SIM Strategic Innovation management Week 1 – Introduction Sources of innovation. Presentatie titel. Rotterdam, 00 januari 2007. Rotterdam, 2011. Agenda week 1. Introduction Class & lecturer Materials Weekly overview Instruction method Grading Course content Assignment
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SIMStrategic Innovation management Week 1 – Introduction Sources of innovation Presentatie titel Rotterdam, 00 januari 2007 Rotterdam, 2011
Agenda week 1 • Introduction • Class & lecturer • Materials • Weekly overview • Instruction method • Grading • Course content • Assignment • Lecture chapters 1 and 2
Materials Textbook (not mandatory): • Title: Strategic management of technological innovation • Author: Melissa A. Schilling • Publisher: McGraw-Hill • ISBN: 978-007-128957-3 PPT’s and all other course information can be found on the Educommons website: http://www.rbs-educommons.nl/ibms-year-3/strategic-innovation-management
Instruction method • 2 hours per week lecture & discussion of articles • 2 hours per week group work (finalising the report as started in block 1 C&CM) Group assignments: • 4 students per group; same groups as in C&CM • Plagiarism will be highly punished and will go directly to the exam board (check in Ephorus) • Individual assignments will not be accepted • Group members who have not contributed equally or have not attended the coaching sessions will not pass • All reports are to be submitted to the lecturer during classes; submission of reports to your lecturer by e-mail will not be accepted or tolerated.
Grading • 60 % report (min. 5,000 words) • 40% case exam • All elements of the module must be completed! • Obtained marks are only valid for this academic year (2011-2012).
Course content • Formulating strategy • Defining the strategic direction • Choosing innovation projects • Collaboration strategies • Protecting innovation • Industry dynamics • Sources of innovation • Types and patterns Strategic Innovation management • Implementation • Organizing for innovation
Assignment / report • This second part of your report covers the conclusions and recommendations (1) and the implementation plan (2). Min. 5,000 words. • Issues to be discussed: • Sources of innovation (1) • Types and patterns of innovation (1) • Choosing innovation projects – strategic options (1) • Collaboration strategies (1) • Protecting innovation (1) • Innovation strategy (1) • Organizing for innovation (2): e.g. structure & culture, internationalization and commercialization • Timing and budget (2)
SIM Week 1 Chapter 1 – Introduction Chapter 2 - Sources of innovation Presentatie titel Rotterdam, 00 januari 2007 Rotterdam, 2011
Importance of Innovation Question: can you name an innovation which inspires you?
Importance of Innovation How about? Umbrellas which can be used at wind force 10?
Importance of Innovation Senz umbrellas can be used at wind force 10…. Video link Senz
Importance of Innovation How about? Transfer of offshore personell as easy as crossing the street?
Importance of Innovation Transfer of offshore personell can be as easy as crossing the street… This will be one of the cases in the guest lectures
Importance of Innovation How about? Boiled water which is directly available?
Importance of Innovation Boiled water can be easily available…
Importance of Innovation How about? Easily surfing the web, checking email, watching movies, and reading books?
Importance of Innovation You all know that surfing the web, checking email, watching movies, and reading books can be easy…
Importance of Innovation How about? No drinking water shortage in Africa?
Importance of Innovation Solution to water shortages: The WaterPyramid is used in tropical remote regions to desalinate saline water and to harvest rainwater.
Importance of Innovation It’s all about innovation! But what’s the exact definition? And what are the sources for innovation?
Importance of Innovation • Definition? • Innovation is the practical implementation of an idea into a new device or process
Importance of Innovation • Technological innovation is the single most important driver of competitive success in many industries • Many firms earn over one-third of sales on products developed within last five years. • Product innovations help firms protect margins by offering new, differentiated features. • Process innovations help make manufacturing more efficient.
Importance of Innovation • Advances in informationtechnologyhave enabled faster innovation • CAD/CAM systems enable rapid design and shorter production runs • Other consequences: • Shorter product lifecycles (more rapid product obsolescence) • More rapid new product introductions • Greater market segmentation
Innovation: The Importance of Strategy • Innovation funnel: most innovative ideas do not become successful new products.
Research brief: The global innovation 1000 R&D spending as a % of sales rose again in 2010
Research brief: The global innovation 1000 Who are the big spenders?
Research brief: The global innovation 1000 Who are the most innovative companies according to their peers?
