Theme 6

Managing the Internal Processes

Managing Innovation

Outline

1. Enabling Effective Search2. Enabling Strategy-making3. Enabling Effective Knowledge

Acquisition4. Enabling Commersionalization

Innovation process model

Today’s challenges for organizations

External conditions lead to discontinuities in the innovation environment – for example, the emergence of radically new technology or of completely new markets – the old ‘rules of the game’ no longer apply.

Innovation management is essentially about building and embedding such routines within the organization – but it is also about reviewing, improving and on occasions replacing them with new and more appropriate ones to cope with what is a constantly changing environment. In other words, it is about building dynamic capability.

Enabling Effective Search

Various kinds of trigger signals (inside & outside)

Effective routines stretch its boundaries to create new space

“selection environment” – a search space made up of knowledge about technologies, markets, competitors…

Approaches can be used to explore and extend this search space

1) Defining the Boundaries of the MarketplaceSometimes innovation can take the form ofrepositioning – offering the same basic product or service but addressed in a new wayto different markets.

2) Understanding Market DynamicsUnderstanding where potential markets may arise as aconsequence of various kinds of change.

3) “Trend-spotting”Market does not exist or where it suddenly takes a turn in a new direction

Approaches can be used to explore and extend this search space

4) Monitoring Technological TrendsIdentification of emerging trends in technologies, where existing trajectories may be challenged or redirected as a result of new knowledge

“research & development”

“connect & development”

“know-how” “know-who”

Approaches can be used to explore and extend this search space

5) Market ForecastingIdentifying markets which do not yet exist but which may emerge as a result of identifiable current trends.

6) Technological ForecastingOpportunities arise in part from the continuing advances in knowledge which make new products, services and processes possible. Making different use of existing technologies configured in new ways.

7) Integrated Future SearchMake simplifying assumptions about the wider context inwhich predicted changes might take place.

Approaches can be used to explore and extend this search space

8) Learning from OthersLooking at ‘best-practice’ demonstration Projects and ‘reverse engineering’.

9) Involving StakeholdersInvolving customers in providing information about the kinds of products and services which they require

10) Involving InsidersIn looking for signals about possible innovation triggers it is important not to neglect those which originate inside the organization.

Enabling Strategy-making

Equally organizations cannot afford to innovate at random – they need some kind of framework which articulates how they think innovation can help them survive and grow and they need to be able to allocate scarce resources to a portfolio of innovation projects based on this view.

They can build on explorations of the future such as the scenarios and they can make use of techniques like ‘technology road-mapping’ to help identify courses of action which will deliver broad strategic objectives.

Enabling Strategy-making

Although developing such a framework is complex we can identify a number of key routines which organizations use to create and deploy such frameworks. These helpprovide answers to three key questions:

• Strategic analysis – what, realistically, could we do?• Strategic choice – what are we going to do (and in

choosing to commit our resources to that, what will we leave out?)

• Strategic monitoring – over time reviewing to check is this still what we want to do?

Enabling Strategy-making

The issue of strategy deployment – communicating and enabling people to use the framework – is essential if the organization is to avoid the risk of having ‘know-how’ but not ‘know why’ in its innovation process.

“lean philosophy”

to mobilize most of the people in an organizationto contribute their ideas and creativity towards continuous improvement

Portfolio Management Approaches

Enabling Effective Knowledge Acquisition

This phase involves combining new and existing knowledge (available within and outside the organization) to offer a solution to the problem of innovation.

It involves both - generation of technological and market knowledge (via research carried out within and outside the organization) - - and technology transfer (between internal sources or from external sources).

Enabling Effective Knowledge Acquisition

Enabling Effective Knowledge Acquisition

Groups of technological knowledge (created by Arthur D. Little):

1) Base technologies represent those on which product/service innovations are based and which are vital to the business. However, they are also widely known about and deployed by competitors and offer little potential competitive advantage.

2) Key technologies represent those which form the core of current products/services or processes and which have a high competitive impact – they are strategically important to the organization and may well be protectable through patent or other form.

Enabling Effective Knowledge Acquisition

Groups of technological knowledge (created by Arthur D. Little):

3) Pacing technologies are those which are at the leading edge of the current competitive game and may be under experimentation by competitors – they have high but as yet unfulfilled competitive potential.

4) Emerging technologies are those which are at the technological frontier, still under development and whose impact is promising but not yet clear.

Enabling Effective Knowledge Acquisition

‘absorptive capacity’ – ability of the organization to take on and make effective use of new knowledge.

Enabling Effective Knowledge Acquisition

Enabling Implementation

Enabling Implementation

Enabling Implementation

Enabling Implementation