4. caso 1- 2010 towards an integrated framework for managing the process of innovation

7/28/2019 4. Caso 1- 2010 Towards an Integrated Framework for Managing the Process of Innovation

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Towards an integrated frameworkfor managing the process ofinnovation

Lan Tao, David Probert and Rob Phaal

Centre for Technology Management, Institute for Manufacturing, University of Cambridge,Cambridge CB3 0FS UK. [email protected]; [email protected]; [email protected]

Innovation has become a major driving force for business growth and success. However,

successful and sustained innovation represents challenges rooted in technological uncertainties,

ambiguous market signals and embryonic competitive structures. Notably, in the management

of innovation, many challenges still remain in both theory and practice, which demand

improved managerial approaches. In this context, the development of a practical and explicit

management framework for the process of innovation could be beneficial. This research sets

out to develop the concept of Innovation Readiness Levels (IRL), an explicit model for

managing the process of incremental innovation. Basically, IRL is a framework depicting the

development of an innovation over its lifecycle. Within the emerging framework proposed inthis paper, five key aspects that determine the effective implementation of innovation are

identified. The lifecycle of innovation is then divided into six phases, and for each phase,

associated assessment aspects and criteria are identified. By providing better monitoring and

control, IRL is intended to help implement innovation over the lifecycle more effectively. It is

also expected to apply as a management tool, for which guidance of use is suggested.

1. Introduction

I nnovation has become a driving force forbusiness growth and success. However, suc-cessful and sustained innovation represents chal-

lenges rooted in technological uncertainties,ambiguous market signals and embryonic compe-

titive structures (Day et al, 2000).

These challenges exist not only in theory but

also in practical innovation management, which is

largely focused on the systematic processes that

organisations use to develop new and improved

products, services and business processes (Ettlie,

2000; Goffin and Mitchell, 2005).

With an increasing pace of the emergence and

development of innovation, coping with the chal-

lenges in the innovation process has become a

foremost concern for technology managers. Whenthis research started, it was observed that a

number of companies were in need of improved

managerial approaches for the innovation pro-

cess.

This background lays the foundation for this

research. The aim is to develop an explicit frame-

work, which can be used as a tool for managing

the process of innovation.In the following sections, the literature related

to this research is reviewed. The research question

and methodology are then defined and clarified.

After describing the case studies that have been

conducted, an initial framework for the incre-

mental innovation process and further research

activity are proposed.

2. The research

The research reported here set out to examinehow technological, market and other associated

aspects of innovation readiness can be depicted
mailto:[email protected]:[email protected]


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over the lifecycle and to provide the Innovation

Readiness Levels (IRL) framework as a tool for

managers to position themselves and take into

account key elements relating to an innovation.

This can be addressed by the following two

specific objectives:

(i) To develop a generic readiness model that can

be abstracted and applied to managing the pro-

cess of innovation in industry;

(ii) To establish generic activities and criteria for

each phase of the innovation lifecycle.

As this research is exploratory and theory

building in nature, it embraces an interpretative

philosophical position and uses a case-study ap-

proach (Yin, 2003).The logic flow is that first, existing theories

about innovation processes and associated activ-

ities were reviewed, following which practical

problems and needs were reviewed and identified

through case studies with companies that have

experienced challenges in managing the process of

innovation, as a result of which the practicability

and applicability of the conceptual framework of

IRL were confirmed.

Further case studies were then conducted with

leading companies in various industrial sectors, in

order to develop and refine the conceptual frame-work of IRL. The objective in selecting the

research subjects was to choose an appropriate

population that would allow generalisation of the

findings. When selecting the research subjects, a

range of industrial sectors and practicalities of

access to companies were considered.

This paper concludes with the proposal of an

initial framework of IRL.

3. Literature review leading to theproposal for IRL

Many theories have been developed to describe

the process of innovation. Some aspects in the

literature are highlighted in this section, as the

foundation on which an improved model for

managing the process of innovation can be devel-

oped.

3.1. Innovation

Innovation was defined by Schumpeter (1934) as

the commercialisation of combinations of the

following:

(i) new materials and components,

(ii) the introduction of new processes,

(iii) the opening of new markets,

(iv) the introduction of new organisational forms.

