Managing Innovation: Integrating Technological, Market and Organizational Change, 8ed (An Indian Adaptation)

1 Innovation – What It Is and Why It Matters 1

1.1 The Importance

of Innovation 2

1.2 Innovation Is Not Just High Technology 4

1.3 It’s Not Just Products . . . 8

1.4 Innovation and Entrepreneurship 9

1.5 Strategic Advantage Through Innovation 11

1.6 Old Question,

New Context 17

1.7 The Globalization

of Innovation 18

1.8 So, What Is Innovation? 21

1.9 A Process View of Innovation 24

1.10 The Scope for Innovation 26

Four Dimensions of Innovation Space 26

Mapping Innovation Space 29

1.11 Key Aspects of Innovation 32

Incremental Innovation – Doing What We Do But Better 32

Component/Architecture Innovation and the Importance of Knowledge 33

Platform Innovation 35

The Innovation Life Cycle – Different Emphasis Over Time 36

Discontinuous Innovation – What Happens When the Game Changes? 39

1.12 Innovation Management 44

Summary 48

Review Questions 49

Hands-On Questions 49

References 50

2 Digital Is Different? 53

2.1 What Is Digital Innovation? 53

2.2 Is It New? 57

2.3 Is It Revolutionary? 58

2.4 What Does It Mean for Innovation? 59

2.5 What Does It Mean for Innovation Management? 62

The New Digital Toolkit 63

New Ways of Thinking About Innovation Management 67

Summary 72

Review Questions 72

Hands-On Questions 72

References 74

3 Innovation as a Core Business Process 76

3.1 The Innovation Journey 76

3.2 Different Circumstances, Similar Management

Challenges 78

3.3 Variations on a Theme 79

Services and Innovation 79

Service Innovation Emphasizes the Demand Side 83

The Extended Enterprise 85

Innovation in the Non-Commercial

Arena 85

Not-For-Profit

Innovation 87

Social Entrepreneurship 88

3.4 Cross Sector Differences 90

Organizational Size 90

Project-Based

Organizations 92

Platform Innovation 92

Ecosystems 93

The Influence of Geography 93

Regulatory Context 94

Industry Life Cycle 94

3.5 Do Better/Do Different 94

3.6 A Contingency Model of the Innovation Process 96

3.7 Evolving Models of the Process 97

3.8 Can We Manage Innovation? 99

3.9 Building and Developing Routines Across the Core Process 102

Navigating the Negative Side of Routines 103

3.10 Learning to Manage Innovation 103

Identifying Simple Archetypes 103

Measuring Innovation Success 105

What Do We Know About Successful Innovation Management? 105

Success Routines in Innovation Management 107

Key Contextual Influences 114

3.11 Beyond the Steady State 115

Summary 116

Review Questions 117

Hands-On Questions 117

References 118

4 Developing an Innovation Strategy 122

4.1 ‘Rationalist’ or ‘Incrementalist’ Strategies for Innovation? 123

Rationalist Strategy 124

Incrementalist Strategy 126

Implications for Management 128

4.2 Innovation ‘Leadership’ Versus ‘Followership’ 130

4.3 The Dynamic Capabilities of Firms 133

Institutions: Finance, Management and Corporate Governance 133

Learning and Imitating 135

4.4 Appropriating

the Benefits from Innovation 137

4.5 Exploiting Technological Trajectories 143

4.6 Developing Firm-Specific

Competencies 147

Hamel and Prahalad on Competencies 147

Assessment of the Core Competencies Approach 149

Developing and Sustaining Competencies 152

4.7 Globalization of Innovation 158

4.8 Enabling Strategy Making 163

Routines to Help Strategic Analysis 163

Portfolio Management Approaches 164

Summary 167

Review Questions 168

Hands-On Questions 168

References 169

5 Building the Innovative Organization 174

5.1 Shared Vision, Leadership and the Will to Innovate 176

5.2 Appropriate Organizational Structure 183

5.3 Key Individuals 186

5.4 High Involvement

in Innovation 189

5.5 A Roadmap for the Journey 194

5.6 Effective Team Working 196

5.7 Creative Climate 202

5.8 Boundary-Spanning 217

Summary 222

Review Questions 222

Hands-On Questions 222

References 223

6 Sources of Innovation 229

6.1 Where Do Innovations Come From? 230

6.2 Knowledge Push 230

