OSM 442 Ch 1-3 Innovation Management

Into, creativity in innovation, types and patterns of innovation

Technological Innovation

The act of introducing a new device, method, or material for commercial or practical purposes; an important driver of competitive success.

Why is innovation becoming more important?

Globalization increases foreign competition, putting pressure on firms to continuously innovate and differentiate their products and services.

Negative Externalities

Unintended harmful effects of technological innovation on people, communities, or the environment.

Examples of negative externalities from technology

Pollution, resource depletion, erosion, destruction of natural habitats, antibiotic-resistant bacteria, and moral dilemmas from genetic modification.

Why is technology still valuable despite negative externalities?

Technology is knowledge that can help people solve problems and pursue goals.

How often do innovative ideas become successful products?

Only a very small percentage of innovative ideas become successful new products; studies suggest only one of several thousand may succeed.

Strategic Management of Technological Innovation

The process of understanding how innovation happens, choosing projects that fit a firm's resources and goals, and organizing people and controls so ideas can be developed and implemented effectively.

Why is innovation compared to a journey?

Innovation works best when the firm's strategy, resources, and path for implementing the innovation all fit together.

Innovation and Competitive Success

Technological innovation is a major competitive driver, and many firms receive more than one-third of their sales and profits from products developed within the previous five years.

How has globalization affected innovation?

Globalization has increased competition and pressure for firms to continuously innovate.

How have advanced technologies affected innovation?

They allow faster product design and make shorter production runs economically feasible.

Positive effects of technological innovation

Increased GDP, greater communication and mobility, and improved medical treatments.

Who provides most R&D funding used for technological innovation?

Industry provides the majority of R&D funds ultimately applied to technological innovation.

What does successful innovation require?

An understanding of innovation dynamics, a well-crafted innovation strategy, and well-developed processes for implementing that strategy.

Sources of Innovation

Innovation can come from individuals, universities, government laboratories, nonprofits, firms, and networks connecting different innovators.

Why are firms important sources of innovation?

Firms have resources, management systems, and incentives to develop new products and services.

Network of Innovators

A group of different innovators that combines knowledge and resources from multiple sources to promote technological advancement.

Creativity

The ability to produce work that is both useful and novel (new).

Novel

Something that is different from previous work and is not simply the next obvious solution.

Reinvention

Something that is new to an individual but is already known to others.

Five factors affecting individual creativity

Intellectual abilities, knowledge, personality, motivation, and environment.

Primary Process Thinking

Unstructured mental activity that can create unexpected connections between ideas.

Divergent Thinking

The ability to explore many possible connections or solutions and identify useful ones.

How does knowledge affect creativity?

Too little knowledge makes it difficult to contribute, while too much knowledge can trap someone in existing ways of thinking. A moderate amount can sometimes encourage greater creativity.

Why can outsiders be creative innovators?

They may not be restricted by traditional assumptions or established ways of thinking.

Personality trait most associated with creativity

Openness to experience.

What does openness to experience include?

Imagination, curiosity, interest in unusual ideas, willingness to try new things, appreciation of art/emotions, and preference for variety.

Intrinsic Motivation

Motivation that comes from genuinely enjoying or being interested in the work itself; it is important for creativity.

Extrinsic Rewards

External rewards such as money or awards; they can sometimes reduce creativity by shifting attention away from intrinsic motivation.

What kind of environment encourages creativity?

An environment with time to explore, tolerance for unusual ideas, autonomy, less rigid hierarchy, and freedom to develop ideas without requiring everyone to agree.

Organizational Creativity

The combination of individual creativity, social processes, and the organizational environment.

Why aren't organizations automatically creative?

Even if an organization has creative employees, its structure, routines, and incentives can either encourage or prevent creativity.

Idea Collection Systems

Systems that allow employees to suggest, evaluate, improve, and develop ideas, such as suggestion boxes, online idea databases, employee idea programs, and innovation competitions.

Innovation

The implementation of creative ideas into a new device, product, or process using the resources and expertise needed to make the idea useful.

Creativity vs. Innovation

Creativity is the generation of new ideas; innovation is turning those ideas into useful products, devices, or processes.

Breakthrough Innovators

People responsible for multiple major innovations who tend to challenge rules, have high self-efficacy, be idealistic, work hard, and teach themselves.

Self-Efficacy

A strong belief in your ability to overcome obstacles and achieve goals.

Why is self-efficacy important for breakthrough innovators?

It helps them tackle difficult problems and continue working despite failure or criticism.

