TIM

• automotive industry and engineering makes up 12% of knowledge intensive value creation

• knowledge-intensive services make up only 24% in comparison to 30% value-added share looking at European neighors and is even low in productivity

• Eastern Germany shows a significant difference in innovation potential

• increasing divergence between European countries weakens Germany’s position as export champion

• urbanization (effective and environmentally friendly infrastructures)

• mobility (effective and sustainable mobility concepts)

• demographic change (efficient and affordable long-term medical care)

• digitalization (new ways of cooperation, new benefits through digitized products)

invention can be defined as the first technical implementation or a new comination of existing scientific inventions. Invention may be the result of planned research and development activities or of a chance

the organization for economic co-operation and development (OECD) defines innovation as the successful commercial introduction of a new product, service or process

• scope (what is new?)

• degree (how new?)

• subject (new for whom?)

• process(from when?)

• role (new with whom?)

• norm (new means successful?)

  
  

• product/service: development of a good or service to satisfy specific customer needs (f. ex.: iPhone)

• process: novel factor combinations that enable more cost-effective, higher quality, safer or faster production (f. ex.: starbucks)

• business model: changing the value creation architecture (f. ex.: uber)

• management: new administrative processes (f. ex.:

• social innovation: change in human / social behavior (f. ex.: unconditional basic income)

holistically describes the core logic of how value is created and captured through the exploitation of an entrepreneurial opportunity

is about creating new models or changing the existig ones to maximize the value created and return it to the organization which created it - capturing value.

• is a process of different activities

• that have been developed by different actors

• be carried out in one or more organisations

• to develop novel combinations of means and ends

• and introduce them to the market or the organization

• managing innovative tasks and decisions is fundamentally different from the management of routine tasks

• standard instruments and management techniques for routine tasks and decisions of medium complexity fail in the face of innovative decisions

• appropriate awareness and assessment of the innovative content of a decision (i.e., the degree of innovativeness) is a prerequisite of successful innovation management

• innovations barriers

• unclear goals / uncertainty

• cooperative leadership

• building networks and markets

• radical innovations are perceived as non-innovative

• the decision-making process is delayed or never starts

• development projects may be terminated too early or may not receive enough attention

• wasted opportunities: competitiveness dwindles, cost savings or additional profits are not realized

• gimmicks are perceived as innovative

• waste of time and money on top management or expert decisions. Resources are used to solve a problem that could been solved by conventional means

• negative consequences for decision-making culture: the inflationary use of the word “innovation” implies that advocates of less significant problems demand more attention than they deserve

Innovation Management is the deliberate organization and coordination of the corporate innovation system, i. e. not only of single innovation processes but also the institution (the strategy, structure, culture and actors), in which these processes occur.

technology management incorporates the analysis, planning, processing and control of decisions and actions in order to build and develop technological capabilities of companies.

• knowledge of new technologies and new needs

• stimulation of new thoughts and ideas, creativity

• communication and networking

• selecting and supporting promising concepts

• focused, target-oriented projects

• knowledge of potential customers and their needs

• knowledge of feasible technologies

• coordination of activities, resources, employees, planning, control, communication and management

  
  

• qualification, durability assurance

• cost management of human resources

• marketing, sales

• services

• competition

• search an internal and external environment

• generate ideas and concepts

• strictly select valuable ideas and concepts

• step-wise reduction of uncertainty

• cross-functional team work & project management

• experimentation and problem solving

• customer integration/Co-Development

• f.ex. design thinking process, scrum, prototyping

• market testing and market feedback

• transfer to serial/mass production

• adoption and diffusion

• knowledge transfer and follow-up innovation

• clear innovation strategy that is derived from business strategy

• understanding technology trends and future customer needs

• balance incremental and radical innovation

• autonomy and freedom for innovative ideas

• failure-tolerant innovation climate

• support of promoters and champions

Corporate Strategy can be defined as “…the pattern of major objectives, purposes or goals and essential policies and plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in and the kind of company it is or is to be…”. Andrews (1971)

Strategic Management is a way of approaching business opportunities and challenges aimed at formulating and implementing strategies that promote a superior alignment between the organization and its environment and the achievement of its goals.

reflects the plan nationally conceived and conceptualised by management to achieve a predetermined clear goal

is the strategy that is eventually implemented. It passes through a multitude of negotiations, agreements and compomises

• is the predominant part of the implemented strategy, which is formed from individual decisions

• comes from a complex social process in which individual managers interpret and adapt the communicated strategy

for example: prof. kocks lebenslauf shows that becoming a professor was the plan, although it was not

• plan: an intentionally selected course of action or guideline to manage a situation

• ploy: a specific dynamic maneuver to overcome the competition (in battle) (tactic)

• pattern: a pattern in a stream of actions that reflects consistens behavior of the organization

• position: the match between the organization and its environment (competitive advantage)

