Innovation Dugga

Incentives for Architectural control

Architectural control over the evolution of a technology is always valuable; however, it becomes particularly valuable if a firm is a significant producer of complements to the technology in question.

Design for manufacturing

Often this involves articulating a series of design rules. The purpose of such design rules is typically to reduce costs and boost product quality by ensuring that product designs are easy to manufacture.

Combining Kano and Quality Function Deployment, the following benefits can be gained:

a deeper understanding of customer requirements and problems trade-offs within product development can be managed more effectively competitive analysis is easier (improved market research) less start-up problems control points are clarified (reduced development time, better planning) effective communication between divisions is facilitated design intent is carried through to manufacturing (quality is built in 'upstream')

patent thickets

a dense web of overlapping patents that can make it difficult for firms to compete or innovate

Failure modes and effect analysis

a method by which firms identify potential failures in a system, classify them according to their severity, likelihood and inability of controls to detect it, and put a plan into place to prevent the failures from happening.

personality

having a high need for autonomy, being willing to challenge authority and high self efficiency can facilitate creativity Self efficacy is a person's belief that they can overcome all obstacles to achieve their goals The personality trait most often associated with creativity is "openness to experience."

basic research

effort directed at increasing understanding of a topic or field without a specific immediate commercial application in mind. This research advances scientific knowledge, which may (or may not) turn out to have long-run commercial implications.

Tools for measuring new product development performance

such performance assessments help the company improve the product as well as its innovation, strategy and development processes. multiple measures are important to give an accurate result decide on a finite period to measure depending on the average cycle time for development project etc

Types of Innovation

Different types of innovation require different kinds of underlying knowledge and have different impacts on the industry's competitors and customers. Four of the dimensions most commonly used to categorize are product innovation vs process innovation, radical innovation vs incremental innovation, competence-enhancing innovation vs competence-destroying innovation and architectural innovation vs component innovation Each of the above dimensions shares relationships with others—for example, architectural innovations are often considered more radical and more competence destroying than component innovations. Furthermore, how an innovation is described on a dimension often depends on who is doing the describing and with what it is being compared.

Kano's model of customer satisfaction

Distinguishes three types of products requirements which influence customer satisfaction in different ways when met

Team size in new product development teams

teams may range from a few members to hundreds. Average team size in the US is 11 members, but it may vary. By combining the efforts and expertise of multiple individuals, groups can often outperform individuals on many problem-solving tasks, implying that the size of the development team might be related to its potential for success Large teams can create more administrative costs and communication problems, leading to costly delays. Additionally, the larger the team, the harder it can be to foster a shared sense of identity among team members. Further, as the size of the team increases, the potential for social loafing also increases. Social loafing occurs when, as the size of the team increases, individuals perceive that they will not receive full credit (or blame) for their contribution to the group effort and so their effort and commitment decrease

A Methodology to assess and evaluate customer requirements

1. Identification of product requirements - walk in you customers shoes: for example through interviews, but attractive requirements are usually not expressed. 2. Construction of the Kano questionnaire: For each product feature a pair of questions is formulated to which the customer can answer in five different ways. 3. Administering customer interviews 4. Evaluation and interpretation

Quality Function Development (QDF) - The house of Quality

1. Identify customer requirements. 2. Weigh the customer requirements in terms of their relative importance form a customer's perspective 3. Identify the engineering attributes that drive the performance of the product 4. Enter the correlation between the different engineering attributes to assess the degree to which one characteristic may positively or negatively affect another. 5. Fill in the body of the central matrix. Each cell in the matrix indicates the relationship between an engineering attribute and a customer requirement (one is low, three is medium and nine is high) 6. Multiply the customer importance rating of a feature by its relationship to an engineering attribute. These numbers are then summed for each column, yielding a total for the relative importance of each engineering attribute. 7. Evaluate the competition. A scale of one to seven is used (one indicating a requirement is not addressed, and seven indicating a requirement is completely satisfied) 8. Determine target values for each of the design requirements, using the relative importance ratings and the score for competing products 9. Create a product design based on the design targets from step 8

4 steps of crowdsourcing

1. Need translation: A clear, concise, and compelling need statement is articulated that reduces industry jargon to a minimum, and that brings the challenge down to its most basic science. 2. Connecting: The innovation challenge must be broadcast to the network of potential solution providers that have been selected as most suitable to respond 3. Evaluation/selection: Submitted proposals get an in-depth review, and the most interesting solution proposals get selected and collated in the form of a report 4. Acquisition: The firm engages with the solution provider and negotiates an agreement to transfer knowledge, a license, patent, and so on. This usually involves a monetary or other compensation scheme. It may also be necessary to adapt the incoming solution to the specific needs of the firm.

Overall innovation performance

1. What is the firm's return on innovation? (This measure assesses the ratio of the firm's total profits from new products to its total expenditures, including research and development costs, the costs of retooling and staffing production facilities, and initial commercialization and marketing costs.) 2. What percentage of projects achieve their sales goals? 3. What percentage of revenues are generated by products developed within the past five years? 4. What is the firm's ratio of successful projects to its total project portfolio?

Partly Parallel Development Process

A development process in which some (or all) of the development activities at least partially overlap. Enables a much closer coordination between the different stages and minimizes the chance that R&D will design products that are difficult or costly to manufacture since the different stages begin before the one before has ended. One type of parallel development process, concurrent engineering, involves not only conducting the typical product development stages simultaneously but also takes into account downstream stages of a product's lifecycle such as maintenance and disposal. In some situations, using a parallel development process can substantially increase the risks or costs of the development process. If, for example, variations in product design require significant changes to the process design, beginning process design before product design is finalized can result in costly rework of the production process. Such risks are especially high in markets characterized by rapid change and uncertainty.