Research brief: The global innovation 1000 3 Innovation strategies; based on the approach to: • incremental versus breakthrough innovation • the role that end customers play in defining future product needs • Need Seekers actively and directly engage both current and potential customers to help shape new products and services based on superior end-user understanding. These companies often address unarticulated needs and then work to be first to market with the resulting new products and services.
Research brief: The global innovation 1000 Innovation strategies (continued): • Market Readers closely monitor both their customers and competitors, but they maintain a more cautious approach. They focus largely on creating value through incremental innovations to their products and being “fast followers” in the marketplace. • Technology Drivers follow the direction suggested by their technological capabilities, leveraging their sustained investments in R&D to drive both breakthrough innovation and incremental change. They often seek to solve the unarticulated needs of their customers through leading-edge new technology.
Research brief: The global innovation 1000 Discussion questions (week 1 - 1st lecture): • Name one example per innovation strategy (need seekers etc) of a company which follows this strategy and explain how • Describe the findings regarding need seekers on pages 7-8. Which achievement do they demonstrate? • Explain the relatively small amount of R&D spending in India/China (exhibit E) although their growth rate is high? • Describe the technology driver strategy as executed by HP and the way in which they balance short and long term activities • Explain the three main steps for success on the final page
Chapter 2 SOURCES OF INNOVATION
Overview • Innovation can arise from many different sources and the linkages between them. inventors, users etc.
Overview • Class discussion: which source of those listed below was the primary one for the innovation in your C&CM report? inventors, users etc.
Creativity Creativity: the ability to produce work that is useful and novel. Individual creativity is a function of: Intellectual abilities (e.g. ability to articulate ideas) Knowledge (e.g. understand field) Style of thinking (e.g. choose to think in novel ways) Personality (e.g. confidence in own capabilities) Motivation (e.g. rely on intrinsic motivation) Environment (e.g. support and rewards for creative ideas)
Creativity Organizational Creativity is a function of: Creativity of individuals within the organization Social processes and contextual factors that shape how those individuals interact and behave Methods of encouraging/tapping organizational creativity: Idea collection systems (e.g. suggestion box) Creativity training programs Culture that encourages creativity Example: link to Google
Transforming Creativity into Innovation • Innovation by Users • Users have a deep understanding of their own needs, and motivation to fulfill them. E.g. Laser sailboat developed by Olympic sailors
Transforming Creativity into Innovation • Research and Development by firms • Research refers to both basic and applied research. • Basic research aims at increasing understanding of a topic or field without an immediate commercial application in mind. • Applied research aims at increasing understanding of a topic or field to meet a specific need. • Development refers to activities that apply knowledge to produce useful devices, materials, or processes.
Transforming Creativity into Innovation • Research and Development by firms • Demand Pull approach: innovation originates with unmet customer need (like need seekers) Customer suggestions invention manufacturing • Science Push approach: innovation proceeds linearly (like technology drivers) Scientific discovery invention manufacturing marketing However, research shows that innovation is not that simple, and may originate from a variety of sources and follow a variety of paths.
Transforming Creativity into Innovation • Firm Linkages with Customers, Suppliers, Competitors, and Complementary firms
Transforming Creativity into Innovation • Firm Linkages with Customers, Suppliers, Competitors, and Complementors • External and internal sources are complements • Firms with in-house R&D also heaviest users of external collaboration networks • In-house R&D may help firm build absorptive capacitythat enables it to better use information obtained externally.
Transforming Creativity into Innovation Universities and Government-Funded Research Governments invest in research through: Their own laboratories Science parks and incubators Grants for other public or private research organizations Fig. 2.6: Percent of R&D Funds by Source and Country, Selected Years (2004-2006)
Innovation in Collaborative Networks • Collaborations include (but are not limited to): • Joint ventures • Licensing and second-sourcing agreements • Research associations • Government-sponsored joint research programs • Value-added networks for technical and scientific exchange • Informal networks • Collaborative networks are especially important in high-technology sectors where individual firms rarely possess all necessary resources and capabilities
Second lecture week 1: group coaching • Coaching sessions for groups (week 1 – 2nd lecture) • Schedule to be announced by your lecturer • Attendance is mandatory • To be discussed: • Your report as handed in for C&CM; please put a hard copy in the pigeon hole of your SIM lecturer a.s.a.p. • The strategy as chosen by the company • Planning weeks 2-7 • Strengths and weaknesses of your group