Managing Innovation

Managing Innovation is the bestselling text for graduate and undergraduate students and a classic in the field. Emphasizing practical, evidence based tools and resources, this title provides students with the knowledge base to successfully manage innovation, technology, and new product development. The holistic approach addresses the interplay between the markets, technology, and the organization, while relating the unique skill set required to manage innovation and innovation processes.

The sixth edition of Managing Innovation continues to include the popular Innovation in Action sections in each chapter which are now newly titled Case Studies, and also features a number of new cases, updated and new research notes and references, and links to videos, audio interviews, activities, and case studies. The sixth edition also features new material on emerging innovation themes, including business model innovation, user innovation, crowd-sourcing, creativity, entrepreneurship, service innovation, public services, and more.

The rapid pace of the field's evolution has brought an increase in multi-disciplinary approaches and skills, while expanding the available tool kit and pushing the boundaries of possibility forward. This text provides expert navigation through the abundance of new data, new methods, new concepts, and approaches but it is designed to encourage and support tailored experimentation, not replace it. Equipped with a strong foundation and a productive innovation management mindset, todays students will be equipped to bring about the eras next great advances.

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

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