Managing innovation Tidd et al. 2005 by 908jn13y


									   Managing innovation
     Tidd et al. 2005
              Lecture: 3
Innovation as a Competitive Advantage
   Competition – to differ in some
   sense in relation to competitors
• Price is just on way to differ!
• It can also be to offering something no one else
  can do; or a novelty in the process of
  production or distribution; with higher
  complexity; offering something that have legal
  protection (patents etc.); better quality; timing
  (offer in the right time); a platform for other to
  develop products from, create a radical
  innovation that rewrites the rules in the sector;
  reconfiguring the parts of the process; adapt
  the product to different market segments
        Types of innovation
• Product innovation – product or service
• Process innovation – changes in the
  ways the are created or distributed
• Position innovation – changes in the
  context in which the products/services are
• Paradigm innovation – changes in the
  underlying mental models which frame
  what the organization does
 Incremental or Radical Innovation
• Degree of novelty (Incremental - “doing what
  we do better”, “new to the enterprise”, “new to
  the world”- Radical)
• On different level (component level – system
• It is the perceived degree of novelty which
  matter – novelty is very much in the eye of the
• When we think of innovation we often talks
  about radical innovations, but incremental,
  discontinuous improvement are at least as
 Innovation as a Knowledge-based
If innovation is to do things that not have been done before
    (that we do not have knowledge about), then you can
    wonder what role established knowledge have in the
• Knowledge to discover and see innovative opportunties
• Knowledge to exploit the ideas with established
    knowledge and routines
• However, it is important to recognize that the innovation
    process is also a knowledge creation process.
• A big challenge is to connect and combine the new with
    the old (important role for the management!)
          A key challenge!
• Christensen Disruptive Innovation
The innovators dilemma is to simultaneously
  managing the steady-state (sustaining)
  and the discontinuous (disruptive) aspect.

To keep up the old and in the same time
 prepare for disruptive innovation
         Sources of innovation
•   New technology
•   New or changed markets
•   Political and institutional changes
•   Contingencies
•   Creative destruction from other innovation
•   Etc..
      Innovation and failures
• There always setbacks and failures in
  innovation processes:
- “fail forward” (Gartner) – use the
  knowledge that comes from failures!
- Learn to tolerate and manage failures!
Ch. 2 Innovation as a Management
“innovation is more than simply coming up with good ideas; it is the
   process of growing them into practical use” Edison
• Search (exploration)
• Select (connect to corporate strategy)
• Implement – Routinize the process
   - Acquire resources and knowledge
   - Execute: problem-solving under uncertainty and ambiguity
   - Launch: market responses
   - Sustain: continuously adoption or revisiting the original idea and
   modifying it – reinnovate
• In each stage there is learning
Observe that the innovation process is not necessarily a linear
   process (A then B then C..) (compare with Van de Ven 1999 and
   Kline & Rosenberg 1986)
            Push or Pull?
• Both!
• Management of innovation is about
  handling the interaction between
  innovative opportunities (“technology
  push”) and market demands (“need pull”)
      Routinizing the innovation
• Can we manage innovation?
• Tidds et al. (2005) view in the book is that the
  role of the management in the process is to
  implement and routinize the process.
• The routines or other established knowledge can
  come from internal or external sources
• Innovation management is a learned capability!
     Ch. 3 Innovation strategy
• What roles have strategies and plans in the
  innovation process?
- Make tacit knowledge explicit; reduce ambiguity;
- Facilitates orientation; convince myself and
  other; creates social commitments
- Tool to require resources
- Trigger action!
Or are strategies and plans something that you
  should follow blindly?
 Rational or incremental strategies
Both have advantages and disadvantages!
• Rationalist strategy (compare with “causation”,
  Sarasvathy 2001): 1) analyse environment 2) determine
  a course of action 3) carry out!
  -problem: Knowledge not necessarily available – to
  acquire knowledge cost
• Incremental strategy: (compare with “effectuation”,
  Sarasvathy 2001): recognize that you have imperfect
  knowledge; Adapt to new information and knowledge: 1)
  Take a (small) step 2) evaluate the effects of that step 3)
  Adjust (if necessary) the objective and decide on the
  next step
  - problem: You can miss more radical innovations
 The Dynamic Capabilities of firms
The strategic dimensions for dynamic change and
  corporate learning in the firm:
• The position: its current endowment of technology and
  intellectual property, its customer base and the external
  innovation system
• The path: strategic alternatives available to the firm and
  attractivness of the opportunities which lies ahead
• The process: the way thing are done in the firm
  (routines or patterns of current practice and learning)
Teece & Pisano (1994)
     Positions: The national and
   competitive environment (ch.4)
• The National Systems of Innovation
- Incentives and Pressures: National demand and
  competitive rivalry
- Competencies in Production and Research
- Institutions (informal and formal “rule-system”:
  Finance, Management and Corporate
- Learning from Foreign Systems of Innovation

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