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Innovation
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What is innovation
–Innovation is the core business process associated with renewing what the organization does and what it offers to the world
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Recent major innovation
Amazon in online retailing, eBay in e-auctions, Skype in voice over internet telecoms and Google in everything from search engines, through advertising to mobile telephones.
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Learning to Managing Innovation
Case study of 3M – a company whose commitment to innovation is such that it based its branding on themes like ‘Innovation – working for you.’
3M see strategic advantage in their being able to come up with a regular stream of product innovation, so much so that they have a policy that 50% of sales should come from products invented during the past 3 years. In practice this means that they are betting on their ability to bring new ideas to market not once or twice but consistently and across a range which now numbers around 60,000 products world-wide.
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Case study of 3M
https://vimeo.com/34085429
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Operation and Innovation
–The key message here for operations management is to ensure that the ways in which the organization carries out its various tasks are tuned to capturing and using knowledge. And much of this comes through learning by doing, trying things out and capturing useful lessons from that experience for next time.
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Simple Model of the Innovation Process
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Type of Innovation
–PRODUCT INNOVATION – changes in the things (products/services) which an organization offers;
–PROCESS INNOVATION – changes in the ways in which they are created and delivered;
–POSITION INNOVATION – changes in the context in which the products/services are introduced;
–PARADIGM INNOVATION – changes in the underlying mental models which frame what the organization does.
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1. Product/Service
–An example of the move to electronic mechanisms, to mobile communications and now to ‘smart’ phones which involve the convergence of computing and communications.
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2. Process
–A change in the manufacturing methods and equipment used for production, such as mobile banking as an alternative to banking systems
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3. Position
–Haagen Dazs changing the target market for ice cream from children to consenting adults.
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4. Paradigm
–iTunes platform – a complete system of personalized entertainment
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Component vs. System Level
–Component level – innovation at a component level
–System level – innovation at a system level
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Type of Innovation
•New version of motor car,
•Aeroplane,
•TV
•New generations e.g. MP3
•Download vs. CD and cassette music
•Steam power
•ICT ‘revolution’
•Bio-technology
Improvements to components
New components for existing systems
Advanced materials to improve component performance
System
level
Component
level
Incremental
(‘doing what we do better’)
Radical
(‘new to the world’)
(‘new to the enterprise’)
Tidd and Bessant, 2009
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Activity
Give examples of types of innovation
System
level
Component
level
Incremental
(‘doing what we do better’)
Radical
(‘new to the world’)
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