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Notes on Management of Technology &

Innovation (di erent sources)
vsaraf (50) (/@vsaraf)in #technology (/trending/technology) • 2 years
ago

Compilation from all over the World Wide Web!

De nition of Technological Environment:-

“Technological Environment means the development in the eld of

technology which affects business by new inventions of productions and
other improvements in techniques to perform the business

External factors in technology that impact business operations. changes n

technology affect how a company will do business. A business may have to
dramatically change their operating strategy as a result of changes in the
technological environment.

Technology is a much broader concept than many people today think it is.
It is the application of knowledge to the world that allows people to affect
their environment by controlling or changing it.

Notes: Changes in the technological environment have had some of the

most dramatic effects on business. A company may be thoroughly
committed to a particular type of technology and may have made major
investments in equipment and training only to new.

Social Impact of technology:

1. Technology reaches people through business

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 2. High expectation of consumer
3. System complexity
4. Social change
5. Technological phases

TECHNOLOGY and Economy

1. Increased productivity -> quality and quantity

2. Need to spend on research and development
3. Technology transfer
4. Jobs tend to become more intellectual
5. Problem of techno structure
6. Need for multi professional
7. Increased regulation and stiff opposition
8. Rise and decline of product and organization
9. Insatiable demand of capital

Main problems and issues facing technology environment and policy in

India

Heavy dominance of government in technology dept.

Condition of stagnation in technology research
Low rate of technology commercialiation
Weak intellectual regime
Limited import of technology due to restriction
Inferior proposition of Indian partner
Import of outdated and inappropriate technology
Little emphasis on technology assimilation and absorption

Technological Change
Technological change is improvement in the 'art' of making products or
developing processes.
A technological product is just something that man created using the
application of knowledge to improve a person's life, environment or
society.

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A technological process is a means to make and improve products and
services. For example, the traditional manner of 'printing' magazines
involved a mechanical printing press.

Technological Change is a term that is used to describe the overall process

of invention, innovation, diffusion of technology or process. The term is
synonymous with technological development, achievement and process.
In essence TC is the invention of a technology, the continuous process of
improving technology and its diffusion throughout industry or society. In
short, technological change is based on both better or more technology.

Process:

1. Technology Creation
2. Technology monitoring
3. Technology assessment
4. Technology transfer
5. Technology acceptance
6. Technology utilization
7. Technology maturity
8. Technology decline

Technology Creation: This phase involves creating and Generation of new

technologies. This phase involves:
a. Creativity and Invention
b. Innovation
c. Senior management commitment to technology creating and generation
d. Developing requisite and supportive corporate culture for promoting
technology creating and generation

Technology Monitoring: This phase calls for monitoring technology trends

and changes before implementing new technology. It involves following
activities:
a. Installing and developing information systems for monitoring
technological trends and changes
b. Competitive analysis to understand competitiveness provided by
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existing and prospective technologies
c. Customer and Supplier interfaces to understand market and
technological changes
d. People links to understand market trends and technological changes.

Technology assessment: This phase involves understanding, integration.

Involves following activity:
a. Understanding the direction of markets in terms of technology.
b. Integration of technology and business planning
c. Customer interfaces to assess the commercial feasibility of prospective
technologies
d. Assessing contributions of technology projects to business strategy.
Technology Transfer: This phase leads to transfer of technology from
external source to own Research and Development; and internally from
R&D to production. This phase involves following activities:
a. Entering strategic alliance to develop or acquire potential technologies
b. Using product design teams for reaping ben ts of planned technological
changes.
c. Reducing functional barriers to technology transfer
d. Utilizing people links for successful technology transfer i.e. involving
people across the organization.

Technology Acceptance: This phase calls for acceptance of technology as a

bene cial change and involves following activities:

a. Supportive organizational design and structures

b. Supportive corporate culture
c. Senior management commitment
d. Assessment of impacts of technological change on organization,
enhancing bene ts, reducing adverse effects, smoothening barriers,
hurdles in the change

Technology Utilization: This phase involves:

a. Effective project management for seeking maximum utilization

b. Process technologies to support and facilitate maximum utilization
c. Supportive marketing strategies, efforts and utilizing feedback for /
improvement.

