Engg 5216 Technology Innovation Strategy and

Management
Class List

GROUP
1 JUN CHEN
2 NARENDRA SYAM KUMAR GOLLU
1 YUECHEN SHI
1 RI ZHAO
1 XIN ZHOU
2 GAYATHIN PREM KUMAR
2 Ying Keung LAI
2 Elsa N SUTEDJA
YAYA HE
LIPENG KANG
KAMRAN HASSAN MALIK
YUE ZHENG

Week Engg 4026 & 5216 Course Topics and Reading

1 Introduction: Overview of the Text: Tidd and Bessant. Managing Innovation
course and assessment. Formation Part 1 Managing Innovation
of Groups Chapter 1 Innovation – what it is and why it matters
What is Innovation?
2 Is it possible to describe an Part 1 Managing Innovation
innovation process and to manage Chapter 2 Innovation as a core business process
innovation? Group presentations on the key findings of an
innovation surveys
3 What are the characteristics of an Part 2: Context
innovative organisation? Chapter 3: Building the Innovative Organisation
Group presentations on the key findings of an
innovation surveys
4 How can a firm build innovation Part 2 Context
into its strategies? Chapter 4 Developing an innovation strategy
What is an innovation strategy?
5 Where does innovation come from? Part 3 Search
Chapter 5 Sources of innovation
6 How can firms tap into external Part 3 Search
knowledge? Chapter 6 Innovation networks
7 What impact does uncertainty have Part 4 Select
on innovation strategy and Chapter 7 Decision making under uncertainty
management?
8
NTW
9 How can a firm decide on the best Part 4 Select
innovation option? Chapter 8 Building the innovation case
10 How do innovations create value – Part 5 Implement
what is value? Chapter 9 Creating new products and services
11 What is a business experiment? Part 5 Implement
 Chapter 10 Exploiting new ventures
12 Who captures the value from Part 6 Capture
Innovation? Chapter 11 Capturing the benefits of innovation
13 Who learns what and how from Part 6 Capture
doing innovation? Chapter 12 Capturing learning from innovation  
What have you learnt from this
course?
SV

Engg 5216 Discussion Topics

Week Topic Group to Lead

Week 3 Innov’n Management Interviews

Week 4 Innov’n Management Interviews

Week 5 Users and Innovation 1

Week 5 Open Innovation 2

Week 7 Network Externalities & Increasing 1

returns
Week 8 Entrepreneurship 2

Week 9 Design Thinking 1

Week 10 Appropriation of benefits 2

Preparing for Discussion

Each week we will focus on a small number of fairly short papers and some specific
questions. I expect everyone to contribute to the discussion and for each person to
be able to address each question if asked. The background reading is for your
interest and as a resource.

The Group that has been allocated a topic is to give a 15 minute introduction to the
issue. This introduction should say why the topic is important, very briefly outline the
content of the key reading, and address the first question.

Innovation Management Interviews

Interview Page Allocation

An interview with IDEO’s CEO [7p] 2 CHEN

Judy Estrin, former CTO at Cisco; and l serial entrepreneurs The Innovation 8 GOLLU
Gap in Silicon Valley and Beyond [Podcast]
Coaching innovation: Intuit's Bill Campbell [8p] 8 HE
Cultivating -Alberto Alessi CEO of a leading Italian design firm [8p] 16 KANG
Innovation lessons from Pixar: Brad Bird [9p] 25 MALIK
Innovative management: Gary Hamel and Lowell Bryan [10p] 33 SHI
Embed Innovation in Corporate Culture for Best Results-Charlie Prather, 43 ZHAO
initial Director of the DuPont Center for Innovation [3p]
Royal Bank's Innovation Challenge-Avi Pollock, Head of Applied Innovation 46 ZHENG
It's a Good Time to Be an Innovator-A conversation with Mike Wing, Vice 52 ZHOU
President, Strategic and Executive Communications, IBM
Connect + Develop with Procter & Gamble- Jeff Weedman, Vice President, 57 CHEN
External Business Development [5p]
Design for Delight-Roy Rosin, VP, Product Mgmtt & Innovation, Intuit. [4p] 62 GOLLU
Xerox VP discusses Innovation and Problem Solving [5p] 66 HE
Collaboration and Co-creation – The Key to Unlocking Value [4p] 71 KANG
Innovation and Tobacco at R.J. Reynolds - Dennis L. Potter, VP of Innovation in 75 MALIK
the Growth and Innovation Group at Reynolds American Inc.
Innovation requires enormous Energy, Excitement, & Commitment - Mitchell 78 SHI
Baker, Chairman and Chief Lizard Wrangler, Mozilla
Fostering Innovation at Kraft Foods - VP Steven Goers [4p] 84 ZHAO
Innovation Consulting at Booz & Company-Alexander Kandybin 88 ZHENG
Ginny Lee, Senior Vice President and CIO of Intuit, recipient of the 2009 CA 91 ZHOU
Leadership Award for Innovation in Lean IT.

