Managing Innovation & New Industrial Product Development

Chapter 10

Managing Innovation


Two approaches:
Induced strategic behavior
 

Traditional Administrative mechanisms Entrepreneurial Product champion

An organization member who creates, defines, or adopts an idea for an innovation and is willing to assume risk. 3M

Autonomous strategic behavior

 

Managing Innovation


Why is the Silicon Valley widely recognized for innovation?

Market for ideas
 

Allocation Attraction Investors v. corporations Employee movement

Market for capital



Market for talent



Managing Technology


Classifying Development projects

Derivative projects Platform projects Breakthrough projects Research and development

Managing Technology


ProductProduct-Family Focus
Products that share a common platform but have different specific features and enhancements required for different sets of consumers.

Disruptive Innovation
 

Overshooting Customer Demands Sustaining v. Disruptive

Sustaining Disruptive


LowLow-end strategy test

For whom? Customers at low-end wanting ______________ low_______________________________________ Create model that can be profitable at discount price to attract customers.

NewNew-market strategy test

For whom? People who lack __________________________ _________________________________________ Present customers who need to go to an inconvenient location

What makes some companies better innovators?

1.

Limited structure
 

Strict priorities for new products Tied to resource allocation

2.

RealReal-Time Communication and Improvisation

 

Better communication Improvisation

Design and execution of actions that approach convergence with each other in time.

What makes some companies better innovators?

3.

Experimentation


Creating options for the future A strategy for competing in fast-changing fastmarkets by creating new products at predictable time intervals.

4.

Time Pacing


What Drives a Firms New Product Performance?



Quality of a Firms New Product Development Process

Process
   

Emphasize market and technical assessment Complete description of product Go/kill set-up points setFlexible Resources committed to meet firms objectives R&D budgets were adequate and aligned with objectives Necessary personnel are available 3M

Resource commitments
  

New product strategy



What Drives a Firms New Product Performance?



Anticipating Competitive Reactions

Developing scenarios When will a competitor react?


If _____________________________ and ______________________

What Drives a Firms New Product Performance?



Sources of New Product Ideas

Internal/External Lead users


A small number of highly influential buying organizations that are consistent early adopters of new technologies.

Lead user method Staying ahead of customers

Quality Function Deployment



Identifies critical customer attributes and establishes a specific link between customer attributes and product design attributes.

Quality Function Deployment



QFD
Voice of Customer


Identify customers needs and wants

Interviews

Assign weights Translate customer needs into product design attributes Examine relationship between design parameters and customer needs

Voice of Engineers


Benefits of QFD

Determinants of New Product Performance and Timeliness



Determinants of Success
Strategic Factors
 

Product Advantage Marketing knowledge

Fit between _____________________ and ____________________________.

Technical synergy
Fit between _____________________ and ____________________________.

International orientation

Determinants of New Product Performance and Timeliness



Determinants of Success
Development Process Factors
 

Predevelopment proficiency Market knowledge and marketing proficiency Technical knowledge and technical proficiency

Determinants of New Product Performance and Timeliness



Determinants of Success
Fast-paced Product Development Fast 

Matching process to development task Compressed strategy for predictable projects

Compressed strategy

Experiential strategy for unpredictable projects