Search Online http://www.ted.com Try ‘Safeplug’ or ‘EcoRock’ 0-1 Chapter 1 Defining Innovation Applying Innovation By David O’Sullivan and Lawrence Dooley © Sage Publications 2008 1-2 Reflections [This slide is left blank intentionally – see next slide set] 1-3 Activities [This slide is left blank intentionally – see next slide set] 1-4 Learning Targets Define innovation and explain the difference with related terms Understand the drivers of the need for innovation and change Explain product, process, and service innovation Describe the difference between radical and incremental innovation Define disruptive technology Show how product and process innovations are related Explain the relationship between innovation and operations 1-5 Definition Making changes to something established by introducing something new … that adds value to customers… And contributes to the knowledge store of the organization. 1-6 Business Imperative Companies ability to ‘innovate’ is key to growth and distinguish it from its competitors Innovation potential is the ‘new’ measure of an organisations assets 1-7 Applying Innovation Applying innovation is the application of practical tools and techniques that make changes, large and small, to products, processes, and services that results in the introduction of something new for the organization that adds value to customers and contributes to the knowledge store of the organization. 1-8 Related Concepts Invention Growth Creativity Design Exploitation Change Failure Entrepreneurship Customers Knowledge Society 1-9 Innovation and Invention Invention: Creating something new that has never existed before 1-10 Alternative Definition Innovation = Invention + Exploitation Innovation = Creativity + Exploitation 1-11 Drivers of Innovation Emerging technologies Competitor actions New ideas from customers, strategic partners, and employees Emerging changes in the external environment 1-12 Diffusion iPhone Blueray Hydrogen Engine Sanitation Metric System Mobile Phone 1-14 Tech Diffusion Technology lag is decreasing New technologies “leapfrogging” over older technologies (i.e., cell phones) 1-15 Diffusion Process Knowledge that the idea exists Recognition that it adds value Opinions and influence of others Decision to adopt Retention and confirmation 1-16 Categories of Innovation Product Innovation Process Innovation Service Innovation 1-17 Tangibility and Customer Contact 1-18 Radical and Incremental Innovation 1-19 Radical Characteristics New performance x2 times better than traditional! 30% reduction in costs! Change basis of competition 1-20 Incremental Innovation Safe, cheap, less risk, low impact, quick returns Steady stream of small changes Caution: Avoid more ‘bells and whistles’ Don’t ignore ‘radical’ innovations 1-21 Product and Process Innovation 1-22 Process Innovation Equally important – making high quality products cheaply e.g. Continuous Casting, Process Reengineering Design vs. Make 1-23 Service Innovation Rethink how best to serve customers Dell Computers Online purchasing, no dealerships, customer configuration, … Ryan Air Low fares, internet booking, open seating, frequent service, … 1-24 Disruptive Innovation Every now and again a radical innovation is introduced that transforms business practice and rewrites the rules of engagement. In other words, business practice across an entire industrial sector changes radically. Christensen (1997) 1-25 Disruptive Innovation Technological innovation that radically disrupts business practice Transistor vs. Vacuum tube Digital vs. Film photography MP3 vs. CD Ryanair vs. British Airways RFID vs. Barcode 1-26 Disruptive Innovation Technological innovation that radically disrupts business practice Ten Major Disruptions … 1-27 1997: Netflix 1-28 1998: Google 1-29 1999: BlackBerry 1-30 2000: minuteclinic 1-31 2001: Apple's iPod 1-32 2002: IRobot's Roomba 1-33 2003: Skype 1-34 2004: Philips' HeartStart 1-35 2005: YouTube 1-36 2006: Nintendo's Wii 1-37 20?? 1-38 Science Push – Market Pull Science Push Results from laboratories Journal Publications Market Pull Customers Lead Customers 1-39 New Technology 1-40 S-Curve for Performance 1-41 Operations and Innovation 1-42 Innovation Plan Titles 1-43 Summary Define innovation and explain the difference with related terms Understand the drivers of the need for innovation and change Explain product, process, and service innovation Describe the difference between radical and incremental innovation Define disruptive technology Show how product and process innovations are related Explain the relationship between innovation and operations 1-44 Activities 1-45 Search Online http://mitworld.mit.edu/ Emerging Technologies: The Innovators’ View Why Large Companies Should OutInnovate Small Ones (Dan Hesse) 1-46 Copyright Copyright © 2009 Sage Publishing, Inc. 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