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Innovation

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Manageme
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Consumer Market
Business Market
E-Commerce Market
International Market

The factors that affect


innovation
Creativity versus
innovation
The Innovation Continuum
Sources of Innovation
Innovation Culture and
myths
Standard Categories of
Innovation
A simplified Classification of

Top-down & Bottom-up


Innovation
Innovation
Independent innovation
Dynamic tensions in
innovations

C1

C2

Perspectives
C11
Product
Innovation
on
Pricing
Types Of
Place
Types &C3
Product
Promotion & C10
Innovation
Market
Communication
Classes Genesis of
People
Innovation
C9
Process
WBB 10202 Innovation
Physical
&
Marketing
C4
Organizational Innovation
Mission
Vision
Classification of Culture
Culture-From Management Organization Objectives
Optimizing people
Strategy
C5

involvement
Infrastructure Structure
Theories
C8 to
Guiding Management
The
Process considerations
Practices
Practice
SourceC7of
Promoting professional

Model
C6
Innovation Process
Attitudes
Process Limitations
Internal Innovation
Organizational
Innovation
Process
Sources
Idea-Concept-Invention
Entrepreneur
Resources
Process
design
Pre-project
(Employers)

Employees
External
Sources
Customers
Competitors
Distributors
Suppliers

Assessment:
Innovation & Management Project 50%
Quiz
10%
Final Exam
40%

Product launch
People
Product follow-up
Intellectual Property (IP)
& IP House
Technology
Marketing Mix
Customer and suppliers References:
1.
Gaynor, Gerard H. Innovation by Design. Amacom 2002. ISBN
Production
0-8144-0696-3
Operation & Finance
2.
Kotler, P.Swee Hoon Ang, Siew Meng Leong & Chin Tiong Tan.
Marketing Management: An Asian Perspective. Prectice Hall
1996
3.
Smith, D(2010) Exploring Innovation 2nd Ed. UK. McGraw-Hill

Chapter 1:
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PERSPECTIVES
ON
INNOVATION

Innovation
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Every organizationnot just


business needs one core
competence: innovation.
- Peter F. Drucker

Innovation
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First Televisor 1928

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Another model 1928

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1935-1941

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WWII (1942-1945)

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1946-1949

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1950-1959

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1960-1969

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1970-1979

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1980-1989

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Latest
LCD TV

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PLASMA TV

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3D TV

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What Next?

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Evolution of handphone

http://www.youtube.com/watch?v=Jc
nXOhrmDB8&feature=related

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Who will realize all


the dreams??

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Michael Dell: Innovator of the


Personal Computer Industry

started the road to

success out of his


University of Texas dorm
room in 1984 with just
$1,000 and an idea to
provide affordable
personal computers to
college students.
Dell is now Chairman and
CEO of his company with
a net worth of over $30
billion.
sells primarily direct to the
customer to avoid
middleman mark-ups.

Innovation
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Tony Fernandes
Born 30 April 1964
Occupation Group

Chief Executive Officer


/ Director of Air Asia
Berhad
Net worth US$230
million

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Innovation
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Creativity vs. Innovation

Creativity

the generation of ideas that result in the

improved efficiency or effectiveness of a


system.
a mental process involving the generation
of new ideas or concepts, or new
associations between existing ideas or
concepts.

Innovation
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Creativity vs. Innovation

Important aspect of creativity


1) Process

2) People

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Creative Problem Solving

Adaptor

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Creativity vs. Innovation

Innovation

introducing something new or doing


something in a new way.
to take an idea from concept to
realization and improve business
performance.
can be a new product, a new process, or
a new way of doing business.

Innovation
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Creativity vs. Innovation

Creativity is thinking new things


while

Innovation is doing new things

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Ideas

The Innovation
Continuum
Concept

Invention

Innovation

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A raw idea .

