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The Lee Kong Chian School of Business

Academic Year 2012/13


Term 2

MGMT 319 MANAGEMENT OF PRODUCT DEVELOPMENT AND INNOVATION


Instructor Name : Arnoud De Meyer
Title : Professor
Tel : 68280181
Email : arnouddemeyer@smu.edu.sg
Office : Admin Building 14th floor

COURSE DESCRIPTION
For almost all organisations it is important to their long term survival to innovate in their product or service
portfolio, or in the way they organise their processes. Innovation is often a continuous process. Sometimes
organisations can come up with a breakthrough product, but more often innovation is about a continuous sequence
of smaller improvements, recombining existing technologies in a new approach and re-positioning of existing solutions
in new business models, all that to enhance the value proposition for the customer in a significant way.
Innovation and product development require creativity and imagination, but also hard work in the form of project
management under uncertainty, improving the productivity of R&D, finding the best way to organise for speed and
quality of the development cycle, profit management, etc. Being an innovator requires talent. This course will not
transform you into an innovator, but will help to hone your skills in managing the product development and
innovation process. It will give an introduction on how organisations manage the process of innovation and how they
can develop successful products, services and systems. The focus will be on innovation and product development in
existing organisations. While we may touch on the topic of corporate entrepreneurship, this course is not about the
start-up of new companies, nor is it a course on marketing of new products.
The course is most valuable for those who want to go work in industrial firms or consulting.

LEARNING OBJECTIVES
By the end of this course, students will be able to have a good understanding of the process of product development
and innovation and thus

• know where and how to find ideas for innovation


• understand the differences between product innovation and business model innovation
• have the toolbox to analyse and shape a strategy for innovation
• understand the different type of organisation to promote innovation
• have a deeper understanding of how one can improve the productivity of Research and Development
• improve the process of development of new products and services in order to gain in time and improve the
quality of the end product
• understand the challenges of managing projects that are confronted with a lot of uncertainty
• understand how to manage in networks of companies that together provide an innovation

PRE-REQUISITE/ CO-REQUISITE/ MUTUALLY EXCLUSIVE COURSE(S)


Please refer to the Course Catalogue on OASIS for the most updated list of pre-requisites / co-requisites for this
particular course.

Do note that if this course has a co-requisite, it means that the course has to be taken together with another course.
Dropping one course during BOSS bidding would result in both courses being dropped at the same time.

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ASSESSMENT METHODS
Many of the sessions will be based on the discussion of a case study. Therefore I will require you to prepare the cases
thoroughly and to participate in the case discussions.

Each of the groups will be required to provide 3 written case preparations. The groups will be able to choose the
cases which they want to prepare. I will expect a written document of maximum six pages (double spaced) with
annexes if you want to (maximum 3 pages).

Each group will also be required to select one company and prepare an analysis of its innovation policy/strategy, based
on publicly available documents. The report on this will have to take the form of a website.

Finally there will be an „open book‟ exam that will provide you with the opportunity to integrate the different topics
we will discuss

Assessment will be as follows:

Class participation: 20%


Final Exam 40%
Case preparation per group 20%
Group project 20%

Academic Integrity
All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication, facilitation of acts of
academic dishonesty by others, unauthorized possession of exam questions, or tampering with the academic work of
other students) are serious offences.

All work presented in class must be the student‟s own work. Any student caught violating this policy may result in
the student receiving zero marks for the component assessment or a fail grade for the course. This policy applies to
all works (whether oral or written) submitted for purposes of assessment.

Where and when in doubt, students are encouraged to consult the instructors of the course. Details on the SMU
Code of Academic Integrity may be accessed at http://www.smuscd.org/resources.html.

INSTRUCTIONAL METHODS AND EXPECTATIONS


Method of instruction

In each of the classes we will discuss a case study or a file on a company. Some of these cases can be quite long
because they describe real complex situations, and are not exercises as you find them normally in textbooks. Good
preparation of these cases will be essential to your learning. Therefore I will expect you to have the case prepared
thoroughly. In my experience it requires three readings of a case to be well prepared: one quick reading to have the
overall understanding of the company and the problem, one reading to analyze the details of the case, and one more
reading after you have done your analysis and determined your approach to the problem to see whether it is
coherent with the facts in the case. Please plan your preparation for the class accordingly.

In the class I will typically spend the first half of the session on the case discussion. If there are groups who have
prepared the case I will give them five minutes to introduce the case. I will expect that all members of the group can
do that introduction.

