Innovation And Managing Innovation

Innovation And Managing InnovationT here are dissimilar types of basis. Joseph Tidd and John Bessant describe in their books four broad categories of variation. (Tidd Bessant, 2009) Following these categories are referred as the 4Ps of innovation crop innovation depart overs in the things (products/services) which an organization offers dish out innovation changes in the ways in which they are created and delivered position innovation changes in the consideration in which the products/services are introduced paradigm innovation changes in the underlying mental imitates which frame what the organization doesFor subject, the cutting version of a elevator car, a reinvigorated brink account offer and a modern home personnel computer are all examples of a product innovation. In comparison to a product innovation a change in the production help and machines used to manufacture the car or the home computer these examples are work on innovations. corresponding the exam ple of the refreshed bank account offer if this came up by changing procedures and sequencing in the bank office. Characteristic for services is the merge of a process and product innovation. For example a new weekend trip mail boat could be combination of both types of innovations.The third type is the position innovation. In this context an innovation changes the perception of the customer through repositioning of the established product or process. For example, to use builder gel also to wash and c run change adduce is a mature example of a position innovation.Sometimes innovation opportunities emerge when people start to think outside the box. A very good example of a paradigm innovation is Henry Ford. He fundamentally changed the way of transportation people. He archived this neither by inventing the force back car (Invention of the motor car was 1999) nor because he changed the way of manufacture and produce an automobile (also the inventor of the conveyer production). His idea was to change the underlying model for the automobile production in this time. He changed the perspective of producing automobiles from handmade specialist product to a few wealthy customers to a mass product with a price a public household could afford. The ensuing transfigure from craft to mass production was nothing short of a revolution in the way cars (and later countless otherwise products and services) were created and delivered. This example shows that a paradigm innovation also requires intensive product and process innovation for example, in component design, in machinery building, in the layout of the factory and in the social system slightly which work was organized. (Edelhoff, 2009)Not completely Henry Ford changed an industry. In the last decades the shift to low-cost airlines and the increasing numbers of goods change in the internet are recent examples of paradigm innovation changes in mental models.From Incremental to Radical InnovationEvery Innova tion is new, scarcely the nous is how new. So we can divide innovations between incremental and root. (doing the same, better ..) For example, a new version of a car model is incremental while come on shot up with a completely new electric driven belief car which is made out of new light weight carbon reference is perfect. Similarly, further development of the accuracy and speed of a saw mill is not the same as replacing it with a computer-controlled laser cutting process. This example shows there are degrees of new innovation, running from minor, incremental emendments to radical changes which changes the way things are done and we use them.These changes are often present to a contingent industry, but sometimes they are so radical and extensive that they are able to change the core of society. The major dance steps in todays communication and cultivation engineering have affected almost every person on this planet and will continue to progress to importance.Figure Di mension of innovation from incremental to radical from component- to system levelMapping Innovation SpaceIn the figure below each of the 4Ps of innovation can take place along an axis. Hence the blue circle indicates the potential innovation space at bottom a business can operate, the innovation is able to run from incremental to radical change.Whether the innovation utilizes all the space is a question of the innovation strategy. The way day-to-day change is approached within an organization differs from the approach how to handle a radical step change in products or processes. Here it is essential to keep in mind that the perceived stage of gewgaw is the important part and that this novelty is in the perspective of the observer. For example, in a giant, technologically advanced organization like Volkswagen or Siemens the tracking of goods from suppliers by RFID and GPS is used and implemented in day to day business while such an expensive process might be totally new and innov ative for a short car dealership or food processor. (Kern, 2006)Figure Innovation spaceSustaining or DisruptiveQuite a lot of innovations involve a dis round-the-clock shift but very few bring something completely new which changes a market conditions dramatically. Most of them usually are incremental. In recent time lean thinking came up in the production and service sector, which underlines the huge possibilities of continue improvements within a firm. (Kohlstedde, 2007) However this continues improvement idea is hampered through the new approach of the platform concept or robust design. This idea bases on the development of a future general design which will dominate the market as wholesome as used by the competitor. A good example for such a robust design is the Walkman originally authentic by Sony. This start design of a portable cassette and radio player system dominated the market for the whole product lifetime of cassettes. Also car makers tend to change their developmen t process from each single model to a platform strategy. (Wallentowitz, Freialdenhove, Olschewski, 2009) The Volkswagen AG introduced platforms which are used for different brands of the company group. This not only saves cost but also helps them to dominate the market with faster model updates and exchanges. The platform and robust design strategy of firms is a powerful way of recover the postgraduate initial investments such as Research and Development as well as market analysis.The Challenge of Discontinues improvementThe common innovation process happens in a set frame, following certain rules and ways of thinking. This naughty played by