1. Innovation - 1 © Minder Chen, 2013 Innovation Management and Creative Problem Solving Minder Chen Associate Professor of MIS California State University Channel Islands Minder.chen@csuci.edu

2. Innovation - 2 © Minder Chen, 2013 Importance of Innovation “In a world of ever-accelerating change, innovation is the only insurance against irrelevance. In an environment of steadily decreasing friction and crumbling entry barriers, innovation is the only antidote to margin- crushing competition. And in a global economy where knowledge advantages dissipate ever more rapidly, innovation is the only brake on commoditization.” –Gary Hamel, “Introduction” to the Innovation to the Core

3. Innovation - 3 © Minder Chen, 2013 Definition of Innovation An innovation is the creation and application of a new or significantly improved technology, product/service, process, or business model that is accepted by markets and society. –Adapted from OECD 2005 and Wikipedia. Innovation applies ideas and new knowledge to the production of goods and services to improve product/service quality and process performance. –UK Design Council http://www.designcouncil.org.uk/Documents/Documents/OurWork/Insight/DesignForInnovation/DesignForInnovation_Dec2011.pdf http://www.youtube.com/watch?v=2NK0WR2GtFs&feature=watch-vrec

4. Innovation - 4 © Minder Chen, 2013 Formula for True Innovation America’s advantage, if it continues to have one, will be that it can produce people who are also more creative and imaginative, those who know how to stand at the intersection of the humanities and the sciences. true innovation, …That is the formula for true innovation, … –Walter Isaacson is the author of “Steve Jobs.”author –http://www.nytimes.com/2011/10/30/opinion/sunday/ steve-jobss-genius.html?pagewanted=all&_r=0http://www.nytimes.com/2011/10/30/opinion/sunday/ steve-jobss-genius.html?pagewanted=all&_r=0

5. Innovation - 5 © Minder Chen, 2013 Innovation: Creative Destruction A commercialization process based on the application of new materials and their components, new technical methods, new markets and new forms of organization. –Joseph Schumpeter The innovation involves both technical world and business world. A change in technology only is just an "invention“.

6. Innovation - 6 © Minder Chen, 2013 Creativity Creativity is the quality or ability to create or invent something original. “Genius is 1% inspiration and 99% perspiration.” –Thomas Edison Creativity is about coming up with the big idea. Innovation is about executing the idea — converting the idea into a successful business. –Vijay Govindarajan –http://blogs.hbr.org/govindarajan/2010/08/innovation-is-not-creativity.htmlhttp://blogs.hbr.org/govindarajan/2010/08/innovation-is-not-creativity.html Innovation is applied creativity.

7. Innovation - 7 © Minder Chen, 2013 Technology Innovation http://www.slideshare.net/Busarovs/innovations-3833340

8. Innovation - 8 © Minder Chen, 2013 Does Customer Know What They Want? Seeing what customers have not yet imagined but will instantly desire. “If I had asked my customers what they wanted, they’d have said a faster horse.” - Henry Ford

9. Innovation - 9 © Minder Chen, 2013 Drivers for Innovation Necessity is the mother of invention. Where there is a friction (frustration), there is an opportunity. –Zappos’ founder Nick Swinmurn –Dropbox file sharing: Drew Houston reportedly conceived the idea for Dropbox after repeatedly forgetting his USB drive –Chinapages.com by Jack Ma

10. Innovation - 10 © Minder Chen, 2013 Product & service Innovation Polaroid Camera (Instant Camera)

11. Innovation - 11 © Minder Chen, 2013 Process Innovation Moving assembly line An idea stolen from : Meat Packing Plant High wage; Model-T: a true innovation available to a wide audience. pleasure car  passenger car

12. Innovation - 12 © Minder Chen, 2013 Business model Innovation Southwest Zara: Fast Fashion Dell: Direct sales IKEA: Self-assembled furniture Apple: iPod & iTune  ecosystem innovation

13. Innovation - 13 © Minder Chen, 2013 Architecture of Innovation Service Innovation Product Innovation Consumer End product/ service & Component Business Science/Technology Creativity & Imagination Process Innovation Business Model Innovation Technology Innovation Experience Innovation Humanity/Art Intersection & Integration

