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COMPETING ON
INNOVATION
PROGRAM DESIGN
COMPETING ON
INNOVATION
Session-wise Content &
Sessio
Discussion topics and Cases
Cases
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COMPETING ON
INNOVATION
Session-wise Content &
Growth through new Cases
business development and organizational changes
Read:
Session
7
10
COMPETING ON
INNOVATION
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SESSION 1
Context and Concept of
Innovation
and
Different types of Innovation
LATE 70s
2000
AUTOMOBILE
GM
TOYOTA
AIRLINES
PAN AMERICAN
SIA, SWA
TYRES
FIRESTONE,
GOODYEAR
BRIDGESTONE,
MICHELIN
IT
IBM
MICTOSOFT,
GOOGLE
INTEL
SATISFACTORY
UNDRPERFORMANCE
Performance
Decline
Path of Competitive
Time
ROADMAP TO OBLIVION
PERFORMAMCE
Inferi
or
Value
Todays
Performanc
freefall
e
TIME
Clear Sailing
Performance
Doomsayer
s
Projections
Tomorrows
Actual
Performance
Downfall
Accumulation
of abundant
resources
A view that
resources will
win out
Resources
substitute for
creativity
Optimized
business
system
Success
confirms
strategy
Deeply
etched
recipes
Momentu
m is taken
for
leadership
Vulnerabili
ty to new
rules
Failure to
REINVENT
leadershi
p
FAILURE OF SUCCESS
PHENOMENA
7 STAGES
S1: SUCCESSFUL BUSINESS
STRATEGY
1. Large
companies
take long
time
to
change
2. Effective
companies
make
dramatic
turnaroun
d
and
change
within
a
short time
CONTEXT OF INNOVATION
Looking at the decline of many well known brands and
companies, it is clear why great companies stumble .
Some obvious reasons are: incompetence, bureaucracy,
arrogance, poor planning and short term investment
horizons
Even best of managers are not able to come up with
innovations , despite massive investment of management
time and money. In general, innovation remains a
frustrating pursuit in many companies.
One reason for failure to come up with innovative ideas is lack of
conceptual clarity regarding different types of innovations and
conditions under which each such innovation can take place. Lack of
appreciation of the underlying concepts and framework leads to
failure to effect successful innovation needed to sustain competitive
advantages.
DIFFERENT TYPES OF
INNOVATION
CONTINUOUS PROCESS IMPROVEMENTS
Involves countless small investments in incremental process
innovations
GEs Six Sigma initiative is a method to promote continuous
process improvements
PROCESS REVOLUTIONS
Also improves current businesses but in major leaps say 30
% increase in productivity through implementation of major
technologies
Wal-Mart investing in RFID for tracking inventory
PRODUCT OR SERVICE INNOVATIONS
New product or services ideas that will meet new needs of
existing customers but will not alter the business model
altogether
Dual core technology vs. earlier technology
Incremental INNOVATION
Incremental innovation aims to exploit existing forms
or technologies. It either improves on something
already existing or reconfigures an existing form or
technology to serve some other purpose
Intel P 4 is an incremental innovation over P3, since
both are based on the same fundamental
technologies. P4 incorporated design improvements
and new features that enhanced cheap performance.
An example of a new use of an existing technology is
Global Positioning Satellite GPS which is used in a
variety of applications starting from automobiles
Avoid adding unnecessary features for the sake of it making the life difficult for
customers [because they have to re-learn] and also new version becomes more
costly . As a matter of fact, if this practice is unchecked, new competition will
come up with new innovation and compatible features will be made available at
lower price [Linux is an example]
Since incremental innovations cannot hedge against risks posed by a competitor
coming up with radical innovation, find a balance between incremental and
radical innovation while allocating resources [Kodak and Polaroid focused too
much on instant chemically coated - photography and forgot to invest in digital
imaging]
Radical INNOVATION
Radical innovation brings something NEW to the world and a
distinct departure from existing technology or method. The terms
discontinuous or breakthrough are often used as synonyms for
radical innovation
An example: The transistor technology developed by Bell Labs
represented a radical innovation that undermined the dominant
players of electronics industry who were deeply committed to
vacuum technology. Digital imaging that replaced chemically
coated technology of Kodak and others is another example. Digital
imaging in fact almost killed the sales of photographic films
In general, radical innovation is an innovation that has one or more
of the following characteristics:
An entirely new set of performance features
Improvements in performance features of 5 times or more
A 30% plus reduction in cost
Performance/Cost
Improvement
Radical Innovation
Time
BUSINESS MODEL
INNOVATION
[to be discussed later in
There is limit to growth and profitability based solely on product
details]
and process innovation.