John Chambers of Cisco 99 JUN CHEN

Procter & Gamble CEO A.G. Lafley (Procter & Gamble) 110 NARENDRA
SYAM KUMAR
GOLLU
Craigslist President and CEO Jim Buckmaster 9 121 YUECHEN SHI
Geoffrey Moore –[podcast] 127 RI ZHAO
Practical Innovation Skills - Phil MJKinney [podcast] 128 XIN ZHOU
Dave Watson from Ford & Steve Bishop from IDEO on co-innovation [pod] 129 GAYATHIN
PREM KUMAR
David Cochran On The HP 35 Calculator 130 Ying Keung LAI
Innovating On Your Own Terms 131 Elsa N
SUTEDJA
Winning the global challenge: The Japanese electronics companies' race to 132 JUN CHEN
innovate. Podcast Interview:
Campbell Soup Co., President and CEO Douglas R. Conant 138 NARENDRA
SYAM KUMAR
GOLLU
Sun Microsystems Chairman Scott McNealy 150 YUECHEN SHI
Lucent Technologies CEO Patricia Russo 167 RI ZHAO
Dare to be different: Why banking innovation matters now 181 XIN ZHOU
People and Innovation: Getting Ideas on the Table 186 GAYATHIN
PREM KUMAR
Closing the generational learning divide: Shifting workforce demographics and 192 Ying Keung LAI
the learning organization
Built for Change – Interviews with CEOs about managing Change 194 Elsa N
 SUTEDJA

Week 5 Users and Innovation

Essential Reading for Discussion

1. Von Hippel et al Creating Breakthroughs at 3M. HBR Case.
2. Thomke, S and Nimgade, A. Innovation at 3M Corporation Case II-19
3. Thomke, S and Nimgade, A Note on Lead User Research. Reading II-16 in
Burgelman, RA, Maidique, MA, and Wheelwright, SC (eds.). Strategic
Management of Technology and Innovation . McGraw Hill. Irwin Third Edition.
2001: pp 496-516

Discussion Questions
 In what situations are lead users useful?
 How can we identify lead users?
 What option would you recommend?
 How can we connect with lead users in different industries?

Background Reading & Sources

 http://www.innovationmanagement.se/category/videos/
[These include presentations by Eric von Hippel on lead user research]
 Eric Von Hippel Democratising Innovation open copyright web-book.
 Goldenberg, Jacob, Donald R. Lehmann and David Mazursky 2001. “The idea
itself and the circumstances of its emergence as predictors of new product
success” Management Science Vol 47, No 1 (January) 69-84.
 Hadjimanolis, A. 2000. A resource-based view of innovativeness in small firms.
Technology Analysis & Strategic Management, 12: 263-281.
 Lilien, G., Morrison, Pamela D., Searls, K., Sonnack, M., von Hippel, E. 2002.
Performance assessment of the lead user generation process for new product
development, Management Science Vol 48, No 8 (August) pp. 1042-1059.
 Lüthje, C. 2003a. Characteristics of innovating users in a consumer goods field.
Technovation,
 Lüthje, C. 2003b. Customers as co-inventors: An empirical analysis of the
antecedents of customer-driven innovations in the field of medical equipment.
Proceedings from the 32th EMAC Conference 2003, forthcoming (Glasgow,
Scotland).
 Morrison, P.D. 1995. A framework for studying the adoption of technological
innovations by organizations and the role of leading edge users in the process,
Unpublished Doctoral Dissertation; Australian Graduate School of Management,
UNSW.
 Morrison, P.D., Roberts, J.H. and von Hippel, E. 2000. Determinants of user
 innovation and innovation sharing in a local market. Management Science, 46:
1513-1527.
 Urban, G. and von Hippel, E. 1988. Lead user analyses for the development of
new industrial products. Management Science, 35: 569-582.
 von Hippel, Eric 1976. "The Dominant Role of Users in the Scientific Instrument
Innovation Process," Research Policy 5, no. 3 (July): 212-39.
 von Hippel, Eric 1977. "The Dominant Role of the User in Semiconductor and
Electronic Subassembly Process Innovation," IEEE Transactions on Engineering
Management EM-24, no. 2 (May):60-71.
 Von Hippel, E. 1988. The sources of innovation. New York: Oxford University
Press.
 Von Hippel, E. 1986. Lead users: A source of novel product concepts.
Management Science 32: 791-806.
Week 6 Open Innovation

