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AusLrallan School of 8uslness

Informanon Systems, 1echno|ogy and Management

INIS3631 Innovanon and 1echno|ogy Management

W1: Introducnon

Dr. Dan|e| Sch|agwe|n

Introducnon Lecturer
Metaphor, Name 1ags
8ra|nstorm|ng Course
!"# !#%&'(()
1extbook
Figures in the slide decks of this
course are generally from this
textbook unless otherwise
referenced.
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AuLhor:
Mellssa Schllllng
rofessor of ManagemenL
SLern School of 8uslness, new ?ork
unlverslLy
8esearch areas: 1echnologlcal lnnovauon,
knowledge creauon.
ubllshed ln: Academy ManagemenL
!ournal, Academy of ManagemenL
8evlew, Crganlzauon Sclence.
hu: unlverslLy of WashlngLon
1extbook
kecommended kead|ng
kecommended kead|ng
1echno|og|ca| Innovanon
1echnologlcal lnnovauon now Lhe s|ng|e most |mportant dr|ver of
compennve success ln many lndusLrles:
! Many rms earn over one-Lhlrd of sales on new producLs, developed
wlLhln lasL ve years
! roduct |nnovanons help rms proLecL marglns by oerlng new,
dlerenuaLed feaLures
! rocess |nnovanons help make manufacLurlng more emclenL
1echno|og|ca| Innovanon
Advances |n I1 have enabled fasLer lnnovauon:
! CAD (compuLer-alded deslgn) sysLems enable rapld deslgn
! CAM (compuLer-alded manufacLurlng) sysLems enable shorLer
producuon runs
1echno|og|ca| Innovanon
lmporLance of lnnovauon and advances ln l1 have lead Lo:
! Shorter product ||fecyc|es (more rapld producL obsolescence)
! More rap|d new product |ntroducnons
! CreaLer market segmentanon
Impact on Soc|ety
lnnovauon enables a w|der range of goods and serv|ces Lo be dellvered Lo
people worldwlde
! more emc|ent food producnon,
! lmproved med|ca| techno|og|es,
! beuer transportanon, eLc.

lncreases Gross Domesnc roduct by maklng
labour and caplLal more eecuve and emclenL
Source: wikipedia.org
Impact on Soc|ety
Powever, lnnovauon may resulL ln neganve externa||nes
! eroslon,
! polluuon,
! anublouc-reslsLanL bacLerla, eLc.
Source: wikipedia.org
Innovanon Iunne|
1he Importance of Strategy
! MosL lnnovauve ldeas do noL become successful new producLs.
! Successful lnnovauon requlres carefully craed sLraLegles and
lmplemenLauon processes.
kesearch 8r|ef
now |ong does new product deve|opment take?
SLudy admlnlsLered by Lhe roducL uevelopmenL and ManagemenL
Assoclauon, uSA found:
! LengLh of developmenL cycle varles wlLh lnnovauveness of pro[ecL
! Incrementa| pro[ecLs Look 6.3 monLhs from concepL Lo markeL
lnLroducuon
! More |nnovanve" pro[ecLs Look [usL over 14 monLhs.
! New-to-the-wor|d producLs Look 24 monLhs.
! Cn average, rms reporLed 12 Lo 40 shorLer cycle umes Lhan
Lhey reporLed ln 1993.
Structure of 1extbook
art Cne:
Ioundanons of 1echno|og|ca| Innovanon
art I: Industry Dynam|cs of
1echno|og|ca| Innovanon
Chapter 2
Sources of
lnnovauon
Chapter S
1lmlng of LnLry
Chapter 4
SLandards 8aules
and ueslgn
uomlnance
Chapter 3
1ypes and auerns
of lnnovauon
art I: Ioundanons of 1echno|og|ca| Innovanon
Sources of |nnovanon?
1he sources from whlch lnnovauon arlses, lncludlng Lhe role of lndlvlduals,
organlzauons, governmenL lnsuLuuons, and neLworks.

1ypes of |nnovanon?
1ypes of lnnovauons, and common lndusLry pauerns of Lechnologlcal
evoluuon and dluslon
art I: Ioundanons of 1echno|og|ca| Innovanon

Dom|nant des|gn?
1he facLors LhaL deLermlne wheLher lndusLrles experlence pressure Lo selecL a
domlnanL deslgn, and whaL drlves whlch Lechnologles domlnaLe oLhers.