Specialists and entering teams at different times

A greater variety of specialists provides a broader knowledge base and increases the cross fertilization of ideas. Having specialists from different areas also allows the project to draw on a wider mix of information sources in the environment through scanning activities Individuals who enter the organization at different times (organizational tenure diversity) are likely to have different contacts outside of the team, enabling the team to draw from a wider mix of resources.

Team composition

A lack of communication among the marketing, R&D, and manufacturing functions of a company can be extremely detrimental to new product development. The lack of cross-functional communication between functions can lead to longer cycle times as a product iterates back and forth between different stages in the process. Cross functional teams fight the problem

patent trolling

A pejorative term for when an individual or firm misuses patents against other individuals or firms in an attempt to extract money from them. For example, a patent troll might buy a patent from a bankrupt firm to sue another company that it claims is infringing on the purchased patent.

Trade secrets

A trade secret is information that belongs to a business that is generally unknown to others. Trade secrets need not meet many of the stringent requirements of patent law, enabling a broader class of assets and activities to be protectable. For example, while the formula for a beverage is not patentable, it can be considered a trade secret Information is typically considered to be a trade secret only if it a) offers a distinctive advantage to the company in the form of economic rents, and b) remains valuable only as long as the information remains private. Trade secret law protects such information from being wrongfully taken by another party.

Research and development by firms

Across all nations, one of the most obvious sources of firm innovation is the firm's own research and development efforts. In most developed countries, firms account for the majority of R&D performed.

Radical innovation

An innovation that is very new and different from prior solutions. Thus, radicalness might be conceived as the combination of newness and the degree of differentness. For example the introduction of wireless telecommunication products. The radicalness of innovation is also sometimes defined in terms of risk. Since radical innovations often embody new knowledge, producers and customers will vary in their experience and familiarity with the innovation, and in their judgment of its usefulness or reliability.

incremental innovation

An innovation that makes a relatively minor change from (or adjustment to) existing practices. For example, changing the screen of a cell phone to make it more crack resistant or offering a new service plan with better international texting rates would represent incremental innovation. An innovation that was once considered radical may eventually be considered incremental as the knowledge base underlying the innovation becomes more common

the inventor

Analysis of personality traits of inventors suggests these individuals are likely to be interested in theoretical and abstract thinking, and have an unusual enthusiasm for problem solving. They have mastered the basic tools and operations of the field in which they invent, but they have not specialized solely in that field; instead they have pursued two or three fields simultaneously, permitting them to bring different perspectives to each. They are curious and more interested in problems than solutions. They question the assumptions made in previous work in the field. They often have the sense that all knowledge is unified. They seek global solutions rather than local solutions, and are generalists by nature

Universities, Government-funded research and Nonprofit Organizations

Another important source of innovation comes from public research institutions such as universities, government laboratories, and incubators. To increase the degree to which university research leads to commercial innovation, many universities have established technology transfer offices, meaning offices designed to facilitate the transfer of technology developed in a research environment to an environment where it can be commercially applied. Universities also contribute significantly to innovation through the publication of research results that are incorporated into the development efforts of other organizations and individuals. Governments of many countries actively invest in research through their own laboratories, the formation of science parks and incubators, and grants for other public or private research entities. Many nonprofit organizations perform their own research and development activities, some fund the research and development activities of other organizations but do not do it themselves, and some nonprofit organizations do both in-house research and development and fund the development efforts of others

exciting or attractive requirements

Are the product criteria which have the greatest influence on how satisfied a customer will be with a given product. Not explicitly demanded or expected. Lead to more than proportional satisfaction. If they are not met, there is no feeling of dissatisfaction

stage-gate process

At each stage, a cross-functional team of people (led by a project team leader) undertakes parallel activities designed to drive down the risk of a development project. At each stage of the process, the team is required to gather vital technical, market, and financial information to use in the decision to move the project forward (go), abandon the project (kill), hold, or recycle the project. Preceding each stage is a go/kill gate. These gates are designed to control the quality of the project and to ensure that the project is being executed in an effective and efficient manner.

Advantages of Protection

Because proprietary systems offer greater rent appropriability, their developers often have more money and incentive to invest in technological development, promotion, and distribution. If a single firm is the primary beneficiary of its technology's success, it has much greater incentive to invest in further developing the technology. The profits from the technology may be directly reinvested in further improvements in the technology Protecting the technology also gives the developing firm architectural control over the technology, which refers to the firm's ability to determine the structure and operation of the technology, and its compatibility with other goods and services. It also refers to the firm's ability to direct the future development path of the technology. Architectural control can be very valuable, especially for technologies in which compatibility with other goods and services is important. If the technology is chosen as a dominant design, the firm with architectural control over the technology can have great influence over the entire industry. Through selective compatibility, it can influence which other firms do well.

strategic roadmap lanes

Business / market drivers Products, services opportunities Technologies Capabilitites

Innovation in Collaborative Networks

Collaborations include (but are not limited to) joint ventures, licensing and second-sourcing agreements, research associations, government-sponsored joint research programs, value-added networks for technical and scientific interchange, and informal networks Collaborative research is especially important in high-technology sectors, where it is unlikely that a single individual or organization will possess all of the resources and capabilities necessary to develop and implement a significant innovation By providing member firms access to a wider range of information (and other resources) than individual firms possess, interfirm networks can enable firms to achieve much more than they could achieve individually. Thus, interfirm networks are an important engine of innovation. The structure of the network is likely to influence the flow of information and other resources through the network.

Copyright treaties

Copyright protection varies from country to country. However, most countries do offer copyright protection to both domestic and foreign works, and there are international copyright treaties for simplifying the process of securing such protection. One of the most significant is the Berne Union for the Protection of Literary and Artistic Property (known as the Berne Convention).

