Lectures Managing Innovation
Inhoud
Lecture 1 – Introducing Topic & Course ................................................................................................. 2
Lecture 2 – Chapter 1 and 3 .................................................................................................................... 5
Lecture 3 – Digital innovation, technological progress and developing innovation strategies ......... 12
Lecture 4 – Building the innovative organization ................................................................................ 18
Lecture 5 – Sources and search strategies of innovation .................................................................... 24
Guest lecture Paperfoam...................................................................................................................... 30
Lecture 6 – Innovation Networks ......................................................................................................... 32
Lecture 7 – Dealing with uncertainty ................................................................................................... 38
Lecture 8 – Creating new products and services ................................................................................. 42
Lecture 9 – Exploiting open innovation and collaboration ................................................................. 45
Lecture 10 – Promoting entrepreneurship and new ventures ............................................................ 47
Lecture 11 – Capturing the business value of innovation ................................................................... 53
Lecture 12 – Capturing social value...................................................................................................... 54
Dus 12 hoorcolleges + 1 gastcollege van Paperfoam
1
,Lecture 1 – Introducing Topic & Course
Introduction to Innovation: Why?
Innovation is both about :
1. A Result: an innovation (noun)
2. A Process: to innovate (verb)
- ‘Most’ innovations have collateral damage, we pay a price for our innovation efforts.
o Examples: nuclear physics (Atom bomb), Medicine (side effects of cure). So, why
would society want or need innovation?
- Most innovations are done by (people in) organisations
o Leading to a combination of ‘new’: products/services/processes/organisational
structures/administrative/managerial/business model/m&a’s
- Average success rate = less than 30%. This means that 70% fails. If the success rate is this
limited, why would organisations continue to innovate?
Societies without innovation: are poor & primitive -> This is a Western Perspective = refers to times
that the Western world thought they were the only innovators. The reasons why this may be is
explained by the book The Human web (McNeill & McNeill) -> degree to which areas of the world are
linked with other areas. In earlier times, innovation was limited by geographical boundaries
(Australia, Sub-Sahara Africa); areas were isolated from rest of the world. After 1200 this changed
which let to more innovation because areas could share ideas about innovation.
- Innovation also improves wellbeing / burn-out / gross national happiness
- We must innovate, not only focus on technological part
Organisations without innovation would continue with ‘business as usual;’. For how long would such
an organisation survive?
- Organisations that never (hardly) innovated; Example = Roman Catholic Church
Organisations innovate:
- Reacting to both:
o New insights & ideas among C-suite/employees
o Changes in (wider) environment
▪ E.g. PESTEL factors
▪ What does competition do? What happens in society?
o Trying to change their environment in order to stay viable: risky environments.
So, innovation is just an experiment that organizations do.
Organizations innovate as reaction to changes in and growing
1960 Efficiency
demands from (wider) environment (Bolwijn & Kumpe + 1970 Quality
Lekkerkerk) 1980 Flexibility
1990 Innovation
See how the demands from the environment have changed 2000 Sustainable (energy/material)
over the years in the figure -----------------------------------------> 2010 Socially responsible quality of
work
2020 Ethically justifiable
2
,What is innovation?
Innovation = ‘Neue kombination’ (Schumpeter):
(1) New arrangement of known elements
(2) One new element + existing elements (larger challenge)
Example = E-bike (idea of bike with some energy to drive you was already there (Sparta met),
Breaker, Headlamp
New/Neue
- Always: new for organization that develops/implements (inside)
- Sometimes: new for world/market/niche (outside)
Both are relevant for innovation/change management
Example: when hiking & camping like this. You need a torch; how to innovate?
= Recombining already existing ideas but when this new combination makes sense, it will be sold.
So not really interested in something innovative, but interested in something that solves a problem
in a better way than before.
We see different types of innovation: process / ICT / administration / product, service / marketing /
social / sustainable / technological / re-innovation. Do these distinctions matter for management?
Example: Breaker. Different product; healthy snack compared to alternatives like Mars. It is
different from how yoghurt was eaten before as a dessert. So from this view it is a new product,
places different in the market. But on the other hand, the processes/machines in the factory also
have to be adapted to be able to make this new product. So not only a product innovation, also in
need of a process innovation. Moreover, they also needed to develop a new channel to the market
because it was sold at petrol stations (they didn’t sell dairy products there before). So it required 3
types of innovation (product/process/marketing). This shows that it is quite hard to distinguish
between the categories of innovation. For managers it is very much more interesting to question
what types of innovation are needed in a business project to make it a success. So is a process
innovation needed, how are we going to do that?
Example: Senseo. Innovative coffee pads + but also machine that can deal with these pads.
