Leadership and innovation

BARRIERS TO OPEN INNOVATION

- Not-invented-here and not-sold-here syndromes

It should be removed by working on culture, rewarding and incentives

- Lack of absorptive and desorptive capacity

Open innovation is not mere outsourcing

- Loss of control over core competencies

IP management and partner selection should be given high priority

- Managerial complexity

ICT knowledge management systems could be used to organize information

FAILURES OF OPEN INNOVATION IN PRACTICE

- Honourable failure: an honest attempt at something new or different has been

tried unsuccessfully

- Incompetent failure: people fail for lack of effort or competence in standard

operations

“A mistake is when you do something wrong, even though you knew the right way to

do it. Failure is when you are trying something new, and you do not know ahead of

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time how to make it successful”

SMARTFAILING: When an organization embraces smart failing, it de-stigmatize

failure internally and uses failure as an opportunity to learn and to find a better course.

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LEAN STARTUP APPROACH

“A start up is a human institutions designed to create a new product or service

under conditions of extreme uncertainty” 44

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Customer development is hypothesis testing. 46

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INNOVATION PROCESS (L10)

Now we go in details of how companies move from ideas to something ready to go on the

market. There is difference between innovation and invention. In fact, an invention is just an

idea, a concept, a new way of thinking; while innovation has some practical applications, it is

more than simply coming up with good idea; it is the process of growing them into practical

use. Meucci brought the idea of telephone but was not able to transfer the invention in an

innovation. The flow is: Ideas R> concepts R> products.

Two parts compose innovation:

 Generation of ideas, concepts, inventions which can lead to products (Value Creation);

 Conversion of new idea in business opportunity (Value Appropriation);

Innovation process starts from a broad sense, develop many ideas in order to select the best

idea with more potential. But, what can we innovate?

 What vs. how: Focus on outputs or processes;

 How new/different: Innovation can be more or less radical (or incremental), how

different from what existing previously?;

 Object: Products, service, system, business model, organizations. Peculiarity in the

innovation process according the object of innovation;

 Scope: Referring to a product, I can innovate the structure or the components (parts);

 Source: Different sources of innovation, new technologies to solve better the problems

I have or innovation of the meaning of the product? (Candle not for the purpose to

make light but for the atmosphere, perfume);

Innovation process is about phases to

translate ideas into products. It has some

inputs such as markets (considering of

some non answered needs or need that

customers are not aware), society

(transform the way in which needs can be

solved), technological opportunities and

changes, etc. and generates an output that

is the new solution. It can be a product or a

business process. What comes next the

innovation process is the innovation life

cycle, the life cycle of what you innovate.

Not just focus on the moment in which the product goes in the hands of consumers but be

sure that will be good for all the duration. 49

The innovation process can be

seen as a funnel

The idea of filtering starts

from a broad set of ideas and

then focus on the more

promising, first screening

based on the fact that ideas are

more or less promising and

then

understand which one can be

translated in something real;

check for feasibility on

different levels on technical side and economic side. Once you have focus on one idea you

have to speed up the process (tunneling). The timing here is different because you have to

have quick feedback from the markets and enter as first.

In the image on the right, we can see the two

phases of filtering and the two phases of

tunneling. The aim of the entire process

innovation is to lunch the product through a set

of coordinated activities to create a new product

(good or service) that has value for the customer.

The phases of the new product development

process are:

The development process stars from the Concept Design. The input of the Concept Design is

the Product Innovation Charter, the junction between strategic objectives of the firm and the

project objectives (goals, target market and so on). The output is the Product Concept

Statement.

The activities of this phase are analysis of users’ needs, development of product requirements,

development of project plan.

What is a (product) concept? There are several definitions of concept:

 Marketing view definition: “It is an idea of new product that defines who will use the

product, its main features and the patterns of use”

 Design view definition: “It is a description of the form, functions and feature of the

product” 50

 “It defines the character of the product from the customer perspective. It is the projection

of an experience, a message delivered by the new product, in the hope of satisfying the

needs of target costumers”

We want to see the key features to develop a concept.

