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Design and Implementation
                 of
        Technology Strategy:
Transforming Invention to Innovation




                    Lecture by:
                            by:
            Djadja.Sardjana@gmail.com

27-Jul-09
27-Jul-               IMT MM-Biztel
                          MM-           1
Design and Implementation
                 of
        Technology Strategy:
Transforming Invention to Innovation



            Definition and Scope
                       IBM
                       30s




27-Jul-09
27-Jul-            IMT MM-Biztel
                       MM-         2
Definition

-   Invention

-   Innovation

-   Innovation diffusion

-   Innovation as part of Entrepreneurship Soul
Definition
                       An invention is an object, process, or
                       technique which displays an element of
                       novelty.
-   Invention
                       Inventions may be concepts, physical
-   Innovation         devices or any other set of things that
                       facilitate an action.

-   Innovation diffusion

-   Innovation as part of Entrepreneurship Soul
                       The invention of a new product or process
                       occurs within what could be called the
                       techno-scientific sphere and it can remain
                       there forever.
Inventors
Definition
                   Innovation = the introduction of something new
-   Change

-   Invention
                   An innovation is an invention that has been put into
                   practice. Innovation occurs when someone uses an
-   Innovation     invention - or uses existing tools in a new way - to
                   change how things work

-   Innovation diffusion

-   Innovation as part of Entrepreneurship Soul
Innovation

„Innovation is the doing of new things or the doing of things that are
already being done in a new way… Innovation is a process by which
new products and techniques are introduced into the economic
system.“(Schumpeter
system.“(Schumpeter 1947)
“the first commercialization of an idea” (Fagerberg 2004)
                                   idea”
An innovation is the implementation of a new or significantly improved
product, or process, a new marketing method, or a new organisational
method in business practice, workplance organisation or external
relations (OECD)
Innovation is an invention that has been successfully implementated
and introduced in the market
Features of Innovation
Novelty:
Innovation is something new
    • Function
    • Technic
    • Design (?)

Implementation:
Innovation is introduced into market

Modification:
A innovation should cause a change/improvement
Innovator
To be able to turn an invention into an
innovation, a firm normally needs to combin e
several types of knowledge, capabilities, skills
and resources

An innovator is the person or organizational unit
responsible for combining the factors necessary
Innovators
   Apple vs
   Microsoft
      5m
And this is not Innovation
Ceasing to use a process, a marketing method or an
organisation method, or to market a product

Simple capital replacement or extension

Changes resulting purely from factor prices

Customisation

Regular seasonal and other cyclical changes
Definition

-   Invention

-   Innovation

-   Innovation diffusion / adoption
                       Is The spreading of innovations
                       new ideas and technology through society
-   Entrepreneurship
Diffusion of innovation
Everett Rogers: Diffusion of Innovations (1962)
„An innovation is an idea perceived as new by the
individual.
Diffusion is the process by which an innovation
spreads…
Adoption is the decision to continue full use of an
innovation.”
innovation.”

5 Adopters‘ categories:
   Innovators (2,5%)
   Early adopters (13,5%)
   Early majority (34%)
   Late majority (34%)
   Laggards (16%)                        Diffusion
                                          3m57
Diffusion
The spread of a new product or process
throughout society or markets
Important process that enables an
innovation to contribute to economic
growth and welfare
Focus on adoption of innovations
Macro perspective
Innovation Diffusion
Definition

-   Change

-   Invention

-   Innovation

-   Innovation diffusion / adoption

-   Innovation as part of Entrepreneurship Soul
                  Entrepreneurship is the practice of starting
                  new organizations, particularly new businesses
                  generally in response to identified opportunities.
Innovation as part of
      Entrepreneurship Soul
“Entrepreneurial spirit” to innovate (Schumpeter)

Entrepreneurship as risk taking (Knight, Drucker, Hart,

Stevenson and Dial)

An entrepreneur is a person who undertakes and

operates a new enterprise or venture, and assumes

some accountability for the inherent risks

Entrepreneurship = starting a new businesses
Design and Implementation
                 of
        Technology Strategy:
Transforming Invention to Innovation

            BMW
            1m05




                   Success and Failure
27-Jul-09
27-Jul-                   IMT MM-Biztel
                              MM-         18
80s: Success and Failure in new Product Development




                              Philiform - Philips
Innovators and Followers
           (Teece)
            Teece)

              Success                Failure

Follower          IBM               KODAK
            personal computer   instant photography



              DUPONT                   EMI
Innovator        teflon              scanner
Innovators and Followers

Apply with the           no
                              Likely failure
dominant design?

Supplementing            no
                              Look for a partner
resources available?

Can the intellectual     no
                              Likely failure
property be protected?


