Lecture 1
Technological innovation processes are a complex phenomenon with many actors and factors that
interact over time, at different levels of analysis. These levels are:
Levels Questions Scientific relevance/
managerial relevance
Project level Innovation project Innovation = product + …
approaches? Topics:
Fit of project in organization, History innovation projects
market, innovation? Different project approaches
Contextual view
Application
Pattern level development / What is the pattern? Pattern = project + …
diffusion How does diffusion proceed? Topics:
How does technology History patterns
development proceed? Different patterns (scientific)
What are factors/actors, Actors, factors, strategies
mechanisms? Application
What are company strategies?
Discipline level Where do inventions come Discipline = range of related
from? new technologies + different
How do different technology discipline representations
patterns emerge and influence Topics:
each other? Example of discipline
Origin invention
How tech’s influence each
other
For the 3 levels of innovation processes, there are alternative models and theories per level
,Project-level aspects of the innovation process are:
• Innovation = product as part of a consistent marketing mix (Prijs, Promotie, Plaats en
Product, eventueel nog Personeel, Proces en Physical evidence)
• Innovation as a consistent marketing mix needs to fit into the type of organization, it
requires a certain type of organization
• Innovation as a consistent marketing mix needs to fit into the type of organization and larger
network (supply chain and market context, so it requires a particular type of organization)
and needs to fit with the type of customers, which to some extent depend on the phase in
the pattern of development and diffusion
• Innovation = consistent marketing mix fitting in organization, fitting in customer groups and
accordingly also fitting the stage of the market
So the message within the project-level aspect of the innovation process is that innovation consists
of:
• Product + service
• Marketing mix (4/7 Ps)
• Organization
• Network of companies
• Ecosystem
The consequence of this is that: a good product is not enough for success
Innovation can require a fundamental system change for the entire organization and the network
around it.
• Innovation that fits the system is easier than one that requires a new/changed system
• Innovation with the new system is easier than innovation that needs to rebuild the existing
system
This leads to: the incumbent company problem. The vast but often overlooked and unfair advantage
that all new people, cities and jobs have over existing (or incumbent) ones.
On the other hand there is the start-up company problem. Unfair disadvantage startups have
relative to incumbent companies.
Typical phases within a process are:
• Strategic phase (to innovate or not)
• Idea generation, testing and selection
• Concept generation, testing and slection
• Product development, testing and improvement
• Production development
• Marketing development
• Market introduction
• Life cycle management
Innovation should be seen as a strategic choice and can be organized as a project, after introduction
many projects can follow.
Learning points regarding the New Product Development (NPD) process are:
• In each stage multiple alternatives are created and a limited number of alternatives is
selected. The number of alternatives typically decreases over the npd process
o Innovating by creating many alternatives and then selecting
, • Stage-gate: gp/no go at each stage
o Innovating by having the selected alternatives evaluated
• Market and technology input throughout the process
o Innovating by considering information during the process
• Typical stages: idea/concept and product creation/slection stages are typically forgotten:
o Up front there is the decision to innovate
o Afterwards there is life cycle management
Some activities are completed in parallel because they can only be completed in combination since
they are interrelated.
Iterations are needed because there is uncertainty (no upfront and exact definition of the innovation
that will be developed. In the earlier stages, many alternatives are considered and choices are made,
and sometimes it turns out that a choice was wrong, so the process needs to be reiterated. In parallel
stages, the activities are very dependent and unknown.
Cooper – Stage-Gate Systems: a new tool for managing new products
Description: article about the archetypical mainstream type of innovation project: stage-gate
innovation. Even though it is an old article, it describes the most used npd approach.
A stage-gate system is both a conceptual and operational model for moving a new product from idea
to launch. It is a blueprint for managing the new production process to improve effectiveness and
efficiency.
There is dire need for better new product management. The single strongest predictor of investment
value is ‘degree of innovativeness’ of a company. However, products are failing at a high rate, due to
too much of a ‘tech push’ instead of a ‘market pull’ orientation.
The strategic solution is better focus on conceiving, developing and launching new products, which
can be done through stage-gate.
Stage-gate systems recognize that product innovation is a process and can be managed. They simply
apply process-management methodologies to the innovation process.
Stage-gate systems divide the process into a predetermined set of stages, themselves composed of a
group of prescribed, related, often parallel activities. They usually involve 4-7 stages and gates,
where each step is usually more expensive than the preceding one.
, The entrance to each stage is a gate, these gates control the process. Each gate is characterized by
• Deliverables that the project leader must bring as input for the gate
• Set of criteria upon which the project will be judged
• Output which are the decisions at the gate, typically go/kill/hold/recycle, and an action plan
for the next stage
Gates are managed by senior manager who act as a gatekeeping group. Their roles include:
• Review of the quality of the inputs or deliverables
• Assessment of the quality of the project from an economic and business standpoint
• Approval of the action plan for the next stage and an allocation of necessary resources
There are some organization changes needed for the implementation of stage-gate:
• A project-team approach is necessary
• Senior managers need to be involved as gate keepers
Activities executed in npd are:
• Initial screening
• Preliminary market assessment
• Preliminary technical assessment
• Detailed market study/marketing research
• Business/financial analysis
• Product development
• In-house product testing
• Customer test of product
• Test market/trial sell
• Trial production
• Pre-commercialization business analysis
• Production start-up
• Market launch
The most poorly executed of these are the initial screening, detailed market study and preliminary
market assessment. The most pivotal activities were the early activities in the npd
What the study shows are:
• Most products fail because of errors of omission and commission in the npd process: a lack
of market assessment, product defects, inadequate launch efforts etc.
• Performance of a product innovation is far from ideal
• Quality of execution separates winners from losers