• perspective: an abstraction existing in th individuals minds. shared visions and mental images form a common understanding and culture with the organization

• articulates the position that an organization would like to attain in the distant future

• future aspirations that lead to an inspiration to be the best in one’s field of activity

characteristics:

• creates identity and shared purpose

• inspires and motivates

• long-term focus, low complexity, high abstraction

• describes what an organization is and why it exists

• essential purpose of the organization, concerning questions like “what is our business”, “who are our customers”

characteristics:

• feasible and reachable

• precise and clear

• mid- to long-term focus, medium complexity

• bundle of decisions, actions and behaviors that aim at achieving long-term success

• aligns (1) strengths & weaknesses, (2) opportunities & threats, (3) objectives & values, and (4) stakeholder expectations

characteristics:

• mid- to long-term focus

• high complexity

• low abstraction

• market based view

  • capability of companies to identify market opportunities

  • focus on market-relevant characteristics

• resource-based view

  • a company’s strategic resources, skills and competences are the foundation for competitive advantage

  • focus on internal perspective

valuable, rare, inimitable, non-substitutable (VRIN)

• ignoring factors surrounding resources

• potentially tautological framework (e.g. if value is defined as giving competitive advantage)

competitive advantage principle: Resting on distinctive processes (ways of coordinating and combining), shaped by the firm's asset positions (such as the firm's portfolio of difficultto-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited

• innovation strategy is a part of overall business strategy that determines when and where innovation is required to meet the aims of the organization and lays out in broad terms what is to be done about it

• innovation strategy is derived from firm strategy

• the market segments and target customers to be adresses

• the product policy guidelines

• the timing of the product launch

• the required technologies

• the allocation of resources regarding these technologies, including make-or-buy decisions

• the timing of technology development (technology roadmaps)

• apple:

  • focus on digital consumer opportunity

  • simplify the consumer experience

  • design the most beautiful products

  • combine hardware, software and cloud

  • expect to invent the next big thing

• google:

  • focus on innovation culture

  • hire engineers out of school

  • one day of the week free for own projects

  • very aggressive large scale goals

  • develop ideas faster than anyone else

  • expect to solve the impossible

• amazon:

  • build a pioneering company and culture

  • hire people who like a rapid rate of change

  • keep new ideas percolating

  • try many ideas at any time

  • use tools to make the world better

basis concept:

• technology s-curve models are based on the idea of technology life cycles (birth, growth, decline of technologies)

• s-curve is a graphical design that demonstrates the performance of a technology relative to its cumulative R&D investments

• slope describes R&D productivity, i.e. the increase of performance of a technology by an additional use of R&D resources

• shape is due to slow introduction phase and natural performance limits

assumptions:

• at any time, technologies can reach their natural performance limits at least in a certain application area

• totally new technologies arise and will substitute the current technologies

examples for physical limits:

• sail boat and wind energy

• copper cable and capacity

• semiconductor and transmission speed

strengths:

• technology s-curve is a centerpiece in thinking about technology and innovation strategy

• inductively derived theory of the potential for technological improvement

• useful insights at an aggregate, industry level about potential of the technology

weaknesses:

• selection of technologies to be integrated in the analysis

• determination of the performance scale

• estimation of the cumulated R&D investments of the analyzed technologies

• big uncertainty regarding the further development course and performance limits of the analyzed technologies

• not all technologies follow s-curved patterns

• the environment dimension also has a negative effect

• the degree of technological innovation has an indirect effect on success because it positively influences the other three dimensions; the overall influence is therefore zero, because positive and negative indirect effects are equally strong

• the cumulated influence is inverted U-shaped (there is an optimal degree of innovativeness

—> the relationship between innovativeness and success is complex, but not unclear

• systematic evaluation of the degree of innovativeness before and during the project is essential

• organizational and environmental dimensions must be taken into account in project evaluations

• a sense of proportion in selecting innovation projects is necessary -> no innovation for the sake of innovation

• classic project success criteria are rather unsuitable for innovative projects and can lead to early project termination

• conscious selection of a small number of highly innovative projects in combination with incremental projects -> protfolio approach to innovation is necessary

• Disruptive technologies are innovations that first result in lower product performance in established value networks but offer a new mix of performance attributes.

• For example, disruptive technologies may be cheaper, simpler, smaller, more accessible or more convenient to use.

• Leading firm’s most profitable customers generally do not want, and initially cannot use, products based on disruptive technologies.

• Disruptive technologies typically are first commercialized in emerging or insignificant markets.

• Disruptive is relative

• No innovation is inherently disruptive

• A given innovation can be disruptive to one firm but sustaining to another firm

• For instance, the internet was a sustaining innovation for mail-order retailers, while it is disruptive for in-store retailers

Technologies and business models go together – disruptive innovation must be evaluated relative to a firm’s business model

Absorb the disruptive technology by building a separated organizational function.