Likely to succeed
Success Factor Grading
       1 Not so important                                                 Number of responses
       2 Fairly important
                                                              0   2   4      6          8       10   12   14
       3 Very important
                                         Superior product
                                Strong market orientation
                                 International orientation
                                    More predevelopment
                       Sharp and early product definition
                                Properly executed launch

                     Organisational structure and climate
                                Top management support
Success Factors




                    Technological and Marketing synergy
                                Aim at attractive markets
                                 Sharper project selection
                     Project control / Quality of execution
                          The resources must be in place
                                                     Speed
                                       Stage gate system
                        Protection of intellectual property
                                         Dominant design
                  Secure access to Complementary assets
                        Consumer Innovator / Lead users
                                                 Learning
                                  Non-product advantage
Cassette Deck
            Development time: two years.
The competitor develops a new deck in just half a year.
                     Now what?
Solutions:
• Concurrent Engineering
• Modular design and Platform design
• Marketeers and Engineers work together in an
    early stage
• Rapid prototyping
Stage-
Stage-Gate according to Cooper
portfolio
management
Cooperation in the network economy

                                 R&D, complementary
Access to knowledge
1. Access to knowledge               technology,
                                   share know how


                                         market knowledge,
      Access to new markets
      2. Access to new markets
                                         local party required



                                                      scale,
            Efficiency
             3. Efficiency
                                                specialised partner


                   Clients do do not want
                    4. Clients not want
                                                        satisfy a need,
                   products, but tailored
                       products, but tailored
                                                        not a demand
                   solutions
                       solutions
IMT Lecture: Transforming Invention To Innovation
Managing Diversity


• from ‘gold seeking’ to synergy with
  market, product/application, technology

• PLUS operations fit




• PLUS cultural, human, strategic fit       soft aspects
• yet complementary in competencies!
How to make a company more innovative?


a.   An innovative company should create an
     environment of learning and experimenting,
     rather than planning.
b. HQ should facilitate the initiatives from
   BUs, rather than direct BUs.
c.   Venturing is not ‘just’ for getting new business,
     but more and more to create new options.
d. Key to getting knowledge and strengthening
   own competencies are strategic alliances.
e. Business teams which strongly disagree (yet
   believe in a common objective) are more
   innovative than a too well structured set up.
Leadership
    Creative           9                         Learning
                                                                          and will to
    climate                                    organization
                                    10                                     innovate

                                                                  1
 Customer         8
  focus


     High
involvement in                10 factors for
                            Joe Tidd et al., Managing                       Appropriate
                                                                             structure
  innovation               Innovation, Wiley, 2008 and                2
              7
                              an innovative
                             on, Chapter 11: Building
                           the Innovative Organization
                              Organization                                        Key
  Extensive
                       6                                              3       individuals
communication


                                     5                        4
               Stretching
                                                                          Effective team
                individual
               capabilities
  27-Jul-09
  27-Jul-                           IMT MM-Biztel
                                        MM-
                                                                                            31
Some useful books:                                           Conceptual (C), Instrumental (In), Reader (R)


1.    Brian Twiss, Managing Technological Innovation, Pitman, Longman, London, 1974, 1980, 1986 and 1992. C, In.
2.    Preston G. Smith and Donald G. Reinertsen, Developing Products in Half the Time, New Rules, New Tools, New
      York, Van Nostrand Reinhold, 1991. Second ed. in 1998. In.
3.    Steven C. Wheelwright and Kim B. Clark, Revolutionizing Product Development, Quantum Leaps in Speed,
      Efficiency, and Quality, New York, The Free Press, 1992. In.
4.    Gary Hamel and C.K. Prahalad, Competing for the Future, Breakthrough Strategies for seizing control of your
      industry and creating the markets of tomorrow, Harvard Business School Press, 1994. C.
5.    Stewart Bray, Total Innovation, How to Develop the Products that your Customers want, Pitman Publ./Pearson,
      London, 1995. In.
6.    Robert A. Burgelman et al. The Strategic Management of Technology and Innovation, 2nd ed., Irwin, 2007. C, R.
7.    Robert A. Burgelman , Modesto A. Maidique and Steven C. Wheelwright, Strategic Management of Technology
      and Innovation, second ed., Irwin, 2008. C, R.
8.    R. G. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Portfolio Management for New Products, Hamilton, Ontario,
      McMaster University, 1997. In.
9.    Joe Tidd et al., Managing Innovation, Integrating Technological, Market and Organizational Change, Wiley, 1997.
      Second ed. 2001. C.
10.   Robert G. Cooper: Winning at New Products, Accelerating the Process from Idea to Launch, Addison-Wesley,
      1993. Third ed. in 2001. In.
11.   V.K. Narayanan, Managing Technology and Innovation for Competitive Advantage, Prentice-Hall, 2001. C.
12.   Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Boston,
      MA, Harvard Business School Press, 2003. C.
13.   David Probert et al., Bringing Technology and Innovation into the Boardroom, Strategy, Innovation and
      Competences for Business Value, European Institute for Technology and Innovation
      Management/Palgrave/MacMillan, 2004. C, R.
14.   Melissa A. Schilling: Strategic Management of Technological Innovation, McGraw-Hill/Irwin, New York, 2005. C.
Design and Implementation
                      of
             Technology Strategy:
     Transforming Invention to Innovation