This phase leads to technology growth as re ected by increase in sales.

Technology Maturity: This phase involves analyzing maturity of existing

technology and its related products/ services/ processes through study of
following indicators:
a. Ef ciency vs. effectiveness contributed by the current technologies in
attaining organizational goals.
b. Market stability in terms of volumes/ sales
c. Rise of substitutes in the marketplace
d. Diminished returns on investment
e. Decline of market share
f. Loss of competitiveness in the marketplace

Technology Decline

a. This is the last phase. During this phase a technology and its related
products/ services/ process/ application/ sales. Technology and its
associated products or services become ordinary commodity. Technology
degrades and become obsolete.
b. This phase calls for movement to new technological opportunities.
c. Therea er the cycle restarts by the creating of a new technology/
movement towards a new technology.

Technology Strategy:
Technology strategy is a function of quantity and quality of technological
capabilities and competences. Experience obtained from enacting
technology strategy feeds back to technological capability and technology
strategy.

Technological capability and competence are complementary concepts

and value chain of porter provides a useful tool for examining their
interim interrelationships.

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In competitive domains, the outcome of rivalry are determined by
technological choices. The success of products and processes that leads
the rm to secure the competitive advantage by gaining the core
competence.

In short, the technology strategy of a rm is a fundamental driver of its

pro tability.

USP: Unique selling point

Core competence : HRM,Marketing, Self Actualiziation, Production

A harmonized combination of multiple resources and skills that
distinguish a rm in the market place. Core competence acc to MTI will
come through technology strategy i.e. Research and
Development/Transfer of technology as it is present in all departments.

A technology strategy is the approach that a rm takes to obtaining and

using technology to achieve a new competitive advantage, or to de ne an
existing technology oriented competitive advantage against erosion.

Substance of Technology Strategy:

1.Competitive strategy stance
• Technology Choice: Targeted technologies development may range from
minor improvement to employment of emerging technologies in a rst
new product in new market.
• Technology Leadership (pioneering role in the development of a
technology vs monitoring role)
• Technology Entry timing (appropriability regimes and control over
complementary assets)
• Technology Licensing (marketing of technologies)
2.Value chain stance (technology strategy)
• Scope of technology strategy is the set of technological capabilities that
the rm decide to develop internally.
• Developing and enriching technological competences.
• Avoiding from the threats of new entrants (if all other four forces be
equal)
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 1. Resources commitment stance (depth of technology strategy)
• Depth of TS is rm prowess within the various core technologies.
• Depth of TS can be expressed in terms of the number of technological
options that the rm has available.
• Depth of technology is likely to be correlated with the rms capacity
to anticipate technological developments in particular area early on.
2. Management Stance
• Organizational Fit
• Firms that can organize themselves to meet the organizational
requirements owing from their competitive, value chain and
resources commitment stances are more likely to have an effective
technology strategy.

Technology Strategy Implementation

• Technology sourcing (internal or external)
• Product and process development
• Technical Support

Technology Strategy at National Level

• At national level two types of strategy options are usually explored
o Internalization Oriented Strategy
♣ This strategy aims at seeking technological development with an
objective to become internally self reliant.
♣ This strategy aims at seeking technology transfer by TNCs/MNCs via
Foreign Direct Investment
♣ The strategy seeks proactive role in attracting TNCs/MNCs and focusses
on ensuring a stable macro-economic environment and good supportive
infrastructure.
o Externalization Oriented Strategy
♣ This strategy aims at seeking technological development with an
objective to tap external market.
♣ Under this strategy. There is restricted role of FDI. This strategy seeks to
foster/encourage indigenous technology development i.e. Developing
domestic technology capabilities in general or in selected strategic

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industries.
♣ Eg. Minority Joint Ventures, Technological assistance to domestic rms,
encouraging import of capital goods

• At Enterprise Level
A formal set of enterprise intentions that allocates available resources and
sets priorities based on clearly stated technological and enterprise
objectives and a perceived environment in which the process is to be
embedded.