The second half of the session will be a lecture on the topic that is illustrated by the case. This lecture will be based
on one to two readings per session and a set of slides. I will encourage you to read the relevant papers before the
class. As readings I have chosen journal articles. This is different from reading a chapter in a textbook. An article
often discusses only part of a problem, and assumes that you know the context. A textbook chapter gives you often
the summary of a lot of papers, and thus provides you with a context. Therefore it will be sometimes difficult for you
to understand fully the message in the article. The lecture is meant to give you that context. I have chosen for this
method to help you understand how to interpret the message in the original sources.

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Groupings and group work

Please form groups of five. You are encouraged to find your own group members. The group-member list should be
submitted to the TA no later than the beginning of the third session at the latest. You are encouraged to form your
groups earlier.

There will be two types of group homework assignments throughout the semester. The first type is that I expect all
groups to provide a written preparation of three cases, to be handed in before the case discussion starts. You will
have to tell me which cases you will analyze at the same time that you give me the group composition. The group‟s
case analyses should be in full written text (no powerpoint presentations) and should be not longer than 6 pages
(double spaced), eventually with annexes (maximum 3 pages). I expect you to do a creative analysis of the case and
provide me with your solutions for the case problem. As with many case studies there is no one right answer, so you
will not be judged on whether your proposals are the right ones, but rather on whether they are creative, and
anchored in the course content.

The second type of assignment is the analysis of the innovation policy/strategy of a company or organization of your
choice, on the basis of publicly accessible documents and websites. I will expect the report to take the form of a
website. In the last session I will ask the groups to make a short presentation with the website as the backbone of the
presentation.

In both types of assignments I expect you to make reference to the readings for the course, i.e. to apply what we
discuss in class. I will expect you to handle the referencing with care.

Overdue assignments will be given a zero mark.

Examinations

There will be a final exam. The exam is open book, and will take the form of a case write up. Once again you will be
judged on the creativity of your analysis and solutions, and on your ability to use the tools and concepts discussed in
class.

You are allowed to bring any tool that you deem appropriate to the exam. The exam is individual and I will require
silence during the exam. But if you want to chat over any of the social media or e-mail, I have no issue with that.
Having said this, I doubt whether you will have the time to chat extensively.

CONSULTATIONS AND TEACHING ASSISTANTS


Information about office hours and TA will be provided later.

CLASS TIMINGS
Classes will be on Monday evenings. I will typically split the class in two sessions, one being an introduction and the case
discussion, the second one the more conceptual class discussion based on the reading and my experience.

CLASS SCHEDULE

The Process of Innovation

Session 1: What is innovation?

In this first session we will try to figure out what we know on how to manage innovation. I will analyze with you what
I consider the 8 critical areas that need to be managed in order to succeed with innovation

Case study: Banyan Tree Resorts and Hotels, by CH Chua, P. Williamson and A. de Meyer (INSEAD)
Reading: De Meyer A. and S. Garg, 2005, Inspire to Innovate, Management and Innovation in Asia, chapter 2, page 12-27

Session 2: Idea generation: listening to users

There are many sources for good ideas, and many conceptual frameworks to manage the first stages of the innovation
process and the design. Innovations most often start with users. IDEO is a successful consultant and developer in this
area, and through the analysis of the case study you should develop an insight in how to get ideas for innovation.

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Case study: IDEO: Service design (A), by Manuel Sosa (INSEAD)
Reading: Thomke S. 2003. “R&D comes to Services: Bank of America‟s path-breaking experiment”, Harvard Business
Review

Session 3: Patterns of innovation: disruptive versus gradual innovation

Case study: Dassault Systemes, by Stefan Thomke and Daniela Beyersdorfer (HBS)
Reading: Christensen, Clayton M., and Michael Overdorf. 2000. "Meeting the Challenge of Disruptive Change."
Harvard Business Review 78, no. 2: 66–76.
Skim: Ansari, S.M. and Krop, P. (2012) "Incumbent performance in the face of a radical innovation: towards a
framework for incumbent challenger dynamics." Research Policy,

Session 4: Innovation in a non-profit institution

Non profits behave somewhat different from profit driven organizations. In the first part of the session we will discuss
the case of a European non-profit in the care for disabled people, on how they innovated, but at the same time had to
influence a change in government policy in order to achieve this innovation.

In the second part of this session I will invite some local innovators from the non-profit sector in order to discuss the
challenges to innovate in the non profit sector in Singapore. This session will be organized in collaboration with SMU‟s
Lien centre for Social Innovation.

