Managing Innovation

M.Sc. Irma Bejarano
24.04.2012

Objectives
• Why Management Innovation maters?
o Global tendencies and benefits
o Which are the most innovative countries and companies.
• What is Management Innovation?
o Concept and implications
o Types of innovations
o Modes of innovations
• How to become a Manager Innovator?
o The innovation challenge
o The innovation process

1.- Why Managing Innovation
matters?

Which are the most innovative
countries?
1 US
2 Germany
3 UK
4 Japan
5 France
6 Switzerland
7 Singapore
8 Canada
Global Innovation Index (GII)
1 Policies
2 Human Capacity
3 Infrastructure
4 Technological Sophistication
5 Markets and Capital
1 Knowledge
2 Competitiveness
3 Wealth

Are these countries also the
richest?
1 US
2 Germany
3 UK
4 Japan
5 France
6 Switzerland
7 Singapore
8 Canada
YES or NOT?

Which are the leading
innovative companies?
Most Innovative
Companies Ranking
Most Known for its
Innovative…..
1 Apple Products (52%)
2 Google Customer
Experience (26%)
3 Toyota Motor Processes (36%)
4 General Electric Processes (43%)
5 Microsoft Products (26%)
6 Tata Group Products (58%)
7 Nintendo Products (63%)
Business Week & BCG
Ranking (04-07)
 2,950 senior executives
 3 yr stock returns
 revenue growth
 margin growth

Are these companies also the
richest?
Most Innovative
Companies Ranking
1 Apple
2 Google
3 Toyota Motor
4 General Electric
5 Microsoft
6 Tata Group
7 Nintendo
 Business Week & BCG
Ranking (04-07): 19% increase
their revenue.
 Innovaro: Sustainable growth
in their price per share in the last
seven years
YES or NOT?

Managing Innovation=
Economic Progress
• The world economic progress has been lead by key innovations
and inventions. Changed the way to do businesses.
Joseph Schumpter,
The “Godfather of
Innovation studies"
• Entrepreneurship + innovation: capitalism and
economic progress.

2.-What is Managing
Innovation?
 Successful exploitation of new ideas.
 leading to the creation of a new product
and service.
 It is more than just generating good
ideas
 it is the process of growing them into
practical use and bringing them to the
market.

Managing Innovation:
Change
Managing innovation in a company involves organizational
changes:
 Traditional management principles,
processes and practices.
 Alters the way the work of
management is performed:
• Setting goals
• laying out plans
• Motivating and aligning efforts
• Coordinating activities, etc

The 4p’s of Innovation
Process
Product
Position
Business
Model
INNOVATION
(incremental……radical) (incremental……radical)
(incremental……radical)(incremental……radical)

Exercise: Types of
Innovation
Nissan Leaf
A1: Product
Innovation
E1:
A2: Process
Innovation
E2:
A3: Position
E3:
A4: Business
Model
Innovation
E4:
1 2
3 4

Modes of Innovation
1
2
Incremental
Innovation
Quantum
Innovation
3
Disruptive
Innovation
Clayton
Christensen

Exercise: Modes of Innovation
A1: Quantum
Innovation
A2: Incremental
Innovation
A3: Quantum
Innovation
A5: Disruptive
Innovation
1 2 3
A1:
A2:
A3:
A4: A5:
A4: Incremental
Innovation

3.- How to Become a
Manager Innovator?

The Innovation Challenge
“The best innovators aren’t lone geniuses.
They are people how can take an idea that is obvious in
one context
The best companies have learnt to
systematize that process”
(Hagardon, Sutton 1990)
and apply it in not-so-obvious ways to a
different context.

The Innovation Challenge
 Out of the box thinking, change in management orthodoxies.
 Part of the core business process.
 Process that generates innovations continually.
 Have a clear structure, be organized and managed.
 Innovative organization infrastructure.
 Design a clear innovation strategy.

The Innovative Organization
 Culture of focused creativity, leadership and motivation.
 Entrepreneurial talent.
 Multifunctional talented team-works.
 Information-knowledge infrastructure.
 R&D procedures and infrastructure.
 Project portfolio management.
.

Which functional areas contribute
to the process?
Marketing R&D
Operations Human
Resources
Finance
• Identify customer’s
needs.
• Dev. concepts and
products.
• Pricing and positioning
strategies.
• Launch of products.
• Development of novel
products aligned with
customer needs.
• Process re-
engineering
• ROI Calculations
and pricing
strategies.
• Hiring, developing and
motivating HR.
• Development of a
culture of innovation

Ideas
“filtered out”
Ideas
Capturing
the Benefits
Rejected concepts
Ideas coming from
open innovation
Screening
and
selection of
ideas
Idea
Generation
Concepts…
Implementati
on-
Bring to the
maket
Projects…
MARKET
• New product
• New services
• New Process
• New Business Processes
Rejected
Projects
• Company
• Society
• World
Ideas… Value Generation…

• Changes begins, looking for customer pains.
• Where companies look for inspiration.
• Find what triggers the innovation process.
• Soft management, creative part.
• Spontaneous, unexpected, accidents.
• Formal methodologies or techniques.

Knowledge Pull
Existing technology or a defined
service and tries to find a market for
it.
Knowledge Push
Creation of a new technology or
service for an identified market.
Users as Innovators
Techniques as innovation blitz and
focus groups to get close to
customers.
Recombinant Innovation
Transferring or combining old ideas or
products in new context or mkts.

MKT
Research
• Cross Functional
Teams: R&D, MKT
• Creativity
Techniques:
 Creativity Sessions
 Brainstorming
 Innovation Blitz
 Morphology Charts
• Full Description of the
products/services
 Principal Characteristics
 Features, Scopes
 Competitive Advantage
 Target market
 Differentiations offer
 Initial Price
 Commercialization Strategy
• R&D
• Physical Products
• MKT Methodologies:
 Interviews
 Surveys online
 Testing prototypes
with end customers
 Focus groups
 QDF
• Investment
• ROI
• Mkt size potentia
• Viability
• Design Procedur
• Quantitative
Screening of a
large number of
ideas

Project Assessment
& Selection
Product
Development
Product
Commercialization
• Portfolio
management
 Selection and
rejection of projects
 Business
Attractiveness
 Risk
 Cumulative Cost
• Physical products
• Design of products
• Manufacturing
procedures
• Testing
• Launching
• Marketing
• Commercializing

• The ultimate purpose of innovation: create value.
 Commercial success
 Market share
 Cost reduction
 Knowledge generation
 Customer’s lifestyles improvement
 Positive changes in society, patents, etc
• They are reflected in:
 Bottom line
 Specific KPI’s
 Economic development: price/earning ratio

Conclusion
“We have reached the end of incrementalism
Only those companies that are capable of
creating industry revolutions
will prosper in the new economy.”
-Gary Hamel

Managing Innovation

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