o Factors that In uence

♣ Sustainability of Technological Lead
• Only if competitors can’t copy it
♣ First Mover advantage
• Advantages like increased reputation, pre-empting competition, early
pro ts, new sales.
• Disadvantages like cost of regulatory approvals, cost of educating buyers,
demand uncertainty, low cost imitations by competitors, risk of
technological discontinuities of existing technology/products/processes
o Types of Strategies
♣ Leadership Strategy: Under this strategy, a rm seeks to be the rst to
introduce technological changes/innovations.
♣ Followership Strategy: A conscious & active strategy, by which a rm
chooses not to be rst on innovations.
♣ Niche Strategy: Focuses on a limited number of critical technologies to
seek leadership. Technology development is selective, and deployment is
oriented towards exploiting the technological strength of the rm in
selected technologies to create competitive advantage.
♣ Technology rationalization involves maintain adequacy only in a select
set of technologies. For these rms, their technology de cit should be
compensated by other competitive strengths in order for them to service
in many competitive domains.

Technology strategy is different from overall business strategy.

• Higher uncertainty
• More use of intellectual property
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• Sometimes results are new to the world (innovation)
• Create strategies and dyanmics that are different
• Require different organizations
• Use different decision making tools
• Opens up new opportunities
• Face different strategic issues

Appropriation of Technology:

The vernacular engineering of Latino car design to environmental analysis

among rural women, groups outside the centers of scienti c power
persistently defy the notion that they are merely passive recipients of
technological products and scienti c knowledge. Rather, there are many
instances in which they reinvent these products and rethink these
knowledge systems, o en in ways that embody critique, resistance, or
outright revolt.

Appropriability refers to the degree to which the potential economic

bene ts from an innovation can be appropriated by the rms engaged in
technology. Where appropriability is high, rms can reap the bene ts of
their innovation; in low appropriability environments, the pro t potential
of innovation is dissipated through imitation by other rms or ceded to
suppliers, distribution channels, or customers.

Technology Transfer
It is the process by which basic science research and fundamental
discoveries are developed into practical and commercially relevant
applications and products.

The process by which existing knowledge, facilities or capabilities

developed under R&D funding are utilized to ful ll public and private
need.

Elements:
TT Function: Coordinate
Coordinating between technology users and developers, between

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researchers and manufactures is an important element of technology
transfer. Access to relevant internal and external resources to individual
projects and enterprises has to be enabled.

TT Function: Nurture
A main ingredient for moving technology from a research laboratory to a
new business enterprise successfully is an environment that is supportive
of entrepreneurship. This needs to be encouraged by providing guidance,
counseling and resources.

TT Function: Link
Cataloging resources related to business enterprises and connecting
would-be entrepreneurs/researchers and other technology developers to
outside groups and organizations which can help in the process of starting
new products, companies etc. Such linkages provide referrals for
individual business counseling, sources of nancing or the names of
individuals who can help with a particular facet of business development.

Also includes processing and evaluating invention disclosures; ling for

patents; technology marketing; licensing; protecting intellectual property
arising from research activity; and assisting in creating new businesses
and promoting the success of existing rms. The result of these activities
will be new products, more high-quality jobs, and an expanded economy.

Agents:

1. Research and Development Units

a. Universities
b. Public research centers
c. Technology institutes (institutions, labs etc)

2. Companies
a. Supplier of technology and R&D to third parties
b. Spin-off
c. Large R&D Department
d. Competitors , suppliers (technological alliances)
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Types of Technology Transfer:
Vertical technology transfer and Horizontal technology transfer: “Vertical
technology transfer occurs when information is transmitted from basic
research to applied research, from applied research to development, and
from development to production. Such transfers occur in both directions,
and the form of the information changes as it moves along this dimension.
Horizontal transfer of technology occurs when technology used in one
place, organization, or context is transferred and used in another place,
organization, or context

Types of Technology Transfer•

• Scienti c Knowledge Transfer, Direct Technology Transfer, Spin-off
Technology Transfer
• Informal Technology Transfer & Formal Technology Transfer
• Internal Technology Transfer & External Technology Transfer
Internal Technology Transfer:
Internal Technology Transfer refer to such technology transfers /
investments where control on the ownership & usage of technology
resides with the transferor. It is a complex process involving following
decisions. Decisions: Timing, Location, Multi-functional teams,
Communication methods & Procedures
Problems:
1.R&D goals are not known to production department.

