Appunti - Leadership and Innovation, prof. Buganza

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

LEADERSHIP AND INNOVATION

LECTURE NOTES

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All the topics covered in the course that you need to know to

successfully pass the exam.

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Prof. Tommaso Buganza

Master of Science in Management Engineering

Politecnico di Milano

A.A. 2019/2020 1

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

INDEX →

00. OPENING 3 →

01. TECHNOLOGY PUSH INNOVATION 12

→

02. DESIGN PUSH INNOVATION 26

→

03. MARKET PULL INNOVATION 31

→

04. LEADERSHIP THEORIES 38

→

05. SELF LEADERSHIP 52 →

06. HOW TO VISUALIZE AND COMMUNICATE A PSS 55

→

07. ACTIVE LISTENING 57

→

08.1 PLATFORMS 61 →

08.2 BIG DATA FOR INNOVATION 68

→

09. LEADING TEAMS 78 →

10. CHALLENGING CONVERSATIONS 82 →

11. MAPPING YOURSELF AND STAKEHOLDERS + WHOLE BRAIN 86

→

12. MOTIVATION 90 →

13. COLLABORATIVE INNOVATION FRAMEWORK 97 2

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

LEADERSHIP AND INNOVATION NOTES

00. OPENING

00.0 A First Introduction to Innovation

When we talk about innovation, these two different concepts should come to our mind:

• →

Object of innovation Something that you can innovate, tangible things.

• →

Object of transformation People, ideas and points of views.

It is difficult is to engage the people on the right, but why? The ones on the right might not want to do

innovation, while the one on the left does it for his job. Remember that when we talk about innovation, we

always start from people! When dealing with innovation, we can innovate the solution (HOW the product-

service-process is working) or the meaning (WHY should people adopt our solution).

→

EXAMPLE PlayStation and Xbox are consoles that are competing against each other and buyers look at

some characteristics (games, quality of the image, quality of the processor…) when it comes to choose one

of them. They both worked on the solution, trying to do the same things of the competitors, but in a better

way. When Wii arrived on the market, it completely changed the game: we cannot even completely say that

it is a competitor of Xbox or PlayStation, because it is a different product. Wii is like a table game, something

that you play in the house with your friends or family, physically interacting with them. So, why would people

Wii’s competitor

buy it? Maybe because they want to have a simple and casual game to play with friends.

should be more something like Monopoly.

→

EXAMPLE With iPhone 3 the things are more or less the same: it was just different from normal phones

and more like a computer. The reason why people buy it is not to call or send text messages, but to have

social networks and surfing on the internet

Remember that innovators have to work also on the meaning, not only on the solution! In order to do that,

→

we need to understand people If we want to change the WHY, we need to change the vision, making a

proposal about a new meaning and a way to engage people about something is a crucial capability that

innovators need to develop. The ability of building stories can be retrospective or prospective (stories about

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

→

the future): when we tell stories about the future, we can literally shape it This is the fundamental of

innovation. →

EXAMPLE Star Trek (the original one of the 50s): it is a fictional world where many things were

introduced and became reality, like sliding doors. Then, probably some engineers and designers had in mind

the Star Trek image and created them.

The other area that this course is going to investigate is leadership. When we talk about leadership we think

about Gandhi, Jesus, Steve Jobs etc., but if we consider leadership as something about changing the world,

“lollipop”

→

we will never get the right point. We can be leader every day, redefining the concept itself The

leadership and the everyday leadership.

→

EXAMPLE Dudley, Ted Talk: Dudley tells the story of an interaction he had with a freshman girl who was

waiting in line with her parents for class registration. The young woman was filled with apprehension and

doubts about her future at the university. She was at the point of turning to her parents and calling off her

plans of attending school right when Dudley entered her life. Dudley was carrying lollipops and passing them

out to individuals to help spread awareness about a charity he was supporting. When he came to this

he turned to the guy in front and said, “You need to give a lollipop to the beautiful woman

nervous girl in line,

next to you.” The guy turned deep red, took the lollipop and begrudgingly held out the lollipop for the young

woman to take. Dudley made a few more humorous remarks and everyone in line fell into laughter, even the

nervous freshman student. At that moment, the young woman says her life was forever changed.

