Innovation - 1 © Minder Chen, 2013 Innovation Management and Creative Problem Solving Minder Chen...

Innovation - 1 © Minder Chen, 2013

Innovation Management and Creative Problem Solving

Minder ChenAssociate Professor of MIS

California State University Channel [email protected]

mailto:[email protected]


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


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

http://www.youtube.com/watch?v=2NK0WR2GtFs&feature=watch-vrec


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

http://www.aspeninstitute.org/about/about-walter-isaacson

http://www.nytimes.com/2011/10/30/opinion/sunday/steve-jobss-genius.html?pagewanted=all&_r=0




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“.


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.

http://blogs.hbr.org/govindarajan/2010/08/innovation-is-not-creativity.html


Technology Innovationhttp://www.slideshare.net/Busarovs/innovations-3833340


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


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


Product & service Innovation Polaroid Camera

(Instant Camera)


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


Business model Innovation

SouthwestZara: Fast FashionDell: Direct salesIKEA: Self-assembled furnitureApple: iPod & iTune ecosystem innovation


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


The Rate of Innovation: Product vs. Process


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


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


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.


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


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


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


For Innovation Opportunities

Rule breaking

DemographicsNew PerceptionNew knowledge


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.


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


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


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

http://blog.insead.edu/2012/03/innovation-success-how-the-apple-ipod-broke-all-sonys-walkman-rules/

http://www.pbs.org/idealab/2012/03/the-difference-between-invention-and-innovation086.html


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.


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

http://www.artofeurope.com/eliot/eli2.htm


Manage the Product/Innovation Pipeline

http://www.keytechinc.com/blog/index.php/2009/reduce-risk-product-development/


Crowdsourcing

Source: http://usercontribution.intuit.com/w/page/18238302/The%20Contribution%20Revolution%20linked%20version

http://usercontribution.intuit.com/w/page/18238302/The%20Contribution%20Revolution%20linked%20version


• 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

http://cavqm.blogspot.tw/2012/02/goldcorp-challenge-and-beginning-of.html

http://books.google.com/books?id=O2k0K1w_bJIC&printsec=frontcover&dq=the+long+tail&hl=en&ei=Lz-_TdjnNaXb0QHjuJG5BQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCoQ6AEwAA#v=snippet&q=netflix%20blockbuster&f=false

http://cavqm.blogspot.tw/2011/05/1000000-netflix-challenge.html

http://eyewire.org/

http://eyewire.org/

http://eyewire.org/

http://blog.eyewire.org/infographic/

http://www.wired.com/wired/archive/14.06/crowds.html


Innovation Arithmetic

• Build up the pipeline

• Quantity matters


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


An Innovation Process


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

http://dschool.stanford.edu/dgift/

https://dschool.stanford.edu/groups/designresources/wiki/36873/attachments/8a846/ModeGuideBOOTCAMP2010.pdf


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)

http://www.gogamestorm.com/?p=42

http://www.slideshare.net/AdilsonJardim/empathy-map-poster-3201288


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/


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, . . .


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?


Business Model Innovation

• “…the key to sustained success is business model innovation.”– Clay Christensen, Harvard Business School


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?


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#!

http://strategicorganizationdesign.com/the-innovator%E2%80%99s-dna-disruptive-research-disruptive-writing

http://www.youtube.com/watch?v=Xy6Ex1C_SAs


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


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


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

http://www.pynthan.com/vri/questorm.htm

http://www.vervago.com/wp-content/uploads/skill_sharpener_aug08.pdf


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?


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.

http://en.wikipedia.org/wiki/Electrical_engineer

http://en.wikipedia.org/wiki/George_de_Mestral


http://99u.com/articles/7210/Tina-Seelig-On-Unleashing-Your-Creative-Potential


What is the answer?

•5 + 5 = ?

•? + ? = 10


Kindergarten Classroom


High School Classroom


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


Pixar Office Building

Stimulating innovation via chanced encounters.


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


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

http://www.youtube.com/watch?v=M66ZU2PCIcM

https://www.youtube.com/watch?v=JkHOxyafGpE

http://v.youku.com/v_show/id_XNDczMzEzNjY4.html


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


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


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

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