1. Dif culties in stopping current production to test the new

products/processes
2. Production department is resistant to innovation and is bound by
routine
3. Non-linkage of new technologies to marketing/customer needs
Overcoming Barriers to Internal Technology Transfer:
4. Top management support and participation in the transfer process.
5. Use of multi-functional teams in the transfer process.
6. Brining R&D closer to production
7. Rotation of few persons between R&D and production.
8. Ensuring effective communication in the organization.
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External Technology Transfer:
In these transfers, control on the ownership & usage of technology usually
does not remain with the transferor and it passes on to the recipient, like
joint venture with local control, licensing agreement etc.
• Type of technology being transferred
• Complexity of the technology being transferred
• Transfer mechanism selected
• Relationship between the parties & compatibility thereof
• Organizational culture of the parties & mutual understanding thereof

Methods:
• Co-operative & Collaborative ventures/strategic alliances
• Licensing agreements
• Contracting agreements
• Enterprise acquisition
Why External?
• Technology already developed saves time and efforts
• Sometimes growth objectives or competitive goals cannot be reached
through internal development
• Lack of internal resources (physical & human) for innovation
• Firm does not have core competencies to deal with complex
technological developments
• Need to keep up with competitors
• Need to cope up with acceleration of technological change
Barriers:
• Associated Costs – usually high prices are required to be paid in the form
of royalties, technical & knowhow fees etc over medium to long term
period.
• Appropriateness of technology i.e. its suitability to core competencies
and market needs is always a point of discussion and investigation
• Heavy reliance on foreign technology – may make transferee/ recipient
technologically dependent on external technology providers/ transferors
even for small issues
• Lack of mutual trust between two parties may hinder full & timely
transfer
• Risk of loss of control over technology and the transferee/ recipient may
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use technology in an arbitrary manner
• Transfer may render existing technology and its related products/
services / processes obsolete
• Transferee may turn a potential competitor in future
• Mismatch in core competencies of the transferor and transferee may
create dif culties in transfer
• Different organization cultures may create dif culties in transfer
• Lack of effective communication between the parties may also create
dif culties in transfer

Overcoming barriers to External Technology Transfer

• Proper and well de ned technology transfer agreement should be signed
• Proper assessment/ evaluation of appropriation of technology
• Proper assessment/ evaluation of compatibility core competencies of the
parties
• Building pre-agreement relationships so as to develop mutual trust and so
as to understand culture of opposite parties
• Seeking cross cultural training
• Ensuring effective communication
• Anticipating problems and adopting measures and facilitating transfer

Technology Transfer Agreement

Tech It can be developed through own research and development or it can
be purchased through indigenous or imported sources.

1. Inventor Assignment Agreement

2. Con dentiality Agreements
3. License Agreements
4. Patents
a. Provision applications
b. PCT applications
c. National applications
d. Issued Patents
5. Drawings and Speci cation, Machinery and Components list etc

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License & Technology
• De ne technology and list of Intellectual Property Rights
• Grant of License
• Rights and Obligations of licensee and licensor
• Exclusive/ Non Exclusive
• Transferability
• Revocability
• Territory
• Sub-licensing
• Advertising & Promotion
• Audit of accounts from outside agency
• Royalty Payment and Calculation

INNOVATION
Innovation = Invention + Exploitation
Innovation involves the creation of new product, process or service to an
organization and introduce them to the market place by utilization and
commercialization of them
Sources: Internal (1-3) External (4-6)

1. R&D
2. Patents
3. Employees (suggestions)
4. Customers (traders, suppliers, competitors)
5. Products in other sectors (market research)
6. Technology
Why?
• Competitive advantage
• Consumer behavior is changing
• Products short life cycle
• Technology changes & new products
• New customers/ markets
Why aren’t they?
• No awareness of innovation (managers)
• High Costs of Innovation
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 • Employees resistance to change
• Monopoly position
• Innovation is a long term process
• Strategic decision to wait and observe
• No incentive for innovation (employees)
• The cash cow exists (a business, investment, or product that provides
a steady income or pro t.)