            Conclusion & Final Words
                       Burgelman
                       Innovation
                         3m42




27-Jul-09
27-Jul-              IMT MM-Biztel
                         MM-                33

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IMT Lecture: Transforming Invention To Innovation

  • 1. Design and Implementation of Technology Strategy: Transforming Invention to Innovation Lecture by: by: Djadja.Sardjana@gmail.com 27-Jul-09 27-Jul- IMT MM-Biztel MM- 1
  • 2. Design and Implementation of Technology Strategy: Transforming Invention to Innovation Definition and Scope IBM 30s 27-Jul-09 27-Jul- IMT MM-Biztel MM- 2
  • 3. Definition - Invention - Innovation - Innovation diffusion - Innovation as part of Entrepreneurship Soul
  • 4. Definition An invention is an object, process, or technique which displays an element of novelty. - Invention Inventions may be concepts, physical - Innovation devices or any other set of things that facilitate an action. - Innovation diffusion - Innovation as part of Entrepreneurship Soul The invention of a new product or process occurs within what could be called the techno-scientific sphere and it can remain there forever.
  • 6. Definition Innovation = the introduction of something new - Change - Invention An innovation is an invention that has been put into practice. Innovation occurs when someone uses an - Innovation invention - or uses existing tools in a new way - to change how things work - Innovation diffusion - Innovation as part of Entrepreneurship Soul
  • 7. Innovation „Innovation is the doing of new things or the doing of things that are already being done in a new way… Innovation is a process by which new products and techniques are introduced into the economic system.“(Schumpeter system.“(Schumpeter 1947) “the first commercialization of an idea” (Fagerberg 2004) idea” An innovation is the implementation of a new or significantly improved product, or process, a new marketing method, or a new organisational method in business practice, workplance organisation or external relations (OECD) Innovation is an invention that has been successfully implementated and introduced in the market
  • 8. Features of Innovation Novelty: Innovation is something new • Function • Technic • Design (?) Implementation: Innovation is introduced into market Modification: A innovation should cause a change/improvement
  • 9. Innovator To be able to turn an invention into an innovation, a firm normally needs to combin e several types of knowledge, capabilities, skills and resources An innovator is the person or organizational unit responsible for combining the factors necessary
  • 10. Innovators Apple vs Microsoft 5m
  • 11. And this is not Innovation Ceasing to use a process, a marketing method or an organisation method, or to market a product Simple capital replacement or extension Changes resulting purely from factor prices Customisation Regular seasonal and other cyclical changes
  • 12. Definition - Invention - Innovation - Innovation diffusion / adoption Is The spreading of innovations new ideas and technology through society - Entrepreneurship
  • 13. Diffusion of innovation Everett Rogers: Diffusion of Innovations (1962) „An innovation is an idea perceived as new by the individual. Diffusion is the process by which an innovation spreads… Adoption is the decision to continue full use of an innovation.” innovation.” 5 Adopters‘ categories: Innovators (2,5%) Early adopters (13,5%) Early majority (34%) Late majority (34%) Laggards (16%) Diffusion 3m57
  • 14. Diffusion The spread of a new product or process throughout society or markets Important process that enables an innovation to contribute to economic growth and welfare Focus on adoption of innovations Macro perspective
  • 16. Definition - Change - Invention - Innovation - Innovation diffusion / adoption - Innovation as part of Entrepreneurship Soul Entrepreneurship is the practice of starting new organizations, particularly new businesses generally in response to identified opportunities.
  • 17. Innovation as part of Entrepreneurship Soul “Entrepreneurial spirit” to innovate (Schumpeter) Entrepreneurship as risk taking (Knight, Drucker, Hart, Stevenson and Dial) An entrepreneur is a person who undertakes and operates a new enterprise or venture, and assumes some accountability for the inherent risks Entrepreneurship = starting a new businesses
  • 18. Design and Implementation of Technology Strategy: Transforming Invention to Innovation BMW 1m05 Success and Failure 27-Jul-09 27-Jul- IMT MM-Biztel MM- 18
  • 19. 80s: Success and Failure in new Product Development Philiform - Philips
  • 20. Innovators and Followers (Teece) Teece) Success Failure Follower IBM KODAK personal computer instant photography DUPONT EMI Innovator teflon scanner