So that’s two value streams. It was a solution to standard coffee makers that made too much coffee
at once.
Degree of Newness & Neue Kombination
3 different types:
- Incremental
o No new elements, new way of combining
o Inside the box
- Radical
o Maybe 1 new element, creatively combined with existing
o Out of the box
- Breakthrough/Disruptive
o Must have new
element/technology
o (Some triggered Kondratieff
newness)
o Why go in a box anyway?
See image ------------>
3
, There is no SI-unit for the degree of Newness
Patent law phrase: ‘not obvious for the field’. So that is the only semi-objectified way of
measuring newness in the field. Is it new for us and for the market? Keep in mind that how new
something is; determines how we approach an innovation project.
Different styles of problem solver (Kirton):
- Adaptors: solve problem within existing knowledge
o Incremental
- Innovators: provide new solution
o Radical, breakthrough
- A validated tool exists to measure the style of an individual. It gives an IQ-like number.
An organization needs both!
- So this shows that the individual level (kind of people, preferred problem solving style) is
also relevant for innovation
Difference between Kaizen & Innovation for management purpose:
- Kaizen/continuous improvement
o Part of each job (belong to a job but don’t differ between units)
o Mostly process or manufacturability
o Introduce within boundary of group/department
- Innovation = projectbased
o Serious money & manpower
o Impact beyond one group/unit (so more impact than Kaizen/individual job)
o Business case/project proposal
o Approved first by higher management & monitored in portfolio
Difference invention & innovation
- Invention = the idea
- Innovation = ‘the idea’ being processed by an innovation project
Some define:
- innovation = the successful introduction of invention
BUT ideas/projects are killed (long) before introduction, then ‘innovations’ cannot fail, only
‘introductions’. So: useless definition (says Lekkerkerk).
Differences between: Research, Development, Design, Engineering (we see these words a lot in
innovation literature)
- Research = basic/fundamental, applied
- Development = close to applied research; towards introduction
- Design/engineering: either the outer appearance of the product or GUI. It is the last phase
towards introducing the innovation.
Those processes are somewhat sequential
The basic difference = time-to-market. Grafeen 2004 => some practical applications now + new
process. Time to market from ideas are very different.
Example: raining trousers. Integrate shoes and trousers => ‘Beak pants’. Time-to-market was 4 years
because of product managers that left etc. Concept = user as innovator. See slides 39-40.
4
Inhoud
Lecture 1 – Introducing Topic & Course ................................................................................................. 2
Lecture 2 – Chapter 1 and 3 .................................................................................................................... 5
Lecture 3 – Digital innovation, technological progress and developing innovation strategies ......... 12
Lecture 4 – Building the innovative organization ................................................................................ 18
Lecture 5 – Sources and search strategies of innovation .................................................................... 24
Guest lecture Paperfoam...................................................................................................................... 30
Lecture 6 – Innovation Networks ......................................................................................................... 32
Lecture 7 – Dealing with uncertainty ................................................................................................... 38
Lecture 8 – Creating new products and services ................................................................................. 42
Lecture 9 – Exploiting open innovation and collaboration ................................................................. 45
Lecture 10 – Promoting entrepreneurship and new ventures ............................................................ 47
Lecture 11 – Capturing the business value of innovation ................................................................... 53
Lecture 12 – Capturing social value...................................................................................................... 54
Dus 12 hoorcolleges + 1 gastcollege van Paperfoam
1
,Lecture 1 – Introducing Topic & Course
Introduction to Innovation: Why?
Innovation is both about :
1. A Result: an innovation (noun)
2. A Process: to innovate (verb)
- ‘Most’ innovations have collateral damage, we pay a price for our innovation efforts.
o Examples: nuclear physics (Atom bomb), Medicine (side effects of cure). So, why
would society want or need innovation?
- Most innovations are done by (people in) organisations
o Leading to a combination of ‘new’: products/services/processes/organisational
structures/administrative/managerial/business model/m&a’s
- Average success rate = less than 30%. This means that 70% fails. If the success rate is this
limited, why would organisations continue to innovate?
Societies without innovation: are poor & primitive -> This is a Western Perspective = refers to times
that the Western world thought they were the only innovators. The reasons why this may be is
explained by the book The Human web (McNeill & McNeill) -> degree to which areas of the world are
linked with other areas. In earlier times, innovation was limited by geographical boundaries
(Australia, Sub-Sahara Africa); areas were isolated from rest of the world. After 1200 this changed
which let to more innovation because areas could share ideas about innovation.
- Innovation also improves wellbeing / burn-out / gross national happiness
- We must innovate, not only focus on technological part
Organisations without innovation would continue with ‘business as usual;’. For how long would such
an organisation survive?
