Post on 03-Jan-2016
Innovation - 1 © Minder Chen, 2013
Innovation Management and Creative Problem Solving
Minder ChenAssociate Professor of MIS
California State University Channel IslandsMinder.chen@csuci.edu
Innovation - 2 © Minder Chen, 2013
Importance of Innovation
• “In a world of ever-accelerating change, innovation is the only insurance against irrelevance.
• In an environment of steadily decreasing friction and crumbling entry barriers, innovation is the only antidote to margin-crushing competition.
• And in a global economy where knowledge advantages dissipate ever more rapidly, innovation is the only brake on commoditization.”– Gary Hamel, “Introduction” to the Innovation to the Core
Innovation - 3 © Minder Chen, 2013
Definition of Innovation
• An innovation is the creation and application of a new or significantly improved technology, product/service, process, or business model that is accepted by markets and society. – Adapted from OECD 2005 and Wikipedia.
• Innovation applies ideas and new knowledge to the production of goods and services to improve product/service quality and process performance.– UK Design Council
http://www.designcouncil.org.uk/Documents/Documents/OurWork/Insight/DesignForInnovation/DesignForInnovation_Dec2011.pdf
http://www.youtube.com/watch?v=2NK0WR2GtFs&feature=watch-vrec
Innovation - 4 © Minder Chen, 2013
Formula for True Innovation
• America’s advantage, if it continues to have one, will be that it can produce people who are also more creative and imaginative, those who know how to stand at the intersection of the humanities and the sciences.
• That is the formula for true innovation, …true innovation, …
– Walter Isaacson is the author of “Steve Jobs.”
– http://www.nytimes.com/2011/10/30/opinion/sunday/steve-jobss-genius.html?pagewanted=all&_r=0
Innovation - 5 © Minder Chen, 2013
Innovation: Creative Destruction
• A commercialization process based on the application of new materials and their components, new technical methods, new markets and new forms of organization. – Joseph Schumpeter
• The innovation involves both technical world and business world. A change in technology only is just an "invention“.
Innovation - 6 © Minder Chen, 2013
Creativity
• Creativity is the quality or ability to create or invent something original.
• “Genius is 1% inspiration and 99% perspiration.”– Thomas Edison
• Creativity is about coming up with the big idea. Innovation is about executing the idea — converting the idea into a successful business.– Vijay Govindarajan – http://blogs.hbr.org/govindarajan/2010/08/innovation-is-not-creativity.html
• Innovation is applied creativity.
Innovation - 7 © Minder Chen, 2013
Technology Innovationhttp://www.slideshare.net/Busarovs/innovations-3833340
Innovation - 8 © Minder Chen, 2013
Does Customer Know What They Want?
• Seeing what customers have not yet imagined but will instantly desire.
• “If I had asked my customers what they wanted, they’d have said a faster horse.”
- Henry Ford
Innovation - 9 © Minder Chen, 2013
Drivers for Innovation
• Necessity is the mother of invention.
• Where there is a friction (frustration), there is an opportunity. – Zappos’ founder Nick Swinmurn
– Dropbox file sharing: Drew Houston reportedly conceived the idea for Dropbox after repeatedly forgetting his USB drive
– Chinapages.com by Jack Ma
Innovation - 10 © Minder Chen, 2013
Product & service Innovation Polaroid Camera
(Instant Camera)
Innovation - 11 © Minder Chen, 2013
Process Innovation
Moving assembly line An idea stolen from : Meat Packing PlantHigh wage;
Model-T: a true innovation available to a wide audience. pleasure car passenger car
Innovation - 12 © Minder Chen, 2013
Business model Innovation
SouthwestZara: Fast FashionDell: Direct salesIKEA: Self-assembled furnitureApple: iPod & iTune ecosystem innovation
Innovation - 13 © Minder Chen, 2013
Architecture of Innovation
Service Innovation
Product Innovation
Consumer
End product/ service
& Component
Business
Science/Technology
Creativity & Imagination
Process Innovation
Business Model Innovation
Technology Innovation
ExperienceInnovation
Humanity/Art
Intersection & Integration
Innovation - 14 © Minder Chen, 2013
The Rate of Innovation: Product vs. Process
Innovation - 15 © Minder Chen, 2013
Fluid Transitional Specific
Product Radical, frequent
Dominant design
Incremental,
rare
Process Rare, rely on skills
General equipment
Specialised equipment
Organisation Organic Semi-structured
Hierarchical
Market Fragmented Segments Commodity
Competition Increasing, different
Decreasing, more similar
Few similar
Key Factors at Three Phases
Innovation - 16 © Minder Chen, 2013
S-Curve or thelogit function for rate of diffusion adoptation.