Surprisingly, she had this overwhelming sense that everything was going to be okay. Four years after that

humorous moment, the now graduated woman told Dudley how greatly he had impacted her life because of

that single moment. To heighten the sweetness of the story, she is marrying the guy who handed her that

lollipop. This interaction was a life altering moment for this young woman. She made a monumental decision

to continue with college all because of a moment that lasted less than a minute. This inspired Dudley so

he has now made it his life’s mission to tell this story, his “lollipop moment”.

much that person’s life, but

→

Lollipop moment It is a special moment where one individual positively shapes another

may not realize his or her impact. “implementation

What is an innovation? An innovation is the of a new or significantly improved product

(good or service), or process, a new marketing method, or a new organisational method in business

practices, workplace organisation or external relations”. (Oslo Manual 2005)

→

EXAMPLE The case of the Royal Crown Cola and Coca Cola: Coca Cola, as we all know, has different

brands, but also many different products under the same brand. The first time in which they changed the

They didn’t create

logo was the moment in which they released Coca Cola Light. it, but copied from Royal

Crown Cola (also a caffeine-free version). In 1958, Royal Crown Cola introduced the first diet cola, Diet Rite,

and in 1980 a caffeine-free cola, RC 100. It has proved to be one of the most innovative soda companies in

the world, but it basically disappeared. In order to understand why, we need to understand the different types

of innovation: there could be strategic, product, process, organizational and market innovation. But so,

did Pepsi, that created the Diet Pepsi too, and Coca Cola innovate? They offer basically the same product as

RC Cola (diet version), but YES, they innovated too, because in Coca Cola, in order to deliver Coca Cola

had to innovate the processes, the formula, the marketing…

Light, they Of course, it was not an innovation

for the market, but it was an innovation for the company.

• →

Innovation for the market It is an external

challenge.

• →

Innovation for the company It is internal:

companies have to change things internally in order to

innovate. 4

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

“me-too

Pepsi and Coca Cola did a so called innovation”: they were not facing the risks that RC had to face

for being first mover in the market. But so, is it important to be a first mover in order to succeed? IT

big companies didn’t want to be first movers in order to reduce the risk of

DEPENDS, but in general many

innovation.

What can be innovated in a company?

• Products

• Processes

• Services

• Packaging

• Business model

00.1 What is an Innovation?

There are other different definitions of innovation:

• →

Schumpeter (1934) Innovation is the implementation of new combinations. In particular, this

author contributed significantly to understand the power and limits of capitalism. He highlighted that

capitalism has an inner capability to foster innovation. In addition, he stated that entrepreneurs are

the most likely to bring innovative ideas, but large companies are the most likely to implement these

ideas and actually innovate, because they have the resources (money, people…) to implement

them: there is a dichotomy between the role of entrepreneurs and large companies. This view is

rather dated, yet these ideas are still very true.

• = “An

→

Freeman (1974) He highlighted the difference between invention and innovation: Invention

improved device, product, process or system”.

idea, a sketch or a model for a new or Innovation (in

“It

the economic sense) = is accomplished only with the first commercial transaction involving

the new product, process”. If we are not able to make money out of it and so if we are not able to

→

transform our ideas into something that is able to relating with the market, it is not innovation It is

not an innovation until the invention is implemented and transacted.

• “to

→

Managerial point of view Innovation means shift the trade-off among performance to

better fulfil existing needs or to generate new performance dimensions for new needs.”

Innovation is not about moving on the trade-off curve, but about transforming the trade-off curve

itself. For example, when there are two different performances, we have to choose where to focus

on, so different performance measures mean that there is always a trade-off. We can move on the

trade-off curve (like in the cost and service curve, increasing service but keeping cost fixed), but to

innovate we need to transform the trade-off curve itself, creating something new. The management

field is more interested in innovations rather than in inventions.

00.2 What is an Innovator?

The most important word for innovators is implement. In fact, in the majority of cases, inventors are not

innovators, but researchers: often they are not interested in putting the results of their studies into a product.

→ → →

EXAMPLE Meucci (inventor Invented the telephone) vs Bell (innovator Put the product in the

market): many times, innovators are nothing more than smart technology/solution brokers.

→

EXAMPLE In 1866 Mr Sholes (a mechanical Engineer form Milwaukee)

creates the first TYPEWRITER by combining (brokering) existing

technologies:

• Forward movement (one step for each pressed key), from watches.

• Back movement leverage, from sewing machines. 5

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

• Keyboard, from telegraphs.

• Hammer mechanical movements for printing each letter, from piano.

Basically, he didn’t invent anything, but just combined some already existing elements to create a new

product. Remember that, in order to be an innovator, you need to be able to replicate the innovation process

(if people do it just once, they are not innovators).

