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Innovation Management

Definition of Innovation
Introduction of a new product, service or process into the marketplace. Based on several other definitions we can deduce that Innovation=Invention + Commercial exploitation

Difference between Invention and Innovation


Invention
1. Its creation of new product, service or process.

Innovation
It is the introduction of new product, service or process into the marketplace Results into commercialisation Usually induced

2. 3. 4. 5. 6. 7.

May not be commercialised It can be autonomous or induced Can be for economic or nonEconomic motive economic motive Usually restricted to R&D centre Spread across the organisation May bring few changes in organisation Proceeds innovation Brings organisational change Succeeds invention

Goals of Innovation
Improving quality Creation of new markets Extension of the product range Reducing labor cost Improving production process Reducing materials Reducing environmental damage Replacement of products/services Reducing energy consumption Conformance to regulations

Reasons for Innovation


Incongruities in operations Changes in perception/needs of the customer Demographic changes Market changes Emergence of new scientific knowledge

Industry requirements Desire to make more profit

Sources/Ideas for Innovation


Ideas for innovation can come from many sources Users or customers From competitors, foreign manufacturers Suppliers of raw materials, components, parts etc. Others like research institutions, universities, internal sales force etc.

Advantages of Innovation
More sales through new products and new service Enhanced market competitiveness More profitability etc.

Risks associated with Innovation


It may not be undertaken in the right direction based on technology forecasting, firms technology objectives and strategy Substantial funds, efforts and time are required for implementing innovation There is risk of rejection of new products, new services etc by the marketplace leading to losses It may displace existing products etc leading to some immediate decline in sales Employees may resist its implementation if it displaces existing products thus affecting their employment It may start a market war with competitors affecting profits

Characteristics of Innovation
It can be applied to all i.e. products, services and processes It leads to significant improvement/development It is different from invention Leads to organisational change which is inevitable It has an economic motive i.e. for seeking profits There can be many sources of innovation It is broader than R&D Involves risk and uncertainty It is realised only when the first commercial transaction takes place

Types of Innovation
Product, Service or Process innovations Open and Closed innovations Incremental and Radical innovations Modular and Architectural innovations Generic and Epochal innovations

INNOVATION PROCESS
IT IS THE PROCESS WHICH FACILITATES INNOVATION AND INVOLVES SEARCH AND SELECTION, EXPLORATION AND SYNTHESIS, CYCLES OF DIVERGENT THINKING AND CONVERGENCE.

INNOVATION PROCESS NEEDS SUPPORT AT THREE LEVELS: NATIONAL LEVEL ENTERPRISE LEVEL INDIVIDUAL LEVEL

CONTD
NATIONAL LEVEL:
INNOVATION DIRECTLY DEPENDS UPON THE THE NATIONAL GOVERNMENTS POLICIES AND SUPPORT

ENTERPRISE LEVEL:
INNOVATION DEPENDS UPON THE TOP MANAGEMNTS SUPPORT AND COMMITMENT

INDIVIDUAL LEVEL:
INNOVATION DEPENDS UPON THE ACTIONS AND MOTIVATION OF MULTIFUNCTIONAL TEAMS AND INDIVIDUALS INVOLVED IN THE PROCESS

INNOVATION PROCESS AT ENTERPRISE LEVEL


1. LINEAR MODEL OF INNOVATION (TRADITIONAL PHASE GATE MODEL)
PRODUCT OR SERVICE IS FROZEN AT EARLY STAGE SO AS TO MINIMISE RISK IT INVOVLES SERIES OF SEQUENTIAL STEPS ARRANGED IN SUCH A MANNER THAT THE PRCEDING PHASE MUST BE CLEARED BEFORE MOVING TO NEXTPHASE CRITERIA FOR PASSING THROUGH EACH GATE, AND THE PERSON AT EACH GATE ARE DEFINED BEFORE HAND

CONTD
THE MODELS WORKS ONLY WHEN:
TIME REQUIRED TO INNOVATE IS SHORTER THAN RATE OF CHANGE IN ENVIRONMENT QUALITY, RELIABILITY AND SAFETY REQUIREMENTS ARE CRITICAL IT IS SAFE AND SUITABLE FOR A FIRST TIME BEGINNER

LIMITATIONS
DELAYED EVALUATION, OR REJECTION OF GOOD PROJECTS TIME CONSUMING FOCUSSED ON CONTROL LONG REVIEW PREPARTION TIME RIGID FOCUS ON ATTAINING TARGET

CONTD
TWO MODELS FOR UNDERSTANDING LINEAR INNOVATION PROCESS: a) TECHNOLOGY PUSH MODEL
TECHNOLOGY IS REGARDED AS THE KEY DRIVER OF INNOVATION IT INVOLVES SERIES OF SEUENTIAL STEPS: FUNDAMENTAL RESEARCH APPLICATION RESEARCH DESIGN ENGINEERING MANUFACTURING MARKETING AND SALES EXAMPLE: MENU OPERATED COMPUTER SOFTWARE

CONTD
b) MARKET PULL MODEL
IT INCULDES AND INTEGRATES, USER NEEDS IN THE INNOVATION PROCESS IT INVOLVES OF SERIES OF SEQUENTIAL STEPS: ASSESSING CUSTOMER NEEDS CONCEPT/IDEA GENERATION REFINING IDEA TO MEET CONSUMER NEEDS DESIGN ENGINEERING MANUFACTURING TEST MARKETING SALES EXAMPLES: PHONES, UPS. INVERTORS etc.