14. Innovation - 14 © Minder Chen, 2013 The Rate of Innovation: Product vs. Process

15. Innovation - 15 © Minder Chen, 2013 FluidTransitionalSpecific ProductRadical, frequent Dominant design Incremental, rare ProcessRare, rely on skills General equipment Specialised equipment OrganisationOrganicSemi- structured Hierarchical MarketFragmentedSegmentsCommodity CompetitionIncreasing, different Decreasing, more similar Few similar Key Factors at Three Phases

16. Innovation - 16 © Minder Chen, 2013 S-Curve or the logit function for rate of diffusion adoptation. The cumulative distribution of innovation adopters who are characterized by the timing of their decision to accept and implement the innovation. Innovation Diffusion Everett M. Rogers (1931-2004), Diffusion of Innovations, 4 th edition (1995) Invent Adopt Persuade Decide Reject Accept Implement Abandon The Process of Innovation Diffusion Innovation Diffusion Function to Saturate a Market

17. Innovation - 17 © Minder Chen, 2013 5 Factors of Innovation Adoption Decision (Roger) FactorDefinition Relative Advantage How improved an innovation is over the previous generation. Compatibility The level of compatibility that an innovation has to be assimilated into an individual’s life. Simplicity or Complexity If the innovation is perceived as complicated or difficult to use, an individual is unlikely to adopt it. Trialability How easily an innovation may be experimented. If a user is able to test an innovation, the individual will be more likely to adopt it. Observability The extent that an innovation is visible to others. An innovation that is more visible will drive communication among the individual’s peers and personal networks and will in turn create more positive or negative reactions.

18. Innovation - 18 © Minder Chen, 2013 Technology Forecasting “I think there is a world market for maybe five computers.” –Thomas Watson, Chairman, IBM (mainframe giant), 1943 “This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” –Western Union (telegraph) internal memo, 1876 “There is no reason why anyone would want a computer in their home.” –Ken Olsen, Founder, Digital Equipment Corp. (minicomputer giant) 1977

19. Innovation - 19 © Minder Chen, 2013 Service innovation is inherently multidisciplinary Science & Engineering Business Administration and Management Social Sciences Global Economy & Markets Business Innovation Technology Innovation Social-Organizational Innovation Demand Innovation SSME = Service Sciences, Management, and Engineering Knowledge sources driving “service” innovations… Grameen Bank (Bank of the poor, Micro lending) Groupon Laser, seminconductor TQM Reengineering

20. Innovation - 20 © Minder Chen, 2013 Three Types of Restaurants Source: Service Is Front Stage Teppanyaki-type Restaurant (i.e., Benihana) 火鍋火鍋 Hotpot

21. © 2005 IBM Corporation © 2009 IBM Corporation T-Shaped Talents: skills, abilities, and knowledge  Cross-disciplinary communication  Service system design, management, and modeling  Value co-creation analysis  Service lifecycle analysis (for quality assurance)  Service supply and demand management  New service development  Business project management  Business case development and analysis  Organizational change management  Marketing and sales  Creative and critical thinking  Communication skills  Leadership and collaboration skills Wendy Murphy & Bill Hefley, “What’s new in service science, management, and engineering?” Presented at Frontiers in Service Conference, October 2008 T-shaped professionals are in high demand because they have both depth and breadth They combine expert thinking (depth in one or more areas) and complex communications (breadth across many areas) complex communication expert thinking

22. Innovation - 22 © Minder Chen, 2013 For Innovation Opportunities Rule breaking Demographics New Perception New knowledge

23. Innovation - 23 © Minder Chen, 2013 Evolution of Dominant Market Demand and Firm’s Focus Time Price Quality Choice, Time of Delivery Uniqueness Market Demand Firm’s Focus Cost Efficiency Quality Flexibility & Agile Innovation Adapted from Felix Janszen, The Age of Innovation, 2000, p. 19.