Essential Reading for Discussion

1. Henry Chesbrough (2004) Managing Open Innovation Research Technology
Management; Jan/Feb 2004; 47.
2. Bughin et al The Next Step in Open Innovation. McKinsey Quarterly. June 2008
3. Slowinski; Want, Find, Get and Manage for Success: An Open Innovation Overview.
Management Roundtable 2006
4. Open Innovation Debates at the UK NESTA [pdf provided]
Discussion Questions

 What is driving the interest in Open Innovation?

 What are the main challenges in managing open innovation?
 What are the main risks of open innovation?

Background Reading & Sources

 Henry Chesbrough (2003) The Era of Open Innovation MIT Sloan Management
Review 44(3): 35-41
 The Open Knowledge Foundation http://www.okfn.org/
 Henry Chesbrough (2003) Open Innovation Harvard Business School Press
 Henry Chesbrough, Wim Vanhaverbeke, Joel West Open innovation: researching
a new paradigm [book]
 Kirschbaum, Robert (2005) Open Innovation in Practice Research-Technology
Management, Volume 48, Number 4, July-August 2005 , pp. 24-28(5)

Week 7 Network Externalities & Increasing returns

Network externalities and increasing returns to scale

The reader should ask herself the following question: Would I subscribe to a telephone service
knowing that nobody else subscribes to a telephone service? The answer should be: Of course not!
What use will anyone have from having a telephone when there is no one to talk to? (Shy, 2001, p.
3)
The uncertainty surrounding production in the introductory phase, which places such importance on
the ability of the firm to secure quick benefits from learning effects, is particularly acute in ‘network
industries’, such as telecommunications, computers, video players, banking services, fuel retailing
and many others. On the demand side, the example of a telephone service shows that the benefit
(or ‘utility’) that people get from consuming such goods depends on the extent to which other
people also use these goods. These goods are said to display network externalities because the
value one consumer gets from, say, a telephone depends on factors external to their own
consumption of it. The idea of externalities is widely used in economics. Network externalities
(which can also be referred to as ‘network effects’) thus ‘arise when the attractiveness of a product
to customers increases with the use of that product by others’ (Fisher and Rubinfeld, 2000, p. 13);
in other words, when the value of one consumer joining a network depends on the number of other
consumers joining the network. The more people who subscribe to the same standardised system,
the more services and people the user can access, and so the greater the value of that system to
each individual user. The implication is that firms that are in the introductory phase of a network
industry life cycle face huge rewards from establishing an early lead for their product. Even if
competing products have more useful features, the product with the largest network will be difficult
to dislodge simply because the number of its subscribers make it the most attractive option for new
subscribers.
On the supply side there is considerable scope for the firm with the largest network to achieve
increasing returns to scale. The firm faces the cost of developing and maintaining a single network,
and that cost can be spread over a large and rising quantity of output, reducing average cost. The
cost advantages are particularly dramatic for a firm that can establish its own network, or a
technical component essential to the functioning of a network, as the industry standard.
Network industries have in common a number of characteristics including complementarity,
compatibility and standards (Shy, 2001, pp. 1–3). A network industry produces complements, such
as trains and railway tracks, cameras and film, computers and software, CD players and CDs, and
cars and fuel. These complementary products must be compatible with one another in the sense
that trains are no use unless they fit the tracks, film is needed if you want to use a film camera and
so on. In other words, complementary products must operate on the same standard. For example,
in the nineteenth century it was impossible for regional railway companies in the UK to run rolling
stock on each other's tracks until a national gauge or width was established. This gauge is an
example of an industry standard. Without a standard gauge or film size or computer operating
system, product standardisation cannot take place and economies of scale are unobtainable.
Establishing an industry standard may involve a struggle between competing would-be standards.
When video players were first introduced in the 1980s, two different recording formats appeared on
the market, VHS and Betamax. It was some years before VHS was established as the industry
standard.
Network externalities on the demand side and increasing returns on the supply side may interact in
what is colloquially termed a ‘double whammy’ to produce a dramatically different industrial
structure as an industry moves into the growth phase. A firm that benefits from such a double
whammy will secure monopoly power in its industry.

