Managing the Innovation Process Organizational Features Overview • Take-Away • Required Readings • Supplemental Readings • Caveats 2 Take-Away • Innovation requires experimenting and prototyping • Innovation relies on recognition of opportunities • Innovation arises from knowledge creation in firm • Innovation on a regular basis can prevent inertia 3 (Leonard-Barton, 1995) • “Wellsprings of knowledge – Chapter 5: Experimenting and prototyping (pp. 111-134)” • Experimenting And Prototyping (develop diverse portfolio of technological options) • Real-world Examples (experimenting – encouraged alloy failures at J&J) (prototyping – camera ‘wrecking crews’ at Kodak) • Creating A Climate For Experimenting and Prototyping (intelligent failure and role of failure in knowledge building) 4 (O'Connor & Rice, 2001) • “Opportunity recognition and breakthrough innovation in large established firms” • Opportunity Recognition (bridge that connects a breakthrough idea to the initial innovation evaluation process) • Example Breakthroughs (Dupont’s Biomax material,GE’s digital X-ray technology, GM’s alternative power supply, IBM’s new microchip) • Improving Odds of Recognizing Opportunity (gatherers, hunters, and radical innovation hub) 5 (Markides, 1997) • “Strategic innovation” • Strategic Innovation (breaking rules of the game to shift market share) • Example Firms (Canon caught Xerox by focusing on quality not speed) (Apple caught IBM by focusing on pc not mainframe) (Southwest caught American by flying point-to-point not hubs) • Redefining Business (share, reuse, and expand core competencies) 6 (Nonaka & Takeuchi, 1995) • “The knowledge-creating company – Chapter 1: Introduction to knowledge in organizations (pp. 3-19)” • Organizational Knowledge Creation (capability of a company as a whole to create new knowledge, disseminate it throughout organization, and embody it) • Japanese vs ‘Western’ Approach (continuous, incremental, and spiral innovation) • Making Tacit Knowledge Explicit (metaphor and analogy, personal to organizational level, ambiguity and redundancy) 7 (Tushman & O'Reilly, 1997) • “Winning through innovation – Chapter 1: The tyranny of success (pp. 1-15)” • Tyranny of Success (success followed by failure; innovation followed by inertia) • Innovation Streams (systematically different kinds of innovation over time) • Ambidextrous Organizations (celebrate stability and incremental change as well as experimentation and discontinuous change simultaneously) 8 Caveats • What about the large costs of experimentation? • Who should be responsible for finding opportunities? • How do employees convert tacit to explicit knowledge? • Are ambidextrous organizations a reality? 9