The idea of innovation at large is habitually associated with the making

and development of new products and services: different from the existing
ones, capable to meet an increased number of users’ needs, performing
better and easier to use, store and carry. The constant technological
advances have and are indeed favoring this process so that in many cases
the application of the latest technology to the existing products and the
provision of services making use of new technologies have enabled
employers to introduce in their relevant market innovative products and
services. Most importantly, technology can clearly help employers to
develop and design unparalleled, completely new products.

Innovation, nonetheless, is not exclusively concerned with products and

services, but also with processes and procedures, which can be designed
and developed to the bene t of a person, unit, business or community at
large (Farr, 1990). As stressed by Martins (2000), the concept of innovation
is also strictly contextual-related; more speci cally, a new idea can be
actually considered as genuinely innovative whether regarded as such
within the speci c settings and, it could be added, by the individuals to
whom it is directed.

Identi ed the different degrees of innovation and stressed the fact that
innovation depends on the circumstances, it is also crucially important to
ensure that innovation serves the business cause. New ideas have hence to
represent for employer’s valuable opportunities enabling these to
effectually pursue their intended strategy (Gaynor, 2002). Once again, the
context and the speci c circumstances came to play; what is considered
innovative today might become obsolete or unsuitable tomorrow as a
consequence of a strategy or environment change, never mind
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technological advances. To ensure that employers’ expectations in terms of
innovation are constantly met these need hence to be relentlessly
monitored and the consequent possibly required initiatives and actions
adapted and adopted accordingly.

The circumstance innovation strongly supports an employer strategy and

essentially enables this to gain competitive edge has accounted for
innovation also being essentially perceived and seen as an, it could be
argued innovative, approach to problem solving.

Innovation does not derive from the development and introduction of new
technologies only; new ideas can in fact also be identi ed by creatively
adapting, improving and enhancing current and even past technologies.

Product Innovation v/s Process Innovation

Product Innovation:
A product innovation is the introduction of a good or service that is new or
signi cantly improved with respect to its characteristics or intended uses.
These include signi cant improvements in technical speci cations,
components and materials, incorporated so ware, user friendliness or
other functional characteristics. Product innovations include both new
products and new uses for existing products.
¥ New products. These are goods and services that differ signi cantly in
their characteristics or intended uses from products previously produced
by the rm. The rst microprocessors and digital cameras are examples of
new products using new technologies. The rst portable MP3 player,
which combined existing so ware standards with miniaturised hard-drive
technology, was a new product combining existing technologies.
• New uses for products. The development of a new use for a product with
only minor changes to its technical speci cations is a product innovation.
An example is the introduction of a new detergent using an existing
chemical composition that was previously used as an intermediary for
coating production only.
A product is any tangible offering that might satisfy the needs or
aspirations of the consumer.
A product has following dimensions:
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a. Core Bene ts: basic functions and attributes meant to be provided by
the good/product
b. Tangible Speci cation: these de ne shape, size, appearance etc. of the
product
c. Augmented Features: these are the additional bene ts or utilities
associated with the product like a er sales service, perceived bene ts of a
brand etc.
Product design is the complete speci cations of a product to be
manufactured and contains details like: functions/attributes, size, weight,
appearance, engineering/technical speci cations, constituents/
components/ parts of nal product. It is the rst step immediately a er
accepting the concept of the product. It has direct impact over the
selection of processing equipment’s and methods, plant layout and in
process material ows.
¬ Ensures that the intended functions are discharged by the product
¬ It can be manufactured with ease in the factory
¬ It can be sold to the customer

Drivers of Product Innovation

• Change in customer requirement
• Adding more functions/attributes
• Increasing salability (appearance)
• Enhancing ease in manufacturing
• Tapping new markets or market segments
• Increasing products life cycle
• Enhancing convenience to use
• Technological advancement and progress
• Standardization and simpli cation efforts in an organization.
• Improving quality
• Improving product reliability
• Maintaining technological leadership
• Reducing processing and manufacturing costs
• Gaining competitive edge
• Sustaining competitiveness

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PROCESS INNOVATION
A process innovation is the implementation of a new or signi cantly
improved production or delivery method. This includes signi cant
changes in techniques, equipment and/or so ware. Process innovations
can be indented to decrease the unit costs of production or delivery, to
increase quality or to produce or deliver new or signi cantly improved
products.

