ENGLISH SUMMARY FOR MBA PROGRAM at KUL
Prof.: Teirlinck Peter
Textbook: Innovation Management and New Product Development (3423), Paul Trott
This document contains a summary of the course content + class notes
Course content:
Part 1: INNOVATION MANAGEMENT
- Innovation management: introduc...
Summary Innovation Management and New Product Development
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Katholieke Universiteit Leuven (KU Leuven)
Master Business Administration
Strategic Innovation Management (BKULHMA65A)
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FACULTY OF ECONOMICS
& BUSINESS
Strategic Innovation
Management
Strategy Innovation Entrepreneurship Track MBA
Prof. Teirlinck Peter
Academic Year: 2020–2021
FACULTY OF ECONOMICS AND BUSINESS - CAMPUS BRUSSELS
WARMOESBERG 26 – B 1000 BRUSSELS BELGIUM
, STRATEGY INNOVATION MANAGEMENT
1.1 INNOVATION MANAGEMENT: INTRODUCTION (CH1)
Learning objectives
• Recognize the importance of innovation
• Explain the meaning and nature of innovation management
• Provide an introduction to a management approach to innovation
• Appreciate the complex nature of the management of innovation within organizations
• Describe the changing views of innovation over time
• Recognize the role of key individuals within the process
• Recognize the need to view innovation as a management process
Definition of innovation Definition from a firm perspective and innovation system perspective
Theoretical conception + technical invention + commercial exploitation)
• An innovation is the implementation of a new or significantly improved product (good or service), or
process, a new marketing method, or a new organizational method in business practices, workplace
organization or external relations.
• The minimum requirement for an innovation is that the product, process, marketing method or
organizational method must be new (or significantly improved) to the firm
• Innovation activities are all scientific, technological, organizational, financial and commercial steps
which actually, or are intended to, lead to the implementation of innovations. Innovation activities also
include R&D that is not directly related to the development of a specific innovation
• Management: The organization and coordination of the activities of a business in order to achieve
defined objectives. Management is often included as a factor of production along with machines,
materials, and money. The basic task of management includes both marketing and innovation.
Management consists of the interlocking functions of creating corporate policy and organizing, planning,
controlling, and directing an organization's resources in order to achieve the objectives of that policy.
(Peter Druncker)
• Innovation is about the commercial exploitation of new ideas, meaning it’s not about having new ideas/
discovering new ideas, but it’s about bringing those ideas to the market!
• Management of innovation is the coordination of activities in a business to achieve defined objectives.
Management is an additional factor (along with the production factors) that can help to improve the
performance of the organization
A typology of innovations
In innovation we can make a
differentiation between different types
of innovation. Examples:
Product innovation: smart watch,
medical service online
Process innovation: JIT system (Japan)
case Drones, new delivery method
(both product- as process
innovation, isn’t mutually exclusive)
Organizational innovation: managing
employees, the way you organize
production & distribution within the
organization (Drone case: unmanned)
,• Product innovation & Process innovation are referred to as technological innovation
• Organizational innovation is non-technological innovation
• Business model innovation: going from an economy that is focused on buying/ owning things to a
shared economy (f.e. Uber, Airbnb) disrupt the business
The interaction between development activities and design environment
It’s also important to mention what is
not considered as an innovation.
Form concepts & Design trends are not
considered as innovation -> more related
to marketing and branding activities
Important to make the distinction between:
• Radical/ Disruptive innovation: a new
Radical or disruptive innovations technology pops-up and it disrupts an existing
market (according to Schumpeterian), f.e.
digital photography (Kodak, Nokia) (typical in
high tech or fast evolving industry such as
pharma-, ICT industry)
• Incremental innovation: continuously make
small improvements on a product, you move
along a certain technology path (typical in low
tech or traditional industry; like the food
industry, clothing industry)
this depends on the industry you’re on
* Technology = knowledge applied to products or
production processes
Doing, using and interacting (DUI) mode of innovation typical in traditional industry (incremental inno)
• In low and medium technology (LMT) intensive industries the traditional science and technology model
of innovation is not applicable and cannot explain continued product and process innovations.
• In LMT environments innovation can be explained through learning by doing and the use of networks of
interactions and extensive tacit knowledge.
• Incremental innovations (along the existing technology path – technology trajectories)
• Food industry: local – distribution – meat consumption – new diaries (insects, soya,…), new perceptions cows
• Incremental innovations (along the existing technology path – technology trajectories)
Up until here we talked about the perceptions of innovations, next we talk about innovation from a
management/ business perspective
, Study of innovation
Overview of the innovation process There are 3 important building blocks in an
organizational innovation process:
1. Creative individuals: the knowledge is the basis
for your innovation (good ideas) -> mostly talking
about the engineers (department)
! Remark: this view is rapidly changing, innovation
takes place among all activities of the organization,
whether its technology, marketing, finance, …
related this is what we called “high innovation
involvement”, this means that you try to include
all of your employees in the innovation process,
you take advantage of all critical reflections/ all
innovative ideas of all your employees of the org.
Open innovation: not only from the knowledge
inside the organization, but also from the
knowledge outside the organization
Neo-classical view versus Neo-Schumpeterian view 2. Firms’ operating functions and activities: how
the firm is organized and operates
Innovation is considered as a process;
1. starting from searching ideas 3. Firms’ architecture and external linkages: how
2. selecting ideas you would like to focus on is the firm connected to the outside world in order
3. implementing those ideas to improve the innovation processes, how does the
4. capturing values of those ideas firm organize itself to deal with fast-changing
environment
Models of innovation 3 key building blocks 1. Science & Technology base: knowledge based
mainly from universities & large science-based
organizations (org. with a large R&D dept)
2. Technological developments: turn that new
knowledge into things that are applicable in a
business (private org central players)
3. Needs of the market: looking at the needs of
the market, increasingly important to listen to the
customer. If you innovate it’s about
commercialization (bringing ideas on the market &
it’s important that the market buys your ideas)
Linear models of innovation
Technology push model (traditional model)
f.e. Philips that has a huge R&D dept. turning new
ideas into production (manufacturing), and
brought to the market (user)
Market pull model
Start form the user needs, based on their needs
(marketing), we will do R&D, then production
both are linear models:
going from one step to another
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