External vs Internal Sourcing of Innovation

Critics have often charged that firms are using external sources of technological innovation rather than investing in original research. But empirical evidence suggests that external sources of information are more likely to be complements to rather than substitutes for in-house research and development. Presumably doing in-house R&D helps to build the firm's absorptive capacity, enabling it to better assimilate and utilize information obtained externally

Involving customers

Customers may be involved in the new product development process as an information source, or as actual co-developers of a new product. Many firms use beta testing to get customer input early in the development process. A beta version of a product is an early working prototype of a product released to users for testing and feedback. Some studies suggest that firms should focus on the input of lead users in their development efforts rather than a large sample of customers. Lead users are those who face the same needs of the general marketplace but face them months or years earlier than the bulk of the market, and expect to benefit significantly from a solution to those needs.

Minimizing development cycle time

Even products that achieve a very close fit with customer requirements can fail if they take too long to bring to market. Bringing a product to market early can help a firm build brand loyalty, preemptively capture scarce assets, and build customer switching costs. A firm that brings a new product to market late may find that customers are already committed to other products. Also, a company that is able to bring its product to market early has more time to develop (or encourage others to develop) complementary goods that enhance the value and attractiveness of the product. Another important consideration regarding development cycle time relates to the cost of development and the decreasing length of product life cycles. First, many development costs are directly related to time. Second, a company that is slow to market with a particular generation of technology is unlikely to be able to fully amortize the fixed costs of development before that generation becomes obsolete. This phenomenon is particularly vivid in dynamic industries such as electronics where life cycles can be as short as 12 months

Why brainstorming kills breakthrough ideas

Fear of judgement, production blocking (forget the ideas after other people have said theirs and Feasibility trump's originality: groups chooses ideas that are less original

Crowdsourcing

Firms can also open up an innovation task by directing an innovation challenge to third parties such as the general public, or specific, targeted groups of innovators from different networks. Sometimes firms work with third parties directly, and other times they use a professional crowdsourcing service provider with their own network of innovators

Firm Linkages with Customers, Suppliers, Competitors, and Complementors

Firms often form alliances with customers, suppliers, complementors, and even competitors to jointly work on an innovation project or to exchange information and other resources in pursuit of innovation. Collaboration might occur in the form of alliances, participation in research consortia, licensing arrangements, contract research and development, joint ventures, and other arrangements. The most frequent collaborations are between firms and their customers, suppliers, and local universities Firms may also collaborate with competitors and complementors -Organizations (or individuals) that produce complementary goods, such as lightbulbs for lamps, chargers for electric vehicles, or applications for smartphones. In some industries, firms produce a range of goods and the line between competitor and complementor can blur.

Project Champions

Firms should assign a senior member of the company to champion a new product development project. Senior executives have the power and authority to support and fight for a project and improve communication and allocation of people Has risks such as a manager's role as champion may cloud judgment about the true value of the project and make it hard to kill the project. Firms may benefit from developing anti champions who play the role of the devil's advocate

Limitations of S-Curve Model as a Prescriptive tool

First, it is rare that the true limits of a technology are known in advance, and there is often considerable disagreement among firms about what a technology's limits will be. Second, the shape of a technology's s-curve is not set in stone and firms can influence the shape of the s-curve through their development activities. For example, firms can sometimes stretch the s-curve through implementing new development approaches or revamping the architecture design of the technology Finally, whether switching to a new technology will benefit a firm depends on a number of factors, including the advantages offered by the new technology, the new technology's fit with the firm's current abilities (and thus the amount of effort that would be required to switch, and the time it would take to develop new competencies), the new technology's fit with the firm's position in complementary resources (e.g., a firm may lack key complementary resources, or may earn a significant portion of its revenues from selling products compatible with the incumbent technology), and the expected rate of diffusion of the new technology. Thus, a firm that follows an s-curve model too closely could end up switching technologies earlier or later than it should.

Downsides to geographical clustering

First, the proximity of many competitors serving a local market can lead to competition that reduces their pricing power in their relationships with both buyers and suppliers. Second, close proximity of firms may increase the likelihood of a firm's competitors gaining access to the firm's proprietary knowledge. Third, clustering can potentially lead to traffic congestion, inordinately high housing costs, and higher concentrations of pollution

Maximizing fit with customer requirements

For a new product to be successful in the marketplace, it must offer more compelling features, greater quality, or more attractive pricing than competing products. Obvious, but many fail when... ...the firm may not have a clear sense of which features customers value the most, resulting in the firm's overinvesting in some features at the expense of features the customer values more Firms may also overestimate the customer's willingness to pay for particular features, leading them to produce feature-packed products that are too expensive to gain significant market penetration. Firms may also have difficulty resolving heterogeneity in customer demands; if some customer groups desire different features from other groups, the firm may end up producing a product that makes compromises between these conflicting demands, and the resulting product may fail to be attractive to any of the customer groups.

Control over Fragmentation

For technologies in which standardization and compatibility are important, maintaining the integrity of the core product is absolutely essential, and external development can put it at risk. This suggests that the developer of any technology that requires standardization and compatibility should retain some degree of control over the technology, or find/establish another governing body with the authority to do so

The structure of new product development teams

Functional teams, lightweight reams, heavyweight temas and autonomous teams

Protection vs Diffusion

Given the range of advantages (and risks) of protecting versus diffusing a technology, a firm must carefully consider the following factors in deciding whether, and to what degree, it should protect its innovation: Production Capabilities, Marketing Capabilities, and Capital, Industry Opposition against Sole-Source Technology, Resources for Internal Development, Control over Fragmentation & Incentives for Architectural control

wholly open systems

Goods based on technology that is not protected and that is freely available for production or augmentation by other producers. Such technologies are usually quickly commoditized and provide little appropriability of rents to their developers Many technologies are neither wholly proprietary nor wholly open—they are partially open, utilizing varying degrees of control mechanisms to protect their technologies. Many technologies that were once wholly proprietary or partially open become wholly open once their patents or copyrights expire

wholly proprietary systems

Goods based on technology that is owned and vigorously protected through patents, copyrights, secrecy, or other mechanisms. Wholly proprietary technologies may be legally produced and augmented only by their developers. Proprietary systems typically provide their developers with the opportunity to appropriate rents from the technology. However, they might also be less likely to be adopted readily by customers as a result of their higher costs and the inability to mix and match components.