competitors is to innovate by doing what has been done before like product- or process innovations or even position- and paradigm innovations, but doing it better. In this controversy of playing the same game some firms manage to do better than others and can gain a competitive advantage through these innovations, but the set of the game is accepted and do not change.Very rare something happens that breaks up this framework and changes how the game is played. This will not happen every day but when this arises the rules and boundaries of a market change rapidly. This will result in upcoming new opportunities and repugn the existing players in their way of working, thinking and doing business.A discontinues improvement occurs out of a technological and conditions stable market, where is a long period of continuous improvements and variations near a basic product or service. The strategy, before the discontinues improvement was, doing what we do, but better. When such an innovation happens one or more of the basic conditions like engine room, markets, social, regulative etc. change rapidly. Now the time of doing different swallows and the rules of the game change so the opportunity space for new innovations appears. Such a rapid technology change is happening right at one time with the development of LEDs in the li ght market. From the invention of the originally light bulb in the late nineteenth one C by Edison and Swan the light market gets more and more restricted by the government. Furthermore the development of the LED light was a major step for the whole market and will influence our daily life in the future. With this upcoming technology new enterprises emerge in the market as well as the inventor Shuji Nakamura with the company Nichia Corporation. This discontinues improvement faces the market dominating companies very hard. Either they adapt to the new light technology or they will pull back market share very rapidly.In the process the underlyingrules of the game change and a new opportunity space for innovation opens up. Dodifferent conditions of this pleasing occur, for example, when radical change takes placealong the technological frontier or when completely new markets emerge.An emergingexample of this could be the replacement of the light light bulb originally certain in the late nineteenth century by Edison and Swan (amongst others). This may be replaced by the solid state white light emitting diode technology patented byNichia Chemical. This technology is 85% more energy efficient, has 16 times the lifeof a conventional bulb, is brighter, is more flexible in application and is likely to besubject to the scale economies associated with electronic component production.In their pioneering work on this theme Abernathy and Utterback developed a modeldescribing the pattern in terms of three distinct legs. Initially, under discontinuousconditions, there is what they term a unstable phase during which there is high uncertaintyalong two dimensions The target what will the new configuration be and who will want it? The technical how will we harness new technological knowledge to create anddeliver this?No one knows what the right configuration of technological means and market demand will be and so there is extensive experimentation (accompanied by numero usfailures) and fast learning by a range of players including many new entrepreneurialbusinesses.Gradually these experiments begin to converge close to what they call a ascendentdesign something which begins to set up the rules of the game. This represents aconvergence around the most popular (importantly not of necessity the most technologicallysophisticated or elegant) solution to the emerging configuration. At this pointa bandwagon begins to roll and innovation options become increasingly channeledaround a core set of possibilities what Dosi calls a technological trajectory.38 Itbecomes increasingly difficult to explore outside this space because entrepreneurialinterest and the resources which that brings increasingly focus on possibilities withinthe dominant design corridor.This can apply to products or processes in both cases the key characteristicsbecome stabilized and experimentation trends to getting the bugs out and refining thedominant design. For example, the ninete enth-century chemical industry moved frommaking soda ash (an essential ingredient in making soap, glass and a host of other products)from the soonest days where it was produced by burning vegetable matter throughto a sophisticated chemical reaction which was carried out on a batch process (theLeblanc process) which was one of the drivers of the Industrial Revolution. This processdominated for n earliest a century but was in turn replaced by a new generation of continuousprocesses which used electrolytic techniques and which originated in Belgiumwhere they were developed by the Solvay brothers. Moving to the Leblanc process orthe Solvay process did not happen overnight it took decades of work to refine andimprove each process, and to fully understand the chemistry and engineering requiredto get consistent high quality and output.The same pattern can be seen in products. For example, the original design fora camera is something which goes back to the early nineteenth century and as avisit to any science museum will show involved all sorts of ingenious solutions. Thedominant design piecemeal emerged with an architecture which we would recognize shutter and lens arrangement, focusing principles, back plate for film or plates, etc. Butthis design was then modified still further for example, with different lenses, motorizeddrives, flash technology and, in the case of George Eastmans work, to creatinga simpleton and relatively idiot-proof model camera (the Box Brownie) which opened upphotography to a mass market. More recent development has seen a similar fluid phasearound digital imaging devices.The period in which the dominant design emerges and emphasis shifts to imitationand development around it is termed the transitional phase in the Abernathy andUtterback model. Activities move from radical concept development to more focusedefforts geared around product differentiation and to delivering it reliably, cheaply, withhigher quality, extended functionality, etc.As the concept matures still further so incremental innovation becomes moresignificant and emphasis shifts to factors like cost which means efforts within theindustries which grow up around these product areas tend to focus increasingly onrationalization, on scale economies and on process innovation to drive out cost andimprove productivity. harvest-home innovation is increasingly astir(predicate) differentiation throughcustomization to meet the particular needs of specific users. Abernathy and Utterbackterm this the specific phase.