According to this definition, innovations are

the composite of two worlds namely, the tech-

nical world and the business world. When only a

change in technology is involved, Schumpeter

terms this invention; when the business world is

involved, it becomes an innovation (Janszen,

2000). In this paper, innovation is defined as

the successful exploitation of new ideas incorpor-

ating new technologies, design and best practice

(BIS, 2008). This definition is adopted because of

the papers focus on technological innovations in

manufacturing companies and the associatedmanagement of the innovation process.

3.2. Types of innovation

Conventionally, innovations have often been clas-

sified as incremental and radical. Incremental

innovation reinforces the capabilities of estab-

lished organisations, while radical innovation

forces them to ask a new set of questions, to

draw on new technical and commercial skills and

to use new problem-solving approaches (Tush-

man and Anderson, 1986; Burns and Stalker,1966). Incremental and radical innovations re-

quire different organisational capabilities and

may require different management processes.

This paper mainly focuses on how established

organisations manage the process of incremental

innovation. Research is ongoing to extend the

framework to radical innovation.

3.3. The process of innovation

A comprehensive understanding of the lifecycle of

innovation can include two phases: technologicaldevelopment and market evolution.

In existing theories, one stream is the approaches

to managing innovation process, which is more

focused on the technological development phase,

such as the Stage-Gates Game Plan (Cooper,

1993, 2001) and Technology Readiness Levels

(TRL, Mankins, 1995) - see Table 1. Another stream

concentrates on the phase of market evolution,

understanding and describing the pattern after

the innovation is inserted into the marketplace.

Examples of this stream can be the theory of

Diffusion of Innovations (DOI, Rogers, 1995), theMarket Adoption Model (Moore, 1999), which was

developed based on the DOI theory (Rogers, 1995),



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and Product Lifecycle (Levitt, 1965; Polli and

Cook, 1969; Beacham, 2006).These theories typically do not embrace the

whole lifecycle of technological innovation from

inception to obsolescence. However, the Stage-

Gates Game Plan (Cooper, 2001) and TRL

(Mankins, 1995) provide guidance for managing

the technological development phase. Besides,

although the DOI theory (Rogers, 1995), Market

Adoption Model (Moore, 1999) and Product

Lifecycle (Levitt, 1965; Polli and Cook, 1969;

Beacham, 2006) are process patterns rather than

management approaches, they illustrate and help

to understand the phase of market evolution.

Therefore, these theories are considered usefulwhen developing a comprehensive lifecycle of

innovation, as part of the conceptual framework

of this research.

Furthermore, in the process approaches on

managing innovation, TRL (Mankins, 1995) pro-

vides a checklist of key activities for only technol-

ogy at each level, while the Stage-Gates Game

Plan (Cooper, 2001) describes mixed key activities

for technology, market and organisation at dif-

ferent stages. Hence, there may be scope for

considering innovation as a multi-aspect process,

in which not only technology, market and orga-nisation but also other key aspects are taken into

account more explicitly throughout the lifecycle.

For this purpose, theories on innovation pro-

cess might be worth reviewing as there are estab-

lished theories on its evolution and

characteristics. In the first four generations of

the innovation process (Roussel et al., 1991;

Rothwell, 1992, 1994; Miller and Morris, 1999;

and Khalil, 2000), conventional key factors that

affect the innovation process are technology, mar-

ket and organisation. In the fifth generations,

there is an emphasis on collaborative innovation

systems and networks (Rothwell, 1992; Rogers,

1996; and Nobelius, 2004), which could be ad-

dressed through partnerships. This also fits into

the trend of globalisation in manufacturing and

the economy. In addition to these factors derived

from the theories on the innovation process, riskshould inevitably be considered whenever an

innovation emerges.

There might be other aspects that are impor-

tant to the process of innovation, such as strategy,

people and culture. However, these aspects are

either contextual factors and are thus beyond the

scope of this research or were found more appro-

priate to be reflected by other key aspects. Thus,

they are not explicitly included in the framework

at this stage of its development.

In summary, this research intended to address

the management of the process of innovation byexplicitly considering the following five key as-

pects of innovation: technology, market, organi-

sation, partnership and risk, through the full

lifecycle of innovation.

