Managing Technology and Innovation CHAPTER 17 Copyright zlikovec/Shutterstock.com RF ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Chapter Introduction Quote “The imperatives of technology and organization, not the images of ideology, are what determine the shape of economic society.” John Kenneth Galbraith ©McGraw-Hill Education. Learning Objectives 1 List the types of processes that spur development of new technologies. 2 Describe how technologies proceed through a life cycle. 3 Discuss ways to manage technology for competitive advantage. 4 Summarize how to assess technology needs. 5 Identify alternative methods of pursuing technological innovation. 6 Define key roles in managing technology. 7 Describe the elements of an innovative organization. 8 List characteristics of successful development projects. ©McGraw-Hill Education. Technology and Innovation Technology • The systematic application of scientific knowledge to a new product, process, or service ©McGraw-Hill Education. Innovation • Changes in method or technology • Positive, useful departure from previous ways of doing things Examples of Different Types of Innovation Product Innovation • 4K TV with four times the resolution of HD TV (Vizio) • Virtual personal assistants (Amazon’s Alexa) ©McGraw-Hill Education. Process Innovation • 3D augmented reality for surgery (Cleveland Clinic) • Blockchain technology for financial transactions (IBM) Business Model Innovation • AI-powered chatbots service customers (Capital One) • Intrapreurship incubators and labs (Google) Forces Driving Technological Development 1. There must be a need, or demand, for the technology. 2. Meeting the need must be theoretically possible, and the knowledge to do so must be available from basic science 3. We must be able to convert the scientific knowledge into practice in both engineering and economic terms. 4. The funding, skilled labor, time, space, and other resources needed to develop the technology must be available. 5. Entrepreneurial initiative is needed to identify and pull all the necessary elements together. ©McGraw-Hill Education. Exhibit 17.2 Technology Life Cycle Jump to Appendix 1 for long description of image. ©McGraw-Hill Education. Exhibit 17.3 Diffusion of Technological Innovations Jump to Appendix 2 for long description of image. ©McGraw-Hill Education. Diffusion of Technological Innovations An innovation will spread quickly if it: • Has a great advantage over its predecessor. • Is compatible with existing systems, procedures, infrastructures, and ways of thinking. • Has less rather than greater complexity. • Can be tried and tested easily without significant cost or commitment. • Can be observed and copied easily. ©McGraw-Hill Education. Advantages and Disadvantages of Technology Leadership Advantages Disadvantages • First-mover advantage • Greater risks • Little or no competition • Cost of technology development • Greater efficiency • Infrastructure costs • Higher profit margins • Costs of learning and eliminating defects • Sustainable advantage • Reputation for innovation • Establishment of entry barriers • Occupation of best market niches • Opportunities to learn ©McGraw-Hill Education. • Possible cannibalization of existing products Technology Followership • The decision on when to adopt new technology also depends on the potential benefits of the new technology, as well as the organization’s technology skills. • Following the technology leader can save development expense. ©McGraw-Hill Education. Copyright Thinkstock/Getty Images RF Assessing Technology Needs Technology audit • Process of clarifying the key technologies on which an organization depends and identifies which technologies are most important ©McGraw-Hill Education. Categories to measure current technologies: • Emerging technologies • Pacing technologies • Key technologies • Base Technologies Assessing External Technological Trends Benchmarking • The process of comparing the organization’s practices and technologies with those of other companies Scanning • Focuses on what can be done and what is being developed • Places greater emphasis on identifying and monitoring the sources of new technologies for an industry ©McGraw-Hill Education. Framing Decisions about Technological Innovation Considerations Examples Market receptiveness—assess external demand for the technology (short/long run) Smartphones, MP3s, wearable technology, water conserving washers, HDTVs Technological feasibility—evaluate technical barriers to progress Deep-sea oil exploration, physical size of PC microprocessors Economic viability—examine any cost considerations and forecast profitability Solar fusion, fuel cells for automobiles, missile defense systems Competence development— determine whether current capabilities are sufficient Information technology in healthcare, digital technology in cameras Organizational suitability—assess the fit with culture and managerial systems Steel companies focusing on creativity and innovation ©McGraw-Hill Education. Sourcing and Acquiring New Technologies Make-or-buy decision • The question an organization asks itself about whether to acquire new technology from an outside source or develop it itself Sources of technology: Internal development • Purchase • Contracted development • Licensing • Technology trading • Research partnerships and joint ventures • Acquisition of the owner of the technology ©McGraw-Hill Education. Exhibit 17.6 Technology Acquisition Options Jump to Appendix 3 for long description of image. ©McGraw-Hill Education. Technology and Managerial Roles Chief information officer (CIO) • Executive in charge of information technology strategy and development • Coordinates the technological efforts of the various business units • Identifies ways that technology can support the company’s strategy • Supervises new-technology development ©McGraw-Hill Education. Key Technology Roles Technical Innovator • A person who develops a new technology or has the key skills to install and operate the technology Product champion • A person who promotes a new technology throughout the organization in an effort to obtain acceptance of and support for it Executive champion • An executive who supports a new technology and protects the product champion of the innovation ©McGraw-Hill Education. Organizing for Innovation Unleashing creativity involves encouraging creativity and celebrating failure. ©McGraw-Hill Education. Bureaucracy busting is necessary because bureaucracy is the enemy of innovation. Elements Essential to Innovation Having a purpose that extends beyond being profitable. Experimenting with new ideas and drawing on data to inform decisions Removing obstacles throughout the company so innovation can occur. Keeping up with changing customer expectations and new technologies. Collaborating across boundaries and see challenges from multiple lenses. Implementing requires alignment of vision and implementation. ©McGraw-Hill Education. SOURCE: Schwab, K., “Ideo Studied Innovation in 100+ Companies-Here's What It Found,” Fast Codesign, March 3, 2017, www.fastcodesign.com Technology and Human Resources Development project • A focused organizational effort to create a new product or process via technological advances Sociotechnical systems • An approach to job design that attempts to redesign tasks to optimize operation of a new technology while preserving employees’ interpersonal relationships and other human aspects of the work ©McGraw-Hill Education. In Review 1 List the types of processes that spur development of new technologies. 2 Describe how technologies proceed through a life cycle. 3 Discuss ways to manage technology for competitive advantage. 4 Summarize how to assess technology needs. 5 Identify alternative methods of pursuing technological innovation. 6 Define key roles in managing technology. 7 Describe the elements of an innovative organization. 8 List characteristics of successful development projects. ©McGraw-Hill Education.