A concept is a draft (basic, selective),

which contains features and

functionalities of the product. It clarifies

the limitations of the product, and

explains the experience (it can also

define the targeted users).

Some definitions of concept:

“The concept is an idea of a new

 product that defines who will use

the product, its main features,

and the patterns of use”;

“The concept is a description of

 the form, functions and features

(technologies and functioning

principles) of the product”;

“The concept defines the

 character of a product from the

customer perspective. It is the

projection of an experience, a

message delivered by the new

product, in the hope of satisfying the needs of target customers”.

Concept consistency and concept design: Two of the main issues are the

correct understanding of the

context (USER NEEDS

analysis) and the ability to

generate scenarios, concepts

and so on (CREATIVITY).

USERS AS SOURCE OF INNOVATION

Which users: Segments are characterized by

different behaviours for which we can

define a common type of offer. Even

within each segment, we can

determine different type of users.

Another important factor is to

understand where users’ needs come

from, in order to be able to satisfy

those needs. Psychological factors <

personal < social < cultural factors

A concept typically is defined by:

 Who: the target customers and other stakeholders (for the sustainability);

 Why: meaning that is associated with the product, the meaning and values that the

target customer should associate;

 What: the problem which solve;

 How: the solution itself, performance and more softer issues;

So the Concept Design is the real understanding of the customer target and customer needs

and creativity are the key parts of concept development. It is divided in:

 Concept Generation, whose phases are: definition of strategic objectives, analysis of

the context (user’s need, competition, market technology) and, at the end, concept

generation;

 Concept Development, whose phases are: feasibility analysis (technology, operations

and marketing strategy, analysis of the investment), definition of product specificities,

business plan and project plan;

Now let’s focus on the users’ needs analysis. There are several kinds of

user categories that we divide in segments. Then for each segment we

divide the users in:

 Representative users;

 New potential users;

 NonRusers;

 Users with very specific needs (e.g. people with handicap);

 Advanced users (high requirements); 38

Understand form where the needs come from. There are very different sources, such as

cultural, social, personal and psychological factors, as we can see in the image above.

In the image on the left we have the Maslow

pyramid with different layers of needs.

Starting from the bottom, there are the

physiological needs (basic needs), then,

moving up on the pyramid, we find more

sophisticate needs: safety and security, social

needs, ego needs and selfRactualization.

The problem is to understand where the

users are in the pyramid, comparing with the

situation for which we are developing a new concept. For example different kind of soap,

basic soap to reduce the diseases for infections or more sophisticated one?

To identify where you are in the pyramid

needs is more or less explicit because

basic needs are, for example, what people

talk about. The problem is that the more

you go upper the more people are not

able to recognize and tell about their

needs. In this case it is better to look at

their behavior and when needs are latent

(not even in the mind of customers) you

need other type of methodologies, such as observing what people make. For needs not

observable, help users to innovate and push them to make explicit what they don’t know yet.

Some types of users anticipate the needs of the “core users” or facilitate the expression of the

needs by trying products and see what products are not fulfilling. 39

Move from just understand the needs outside the context of use to specific context of use,

increase level of involvement and interaction from left to right.

There are different models of user involvement in Concept Design:

The sources of information are many and very different: product feedback, competitors, our

own experience, and so on. Some methodologies based on “what people say” are:

 Questionnaires and interviews: they can be more or less formalized. Questionnaires

require less time and achieve pure information. On the other way around, the

interview requires more time but can achieve richer info. Questionnaire design is

fundamental to minimized biased information. Start with defining the section of the

questionnaire in order to make rational tradeRoff between the length and the necessity

of various sections, ensure all necessary information is collected, and eliminate

redundancy. Then is convenient to preRtest the questionnaire with a small group of

experts and conduct a preRanalysis to identify if the data gathering and data analysis

can be conducted as defined in the design of the questionnaire;

 Focus Group: are fundamentally different from quantitative survey/questionnaire

methods in their purpose, procedures and results. Despite this technique constitutes a

notable improvement in comparison to the interviews, it introduces three strong

limitation: the choic