the product.
BERKHOUT (2010)
CYCLICAL MODEL OF INNOVATION (CIM)
Innovation never occurs from just one source
Multifaceted approach is optimal
Combining hard and soft sciences to create optimal innovation eg: Ella’s Kitchen
I say:
I agree. Even firms who appear to solely innovate are themselves consumers of products and give feedback to the system eg: iPhone, Google search browsers
The combination MUST vary between innovations with a focus source - trying to equally balance means synergy is less likely
THOMKE AND VON HIPPEL
Cost of getting product suggestions right is high
Many fail to get to market at all
I say:
I agree - however does this mean we should shelve it as it is not the right time and it might be later? eg: 1980s smokeless cigarettes and Google glass.
Does it mean the idea was valid? Did the firm innovate without the right consumer need or did the user simply not have enough funds to take the project to market successfully?