• Production methods. These methods involve the techniques, equipment

and so ware used to produce goods or services. Examples of new
production methods are the implementation of new automation
equipment on a production line or the implementation of computer-
assisted design for product development.

• Delivery methods. These concern the logistics of the rm and encompass

equipment, so ware and techniques to source inputs, allocate supplies
within the rm or deliver nal products. An example of a new delivery
method is the introduction of a bar-coded or active RFID (radio frequency
identi cation) goods tracking system.

Process innovation results in:

1. Reduce costs
2. Improve quality
3. Shorten delivery time
4. Reduce inventories
5. Minimize plant and equipment investment
6. Shi scale economies
7. Allow greater exibility
8. Strategic initiative to defend a market niche by increasing entry
barriers
9. Safeguards competitive advantage

Embedding Innovation in Organizational Culture

Why it is necessary to embed innovation into organizational culture

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There are indeed plenty of reasons for employers having to introduce
innovation as a strong component of corporate culture. As suggested by
Voelpel et al (2005), an innovation-based organizational culture should rst
and foremost enable employers to successfully compete in their market in
a sustainable way. Albeit innovation is crucially important for all the
employers, irrespective of the industry they operate in, in some industries,
as for instance it is the case of high-tech and information technology,
innovation plays an even more signi cant role insofar as employers need
imperatively to innovate, seriously risking otherwise to disappear (Angel,
2006). Organizational culture should hence rst and foremost support and
ensure individual readiness to change. In order to become part of
everyday employee behaviour, needing to be embedded into culture

Encouraging continuous innovation is essentially important to support the

business over time and enable the organization to gain and maintain
competitive edge. This unremitting process clearly entails remarkable
efforts which would be pointless to think could be ever made by a limited
number of employees who, by reason of their formal role, may be
considered as the only ones suitable to take the challenge up. Including
innovation as a founding pillar of culture enables employers to ensure that
every individual takes up the challenge and does his/her utmost to
contribute to a constant, unrelenting innovation process (Kenny and
Reedy, 2007).

Embedding innovation into culture can also help individuals to come up

with new, innovative ways to analyse problems and identify solutions
(Lock and Kirkpatrick, 1995). Employers are in fact increasingly
considering embedding innovation into organizational culture to promote
and encourage problem solving within their business. One of the main
reasons for managers usually complaining about their direct reports
relates to their readiness to represent the issues and dif culties associated
with their tasks and duties, and their lack of ability and eagerness to come
up with and suggest appropriate solutions to overcome these. Despite this
is not obviously the sole reason for employers deciding to include
innovation amongst their organizational values, developing and rooting
within a rm’s culture a strong employee aptitude to problem solving
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clearly represents a massive advantage and asset on its own. Managers at
all levels could thus focus on other issues and employees would nd their
job and daily activities de nitely much more signi cant and compelling,
increasing their self-esteem and deriving from their job a higher value in
terms of intrinsic reward.

The development of innovation as a means to foster problem solving

within a business can indeed prove to be particularly advantageous.
Whether employers are keen and long to come up with new ideas,
products, services, processes and procedures this is indeed invariably
associated with their need to solve current problems and anticipate or
avoid likely future ones to arise. Regularly introducing in the relevant
market new products and services would enable organizations to stay
ahead of the competition, whereas developing more ef cient and effective
processes and procedures can enable these to control variable and xed
costs and to resist and insist thus in the market.