The cumulative distribution of innovation adopters who are characterized by the timing of their decision to accept and implement the innovation.
Innovation Diffusion
Everett M. Rogers (1931-2004), Diffusion of Innovations, 4th edition (1995)
Invent
Adopt
Persuade
Decide Reject
Accept
Implement
Abandon
The Process of Innovation Diffusion
Innovation Diffusion Function to Saturate a Market
Innovation - 17 © Minder Chen, 2013
5 Factors of Innovation Adoption Decision (Roger)
Factor DefinitionRelative Advantage
How improved an innovation is over the previous generation.
CompatibilityThe level of compatibility that an innovation has to be assimilated into an individual’s life.
Simplicity orComplexity
If the innovation is perceived as complicated or difficult to use, an individual is unlikely to adopt it.
TrialabilityHow easily an innovation may be experimented. If a user is able to test an innovation, the individual will be more likely to adopt it.
Observability
The extent that an innovation is visible to others. An innovation that is more visible will drive communication among the individual’s peers and personal networks and will in turn create more positive or negative reactions.
Innovation - 18 © Minder Chen, 2013
Technology Forecasting
• “I think there is a world market for maybe five computers.” – Thomas Watson, Chairman, IBM (mainframe giant),
1943
• “This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”– Western Union (telegraph) internal memo, 1876
• “There is no reason why anyone would want a computer in their home.”– Ken Olsen, Founder, Digital Equipment Corp.
(minicomputer giant) 1977
Innovation - 19 © Minder Chen, 2013
Service innovation is inherently multidisciplinary
Science & Engineering
Business Administrationand Management
Social Sciences
Global Economy& Markets
BusinessInnovation
TechnologyInnovation
Social-OrganizationalInnovation
DemandInnovation
SSME = Service Sciences, Management, and Engineering
Knowledge sources driving “service” innovations…
Grameen Bank (Bank of the poor, Micro lending)
Groupon
Laser, seminconductor
TQMReengineering
Innovation - 20 © Minder Chen, 2013
Three Types of Restaurants
Source: Service Is Front Stage
Teppanyaki-typeRestaurant (i.e., Benihana)
火
鍋
Ho
tpo
tH
otp
ot
© 2005 IBM Corporation© 2009 IBM Corporation
T-Shaped Talents: skills, abilities, and knowledge
Cross-disciplinary communication
Service system design, management, and modeling
Value co-creation analysis
Service lifecycle analysis (for quality assurance)
Service supply and demand management
New service development
Business project management
Business case development and analysis
Organizational change management
Marketing and sales
Creative and critical thinking
Communication skills
Leadership and collaboration skills
Wendy Murphy & Bill Hefley, “What’s new in service science, management, and engineering?”Presented at Frontiers in Service Conference, October 2008
T-shaped professionals are inhigh demand because theyhave both depth and breadth
They combine expert thinking(depth in one or more areas)and complex communications(breadth across many areas)
complex communication
expert
thin
king
Innovation - 22 © Minder Chen, 2013
For Innovation Opportunities
Rule breaking
DemographicsNew PerceptionNew knowledge
Innovation - 23 © Minder Chen, 2013
Evolution of Dominant Market Demand and Firm’s Focus
Time
Price
Qual
ity
Choice,
Tim
e
of Del
iver
yUniq
uenes
s
Market Demand
Firm’sFocus
Cost E
ffici
ency
Qual
ity
Flexi
bility
&Agile
Innova
tion
Adapted from Felix Janszen, The Age of Innovation, 2000, p. 19.