6.3 Need Pull 232

6.4 Making Processes Better 235

6.5 Crisis-Driven

Innovation 238

6.6 Whose Needs? The Challenge of Underserved Markets 239

6.7 Emerging Markets 243

6.8 Towards Mass Customization 246

6.9 Users as Innovators 248

6.10 Using the Crowd 252

6.11 Extreme Users 255

6.12 Prototyping 255

6.13 Watching Others – and Learning from Them 256

6.14 Recombinant Innovation 257

6.15 Design-Led

Innovation 259

6.16 Regulation 260

6.17 Futures and Forecasting 261

6.18 Accidents 262

Summary 264

Review Questions 265

Hands-On Questions 265

References 266

7 Search Strategies for Innovation 268

7.1 The Innovation

Opportunity 269

Push or Pull Innovation? 269

Incremental or Radical Innovation? 270

Exploit or Explore? 270

7.2 When to Search? 271

7.3 Who Is Involved in Search? 272

7.4 Where to Search – The Innovation Treasure Hunt 274

Ambidexterity in Search 275

Framing Innovation Search Space 275

7.5 A Map of Innovation Search Space 277

Zone 1 278

Zone 2 278

Zone 3 279

Zone 4 279

7.6 How to Search? 280

7.7 Absorptive Capacity 283

7.8 Tools and Mechanisms to Enable Search 285

Managing Internal Knowledge Connections 286

Extending External Connections 287

Summary 290

Review Questions 290

Hands-On Questions 291

References 292

8 Innovation Networks 295

8.1 The ‘Spaghetti’ Model of Innovation 297

8.2 Innovation Networks 298

Why Networks? 299

Emergent Properties in Networks 301

Learning Networks 302

Breakthrough Technology Collaborations 303

Regional Networks and Collective Efficiency 304

Mobilizing Networking 304

8.3 Networks at the Start-Up 306

8.4 Networks to Scale . . . 308

8.5 Networks on the Inside . . . 311

8.6 Networks on the Outside 312

8.7 Networks into the Unknown 317

8.8 Managing Innovation Networks 319

Configuring Innovation Networks 319

Facing the Challenges of Innovation Networks 321

Summary 322

Review Questions 323

Hands-On Questions 323

References 324

9 Dealing with Uncertainty 327

9.1 Meeting the Challenge of Uncertainty 328

9.2 The Funnel of Uncertainty 328

9.3 Planning Under Uncertainty 330

9.4 Forecasting Innovation 335

Customer or Market Surveys 337

Internal Analysis, for example, Brainstorming 338

External Assessment, for example, Delphi 338

Scenario Development 339

9.5 Estimating the Demand for Innovations 341

9.6 Assessing Risk, Recognizing

Uncertainty 343

Risk as Probability 344

Perceptions of Risk 346

9.7 Assessing Opportunities for Innovation 350

Financial Assessment of Projects 350

How to Evaluate Learning? 351

How Practicing Managers Cope? 359

9.8 Decision Making at the Edge 361

Selection and Reframing 361

9.9 Mapping the Selection Space 365

Summary 372

Review Questions 372

Hands-On Questions 373

References 374

10 Creating New Products and Services 377

10.1 Processes for New Product Development 377

Concept Generation 381

Project Selection 381

Product Development 382

Product Commercialization and Review 383

Lean and Agile Product Development 384

Lean Start-Up 384

10.2 Factors Influencing Product Success or Failure 386

Commitment of Senior Management 391

Clear and Stable Vision 391

Improvisation 391

Information Exchange 391

Collaboration Under Pressure 392

10.3 Influence of Technology and Markets on Commercialization 393

10.4 Differentiating Products 397

10.5 Building Architectural Products 400

Segmenting Consumer Markets 401

Segmenting Business Markets 402

10.6 Commercializing Technological Products 407

10.7 Implementing Complex Products 410

The Nature of Complex Products 411

Links Between Developers and Users 411

Adoption of Complex Products 413

10.8 Service Innovation 414

10.9 Diffusion of Innovations 419

Processes of Diffusion 420

Factors Influencing Adoption 423

Characteristics of an Innovation 423

Summary 430

Review Questions 430

Hands-On Questions 431

References 432

11 Exploiting Open Innovation and Collaboration 436

11.1 Joint Ventures and Alliances 437

Why Collaborate? 437

