Leadership Innovation, prof Canterino, by Cremaschi

LEADERSHIP & INNOVATION

Sommario

1.0 Innovation & innovation strategies ............................................................................................................. 3

1.1 What is innovation................................................................................................................................... 3

1.2 Types of Innovation – How? .................................................................................................................... 4

1.3 Types of Innovation – Why? .................................................................................................................... 7

1.4 What are the challenges .......................................................................................................................... 8

1.5 Innovation strategies ............................................................................................................................... 9

2.0 Technology push innovation strategy ......................................................................................................... 9

2.1 S-shape curve........................................................................................................................................... 9

2.2 Diffusion of an innovation and Dominant Design ................................................................................. 11

2.3 Market dynamics ................................................................................................................................... 12

3.0 Market pull innovation strategy ................................................................................................................ 15

3.1 Users needs analysis .............................................................................................................................. 16

3.2 Methods for users’ needs analysis and user innovation ....................................................................... 16

3.3 Beyond users: Stakeholders needs analysis .......................................................................................... 20

4.0 Innovation of meaning .............................................................................................................................. 21

5.0 Sustainability oriented innovation ............................................................................................................ 24

5.1 The challenge of sustainable development ........................................................................................... 24

5.2 The value of sustainability ..................................................................................................................... 26

5.3 Sustainability oriented innovation ........................................................................................................ 28

5.4 Sustainable vs conventional innovation ................................................................................................ 31

6.0 Creativity.................................................................................................................................................... 32

6.1 Creativity and creative process ............................................................................................................. 32

6.2 Creative teams ....................................................................................................................................... 33

6.3 Creative organizations: Disney Pixar ..................................................................................................... 34

6.4 Creative leaders ..................................................................................................................................... 35

6.5 Techniques to foster creativity .............................................................................................................. 35

7.0 Open and collaborative innovation ........................................................................................................... 38

7.1 The open innovation paradigm ............................................................................................................. 38

7.2 The collaborative innovation framework .............................................................................................. 43

8.0 Two sided platforms .................................................................................................................................. 44

8.1 Internal platforms to enhance NPD ....................................................................................................... 44

8.2 Industrywide platforms ......................................................................................................................... 45

8.3 Platforms as two-sided markets ............................................................................................................ 46

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8.4 Data driven innovation .......................................................................................................................... 49

8.4 Recap ..................................................................................................................................................... 49

1.0 What is leadership? ................................................................................................................................... 50

1.1 Leadership vs management ................................................................................................................... 50

1.2 Leadership functions ............................................................................................................................. 50

1.3 Leadership traits .................................................................................................................................... 51

1.4 The role of the followers ....................................................................................................................... 52

1.5 Leadership behaviours........................................................................................................................... 52

1.6 Leadership in situations ......................................................................................................................... 53

1.7 Transformational leadership vs transactional leadership ..................................................................... 54

1.8 Shared leadership .................................................................................................................................. 56

2.0 Leading self – Whole Brain model ............................................................................................................. 57

3.0 Leading Collaboration ................................................................................................................................ 59

3.1 The perceptual process ......................................................................................................................... 59

3.2 How to give feedback ............................................................................................................................ 60

3.3 How to handle conflict .......................................................................................................................... 61

4.0 Leading Teams ........................................................................................................................................... 63

4.1 What is a team? ..................................................................................................................................... 64

4.2 Group development .............................................................................................................................. 66

4.3 Effective teams ...................................................................................................................................... 68

4.3 Pitfalls of teams ..................................................................................................................................... 69

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1.0 Innovation & innovation strategies

1.1 What is innovation

“An Innovation is the implementation 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.” The Oslo Manual, 2005

Schumpeter (1934): “innovation is the implementation of new combinations”

Freeman (1974):

Invention: “an idea, a sketch or a model for a new or improved device, product, processor system”

Innovation (in the economic sense): “it is accomplished only with the first commercial transaction

involving the new product, process”

From a managerial point of view, we can say innovation is to shift the trade-off among

performances to better fulfil existing needs or to generate new performance dimensions for new

needs

What can be innovated in a company?

• •

Strategic Innovation Organizational Innovation

• •

Product Innovation Market Innovation

• •

Process Innovation …

Innovation for the market is an external challenge

Innovation for the company is an internal challenge

Innovation asset: assets necessary to enter in a new market, to create innovation (e.g. ideas,

technology)

Complementary asset: assets that can be exploited once the innovation is created, that enables

the diffusion of the new solution (e.g. distribution network, advertising, efficient production)

WHAT IS AN INNOVATOR?

Meucci was the inventor of the telephone, Bell was the innovator, he brought the telephone to

the market. He was the real creator of value for the people. Innovation is more than simply

coming up with good ideas; it is the process of growing them into practical use. Inventing means

creating a new technology for something. Innovating means bringing this technology to the

market. Innovation is composed by two parts:

1. idea generation (value creation)

2. conversion of new idea in business opportunity (value appropriation)

Many times, the Innovators are nothing more than very smart Technology Brokers:

Ex. In 1866 Mr. Sholes (a mechanical Engineer form Milwaukee) creates the first TYPEWRITER by

combining existing technologies:

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

• Back movement leverage: from sewing machines

• Keyboard: from telegraphs

• Hammer mechanical movements for printing each letter: from Pianoforte 3

Many times, the Innovators are nothing more than very smart Solution Brokers:

Ex. United Colors Of Benetton and DELL both innovated their business model using the

postponement strategy. The first would colour clothes only after demand was clear, the second

would make you build your computer online by offering different components and then assemble

it to your specks.