- Organisations that never (hardly) innovated; Example = Roman Catholic Church
Organisations innovate:
- Reacting to both:
o New insights & ideas among C-suite/employees
o Changes in (wider) environment
▪ E.g. PESTEL factors
▪ What does competition do? What happens in society?
o Trying to change their environment in order to stay viable: risky environments.
So, innovation is just an experiment that organizations do.
Organizations innovate as reaction to changes in and growing
1960 Efficiency
demands from (wider) environment (Bolwijn & Kumpe + 1970 Quality
Lekkerkerk) 1980 Flexibility
1990 Innovation
See how the demands from the environment have changed 2000 Sustainable (energy/material)
over the years in the figure -----------------------------------------> 2010 Socially responsible quality of
work
2020 Ethically justifiable
2
,What is innovation?
Innovation = ‘Neue kombination’ (Schumpeter):
(1) New arrangement of known elements
(2) One new element + existing elements (larger challenge)
Example = E-bike (idea of bike with some energy to drive you was already there (Sparta met),
Breaker, Headlamp
New/Neue
- Always: new for organization that develops/implements (inside)
- Sometimes: new for world/market/niche (outside)
Both are relevant for innovation/change management
Example: when hiking & camping like this. You need a torch; how to innovate?
= Recombining already existing ideas but when this new combination makes sense, it will be sold.
So not really interested in something innovative, but interested in something that solves a problem
in a better way than before.
We see different types of innovation: process / ICT / administration / product, service / marketing /
social / sustainable / technological / re-innovation. Do these distinctions matter for management?
Example: Breaker. Different product; healthy snack compared to alternatives like Mars. It is
different from how yoghurt was eaten before as a dessert. So from this view it is a new product,
places different in the market. But on the other hand, the processes/machines in the factory also
have to be adapted to be able to make this new product. So not only a product innovation, also in
need of a process innovation. Moreover, they also needed to develop a new channel to the market
because it was sold at petrol stations (they didn’t sell dairy products there before). So it required 3
types of innovation (product/process/marketing). This shows that it is quite hard to distinguish
between the categories of innovation. For managers it is very much more interesting to question
what types of innovation are needed in a business project to make it a success. So is a process
innovation needed, how are we going to do that?
Example: Senseo. Innovative coffee pads + but also machine that can deal with these pads.
So that’s two value streams. It was a solution to standard coffee makers that made too much coffee
at once.
Degree of Newness & Neue Kombination
3 different types:
- Incremental
o No new elements, new way of combining
o Inside the box
- Radical
o Maybe 1 new element, creatively combined with existing
o Out of the box
- Breakthrough/Disruptive
o Must have new
element/technology
o (Some triggered Kondratieff
newness)
o Why go in a box anyway?
See image ------------>
3
, There is no SI-unit for the degree of Newness
Patent law phrase: ‘not obvious for the field’. So that is the only semi-objectified way of
measuring newness in the field. Is it new for us and for the market? Keep in mind that how new
something is; determines how we approach an innovation project.
Different styles of problem solver (Kirton):
- Adaptors: solve problem within existing knowledge
o Incremental
- Innovators: provide new solution
o Radical, breakthrough
- A validated tool exists to measure the style of an individual. It gives an IQ-like number.
An organization needs both!
- So this shows that the individual level (kind of people, preferred problem solving style) is
also relevant for innovation
Difference between Kaizen & Innovation for management purpose:
- Kaizen/continuous improvement
o Part of each job (belong to a job but don’t differ between units)
o Mostly process or manufacturability
o Introduce within boundary of group/department
- Innovation = projectbased
o Serious money & manpower
o Impact beyond one group/unit (so more impact than Kaizen/individual job)
o Business case/project proposal
o Approved first by higher management & monitored in portfolio
Difference invention & innovation
- Invention = the idea
- Innovation = ‘the idea’ being processed by an innovation project
Some define:
- innovation = the successful introduction of invention
BUT ideas/projects are killed (long) before introduction, then ‘innovations’ cannot fail, only
‘introductions’. So: useless definition (says Lekkerkerk).
Differences between: Research, Development, Design, Engineering (we see these words a lot in
innovation literature)
- Research = basic/fundamental, applied
- Development = close to applied research; towards introduction
- Design/engineering: either the outer appearance of the product or GUI. It is the last phase
towards introducing the innovation.
Those processes are somewhat sequential
The basic difference = time-to-market. Grafeen 2004 => some practical applications now + new
process. Time to market from ideas are very different.
Example: raining trousers. Integrate shoes and trousers => ‘Beak pants’. Time-to-market was 4 years
because of product managers that left etc. Concept = user as innovator. See slides 39-40.
4
