Management of Technology (OM476)

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Management of Technology (OM476)

• Creativity and Innovation
• January 18, 2006
• S. Fisher

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Agenda

• Why is innovation important? How does it affect
  society?
• Lessons learned from Gunfire at Sea reading
• Start thinking about where innovation comes from

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Technological Innovation Process

NEW AND IMPROVED PRODUCTS
INDIVIDUAL CREATIVITY
TECHNOLOGICAL ADVANCES
ENHANCED GLOBAL COMPETITION
INCREASED SALES
RISING EMPLOYMENT AND LIVING STANDARDS
ORGANI- ZATIONAL CREATIVITY
IMPROVED PROCESSES AND PRODUCTIVITY
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Impact on Society

• Increases in GDP, standard of living,
  availability of products
• "Increasingly, patents have become an essential
  ingredient of our economic vitality, paving the
  way for investment in commerce and in research
  and development, and creating jobs for millions
  of Americans. Jon Dudas, Under Secretary of
  Commerce for Intellectual Property
  (http//www.uspto.gov/main/homepagenews/bak11jan20
  05.htm)

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Top Private Sector Patent Recipients, 2004
Source US Patent and Trademark Office
(www.uspto.gov)
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Sales from new products

• Indicator of contribution from innovation to the
  organizations bottom line
• For example, Bayer (2004) - 20 of sales from new
  products
• 3M up to 45 according to Schilling, but how
  are they defining new products?
• Subaru B9 Tribeca (newest model) sold 12,000
  out of 187,400 total vehicles in 2005
• Several other models were also redesigned how
  does this affect return on innovation?

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Negative effects (externalities) of innovation?

• Effects on communities and environments?
• Shorter product life cycles
• Increased use of the internet
• Advances in medical technology
• Cloning, creation of chimeras
• Need to think long term
• A problem with the technology or just the
  application of the technology?

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The World is Flat

• Premise is that technology is serving to remove
  boundaries and flatten the world
• Increasing global competitiveness
• Key question do we want to lose all of those
  boundaries? Are some boundaries important
  sources of identity and belonging that we want to
  protect?

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Strategic Management of Innovation

• Costly process must allocate resources wisely
• Even 3M started constraining the innovation
  process
• McNerney 1500 products in the developmental
  pipeline is too many. Funnel resources toward
  those ideas with greater market promise
• Should be aligned with firms resources and
  objectives
• Intel and Cisco moving into consumer
  electronics. Alignment? Challenges?

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Innovation Funnel
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In-class writing

• Briefly describe two key points about
  technological innovation from the Gunfire at Sea
  reading.

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Gunfire at Sea

• What were the key lessons regarding technological
  innovation?
• Factors enhancing innovation?
• Factors holding innovation back?
• Do these lessons still apply today? If not, how
  have things changed?

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For Monday

• Topic Sources of innovation
• How do people/organizations come up with
  innovative ideas?
• Read
• Schilling Chapter 2
• Discipline of Innovation Peter Drucker