3.4. Conceptual framework of IRL

Based on the above discussion, the conceptual

framework of IRL is proposed. As demonstrated

in Table 2, the framework is a six C model,

which separates the comprehensive lifecycle of

innovation into six phases (readiness levels), andaddresses the management of the process of

innovation by considering five key aspects that

are defined below. The purpose of defining these

terms is to provide a precise understanding in the

context of this research.

(i) Defining the key aspects considered in IRL:

(a) Technology:

Braun (1998) defines technology as the ways

and means by which humans produce purposeful

material artefacts and effects.

According to the National Academies of En-

gineering (NAE, 2008), technology is the processby which humans modify nature to meet their

needs and wants. Most people, however, think of

Table 1. Technology-readiness levels

Technology-

readiness levels

Definitions

TRL 1 Basic principles observed andreported

TRL 2 Technology concept and/orapplication formulated

TRL 3 Analytical and experimental criticalfunction and/or characteristic proof-of-concept

TRL 4 Component and/or breadboardvalidation in a laboratoryenvironment

TRL 5 Component and/or breadboardvalidation in a relevant environment

TRL 6 System/subsystem model or

prototype demonstration in arelevant environment (ground orspace)

TRL 7 System prototype demonstration in aspace (operational) environment

TRL 8 Actual system completed andqualified through test anddemonstration (ground or space)

TRL 9 Actual system proven throughsuccessful mission operations

Source: Mankins, 1995.

Integrated framework for managing the process of innovation


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technology in terms of its artefacts, such as

computers and software, mobile phones, automo-

biles, aircraft and medical devices. But technology

is more than these tangible products. It includes

the entire infrastructure and knowledge necessary

for the design, manufacture, operation and repair

of technological artefacts, from corporate head-

quarters and engineering schools to manufactur-

ing plants and maintenance facilities. As stated

before, this paper focuses on incremental techno-

logical innovation in established organisations.

(b) Market:In the context of this research, the term market

refers to the groups of consumers or organisations

that are interested in innovative technology or the

product, have the resources to purchase the

product and are permitted by law and other

regulations to acquire the product (adopted

from Doyle, 2002 and Perreault, 2005). The

marketplace is the battleground on which the

innovations fortunes will be decided (Cooper,

2001).

(c) Organisation:

In this research, the companies involved are all

established. However, the notion of organisationdoes not refer to the entire corporation. It actu-

ally refers to the parts of the organisation(s)

involved in the process of innovation, whose

goal is to implement the innovation, to generate

specific services and/or to produce goods

throughout the lifecycle.

(d) Partnership:

The term partnership is taken in this research

to specify a range of inter-organisational relation-

ships: in which the parties maintain autonomy

but are bilaterally dependent to a non-trivial

degree (Williams, 1991; Minshall et al., 2005).Examples of partners include suppliers, resellers

and research partners.

(e) Risk:

As Goffin and Mitchell (2005) point out, ways

of assessing of addressing risks must come high

on the list of techniques for managing innovation

projects.

In this research, risk refers to a combined

concept that denotes a potential negative impact

on innovation at the business level. In the man-

agement of the process of innovation, this conceptintegrates technological, market and organisa-

tional risks (Day et al., 2000), which are consid-

ered or assessed in certain levels of IRL (Table 3).

(ii) Defining the phases of IRL:

(a) Concept:

Basic scientific principles of the innovation

have been observed and reported, and the critical

functions and/or characteristics have been con-

firmed through experiments (equivalent to TRL

13).

(b) Components:

Components have been developed and validated,and a prototype has been developed to demonstrate

the technology (equivalent to TRL 46).

Table 2. Conceptual thinking of innovation-readiness levels (IRL)

Innovation-readiness

levels

The lifecycle of innovation

Technological development Market evolution

IRL 1 IRL 2 IRL 3 IRL 4 IRL 5 IRL 6Concept Components Completion Chasm Competition Changeover/

closedown

Key aspectsTechnologyMarketOrganisationPartnershipRisk

Table 3. Sources of risk in innovation

Sources of risk in innovation

Technologyrisk

Market risk Organisational risk

Technicalfeasibility

Market size andscope

Cost and return

Supply ofmaterials

Knowledge ofcustomer needs

Dependence ofpartners

Intellectualproperty regimes

Quality andavailability ofpersonnel

Regulatoryenvironment Capital

Source: Day, 2000.