Resources for Internal Development

If a firm does not have significant resources (capital, technological expertise) to invest in the technology's functionality, it may have difficulty producing a technology that has an initial performance level, and rate of improvement, that the market finds attractive. In such instances, it can be valuable to tap the external development efforts of other firms (or individuals) through utilizing a more open technology strategy

Production Capabilities, Marketing Capabilities, and Capital

If a firm lacks the production capability or expertise to produce a sufficient range of complementary goods, or the capital to acquire such capabilities quickly, it should encourage collective production of complements through a more open technology strategy and utilize forms of sponsorship

Industry Opposition against Sole-Source Technology

If the industry is able to pose significant opposition, the firm may need to consider a more open technology strategy to improve the technology's likelihood of being chosen as a dominant design.

The Agile Development Process - described in detail

In agile development, a manager deemed the product owner (a person at the organization who represents the customer's interests) assembles a complete list of functions to be developed for the product based on user stories—short descriptions of functions described by customers in their own words. This list is called the product backlog. Work on the product backlog is organized into a series of sprints, periods of roughly two weeks in which a small set of features from the product backlog are developed and tested. Work is conducted by scrum teams, small, self-organizing teams with no titles or team manager. There is no formal task assignment; each member just contributes in whatever way they can to complete the work and the team makes decisions as a whole. Sometimes agile development projects also have a scrum master who acts as a coach for multiple scrum teams. The scrum master does not provide day-to-day direction or impose any particular technical solution; rather, the scrum master's job is to help guide the scrum process itself. The teams figure out what items they can commit to and create a sprint backlog—a list of tasks they will complete during the sprint. Each day of the sprint, all the team members and the product owner attend a quick scrum meeting of 15 minutes max where they share what they worked on the previous day, what they will work on that day, and any obstacles to their progress. During the sprint, the scrum team takes a small set of features from idea through coding and testing. At the end of each sprint, there should be work that can be demonstrated to a client—a minimum viable product. Feedback early and often, helping the scrum teams weed out or refine their ideas. A burndown chart shows the amount of work remaining in a sprint or a product release, and is used to determine whether a sprint or release is on schedule. "Release early, release often". In agile development, rather than having grand comprehensive product redesigns, the product is constantly, incrementally adapted. Introducing small changes one or a few at a time helps to reduce risk, and also improves transparency about what works and what does not work.

Autonomous teams

In autonomous teams, members are removed from their functional departments and dedicated full-time (and often permanently) to the development team. Team members are collocated with the project manager, who is a very senior person in the organization. The project manager is given full control over resources contributed from different functional departments, and the project manager has exclusive authority over the evaluation and reward of team members. Autonomous teams often do not conform to the operating procedures of the rest of the organization; instead they are permitted to create their own policies, procedures, and reward systems. Autonomous teams are also held fully accountable for the success of the project; in many ways, autonomous teams act like independent divisions of the firm. Autonomous teams typically excel at rapid and efficient new product development, particularly when such development requires breaking away from the organization's existing technologies and routines. Thus, autonomous teams are typically considered to be appropriate for breakthrough projects and some major platform projects. They can be the birthplace of new business units. However, the independence of the autonomous teams can cause them to underutilize the resources of the parent organization. Autonomous teams are often hard to fold back into the organization if the project is completed or terminated. Many autonomous teams thus go on to become separate divisions of the firm, or may even be spun off of the firm as a subsidiary

diffusion of technologies

In industries characterized by increasing returns, firms sometimes choose to liberally diffuse their technologies to increase their likelihood of rising to the position of dominant design. This enviable position can be so lucrative that firms may be willing to lose money in the short term to improve their technology's chance of rising to the position of dominant design. Thus, firms may liberally diffuse their technologies (through, e.g., open source software or liberal licensing arrangements) to accelerate the technology's proliferation and thereby jump-start the self-reinforcing feedback effect that can lead to the technology's dominance

what cannot be patened

In most countries, the discovery of scientific principles that pertain to natural laws (e.g., gravity) cannot be patented because they are considered to have always existed. Additionally, the following are not typically patentable: Substituting one material for another (e.g., plastic for metal) Merely changing the size of an already existing device Making something more portable Substituting an element for an equivalent element Altering an item's shape. There is currently no "world patent," and a patent granted in one country does not automatically provide protection in other countries.

Creativity

Innovation begins with the generation of new ideas. The ability to generate new and useful ideas is termed creativity. Creativity is defined as the ability to produce work that is useful and novel.

Innovation by users

Innovation often originates with those who create solutions for their own needs. Users often have both a deep understanding of their unmet needs and the incentive to find ways to fulfill them. Usually no initial intention of profit.

Patents Strategies

It is typical to assume that an inventor seeks a patent because they desire to make and sell the invention themselves. However, inventors and firms may monetize patents in a range of different ways, including licensing the technology to others or selling the patent rights to another firm that can better utilize the technology A study by Stuart Graham and Deepak Hegde found that the vast majority of patentees prefer to disclose their patent applications before they are granted. Both large and small inventors, across all major technology fields exhibited this preference for early disclosure, presumably because it allows them to publicize their invention's quality and scope to competitors, external investors, and potential licensees. Disclosure via patent application also establishes the date from which patentees can enjoy provisional patent rights

Kichuk and Willi Wiesner

Kichuk and Willi Wiesner explored whether five personality factors (conscientiousness, extroversion, neuroticism, agreeableness, and openness to experience) influenced the likelihood of success in new product development teams. Kichuk and Wiesner found that the personality characteristics that enhanced the success of a new product development team were high extroversion, high agreeableness, and low neuroticism

