Innovation management in multinationals

• Innovation is the process by which an idea or invention is translated into a good or service for which customers are willing to pay
• Innovation= invention + commercialisation
• Innovation is not creativity it is a discipline that needs to be managed
• The key lesson from the Spanx case study is that innovation is not just about an invention but about commercialising it
• Studies show there is no direct relationship between R&D spend and innovation
• Incremental innovation is minor product change, high succes rate, low returns
• Radical innovation is large product change, low succes rate, high potential returns
• Product vs process innovation: product innovation new product that is launched into the market. Process innovation: new process that is used internally
• The old method of innovation is slow and has communication problems because once departments are done with their part of the process they hand it over to the next and stop contributing
• Customers are more likely to suggest incremental innovations or wild ideas
• Employees and experts are more likely to suggest practical, easily implementable idea
• Universities are more likely to suggest radical innovations
• Many ideas for breakthrough innovations come from outsiders, they are not bound by the traditional way of doing things
• Gavriel Iddan improved the endoscope because he came at it with a fresh mind
• Innovation is sometimes just about combining two things to make something new and unique
• After you've developed an idea you make a concept: a representation of the new product
• After a concept it developed a prototype is made: a first preliminary version of the product
• In the prototype stage there is an alpha test which entails a technical test by the manufacturer
• In the prototype stage there is also a beta test which is a test of the prototype by a small group of people in a real-life environment
• Test market is a stage where you sell you product in a set area, to be able to have more control over the sales process
• The three components of creativity are: expertise, creative-thinking skills and, motivation
• Innovation is applied creativity
• People become more creative when you give them constraints, because they will have to innovate within the given environment
• The innovation mortality curve shows the relationship between the amount of ideas and the stage of the innovation funnel, cummulative
• Criteria to asses new product ideas: product, market, competition, organization and, financials
• Cooper (1979) compared successful and unsuccessful new products, and found that successful products were more likely to be innovative, while unsuccessful products were more likely to be imitative
• The most important success factor for a new product is whether it creates superior value for customers
• A reason for collaboration is to develop technological industry standards (CDs)
• A reason for collaboration is to share development costs
• Lead users are good collaborators because they are innovative and ahead of the market
• Key customers in the value chain are good collaborators because they make the key decisions
• You should use different types of customers for collaboration during different stages of the innovation process
• Small customers can be good collaborators because they are more willing and have more time
• Lead users face the need for a product before it exists, would benefit from the product, often end up creating their own solutions
• Hermann Kralik helped develop a bath innovation for the elderly because he was a plumber and had back issues
• Lead users can be found either in the same industry or a different one
• Lead users may not always be able to provide a solution that is attractive to 'regular' customers
• Start with innovative customers, the move to representative customers, and close to launch customers with a positive image in market
• Outside-in open innovation is using contributions from external partners
• Inside-out open innovation is transferring technology to external parties