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(c) Completion:

Technological development has been com-

pleted and the complete system functionality has

been proven in the field (equivalent to TRL 79).

(d) Chasm:

The term chasm here is broader than Moores

definition (1999): the chasm between the early

adopters of high technology and the product (the

enthusiasts and visionaries) and the early majority

(the pragmatists). Chasm in the IRL framework

refers to the challenges and difficulties that in-

novation may encounter when first introduced

into the market (early stage).

(e) Competition:

This is the mature phase of the market, when it

has reached a state of equilibrium marked by theabsence of significant growth or innovation

(adapted from Moore, 1999). The main mission

in this phase is to maintain and enhance the

position of innovation and to cope with competi-

tion.

(f) Changeover/closedown:

These are the two options in the declining stage

of the market. Changeover refers to the re-innova-

tion of technology, inaugurating new markets,

transformation of the business model and corpo-

rate re-invention, in order to seek and develop a

competitive advantage. On the other hand, close-down means that the innovation has come to

obsolescence and exits.

3.5. Mapping literature onto the IRLframework

Based on the above discussion, the key literature

reviewed that relates to lifecycle models is

mapped onto the conceptual framework of IRL,

presenting an overview of the existing literature

(Table 4).

In this map, representative theories on the

process of innovation, TRL (Mankins, 1995),

Stage-Gates Game Plan (Cooper, 2001), the

DOI Theory (Rogers, 1995), Market Adoption

Model (Moore, 1999) and the Life Cycle of

Innovation (Beacham, 2006), have been placed

into matching positions (highlighted with a grey

background).

This literature map also illustrates how this

research explores the existing literature.

4. Developing the framework of IRL

In this section, case studies conducted for devel-

oping the conceptual framework of IRL are

discussed.

The companies that have participated in the

case studies are outlined in Table 5. Except for

Company B, which is a consulting service com-

pany, all other companies are technology-based

businesses. Practical issues and challenges were

discussed with all the companies but particularly

with the first two companies, while the last three

companies have clearly succeeded in managing

the process of innovation and contributed more inthe development of the IRL framework.

4.1. Company A telecommunicationequipment manufacturer

4.1.1. Brief introduction to the business

Company A is an established company based

in Europe, manufacturing telecommunication

equipment. It has 14 manufacturing facilities in

Table 4. Mapping literature onto the innovation-readiness levels (IRL) framework

Innovation-readinesslevels


IRL1 IRL2 IRL3 IRL4 IRL5 IRL6Concept Components Completion Chasm Competition Changeover/

closedown

Key aspectsTechnology TRL (Mankins, 1995); Stage-GatesGame

Plan (Cooper, 2001)Market Stage-Gates Game Plan (Cooper, 2001) Diffusion of Innovation Theory (Rogers,

1995); Market Adoption Model (Moore,1999); Life Cycle of Innovation(Beacham, 2006)

Organisation

PartnershipRisk



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eight countries and R&D centres in 11 countries.

Its net sales in 2005 were over h10 billion, with

450,000 employees. Company A is strategically

moving from traditional telecommunication man-

ufacturing into new areas, for example, multi-

media and business solutions.

4.1.2. Issues in managing innovation

The main form of communication within the

company is informal internal talk, which re-

quires an individual to be able to advance inno-vative technologies sufficiently in the organisation

and other employees awareness. Once the tech-

nology is proven by managers, discussions may

start at different levels. In this way, the approach

is not systematic or consistent, although it might

have a positive outcome. For instance, when

developing re-configurable logical processors,

the limitations and issues perceived by Company

A were

(i) because of the management style and organisa-

tional culture, people in each department have

limited knowledge of what the others are doing;(ii) the allocation of responsibility is very restric-

tive within the organisation; and

Table 5. Profiles of companies participating in the research

Company Sector No. of employees in 2005

(worldwide)

Corporate

base

A Telecommunication equipment 50,000 EuropeB Consulting 410,000 EuropeC Aerospace 50,000100,000 EuropeD Image-processing equipment 20,000 EuropeE Chemicals 30,000 Europe

Stage1

Stage2

Stage3

Stage4

Stage5

Second

Screen

Discovery

StageGate

2Gate

3Gate

4Gate

5

Post

Launch

Review

Go to

Development

Go to

Testing

Go to

Launch

Idea

Screen

Gate1

Scoping

Build

Business Case Development

Testing and

Validation Launch

Figure1. Stage-Gates Game Plan (Source: Cooper, 1993, 2001).