1|m|ng of entry?
LecLs of umlng of enLry, and how rms can ldenufy (and manage) Lhelr enLry
opuons.
Structure of 1extbook
art II:
Iormu|anng 1echno|og|ca| Innovanon Strategy
art II: Iormu|anng 1echno|og|ca|
Innovanon Strategy
Chapter 6
uenlng Lhe Crganlzauon's
SLraLeglc ulrecuon
Chapter 8
Collaborauon
SLraLegles
Chapter 7
Chooslng lnnovauon
ro[ecLs
Chapter 9
roLecung lnnovauon
art II: Iormu|anng 1echno|og|ca| Innovanon Strategy
Strateg|c d|recnon?
! Assesslng Lhe rm's posluon and denlng lLs sLraLeglc dlrecuon.
ro[ect poruo||o?
! Chooslng lnnovauon pro[ecLs ln whlch Lo lnvesL, lncludlng boLh
quanuLauve and quallLauve valuauon Lechnlques.
Co||aboranon strategy?
! uecldlng wheLher and how Lhe rm wlll collaboraLe on developmenL
acuvlues, chooslng a collaborauon mode, and chooslng and monlLorlng
parLners.
rotecnng |nnovanon?
! Cralng a sLraLegy for proLecung - or dluslng - a Lechnologlcal
lnnovauon Lhrough such meLhods as paLenLs, Lrademarks, copyrlghLs, and
Lrade secreLs.
art II: Iormu|anng 1echno|og|ca| Innovanon Strategy
Structure of 1extbook
art III:
Imp|emennng 1echno|og|ca| Innovanon Strategy
art III: Imp|emennng 1echno|og|ca|
Innovanon Strategy
Chapter 10
Crganlzlng for
lnnovauon
Chapter 13
Cralng a
ueploymenL
SLraLegy
Chapter 12
Managlng new
roducL uevelopmenL
1eams
Chapter 11
Managlng Lhe new
roducL uevelopmenL
rocess
art III: Imp|emennng 1echno|og|ca| Innovanon Strategy
Crgan|z|ng for |nnovanon?
! SLrucLurlng Lhe rm Lo lmprove lLs llkellhood of lnnovaung, lLs
eecuveness aL new producL developmenL, and lLs speed of new producL
developmenL

Manag|ng the new product deve|opment process?
! Managlng new producL developmenL processes Lo maxlmlze L wlLh
cusLomer needs, whlle slmulLaneously mlnlmlzlng developmenL cycle ume
and conLrolllng developmenL cosLs
art III: Imp|emennng 1echno|og|ca| Innovanon Strategy
Manag|ng new product deve|opment teams?
! Composlng, sLrucLurlng, and managlng new producL developmenL Leams
Lo maxlmlze new producL developmenL eecuveness

Crah|ng a dep|oyment strategy?
! Cralng a sLraLegy for eecuvely deploylng Lhe lnnovauon lnLo Lhe
markeLplace, lncludlng umlng, llcenslng sLraLegles, prlclng sLraLegles,
dlsLrlbuuon, and markeung
D|scuss|on uesnon


Why ls lnnovauon so lmporLanL for rms Lo compeLe ln many lndusLrles?"
D|scuss|on uesnon


WhaL are some of Lhe advanLages of Lechnologlcal lnnovauon?
ulsadvanLages?"
D|scuss|on uesnons


Why do you Lhlnk so many lnnovauon pro[ecLs fall Lo generaLe an economlc
reLurn?"
Case Study: L|near A|r
Case Study uesnons
_ uo you Lhlnk Lhe alr Laxl lndusLry ls polsed Lo Lake o? ls Lhe value proposluon
compelllng for cusLomers? lor key players ln Lhe ecosysLem? WhaL cusLomer
segmenLs mlghL Lhe servlce appeal Lo?
_ Compare uay!eL, SA1Salr, and Llnear Alr's vlslons of Lhls new lndusLry. Are Lhese
vlslons complemenLary or compeung? WhaL are Lhe sLrengLhs and weaknesses of
each model? Why has uay!eL lnvesLed so aggresslvely ln developlng Lhe
ecosysLem?
_ 1he alrllne lndusLry ls generally consldered unauracuve, wlLh hlgh varlauon ln
performance over ume. (See Lxh|b|t 9.) ls Lhe alr Laxl lndusLry headed Loward a
slmllar faLe? WhaL can Perp do Lo make Lhe alr Laxl lndusLry more auracuve?
_ WhaL growLh plan should Llnear Alr follow for Lhe nexL few years? SLay focused
on Lhe norLheasL and solldlfy a base? Lxpand lnLo Lhe SouLheasL Lo caplLallze on
Lhe publlclLy LhaL uay!eL has generaLed? Lxpand preempuvely lnLo Callfornla?
Update on Case
" Lc||pse Av|anon enLered ChapLer 11 bankrupLcy ln november 2008 and ChapLer 7
llquldauon proceedlngs ln lebruary 2009. ln AugusL 2009, Lhe asseLs of Lhe company
were acqulred and a new company, Lcllpse Aerospace, was formed. 1he new company
ls lnlually upgradlng Lhe exlsung Lcllpse eeL wlLh lmproved avlonlcs and de-lclng
sysLems and plans Lo renew manufacLurlng of planes ln 2011. A LoLal of 260 Lcllpse 300
vL!s have been dellvered
" DayIet ceased operauons ln SepLember 2008, sLaung, uay!eL...has dlsconunued lLs [eL
servlces and cancelled all fuLure lghLs as a resulL of Lhe company's lnablllLy Lo arrange
crlucal nanclng ln Lhe mldsL of Lhe currenL global nanclal crlsls."
" SA1Sa|r ceased operauons ln CcLober 2009.
" L|near A|r: Sull ln buslness as of 2013. ln response Lo Lhe economlc downLurn, Perp has
Laken a number of sLeps Lo ad[usL Lhe economlcs of hls buslness. Aer Lcllpse declared
bankrupLcy, exlsung owners needed malnLenance and lghL-Lralnlng servlces. Perp now
oers boLh servlces. Perp now posluons Lhe alrllne core buslness as Lhe SouLhwesL of
Lhe neL[eLs space." Lxecuuves under pressure Lo cuL luxurles llke corporaLe [eLs nd
Llnear Alr a good alLernauve.
Source: murderati.com