Innovation - 24 © Minder Chen, 2013
Discovery, Invention, and Innovation
“If an idea begat a discovery, and if a discovery begat an invention, then an innovation defined the lengthy and wholesale transformation of an idea into a technological product (or process) meant for widespread practical use. Almost by definition, a single person, or even a single group, could not alone create an innovation. The task was too variegated and involved.”
– The Idea Factory, by Jon Gertner
Innovation - 25 © Minder Chen, 2013
Discovery vs. Invention
• lightning was a form of electricity.
Applied creativity — taking clever ideas and smart designs and applying them to useful devices.
– Walter Isaacson
Innovation - 26 © Minder Chen, 2013
Invention vs. Innovation• iPod wasn't the first portable music device (Sony
popularized the "music anywhere, anytime" concept 22 years earlier with the Walkman; MP3)
• What made Apple innovative was that it combined all of these elements -- design, ergonomics and ease of use -- in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music.
• Apple invented nothing. Its innovation was creating an easy-to-use ecosystem (with iTune Store, iTune, ans iPod) that unified music discovery, delivery and device. And, in the process, they revolutionized the music industry. Creative Creative CollisionCollision
Source: http://www.pbs.org/idealab/2012/03/the-difference-between-invention-and-innovation086.html
Innovation - 27 © Minder Chen, 2013
Innovation Arena: TAMO
Adapted from Felix Janszen, The Age of Innovation, 2000, p. 9.
New materials and components
New processes New services
Invention
Invention
Innovation
Innovation
A solution looks for a problem.
A problem looks for a solution.
Innovation - 28 © Minder Chen, 2013
From Ideas to Product/Service/BusinessU
ncer
tain
ty
Resource allocated
Is it possible?
Idea
Product/Service/Business
Is it attractive?
Is it do-able?
Is it what our customers want?
How do we implement it?
Source: Felix Janszen, The Age of Innovation, 2000, p. 99.And http://www.artofeurope.com/eliot/eli2.htm
Between the conception And the creation Between the emotion And the response Falls the Shadow - T.S. Elliot
Innovation - 29 © Minder Chen, 2013
Manage the Product/Innovation Pipeline
http://www.keytechinc.com/blog/index.php/2009/reduce-risk-product-development/
Innovation - 30 © Minder Chen, 2013
Innovation - 31 © Minder Chen, 2013
Crowdsourcing
Source: http://usercontribution.intuit.com/w/page/18238302/The%20Contribution%20Revolution%20linked%20version
Innovation - 32 © Minder Chen, 2013
• GoldCorp Challenge
– $575,000 award money– http://cavqm.blogspot.tw/2012/02/goldcorp-challenge-and-beginning-of.html
• Netflix Cinematch challenge
– Netflix views their business as more than renting videos to customers, " we create demand for content and we help you find great movies that you'll really like."
– 1 million award– http://cavqm.blogspot.tw/2011/05/1000000-netflix-challenge.html
• Crowdfunding: Kickstarter.com
• Eyewire:
– http://eyewire.org/
– http://blog.eyewire.org/infographic/ Source: http://www.wired.com/wired/archive/14.06/crowds.html
Innovation - 33 © Minder Chen, 2013
Innovation Arithmetic
• Build up the pipeline
• Quantity matters
Innovation - 34 © Minder Chen, 2013
Seven Innovation Myths
1. Innovation is risky.
2. Innovation is (only) about products.
3. Innovation is about "big" ideas.
4. Innovation can't be taught.
5. Innovation is a diversion.
6. Innovation is expensive.
7. Innovation is an exception.
Source: Innovation to the core
Innovation - 35 © Minder Chen, 2013
An Innovation Process
Innovation - 36 © Minder Chen, 2013
Design Thinking Process by Stanford d.school / IDEO
• http://dschool.stanford.edu/dgift/• https://dschool.stanford.edu/groups/designresources/wiki/36873/attachments/8a846/ModeGuideBOOTCAMP2010.pdf
“To create meaningful innovations, you need to know your users. Empathize and care about their lives.”
“Framing the right problem is the only way to create the right solution.”