24. Innovation - 24 © Minder Chen, 2013 Discovery, Invention, and Innovation “If an idea begat a discovery, and if a discovery begat an invention, then an innovation defined the lengthy and wholesale transformation of an idea into a technological product (or process) meant for widespread practical use. Almost by definition, a single person, or even a single group, could not alone create an innovation. The task was too variegated and involved.” – The Idea Factory, by Jon Gertner

25. Innovation - 25 © Minder Chen, 2013 Discovery vs. Invention lightning was a form of electricity. Applied creativity — taking clever ideas and smart designs and applying them to useful devices. – Walter Isaacson

26. Innovation - 26 © Minder Chen, 2013 Invention vs. Innovation iPod wasn't the first portable music device (Sony popularized the "music anywhere, anytime" concept 22 years earlier with the Walkman; MP3) What made Apple innovative was that it combined all of these elements -- design, ergonomics and ease of use -- in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music. Creative CollisionApple invented nothing. Its innovation was creating an easy-to-use ecosystem (with iTune Store, iTune, ans iPod) that unified music discovery, delivery and device. And, in the process, they revolutionized the music industry.  Creative CollisionIts innovation was creating an easy-to-use ecosystem Source: http://www.pbs.org/idealab/2012/03/the-difference-between-invention-and-innovation086.html

27. Innovation - 27 © Minder Chen, 2013 Innovation Arena: TAMO Adapted from Felix Janszen, The Age of Innovation, 2000, p. 9. New materials and components New processes New services Invention Innovation A solution looks for a problem. A problem looks for a solution.

28. Innovation - 28 © Minder Chen, 2013 From Ideas to Product/Service/Business Uncertainty Resource allocated Is it possible? Idea Product/Service/ Business Is it attractive? Is it do-able? Is it what our customers want? How do we implement it? Source: Felix Janszen, The Age of Innovation, 2000, p. 99. And http://www.artofeurope.com/eliot/eli2.htmhttp://www.artofeurope.com/eliot/eli2.htm Between the conception And the creation Between the emotion And the response Falls the Shadow - T.S. Elliot

29. Innovation - 29 © Minder Chen, 2013 Manage the Product/Innovation Pipeline http://www.keytechinc.com/blog/index.php/2009/reduce-risk-product-development/

30. Innovation - 30 © Minder Chen, 2013

31. Innovation - 31 © Minder Chen, 2013 Crowdsourcing Source: http://usercontribution.intuit.com/w/page/18238302/The%20Contribution%20Revolution%20linked%20version

32. Innovation - 32 © Minder Chen, 2013 GoldCorp Challenge –$575,000 award money –http://cavqm.blogspot.tw/2012/02/goldcorp-challenge-and-beginning-of.htmlhttp://cavqm.blogspot.tw/2012/02/goldcorp-challenge-and-beginning-of.html Netflix Cinematch challenge –Netflix views their business as more than renting videos to customers, " we create demand for content and we help you find great movies that you'll really like." we create demand for content –1 million award –http://cavqm.blogspot.tw/2011/05/1000000-netflix-challenge.htmlhttp://cavqm.blogspot.tw/2011/05/1000000-netflix-challenge.html Crowdfunding: Kickstarter.com Eyewire: –http://eyewire.org/http://eyewire.org/ –http://blog.eyewire.org/infographic/http://blog.eyewire.org/infographic/ Source: http://www.wired.com/wired/archive/14.06/crowds.html

33. Innovation - 33 © Minder Chen, 2013 Innovation Arithmetic Build up the pipeline Quantity matters

34. Innovation - 34 © Minder Chen, 2013 Seven Innovation Myths 1.Innovation is risky. 2.Innovation is (only) about products. 3.Innovation is about "big" ideas. 4.Innovation can't be taught. 5.Innovation is a diversion. 6.Innovation is expensive. 7.Innovation is an exception. Source: Innovation to the core

35. Innovation - 35 © Minder Chen, 2013 An Innovation Process

36. Innovation - 36 © Minder Chen, 2013 Design Thinking Process by Stanford d.school / IDEO http://dschool.stanford.edu/dgift/ https://dschool.stanford.edu/groups/designresources/wiki/36873/attachments/8a846/ModeGuideBOOTCAMP2010.pdf “To create meaningful innovations, you need to know your users. Empathize and care about their lives.” “Framing the right problem is the only way to create the right solution.” “It’s not about coming up with the ‘right’ idea, it’s about generating the broadest range of possibilities.” “Build to think and test to learn.” “Testing is an opportunity to learn about your solution and your user.” IDEO: Inspiration  Ideation  Implementation