• Strengthen the core business and relationships with customers by building sustaining innovations

• A separate organizational to focus on growth opportunities of disruptive technologies. (separated from the core business)

• New unit is unencumbered by existing customers demand, margins and market-size thresholds

• Re-integration to the main organization after success and growth

Empirical support for success (Christensen and Raynor, 2003, Gilbert 2006)

Critique:

Separation also has disadvantages (Gemünden/Salomo/Krieger 2015; O’Reilly and Tushman 2016):

• Creation of interfaces that need coordination

• Higher visibility of new unit (easy to terminate)

• Redundancy (lacking synergies with main organization)

• Internal competition and conflicts with main organization

• Resource intensive

Organizational separation does not have a significant impact on innovation success in case of radical innovation (Gemünden/Salomo/Krieger, 2015)

Aggressively invest in existing capabilities to extend current performance-improvement trajectories to slow onset of disruption

• Reposition in profitable new niches

• Co-opt disruptive entrants once they start challenging incumbents’ market leadership (e.g., partner, license startup technology, acquire entrants)

• Pursue technology reemergence: redefine the meanings and values associated with legacy technology (and create new performance dimensions)

• Hybrid offerings (combine features of emerging and existing offerings): Hybrid cars, online newspapers, hybrid brick-and- mortar/online video rental

• Insulate disruptive innovation efforts from evaluation metrics that favor sustaining innovation (e.g., discounted cash flow)

Pioneer:

“We want to be on the leading edge - not on the bleeding edge.”

Follower:

“You don ́t have to get the first bite of an apple to make out. The second or third juicy bite is good enough. Just be careful not to get the tenth skimpy one.”

Advantages:

• Establish barriers to imitation

• Reap early profits

• Leadership reputation with customers & users

• Create switching costs

• Lock-in key suppliers

• Define industry standards

• Pre-empt scarce resources (see next slide)

• Capitalize non-linear effects of s-curves, learning curves, and diffusion curve (see following slides)

Disadvantages

• Incur pioneering costs, from which followers can also benefit

• Experience greatest demand uncertainty

• Experience difficulties of unproven technologies (“bugs”)

• Cope with changing customer/ user needs

• Make irreversible specific capital investments

• Cope with unexpected low-cost imitation

• geographic space: Prime physical locations with access to local resources: natural resources, traffic flows, financial flows, consumption flows, local knowledge-flows, political decision-making flows, etc.

• Communication space: Prime access to communication flows through control over mass media like radio, TV, print media, heavily visited sites on the web.

• Technological knowledge space:Prime access to knowledge generating and diffusing institutions, which act as competence center & diffusion agents. (e.g., TÜV, food and drug administration in the U.S.)

• Cultural space: Attracting and activating high potentials and their cooperation through an entrepreneurial achievement-oriented culture.

• Legal space: Exclusive rights for business licenses, exclusive occupation of legal rights like patents, trademarks, or trade-secrets.

• Disruption space: Access to physical distribution (particularly relevant for consumer goods in a highly concentrated retailing industry).

Advantages:

• Free ride on first mover investments (cheap access to knowledge and markets)

• Resolution of market, technological or regulatory uncertainty

• Development in technology and/or changes in customer needs

• Targeting of other market segments

• Better complementary assets

Disadvantages:

• Entry barriers

• Innovator is market and technology leader

• No image advantages

• Adjustment to standards required

“the pattern of basic assumptions that a group has invented, discovered or developed to cope with its problems of external adoption or internal integration, that has worked well and are taught to new members as the way to perceive, think, feel and behave.”

—> aggregation of values, norms, beliefs and attitudes in a company

“perceptions of the events, practices and procedures and the kinds of behavior that are rewarded, supported, and expected in a setting

—> shared perception of the working environment

climate can be changed much more easily than culture

• artifacts/symbols/signs: corporate identity, technologies, architecture, behavioral patterns, rituals and stories

• norms and standards: formal rules, behavioral standards

• basic assumptions = world view of the companies:

  • about thruth and time

  • about the environment

  • about the nature of mankind

  • about the nature of human relationships

• hierarchy

• pay levels

• job description

• informal practices such as norms

• espoused values and rituals

• stories, jokes and jargons

• physical environment

• system openness: ready for innovation dialogue, open-minded

• degree of organization: conscious doage of the degree of organization: organization as free space for action and not as a restriction of freedom to act

• information style: informal information relationships

• cooperation promotion: willingness to cooperate and actively promote -> mutual appreciation

• conflict awareness: positive attitude towards conflict

• recruitment mode and personnel development: unconventional conflict-prone people

• competence and responsibility: more flexible understanding of responsibility

• organizational encouragement

• supervisory encouragement

• work group supports

• sufficient resources

• challenging work

• freedom

• organizational impediments

• workload pressure

• openness & flexibility vs. reflexivity

• supervisory support vs. participation

• communication vs. collaboration

• psychological safety

  
  

  a strong innovation climate requires a comprehensive set of balanced, innovation-promoting factors

  
  

• “The fear of mistakes paralyses, and the claim to control everything not only costs an incredible amount of energy, but also makes operationally blind.”