Time

%o

ftotalmarket

Innovators

2.5%

Early

Adopters13.5%

Early

Majority34%

Late

Majority34%

Laggards

16%

Figure2. Diffusion Process (Source: Rogers, 1995).



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(iii) existing criteria are too vague to follow

during the process of procuring innovation.

In such a complex situation, Company A is

seeking possibilities to establish a formal process

for managing technological innovation with the

following functions:

(i) It should indicate clear allocation of responsi-

bilities;

(ii) It should break down the process of innova-

tion into explicit phases, which can be effectiveand convenient.

Company A confirmed the applicability of the

conceptual thinking of IRL and perceived it as a

potentially useful tool.

4.2. Company B global professionalservices


Company B is a global professional services

company and auditor. It also provides businessadvice, including strategic and operational man-

agement consulting services. Company B earned a

revenue of4US$15 billion in 2005 and employed

approximately 120,000 people globally.

4.2.2. Learning from experience

According to the experience of Company B with

clients, there is a practical need to improve the

management of innovation. Many established

organisations have experienced the following is-

sues and challenges:

(i) The process of innovation is vague to follow;

(ii) The best possible benefit erodes during re-search;

(iii) Need to locate investment for testing the

technology. There is a gap of translation (Figure

5) between technology and cash value, which makes

it confusing where a benefit or value arises. This

results in difficulty in obtaining investment. There-

fore, it is crucial that the translation is made visibly

and effectively in order to obtain investment.

Company B confirmed that IRL is practical and

recommended that the IRL framework covers the

following issues:

(i) Value or benefits of the innovation should be

visible in order to obtain investment;

Chasm

Early

Majority

LaggardsEarly

Adopters

Late

Majority

Innovators

Figure3. Market Adoption Model (Source: Moore, 1999). Note: Area under the curve represents the number of customers.

Innovation Growth Maturation Decline

Timeline

Volume

Figure4. Product Life Cycle (Source: Levitt, 1965; Polli and Cook, 1969; Beacham, 2006). Note: Area under the curve representsthe number of customers.



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(ii) Risk should be addressed in a widely acceptedway.

4.3. Company C aerospace


Company Cis a UK-based defence contractor and

a commercial aerospace products manufacturer.

It has operations and customers in about 100

countries. In 2005, the company employed circa

100,000 people and has generated annual sales in

excess ofd10 billion.

4.3.3. Developing the IRL framework with

Company C

Over 60% of the innovations in Company Cs

business are incremental, e.g. improvement in

flight controls, displays and mission systems.

Company C uses a slightly modified version of

TRL (Mankins, 1995) to manage the innovation

process.

In Company C, technological development and

business development are actually considered

separately. For developing technology, TRL is

the main consideration. Technological develop-ment terminates when TRL is completed. After

this, no further explicit stages are introduced

except for the ongoing annual business planning

cycle (including business planning and reviews)

for managing innovations already in the market.

The business planning and reviews enable the

practice to be executed across all the functions.

The aim is to deal with the insertion of the

innovation to the market, the competitive envir-

onment and the overall dynamic of the industry.

Therefore, it is perceived that the business plan-

ning cycle fits into the last three stages of IRL Chasm, Competition and Changeover/Close-

down.

The aspects and associated assessments consid-

ered by Company C when implementing the

innovative system have also been interpreted

with the IRL framework and further contributed

to its development. Regarding technology, the

assessment criteria are very similar to those of

TRL. In the past when Company C had regular

customers, market was not particularly recog-

nised as a key aspect in managing innovation.