Copyright

Like trademarks, the rights of copyright protection are established by legitimate use of the work. This protection is available whether or not the work is published and prevents others from producing or distributing that work. There are, however, limitations to these rights. In particular, in the United States, the doctrine of fair use stipulates that in most circumstances it is not a violation of copyright for others to use copyrighted material for purposes such as criticism, comment, news reporting, teaching, scholarship, or research some types of work cannot be protected by copyright. For example, work that has not been fixed in a tangible form of expression is not eligible for copyright protection. Titles, names, short phrases, slogans, familiar symbols, and lists of ingredients also cannot be copyrighted Unlike patent protection, copyright protection is secured automatically when an eligible work is created and fixed in a copy or phonorecord for the first time. No publication or registration with the Copyright Office is necessary to establish this copyright, though registering the copyright is advantageous in that it establishes a public record of the copyright claim and is required before filing an infringement suit in court

Patent treaties

Many inventors wish to patent their inventions in many countries simultaneously. To make that easier, several international treaties have been negotiated between countries that seek to harmonize the patent laws around the world. Two of the most significant are the Paris Convention for the Protection of Industrial Property and the Patent Cooperation Treaty.

Technology S-curves

Many technologies exhibit an S-curve in their performance improvement over their lifetimes. When a technology's performance is plotted against the amount of effort and money invested in the technology, it typically shows slow initial improvement, then accelerated improvement, then diminishing improvement. Performance improvement in the early stages of a technology is slow because the fundamentals of the technology are poorly understood As scientists or firms gain a deeper understanding of the technology, improvement begins to accelerate. The technology begins to gain legitimacy as a worthwhile endeavor, attracting other developers. At some point, diminishing returns to effort begin to set in. As the technology begins to reach its inherent limits, the cost of each marginal improvement increases, and the s-curve flattens Technologies do not always get the opportunity to reach their limits; they may be rendered obsolete by new, discontinuous technologies. A new innovation is discontinuous when it fulfills a similar market need, but does so by building on an entirely new knowledge base.

Objectives of the new product development process - must achieve 3 goals

Maximizing fit with customer requirements, minimizing development cycle time & controlling development costs

Involving suppliers

Much of the same logic behind involving customers in the new product development process also applies to involving suppliers. By tapping into the knowledge base of its suppliers, a firm expands its information resources

Sources of innovation

Networks of innovators that leverage knowledge and other resources from multiple sources are one of the most powerful agents of technological advance We can thus think of sources of innovation as composing a complex system wherein any particular innovation may emerge primarily from one or more components of the system or the linkages between them

contract book

Once the team charter is established, core team members and senior managers must negotiate a contract book, which defines in detail the basic plan to achieve the goal laid out in the project charter. Typically, the contract book will estimate the resources required, the development time schedule, and the results that will be achieved. The contract book provides a tool for monitoring and evaluating the team's performance in meeting objectives by providing a set of performance benchmarks and deadlines to which the team's performance can be compared. More important, however, the contract book is an important mechanism for establishing team commitment to the project and a sense of ownership over the project. Team members who sign the contract book typically feel a greater sense of duty to work toward the project's goals. Signing the contract book can give team members a sense of ownership over the project and empowerment to make decisions about the project. This ownership and empowerment can help team members identify with a project's outcome and can encourage them to exert extra effort to ensure its success.

Process innovations

Process innovations are innovations in the way an organization conducts its business, such as in the techniques of producing or marketing goods or services. For example, Elon Musk's use of automation for most of the production process for the Model 3 with giant robots is a process innovation. Process innovations are often oriented toward improving the effectiveness or efficiency of production by, for example, reducing defect rates or increasing the quantity that may be produced in a given time

Controlling development costs

Sometimes a firm engages in an intense effort to develop a product that exceeds customer expectations and brings it to market early, only to find that its development costs have ballooned so much that it is impossible to recoup the development expenses even if the product is enthusiastically received by the market. This highlights the fact that development efforts must be not only effective, but also efficient.

strategic roadmap

Roadmapping is a strategic exercise typically conducted by the management team, in considering existing and potential markets (one roadmap per market). A timescale of 10-20 years is considered and predictions will be less accurate the further in the future they are. For this reason, the roadmap will be updated regularly. There are different forms of roadmap but four swim lanes and 10-20 years is typical.

Customer satisfaction as a source of competitive advantage

Shift in strategic thinking form market share strategy to customer satisfaction. Leads to customer loyalty → steady stream of future cash flows and reduced costs Costs five or six times more to acquire a new customer than to keep one.

Technology Clusters

Sometimes geographical proximity appears to play a role in the formation and innovative activity of collaborative networks. Well-known regional clusters such as Silicon Valley's semiconductor firms, lower Manhattan's multimedia cluster, and the Modena, Italy, knitwear district aptly illustrate this point. This has spurred considerable interest in the factors that lead to the emergence of a cluster Clusters often encompass an array of industries that are linked through relationships between suppliers, buyers, and producers of complements.

Tools for developing the new product development process

Stage-gate process: escalating commitment can lead managers to support projects when they shouldn't. To help avoid this, many managers and researchers suggest implementing tough go/kill decision points in the product development process. The most widely known development model incorporating such go/kill points is the stage-gate process developed by Robert G. Cooper. Quality function development (QFD) - the house of quality: was developed in Japan as a comprehensive process for improving the communication and coordination among engineering, marketing, and manufacturing personnel. It achieves this by taking managers through a problem-solving process in a very structured fashion. The house of quality makes the relationship between product attributes and customer requirements very clear, it focuses on design trade-offs, it highlights the competitive shortcomings of the company's existing products, and it helps identify what steps need to be taken to improve them. The house of quality is a matrix that maps customer requirements against product attributes. Design for manufacturing, failure modes and effect analysis & computer aided design/ computer aided engineering/ computer aided manufacturing