→

EXAMPLE Apple: the first computer was sold by mail and people had to assemble it themselves, but it

was hard to do, so the company created Apple II. This product was a huge success and everyday more and

more people wanted to use its computer. Apple decided to go in the stock market, but people in the stock

market were sure that at some point customers would have stopped buying its products and the investors

were not sure about Apple. In order to consider a company innovative, we have to see if the company

is capable of keep putting innovation on the market over time: if the company manages to be innovative

just once, it can’t be considered as innovative. Thus, Apple worked on Apple III for a very long time and then

they started to sell it, but not to deliver it, because it was so innovative that the company needed more time:

it was a huge failure and Apple almost collapsed. At that point, they released Macintosh, that was not as

→

innovative as Apple 3, but was working People at Apple were able to put somehow the same components

in a different way and achieved innovation. →

00.3 What is a Product Service System? Product + Service + Communication

→

EXAMPLE Nespresso: Device + Shopping online + Commercials. The 3 parts, of course, need to go

together. Nespresso was able to reshape the shopping experience, taking a product from the concept of the

product itself to the experiences that it can generate: in this case, the product is a commodity and it was

a “affordable luxury experience”.

transformed into

00.4 The different typologies of Innovation

Now that we have a clearer idea of what an Innovation is, let's deepen its different typologies:

1. MEANING vs SOLUTION. The very first framework that we want to analyse is the Solution-Meaning-

People framework. In fact, when dealing with Innovation, there are two main questions that you have to

answer.

• HOW? The answer is the solution that you want to deliver in order solve the problem, fulfilling the

need.

• WHY? This deals with what are the meanings that you are delivering to the customers (this concept

is particularly known in the marketing field). What is the meaning that the customer attaches to the

solution? We know that different individuals will attach different meanings to the same solution. In

order to understand this, we need to study people (the customer). Remember that when you set a

meaning, the market is not always ready for it and it’s harder than innovation of

new solution to be

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accepted Why people should buy and use certain products?

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PEOPLE DIRECTION (Criticism Inside out approach that means to be constructive and

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purposeful) SOLUTION (Ideation Outside in approach) 6

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

Not only this framework helps us to understand the innovation process, but it also lets us understand that

Innovation is not only in terms of solution, but also in terms of meaning (notice that this concept was

introduced for the first time by Roberto Verganti and his research team at Politecnico di Milano). →

A powerful tool to express meaning is the metaphor, that allows to say complex things in just one word

For example, “Watch is a tool” (Casio) and “Watch is a tie” (Swatch).

→

EXAMPLE Normal thermostat vs NEST

A thermostat is something to manage and regulate the heating and air conditioning system: it measures the

temperature and it is able to cool it down or heat it up. If you go to buy it in a shop, they can have a very wide

range of price (from 30 to 300 euros). In general, the more expensive it is, the more options you have (you

can plan it in different ways, making distinctions among days, seasons, you can measure different things like

humidity…), but this is quite weird: it’s not fun to program something like this and more complicated it is, the

more difficult it is to program. The final result is that the more complicated it is, the less keen you are to do

may be different, but you don’t want to sit down and reprogram it

the programming. After years, your needs

again. In this case, the more you spend, the more control and decision power you have (as a client), but

also more work to do. Some years ago, NEST created a new type of

thermostat, completely different, very simple

and without many options, just a gear that you

can turn. The system is equipped with a set of

different sensors that can detect if you are at

home or not by using AI, creating a pattern

and heating the house when it thinks that you

are coming home (it has also other functions

like these ones). Moreover, it can be

connected to some devices that are able to

measure your sleeping quality in order to find

the best temperature for you to sleep. We can

also have cars connected to the internet so

that the car communicates with the thermostat

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Prof. Tommaso Buganza Leadership and Innovation 2019/2020 MSc in Management Engineering POLIMI

and tells it if you are coming back home (notice that Google bought NEST for 3.2 billion dollars). The big

innovation here is in the product, in its functionalities and how it works, but what is changing is that if before

the more money it costed the more control you had, now with NEST they completely changed the

promise: give me your money so that you don’t have to do anything; give me money and I give you

time. This is an innovation in the WHY (meaning) but, of course, also the solution had to be different.

when you change the solution, you don’t have to change the meaning

It's important to know that

necessarily, but if you change the meaning you must change the solution.

Other examples of innovation of meaning are:

• →

Philips They tried to be a game changer within their environment, focusing on patience

experience rather than on technology.

• →

Whole Foods Market They completely redesign their shop environment in order to improve the

shopping experience when people go to buy their bio products.

• →

Yankee Candle Candles are no more used for lighting the space, but are bought for the perfume,

the ambient, the atmosphere and the meditation they provide.

2. INCREMENTAL vs RADICAL. →

EXAMPLE Fan

People buy the bladeless ventilator because they need a

fan, but in this case, they are also buying the fact that other

people will be amazed about it: so, people are not just

buying a tool to move the air, but also to start a discussion

(even though the main reason remains the same).

• →

Incremental innovation We are not completely chan