The innovator has to be able to replicate the innovation process. A company is defined as

innovative only if they are able to replicate their innovation over long periods of time.

The problem is not creating new ideas, we are overcrowded from ideas. The real problem is to

convert these ideas into concepts and then into practical use.

1.2 Types of Innovation – How?

The first innovation classification is between incremental and radical. Incremental will be an

iteration of the old technology while the radical innovation will be something completely new

which satisfies the same purpose, maybe better.

Incremental innovation is safer since it requires little resources to implement but there is a chance

to become obsolete if another company disrupts the market with a radical product.

Radical innovation is riskier, since it requires more resources, but the potential return on

investment is higher. 4

AMBIDEXTROUS ORGANIZATIONS

Top management controls two sides of the company one dedicated to incremental innovation and

Architectural innovation and daily operations. The other is dedicated to Discontinuous

innovations: radical advances that may significantly alter the basis for competition in an industry.

The structure and culture in the two parts of the organizations are completely different.

Competence destroying discontinuities require new skills, abilities, and knowledge in either

process or product design. The skills needed for the core technology shift, causing power and

structure shifts in organizations. They are usually initiated by new firms.

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

performance that build on existing know-how within a product class". These discontinuities tend

to consolidate industry leadership.

Product Architecture: lays out how the components work together

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 PS2 the shape and number is different, so we have architectural innovation. In the Wii controller we have

component innovation with gyroscopes and accelerometers.

The Service Package: The Service Concept often requires the additional definition of a group of

components (products and services). 5

= + +

VALUE VS PERFORMANCE: KANO’S MODEL

MULTIPLE PERFORMANCES 6

There is a trade-off curve which depends on the functions I’m achieving with my product.

Wrap-up: Typologies of innovation of solutions (the how)

• Incremental vs. Radical

• Competence enhancing vs. Competence destroying

• Architectural vs. Component based

1.3 Types of Innovation – Why?

NEST CASE: from the old thermostat to a smart one which can learn your habits and reduces energy

consumption. First thermostat meant regulating temperatures, now it means energy savings.

ARTEMIDE CASE: new reason for buying a lamp, not for lighting, but for creating atmosphere

We want to create value, but also capture the value. The difference is that created value is potential

→

New solutions value creation

→

Operations Value capturing

We can innovate Operations too using these 3 models:

1. REVENUE MODEL: Product is free, but you have to buy the consumables that go with the product

2. ENTERPRISE MODEL: Ex. Fast Fashion

3. ECOSYSTEM MODEL: Ex. Appstore

Some useful information on available data in Italy on innovation: 7

FIRST MOVER ADVANTAGE

• Profit from temporary monopoly

• Assets:

o Reputation (brand)

o Knowledge (learning economies) and new innovations

o Cost (scale economies)

o Standards and rules of the game

o Positive externalities

o Switching costs

o Access to complementary assets

1.4 What are the challenges

Sustained Innovation is Rare: companies which were once successful and now are small players When

interviewed about their strategy, claimed they were investing in innovation, some substantially more than

competitors. So why did they fail?

The reason is that companies which are successful are very good players in their field and with their set of

rules, but when these rules change their paradigm is broken and they fail. The only mistake was to not be

able to foresee radical change in the market or underestimating it as not a threat. Companies can invest a

lot of money, but if they don’t change their mindset and aren’t flexible enough they will always fail on the

long run.

“Most companies die not because they do the wrong things, but because they keep doing what used to be

the right things for too long.” MikoKosonen, Former CIO Nokia

Radical change is hard to implement for a big company:

• Risk

• Big Investments required

• There are still margins for incremental improvements in existing products

• Competence enhancing versus competence destroying

• The company is successful as is

• Customers aren’t asking for change

• The new innovations are affecting small markets (disruptive innovations)

• No competitor is changing

• “Our niche or our market is protected”

• Cannibalization

• Complementary assets, standard and ecosystem

• “Innovation is impossible, NIH Syndrome” 8

Innovation is created by entrepreneurs and not by large businesses. Today companies are starting to push

their employees to foster entrepreneurial attitudes to be more innovative and flexible.

Nonetheless companies need dynamic capabilities:

• Capability to Reframe their vision(reinterpret)

• Capability to Change (mobilize the organization)

1.5 Innovation strategies

2.0 Technology push innovation strategy

In this framework technology is the key driver of innovation, ideas come from research or technology

discoveries. Whenever a new or improved technology emerges it leads to innovation. The main steps of

technology push innovation are:

1. Basic/Fundamental research

2. Application research

3. Design

4. Engineering

5. Manufacturing

6. Marketing & Sales

2.1 S-shape curve

S-Shape curves represent the evolution of a single parameter of a technology over time.

Hypothesis:

• Limited growth (L)

• 3 Phases

• Constant innovation effort (b) 9

= ∗ ∗ (1 − ) → = −∗

1 + ∗

We use S-shape curves to:

• understand the development stage for a technology to gauge our investment policy

• foresee L

• foresee when a given technology will reach a specific level

• drive the technology switch

The limits of this model come from assuming that b is constant, when = (, , )

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2.2 Diffusion of an innovation and Dominant Design

Innovators

Innovators are willing to take risks, have the highest social status, have financial liquidity, are social and

have closest contact to scientific sources and interaction with other innovators. Their risk tolerance allows

them to adopt technologies that may ultimately fail. Financial resources help absorb these failures.

Early adopters

These individuals have the highest degree of opinion leadership among the adopter categories. Early

adopte