1. Innovation Management: an overview
Dr Paul Trott, Reader in Innovation Management, University of Portsmouth.
Professor of Innovation & Entrepreneurship,
TU Delft, The Netherlands.

2. PAUL TROTT
INNOVATION MANAGEMENT AND
NEW PRODUCT DEVELOPMENT
4th Edition

3. Management of Innovation: an overview
Introduction
Can we manage innovation?
Models of understanding of innovation management
Factors that influence the innovation process
A framework for innovation management
Conclusions

4. Popular view of innovation:
. . . the lone inventor/mad professor.
But, such views lead to misunderstanding.
Science does not equal innovation.
Innovation is much more than science,
e.g. scientific discoveries predate
commercial products by many years

5. Table 1: World’s most innovative companies
2006 Rank
Company
Margin Growth %
Stock Returns 1
Apple
7.1
24.6 2
Google
NA** 3 3M
3.4
11.2 4
Toyota
10.7
11.8 5
Microsoft
2.0
18.5 6
General Electric
5.7
13.4 7
Procter & Gamble
4.4
12.6 8
Nokia
0.0
34.6 9
Starbucks
2.2
27.6 10
IBM
-0.7
14.4
Source: Business Week April 24, (2006)

6. { { Overview of the innovation process Scientific & Firms
technological
developments
inevitably
lead to knowledge
inputs.
Firms
operating
functions &
activities
Creative
individuals
Firm’s develop
knowledge,
processes &
products.
Firms architecture
& external
linkages {
Societal changes &
market needs lead to
demands & opportunities.

7. 2. What is innovation ? Invention & innovation
Innovation = conception + invention + exploitation
Source: Henry & Walker (1991)
Innovation is not a single action but a total process of interrelated
sub processes. It is not just the conception of a new idea, nor
the invention of a new device, nor the development of a new market.
The process is all these things acting in an integrated fashion '
Myers and Marquis (1969).

8. 3. Types of innovation Dimensions of Innovation space Perceived
Dimensions of
Innovation space
discontinuous
New manufacturing
technique
Perceived
extent of change
radical
Launch of
ebay
New improved
detergent
incremental
product
service
process
What is changed?

9. New services that also create new business models/value
Company
Industry sector
New service/new business model/value
Ebay
On-line auction
A new way of buying and selling through a
community of individual users
Ryanair
Airline
A new way of consuming air-travel with no frills
service and emphasis on economy.
Amazon
Retailer
New way to buy goods- on-line retailer
Napster; iTunes
Music retailer
New way to buy and download music.
Google
Internet search
engine
A fast way to search for information on the internet
Partygaming
On-line gambling
Gambling and gaming from the comfort of your
own home
Myspace/
Facebook
Social networking
A community of users on-line who can chat and
share music, images, news from their own home.
You-Tube
On-line video and
film archive
A community of users sharing home made video
clips plus recorded favourite clips from movies.
* The world’s largest internet poker company (Moules, 2007).

10. Disruptive innovations
Research by Utterback (1994) & Christensen (2000)
suggests many firms find it difficult to manage
disruptive innovations;
e.g. IBM, Hoover, UK Banks, etc.
Incumbents in an industry do not respond well to
dramatic shifts in behaviour
How do firms manage both continuous change
and discontinuous change?

11. 5 studies of innovation management
1. Carter & Williams Industry & technical progress
2. Project Hindsight- TRACES Historical reviews of US gvt funded (Isensen) defence industry
3. Wealth from knowledge (Langrish et al.) 1972 Queens Awards for tech innov
4. Project Sappho Success & failure factors in chemical industry
5. Minnesota Studies (van de van) case studies of innovations
6. Rothwell yr review of studies
7. Sources of innovation
(Wheelwright & Clark) Different levels of user involvement
8. MIT studies (Utterback) major industry-level cases
9. Project NEWPROD (Cooper) Longditudinal survey of success & failure in new products
10. Radical innovation (Leifer) Review of mature businesses

12. Factors that affect innovation
Firm related factors:
Organisational heritage
Experience
R&D team
Strategy towards
Innovation
Organisational structure
R&D intensity
Product related factors:
Relative price
Relative quality
Uniqueness
Technologically advanced
Successful
marketable
product
Technological
viability
Commercial
viability
Project related factors:
Complementarity
Management style
Top management
support
Market related factors:
Concentration of
Target market
Timing of market entry
Competitive pressure
Marketing

13. Linear models of innovation management

14. latest science and technology
Interactive model of innovation
TECHNOLOGY
PUSH
latest science and technology
advances in society
commercial
product
idea
R&D
Manufacturing
Marketing
needs of society
and the market place
MARKET
PULL
Source: Rothwell & Zegweld (1985)

15. Open Innovation Basic Research New Product Development Current market
And business model
Internal
research
projects
Technology
In-licensing
Technology
acquisition
Venture investing
External research
project
(Chesbrough, 2003)

16. Procter & Gamble’s web of links for
Open innovation . . .
Procter & Gamble’s web of links for
innovation and new product development
Source: HBR (2006)

17. Cyclic Innovation Model
Technological
research
integrated
engineering cycle
hard sciences
cycle
Scientific
exploration
Product
creation
Entrepreneurship
Marketing
cycle
soft sciences
cycle
Market
transitions
Source: G Berkhout (2007), TU Delft.

18. The end
Thank you
For listening