1. MANAGING THE INTERNAL PROCESS
Chapter 9
MANAGING THE INTERNAL PROCESS

2. The innovation process model in detail
Search
Select
Implement
Learn

3. Figure 2.1 Simple representation of the innovation process
©2005 Joe Tidd, John Bessant and Keith Pavitt

4. Figure 9.8 The development funnel
©2005 Joe Tidd, John Bessant and Keith Pavitt

5. The need for routines to handle the different phases in the innovation management process
”Innovation management is essentially about building and embedding such routines within the organization – but it is also about reviewing, improving and on occasions replacing them with new and more appropriate ones to cope with what is a constantly changing environment. In other words, it is about building dynamic capability.”
(Tidd et al., p. 348)

6. Management of change...
’Production capacity’ – capital goods, knowledge and labour skills to produce
’Technological (innovative) capabilities’ – skills, knowledge and institutions that make it possible to generate and manage change in technology
(Bell & Pavitt 1997)

7. Table 2.4 Core abilities in managing innovation
©2005 Joe Tidd, John Bessant and Keith Pavitt

8. Table 2.4 Core abilities in managing innovation (continued)
©2005 Joe Tidd, John Bessant and Keith Pavitt

9. Search
Scanning the environment (internal and external) for, and processing relevant signals about, threats and opportunities for change

10. ”Search space”
Exploring an environment made up of knowledge about technologies, markets, competitors, etc
Effective routines
Existing search space
Create new search space

11. Signals can be found through…
Technological and organizational change
In general (worldwide + all sectors)
Sector-specific developments
Developments within inter-organizational networks
Developments within the own firm
Market change
Political change
Cultural change

12. Tools for exploring search space
Defining the boundaries of the marketplace
Understanding market dynamics
Trendspotting
Monitoring technological trends
Marketing forecasting
Technological forecasting
Integrated future search
Learning from others
Involving stakeholders
Involving insiders
Mistakes management
Communication and connection

13. Where are the huge markets of tomorrow emerging?
Ex. 1: mobile phone industry (signals initially weak, but a combination of technological and cultural change has enabled it to become a massmarket)
Ex. 2: ”healthy food” industry (education and changing social attitudes have given rise to a huge market for the products of this industry, which was earlier very small)

14. Tomorrow’s market As a result of change Communication Technical
Cultural
”What we know”
Trends
Communication
Customers
Suppliers
Universities
Government
Internal
Competitors

15. Monitoring technological trends
Look in the periphery
Use the internet
Visit conferences, seminars, exhibitions
Building links to providers of knowledge
Suppliers
Universities
Associations
Informal network

16. Looking for ”tipping trends”
A sudden change in public perception change how things are done.
Ex. 1: What about energy use? Could an increasing awareness of environmental pollution and global warming change how we look at and use energy resources? (HYBRID CARS, LED LIGHTING)

17. Anticipating the future
Structured techniques for forecasting
Market
Technological
Integretated future search

18. Learning and involving
Employees
Stakeholders
Capture their needs
Lead users/demanding customers
Competitors
Benchmarking
”Mistakes”
User perspective – throughout the organisation

19. Select
Deciding (on the basis of a strategic view of how the enterprise can best develop) which of these signals to respond to.

20. Enabling strategy-making
Strategic analysis – what can we do?
Strategic choice – what will we do?
Strategic monitoring – making sure that we over time still do what we want to do

21. Routines to help strategic analysis
Close fit between innovation strategy and the overall business strategy
Estimate the actual capabilities of the firm
The role of intermediaries – consultants who can provide assistance in thinking through innovation strategy
Regional and national government support programmes
IRAP programme (Canada, Thailand and others)
MINT programme (EU)
TEKES counselling scheme (Finland)
Manufacturing Advisory Service (UK)
AMT programme (Ireland)

22. Strategy deployment
Communication and share the strategic analysis – enable people within the firm to understand and commit the framework
To have ’know-why’ and not only ’know-how’
Especially important when it comes to implementing the idea of continuous improvements!
Often fails – no room for small innovations
Kaizen = continuous improvement, high involvement, 3-year mid-term plans (MTPs), specific measurable objectives

23. Strategic Choice No organization can do everything
Portfolio should include on both radical and incremental options
Factors to consider
Risk vs. reward
Familiarity of market and technology
Ease of entry vs. Market attractiveness
Competitive position vs. Market attractiveness
Expected time to reach the market vs. Market attractiveness

24. Building coalitions
Involve different people at an early stage in strategy-making
Across functional boundaries
Suppliers of components and sub-systems
Interaction with regulatory frameworks (product standards, environmental controls, safety legislation, etc.)

25. Implementation
Acquiring the knowledge resources (for example, by creating something new through R&D, market research, etc., acquiring knowledge from elsewhere via technology transfer, strategic alliance, etc.).
Executing the project under conditions of uncertainty
Launching the innovation and managing the process of initial adoption
Sustaining adoption and use in the long term – or revisiting the original idea and modifying it – reinnovation.

26. Enabling effective knowledge acquisition
Generation of knowledge within the firm
Generation of knowledge outside the firm
Technology transfer from external sources
Technology transfer within the firm itself
Small firms and large firms need to make use of external knowledge

27. Table 9.2 Key abilities in technology transfer
©2005 Joe Tidd, John Bessant and Keith Pavitt

28. Developing absorptive capacity
Absorptive capacity – a firm’s ability to take on and make effective use of new knowledge
To use research results effectively, firms need to learn the basic skills of actually doing research!
(Cohen & Levinthal, 1990)

31. Implement
Increasing commitment of resources makes it difficult to change direction
When to stop a project that has been initiated but that seems to be a failure?
Stage model with different ”gates”
At each gate the project has to meet certain well defined criteria – if not it should be stopped

32. Figure 9.8 The development funnel
©2005 Joe Tidd, John Bessant and Keith Pavitt

33. Figure 9.9 Accelerating Idea to market - the AIM process
©2005 Joe Tidd, John Bessant and Keith Pavitt

34. ©2005 Joe Tidd, John Bessant and Keith Pavitt
Matrix = functional & project -> managers on both levels, Project = functional staff work under project leader direction, Heavyweight project management = extensive influence over functional personnel
©2005 Joe Tidd, John Bessant and Keith Pavitt

35. More ”good practice”
Up to 70% of a product’s cost is determined at the design stage
’learning before doing’.
Interplay between designers, makers, sellers and users.
Concurrent working
Proper project structures
Support tools

36. Routines for launch Customer testing Test marketing
Developing a marketing strategy
Developing a marketing plan
Developing a support organization

37. Launching process innovation
Internal market
Countinuos cycles of adaption
Organizational development (OD)
Clear management strategy
Communication/open climate
Early involvment
Clear targets
Invest in training

38. Learn
Reflection
Conceptulize
Experimenation
Documentation of project