Leadership & Innovation

Leadership & Innovation

Management Engineering – Politecnico di Milano

Academic Year: 2025-2026

Prof. Canterino Filomena

Table of Contents

Innovation

24/2 What is Innovation and Why do we need it? .………………………………………………. 01

9/3 Innovation Process and Collective Creativity .…………………….………………………. 05

10/3 Technology Push Innovation .……………………………………………………………..……. 07

16/3 Market Pull Innovation ….……………………………………………………………………….. 11

17/3 Innovation of Meaning: Design Push Innovation ….…………………….…………………. 15

24/3 Platform Thinking ….………………………………………………………………………………. 17

14/4 Sustainable Innovation ….………………………………………………………………………. 19

Leadership

2/3 Leadership theories: functions, traits, and behaviours ….…………………………….. 21

3/3 Situational, transactional and transformational leadership ….………………………. 24

31/3 Servant and Shared Leadership ….…………………………………………………………… 26

13/4 Team Dynamics and Psychological Safety ….……………………………………………… 28

21/4 Leading Change ….………………………………………………………………………………… 31

27/4 Leading Motivation ….……………………………………………………………………………. 33

i

24/2 What is Innovation and Why do we need it?

What is innovation?

Schumpeter (1934): Innovation is the implementation of new combinations -> combine things

in a new way

Freeman (1974):

- Invention: an idea, a sketch or a model for a new or improved device, product, process

or system.

- Innovation is accomplished only with the first commercial transaction involving the new

product, process. There is not innovation if it is not sold into the market. There is a

connection between the innovation and the market

Managerial point of view: We don’t move along the already existing trade-off curve (ex. quality

– cost) but we shift the curve towards a new trade-of

Oslo Manual (2005): An innovation is the implementation of a new or significantly improved

product (good or service), or process, a new marketing method, or a new organizational method

in business practices, workplace organisation or external relations.

Inventors Vs. Innovators

The telephone was invented by Antonio Meucci. He was an inventor. However, the patent of the

creation of Meucci was taken by Graham Bell. He took the idea creating the phone and bringing

it to the market.

Innovation is more than coming up with good ideas, it is the process of growing them into

practical use.

Innovation is made of two part: invention (value creation: idea generation) and exploitation

(value appropriation: conversion of the new idea in a business opportunity)

Many times, the innovators are technology/solution brokers (they bring an idea to the market)

The innovator is able to replicate the innovation process (not just to create innovation once)

What can be the subject of innovation in companies?

Products, services, solutions, processes, business models, advertising, packaging, …

Innovation can be Strategic Innovation, Product Innovation, Process Innovation, Organizational

Innovation, Market Innovation...

Innovation of the company (internal challenge) VS Innovation for the market (external

challenge)

NB: if two features are in trade-off, innovation also means moving the potential curve to find a

new, better trade-off1 1

Product-service system

Product (Device)+ Service (Maintenance support) + Communication (Commercials, brand

ambassadors)

Innovation framework

People (target) + Meaning (to change the why) + Solution (to change the how)

Coca Cola’s first competitor: Royal Crown Cola

The first diet coke was produced by Royal Crown Cola. They were also the first to put soda into

cans. They introduced at least two of the most valuable innovations in the industry, but even

being good in thinking great things, they didn’t manage to be successful. The execution counts

90%. In fact, they lacked complementary assets, those assets not needed to do innovation but

to win the market.

A “meteor” is a company that becomes very famous and then it’s not able to sustain the

innovation over time, due to a shortage of complementary assets.

Possible complementary assets: distributors (networks to deliver the products),

technologies (app store for smartphones), services (additional support), competitive

manufacturing (efficiency, scalability).

Radical vs. Incremental innovations

Incremental innovation: you are readapting something that is already existing with small

adjustment → Small investments, little time, low risk.

They have a limit: After a while, it is more difficult to improve it → There is a decreasing

marginality.

At a certain point, a radical innovation is needed.

Radical innovation: you start from a scratch. It is big, therefore requiring a lot of investment, a

lot of time and a higher risk: failing, all money is lost.

After a radical innovation, there is once again incremental innovation.

2

Architectural vs. Component-based innovations

There is a distinction between assembled products and process-based ones.

However, most products are assembled. It means that there is a distinction between the

product as a whole and the product in its parts. Innovation can be made either on the

component or on the architecture.

Product architecture is (1) the arrangement of functional elements, (2) the mapping from

functional elements to physical components (3) the specification of the interfaces among

interacting physical components. In brief, it is he list of components and the way in which they

interact.

Architecture of a service

The idea of architecture could be applied to services, calling it the Service Package.

One of the most famous models applied to the services is the Kano's Model that shows the

trade-off among Value vs Performance.

From a managerial perspective, I would invest to

innovate the linear → proportional improvement

Innovation and competences

Competence-destroying discontinuities require new skills, abilities, and knowledge needed for

the core technology shift. They are usually initiated by new firms. (Es. Online classes for covid)

Competence-enhancing discontinuities are order-of-magnitude improvements in price-

performance that build on existing know-how within a product class. Discontinuities tend to

consolidate industry leadership. (Es. Bigger rooms for covid)

3

Why to innovate?