• "I'd rather ask for forgiveness afterwards than always ask for permission before.”

• “Try to kill every project you have, then successful ones will emerge.”

• Promotors (in general)

  • are persons, who actively and intensively support an innovation

  • start an innovation process

  • sustain a high activity level

  • terminate the decision process

• Power Promotor

  • has hierarchical power

  • has access to material resources

  • acts as an investor

  • legitimizes projects

  • influences personnel decisions

  • blocks opposition

  • protects expert promotors

  • influences priorities and schedules

  -> surmount barriers of will through their hierarchical potential

• Expert Promotor

  • knows critical details

  • develops alternatives

  • evaluates external solution

  • proposals

  • implements concepts

  • tests prototypes

  • solves problems

  -> surmount barriers of capability through their expert knowledge

Process Promotor

• has some hierarchical influence

• knows processes, rules, values

• has social competence, and good

internal networks

• searches and promotes people with ideas and initiative

• gives contacts to senior management

• plans, controls, moderates change processes, supports flow of information

• builds trust, solves conflicts, supports common goals within the firm

Relationship promoter

• has market-based influence

• knows players and rules of a market

• has social competence, and good external networks

• hinds adequate cooperation- partners and promotes them

• gives contact to internal promotors

• plans, controls, moderates exchange processes , supports flow of information

• builds trust, solves conflicts, supports common goals between firms

• Promotors are informal roles that are defined by - the barrier they overcome,

- the power base they have, and - the contributions they make

• Promotors are beneficial for innovation processes

• Promotor roles can change over the course of the process; several people can play the same role; individuals can play multiple roles

• Ideally, promotor roles are played by different people

• Promotors cannot be formally appointed, they act out of their own motivation

-> find promotors

-> support promotors

-> retain promotors

advantages:

• close to the market

• flexibility

• allows cross-functional coordination

• immediate response to market changes

disadvantages:

• redundancy, no synergies across businesses

• “applicationcloseness” —> neglecting the risk of long-term goals

advantages:

• knowledge concentration

• cost advantages

• coordination

• support of long-term goals

disadvantages:

• “ivory tower effect”

• transfer problems in project implementation

• “happy engineering” —> inefficient / ineffective

advantages:

• clear responsibilities for innovation

• development of specific skills

disadvantages:

• insufficient resources

• no basis for long-term R&D platforms

overemphasis on existing competences

-> f. ex. VW

overemohasis on improving existing products reduces learning of new skills leading to obsolescence

“such things as refinement, choice, production, efficiency, selection, implementation, execution”

the focus is on reducing varietey, increasing efficiency, and improving alignment to current environments (short-term performance)

overemphasis on new competences

-> f. ex. sony ericsson, tesla

overemphasis on exploring new competences risks spending scarce resources with very little payback

-> companies that only explore may not survive today, companies that only exploit may not survive tomorrow

“things captured by terms such as search, variation, risk taking, experimentation, play, flexibility, discovery, innovation

the focus is on seeking variety and increasing adaptibility (long-term performance)

-> firm performance depends on balance

• follow the rules and drive out the variance and slack

• focus on serving existing customers and their needs

• manage and refine existing competences

• make money now

• will more likely lead to incremental innovation

• profits from a more mechanistic organization

terms associated with exploitation:

refinement, control, production, efficiency, selection, implementation, execution, disciplined Management, elimination of variance, short-term focus

• break the rules and promote variance and slack

• serve new customers with new needs

• develop and lead new competences

• make money later

• will more likely lead to radical innovation

• profits from a more organic organization

terms associated with exploration:

search, variation, experimentation, play, flexibility, discovery, innovation, risk taking, tolerant of failure, long-term perspective

• long periods of exploiting punctuated by short bursts of exploration

• response to dramatic external or internal change

• more useful in stable, slower moving environments

• often the case in the evolution of start-ups because of the lack of resources to simultaneously purse exploration and exploitation

f. ex. startup, nokia, hp, ford

• establish project teams that are structurally independent units, each having its own processes, structures, and cultures, but are integrated into the existing management hierarchy

• requires that the two types of business are held together through senior management team

• requires integration, common vision and values, and common senior-team rewards

f. ex. siemens, ABInBev

• take initiative and are alert to opportunities beyond the confines of their own jobs

• are cooperative and seek out opportunities to combine their efforts with others

• are brokers, always looking to build internal linkages

• are multi-taskers who are comfortable wearing more than one hat

• idea generation, strategic fit

• selection & consolidation

• decision

• coordination, controlling, leveraging synergies

• benefit realization

root causes:

• lack of goal & decision making clarity

• lack of transparency over project portfolio

• lack of responsiveness & pro-activeness

• maximize value of portfolio: allocate resources so as to maximize the portfolio in terms of some business objective, e.g. expected net present return on net assets

• balance of projects: restrict potfolio risk: achieve desired balance of projects in terms of, e.g., long vs. short term or high vs. low risk, across markets, technologies and project types

• strategic alignment of projects: ensure that breakdown of spending truly reflects business strategy - that all projects are “on-stretegy”

there may be conflicts and trade-offs between these three objectives! Portfolio success must therefore be multi-dimensional

• recognize and terminate non-successful projects early

• reduce error rates

• increase effectiveness -> developing the “right” products and services

• increase efficiency (with a minimum of resources)

• better documentation and process controlling

• learn from experience (from previous projects)

• strengthen communication between departments and team members by establishing a shared understanding

• subdivide the innovation process into a defined set of discrete and identifiable phases (stage)

• each phase contains a set of prescribed, interdisciplinary and parallel activities

• a gate forms the end of each phase

• the gates control the process and represent quality inspections: decisions about the further process

• gates have a uniform structure and consist of three main elements: deliverables, criteria, outputs

stage:

• gather information in order to minimize project risks

• reduce uncertainty faster than costs increase

• activities run in parallel and are carried out by an interdisciplinary team

• each phase is cross-functional: no department is responsible for its own phase but interaction is required

gates:

• deliverables: results of completed activities, visible and standardized

• criteria for evaluation:

  • must-criteria

  • can-criteria

• outputs: decision + action plan for the next stage + set deliverables for the next gate

inability to make tough decisions and focus resources

• longer time to market

• poor execution quality

• tasks in the initial phase are not fulfilled

• correct market inputs missing

• uncertain and vague product definitions

• market launches are mediocre

• -> high error rates

• -> long throughput times

• -> low profits

• appropriate balance between errors of acceptance and errors of rejection

• project evaluation is characterized by uncertainty of information and lack of reliable financial data

• each decision point is only a preliminary approval in an ongoing conditional process

• project evaluation includes a variety of objectives and therefore considers several decision criteria

• the evaluation method must be realistic, easy to use and robust

1. gates without teeth

2. hollow decisions at the gates

3. who are the gatekeepers?

4. inappropriate behavior of gatekeepers

5. set up portfolio management without a stage-gate process

6. too much ureaucracy in the initiative process

7. a lot of work without direct added value in the stages

8. too much trust in software solutions

9. expect the impossible from a process

• all projects must pass the gates. no special treatment or bypass

• scheduled gate meetings should be attended by gatekeepers. if a team cannot deliver the agreed work packages for the gate on time, the gate should be moved and re-scheduled

• if a gatekeeper cannot attend, a representative can be sent to decide

• gatekeepers should avoid decision meetings before the gate (premature evaluations) the gate meeting represents new data and raises new questions

• a decision must be made on the day of the gate meeting, the project team must be informed about the decision, personally and with justification

• if resources are allocated by the gatekeepers (personnel, time, money), these commutments should be strictly kept

• gatekeepers must accept and follow these rules

summary:

• stage-gate systems are in essence beneficial (increased success rate, reduces uncertainty, higher development speed, etc.)

• wrong application can be dangerous

• inherent problems with the system (too much formalization, high reliance on financial criteria) can be harmful for the company’s overall innovation system and reduce innovativeness of products

implications:

• formalization per se does not prevent innovation, but

• complement formal control with informal control (autonomy, cross-functional collaboration)

• prefer target results and milestones over strictly prescribed procedures and strict phase structures

• radical innovation needs different evaluation criteria and control systems

• divergence paradigm (bottom-up)

• funnel paradigm (horizontal)

• planning paradigm (top-down)

• initiating person

• divergence

• perception of divergence

• motivation to become active

• communication

• automation

• divergence paradigm (bottom-up)

  • bottom-up movement

  • change it, love it or leave it

  • human-oriented stimulation of the initiative process

  • team- & community based integration of technology and market

• funnel paradigm (horizontal)

  • development and design perspective: What should the innovation engine or innovation funnel look like?