Adapted from: http://openlearn.open.ac.uk/mod/resource/view.php?id=281255

Essential Reading for Discussion

 S. J. Liebowitz and Stephen E. Margolis Network Externalities (Effects)- paper
 McGee & Bonnici Network industries in the new economy. European Business Journal 2002
 Stanley M. Besen, Innovation, Competition, and the Theory of Network Externalities– paper

Discussion Questions
1. What are network externalities?
2. When might increasing returns arise? Increasing returns to who or what?
3. Why are network externalities and increasing returns significant for innovation strategy?
4. What is ‘lock in’ and what is its significance?

Background Reading & Sources

 W. Brian Arthur. Competing Technologies, Increasing Returns, and Lock-In by
Historical Events. The Economic Journal, Vol. 99, No. 394. (Mar., 1989), pp. 116-131.

 Shy, O. (2001) The Economics of Network Industries. Cambridge University Press, 2001
 Cortada, J. (2004) The DIGITAL HAND. How Computers Changed the Work of American
Manufacturing, Transportation, and Retail Industries. OXFORD UNIVERSITY PRESS 2004

Week 8 Entrepreneurship

Essential Reading for Discussion

We will watch a number of short videos and discuss in class, including:
http://www.youtube.com/watch?v=GpolR6n0tY0
We will also discuss:
 Entrepreneurs Mistakes and Lessons (see file)

Discussion Questions
1. What is entrepreneurship?
2. What the advantages and disadvantages of new ventures for commercialising a new
technology?
3. When you are an entrepreneur how will you avoid the most common mistakes?

Background Reading & Sources

 Markman – Research and Technology Commercialisation.
 Gladwell – on Entrepreneurs
 http://www.forentrepreneurs.com/
  http://ecorner.stanford.edu/popularVideos.html

Week 9 Design Thinking

Essential Reading for Discussion

1. Tim Brown “Design Thinking”. Harvard Business Review • June 2008
2. Kees Dorst “Design Problems and Design Paradoxes”. Design Issues: Volume 22, Number 3
Summer 2006

http://www.youtube.com/watch?v=fzW8Y6F-mQ4
http://www.youtube.com/watch?v=R6DwjBDxO4k
http://mitworld.mit.edu/video/357/
http://www.ted.com/talks/tim_brown_on_creativity_and_play.html

Discussion Questions
1. What is design thinking?
2. What competencies are required for design thinking?

Background Reading & Sources

 Helsinki Design Lab http://helsinkidesignlab.org/pages/what-is-strategic-design
http://helsinkidesignlab.org/
http://helsinkidesignlab.org/casestudies/elemental
 Kees Dorst, and Nigel Cross, ‘Creativity in the design process:co-evolution of problem–
solution.’ Design Studies 22 (2001) 425–437
 James Utterback, Bengt-Arne Vedin, Eduardo Alvarez, Sten Ekman , Susan Walsh Sanderson
Bruce Tether and Roberto Verganti Design-Inspired Innovation

Week 10 Appropriation of benefits

Essential Reading for Discussion

Teece, D. Profiting from Technological Innovation. Research Policy 15 (1986) 285-305

Discussion Questions
 What is appropriation?
 How do firms appropriate the benefits of innovation?
 Under what circumstances might firms capture a small share of the benefits of their
successful innovations?

Background Reading & Sources

 Henry Chesbrough, Julian Birkinshaw, Morris Teubal (2006). Introduction to the research
policy 20th anniversary special issue of the publication of “Profiting from Innovation” by
David J. Teece Volume 35, Issue 8, Pages 1091-1099 (October 2006
 Nelson, R. (2006) Reflections of David Teece’s “Profiting from technological innovation . .”
Research Policy 35 (2006) 1107–1109
 Pisano, G. and Teece, D. (2007). “How to Capture value from Innovation: Shaping
Intellectual Property and Industry Architecture,” California Management Review, 50 (1), Fall,
pp. 278-296
 Gans, Joshua S. and Stern, Scott (2003). “The Product Market and the Market for ‘Ideas’:
Commercialization Strategies for Technology Entrepreneurs,” Research Policy 32, pp. 333-
350.