INNOVATION MANAGEMENT
Index
0. Glossary......................................................................................................................................................... 2
1. Introduction to Innovation ........................................................................................................................... 3
2. Patterns of Innovation.................................................................................................................................. 3
a. Industry evolution – Utterback and Abernathy Model ................................................................................. 4
b. “The Innovator’s Dilemma” – Christensen Model ......................................................................................... 5
3. Sources of Innovation ................................................................................................................................... 5
a. Functional sources of knowledge along the value chain ............................................................................... 6
b. Hybrid innovation – co-creation & crowdsourcing ....................................................................................... 6
c. Open innovation (Henry Chesbrough) .......................................................................................................... 6
4. Organizational Incentives for Innovation .................................................................................................... 7
5. Organizing for Innovation............................................................................................................................. 7
a. Company size ................................................................................................................................................ 7
b. Company structure ........................................................................................................................................ 7
c. Company culture and in-house silicon valley ................................................................................................ 8
6. Innovation Strategy ...................................................................................................................................... 9
a. Technology analysis – S-Curve of technology improvement ......................................................................... 9
b. Demand analysis – Delphi analysis .............................................................................................................. 10
c. Competition analysis – Returns to Innovation (Teece 1986) ...................................................................... 10
d. Developing innovation strategies – Technology Portfolio (McKinsey) ........................................................ 10
7. Diffusion and Commercialization of Innovation ........................................................................................ 11
a. Diffusion – Rogers’ Adoption Curve & Crossing the Chasm (Moore) .......................................................... 11
b. Commercialization – mode, technology, and timing................................................................................... 11
, 0. Glossary
Complementary assets are assets that complement an innovation, including production capacity, sales channels
(radical innovation), brand recognition, and infrastructure (e.g., charging stations).
Creative destruction (Schumpeter) is the key driver of progress in capitalist societies. It denotes the emergence
of new technological discontinuity (S-curves) that overturns existing competitive structures of industries,
creating new leaders and losers.
Development (in R&D) denotes the application of knowledge to useful devices, materials, or processes.
Disruptive (radical or evolutionary) innovations denote the introduction of completely new approaches that
have the potential to create a new industry or transform an existing one. They initially offer little performance
(i.e., low quality) but plenty in terms of cheapness, convenience, and ease of use (e.g., 3D printers).
Dominant design: Consensus about desired product attributes, driven by increasing returns to adoption (learning
effects and network externalities). Sometimes dominant designs are stipulated by regulators (e.g., USB-C,
network infrastructure).
Evolutionary innovations are disruptive innovations that are formed by the convergence of previously separate
research areas (e.g., electronic banking).
Innovation is the exploitation of a former invention. It can also be conceived as the “original recombination of
knowledge components” (Nahapiet & Ghoshal, 1998), that is, innovation can pertain to one or more components
of the system or the linkages between them.
Path dependence: A concept from social sciences, including (1) multiple initial alternatives, (2) chaotic (non-
deterministic) junctures, and (3) a stable phase after junctures (lock-in, positive feedback). Relatively small
historical events can have a great impact on the final outcome because they determine the “path” a firm takes
after critical junctures.
Process innovation pertains to techniques of producing and marketing. Its primary objective is improving the
efficiency and effectiveness of operations, reducing costs, and allowing the company to compete for prices.
Product innovation pertains to the outputs of an organization, including radical or incremental change.
Radical (revolutionary) innovations are disruptive innovations that combine newness (new to the world) and
differentness, i.e., exceptional difference from existing products and services (e.g., digital photography,
semiconductors).
Research (in R&D) refers to basic (acquires new knowledge) or applied research (explores specific needs).
Sustaining (incremental) innovations are linear improvements of existing technology.
Index
0. Glossary......................................................................................................................................................... 2
1. Introduction to Innovation ........................................................................................................................... 3
2. Patterns of Innovation.................................................................................................................................. 3
a. Industry evolution – Utterback and Abernathy Model ................................................................................. 4
b. “The Innovator’s Dilemma” – Christensen Model ......................................................................................... 5
3. Sources of Innovation ................................................................................................................................... 5
a. Functional sources of knowledge along the value chain ............................................................................... 6
b. Hybrid innovation – co-creation & crowdsourcing ....................................................................................... 6
c. Open innovation (Henry Chesbrough) .......................................................................................................... 6
4. Organizational Incentives for Innovation .................................................................................................... 7
5. Organizing for Innovation............................................................................................................................. 7
a. Company size ................................................................................................................................................ 7
b. Company structure ........................................................................................................................................ 7
c. Company culture and in-house silicon valley ................................................................................................ 8
6. Innovation Strategy ...................................................................................................................................... 9
a. Technology analysis – S-Curve of technology improvement ......................................................................... 9
b. Demand analysis – Delphi analysis .............................................................................................................. 10
c. Competition analysis – Returns to Innovation (Teece 1986) ...................................................................... 10
d. Developing innovation strategies – Technology Portfolio (McKinsey) ........................................................ 10
7. Diffusion and Commercialization of Innovation ........................................................................................ 11
a. Diffusion – Rogers’ Adoption Curve & Crossing the Chasm (Moore) .......................................................... 11
b. Commercialization – mode, technology, and timing................................................................................... 11
, 0. Glossary
Complementary assets are assets that complement an innovation, including production capacity, sales channels
(radical innovation), brand recognition, and infrastructure (e.g., charging stations).
Creative destruction (Schumpeter) is the key driver of progress in capitalist societies. It denotes the emergence
of new technological discontinuity (S-curves) that overturns existing competitive structures of industries,
creating new leaders and losers.
Development (in R&D) denotes the application of knowledge to useful devices, materials, or processes.
Disruptive (radical or evolutionary) innovations denote the introduction of completely new approaches that
have the potential to create a new industry or transform an existing one. They initially offer little performance
(i.e., low quality) but plenty in terms of cheapness, convenience, and ease of use (e.g., 3D printers).
Dominant design: Consensus about desired product attributes, driven by increasing returns to adoption (learning
effects and network externalities). Sometimes dominant designs are stipulated by regulators (e.g., USB-C,
network infrastructure).
Evolutionary innovations are disruptive innovations that are formed by the convergence of previously separate
research areas (e.g., electronic banking).
Innovation is the exploitation of a former invention. It can also be conceived as the “original recombination of
knowledge components” (Nahapiet & Ghoshal, 1998), that is, innovation can pertain to one or more components
of the system or the linkages between them.
Path dependence: A concept from social sciences, including (1) multiple initial alternatives, (2) chaotic (non-
deterministic) junctures, and (3) a stable phase after junctures (lock-in, positive feedback). Relatively small
historical events can have a great impact on the final outcome because they determine the “path” a firm takes
after critical junctures.
Process innovation pertains to techniques of producing and marketing. Its primary objective is improving the
efficiency and effectiveness of operations, reducing costs, and allowing the company to compete for prices.
Product innovation pertains to the outputs of an organization, including radical or incremental change.
Radical (revolutionary) innovations are disruptive innovations that combine newness (new to the world) and
differentness, i.e., exceptional difference from existing products and services (e.g., digital photography,
semiconductors).
Research (in R&D) refers to basic (acquires new knowledge) or applied research (explores specific needs).
Sustaining (incremental) innovations are linear improvements of existing technology.