Diversity in teams

Teams that are composed of people from diverse backgrounds have several advantages over teams that are drawn from only one or a few functional areas. Teams that incorporate cultural diversity should show better problem solving by incorporating multiple viewpoints, and teams composed of members who are diverse in terms of education, gender, or age can help ensure a variety of viewpoints are considered and external resources are tapped. Studies have demonstrated that demographic diversity in teams can increase innovative outcomes and overall performance. Diversity of team members, however, can also raise coordination and communication costs. Individuals tend to interact more frequently and more intensely with other individuals whom they perceive as being similar to them on one or more dimensions. This phenomenon is known as homophily. Research on homophily suggests that individuals prefer to communicate with others they perceive as similar to them because it is easier and more comfortable to communicate with those who have similar dialects, mental models, and belief systems When individuals perceive others as being very different from them, they may be less willing to interact frequently or intensely, and it may be more difficult for them to develop a shared understanding. Heterogeneous teams often have greater difficulty integrating objectives and views, leading to conflict and lower group cohesion Research has also indicated, however, that the communication and coordination differences between heterogeneous or homogeneous teams diminish if the groups maintain long-term contact. Presumably, through extensive interaction, heterogeneous teams learn to manage their group processes better

Cross-functional teams

Teams whose members are drawn from multiple functional areas in the firm such as R&D, marketing, manufacturing, distribution, and so on.

agglomeration economies

The benefits firms reap by locating in close geographical proximity to each other are known collectively as agglomeration economies, such as people moving there to work. One primary reason for the emergence of regional clusters is the benefit of proximity in knowledge exchange Proximity and interaction can directly influence firms' ability and willingness to exchange knowledge. First, knowledge that is complex or tacit may require frequent and close interaction to be meaningfully exchanged. Second, closeness and frequency of interaction can influence a firm's willingness to exchange knowledge. When firms interact frequently, they can develop trust and reciprocity norms.

Organizational creativity

The creativity of the organization is a function of creativity of the individuals within the organization and a variety of social processes and contextual factors that shape the way those individuals interact and behave An organization's overall creativity level is thus not a simple aggregate of the creativity of the individuals it employs. The organization's structure, routines, and incentives could thwart individual creativity or amplify it. The most familiar method of a company tapping the creativity of its individual employees is the suggestion box

creative destruction

The emergence of a new technological discontinuity can overturn the existing competitive structure of an industry, creating new leaders and new losers. Schumpeter called this process creative destruction, and argued that it was the key driver of progress in a capitalist society

The Effectiveness and Use of Protection Mechanism

The methods used to protect innovation—and their effectiveness—vary significantly both within and across industries In some industries, such as pharmaceuticals, legal protection mechanisms such as patents are very effective. In other industries, such as electronics, patents and copyright provide relatively little protection because other firms can often invent around the patent without infringing on it If patents provide little protection, the firm may rely more heavily on trade secrets; however, the ability to protect trade secrets also varies with the nature of the technology and the industry context

Advantages of Diffusion

The primary argument for diffusing a technology instead of protecting it is that open technologies may accrue more rapid adoptions A liberal diffusion strategy can stimulate the growth of the installed base and availability of complementary goods External innovators - but there's a risk of excessiveness because of lack of communication

Technology Cycles

The s-curve model suggests that technological change is cyclical: Each new s-curve ushers in an initial period of turbulence, followed by rapid improvement, then diminishing returns, and ultimately is displaced by a new technological discontinuity.

The Management of New Product Development Teams: Team Leadership

The team leader is responsible for directing the team's activities, maintaining the team's alignment with project goals, and serving as a communicator between the team and senior management. In heavyweight and autonomous teams, the team leader may also be the person who is primarily responsible for the evaluation, compensation, and promotion of individual team members. Effective team leaders are often much more directly related to the team's success than senior management or project champions. This may be because team leaders interact much more frequently with the team and more directly influence the team's behavior. Different types of teams have different leadership needs. For instance, while lightweight teams might have a junior or middle-management leader who provides basic coordination between the functional groups, heavyweight and autonomous teams require senior managers with significant experience and organizational influence. In heavyweight and autonomous teams, the project manager must be someone who can lead and evaluate the team members, champion the development project both within the team and to the wider organization, and act as a translator between the various functions. In particular, project managers in heavyweight and autonomous teams must have high status within the organization, act as a concept champion for the team within the organization, be good at conflict resolution, have multilingual skills (i.e., they must be able to talk the language of marketing, engineering, and manufacturing), and be able to exert influence upon the engineering, manufacturing, and marketing functions. teams whose project managers are deficient in one or more of these dimensions will have a lower probability of success.

Computer-aided design/computer aided engineering / computer aided manufacturing

The use of computers to build and test product designs. CAD enables the creation of a 3 dimensional model and CAE virtually tests the characteristics. Eliminating the need to build physical prototypes can reduce cycle time and lower costs. CAM is the implementation of machine controlled processes in manufacturing. More flexible than traditional manufacturing.

Technology trajectory

This path may refer to its rate of performance improvement, its rate of diffusion, or other change of interest.

Trademark treaties

To eliminate the need to register separately in each country (or region), the World Intellectual Property Organization administers a System of International Registration of Marks governed by two treaties: the Madrid Agreement Concerning the International Registration of Marks and the Madrid Protocol.

The Management of New Product Development Teams: Team administration

To ensure that members have a clear focus and commitment to the development project, many organizations now have heavyweight and autonomous teams develop a project charter and contract book.

Trademarks and Service Marks

Trademark rights may be used to prevent others from using a mark that is similar enough to be confusing, but they may not be used to prevent others from producing or selling the same goods or services under a clearly different mark. Most are visuals, but can include all 5 senses. Unlike patents and copyrights, trademark protection can last as long as the trademark is in use, but the registration requires periodic renewal. Nearly all countries offer some form of trademark registration and protection.