37. Innovation - 37 © Minder Chen, 2013 what really counts major preoccupations, worries & aspirations what friends say what boss says what influences say environment friends what the markets offers attitude in public appearance behavior towards others http://www.gogamestorm.com/?p=42 http://www.slideshare.net/AdilsonJardim/empathy-map-poster-3201288EmpathyMap GAIN “wants”/needs, measures of success, obstacles PAIN fears, frustrations, obstacles Customer (user)

38. Innovation - 38 © Minder Chen, 2013 What is Design? – Tom Kelley Not just problem solving – creative leap Messy – No right answer Takes a point of view – or many POVs Calls for vision and multiple minds Open attitude – many solutions Learned from experience with reflection Requires a feel for the materials Starts with broadening, followed by narrowing Divergent Thinking  Assimilation  Convergent Thinking Requires ongoing mindfulness 用心 Compiled by Scott Klemmer http://hci.stanford.edu/cs147/

39. Innovation - 39 © Minder Chen, 2013 IDEO Brainstorming Rules & Tips Defer judgment Encourage wild ideas Go for quantity Build on the ideas of others One conversation at a time Stay focused on the topic Be visual 1.Number and record each idea – let’s try to get a hundred ideas, motivates participants 2.Write the flow of ideas in a way that is visible to the group 3.Make sketches, mind-maps, diagrams,...

40. Innovation - 40 © Minder Chen, 2013 SCAMPER Method for Brainstorming (Eberle, 1971) SubstituteWhat could be used instead of an existing component? CombineWhat could be added to an existing product? AdaptHow can it be adjusted to suit a condition or purpose? Modify, Magnify, & Minify How can the color, shape, or form be changed? How can it be made larger, stronger, or thicker? How can it be made smaller, lighter, or shorter? Put to other uses What else can it be used for? EliminateWhat can be removed or taken away from it? Reverse &Rearrange How can it be placed opposite its original position? How can the pattern, sequence, or layout be changed?

41. Innovation - 41 © Minder Chen, 2013 Business Model Innovation “…the key to sustained success is business model innovation.” –Clay Christensen, Harvard Business School

42. Innovation - 42 © Minder Chen, 2013 Elevator Pitch Who is the target customer? What is the customer need? What is the product name? What is its market category? What is its key benefit? Who or what is the competition? What is the product’s unique differentiator?

43. Innovation - 43 © Minder Chen, 2013 The Business Model Canvas

44. Innovation - 44 © Minder Chen, 2013 http://strategicorganizationdesign.com/the-innovator%E2%80%99s-dna-disruptive-research-disruptive-writing http://www.youtube.com/watch?v=Xy6Ex1C_SAs#http://www.youtube.com/watch?v=Xy6Ex1C_SAs#!

45. Innovation - 45 © Minder Chen, 2013 Questioning “The important and difficult job is never to find the right answers, it is to find the right question.” -Peter Drucker “question the unquestionable.” -Ratan Tata

46. Innovation - 46 © Minder Chen, 2013 Risk Taking Culture “Fail often to succeed sooner.” – IDEO’s motto Risk taking: Take enough chances and you risk a few big failures. Prototyping Embrace mini-failure Large firms tend to be more risk-averse

47. Innovation - 47 © Minder Chen, 2013 QuestionStorming What are your questioning patterns? What kinds of questions do you focus on? What questions yield unexpected insights into why things are the way they are? What questions surface fundamental assumptions and challenge the status quo? What questions generate strong emotional responses (a great indicator of challenging the way things are)? What questions guide you best into disruptive territory? Innovator’s DNA, p. 88 Also http://www.pynthan.com/vri/questorm.htm andhttp://www.pynthan.com/vri/questorm.htm http://www.vervago.com/wp-content/uploads/skill_sharpener_aug08.pdf Questionstorming differs from brainstorming in its focus on questions, not ideas

48. Innovation - 48 © Minder Chen, 2013 Example A QuestionStorming which is a brainstorming but you brainstorm to generate questions to ask, such as what questions we should ask to improve ABC Compnay's innovation initiative? "Idea" now becomes "Question" Examples: –Who should be in charge? –What are the major barrier? –Which area has the most potential?

