Innovation Management

-An Introduction

Objectives
Recognize the importance of innovation
Explain the meaning and nature of innovation
management
Provide an introduction to a management approach
to innovation
Appreciate the complex nature of the management
of innovation within organizations
Describe the changing views of innovation over
time
Recognize the role of key individuals within the
process
Recognize the need to view innovation as a
management process
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The importance of
Innovation - For Organizations

The ability to change & adapt is essential

to survival (Competition fosters this)

Not to innovate is to die

Examples of successful & innovative

organizations - Boeing, Glaxo, Mercedes,
Ford, Intel, IBM
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Importance of the Innovation -For

country

Technical Innovation has led to substantial

economic benefits for innovative company
& country (Example Steam Engine, Iron
Boat,Locomotive,Electric light bulb)

Economies are more likely to experience

growth due to the development of
products such as a computer software or
new drug than reduction on prices but it
occurs in the bursts
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Continued..

Neo classical economies is a theory of

economic growth that explains how savings,
investment and growth respond to population
growth and technological change

The rate of technological change influences

the rate of economic growth but economic
growth does not influence technological
change . Rather technological change is
determined by chance
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General overview of the

innovation process

Innovation should be viewed in an

organizational context

The role of other firms as well as

the firms functions ( Economics,Org.
Behavior, Marketing, R & D,
Manufacturing and competition)
contribute towards innovation
process
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Figure :General overview of the

innovation process

Other Firms

The Firms innovating architecture

Technology and
The Firms
functions

Individuals

Products effects

Interaction
Knowledge and
Technology

MICRO ENVIRONMENT

providers

Effects

MACRO ENVIRONMENT

Todays innovations are associated

with groups of people, teams &
organizations (see table 1.3)

Polythene
Boll point pen
Manufacturing process : Float Glass
Photocopying
Personal Computer
Computer Operating System:Windows

- ICI
- Reynolds.
- Pilkington
- Xerox
- Apple Computer
-Microsoft

Individuals , who define problems ,have ideas &

perform creative linkages & associations also leads
to inventions & innovations (This has lead to the
development of individuals in the innovation
process such as inventor, entrepreneur)
Innovation needs to be viewed as a process
Products are the eventual outputs from inventions
& The process from new discovery to eventual
product is the innovation process

Entrepreneurship,Innovati
on & Invention

Entrepreneurship is the process whereby an

individual or group of individuals use
organized efforts to pursue opportunities (to
create value & grow by fulfilling wants &
needs through innovation & uniqueness)
Innovation is not a single action but a total
process of interrelated sub processes. It is
not just the conception of a new idea, nor
the invention of a new devise nor the
development of market.The process is all
these things acting in an integrated fashion.
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Innovation is concerned with the commercial

& practical application of ideas or inventions
Innovation=theoretical conception + technical invention +
commercial exploitation

The conception of new ideas is the starting point

of for innovation

The process of converting intellectual

thoughts into a tangible new artifact (usually
a product or process) is an invention

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Innovation depends on inventions but

inventions need to be harnessed to
commercial activities before they can
contribute to the growth of an organization
Hence Innovation is the management of all
the activities involved in the process of idea
generation, technology
development,manufacturing and marketing
of a new ( or improved) product or process
or equipment. Sometimes commercial
failure makes innovation unsuccessful
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Different types of
innovations

The successful commercialization

of the innovation may involve
considerably wider organizational
changes (technological innovation
can be accompanied by additional
managerial & organizational
changes)

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Topology of innovations

table

Type of Innovation
Product innovation
product
Process Innovation
process

Example
The development a new or improved
The development a new manufacturing

Organizational innovation

A new venture, A new communication

system, A new accounting procedure
Management Innovation
TQM, BPR ,SAP
Production innovation
Quality Circles, Just-in-time,PPS, MRP-II
Commercial/ Marketing innovation
New sales Approach
Service innovation
Web Financial Services

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Technology & Science

Science can be defined as

systematic & formulated
knowledge.
Technology is knowledge applied to
product or production processes.
Technology, as an outgrowth of
science that fuels the industrial
engine.
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Models of Innovation