However, as competition has intensified, much

more attention is now drawn to market. While

organisation is not one of the major concerns of

Company C in managing the innovation process,

partnership has become an increasingly important

aspect. This includes collaborating with suppliers

of displays and sensors, etc. and with universitiesand advanced technology research group. The

criteria considered by Company C for risk are

very comprehensive, which include technology,

market and organisational risks.

4.4. Company D image-processingequipment manufacturer


Company D is based in Europe and manufactures

image-processing equipment. In 2005, the com-

pany, which employed 20,000 people, achievedrevenues of over h2 billion. It is commercially

active in 80 countries and has it own sales and

service establishments in more than 30 countries.


Company D

The company has a formal process for managing

innovation, which consists of seven milestones,

from Milestone 1 (M1), the definition of technol-

ogy project to Milestone 7 (M7), the end of the

project. IRL is developed by interpreting Com-

pany Ds milestone process. Reflections from thisstudy are as follows:

(i) the sequences of the milestones are consistent

with the six phases of IRL;

(ii) the five key aspects of IRL cover the mixed

activities in the milestone process;

(iii) activities and criteria that tend to be generic

or confirming the literature are regarded as con-

tributions to the development of IRL;

(iv) the organisational change in the process of

innovation has been identified: Company D in-

tends to formalise the organisation from M3

onwards; and(v) the activities of partnerships in the process

have been clarified.

Figure5. Gap of translation between technology and cashvalue.



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4.5. Company E chemicals


Company E is a large Europe-based chemicalproducer with a revenue of over d4 billion in

2005. It has employed 30,000 people in more than

50 countries.


Company E

A stage-gate process is used in the implementa-

tion of innovation, which is a modified version of

the Stage-GatesGame Plan (Cooper, 2001). This

method ensures that the innovation fits into the

overall strategy of the company and the risk of

developing innovation is reduced.Within the process, each stage is designed to

gather information needed to move the project

forward to the next stage. Each stage consists of a

set of parallel activities undertaken by people

from different functional areas within the com-

pany. The functional areas may be technical,

market, finance and so on. This multi- or cross-

functional idea and the functional areas are con-

sistent with IRL and its five key aspects.

The company is interested in sub-dividing the

last stage Post-Launch Review, for the sake of

better control and monitoring of innovation. As

perceived by managers in Company E, it is feasible

that this last stage Post-Launch Review be

divided into the last three phases of IRL, which

are Chasm, Competition and Changeover/Close-

down. Detailed issues are discussed, respectively:

(i) Chasm (IRL 4)

Chasm here is understood in a broader sense

problems and difficulties obstructing the innova-

tion from becoming a winner.

(ii) Competition (IRL 5)

Company E possesses a strong brand in some

countries and areas in the world. They had the

ambition to strengthen the brand for some of theother areas. Multiple approaches were used to

cope with competition:

maintain constant innovation,

differentiate products,

provide more efficient service,

use IP to prevent people from copying, e.g.

trademark, registered designs and registered

packaging.

(iii) Closedown/changeover (IRL 6)

This phase of innovation process was consid-

ered by Company E but not in a formal way.Some strategies include re-positioning or close-

down of the technology.

5. Discussion

The main output of this research is the emerging

framework of (IRL), which is presented in Table

6. The literature reviewed provides a theoretical

base for the conceptual thinking of IRL, while the

five case studies, particularly the last three, have

confirmed the feasibility of IRL and contributed

to the development of the emerging framework of

IRL.

The novelty of the research findings could be

displayed in the following areas:

(i) Partition of the lifecycle of innovation;

(ii) Five aspects identified in the literature and

observed in the cases that are key to managing thelifecycle of innovation: technology, market, orga-

nisation, partnership and risk;

(iii) Key activities and criteria within each phase

of the lifecycle of innovation (those derived from

the literature and those observed from the cases

are highlighted in different colours in Table 6).

5.1. Implications for theory

This research is coherent with existing theories in

related areas. The limitations and gaps of existing

theories on the management of the process ofinnovation led to the initial idea of a more

comprehensive and explicit way to manage inno-

vation throughout the lifecycle, which has so far

been accomplished by this ongoing research.