Case: Monnikenheide (A) (TBC because the case is still not released)
Reading:

Amit R. and C. Zott. 2012. “Creating value through Business Model Innovation”, Sloan Management Review, vol.53,
no.3 (Spring)

Strategies for Innovation

Session 5: Creating a Culture for Innovation

No strategy for innovation will work unless there is the right culture. Through the case study of a small Singaporean
subsidiary of an entrepreneurial broadcast services provider we will analyze how one can create a culture for
innovation, even in what is a relatively mundane service business.

Case: Encompass Digital Media (TBC because the case is not yet released)
Reading: Tushman M.L, W.K. Smith and Andy Binns. 2011. The Ambidextrous CEO, Harvard Business Review, vol 89,
no.6, pp. 74-80

Session 6: Strategies for Innovation: portfolio management

One of the challenges of innovation is often that we have too many ideas for the resources we have available to
pursue all of them. In this case on a large European luxury goods producer we will analyze how we can prioritize
projects across different businesses and within businesses.

Case study: R&D Management at Universal Luxury group – Perfumes and Cosmetics Division, by Cyrille Balmes and
Manuel Sosa (INSEAD)
Reading: De Meyer A., (2008) "Technology strategy and China's technology capacity building", Journal of Technology
Management in China, Vol. 3 Issue 2, pp.137 – 153

Product development Management

Session 7: Project management under uncertainty

Case study: Vol de Nuit: The dream of the Flying Car at Lemond Automobiles SA, by Christoph Loch and Svenja
Sommer (INSEAD)
Readings:

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De Meyer, A., M.T. Pich and C.H. Loch, (2001), Managing Project Uncertainty, From Variation to Chaos, Sloan
Management Review, Winter 2001, pp. 60-67
Royer I. 2003. Why Bad Projects are so hard to kill, Harvard Business Review, (February)

Session 8: Project Management: Managing design cycle times

Case study: BMW AG: The Digital Car Project (A), by Stefan Thomke (HBS)
Reading:
Adler P.S., A. Mandelbaum, V. Nguyen and E. Schwerer. 1996. Getting the Most out of your Product
Development Process, Harvard Business review, vol 74, March-April
Thomke, S. and D. Reinersten.m 2012. "Six Myths of Product Development." Harvard Business Review 90, no. 5 (May):
84–94.
Skim: Loch, C.H., De Meyer, A., C. Terwiesch, (2000) Preliminary Information, Interdependence and Task
Concurrency in Product Development, Organization Science, vol 13, no 4, pp. 402-419.

Session 9: The role of prototyping

Case: Handpresso (A), by AM Varrick-Cagna and Manuel Sosa (INSEAD) – This case is also available as an eBook on iPad
Reading: Thomke, S. 2001. "Enlightened Experimentation: The New Imperative for Innovation." Harvard Business
Review 79, no. 2 (February).

Session 10: Project management: improving the productivity of the R&D group

In this session we will use a disguised case on a large European chemicals producer to discuss the issues of
productivity in an R&D department.

Case study: Rhodex Puguet


Reading: De Meyer A. 2007. Innovation and organizational Wisdom, in E.H. Kessler and J.R. Bailey (eds.), Handbook of
Organizational Wisdom, Sage Publications, Ca. USA

Session 11: Organization for Innovation

What is the best organization for innovation: a project based organization, a functional organization, a spin off, or a
hybrid organization such as a matrix. The case will introduce a Taiwanese subcontractor who wants to develop an
R&D capability and we will evaluate whether they have taken the right approach.

Case study: Quanta research Institute: Rainforest or Hothouse, by W. Shih, J-C Wang and H. Yu (HBS)
Reading: Brown B. and S.D. Anthony. 2011. “How P&G tripled its Innovation Success rate”. Harvard Business Review,
vol. 89, no.6 pp. 64-72

Session 12: Organization for Innovation: Managing in Ecosystems

Very often companies operate in networks. ARM is a successful developer of Risc processor designs based in
Cambridge. Theuy work in a complicated network of developers and innovators, and compete with integrated
innovators like INTEL. Is this an idiosyncratic approach, or can it be generalized? I will use this opportunity to
introduce you to my most recent research project (as you will see the paper was published in October 2012)

Case study: ARM Holdings PLC: Ecosystem Advantage


Reading: Williamson P. and A. De Meyer.2012. “Ecosystem Advantage: How to successfully harness the Power of
Partners, California Management Review

Session13: Review and presentation of projects.