Innovation Intro

G. Brophey ADMN2167
Winter’24
 As aspiring managers why should we care
about innovation?

What about the effects of innovation in these

industries over the last 20-30 years? Next 20-30
years?

n Communication
n Automotive
n Health care
n Music

Will managing innovation be important in your

future?
The innovation field - where it get’s
used
Innovation thinking is applied;
At the policy and forecasting level
n Economy
n Technology
n Industry

And at the In-firm level

n Metrics
n Firm
n Individual innovation
n Stages of innovation
n Individual innovation practices, risks etc.

3
Innovation concepts
These concepts all get used in most fields
Sustaining – (product improvement, next
year’s model, etc.,)
Wikinomics, - (customer’s choice instead
of marketer’s choice)
Open innovation – (American idol ,etc.)
Disruptive, Diffusion, etc.,
Presentation themes
Fit into the big picture of innovation
n The innovation process at its core

n Some innovation stories

n Disruptive

n Diffusion – technology and other

5
Simplified picture of the core innovation
process inside the firm-what happens?

Idea Generation

Idea Evaluation

Idea Implementation

6
Even bad ideas can lead to good
ideas

7
8
9
Moderately complex innovation – what happens?

10
Major innovations- what happens?

11
Some innovation stories
q Qwerty keypad.
q https://en.wikipedia.org/wiki/Dvorak_Simplified_
Keyboard
Why are light bulbs shaped the
way they are?
…and another story
n How space travel has been affected by the
width of a horse’s _ss
Lessons learned?
n Space travel and light bulbs -
Infrastructure matters
n QWERTY - Required training affects
adoption rates – changing behaviours
matters

18
Apple – Were they innovative
under Steve Jobs?
Steve Jobs - Entrepreneurial leader with vision
n Market cap when he returned to Apple, $5B, at his
resignation, $349B
n Check this out
n https://www.technobezz.com/the-apple-products-that-
totally-failed-in-the-market/

What lesson can we learn from this example?

19
Lesson learned?
n Apple - even the best innovators in the
world often get it wrong, so we better plan
for failures to be part of any innovation
process we wish to take on.
Innovation lessons from history
n Heroes to handles
Achilles –The Battle for Troy ≈ 1200 BC
Hoplite Armor – 670BC
Hoplite Phalanx
More lessons learned
n Innovations can affect power structures
and the power of individuals, so be aware
that sensibilities are heightened when new
ideas are being discussed.
n New ideas can “corner” the establishment
and how they will react is a wild card
Another story – disruptive
innovation
n How the icemen left us and how record
companies took the same exit.
Landmark study
n Clayton Christensen – studying changes in
the structure/players of an industry
n Compared technological change,
performance of incumbents and
performance of new entrants
n Looked at computer memory as it
exhibited multiple quick changes in
technology – ‘fruit flies’ of industrial
economics
Product Performance over Time
Innovation Diffusion – What Is
It?
Diffusion is the process through which an
innovation (an idea, product, technology,
process, or service) spreads (more or less
rapidly, in more or less the same form)
through mass and digital media, and
interpersonal and network communication,
over time, through a social system, with a
wide variety of consequences (positive and
negative). – Robert Rice
Factors affecting Rates of
Diffusion
n Everett Rogers – 1952 – confused about why hybrid corn
innovations didn’t spread among local farmers- chased
down other diffusion stories (diffusion of kindergarten,
driver training, tetracycline,etc.)
n Is a process of universal social change - doesn’t seem
to be affected by type of innovation and that smaller
groups act like societies.
n Early adopters were found to have traveled and read
widely and were cosmopolitan in their thinking.
Forecasting adoption rates using
Rogers Diffusion Factors
Characteristics Definition

Relative Advantage The degree to which an innovation is perceived as being better than the idea it
supersedes. It is often expressed as economic profitability, but can also be related
to social advantages. Relative advantage is positively related to its rate of adoption.

Compatibility The degree to which an innovation is perceived as consistent with the existing
values, past experiences and needs of potential adopters. Increased compatibility
is positively related to its rate of adoption.
Complexity The degree to which an innovation is perceived as relatively difficult to
understand and use. Increased complexity of an innovation is negatively related to
its rate of adoption.
Trialability The degree to which an innovation may be experimented with on a limited basis.
Easier trialability is positively related to its rate of adoption.
Observability The degree to which the results of an innovation are visible to others. Ease of
observability and greater influence of the audience are positively related to its
rate of adoption.
n Found adoption rates were S-curved and
that is a universal process of social
change.
Takeaways about Innovation
n Infrastructure matters
n Changing behaviour matters
n Innovations aren’t a sure thing
n Innovation can have a powerful effect on society
and firms
n Disruptive innovations almost always come from
outside the existing industry – nearly impossible
to manage internally
n Rate of innovation diffusion is somewhat
predictable – (Roger’s factors)
38