Part II: Strategic innovation Flashcards
Basics:
Invention vs inovation
Invention:
Act of creating or developing a new product or process
Innovation:
Process of creating a commercial product or process
Product innovation: Relates to the final product (or service). Focus on features.
Process innovation: Relates to the way in which this product is produced and distributed. Focus e.g. on improvements in cost or reliability.
Types of inovation
Market vs Technology inovation. 2x2 matrix:
\+--------------------------------+
| Technology |
\+---------------------------------+
| old | new | \+--------------+--------+-------------------+-----------+ | | new | Market | Radical | \+ Market +--------+-------------------+------------+ | | old | Incremental | Tech. | \+--------------+--------+-------------------+------------+
Inovation Timing
First-mover (Innovators)
- Experience curve benefits - Scale benefits - Pre-emption of scarce resources - Reputation - Buyer switching costs
Late mover (followers)
- Free-riding - Learning
What main aspects influence innovation inside an organization?
Organizational structure and organizational culture.
What organizational structure characteristics can influence innovation inside an organization?
Span of control: Number of people directly reporting to the next level. Tall versus flat. Bureaucratic vs task-oriented.
Centralization: Degree to which formal decision making is held by a small group of people at the top of the organization.
Formalization: Degree to which organizations standardize behaviour through rules, procedures, formal training, etc. Eleminationg vs enhancing cariation. Tight vs loose financial control.
Departmentation: E.g. functional versus divisional structure.
Etc, etc… (more examples in slide 11 of set 7)
What R&D characteristic may contribute on quality of innovation? What are the challenges?
Geographic distribution:
Each location contributes unique knowledge. The greater the distribution of R&D activity, the greater the likelihood that the asset of the location can be used.
Challenges:
- Search costs: Increasing geographic distribution leads to a greater number of distant units that could have the relevant information for problem solving issues
- Transfer problems from one unit to another
Geographic distribution of R&D activity is not enough. What else should be there?
Intraorganizational linkages
Linkages have a significant advantage in processing technological knowledge.
The greater the level of a firm’s intraorganizational linkages, the more positive the impact of the geographic distribution of R&D activity on
innovation quality.
Increased interactions between locations will enable R&D units to quickly identify and locate the relevant technological knowledge that can be used for problem solving.
Whats organizational culture? What are the types?
Collection of relatively uniform and enduring values, beliefs, customs, traditions and practices that are
shared by an organization’s members, learned by new recruits, and transmitted from one generation of employees to the next.
2x2 matrix:
Internal/external focus vs change/stability
Felxible
internal vs external
Clan culture, Adhocracy culture,
Stability and controlo
interlan vs external
Hierarchy culture, Market culture
What are the challenges in Organizational culture, innovation and change
Culture of positive challenge:
- Tasks need to be interesting and rewarding - Individuals need to feel supported by supervisors
Ensure autonomy
- Individuals need to free to determine how they perform a task
Ensure work group support
- Make sure that ideas can be shared and discussed without anxieties
Absence of organizational impediments
- Avoid destructive criticism, political problems, pressure to maintain the status quo
Seven keys to change
1) Establish a new and different mission (in a careful way)
2) Select personnel in a different way
3) Lead by example (leaders are role models), empower individuals
4) Change the structural design of the organization
5) Use tools of management development
6) Change the procedures of performance evaluation and the reward system
7) Found a new department or division, using it as a role model
What are the different approches for management of innovation?
Cross-functional product development teams
Product champions and corporate incubators
Buying innovation
Open innovation
Describe cross-functional product development teams
A type of departmentalization with a flat span of control and relatively little formalization, consisting of self-directed work teams.
Features:
- Self-directed work teams
- Teams organized around work processes
- Flat span of control
- Little formalization
- Divisionalized structure
Challagens of cross-functional product development teams
- No routine
- Time pressure
- Multidisciplinarity
- Interdivisional cooperation
Characteristics of Product champions and corporate incubators
Entrepreneurial leadership
Product champions have two means:
- Incorporate individual creativity within organizational processes - Linking invention to subsequent commercialization
Corporate incubators are internal business developments established to fund and nurture new businesses but with limited applications within established businesses.
Describe Buying innovations
Small, technology-intensive startups have advantages in the early stages of the innovation process
Large corporations have superior capabilities and extensive financial resources
Strategies: Licensing, outright purchase of patents or acquiring the whole company