11.2 Forms of Collaboration 441

11.3 Patterns of Collaboration 443

11.4 Influence of Technology and Organization 446

Competitive Significance 447

Complexity of the Technology 448

Codifiability of the Technology 449

Credibility Potential 449

Corporate Strategy 449

Firm Competencies 450

Company Culture 450

Management Comfort 451

Managing Alliances for Learning 451

11.5 Collaborating with Suppliers to Innovate 458

11.6 User-Led

Innovation 462

11.7 Extreme Users 465

Co-Development

Democratic Innovation and Crowdsourcing 467

11.8 Benefits and Limits of Open Innovation 469

Summary 474

Review Questions 475

Hands-On Questions 475

References 476

12 Promoting Entrepreneurship and New Ventures 480

12.1 Ventures, Defined 480

Profile of a Venture Champion 481

Venture Business Plan 486

Funding 487

Crowdfunding 490

Corporate Venture Funding 491

Venture Capital 493

12.2 Internal Corporate Venturing 496

To Grow the Business 498

To Exploit Underutilized Resources in New Ways 499

To Introduce Pressure on Internal Suppliers 499

To Divest Non-Core Activities 499

To Satisfy Managers’ Ambitions 499

To Spread the Risk and Cost of Product Development 499

To Combat Cyclical Demands of Mainstream Activities 500

To Learn About the Process of Venturing 500

To Diversify the Business 500

To Develop New Competencies 500

12.3 Managing Corporate Ventures 502

12.4 Assessing New Ventures 506

Structures for Corporate Ventures 507

Direct Integration 508

Integrated Business Teams 509

New Ventures Department 509

New Ventures Division 509

Special Business Units 510

Independent Business Units 510

Nurtured Divestment 511

Complete Spin-Off

Learning Through Internal Ventures 512

12.5 Spin-Outs

and New Ventures 515

12.6 University Incubators 518

12.7 Growth and Performance of Innovative Small Firms 526

Summary 537

Review Questions 537

Hands-On Questions 537

References 538

13 Capturing the Business Value of Innovation 543

13.1 Creating Value Through Innovation 543

13.2 Innovation and Firm Performance 548

13.3 Exploiting Knowledge and Intellectual Property 551

Generating and Acquiring Knowledge 552

Identifying and Codifying Knowledge 552

Storing and Retrieving Knowledge 556

13.4 Sharing and Distributing Knowledge 557

Converting Knowledge into Innovation 560

13.5 Exploiting Intellectual Property 563

Patents 564

Copyright 569

Design Rights 569

Licensing IPR 569

13.6 Business Models and Value Capture 572

13.7 Dynamics of Generative Interaction 579

Summary 581

Review Questions 582

Hands-On Questions 582

References 583

14 Creating Social Value 586

14.1 Innovation and Social Change 586

14.2 The Social Innovation Process 589

Social Innovation as a Learning Laboratory 592

Public Sector Innovation 593

Supporting and Enabling Social Innovation 593

Challenges in Social Innovation 593

14.3 Inclusive Innovation 595

14.4 Humanitarian Innovation 596

14.5 The Challenge of Sustainability-Led Innovation 598

14.6 A Framework Model for Sustainability-Led Innovation 600

14.7 Responsible Innovation 608

Summary 610

Review Questions

610

Hands-On Questions 611

References 612

FM.indd 23 27-06-2025 11:12:22

xxiv Contents

15 Capturing Learning from Innovation 613

15.1 What Have We Learned About Managing

Innovation? 614

15.2 How to Build Dynamic Capability? 615

15.3 How to Manage Innovation? 616

15.4 The Importance of Failure 617

15.5 Tools to Help Capture Learning 619

Post-Project

Reviews (PPRs) 619

Proceduralizing Learning 620

Agile Innovation Methods 620

Benchmarking 620

Capability Maturity Models 621

15.6 Innovation Auditing 621

15.7 Measuring Innovation Performance 622

15.8 Measuring Innovation Management Capability 623

15.9 Reflection Questions for Innovation Auditing 625

Search 625

Select 626

Implement 627

Proactive Links 629

Learning 630

15.10 Developing Innovation Capability 630

15.11 Final Thoughts 633

Summary 634

Review Questions 634

Hands-On Questions 635

References 636

Index