49. Innovation - 49 © Minder Chen, 2013 Observation: Learning From Nature Burs of Burdock Velcro is a company that produces the first commercially marketed fabric hook-and-loop fastener, invented in 1948 by the Swiss electrical engineer George de Mestral. electrical engineerGeorge de Mestral

50. Innovation - 50 © Minder Chen, 2013 Source: Innovation DNAs, p. 184

51. Innovation - 51 © Minder Chen, 2013 http://99u.com/articles/7210/Tina-Seelig-On-Unleashing-Your-Creative-Potential

52. Innovation - 52 © Minder Chen, 2013 What is the answer? 5 + 5 = ? ? + ? = 10

53. Innovation - 53 © Minder Chen, 2013 Kindergarten Classroom

54. Innovation - 54 © Minder Chen, 2013 High School Classroom

55. Innovation - 55 © Minder Chen, 2013 Office Cubicles Radical innovations are spawned by the interplay of different ideas and domains that don’t usually belong together, through connectivity and conversation. Source: Innovation to the Core

56. Innovation - 56 © Minder Chen, 2013 Pixar Office Building Stimulating innovation via chanced encounters.

57. Innovation - 57 © Minder Chen, 2013 Meeting at Pixar Brain trust Give advice not command No PowerPoint, please Daily Reviews (Dailies) Overcoming Inhibitions Showing unfinished work each day liberates people to take risks and try new things because it doesn’t have to be perfect the first time. Peer Culture

58. Innovation - 58 © Minder Chen, 2013 Creativity and Teamspirit One doesn’t manage creativity [but nurtures] One manages for creativity (i.e., creative process) Tap ideas from all ranks (using multidisciplinary teams) Lone inventor myth  Encourage and enable collaboration Enlightened trial and error (of a creative team) succeeds over the planning of lone genius.* * http://www.youtube.com/watch?v=M66ZU2PCIcM Source: https://www.youtube.com/watch?v=JkHOxyafGpESource: https://www.youtube.com/watch?v=JkHOxyafGpE (1of 3) http://v.youku.com/v_show/id_XNDczMzEzNjY4.html

59. Innovation - 59 © Minder Chen, 2013 Left Brain vs. Right Brain Imagination is more important than knowledge - Albert Einstein Imagination Intuition Knowledge Rational thought http://www.nytimes.com/2011/10/30/opinion/sunday/steve-jobss-genius.html?_r=0 Logical thinking Analogical thinking correctively Solving problem correctively creatively Solving problem creatively

60. Innovation - 60 © Minder Chen, 2013 Left Brain vs. Right Brain Left brain functions uses logic detail oriented facts rule words and language present and past math and science can comprehend knowing acknowledges order/pattern perception knows object name reality based forms strategies practical safe http://www.heraldsun.com.au/news/right-brain-v-left-brain/story-e6frf7jo-1111114603615 http://theness.com/neurologicablog/index.php/left-brain-right-brain-and-the-spinning-girl/ Right brain functions uses feeling "big picture" oriented imagination rules symbols and images present and future philosophy & religion can "get it" (i.e. meaning) believes appreciates spatial perception knows object function fantasy based presents possibilities impetuous risk taking

61. Innovation - 61 © Minder Chen, 2013 Comparison between Creative and Receptive Hexagrams Hexagram 1 ( 乾 )Hexagram 2 ( 坤 ) CreativeReceptive Creative talentsTolerance attitude Divergent thinking (open)Convergent thinking (close) Visioning and planningImplementation & execution LeaderFollower ChangeSimplify Facing & taking risksDealing with resistances Big picturesSmall details TimeSpace 乾知大始，坤作成物。

62. The End is the Beginning! 生生不息