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Innovate to Grow:
12 rules of innovation
Koenraad Debackere
KU Leuven
30-9-2013 Leuven.Inc "Innovate or Die" 1
12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The Janus factor
• Joseph Schumpeter (inspired by Kondratiev):
technological progress as fundamental to economic
progress, driving competition through product
differentiation
• Schumpeter developed two models: he considered
them to be “opposites” and mutually exclusive, though
in reality they turned out to be highly complementary
“The eternal gale of creative destruction”
… pushing new firms and industries to the forefront and
destroying old ones … e.g. Michael Porter…
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The Janus factor
• Robert Solow and the econometric proof of technology as
the “3rd” production factor Solow-residual to explain
economic growth beyond labor and capital (The Review of Economics
and Statistics, Vol. 39, No. 3. (1957), pp. 312-320):
– Y=F(K,L) (i.e. Cobb-Douglas Y = aLbKg)
– Y=F(K,L).X(T) with X(T) a parameter measuring technical progress
(e.g. evolution in R&D expenditures)
– R2: 20% ==> 80%
“Learning by doing and continuous innovation”
… enabling firms to reap enormous benefits from
institutionalising and routinising their innovation production
function… also: William Baumol …
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The risk factor
Risk and uncertainty --- “compagnons de route”, cf. Arrow
Fumbling the future …
Smith & Alexander, 198830-9-2013 Leuven.Inc "Innovate or Die" 6
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The user value factor
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The process factor
• Professionalise innovation to manage risk!
• YES, but:
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The team factor
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The boundary-spanning factor
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The durability factor
• Uniqueness is what breeds innovation success …
• Though, not sufficient for a sustainable advantage:
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The attention factor
Source: Hayes, R.H., Wheelwright, S.C., and Clark, K.B. (1988). Dynamic Manufacturing. New York: The Free Press, p. 279.
See also Gluck and Foster. (1975, September-October). "Managing Technological Change: A Box of Cigars for Brad."
Harvard Business Review, p. 141.
Phases
Index of
Influence
High
Low
ACTUALMANAGEMENTACTIVITYPROFILE
KnowledgeAcquisition
ConceptInvestigation
BasicDesign
PrototypeBuilding
PilotProduction
ManufacturingRamp-Up
ABILITYTO INFLUENCEOUTCOME
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The proximity factor
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The entrepreneurship factor
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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De S-curve
transitie
SOCIETAL CHALLENGE
+
MARKET OPPORTUNITY
=
SHARED VALUE
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12 RULES OF INNOVATION …
1) Rule 1: the Janus factor
2) Rule 2: the risk factor
3) Rule 3: the user value factor
4) Rule 4: the process factor
5) Rule 5: the team factor
6) Rule 6: the boundary-spanning factor
7) Rule 7: the durability factor
8) Rule 8: the attention factor
9) Rule 9: the proximity factor
10) Rule 10: the entrepreneurship factor
11) Rule 11: the shared value factor
12) Rule 12: the knowledge-creativity factor
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The knowledge-creativity factor
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THANK YOU! QUESTIONS?
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