The literature identifies maturity criteria for

technology and market in the first three phases:

concept, components and completion. IRL de-

scribes the activities and criteria for these two

aspects in the last three phases: chasm, competi-

tion and changeover/closedown, and for the other

three aspects in the whole lifecycle.

5.2. Implications for practice (guidancefor use)

The IRL framework is intended to be used as a

management tool for managing the process of

innovation. In general, IRL is a descriptive scale

rather than a prescriptive one. When it is to be used

in a particular industrial sector or company, IRL

could be adapted to suit that situation. The current

framework focuses on incremental innovation,

although research is continuing to extend the

framework to breakthrough innovation. An essen-tial feature of IRL is cross-functional collabora-

tion. Suggested responsibilities allocated to the



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departments in an organisation are as shown in

Table 7. The activities and criteria relate to parti-cular functional departments, with periodic cross-

functional meetings. Based on cooperation and

discussion with senior managers involved, when

all the key activities in one phase are accomplished,this phase is called ready and the implementation

proceeds to the next phase. In this way, the devel-

Table 6. An initial framework of innovation-readiness levels (IRL)

Innovation-

readinesslevels


IRL 1 IRL 2 IRL 3 IRL 4 IRL 5 IRL 6Concept Components Completion Chasm Competition Changeover/

closedown

Key aspectsTechnology Potential

improvementsof existingtechnologies orproductsidentified andreported;Technology

feasibilityconfirmed

Individualcomponentstested;Prototypesdemonstrated;IP protected

Actual systemdemonstrated;External testcompleted;IP protected;Technology/productdocumented;Launch

Expertiseformed;Generalavailability tothe market;Aftersalessupport

Lower R&Dactivities;Technologymaintenanceenabled;Technologicalserviceprovided

Re-innovate orexit

Market Marketresearchconducted;Working withleadingcustomers;Customerneeds anddemandsobserved

End-customeridentified;Detailedmarket launchplan issued

Specific needsandrequirements ofcustomersknown;Marketsegment, sizeand sharepredicted;Pricing &Launchingissued

Positioning inthe market;Business modelestablished;Customer-intimatemarketing(feedback);Competitorsidentified;Partnership isan option tobreak intomarket

Productsdifferentiated;Service andsolutionsprovided;Periodicalreviewconducted;Business modelrefined;Partnership isan option tocompete

Decliningmarketconfirmed;Marketresearchconducted forapproval to re-innovate or exit

Organisa-tion

Strategy fitconfirmed;

Businessanalysed andplan issued;Key individualsinvolved

Formalisingorganisation

Formalorganisationestablished

Improvedeffectivenessandcooperation;Necessary re-structure made

Partnership Potentialpartnersidentified

Partnersselected;Calibrationestablished

Partnershipformallyestablished

Cooperationwithin dynamicnetwork;On-goingmanagement

Ceasepartnership

Risk Technologyrisk considered

Technologicalrisk assessed(alternativesolution

considered);Market riskassessed;Organisationalrisk considered(investmentplan initiatedand investmentstarted)

Technologicalrisk assessed;Organisationalrisk assessed

(profitpredicted; largeinvestmentissued)

Organisationalriskperiodicallyassessed

(especiallyfinancialindicators)

Organisationalriskperiodicallyassessed

(especiallyfinancialindicators)

Re-innovate orexit considered;Changeover orclosedown plan

issued

Activities or criteria first provided by the literature are in italics. Activities or criteria observed from case studies are in normal.



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opment of innovation is under control and risk is

monitored. This proposed usage of IRL is yet to be

tested and consolidated.

6. Conclusions

In this paper, an emerging framework of IRL has

been proposed.

In the context of an increasing pace of innova-

tion and fiercer competition, the motivation to

conduct this research was the desire observed in

practice for an improved framework for mana-

ging the process of innovation.

The research started with reviewing existing

theories and tools related to innovation manage-ment. Major scope was identified as a more

comprehensive partition of the innovation life-

cycle and the use of five aspects that are key to

effective implementation of innovation process.

This contributed to the conceptual thinking of the

framework of IRL.

