Managing Innovation

About The Authors v


Preface To The Sixth Edition vii


How To Use This Book: Key Features ix


1 Innovation – What It Is and Why It Matters 1


1.1 The Importance of Innovation 1


1.2 Innovation Is Not Just High Technology 3


1.3 It’s Not Just Products 6


1.4 Innovation and Entrepreneurship 7


1.5 Strategic Advantage Through Innovation 9


1.6 Old Question, New Context 14


1.7 What Is Innovation? 15


1.8 A Process View of Innovation 19


1.9 Innovation Scopes and Types 20


1.10 Key Aspects of Innovation 26


1.11 Innovation Management 40


Summary 44


Further Reading 44


Case Studies 46


References 46


2 Innovation as a Core Business Process 48


2.1 Different Circumstances, Similar Management 49


2.2 Services and Innovation 50


2.3 Variations on a Theme 55


2.4 A Contingency Model of the Innovation Process 63


2.5 Evolving Models of the Process 64


2.6 Can We Manage Innovation? 67


2.7 Learning to Manage Innovation 70


2.8 What Do We Know About Successful Innovation Management? 73


2.9 Beyond the Steady State 83


Summary 84


Further Reading 84


Case Studies 85


References 85


3 Building the Innovative Organization 89


3.1 Shared Vision, Leadership, and the Will to Innovate 91


3.2 Appropriate Organizational Structure 96


3.3 Key Individuals 100


3.4 High Involvement in Innovation 103


3.5 A Roadmap for the Journey 108


3.6 Effective Team Working 111


3.7 Creative Climate 117


3.8 Boundary-Spanning 131


Summary 134


Further Reading 134


Case Study 135


References 135


4 Developing an Innovation Strategy 139


4.1 “Rationalist” or “Incrementalist” Strategies for Innovation? 140


4.2 Innovation “Leadership” versus “Followership” 147


4.3 The Dynamic Capabilities of Firms 150


4.4 Appropriating the Benefits from Innovation 156


4.5 Exploiting Technological Trajectories 161


4.6 Developing Firm-specific Competencies 164


4.7 Globalization of Innovation 175


4.8 Enabling Strategy Making 180


Summary 184


Further Reading 184


Case Studies 185


References 185


5 Sources of Innovation 190


5.1 Where Do Innovations Come From? 190


5.2 Knowledge Push 191


5.3 Need Pull 193


5.4 Making Processes Better 196


5.5 Crisis-driven Innovation 198


5.6 Whose Needs? The Challenge of Underserved Markets 200


5.7 Emerging Markets 204


5.8 Toward Mass Customization 206


5.9 Users as Innovators 208


5.10 Using the Crowd 210


5.11 Extreme Users 213


5.12 Prototyping 214


5.13 Watching Others – and Learning From Them 215


5.14 Recombinant Innovation 215


5.15 Design-led Innovation 217


5.16 Regulation 219


5.17 Futures and Forecasting 220


5.18 Accidents 220


Summary 222


Further Reading 222


Case Studies 223


References 223


6 Search Strategies for Innovation 226


6.1 The Innovation Opportunity 227


6.2 When to Search 229


6.3 Who Is Involved in Search 230


6.4 Where to Search – The Innovation Treasure Hunt 232


6.5 A Map of Innovation Search Space 235


6.6 How to Search 238


6.7 Absorptive Capacity 241


6.8 Tools and Mechanisms to Enable Search 243


Summary 251


Further Reading 252


Case Studies 252


References 253


7 Innovation Networks 255


7.1 The “Spaghetti” Model of Innovation 256


7.2 Innovation Networks 258


7.3 Networks at the Start-up 266


7.4 Networks on the Inside 267


7.5 Networks on the Outside 268


7.6 Networks into the Unknown 272


7.7 Managing Innovation Networks 275


Summary 278


Further Reading 278


Case Studies 278


References 279


8 Decision Making Under Uncertainty 281


8.1 Meeting the Challenge of Uncertainty 282


8.2 The Funnel of Uncertainty 282


8.3 Decision Making for Incremental Innovation 284


8.4 Building the Business Case 287


8.5 Concept Testing and Engaging Stakeholders 289


8.6 Spreading the Risk 290


8.7 Decision Making at the Edge 291


8.8 Mapping the Selection Space 297


Summary 302


Further Reading 303


Case Studies 303


References 303


9 Making the Innovation Case 306


9.1 Developing the Business Plan 306


9.2 Forecasting Innovation 310


9.3 Estimating the Adoption of Innovations 315


9.4 Assessing Risk, Recognizing Uncertainty 326


9.5 Anticipating the Resources 333


Summary 343


Further Reading 344


Case Studies 344


References 345


10 Creating New Products and Services 347


10.1 Processes for New Product Development 347


10.2 Factors Influencing Product Success or Failure 356


10.3 Influence of Technology and Markets on Commercialization 362


10.4 Differentiating Products 367


10.5 Building Architectural Products 370


10.6 Commercializing Technological Products 376


10.7 Implementing Complex Products 380


10.8 Service Innovation 383


Summary 390


Further Reading 391


Case Studies 391


References 392


11 Exploiting Open Innovation and Collaboration 394


11.1 Joint Ventures and Alliances 394


11.2 Forms of Collaboration 399


11.3 Patterns of Collaboration 402


11.4 Influence of Technology and Organization 404


11.5 Collaborating with Suppliers to Innovate 417


11.6 User-led Innovation 422


11.7 Extreme Users 424


11.8 Benefits and Limits of Open Innovation 428


Summary 431


Further Reading 431


Case Studies 432


References 432


12 Promoting Entrepreneurship and New Ventures 436


12.1 Ventures, Defined 436


12.2 Internal Corporate Venturing 448


12.3 Managing Corporate Ventures 455


12.4 Assessing New Ventures 459


12.5 Spin-outs and New Ventures 469


12.6 University Incubators 471


12.7 Growth and Performance of Innovative Small Firms 479


Summary 487


Further Reading 488


Case Studies 489


References 489


13 Capturing the Business Value of Innovation 493


13.1 Creating Value through Innovation 493


13.2 Innovation and Firm Performance 498


13.3 Exploiting Knowledge and Intellectual Property 502


13.4 Sharing and Distributing Knowledge 508


13.5 Exploiting Intellectual Property 513


13.6 Business Models and Value Capture 521


13.7 Dynamics of Generative Interaction 525


Summary 527


Further Reading 527


Case Studies 528


References 528


14 Capturing Social Value 531


14.1 Building BRICs – The Rise of New Players on the Innovation Stage 531


14.2 Innovation and Social Change 536


14.3 The Challenge of Sustainability-led Innovation 542


14.4 A Framework Model for Sustainability-led Innovation 543


14.5 Responsible Innovation 548


Summary 552


Further Reading 552


Case Studies 553


References 553


15 Capturing Learning from Innovation 554


15.1 What We Have Learned About Managing Innovation 554


15.2 How to Build Dynamic Capability 556


15.3 How to Manage Innovation 557


15.4 The Importance of Failure 559


15.5 Tools to Help Capture Learning 560


15.6 Innovation Auditing 563


15.7 Measuring Innovation Performance 564


15.8 Measuring Innovation Management Capability 565


15.9 Reflections 567


15.10 Developing Innovation Capability 572


15.11 Final Thoughts 574


Summary 575


Further Reading 575


Case Studies 575


References 575


Index 577