strategic management of technology-based innovation
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Learn the strategic management of technology-based innovations every manager should knowTRANSCRIPT
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Strategic Management of
Technology-based Innovation
TM 721 – Managerial Economics---------------------------------------------------------------------
Ms. Sheryl B. [email protected] 1
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Innovation
“the process whereby new and improved products, processes, materials, and services are developed and transferred to a plant and/or market where they are appropriate”
-David Rubenstein, Co-Founder The Carlyle Group 2
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Types of Innovation1.Product Innovation
Developing a new productIt is concerned with increasing the revenue.
2.Process Innovation improving the processes employed to
produce or deliver the product, and to make it more efficient or productive
It is concerned with reducing the costs. 3
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Innovation MatrixCustomer need
Technologyold
new
new
IncrementalInnovation
Market Breakthrough
Technology Breakthrough
RadicalInnovation
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Innovation Matrix + examplesCustomer need
Technologyold
new
new
Airplanes > Superbody Airbus new Gillete razorSolid > Liquid soap
Propeller planes > jet planesLaser hair treatmentRadio tubes > Transistor>IC
Air-conditionerCellphoneDisposable diapersElectric coffee makerInstant photographyPost-it-notes
Hand sanitizer Likas papaya soapSUVsPaper shredderremote control
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Why are theseRadical Innovations?
Air-conditionerCellular phoneDigital cameraDVDDisposable diapers
Electric coffee maker
Elevator
Instant photography
Microwave oven
MP3PDAsPCsTVThe web
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Effect of Innovations
•“Sustaining innovation”
•“Disruptive innovation”
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Sustaining Innovation
improves the performance of existing products along values of mainstream customers
hardly results in the downfall of established companies
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Disruptive Innovation will often have characteristics that
traditional customer segments may not want, at least initially
appear as inferior or riskier vs. existing products
eventually changes consumer behavior and preferences, and industry hierarchy
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Adoption Curve
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Q ui ckTi me™ and a decompressor
are needed to see thi s pi cture.
ice harvestingindustry
ice factories
refrigeratorcompanies
Jumping the Curves
Time
turbulenceperiod
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Strategic Management of Technology-based Innovation involves:
PLANNING IMPLEMENTATION EVALUATION AND CONTROL
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Planning for Innovation
• Summarizes what the business is aboutDetermine the
Vision
• Summarizes the firm’s vision itself, its values, and what it values
Set the Mission
• Establishes how the firm will carry out its mission
Establish Goals and Objectives
• Delineates the specific operational activities the firm will undertake to achieve its goals and objectives
Set Strategy 13
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Innovation Concerns for Different Levels of Strategy
Strategic Coordinate entire organization; Exploit new technologies; Assess external factors; Maximize returns; Determine which technologies and units to emphasize process.
Business Coordination and implementation of innovation of individual business unit; Manage product and technical innovation; Ensure cost-effectiveness of that unit and relevant technologies.
Operational Manage change at operational level; Provide training; Assist marketing; Control costs; Supply technical support.
Levels of Strategy and their Innovation Concerns
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Factors to be considered when Planning for Innovation1. Creativity
AdventuringConfrontingPortfolio of Skills
2. Organization-wide issuesCommunicationReward SystemOrganizational Assumptions
3. Political issues 15
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Managerial Guidelines: Planning for Innovation
1. Recognize that innovative individuals exist throughout the organization.
2. Periodically reconsider how work is being accomplished.
3. Encourage “turning the prism” to put a new light on problems.
4. Ask employees what their biggest aggravations are.
5. Train people to recognize their creative abilities and participate in the planning innovation.
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Guiding Questions: Planning for Innovation
1. As the planning process begins, have the firm’s current activities been examined to determine whether they are providing leverage for the firm to maintain a sustainable competitive advantage?
2. In the planning process, are concepts being developed that provide an immediate measurable and discernible competitive advantage?
3. Does the process of innovation add to the firm’s value for shareholders and other stakeholders? How? If not, can the planning process be changed to ensure that it does?
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Guiding Questions: Planning for Innovation
4. Do employees feel encouraged about their importance in the innovation activities of the firm, particularly the planning process?