Social school argues that innovations are

the result of a contribution of external
social factors & influences such as
demographic changes,economic influence
& cultural changes.(when the conditions
were right innovation would occur)
Individualistic school argues that the
innovations were the result of unique
individual talents (& innovations are born)
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Models Of Innovations
(1) Serendipity
Historically innovation have highlighted
the importance of the unexpected
discovery
But the role of Serendipity (or luck) is rare
One need to have prior knowledge in that
particular area

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Models of Innovations
(2) Linear Models
Conceptual framework of Innovation

Creation of new
Knowledge,dominated by
universities and large sciencebased organization

Science and
Technology base

Technology Development
dominated by
organization

Technological
developments

Consumes express their

needs and wants through
the consumption of
products

Needs Of the market

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Models of Innovations
(2) Linear Models
There are two variations
A . Technology push

Research &
Development

Manufacturing

Marketing

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A . Technology push

Scientist make unexpected discoveries

Technology apply them to develop product ideas &
Engineers & designers turn them in to prototypes for
testing
Manufacturers devise ways of producing product to the
potential consumer
Finally marketing & sales will promote to the consumer
In this model the market place was a passive recipient for
the fruits of R & D (Applied to few cases like pharmaceutical
industry )
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B . Market Pull

Marketing

Research &
Development

Manufacturing

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B . Market Pull

In 1970 new studies of actual innovation

suggested that the role of marketplace was
influential in the innovation process
The Market-pull model of innovation (Customer
need-driven ) model emphasizes the role of
marketing as an initiator of new ideas resulting
from close interactions with customers
In they are conveyed to R & D for design &
engineering & then to manufacturing for production

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Models of Innovations
(3) Simultaneous Coupling Models

Manufacturing

Research & Development

Marketing

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Models of Innovations
(3) Simultaneous Coupling
Model
The linear model is only able to offer an
explanation of where the initial stimulus for
innovation was born i.e. where is the trigger for the
idea or need was initiated .
The simultaneous coupling model as shown in the
figure suggests that it is result of the simultaneous
coupling of the knowledge within all three functions
that will foster innovation (The point of
commencement is not known in advance)

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Models of Innovations
(4)Interactive Model

Interactive model links together the technology

push & market-pull models
It emphasizes that innovation occur as the result of
the interaction of the market place, the science base &
the organization capabilities
There is no explicit staring point & innovation
transpire from wide variety of points
At the center of the model are the organizational
functions of R & D, engineering & design
,manufacturing & sales
Flow of communication is not necessarily linear &
there is provision of feedback

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Models of Innovations
(4) Interactive Model

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Models of Innovations
(4) Interactive Model
There are linkages with science base & the
marketplace between all functions, not just with
R & D or marketing ( For Example Manufacturing
department may initiates a design improvement )
The generation of ideas is dependent on input
from three basic components: organization
capabilities ; the needs of the market place; the
science & technology base

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Models of Innovations
Table showing the chronological
development of models of
innovation
Date
Characteristics

1950/60
process.

Model

Technological Push

Simple linear sequential

Emphasis on R & D .

1970
process.

Market Pull

Simple linear sequential

Emphasis on Marketing

1980
&D
1980/90
Pull

Coupling Model
Interactive Model

Emphasis on integrating R
and Marketing
Combination of Push and
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Innovation as a Management Process

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Innovation Management
Framework
Interactions of functions inside the organization as
well as with external environment are important
Scientists and engineers within firm continually
interact with fellow scientists in universities and other
firms about scientific and technological developments
Similarly, the marketing function will need to interact
with suppliers, distributors, customers and competitors
to ensure market pulse is measured
Business planners and senior management
communicate with other firms & government ,supplier
& customer
Knowledge is captured and utilized to develop
successful new products

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Innovation Management
Framework
The Three main functions: marketing, research
and manufacturing and business planning are the
most influential in the innovation process
The knowledge( both Tacit & Explicit ) has to
shared and exchanged
The organizational heritage ( combination of
organizational knowledge base & organizations
unique architect ) will influence its future
decisions regarding the markets in which it will
operate

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