chapter 2

Chapter 2

Innovation as a core business process

1 2013 John Wiley & Sons Ltd.

www.innovation-portal.info

Innovation Process

Session 2. Key issues:

Routines & innovation

A generic process for innovation

Influence of context & contingency



Systems Innovation

How innovation happens?

Success (?)Process



Systems Innovation

How it really happens ..



Routines & Innovation

What are organizational routines (Nelson & Winter,

1982)?

Regular & predictable

Collective, social & tacit

Guide cognition, behaviour & performance

Promise to bridge (economic & cognition) theory &

(management & organizational) practices

the way we do things around here

Can promote or prohibit innovation




Research on routines (Becker, 2005):

enable co-ordination

provide a degree of stability in behaviour

enable tasks to be executed sub-consciously, economizing on limited cognitive resources

binding knowledge, including tacit knowledge.

But, difficult to operationalize, research or

manage

Need to focus on cognition & practice




Routines in practice (Feldman & Pentland, 2003):

Dual nature, sites of both stability/reproduction, & creation/change

Distinguish between 'ostensive' aspects (what they aim or claim to do), & 'performative' aspects (what they actually do).



Innovation Process

Generic phases of the innovation process:

Searching & scanning the internal & external

environments

Filtering & selecting potential opportunities

acquiring the technical, financial & market

resources

implementing development & commercialisation

reviewing & learning from experience



Innovation Process

Scanning the external environment:

identify, segment & exploit lead customers

identify, segment & involve key suppliers

explicit criteria for selecting alliance partners

clear objectives & guidelines for licensing & out-sourcing

involve all relevant parties e.g. financial & regulatory

use formal exploratory techniques to identify future trends



Searching

These typically:

Recognize requirements early - are ahead of the market in identifying and planning for new requirements.

Expect high level of benefits - due to their market position and complementary assets.

Develop their own innovations and applications - have sufficient sophistication to identify and capabilities to contribute to development of the innovation.

Perceived to be pioneering and innovative - by themselves and their peer group.



Searching

Why universities commercialize technology:

No existing company is ready or able to take on

the project on a licensing basis;

invention consists of a portfolio of products, or is

an enabling technology;

inventors have a strong preference for forming a

company;

income - changes in funding & IPR law;

technological opportunity



Searching

But, successful commercialization still rare:

highly concentrated in a small number of elite

universities - top 20 account for 70%;

a very small number of key patents account for

most of licensing income, the 5 most successful

patents typically account for 70-90% of total;



Innovation Process

Selecting & filtering the opportunities for

innovation:

Strategic

Capabilities e.g. relatedness

Commercial e.g opportunity & competition

Risk/Reward e.g. probability, scale

Financial e.g. NPV, option value



Innovation Process

Resourcing the chosen innovations:

Scope of innovation internal versus external

resources

Structure of project e.g. alliances, joint ventures,

licensing



Innovation Process

Implementing the innovation:

Functional integration & group structure

Roles of suppliers, users & other stakeholders

Timing & degree of involvement

Project management

Supporting tools & techniques



Capturing Benefits & Learning

Characteristics of a learning organization:

Knowledge management & IPR

Experimentation & structured reflection;

Challenges & multiple perspectives;

Formal processes & documentation;

Measurement & targets;

Display & dissemination of results;

Emphasis on training & development.



2013 John Wiley & Sons Ltd.

www.innovation-portal.info17



SEARCH

Potential for change

New Technological Opportunities :Need for change pulling through innovation;Push which comes from new opportunities

Changing Requirements on the part of markets (legislative Pressure /Competitor action)

2009 John Wiley & Sons Ltd.www.wileyeurope.com/college/tidd

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chapter 2

Documents

john wiley sons

routines innovation

innovationhow innovation

financial market resources

cognition practice6

tacit knowledge

routines becker

market position