*Finally the stage is set for change the scope for innovation becomes smaller andsmaller whilst outside for example, in the laboratories and imaginations of researchscientists new possibilities are emerging. Eventually a new technology emerges whichhas the potential to contend all the by now well-established rules and the game isdisrupted. In the camera case, for example, this is happening with the advent of digitalphotography which is having an impact on cameras and the overall service packagearound how we get, keep and share our photographs. In our chemical case this is happeningwith biotechnology and the emergence of the possibility of no longer needinggiant chemical plants but instead moving to small-scale operations using live organismsgenetically engineered to produce what we need.Table 1.2 sets out the main elements of this model. Although originally developedfor manufactured products the model also works for services for example the earlydays of Internet banking were characterized by a typically fluid phase with manyoptions and models being offered. This gradually moved to a transitional phase, build- ing a dominant design consensus on the package of services offered, the levels andnature of security and privacy support, the interactivity of website, etc. The field hasnow become mature with much of the competition shifting to marginal issues like relativeinterest rates.The pattern can be seen in many studies and its implications for innovationmanagement are important. In particular it helps us understand why establishedorganizations often find it hard to deal with discontinuous change. Organizations buildcapabilities around a particular trajectory and those who may be strong in the later(specific) phase of an established trajectory often find it hard to move into the new one.(The example of the firms which successfully exploited the transistor in the early 1950sis a good case in point many were new ventures, sometimes started by enthusiasts intheir garage, yet they rose to challenge major players in the electronics industry likeRaytheon.39) This is partly a consequence of sunk cost and commitments to existingtechnologies and markets and partly because of psychological and institutional barriers.40 They may respond but in slow fashion and they may make the mistake of well-favored responsibility for the new development to those whose current activities wouldbe threatened by a shift.41Impor tantly, the fluid or ferment phase is characterized by co-existence of old andnew technologies and by rapid improvements of both.41,42 (It is here that the so-calledTABLEsailing ship effect can often be observed, in which a mature technology accelerates inits rate of improvement as a response to a competing new alternative as was the casewith the development of sailing ships in competition with newly emerging steamshiptechnology.43,44Whilst some research suggests existing officers do mischievously, we need to be carefulhere. Not all existing players do badly many of them are able to build on the newtrajectory and deploy/leverage their accumulated knowledge, networks, skills andfinancial assets to enhance their competence through building on the new opportunity.42 Equally whilst it is true that new entrants often small entrepreneurial firms play a strong role in this early phase we should not forget that we see only the successfulplayers. We need to remember that there is a stron g ecological pressure on newentrants which means only the fittest or luckiest survive.It is more helpful to suggest that there is something about the ways in which innovationis managed under these conditions which poses problems. Good practice of thesteady-state kind described above is helpful in the mature phase but can activelymilitate against the penetration and success in the fluid phase of a new technology.46 How doenterprises pick up signals about changes if they take place in areas where they dont patternly do research? How do they understand the needs of a market which doesntexist yet but which will shape the eventual package which becomes the dominantdesign? If they talk to their existing customers the likelihood is that those customerswill tend to ask for more of the same, so which new users should they talk to andhow do they find them?The challenge seems to be to develop ways of managing innovation not only understeady-state but also under the highly uncertain, rapidly evolving and changing conditionswhich result from a dislocation or discontinuity. The kinds of organizationalbehaviour needed here will include things like agility, flexibility, the ability to learn fast,the lack of preconceptions about the ways in which things might evolve, etc. andthese are often associated with new small firms. There are ways in which large andestablished players can also exhibit this kind of behaviour but it does often conflictwith their normal ways of thinking and working.Extensive studies have shown the power of shifting technological boundaries in creatingand transforming industry structures for example, in the case of the typewriter,the computer and the automobile. Such transformations happen relatively often noindustry is immune (see Box 1.3 for an example).Worryingly the source of the technology which destabilizes an industry often comesfrom outside that industry. So even those large incumbent firms which take time andresources to carry out research to try and stay abreast of developments in their field may find that they are wrong-footed by the entry of something which has been developedin a different field. The massive changes in insurance and financial services whichhave characterized the shift to online and telephone provision were largely developedby IT professionals often working outside the original industry.6 In extreme cases wefind what is often termed the not invented here NIH effect, where a firm findsout about a technology but decides against following it up because it does not fitwith their perception of the industry or the likely rate and direction of its technologicaldevelopment. famed examples of this include Kodaks rejection of the Polaroidprocess or Western Unions dismissal of Bells telephone invention. In a famous memodated 1876 the board commented, this telephone has too many shortcomings to beseriously considered as a means of communication. The device is inherently of no valueto us.