“It’s not about coming up with the ‘right’ idea, it’s about generating the broadest range of possibilities.”
“Build to think and test to learn.”
“Testing is an opportunity to learn about your solution and your user.”
IDEO: Inspiration Ideation Implementation
Innovation - 37 © Minder Chen, 2013
what really countsmajor preoccupations, worries & aspirations
what friends saywhat boss sayswhat influences say
environmentfriendswhat the markets offers
attitude in publicappearancebehavior towards others
http://www.gogamestorm.com/?p=42http://www.slideshare.net/AdilsonJardim/empathy-map-poster-3201288
Empathy Empathy MapMap
GAIN“wants”/needs, measures of success, obstacles
PAINfears, frustrations, obstacles
Customer (user)
Innovation - 38 © Minder Chen, 2013
What is Design? – Tom Kelley
• Not just problem solving – creative leap
• Messy – No right answer
• Takes a point of view – or many POVs
• Calls for vision and multiple minds
• Open attitude – many solutions
• Learned from experience with reflection
• Requires a feel for the materials
• Starts with broadening, followed by narrowingDivergent Thinking Assimilation Convergent Thinking
• Requires ongoing mindfulness 用心
Compiled by Scott Klemmerhttp://hci.stanford.edu/cs147/
Innovation - 39 © Minder Chen, 2013
IDEO Brainstorming Rules & Tips
• Defer judgment• Encourage wild ideas• Go for quantity• Build on the ideas of others• One conversation at a time• Stay focused on the topic• Be visual
1. Number and record each idea – let’s try to get a hundred ideas, motivates participants
2. Write the flow of ideas in a way that is visible to the group
3. Make sketches, mind-maps, diagrams, . . .
Innovation - 40 © Minder Chen, 2013
SCAMPER Method for Brainstorming (Eberle, 1971)
Substitute What could be used instead of an existing component?
Combine What could be added to an existing product? Adapt How can it be adjusted to suit a condition or
purpose? Modify, Magnify, & Minify
How can the color, shape, or form be changed? How can it be made larger, stronger, or thicker? How can it be made smaller, lighter, or shorter?
Put to other uses
What else can it be used for?
Eliminate What can be removed or taken away from it?
Reverse &Rearrange
How can it be placed opposite its original position? How can the pattern, sequence, or layout be changed?
Innovation - 41 © Minder Chen, 2013
Business Model Innovation
• “…the key to sustained success is business model innovation.”– Clay Christensen, Harvard Business School
Innovation - 42 © Minder Chen, 2013
Elevator Pitch
• Who is the target customer?
• What is the customer need?
• What is the product name?
• What is its market category?
• What is its key benefit?
• Who or what is the competition?
• What is the product’s unique differentiator?
Innovation - 43 © Minder Chen, 2013
The Business Model Canvas
Innovation - 44 © Minder Chen, 2013http://strategicorganizationdesign.com/the-innovator%E2%80%99s-dna-disruptive-research-disruptive-writing
http://www.youtube.com/watch?v=Xy6Ex1C_SAs#!
Innovation - 45 © Minder Chen, 2013
Questioning
• “The important and difficult job is never to find the right answers, it is to find the right question.”
-Peter Drucker
• “question the unquestionable.”
-Ratan Tata
Innovation - 46 © Minder Chen, 2013
Risk Taking Culture
• “Fail often to succeed sooner.” – IDEO’s motto
• Risk taking: Take enough chances and you risk a few big failures.
• Prototyping
• Embrace mini-failure
• Large firms tend to be more risk-averse
Innovation - 47 © Minder Chen, 2013
QuestionStorming
• What are your questioning patterns? What kinds of questions do you focus on?
• What questions yield unexpected insights into why things are the way they are?
• What questions surface fundamental assumptions and challenge the status quo?
• What questions generate strong emotional responses (a great indicator of challenging the way things are)?
• What questions guide you best into disruptive territory?
