Management of Technology (OM476)

1. Management of Technology (OM476) Sources of Innovation January 23, 2006 S. Fisher

2. Agenda • Where does innovation come from? • Applicability of different types of research • Review requirements for case deliverables

3. Individual assessment • Complete the assessment • Will score it when everyone is done • What do you think this measures?

4. Creativity • The ability to produce work that is useful and novel. • Individual creativity is a function of: • Intellectual abilities (e.g., ability to articulate ideas) • Knowledge (e.g., understand field, but not wed to paradigms) • Style of thinking (e.g., choose to think in novel ways) • Personality (e.g., confidence in own capabilities) • Motivation (e.g., rely on intrinsic motivation) • Environment (e.g., support and rewards for creative ideas)

5. Not wed to paradigms? • “Space travel is utter bilge.” – Sir Richard van der Riet Wooley, The Astronomer Royal, 1956 • “With over 50 foreign cars already on sale here, the Japanese auto industry isn’t likely to carve out a big slice of the U.S. market” – Business Week Aug. 1968 • “There is no reason for an individual to have a computer in their home” – Ken Olsen, President of DEC, 1977 • “People will soon get tired of staring at a plywood box every night” – Darryl Zanuck, Head of 20th Century Fox, 1946

6. Organizational Creativity • Function of creative individuals and social processes & contextual factors that shape how those individuals interact and behave • Methods of encouraging/tapping organizational creativity: • Idea collection systems (e.g., suggestion box) • Training • Culture

7. CREATIVITY AND INNOVATION • CREATIVITY is developing new ideas….inventing. • INNOVATION is converting ideas or inventions into tangible products, services and processes

8. Systems supporting innovation • Google [Source: Elgin (Oct 3 2005) Business Week] • Engineers have one day/week to work on pet projects • Ideas mailing list • Dir. of consumer web products has office hours • OXO International • Culture of trial and error – mistakes are acceptable and lead to learning • “Overprocessing” would kill creativity

9. Innovation by Inventors • Classic inventors: Ben Franklin, Edison, Bell, etc) • Who are today’s inventors? • Are Larry Page and Sergey Brin ‘inventors’?

10. Drucker’s Sources of Innovation: Finding Opportunity • Inventors (wherever they are located) can identify and respond to: • Unexpected occurrences • Incongruities • Process needs • Industry and market changes • Demographic changes • Changes in perception • New knowledge

11. Innovation by Users • Continued development of Linux • Represents a process innovation (open source) as well as the product innovation (operating system) • Potential benefits and drawbacks of innovation by users?

12. R&D by Firms • R&D spending by many firms is huge • Motorola – 10% of sales • Cisco – 14.5% • Nokia – around 10% • Range of basic to very applied research • Bell Labs (now part of Lucent) is the classic example (http://www.bell-labs.com/about/) • Transistors, lasers, digital encryption • Averaging two patents per day!

13. Example: H-P labs • 6 labs around the globe; Palo Alto, CA; Bangalore, India; Bristol, UK; Haifa, Israel; Tokyo; Beijing; employ about 600 people • Collaboration with governments and universities • Creating a distributed, virtual museum with over 100 Chinese university museums Source: Singer (2005). HP opens R&D lab in China. http://www.news.com

14. Universities and Government Funded Research • Universities can often do more basic research that becomes a component of future innovations • Science-push model • Measured outcome is typically publications rather than new products to market • Technology transfer – taking ideas developed at universities and making them marketable • Bayh-Dole Act allows universities to keep some rights to IP developed on gov’t funded grants Source: http://www.aau.edu/research/TechTrans6.3.98.html

15. Inter-firm relationships • Complementors • Where would Griffin Technology be without the iPod? • Technology clusters • Silicon Valley • Detroit (Auburn Hills, really) • Develop the labor market, supplier base, etc, to support industry efforts

16. For Wednesday • Topic: Case #1 IDEO Product Development • Team 1 will be presenting • Team 5 will have review/question role • All other teams must hand in exec summary

17. Team Presentations (15 points) • Approximately 30 minutes long • Each team member must have a speaking role • Must be professional – presentation style, dress, visual aids, etc. • Discuss: • Overview of company and case • Analyses conducted to answer case questions (may not always be quantitative) • Answers to case questions • Specific recommendations for the company

18. Review and questioning role • Prepare executive summary of case questions • Prepare a list of additional questions to ask the presenters, along with written answers to those questions • Ask the prepared questions that were not addressed in the presentation • 8 points

19. Team Executive Summaries • Answer questions for the case • Demonstrate understanding of the key issues in the case • Conduct some analysis • Approximately 2-3 pages long • Due at the beginning of class • 2 points each (12 points total)