Employers, those who strive for innovation included, unfortunately also

constantly wait in ambush in order to be ready to copy and replicate the
innovative ideas developed by their direct and indirect competitors as
quickly as possible. This actually is one of the main reasons, arguably the
main reason, for innovation being all too o en short-lived. This is indeed
also the motive for innovation being typically regarded as an everything
but straightforward process and should be as far as possible invariably
coupled with the concept of “dif cult to replicate” (it can hardly be used
the term “impossible”). All of that should not deter employers from
struggling for innovation. Copying and replicating also require time and
efforts and sometimes it can also be the cause for dismal failure. Yet,
introducing in the market innovative and original products and services
de nitely contributes to the employer brand image, in addition to the
consumer brand image. Findings of an investigation carried out in the
health sector (Tuan and Venkatesh, 2010), for instance, revealed that
technological innovation is considered by many hospitals’ directors as an
effective means to increase both “hospitals reputation and brand image”
and improve the institutions marketing efforts credibility.

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How can I start to embed innovation within my organization?

The three absolute basics every organization must do that don’t require
budget are as follows:
¥ Firstly, start involving all your employees in everything and I mean ‘all’
your employees.
Remind yourself of the NASA story where a reporter asked a janitor what
he did, a seemingly obvious question. However, the janitor replied: “I’m
part of the team that puts people on the moon.”
It doesn’t cost anything to create a culture like that as it’s about people,
relationships and how you collaborate.

¥ Secondly, start talking about innovation and differentiation. But, make

sure you use your own language in order to translate innovation into
something you and your people can understand.
Most organizations start their innovation journey because the proverbial
doodoo has hit the fan and a quick x is needed. In this instance the
‘innovation’ requirement is usually interpreted as being ‘radical’, which is
too big for most people to cope with hence nothing happens and the
innovation efforts stall.

¥ Finally, however much you think you talk to your people increase it.
Communication either poor or a lack of is one of the biggest barriers to
organizations pushing forward and is almost a brick wall in terms of
driving innovation.
Create small hubs, teams of groups and give them different initiatives
based around driving innovation and doing things differently. Choose
champions from every corner of your organization to help galvanize your
innovation efforts and create a community of entrepreneurs, ideas and
potential.

ECONOMIES OF INNOVATION

Innovation Strategy:
How?

1. Scan and monitor the sources of innovation opportunity.

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 2. Create a personal future scan system.
3. Integrate future scanning with your companies idea management
system.
4. Assault industry assumptions.
5. Broaden your company’s vision. Strategize your place in the rst
mover, fast follower race.
6. Focus relentlessly on value creation throughout the developmental
process
7. Design and implement a new product development process.
8. Use cross functional teams
9. Use rapid prototyping

Strategies:

1. First-Mover
a. High Risk
2. Second- Mover (follow the leader)
a. Adaptive
b. Second but “best”
c. Can fail in industries with short product cycles or network effects
3. Late-to-Market (application engineering)
a. Economic
b. Low cost producer requires lots of manufacturing innovation
c. Made in China
4. Market Segmentation (me-too)
5. Innovative Application
a. Creative use of existing technology

Models:

1. The suggestion system

2. Continuous improvements teams
3. New venture team model
4. The incubator model of idea management
5. Innovation team
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Innovation Relevance
What are the core business bene ts?
This enables them to achieve a range of key business outcomes including;
– Engaging and inspiring people to tap into the power of the internal
crowd, and empower people to create, invent and innovate new products,
processes and services.
– Increasing their ROI to shareholders,
– Achieving business growth goals and improving bottom line results,
– Increasing business value making the business attractive to
shareholders, mergers and acquisitions,
– Making productivity and ef ciency gains to increase pro tability,
– Competing successfully to respond to industry disrupters, increase
market shares and extend product lifecycles,
– Responding quickly by developing the internal capability in both human
and technology resources to change direction and do things differently.