  • 21. Innovators and Followers Apply with the no Likely failure dominant design? Supplementing no Look for a partner resources available? Can the intellectual no Likely failure property be protected? Likely to succeed
  • 22. Success Factor Grading 1 Not so important Number of responses 2 Fairly important 0 2 4 6 8 10 12 14 3 Very important Superior product Strong market orientation International orientation More predevelopment Sharp and early product definition Properly executed launch Organisational structure and climate Top management support Success Factors Technological and Marketing synergy Aim at attractive markets Sharper project selection Project control / Quality of execution The resources must be in place Speed Stage gate system Protection of intellectual property Dominant design Secure access to Complementary assets Consumer Innovator / Lead users Learning Non-product advantage
  • 23. Cassette Deck Development time: two years. The competitor develops a new deck in just half a year. Now what?
  • 24. Solutions: • Concurrent Engineering • Modular design and Platform design • Marketeers and Engineers work together in an early stage • Rapid prototyping
  • 27. Cooperation in the network economy R&D, complementary Access to knowledge 1. Access to knowledge technology, share know how market knowledge, Access to new markets 2. Access to new markets local party required scale, Efficiency 3. Efficiency specialised partner Clients do do not want 4. Clients not want satisfy a need, products, but tailored products, but tailored not a demand solutions solutions
  • 29. Managing Diversity • from ‘gold seeking’ to synergy with market, product/application, technology • PLUS operations fit • PLUS cultural, human, strategic fit soft aspects • yet complementary in competencies!
  • 30. How to make a company more innovative? a. An innovative company should create an environment of learning and experimenting, rather than planning. b. HQ should facilitate the initiatives from BUs, rather than direct BUs. c. Venturing is not ‘just’ for getting new business, but more and more to create new options. d. Key to getting knowledge and strengthening own competencies are strategic alliances. e. Business teams which strongly disagree (yet believe in a common objective) are more innovative than a too well structured set up.
  • 31. Leadership Creative 9 Learning and will to climate organization 10 innovate 1 Customer 8 focus High involvement in 10 factors for Joe Tidd et al., Managing Appropriate structure innovation Innovation, Wiley, 2008 and 2 7 an innovative on, Chapter 11: Building the Innovative Organization Organization Key Extensive 6 3 individuals communication 5 4 Stretching Effective team individual capabilities 27-Jul-09 27-Jul- IMT MM-Biztel MM- 31
  • 32. Some useful books: Conceptual (C), Instrumental (In), Reader (R) 1. Brian Twiss, Managing Technological Innovation, Pitman, Longman, London, 1974, 1980, 1986 and 1992. C, In. 2. Preston G. Smith and Donald G. Reinertsen, Developing Products in Half the Time, New Rules, New Tools, New York, Van Nostrand Reinhold, 1991. Second ed. in 1998. In. 3. Steven C. Wheelwright and Kim B. Clark, Revolutionizing Product Development, Quantum Leaps in Speed, Efficiency, and Quality, New York, The Free Press, 1992. In. 4. Gary Hamel and C.K. Prahalad, Competing for the Future, Breakthrough Strategies for seizing control of your industry and creating the markets of tomorrow, Harvard Business School Press, 1994. C. 5. Stewart Bray, Total Innovation, How to Develop the Products that your Customers want, Pitman Publ./Pearson, London, 1995. In. 6. Robert A. Burgelman et al. The Strategic Management of Technology and Innovation, 2nd ed., Irwin, 2007. C, R. 7. Robert A. Burgelman , Modesto A. Maidique and Steven C. Wheelwright, Strategic Management of Technology and Innovation, second ed., Irwin, 2008. C, R. 8. R. G. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Portfolio Management for New Products, Hamilton, Ontario, McMaster University, 1997. In. 9. Joe Tidd et al., Managing Innovation, Integrating Technological, Market and Organizational Change, Wiley, 1997. Second ed. 2001. C. 10. Robert G. Cooper: Winning at New Products, Accelerating the Process from Idea to Launch, Addison-Wesley, 1993. Third ed. in 2001. In. 11. V.K. Narayanan, Managing Technology and Innovation for Competitive Advantage, Prentice-Hall, 2001. C. 12. Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Boston, MA, Harvard Business School Press, 2003. C. 13. David Probert et al., Bringing Technology and Innovation into the Boardroom, Strategy, Innovation and Competences for Business Value, European Institute for Technology and Innovation Management/Palgrave/MacMillan, 2004. C, R. 14. Melissa A. Schilling: Strategic Management of Technological Innovation, McGraw-Hill/Irwin, New York, 2005. C.
  • 33. Design and Implementation of Technology Strategy: Transforming Invention to Innovation Conclusion & Final Words Burgelman Innovation 3m42 27-Jul-09 27-Jul- IMT MM-Biztel MM- 33