Following this was the designed multi-case

studies with five European companies. Empirical

data were obtained through in-depth interviews

with top management members, technology man-

agers and individuals involved in the management

of innovation process. Company documents were

another source of data. Based on the analysis ofthe data, the feasibility of the thinking of IRL was

confirmed and the conceptual framework of IRL

was developed, leading to an emerging framework

(Table 6). This framework is considered simple,

explicit and practical to be followed and used by

the case-study participants.

There are limitations in the findings of this re-

search, which provide an agenda for future research.

(i) Generalisation of the research findings

This exploratory research is based on an in-

ductive philosophy of science and is thus theory

building in nature.Future testing of the framework is necessary in

order to increase its robustness and to better

understand its application and impacts on

developing effective incremental innovation ap-

proaches.

(ii) Radical innovation

This research has mainly focused on incremen-

tal innovation. It is expected that more knowledge

about managing the process of radical innovation

can be obtained through further research.

In sum, IRL is believed to be beneficial as an

improved framework for managing the innova-

tion process. It is intended to help implement

innovation over the lifecycle more effectively with

managed risk. It is also expected to apply as a tool

to enable companies to assess their innovation

management practice.

Acknowledgement

The authors gratefully acknowledge the contribu-

tions to this research and this paper from Tim

Minshall, James Moultrie, Charles Romito, Mar-

cel Dissel, Rick Mitchell, Francis Hunt and

Elizabeth Garnsey.

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Table 7. Responsible functional department for the keyaspects of innovation-readiness levels

Key aspects Suggested responsible functionaldepartment

Technology R&DMarket Sales & MarketingOrganisation Strategic Planning Group, Human

ResourcesPartnership Outsourcing group, research liaison

group, salesRisk Finance and accounting, strategic

group



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Web References

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Lan Tao is a doctoral student at the Centre for

Technology Management, Institute for Manufac-

turing, University of Cambridge. Lan holds an

MPhil Degree from the University of Cambridge

and a Bachelor Degree in Engineering from

Tsinghua University in China. He worked as a

research assistant in the Centre for Technology

Management during 20062007 before commen-

cing research for a PhD. His research interests

include the innovation process, the management

of radical innovation, intrapreneurship in estab-

lished firms and emerging industries.

David Probert is currently the head of the Centre for

Technology Management. He pursued an industrial

career with Marks and Spencer and Philips for 18

years before returning to Cambridge in 1991. His

experience covers a wide range of industrial engi-

neering and management disciplines in the United

Kingdom and overseas. He joined the engineering

department as Royal Academy of Engineering/

Lucas Industries research fellow, to develop a

practical approach to the issues of make or buy

and vertical integration in manufacturing industry,

which has been widely applied and disseminated.

Now a reader in technology management, his

current research interests include technology and

innovation strategy, technology management

processes, technology valuation, technology in-

telligence and software sourcing. His publications

include the IET books Developing a make or buy

strategy for manufacturing business, Technology

management assessment procedure, and more re-

cently T-Plan: The fast start to technology road-

mapping and Technology intelligence: Identifying

threats and opportunities from new technologies

published by the Institute for Manufacturing.

Robert Phaal is a senior research associate in

the engineering department of the University of

Cambridge, based in the Centre for Technology

Management (Institute for Manufacturing). He

conducts research in the area of strategic technol-

ogy management, with a particular interest in the

areas of technology road mapping and evalua-

tion, emergence of technology-based industry and

the development of practical management tools.

He has a mechanical engineering background,

with a PhD in computational mechanics, withindustrial experience in technical consulting, con-

tract research and software development.

http://www.dius.gov.uk/innovationhttp://www.dius.gov.uk/innovationhttp://%20http//www.hq.nasa.gov/office/codeq/trlhttp://%20http//www.hq.nasa.gov/office/codeq/trlhttp://www.nae.edu/nae/naehome.nsfhttp://www.nae.edu/nae/naehome.nsfhttp://www.nae.edu/nae/naehome.nsfhttp://www.nae.edu/nae/naehome.nsfhttp://%20http//www.hq.nasa.gov/office/codeq/trlhttp://%20http//www.hq.nasa.gov/office/codeq/trlhttp://www.dius.gov.uk/innovationhttp://www.dius.gov.uk/innovation


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