Collaborative R&D Networks

Networks involving joint ventures, licensing agreements, research partnerships, government-sponsored research, or informal networks that allow organizations to share knowledge and resources.

Interfirm Network

Connections between firms that allow them to share information and resources.

Dense Networks

Networks with many connections, allowing information to spread faster and more widely.

Technology Cluster

A geographic area where related innovative firms and industries are concentrated.

Why do technology clusters form?

Proximity makes it easier for firms to exchange knowledge, especially knowledge that is difficult to transfer remotely.

Tacit Knowledge

Knowledge that is difficult to explain or write down and is often learned through experience and person-to-person interaction.

Agglomeration Economies

Advantages created when firms locate close together, such as attracting firms and skilled workers, improving the labor pool, and increasing employment and infrastructure.

Technological Spillovers

When the benefits of one firm's R&D or research spread to other firms or organizations; a positive externality of R&D.

What affects technological spillovers?

Protection mechanisms, the type of knowledge, and labor mobility.

Sources of Innovation

Innovation can come from individuals, universities, government laboratories, nonprofits, firms, and networks connecting different innovators.

Why are firms important sources of innovation?

Firms have resources, management systems, and incentives to develop new products and services.

Network of Innovators

A group of different innovators that combines knowledge and resources from multiple sources to promote technological advancement.

Creativity

The ability to produce work that is both useful and novel (new).

Novel

Something that is different from previous work and is not simply the next obvious solution.

Reinvention

Something that is new to an individual but is already known to others.

Five factors affecting individual creativity

Intellectual abilities, knowledge, personality, motivation, and environment.

Primary Process Thinking

Unstructured mental activity that can create unexpected connections between ideas.

Divergent Thinking

The ability to explore many possible connections or solutions and identify useful ones.

How does knowledge affect creativity?

Too little knowledge makes it difficult to contribute, while too much knowledge can trap someone in existing ways of thinking. A moderate amount can sometimes encourage greater creativity.

Why can outsiders be creative innovators?

They may not be restricted by traditional assumptions or established ways of thinking.

Personality trait most associated with creativity

Openness to experience.

What does openness to experience include?

Imagination, curiosity, interest in unusual ideas, willingness to try new things, appreciation of art/emotions, and preference for variety.

Intrinsic Motivation

Motivation that comes from genuinely enjoying or being interested in the work itself; it is important for creativity.

Extrinsic Rewards

External rewards such as money or awards; they can sometimes reduce creativity by shifting attention away from intrinsic motivation.

What kind of environment encourages creativity?

An environment with time to explore, tolerance for unusual ideas, autonomy, less rigid hierarchy, and freedom to develop ideas without requiring everyone to agree.

Organizational Creativity

The combination of individual creativity, social processes, and the organizational environment.

Why aren't organizations automatically creative?

Even if an organization has creative employees, its structure, routines, and incentives can either encourage or prevent creativity.

Idea Collection Systems

Systems that allow employees to suggest, evaluate, improve, and develop ideas, such as suggestion boxes, online idea databases, employee idea programs, and innovation competitions.

Innovation

The implementation of creative ideas into a new device, product, or process using the resources and expertise needed to make the idea useful.

Creativity vs. Innovation

Creativity is the generation of new ideas; innovation is turning those ideas into useful products, devices, or processes.

Breakthrough Innovators

People responsible for multiple major innovations who tend to challenge rules, have high self-efficacy, be idealistic, work hard, and teach themselves.

Self-Efficacy

A strong belief in your ability to overcome obstacles and achieve goals.

Why is self-efficacy important for breakthrough innovators?

It helps them tackle difficult problems and continue working despite failure or criticism.

Collaborative R&D Networks

Networks involving joint ventures, licensing agreements, research partnerships, government-sponsored research, or informal networks that allow organizations to share knowledge and resources.

Interfirm Network

Connections between firms that allow them to share information and resources.

Dense Networks

Networks with many connections, allowing information to spread faster and more widely.

Technology Cluster

A geographic area where related innovative firms and industries are concentrated.

Why do technology clusters form?

Proximity makes it easier for firms to exchange knowledge, especially knowledge that is difficult to transfer remotely.

Tacit Knowledge

Knowledge that is difficult to explain or write down and is often learned through experience and person-to-person interaction.

Agglomeration Economies

Advantages created when firms locate close together, such as attracting firms and skilled workers, improving the labor pool, and increasing employment and infrastructure.

Technological Spillovers

When the benefits of one firm's R&D or research spread to other firms or organizations; a positive externality of R&D.

What affects technological spillovers?

Protection mechanisms, the type of knowledge, and labor mobility.