  • focused on the functions that an innovation system should fulfil, especially in the early phases of the innovation process

• planning paradigm (top-down)

  • systematic, strategy-oriented, top-down stimulation of initiatives

  • planning-based integration of technology push and market pull

• shocks to the system

• accidents

• watching others

• recombination innovation

• regulation

• avertising

• inspiration

• knowledge push

• need pull

• users as innovators

• exploring alternative future

• lesson 1: evolution and innovation usually happen in the realm of the adjacent possible

• lesson 2: world-changing ideas generally evolve over time as slow hunches rather than sudden breakthroughs

• lesson 3: platforms are springboards for innovations

• lesson 4: innovation and evolution thrive in large networks

• lesson 5: collaboration is at least as important a driver of innovation as competition

• lesson 6: lucky connections between ideas drive innovation

• lesson 7: serendippitous discoveries can be facilitated by a share intellectual or physical space

• lesson 8: great innovations emerge from environments that are partly contaminated by error

• lesson 9: innovation thrives on reinventing and reusing the ols

• the development of new and useful ideas

• “a response will be judged as creative to the extent that it is both a novel and appropriate, useful, correct or valueble response to the task at hand and the task is heuristic rather than algorithmic”

  
  

• intuitive-creative methods

  • free association, analogy building, intuitive confrontation

    • brainstorming

    • brainwriting

    • scamper

• semantic-analytical methods

  • planned and systematic generation of problem solutions

    • morphological analysis

    • TRIZ (Theory of Inventive problem solving

  • 
    

• goal: find as many ideas as possible with the help of a group

• concept and principles:

  • intuitive-creative method

  • particularly suitable for ideas of simple complexity

  • based on the principles of

    • postponement of criticism

    • quantity creates quality

• rules according to osborn:

  1. no criticism

  2. freewheeling welcome

  3. quantity desired

  4. combining/improving ideas encouraged

• threats of face-to-face brainstorming groups:

  • production blocking

  • social loafing

  • evaluation anxiety and conformity

  • downward norm setting

• preparation

• execution

• evaluation

pros:

• short time, many ideas

• commitment of all regarding the solution increases

• combined ideas because of group

• no criticism -> motivation and satisfaction

• simple, flexible, fast to learn, very widespread

cons:

• insufficient consideration of quality

• solution strongly dependent on formulation of the question

• high effort for evaluation and selection of ideas

• only for low complexity problems (no resolution of the problem)

• negative group dynamics cannot be excluded

• meaning: 6 people write down 3 ideas in 5 minutes

• usage: for tasks that require more complex formulations

• execution:

  1. six people sit down at one table. each one has a pen and a note

  2. each writes three ideas for the task on the piece of paper. there are 5 minutes available for this

  3. the notes are passed on to the neighbour

  4. the whole thing is repeated until everyone has worked on each piece of paper

• avantages:

  • quieter process

  • equal treatment of all participants

• visualization tool

• tabular display of all parameters with their characteristics

• ideal: all solution combinations visible

• approach:

  1. a precise description and definition of the problem

  2. partial aspects (parameters) are searched for and described

     1. complete, no overlapping

     2. independent, essential for the research question

  3. arrangement in a matrix

     1. parameters in first column, right: values

     2. matrix size = parameter x values

  4. analysis and evaluation of all possible combinations

  5. selection and realization of the optimal solution

pros:

• flexible and universally applicable

• also suitable for complex problems

• all possible solutions become visible

• information is condensed

• analytic approach trains cognitive skills

cons:

• labor-intensive and time-consuming

• precise, selective thinking necessary

• deep understanding of the problem and expert knowledge necessary

• high expenditure for elimination of unsuitable solutions

• information overload

pros:

• especially helpful in mature markets where there are many competing solutions

• easy to use, works like a checklist

• can be used alone or in a team

• can be used for a wide variety of topics

• questions structure the process and thus make it mor efficient

cons:

• needs additional technique for idea selection

• hardly suitable for narrowly defined problems

• less effective within a rigid process flow with specified delivery dates

• if there is insufficient moderation, the session can slide into unproductive discussions

• with large groups, the execution and evaluation can quickly become confusing

• necessary aspects:

  • clearer understanding of front-end output

  • exact knowledge of necessary activities in the front-end

  • knowledge of how to overcome difficulties

• clear product definition as output

  • description of a new product idea as well as its properties and the associated customer benefits (product concept)

  • information on target markets, customer needs, product specifications, positioning and requirements

  • good product definition creates a clear understanding of the development time, development costs, technical expertise, maket potential, risk and organizational fit

• main task: risk calculation and reduction of uncertainty through rapid identification and evalutaion of information on changes in technologies, markets, internal organizational developments and other competitors

• goal: rapid concretization of ideas into conepts that can be used further

• success factors

  • internal cooperation between departments

  • composition of project teams

  • cooperation with external actors

• Question to be answered: should an idea be further developed or rejected?