Innovator’s DNA, p. 88Also http://www.pynthan.com/vri/questorm.htm and http://www.vervago.com/wp-content/uploads/skill_sharpener_aug08.pdf
Questionstorming differs from brainstorming in its focus on questions, not ideas
Innovation - 48 © Minder Chen, 2013
Example
• A QuestionStorming which is a brainstorming but you brainstorm to generate questions to ask, such as what questions we should ask to improve ABC Compnay's innovation initiative?
• "Idea" now becomes "Question"• Examples:
– Who should be in charge?
– What are the major barrier?
– Which area has the most potential?
Innovation - 49 © Minder Chen, 2013
Observation: Learning From Nature
• Burs of Burdock
• Velcro is a company that produces the first commercially marketed fabric hook-and-loop fastener, invented in 1948 by the Swiss electrical engineer George de Mestral.
Innovation - 50 © Minder Chen, 2013 Source: Innovation DNAs, p. 184
Innovation - 51 © Minder Chen, 2013
http://99u.com/articles/7210/Tina-Seelig-On-Unleashing-Your-Creative-Potential
Innovation - 52 © Minder Chen, 2013
What is the answer?
•5 + 5 = ?
•? + ? = 10
Innovation - 53 © Minder Chen, 2013
Kindergarten Classroom
Innovation - 54 © Minder Chen, 2013
High School Classroom
Innovation - 55 © Minder Chen, 2013
Office CubiclesRadical innovations are spawned by the interplay of different ideas and domains that don’t usually belong together, through connectivity and conversation.Source: Innovation to the Core
Innovation - 56 © Minder Chen, 2013
Pixar Office Building
Stimulating innovation via chanced encounters.
Innovation - 57 © Minder Chen, 2013
Meeting at Pixar
Brain trustGive advice not command
No PowerPoint, please
Daily Reviews (Dailies)Overcoming InhibitionsShowing unfinished work each day liberates people to take risks and try new things because it doesn’t have to be perfect the first time.
Peer Culture
Innovation - 58 © Minder Chen, 2013
Creativity and Teamspirit• One doesn’t manage creativity [but nurtures]
• One manages for creativity (i.e., creative process)• Tap ideas from all ranks (using multidisciplinary teams)
• Lone inventor myth Encourage and enable collaboration
• Enlightened trial and error (of a creative team) succeeds over the planning of lone genius.*
http://www.youtube.com/watch?v=M66ZU2PCIcMSource: https://www.youtube.com/watch?v=JkHOxyafGpE (1of 3)
http://v.youku.com/v_show/id_XNDczMzEzNjY4.html
Innovation - 59 © Minder Chen, 2013
Left Brain vs. Right Brain
Imagination is more important than knowledge - Albert Einstein
Imaginatio
n
Intuition
KnowledgeRational thought
http://www.nytimes.com/2011/10/30/opinion/sunday/steve-jobss-genius.html?_r=0
Logical thinkingAnalogical th
inking
Solving problem
correctively
correctivelySolving problem
creatively
creatively
Innovation - 60 © Minder Chen, 2013
Left Brain vs. Right BrainLeft brain functionsuses logicdetail orientedfacts rulewords and languagepresent and pastmath and sciencecan comprehendknowingacknowledgesorder/pattern perceptionknows object namereality basedforms strategiespracticalsafe
http://www.heraldsun.com.au/news/right-brain-v-left-brain/story-e6frf7jo-1111114603615http://theness.com/neurologicablog/index.php/left-brain-right-brain-and-the-spinning-girl/
Right brain functionsuses feeling"big picture" orientedimagination rulessymbols and imagespresent and futurephilosophy & religioncan "get it" (i.e. meaning)believesappreciatesspatial perceptionknows object functionfantasy basedpresents possibilitiesimpetuousrisk taking
Innovation - 61 © Minder Chen, 2013
Comparison between Creative and Receptive Hexagrams
Hexagram 1 ( 乾 ) Hexagram 2 ( 坤 )Creative Receptive
Creative talents Tolerance attitude
Divergent thinking (open) Convergent thinking (close)
Visioning and planning Implementation & execution
Leader Follower
Change Simplify
Facing & taking risks Dealing with resistances
Big pictures Small details
Time Space
乾知大始,坤作成物。
The End is the
Beginning! 生生不息