Also, many a time product and process
COMPETING ON
INNOVATION
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What can you learn from the behaviours and needs of your leadingedge or laggard customers, employees or suppliers?
7.
ANALOGIES
organizations
Borrow
from
other
industries
applied
in
or
other
COMPETING ON
INNOVATION
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SESSION 3
Product innovation: Making connection across
seemingly unrelated fields and disciplines
Associating: What is the meaning
It is an ability to connect and cross- pollinate ideas
own as well as those originating from multiple fields
such
as
people,
industry,
objects,
services,
technologies and disciplines and develop new and
unusual innovations
Disney, Apple, Virgin and Amazon are companies where
such associating skills required to cross-pollinate ideas
are very common. Sonys Walkman came up this way.
Innovators think differently to associate ideas
originating from different fields based on their ability to
associate, a cognitive skill which is at the core of
Innovators DNA.. One can develop such a cognitive
skills as discussed later
SESSION 3
Product innovation: Making connection across
seemingly unrelated fields and disciplines
Associating: Where it happens - finding the NEW idea
As mentioned, innovative ideas flourish at the intersection of
diverse experience, whether it be others or are our own. More
diverse is the mix of experience, more will be the possibility of
surprise developments occurring out of synthesis of these ideas
Innovators tend to focus intentionally at the intersection where
diverse experience flourish and foster the discovery of new
ideas. Successful innovators can see and feel a spark that
occurs in a geographic space or market space where a
combination of novel ideas brings to surface quite surprising
outcomes
Identifying the diverse experience sets that are likely to
contribute in getting fresh ideas and then immerse
oneself in the same with an objective to generate ideas at
the intersection is a critical skill of all innovators
SESSION 3
Product innovation: Making connection across
seemingly unrelated fields and disciplines
Associating: How it works
To understand how innovators get ideas vs. non-innovators, it is
important to know how our brain works. Research has established
that more diverse knowledge the brain possesses, the more
connections it can make when fresh additional inputs of knowledge
enters the brain and such fresh inputs trigger the association with
diverse knowledge the brain already possesses and creates novel
ideas
Such unexpected associations are powerful and act as supplements
to data when working through a problem or a challenge.
Analogies and associations are critical creative tools
to help
innovators generate strategic insights.
SESSION 3
Product innovation: Making connection across
seemingly unrelated fields and disciplines
COMPETING ON
INNOVATION
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What can I do tomorrow to move the new idea into action and out of
analysis? Describe the first step.
Who might I approach as a potential customer? Collaborator? Value chain
partner?
For each of the key assumptions, what new facts, if known, would cause me
to alter my assumption.
How will I recognize success? What are the specific behavioural metrics I
want to pay attention to?
VI. Scaling required to fully exploit the potential of the business model
covering all components of the model [A to F]
Deciding whether all the activities of the new business model will be carried
out by the concerned publisher will require critical consideration of trade-offs
[ new business model governance innovation]. For example, should the
publishers digital content be delivered by publisher branded device or by
proprietary devices like Kindle or iPad, thereby leveraging their existing
position in the market? Or should content be delivered through Internetbased platforms compatible with a broad range of devices, enabling global
distribution? These are crucial business model governance questions.
Book publishers NEW business models will create value through
complementarities and interdependence among activities and through
enormous efficiencies in the publishing process that the new business
models could generate.
A number of alternative revenue models can be considered associated with
these new BMs such as
single subscription pricing independent of the
number of downloaded manuscript, piecemeal pricing and/or value-based
pricing for time sensitive publication [like first release of a highly promoted book
The six questions help identify the ecosystem and networks in which any business
operates
During travelling out of our own country, we find things different and hence
notice every detail, from street signs to even how we pay at the
restaurants.. We learn new things not because we are smart but because we
pay attention. On a trip, we become our own versions of Sherlock Homes.
We continuously figure out a world that in foreign and new. in fact, we see
the world with fresh eyes.
Rediscover the familiar with the eyes of a traveller for example, if we
stand in que at check out counter of a Super market and watch what people
do we will get new insight. In general, if we have beginners mind and eye
in everything we do daily, we will get new insights from familiar setting