Protecting intellectual property

While patents, copyrights, and trademarks are all ways of protecting intellectual property, they are each designed to protect different things The purpose of intellectual property protection is to provide recognition and incentive for creative work

Development

activities that apply knowledge to produce useful devices, materials, or processes.

environment

an environment that lets people be individualistic, is risk tolerant and empowers people to have dissenting views can empower creativity

Product innovations

are embodied in the outputs of an organization—its goods or services, even if those products are services. For example, Snapchat's filters and special effects that enable users to augment their photos are product innovations.

basic or "Must be" requirements

basic criteria of a product. If they are not fulfilled, the customer will be extremely dissatisfied. As the customer takes these requirements for granted, their fulfillment will not increase her satisfaction → will only lead to a stage of "not dissatisfied" For example punctuality with British Rail. Not explicitly demanded since it is taken for granted

Competence-enhancing innovation

builds on existing knowledge and skills. Whether an innovation is competence enhancing or competence destroying depends on whose perspective is being taken. An innovation can be competence enhancing to one firm, while competence destroying for another.

knowledge

can be somewhat double edged: having a lot of knowledge in an area can make you more familiar with potential solutions, and more skilled at selecting among them. But too much knowledge in an area can also sometimes trap you in assumptions and paradigms that prevent you from generating more novel solutions. Might be the reasons that breakthrough innovation often comes from outsiders

performance or One-dimensional requirement

customer satisfaction is proportional to the level of the fulfillment of these requirements - the higher the fulfillment, the higher the satisfaction. Usually explicitly demanded by the customer. For example battery life

Three components of the gates

deliverables (these are the results of the previous stage and are the inputs for the gate review), criteria (these are the questions or metrics used to make the go/kill decision), and outputs (these are the results of the gate review process and may include a decision such as go, kill, hold, or recycle; outputs should also include an action plan for the dates and deliverables of the next gate).

Applied research

directed at increasing understanding of a topic to meet a specific need. In industry, this research typically has specific commercial objectives

The sequential process

each step must be completed before the next step is started. Includes a number of gates at which managers would decide whether to proceed to the next stage, send the project back to a previous stage for revision, or kill the project According to critics, one problem with such a system emerges at the product design stage when R&D engineers fail to communicate directly with manufacturing engineers. A sequential process has no early warning system to indicate that planned features are not manufacturable. Consequently, cycle time can lengthen.

The Management of New Product Development Teams: Managing virtual teams

enables individuals with unique skills to work on a project, regardless of their location. By meeting virtually, individuals who live at great distances can collaborate without incurring travel costs or disruption to their lives. This is especially valuable for a company whose operations are highly global. Much of the work on the structure of new product development teams has emphasized the importance of collocation. Collocation facilitates communication and collaboration by giving team members opportunities for rich face-to-face communication and informal interaction. Proximity and frequent interaction help teams to develop shared norms and a dialect for communicating about the project. Virtual teams don't have this, which makes it more challenging. In the forming of virtual teams, it is important to select personnel who are both comfortable with the technologies being used to facilitate collaboration and who have strong interpersonal skills. Team members must be able to work independently and have a strong work ethic. Since distance makes it easy for team members to deflect opportunities for interaction, it is important to choose individuals who tend to seek interaction rather than avoid it. It is important that members of the team establish standards for how quickly they will respond to messages etc. Because many of the opportunities for informal interaction may be lost in a virtual environment, more types of interaction may have to be incorporated into the ground rules of the team. Virtual teams also face challenges in developing trust, resolving conflict, and exchanging tacit knowledge, as discussed in the accompanying Research Brief about virtual international R&D teams.

project charter

encapsulates the project's mission and articulates exact and measurable goals for the project. It might include a vision statement for the project and a background statement for why this project is important for the organization. The charter may describe who is on the team, the length of time members will spend on the team, and the percentage of their time that will be spent on team activities. It may also stipulate the team's budget, its reporting timeline, and the key success criteria of the project (e.g., meeting a particular time-to-market goal, exceeding customer satisfaction criteria established for the project, capturing a target amount of market share within a defined period of time, etc.). Establishing an explicit set of goals for the project helps ensure that the team members have a common understanding of the project's overall purpose and priorities. Goals also help to structure the new product development process and can facilitate cooperation by keeping team members oriented toward a common outcome.

Component Innovation

entails changes to one or more components, but does not significantly affect the overall configuration of the system. For example an innovation in bicycle seat technology (such as the incorporation of gel-filled material for additional cushioning) does not require any changes in the rest of the bicycle architecture.

Architectural Innovation

entails changing the overall design of the system or the way that components interact with each other. An innovation that is strictly architectural may reconfigure the way that cterm-31omponents link together in the system, without changing the components themselves. Most architectural innovations, however, create changes in the system that reverberate throughout its design, requiring changes in the underlying components in addition to changes in the ways those components interact.

S-Curves in technology diffusion

s-curves in technology diffusion are obtained by plotting the cumulative number of adopters of the technology against time. This yields an s-shape curve because adoption is initially slow when an unfamiliar technology is introduced to the market; it accelerates as the technology becomes better understood and utilized by the mass market, and eventually the market is saturated so the rate of new adoptions declines One rather curious feature of technology diffusion is that it typically takes far more time than information diffusion

Cons with technology diffusion

firms often face a dilemma: If it liberally diffuses the technology to would-be competitors, it relinquishes the opportunity to capture monopoly rents when and if the technology emerges as a dominant design. Furthermore, once control of a technology is relinquished, it can be very hard to regain; thus, such diffusion may result in the firm losing all hope of controlling the technology. Finally, liberal diffusion of the technology can result in the fragmentation of the technology platform: As different producers add improvements to the technology that make it better fit their needs, the "standard" may be split into many non standardized versions To resolve these trade-offs, firms often adopt a strategy of partial protection for their innovations, falling somewhere on the continuum between wholly proprietary systems and wholly open systems.