CONTD
2. INNOVATION PROCESS FLEXIBLE MODEL
COMBINATION OF LINEAR MODEL AND NON LINEAR APPROACHES HAS LEAD TO THE EMERGENCE OF THIRD GENERATION MODELS THESE MODELS INCLUDE TECHNOLOGY PUSH + MARKET PULL COMBINATION R&D + MARKETING CYCLICAL MODEL THE MODELS ATTEMPT TO EXPLAIN RADICAL INNOVATION PROCESS IN A RAPIDLY CHANGING ENVIRONMENT IN THESE MODELS PHASES ARE OVERLAPPED

CONCURRENT ENGINEERING
DURING INITIAL STAGES OF INNOVATION PROCESS, MANY ORGANISATIONS FOCUS ON NEW PRODUCT DEVELOPMENT AND ITS COMMERCIALISATION DURING INTIAL PERIOD, LESS/LITTLE EFFORTS ARE MADE DURING LATER STAGES, FOCUS SHIFTS TO ATTAINING PROCESS EFFCIENCIES THIS APPROACH IS SUITABLE WHEN THE RATE OF TECHNOLOGICAL CHANGE IS SLOW IN THIS APPROACH THE PRODUCT DESIGN PROCEEDS AT THE SAME TIME AS PROCESS DESIGN WITH CONTINUOUS INTERACTION BETWEEN TWO DEPARTMENTS

FAILURES OF INNOVATION
1. INTERNAL CAUSES a) FAILURE IN THE CULTURAL INFRASTRUCTURE
POOR LEADERSHIP POOR ORGANISATION POOR COMMUNICATION POOR EMPOWERMENT POOR KNOWLEDGE MANAGEMENT

CONTD
b) FAILURE WITH IN THE INNOVATION PROCESS POOR GOAL DEFINITION POOR ALIGNMENT OF ACTIONS TO GOALS POOR PARTICIPATION IN TEAMS POOR MONITORING OF RESULTS POOR COMMUNICATION ACCESS TO TO INFORMATION

CONTD
EXAMPLES OF INTERNAL CAUSES ARE:
WHEN R&D EFFORTS ARE GUIDED BY MARKETING RESEARCH OR CUSTOMER REQUIREMENTS AND PREFERENCES WHEN R&D EFFORTS ARE NOT GUIDED BY MANUFACTURING CAPABILITIES AND SKILLS AND THERE IS NO CHANGE/IMPROVEMENT IN MANUFACTURING CAPABILITIES/SKILLS WHEN THERE IS NO CORRESPONDING CHANGE IN ORGANISATIONAL PROCESSES WHEN NEW PRODUCT LAUNCH IS NOT ACCOMPANIED BY CHANGE IN MARKETING STRATEGIES

CONTD
2. EXTERNAL CAUSES
EXAMPLES ARE: MISMATCH BETWEEN PRICE CHARGED AND VALUE BENEFITS PERCEIVED BY CUSTOMER MERE IMITATION/COPY WITHOUT ANY INCREASE IN VALUE/UTILITY TO CUSTOMER COMPETITOR BRINGS IN DISRUPTIVE TECHNOLOGY/ INNOVATION GOVERNMENT REGULATIONS UNDERGO CHANGE ADVERSLY AFFECTING INNOVATION

Innovative Organisation
Emphasis on:
Top managements commitment and support. Capability /need to manage in the light of corporate restructuring and transient senior management. High degree of flexibility in planning and control. Effective communication. Multifunctional teams. Internal integrity. Supporting organisational culture and environment.

Innovision
It is long term orientation / approach of the nation or organisation towards innovation. It means building the future through Technological excellence Technological leadership Innovation

Nature and dynamics of innovision

At macro (national) level. At micro (organisational ) level.

Innovation Strategies
Depends upon: Government support and policies. Risk taking ability. Organisational goals and policies. Degree of technological changes. Degree of competition. Availability of funds. Age of the organisation.

Types of Innovation Strategies.


Organisation can follow two types of strategies : Innovation leader. Innovation follower.

Change in innovation strategies


From incremental to radical innovation strategic framing Scouting R&D. Idea portfolio. High impact research. Target selection Rapid product development. Rapid commercialisation.

From radical to incremental innovation.

Install various gatekeepers at various stages. Extended budgetary support. Carry out rigorous progress review. Use more controls.

Innovation Management

Innovation management

Need of Innovation Management


To integrate technology into overall strategic objective of the organisation. To get into and out of the technologies faster and more efficiently. To accomplish technology transfer. To reduce new product development time. To manage large ,complex and interdisciplinary projects and systems.

Essentials for proper management of innovation


Failures and unsuitable ideas should be identified and screened out immediately. Creation of high productive teams to increase productivity. Maximum participation of the concerned individuals. Strong integration of cross functional activities.

Continued ..
Top management s commitment and support. Planning and control systems with high degree of flexibility. Corporate restructuring and transient senior management. Respect for individual initiative and personal growth. Building a unified and committed multifunctional team.

Continued
Supporting organisational culture and environment. The manager of the technology must be well trained and sensitive to the pattern of the technology change,market needs and business opportunities. Effective communication in the organisation.

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