• qualitative and quantitative criteria for assessment (potential market demand, technical feasibility, added value for the company portfolio, strategic fit with corporate strategy, etc.). The right balance of criteria is necessary in order not to sort out good ideas at an early stage, but not to pursue bad ones further if possible

• for critical evaluation, “external” persons should also be consulted

• dissatisfier:

  • characteristics a product or service must have (expected quality)

  • can only decrease the customer satisfaction but not increase

• satisfier:

  • desired product characteristics that can linearly increase or decrease satisfaction

• delighters:

  • customers are excited about new features (wow-effect)

• over the time a delightful innovation becomes a basic need

• method for supporting customer-oriented product development

• comparison between requirements and characteristics of the new product as a central element

• component of total quality managment

• usability from product development to the maufacturing process (first application in 1966 at Bridgestone Kurume Factory in Japan)

• today QFD is often presented as house of quality

• understand customer wishes and translate customer requirements into real products

• link market requirements and technical solutions

• improved communication between development, production and marketing

• identify opportunities for further development and differentiation of products

• errors in product development, long development times and non-compliance with market requirements should be avoided

1. enter customer requirements

2. weighting of customer requirements

3. customer service / customer complaints

4. competitive comparison from the customer’s point of view

5. analysis of the competitive comparison

6. determination of product characteristics

7. definition of measurable target values for the product characteristics

8. optimization direction

9. relationship strengths between customer

10. assessment of the balance of product characteristics

11. technical competitive comparison

12. evaluation of the importance of product features from the customers point of view

13. difficulty - critical features

14. definition of the sales focus points

• who is the customer?

• what problem are they trying to solve?

• what customer segment makes the most attractive target?

• understanding customer needs is crucial to develop right products or services

• all involved innovation team members should have the same understanding of these customer needs

• but a language to communicate needs does not exist

• progress is hinderes when you cannot agree on the characteristics, structure, and format of the customer need statements

• customers often have needs they are unaware of or are unable to articulate (latent needs)

• an approach to overcome these problems is the use of personas, but personas neither represent real customers and their needs nor their size and importance of that market segment

• “people don’t want a quarter inch drill, they want a qurter inch hole”

• two different options to analyse a market:

  • analyse the products that comprise the market

  • analyse the reason why the product is needed (job-to-be-done)

• the jobs-to-be-done perspective provides a new way to

  • define customers, markets, and needs

  • segment and size markets

  • construct and test ideas

• customers are not good at imagining solutions that go beyond what they already know

• but they can talk about their tasks and the difficulties they face

• observe customers and talk to them to find out more about their tasks

• talk to customers of competing solutions or customers who reject existing solutions

• the goal is less to understand the person than his or her situation

• this situation can be illustrated by a sequence of events, experiences, and thought processes

• in some cases, you may be surprised by the reasons customers value your services (example case on the next slide)

• stagnating milkshake sales let a big fast food chain apply the ODI approach

• what job causes you to hire a milkshake?

• half of the milkshakes were sold before 8 am

• customers were alone and the milkshake was the only thing they bought, didn’t spend time within the ‘restaurant’ and drove directly away

• a survey showed that all customers:

  • had a long drive to work

  • needed something to do with their second hand while they drove

  • weren’t hungry, but knew they’d be hungry at 10 am, so they needed something to stay in their stomach

• neither a bagel nor a banana, a donut nor a snickers bar gets the job done

• milkshake is convenient: it fits in hand and cupholder and takes 20 min while driving to work. ingredients don’t matter that much

• core growth: meet unmet needs and outcome expectation associated with a job that customers want to achieve. perfecting the current solution paradigm

• related job growth: bundle solutions that achieve the needs of more than one main or related jobs-to-be-done

• new job growth: expand the solution space to accomplish different jobs-to-be-done

• disruptive growth: change noncustomers to customers by offering solutions that more customers can afford

1. define a market

2. identify needs

3. quantify needs

4. identify market segments

5. analyse the data

• outcome expectations are solution-neutral and reside at a higher level than functional apsects of a job-to-be-done (increase the duration of illumination - using any solution)

• it is important to define any outcome expectations associated with a job-to-be-done to understand with which solutions customers are satisfied and where there is potential to innovate

• view outcome expectations as hiring criteria

• customers usually hire a solution (product/service) that provides more benefits (desired outcomes) and less cost and harm (undesired outcomes)

• outcome expectations exist not only for customers but also for the provider of a solution

1. desired outcomes customers want to achieve

2. undesired outcomes customers want to avoid

3. desired outcomes providers want to achieve

4. undesired outcomes providers want to avoid

"A team can be defined as a social system of three or more people, which is embedded in an organization (context), whose members have a common identity, and who collaborate on a common task (teamwork).”

Högl/Gemünden (2001)

• early warning tool (six dimensions)

  
  

Adoption is an individual process detailing the series of stages one undergoes from first hearing about an innovation to finally adopting it

diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system

• before a potential adopter cognitively deals with an innovation, it is necessary to overcome the perception barrier

• relevant: terminology, attributes, attribute characteristics, product use

• “selective exposure”: which information reaches the individual?

• “selective attention”: which information is perceived?

