Week 4
Lecture Notes
Innovation Management
What is innovation?
Innovation =
Theoretical Concept + Technical Innovation + Commercial Exploitation
What is innovation? (to me)
Innovation is doing something well in a new & unique way. It needs to be deemed better than the previous thing and succeed in changing people's habits with the thing
Types of Innovation
Product Innovation EX: Creative SXFI Air --> Develop music based on the ear shape
Process Innovation EX: 3D Printing --> Replace regular manufacturing processes like plastic molding
Organization Innovation EX: Singapore Airline Scoot, SIA Engineer &
Management Innovation EX: Total quality management 6 Sigma
Production Innovation EX: Quality Circles Just-IN-Time
Marketing Innovation EX: Leasing of Photocopier Pre-paid SIM Cared
Service Innovation EX: Grab --> Grab Food YouTrip --> Allow for seamless transaction between own home bank to other country's currency
Dilemma of Innovation Management
Stability vs Creativity
How to be efficient while you are trying to be disruptive and be flexible?
Clash in value and can be hard to reconcile
Importance of Innovation
Rapid Market Changes Companies need to change Companies develop new products/service Establish to be the Market Leader
EX: Huawei vs Apple, Airbus vs Boeing, and Grab vs Nets
Disruptive Innovation
Radical change that create new markets and significant changes especially for consumers.
EX:
Products: Hard Disk (5.25 - 2.5 - Solid state) One Pungol automated coffee machine Service: Social Media Advertising Bit Coin
Is the Smart watch a disruptive Innovation?
Sustaining Innovation
Incremental Improvement to existing products/ services
EX: Product: iPhone 4 –> 4s Service: McDonald's --> McCafe
Product/Service Strategy
Short term vs Long term
Need for Innovation in an Organization Context
Resources in Company: Knowledge, Skills, Money, Market Experience
Personalities required in Company: Inventor, Entrepreneurs, Business Investor
Skills Essential in Innovation Management: Virtual Management, Managing without Authority, Shared Leadership, Building Extensive Network
New Product/Service Innovation
New Product Development
It is a sub-process of the innovation process. The five basic decision (Krishnan & Uldrich, 2001) to be made are: What are the target values of the product attributes? What will the product concept be? What variants of the product will be offered? What is the product architecture? What will be the overall physical form and industrial design of the product?
Product Strategies are influenced by the following factor: Corporate Planning Market Planning Technology Management Opportunity Analysis Serendipity
Classification of New Product
New-to-the-world
New product lines (new to the firm)
Additions to existing lines (line additions)
Improvements and revisions of existing products
Cost Reductions
Repositioning
The Valley of Death
The process involves many steps.
Fraught with Uncertainty: Market Potential vs Product/Concept failure
Many product ideas and innovation will die before reaching the end
Reasons for New Product Failure
Nothing New
Lack of Management Support
Inadequate Budget for development
Poor Market Research, Positioning
Did not involve customer
Packaging In NPD
Principles of Packaging: Protection, Identification & Containment
Characteristics of Packaging
Dispensing, Storing, Stability, handling, Opening/Resealing. After Use & Secondary Use, and Disposal
Product Rejuvenation
EX: Pokka
Create packaging that create alternative use for material and identified as uplifting and useful
Marketing and R&D Interface
Marketing:
Focus on Short time spans
Talks about product benefits and market position
R&D:
Have longer time frame
Talk about performance and specification
Growth in Service
The main change in development of the economies over the past 20 years has been the growth of knowledge based economy
Characteristic of Customer innovation Service
Operation Staff Intangibility Heterogeneity Simultaneous production and consumption Perishability
Technology and New Service Development
Marketing Department + Technology Department = New Service Development Team
Technology has become the most significant enabler of innovation in services
Reflection & Tutorial
Research to find 3 products/services that are considered as disruptive innovation
1. Netflix vs Blockbuster, Movie theater, Television
It first started as a DVD rental model in which consumers could select their movie they wanted and the DVD would be conveniently mailed-out. But recognizing the trend towards digital, they switched to digitally steaming their movies. Netflix disrupted traditional video rental stores, movie theaters and traditional TV programme. Now the whole landscape of movies has largely now focused on streaming services
2. Apple iPod & iPhone, App Store vs Camera, Radio, Games
Allow for carrying of music streaming, camera, etc easily. Created a new industry of apps for the iPhone.
3. FedEx vs Mail delivery
It is a renowned logistics and delivery company, is recognized as a disruptive innovator that transformed the industry by introducing the concept of “express” mail delivery. It provided customers with faster and more reliable shipping options. This innovation not only improved the efficiency of global trade but also had a significant impact on e-commerce and supply chain management
Research to find 3 new products by entrepreneurs with design background. Or, Alternatively, a designer who has collaborated with a big company to bring out a new product
1. Pinterest by Evan Sharp
He studied architecture and moved on to be a product designer at Facebook. Started Pinterest as a side project with 2 friends.
Pinterest is one of the largest social networking sites, sneaking up on Facebook and Twitter. Its website and mobile app enables users to collect and share their favorite images of events, interests and hobbies. In large part due to its simplicity and beautiful execution, Pinterest has quickly skyrocketed to success, with more than 100 million users and $11 billion valuation
2. Kickstarter by Charles Adler (cofounder)
A trained graphic designer, Charles cofounded the online art publication Subsystence, as well as Source-ID, an independent interaction design studio.
Today, Kickstarter is the world's largest funding platform for creative projects. Since its launch in 2009, more than 10 million people have pledged over $2 billion to support over 98,000 creative projects from the worlds of music, film, art, technology, design, games, fashion, food, publishing and other creative fields.
3. Airbnb by Brian Chesky and Joe Gebbia
Met at the Rhode Island School of Design where Brian received a Bachelor of Fine Arts in industrial design, and Joe earned dual degrees in graphic design and industrial design.
Last summer, nearly 17 million people worldwide booked their guest stays with Airbnb. It is active across 150 countries, projected to bring in $900 million in revenue for 2015, and is considered the third most valuable privately held startup.
Research to find three new services where customers are co-creators
1. Canva
Consumers can create and share content (templates, elements, etc) that others can use Designer sharing ground
2. IKEA
Co-create IKEA:
Asking customers for product idea suggestions
Running IKEA Bootcamps to work with entrepreneurs
Collaborating with university students on product solutions
Connecting with innovation labs around the world
3. BMW & Local Motors
In 2010, BMW announced its first-ever open innovation contest: ‘Tomorrow’s Urban Mobility Services’. Launched within BMW’s Co-Creation Lab, the contest was an opportunity for fans and customers to share their product ideas and opinions with BMW. This contest gave consumers the opportunity to get intimately involved in the design process from start to finish and created a real incentive for die-hard fans to contribute their ideas.