Anderson and Tushman

found that each technological discontinuity inaugurated a period of turbulence and uncertainty (which they termed the era of ferment). While the new technology displaces the old (Anderson and Tushman refer to this as substitution), there is considerable design competition as firms experiment with different forms of the technology. Just as in the Utterback and Abernathy model, Anderson and Tushman found that a dominant design always arose to command the majority of the market share unless the next discontinuity arrived too soon and disrupted the cycle, or several producers patented their own proprietary technologies and refused to license to each other. The rise of a dominant design signals the transition from the era of ferment to the era of incremental change. In this era, firms focus on efficiency and market penetration. Firms may attempt to achieve greater market segmentation by offering different models and price points. They may also attempt to lower production costs by simplifying the design or improving the production process. This period of accumulating small improvements may account for the bulk of the technological progress in an industry, and it continues until the next technological discontinuity.

An individual's creative ability is thought to be a function of their

intellectual abilities, knowledge, personality, motivation and environment

Key intellectual abilities for creativity include

intelligence, memory, ability to look at problems in unconventional ways & ability to articulate ideas to others One important intellectual ability for creativity is a person's ability to let their mind engage in a visual mental activity termed primary process thinking. Because of its unstructured nature, primary process thinking can result in combining ideas that are not typically related, leading to what has been termed remote associations or divergent thinking

Motiviation

intrinsic motivation is very important for creativity, i.e individuals are more likely to be creative if they work on things they are genuinely interested in and enjoy extrinsic motivation like rewards and money can undermine creativity

Heavyweight teams

members are removed from their functional departments so that they may be collocated with the project manager. Project managers are typically senior managers who outrank functional managers, and have significant authority to command resources, and evaluate and reward team members. The core group of team members is often dedicated full-time to the project. This combination of factors helps ensure that the team has strong cross-functional coordination and communication, and that team members are significantly committed to the development project. However, heavyweight teams are still often temporary; thus, the long-term career development of individual members continues to rest with their functional managers rather than the project manager. This type of team structure offers a significant improvement in communication and coordination over functional teams, and it is typically considered appropriate for platform projects.

functional teams

members remain in their functional departments (e.g., R&D, marketing, manufacturing, etc.), and report to their regular functional manager, however, they may meet periodically to discuss the project. Such teams are usually temporary, and individuals may spend less than 10 percent of their time working on team-related activities. typically do not have a project manager straightforward to implement because it requires little deviation from the normal operations provides little opportunity for cross-functional coordination Since individuals are still evaluated and rewarded almost exclusively based on their functional performance, the team members may have little commitment to the development project. More appropriate for derivative projects that affect a single function of the firm

Lightweight teams

members still reside in their functional departments, and functional supervisors retain authority over evaluation and rewards Like functional teams, lightweight teams are typically temporary, and members spend the majority of their time on their normal functional responsibilities (up to 25 percent of their time might be spent on team-related activities). However, lightweight teams have a project manager and dedicated liaison personnel who facilitate communication and coordination among functions. Managers are normally junior or middle management employees, who are not able to exert significant influence or authority over team members. As a result of these factors, lightweight teams offer a small improvement in team coordination and likelihood of success over functional teams. Such a team structure might be appropriate for derivative projects where high levels of coordination and communication are not required.

Utterback and Abernathy

observed that a technology passed through distinct phases: In the first phase (what they termed the fluid phase), there was considerable uncertainty about both the technology and its market. Products or services based on the technology might be crude, unreliable, or expensive, but might suit the needs of some market niches. In this phase, firms experiment with different form factors or product features to assess the market response. Eventually, however, producers and customers begin to arrive at some consensus about the desired product attributes, and a dominant design emerges. The dominant design establishes a stable architecture for the technology and enables firms to focus their efforts on process innovations that make production of the design more effective and efficient or on incremental innovations to improve components within the architecture. Utterback and Abernathy termed this phase the specific phase because innovations in products, materials, and manufacturing processes are all specific to the dominant design.

Technological Spillovers

occur when the benefits from the research activities of one firm (or nation or other entity) spill over to other firms (or nations or other entities). Spillovers are thus a positive externality of research and development efforts. Evidence suggests that technology spillovers are a significant influence on innovative activity Whether R&D benefits will spill over is partially a function of the strength of protection mechanisms such as patents, copyrights, and trade secrets The likelihood of spillovers is also a function of the nature of the underlying knowledge base (e.g., as explained in the previous section, tacit knowledge may not flow readily across firm boundaries) and the mobility of the labor pool

Patents

protects an invention. In the United States, patents are categorized into different types such as a utility patent for a new and useful process, machine, manufactured item, or combination of materials; a design patent for an original and ornamental design for a manufactured item; or a plant patent for the discovery and asexual reproduction of a distinct and new variety of plant. To qualify for a patent, an invention must usually meet the following criteria: 1. It must be useful (i.e., it must produce a desirable result, solve a problem, improve on or propose a new use for an existing development or show potential of doing so). 2. It must be novel (i.e., it must not already be patented or described in public literature, or be in public use for more than a year). 3. It must not be obvious (i.e., a person with experience or skill in the particular art of the patent would not be expected to achieve the same invention with a normal amount of effort).

Absorptive capacity

refers to the firm's ability to understand and use new information

Appropriability

refers to the the degree to which a firm can capture the rents from its innovation In general, the appropriability of an innovation is determined by how easily or quickly competitors can imitate the innovation, which is in turn a function of both the nature of the technology itself and the strength of the mechanisms used to protect the innovation. If this knowledge base is tacit (i.e., it cannot be readily codified into documents or procedures) or socially complex (i.e., it arises through complex interactions between people), competitors will typically find it very difficult to duplicate Many innovations, however, are relatively easy for competitors to imitate. Individuals and firms often employ legal mechanisms to attempt to protect their innovations. Most countries offer legal protection for intellectual property in the form of patent, trademark, copyright, and trade secret laws

competence-destroying innovation

renders existing knowledge and skills obsolete.