Ideas

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Ideas
3,000 raw
ideas

Numbe
r of
ideas

Source: Stevens
and Burley Plotting
the rocket of
radical innovation,
2003

300 ideas
submitted
125 small
projects
9 early stage
developments
4 major
1.7 launches
developments

1 success

Stage of new business development process

A Universal Industrial Success Curve

Innovation
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Concept

The work effort to develop a concept:

Identifying the available resources


Understanding the organizational
infrastructure
Assessing the competencies and
capabilities of the organization
Interpreting economic and global
demographic information

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Concept

It requires a proof of concept to show that


the concept is workable.
Developing a concept takes time
to clear up

the undefined
the uncertainties
the unpredictable
issues and circumstances

Innovation
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Invention

A management scholar:
We discover what before existed, though to us
unknown; we invent what did not exist before.

An eminent educator:
The invention process covers all efforts aimed at
creating new ideas and getting them to work.

An economist:
Every invention is (a) a new combination of (b) preexisting knowledge which (c) satisfies some want.

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INNOVATION
INVENTION

IMPLEMENTATION
/COMMERCIALIZATION

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The Factors That Affect


Innovation
Culture

Resources

INNOVATION

Process

Infrastructure

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The Factors That Affect


Innovation

Resources

People
Money
Time
Customers
Suppliers

Infrastructure

Vision
Mission
Objectives
Strategies

Management attributes
Support to innovation

Capability
Intellectual property
Access to information
Plant and equipment
Financial reserves

Innovation
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The Factors That Affect


Innovation

Culture

Past accomplishments
Policies and practice
Rules of conduct
Philosophy
Artifacts

Process

Idea (from

recognized need)
Developed into

concept,

Invention

Development
Production
Diffusion
Adoption by end users.

Shared values
Belief
Legends
Rituals
History
Traditions

Innovation
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Innovation Culture and


Myths

Culture
difficult to innovate in an organization that
essentially closes the door to new ideas.
companies have to develop a culture that fosters
innovation.
innovation requires individual as well as team

performance
customers are important but are not the sole sources of
ideas
culture is important
any use of a rigid process without thought just doesn't
work.

Innovation Culture and


Myths

Innovation
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Myths

Realities

Individuals drive innovation.

Innovation is a team sport.

Innovation begins with


brainstorming.

Innovation begins with


understanding the customer.

Innovation requires creative


people.

Innovation requires effective


problem solvers rather than
creative people.

An innovation process will


give the results you need.

The innovation process is


only one tool for successful
innovation.

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1.
2.
3.
4.
5.
6.
7.

Sources of Innovation
(Peter Drucker)
The Unexpected
The Incongruity
Process Need
Industry and Market Structure Change
Demographics
Changes in Perception, Meaning, Mood
New Knowledge

Innovation
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Sources of Innovation
(Peter Drucker)

1. The Unexpected

An unexpected success, an
unexpected failure or an unexpected
outside event.

Innovation
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The invention
of Post-it Notes

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The invention
of Post-it Notes

Art Fry came upon


the Post-it Notes
concept out of
frustration at how
his scrap paper
bookmarks kept
falling out of his
church choir
program.

Innovation
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Sources of Innovation
(Peter Drucker)

2. The Incongruity

the gap between what is and what


should be.
These occur whenever a difference
exists between expectations and
reality.

Innovation
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Sources of Innovation
(Peter Drucker)

3. Process Need

task focused rather than situation


focused. A process is perfected or
redesigned or a weak link replaced.

Innovation
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Sources of Innovation
(Peter Drucker)

4. Industry and Market Structure


Change

The opportunity for an innovative


product, service or business approach
occurs when the underlying foundation
of the industry or market shifts.

Innovation
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Sources of Innovation
(Peter Drucker)

5. Demographics
Changes in the populations size, age
structure, composition, employment, level
of education and income can create
innovative opportunities.

Innovation
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Sources of Innovation
(Peter Drucker)

6. Changes in Perception, Meaning,


Mood

Innovative opportunities can develop


when a societys general assumptions,
attitudes and beliefs change.

Innovation
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Sources of Innovation
(Peter Drucker)

7. New Knowledge

Advances in scientific and


nonscientific knowledge can create
new products and new markets.

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Tutorial Question

Innovation
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Case Study:
Sony Walkman

1979 : The first


model of the firstgeneration
Walkman personal
stereos.

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Answers:

Incongruity: Akio Morita's observation


of teenagers lugging their radios with
them on vacations.
Unexpected: most people used it as a
personal, portable music player.

Innovation
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