5. Have the leaders of innovation been identified at all levels of the organization? Are these individuals involved in the planning process?
6. Does the result of the planning process indicate what needs to be done next, who needs to do it, and when it needs to be done?
7. How are “newness” and “failure” handled by the firm?
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Implementation in InnovationLeadership
• Install supportive systems and policies
• Create mechanisms for innovation
• Allocate ample resources to critical activities
Alignment• Tie rewards to
achievement• Build “fit”• Build a capable
organization
Engagement• Build a knowledge-
based culture• Training and
development• Mentoring
Extension• Develop and share
lessons learned• Monitor
organizational competencies
• Look for other opportunities
What to do now versus later?
What is the timing, human resources, and existing platforms that are necessary or useful?
What should be delegated and to whom?
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Managerial Guidelines: Implementation of Innovation
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Checklist for Innovation Implementation
Vision Leadership• Does the team have a clearly
articulated vision, mission, or set of objectives?
• Is the vision (objectives) clearly stated?• Did everyone participated in creating it
(them)?• Is this vision (objectives) attainable?
• Is excellence of central importance to the team?
• How does the manager monitor and improve performance levels?
• Are all team members committed to excellence?
• Does the leader encourage open idea exchanges?
Processes Resources• Do team members share information
fully?• Do all team members participate
decision making?• Are team members comfortable
proposing new ideas?• Are team members able to challenge
standard practice?• Is there a climate of trust within the
group?
• Does management support new ideas?• Do team members support new ideas
by giving time, cooperation, and resources?
• Does the team leader offer practical help and resources for the development of new ideas?
• What happens when a new idea fails?21
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Evaluation and Control in Innovation
Establish Objectives (control)
Establish Standards (control)
Measure Performance (evaluation)
Compare Performance to Standards (evaluation)
Take Corrective
Action (control)
Do nothing or Reinforce
actions (control)
inadequate
adequate
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Managerial Guidelines: Evaluation and Control in Innovation
1. A balance among various approaches in evaluation and control.
2. Involvement of top management.3. A focus on the ends.4. Objectives should be specific and
understood.5. Feedback is an integral part of the
innovation process; it is not a one-year occurrence.
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Guiding Questions: Evaluation and Control in Innovation1. Is the evaluation and control process future
oriented?2. Are costs and benefits being properly weighed
against each other?3. Are a number of innovative ideas being
generated?4. Is the proper amount of funding available to the
best potential projects?5. Are the product and process features that are
being implemented appropriate and necessary?6. Do the people in the organization “feel good”
about what the expectations, rewards, and outcomes are?
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The World’s 50 Most Innovative Companies 2012
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Most Innovative Company 2012
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Steve Jobs’ 7 Principles of Innovation
1. Do what you love. 2. Put a dent in the universe.3. Connect things to spark your
creativity.4. Say no to 1,000 things. 5. Create insanely different
experiences. 6. Master the message. 7. Sell dreams, not products.
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"When all think alike, then no one is thinking."
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--Walter Lippman (American public intellectual writer, reporter, and political commentator)
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Thank you
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Sources:1. Bruton, Grarry D. and Maragaret A. White. Strategic
Management of Technology and Innovation. Canada: South-Western CENGAGE Learning, 2011.
2. Posadas, Dennis. Rice & Chips: technopreneurship and innovation in Asia. Singapore: Prentice Hall, 2007.
3. Gonzales, Federico C. Technopreneurship Basics.4. Gallo, Carmine. What makes Steve ‘Steve’? Forbes
Online Magazine. December 5, 2012 http://www.forbes.com/sites/carminegallo/2011/08/24/what-makes-steve-steve/
5. Greeley, Matthew. Innovation Essentials: 10 Basic Principles of Innovation - Everyone Should Know. Customer Think. December 3, 2012 http://www.customerthink.com/blog/innovation_essentials_10_basic_principles_of_innovation_everyone_should_know
6. The World’s 50 Most Innovative Companies 2012. Fast Company. December 1, 2012 http://www.fastcompany.com/most-innovative-companies/2012/full-list
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