• offers that do not overcome this barrier do not reach te “evoked set” (“passive rejection”)

• in reality: information reception does not end with this phase

• in this phase the individual compares the perceived information with his/her personal situation and goals

• basis = perceptions (not objective reality)

• the linking process of the individual is modelles in different ways

• models originate predominantly from psychology

  • theory of reasoned action

  • theory of planned behavior

• in the decision phase, the innovation is “adopted”

• observable behavior

• partial “re-invention”

• often observable: high demand for information after adoption (ex-post justification for reducing cognitive dissonance)

• the best known typology is by Rogers (2003), who divided customers into five groups (Innovators, early users, early majority, late majority, laggards)

• innovator = willing to take risks, open to changes, less dogmatic, higher social status, higher level of education, better social integration etc.

• numerous empirical studies show that these considerations apply relatively clearly

• relative advantage: created benefit increment. this aggregated category encompasses various aspects and has the strongest positive effect on adoption

• complexity: level of difficulty of an innovation - with what cognitive effort can a user understand and use the innovation? negative effect on adoption

• compatibility: to what extent does the innovation coincide with the views of the potential adopter? is it related to values, experiences, resources, etc.? positive effect on adoption

• perceptibility: to what extent is the innovation detectable for the members of the social system? communicability and visibility of the benefits of an innovation

• testability: possibility of trial use without commitment. only few and contradictory empricial findings

• perceived risk: adopters uncertainty as to whether they will actually achieve their innovation goals. empricial studies show strong effect on adoption

diffusion is a social process

explanation:

• for most members of social systems, the adoption decision depends heavily on the adoption decisions of other members

• the more people accept an innovation, the lower the perceived adoption risk

• the reault is an S-shaped diffusion curve (integral of the adoption curve)

• refers to technologies

• includes the development and protection of a firm’s technological competitiveness (as part of strategic management)

• not only focused on new technologies, but also on existing technologies

• neglects customers (product market) and exploitation

focus on portfolio of strategic technological capabilities of a firm

• refers to all types of innovation (product, process, social, organizational innovations)

• includes overcoming of innovation barriers within the company and in the market

• emphasizes behavioral issues

• focuses on possible implementation of intentions and otions of exploitation

• combines technologies and user needs into a product / service

• considers customers and market exploitation

focus on organizational, institutional and social implementation

goals:

• maintain and increase competitiveness

• support sustainable corporate success

tasks:

• identifictaion and evaluation of new technological options (foresight)

• assessment of technologies and technical knowledge

• protection and development of own R&D potential

• selection and development of innovative technology fields

• planning and control of technology-related processes and measures

• managing technology-related projects and ensuring an innovative working atmosphere

-… to seperate hype from the real drivers of a technology’s commercial promise

-… to reduce the risk of their technology investment decisions

-… to compare their understanding of a technology’s business value with the objectivity of experienced analysts

“a patent is a legal title granting its holder the exclusive right to make holder the exclusive right to make use of an invention for a limited area and time by stopping others from, among other things, making, using or selling it without authorization”

effect

• invention may not be commercially used or sold without the consent of the patent holder

• protection of the invention for a period of 20 years

• enforcement by courts

reasons:

• disclosure of the invention for the public good

• temporary monopoly of the inventor as an incentive for investment in research and development

• extreme growth in patenting has been associated with a detoriation of patent quality -> patent landscape is littered with ‘weak patents’ that are unlikely to be enforced by courts if challenged

• the problem of patent thickets - fragmented property rights that require a firm to secure license agreements from many patentees in order to undertake R&D, making innovation more difficult and costly

• risking costs of enforcing patent rights once they have been secured discourage innovation in the first place

Freedom to operate (FTO) is usually used to mean determining whether a particular action, such as testing or commercializing a product, can be done without infringing valid intellectual property rights to others

Example:

• company A developed a hybrid motor, an improved version of the one that company B patented by patent B two years ago

• company A gets patent A granted as the invention is novel, inventive and useful

• however, as the basic parts are covered in the patent B of company B the freedom to operate is not fulfilled

• company A needs to license in patent B to manufacture and sell the motor coveres by its own patent

for patenting:

• protection of proprietary product/process technologies

• possibility of retaliation against competitors

• possibility of license sale

• access to new technologies through “cross-licensing”

• faciliated R&D cooperation with others

• negotiating power in setting industry standards

• motivation for employees to be inventive

• measurement of R&D productivity

• improving the reputation of the company

against patenting:

• publication of technical information (duty of disclosure)

• publication of strategic thrust directions

• costs (search, registration, maintenance, enforcement)

• not all inventions are patentable

• any confidential business information which provides an enterprise a competitive edge may be considered a trade secret

• trade secrets encompass manufacturing or industrial secrets and commercial secrets. the unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret

pros:

• not limited in time

• no registration costs, no formalities (however, other cost of confidentiality)

• immediate effect

• no disclosure of information (as compared to patents)

cons:

• if secret is embodied in a product, others may be able to discover it

• more difficult to enforce than a patent

• secret may be patented by someone else who developed the relevant information by legitimate means

Innovation that displaces established market-leading firms, products and alliances

The capability to do exploration and exploitation equally well