What are the challenges? 4

9/3 Innovation Process and Collective Creativity

Innovation process as a funnel

What is creativity?

Creativity is a process involving imagination and ability to develop something new and unique,

by combining knowledge, creative skills and motivation.

The creative process:

Creativity, most of the time, involves some degree of social interactions. Most creative ideas

within the context of work are the outcomes of exchanges in a collective space.

What is a team?

Team is a small number of people with complementary skills who are committed to a common

purpose, performance goals, and approach for which they hold themselves mutually

accountable. 5

Drivers influencing team effectiveness:

- Context: Adequate resources, Leadership and organizational macrostructure

- Composition: Team member abilities, Diversity, Role allocation

- Process: Common purpose, Conflict management

Team creativity: when a team is effective, the pool of

knowledge of the group > sum of the individual knowledge,

because individuals build on others’ ideas and produce new

and better ideas

Team ineffectiveness:

1. The Asch effect (conformity pressure): The distortion of individual judgment by a unanimous

but incorrect opposition

2. Groupthink: Consensus is above all other priorities, including using good judgment

3. Conformity: Apprehension to express ideas because of others’ judgment

4. Production Blocking: Members of a team may be prevented from generating new ideas

because they are distracted by hearing the contributions of other members while waiting for

their turn to participate (interruption of the flow)

5. Performance Matching: The performance of people working within a group tends to

converge over time

Techniques to foster idea generation

1. Morphological analysis 2. Mindmapping

3. Brainstorming: Quantity is essential

4. Brainwriting: Ideas are listed on sheets of papers, participants work at their own speed

5. Nominal Group Technique: write down ideas, present them, global discussion, secret ballot

6. Six hats for thinking: white (facts and information), red (feelings and intuition), black (critical

judgment), yellow (optimism), green (creativity and innovation), blue (process and

management) 6

10/3 Technology Push Innovation

The company proposes something new to the market, and the new

come from the technology.

The process is driven by scientific / technological competencies.

The innovation typically revolves around the physical attributes of the product.

Main steps: Basic/Fundamental research → Application research → Design → Engineering →

Manufacturing → Marketing & Sales

What is the risk of technology push innovation?

That the innovation will simplify/introduce tasks that weren’t relevant/useful for the user before

S-shape curve

Time based evolution of a single parameter (y) of a technology.

Hps: Limited growth (L)

Constant innovation effort (b)

Phases (Initiation, Development, Maturity)

The main idea is to understand how the performances of the technology evolve over time, in

order to see when it’s time to shift to another technology.

- Initiation: at the beginning the return is low because it’s necessary to discover everything.

- Development: once you realize how to use the technology, the return grows significantly.

- Maturity: there is still room for improvement, but with small performance improvements.

Envelope curve (long period)

It explains how different technologies are working

together to see an increase on a single performance.

Non-constant innovation effort (b)

A company can stop investing (e.g. if they have reached the desired

performance) or increase the level of investment (to reach a higher

level sooner in time).

Limits of the S-shape curve

It considers just one performance at a time. It’s not possible to foresee directly the limit.

Therefore, it’s a theoretical model. 7

Electric vs. Petrol engine in automotive

The electric engine was already evaluated into the

market years ago: the two curves started at the same

time, but the market decided to invest in just one.

So even in case of technology push, the market has

an important role in the diffusion of a technology.

Rogers Diffusion of Innovation

NB: The flow of information is at the basis of the roger diffusion model; thanks to internet the

information moves faster.

Innovators have the highest social status and are willing to take risks.

Early adopters are more discreet in adoption choices than innovation and have the highest

degree of opinion leadership among the adopter categories.

Early majority adopt an innovation after a varying degree of time (longer than the first two).

Late majority adopt an innovation after the average participant. They approach an innovation

with a high degree of skepticism.

Laggards typically have an aversion to change.

Dominant Design

It’s the architecture winning on the market and becomes the archetype of the product.

How does the DD emerge? Complementary assets, strategic manoeuvring, better understand

of customer needs, rules and laws, network effects (network externalities, lock-in effect,

critical mass…) 8

Technology Push Dynamics

Relation between product and process

innovation.

In the fluid phase, all the companies in the

market are trying to make their own proposal and

this increase the quality of innovation, until the

DD wins.

Transition phase: Once reached the dominant design at the product level, it starts the one at

the process level (making the production process faster and more efficient, …).

Specific phase: standard products, automated equipment, incremental innovation and

competition on price.

Incumbent curse – Tushman Cycle innovation has two levels:

- Technology discontinuity that brings to a fluid phase.

- Selection of a DD and then an era of incremental

innovations.

The cycle starts once again once a technology

discontinuity enters the marker.

An incumbent is a company that has a strong position on the market. However, radical

innovations are introduced by someone th