More importantly:

1. Creates a competitive advantage

2. Establish the best method for your own business
a. Own unique priorities, sector speci c issues, business pobjectives
b. Recognize your own current resources, opportunities for
development, response to customer or organizational needs and
anticipation of future trends

INNOVATION AS COMPETITIVE ADVANTAGE

Competition is more and more present on the business environment, on

the rm’s environment and on the management decision taking. Mainly in
the last and in the current century, the market globalization deeply
in uenced how the companies compete among themselves and for their
own survival. The frequent need of showing something new, improved or
unique to the consumption shows the competitive level that companies are
having. What was great yesterday already suffering from contests today
and it will possibly not be supported tomorrow.

/
The market dynamics are affected by many factors - from consumers’
socioeconomic conditions to a rm’s capacity to show an innovative
product for consumption. Thus, innovation is becoming the companies’
main competitive factor to increase and keep their operating area.

To be innovative is seeing things from new angles, having broad

perspectives, taking risks and being exible. Promoting innovation in the
workplace entails encouraging employees to become idea champions.
Two indispensable and strategic ways of developing idea champions are
extensive and continuing training, and development programs.

Large companies see training and development as a vital strategy in

human resource management because this stimulates innovation among
employees.
Training and development do not just improve job performance but also
develop creativity and problem-solving skills. They also contribute to
employee exibility, especially in adapting to change.

innovations are crucial, because they distinguish their products and

services from the competitors, creating an additional or new value to
customers.

Innovation is becoming more and more crucial for business

competitiveness (Giget, 1997), and in sequence, having re ection on the
regional development. Results from studies taken in more developed
countries indicate that innovation is responsible for 80% to 90% of
productivity growth.

The markets have become more complex and unpredictable, demanding,

from the management, mechanisms which can follow and recognize
future trends in the industry in which the rm is inserted. Knowing the
competitors’’ movements have also become more frequent by the rm. It
is no longer possible to expect that a competitor implements a new market
strategy without having in mind how to react.

INNOVATION AS A COMPETITIVE ADVANTAGE FACTOR

/
It is necessary to emphasize the causal link of innovation, making the
competitive advantages generation possible for the rm. It is common that
managers seek the survival of the organization in the initial moments and,
later, the expansion of their activities through strategies that unfold in
differentiation or competition for costs, either having a broad or speci c
focus. In this process, it is also natural to imagine that the challenges
appear and that rms seek adaptation to the context, preferably in a
unique way over their competitors. Giving these assurances, in order to
achieve sustainable competitive advantages, there is the need of
implementing new procedures and attributes, internal or external, which
so far has not been used by the market or by the organization. It is in this
context that the function of innovation is inserted as a competitive
advantage generation factor.

Firms operate in a competitive environment, and one of the adopted ways

to face the competition is the adoption of strategies which aim at
strengthening the organization in the market. The way that the company
will model its strategies to face the challenges and the way that will take
advantage of the opportunities will result or not in the achievement of
competitive advantages (Porter, 1989). However, Barney (2001) mentions
that the company must take into consideration the available sources,
which can be the difference on the construction and consolidation of the
advantages. In this way, the competitive advantage is achieved when the
organization effectively implements a strategy or an innovation capable of
creating value for the market (Bharadwaj et al., 1993).

Thereby, the innovation can be the main mechanism for a company to

achieve sustainable competitive advantage facing the other competitors.
According to Hall (1980), the source of differentiated competitive
advantages is achieved by the reduction of prices, the use of advertising
means and the innovation of products. In accordance with this purpose,
Coyne (1986) argues that the existing difference between the rm’s product
or service and its competitors must be a long-lasting difference under the
market’s supervision. Hence, the competitive advantage becomes
sustainable when none of the other rival rms can replicate the bene ts of
the adopted strategy (Barney, 2001).
/
 Thus, the existing relation between innovation and competitive advantage
is in the organization’s fact to use more ef cient its sources, in a way to
manage them to generate innovations and those to be subjected to achieve
competitive advantage (Ito et al., 2012). In this way, according to Figure 1,
it will only be considered an innovation if there is (viable) economic result
and (quantitative) nancial result and this innovation will be able to
determine if the rm will obtain competitive advantage facing its
competitors. This advantage is characterized by the market perception on
the differentiation and the value creation of products and services, which
so far were not available to consumers. It is reinforced in this assurance
the ex post facto character of innovation.

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