Managing Technology and Innovation Chapter 17 Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

Learning Objectives LO 1 List the types of processes that spur development of new technologies LO 2 Describe how technologies proceed through a life cycle LO 3 Discuss ways to manage technology for competitive advantage LO 4 Summarize how to assess technology needs 17-2

Learning Objectives (cont.) LO 5 Identify alternative methods of pursuing technological innovation LO 6 Define key roles in managing technology LO 7 Describe the elements of an innovative organization LO 8 List characteristics of successful development projects 17-3

Technology and Innovation Technology The systematic application of scientific knowledge to a new product, process, or service. 17-4

Question ___________ is a change in method or technology. A.Innovation B.Quality C.Speed D.Service 17-5

Technology and Innovation Innovation A change in method or technology; a positive, useful departure from previous ways of doing things. 17-6

Forces Driving Technological Development 1.Must be a need, or demand, for the technology 2.Meeting the need must be theoretically possible, and the knowledge to do so must be available from basic science 3.Must be able to convert the scientific knowledge into practice in both engineering and economic terms 17-7

Forces Driving Technological Development 4.The funding, skilled labor, time, space, and other resources needed to develop the technology must be available 5.Entrepreneurial initiative is needed to identify and pull all the necessary elements together. 17-8

Technology Life Cycle Technology life cycle A predictable pattern followed by a technological innovation, from its inception and development to market saturation and replacement. 17-9

The Technology Life Cycle Figure 17.1

Technology Dissemination Pattern and Adopter Categories Figure 17.2

Diffusion of Technological Innovations Innovators Early Adopters Early Majority Late Majority Laggards

Diffusion of Technological Innovations An innovation will spread quickly if it Has a great advantage over its predecessor Is compatible with existing systems, procedures, infrastructures, and ways of thinking Has less rather than greater complexity Can be tried and tested easily without significant cost or commitment Can be observed and copied easily 17-13

Technological Innovation in a Competitive Environment 17-14

Advantages and Disadvantages of Technology Leadership Table 17.1

Technology Followership A managers decision on when to adopt new technology also depends on the potential benefits of the new technology, as well as the organizations technology skills Following the technology leader can save development expense 17-16

Dynamic Forces of a Technologys Competitive Impact Figure 17.3

Question What is the process of clarifying the key technologies on which an organization depends? A.Managerial audit B.Benchmarking C.External audit D.Technology audit 17-18

Assessing Technology Needs Technology audit Process of clarifying the key technologies on which an organization depends 17-19

Measuring Current Technologies Emerging technologies are still under development and thus are unproved Pacing technologies have yet to prove their full value but have the potential to alter the rules of competition by providing significant advantage 17-20

Measuring Current Technologies Key technologies have proved effective, but they also provide a strategic advantage because not everyone uses them Base technologies are those that are commonplace in the industry; everyone must have them to be able to operate 17-21

Question What is the process of comparing the organizations practices and technologies with those of other companies? A.Benchmarking B.Quality control C.Scanning D.Environmental scanning 17-22

Assessing External Technological Trends Benchmarking the process of comparing the organizations practices and technologies with those of other companies 17-23

Assessing External Technological Trends Scanning focuses on what can be done and what is being developed places greater emphasis on identifying and monitoring the sources of new technologies for an industry 17-24

Key Factors to Consider in Technology Decisions Anticipated market receptiveness Technology feasibility Economic viability Anticipated competency development Organizational suitability

Framing Decisions about Technological Innovation Table 17.2

Sourcing and Acquiring New Technologies Make-or-buy decision The question an organization asks itself about whether to acquire new technology from an outside source or develop it itself

Sourcing and Acquiring New Technologies Internal development Purchase Contracted development Licensing Technology trading Research partnerships and joint ventures Acquisition of the owner of the technology 17-28

Sourcing and Acquiring New Technologies Managers should ask the following basic questions: 1.Is it important (and possible) in terms of competitive advantage that the technology remain proprietary? 2.Are the time, skills, and resources for internal development available? 3.Is the technology readily available outside the company? 17-29

Technology Acquisition Options Figure 17.4

Question Which executive is in charge of information technology strategy and development? A.COO B.CEO C.CTO D.CIO 17-31

Technology and Managerial Roles Chief information officer (CIO) executive in charge of information technology strategy and development. coordinate the technological efforts of the various business units identify ways that technology can support the companys strategy supervise new-technology development 17-32

Technology and Managerial Roles Technical innovator A person who develops a new technology or has the key skills to install and operate the technology Product champion A person who promotes a new technology throughout the organization in an effort to obtain acceptance of and support for it

Technology and Managerial Roles Executive champion An executive who supports a new technology and protects the product champion of the innovation

Organizing for Innovation Unleashing creativity involves encouraging creativity and celebrating failure Bureaucracy busting is necessary because bureaucracy is the enemy of innovation 17-35

3Ms Rules for an Innovative Culture Table 17.3

Organizing for Innovation Development project A focused organizational effort to create a new product or process via technological advances 17-37

Organizing for Innovation Sociotechnical systems An approach to job design that attempts to redesign tasks to optimize operation of a new technology while preserving employees interpersonal relationships and other human aspects of the work 17-38

Compensation Practices in Traditional and Advanced Manufacturing Firms Table 17.4

Destination CEO: Adobe Discuss the role of innovation at Adobe. If you were a manager, how would you encourage creativity? 17-40