INNOVATION MANAGEMENT Strategy and Implementation using the Pentathlon Framework SECOND EDITION KEITH GOFFIN & RICK MITCHELL Includes 77 innovation case studies - from the service and manufacturing sectors and from around the globe macmillan Table of Contents List of Case Studies Acknowledgements Preface About the Authors Copyright Material • 1 2 xi xvii xix xxi xxiii KEY ASPECTS OF INNOVATION MANAGEMENT . Introduction Innovation Drivers Technological Advances; Changing Customers and Needs; Intensified Competition; Changing Business Environment; Responding to the Environment — Strategic Intent Characteristics Of Innovation Definitions of Innovation; Dimensions of Innovation; Dimensions of Innovation in Services; Degrees of Innovation; Evaluating Dimensions and Degrees; Innovation and Continuous Improvement; Phases of Innovation; Innovation throughout the Organization Key Research On Innovation Macro-Level Investigations; Micro-Level Investigations; Project-Level Investigations; Service Innovation Research Managing Innovation - The Challenge , Need for a Framework; The Innovation Pentathlon Framework The Structure Of This Book Format of the Chapters Summary INNOVATION AND ECONOMICS Introduction Economic Measures Of Innovation Factors Mediating Innovation Company Size and Innovation; Market Sectors and Innovation; Education Levels, National Culture and Innovation; Government Policies and Innovation Impacts Of Innovation Innovation and Business Cycles; Innovation Innovation and Company Performance; Product Innovation and Growth Diffusion Of Innovations and 1 1 2 6 20 26 32 34 41 41 42 44 51 Employment; 56 VII VIII TABLE OF CONTENTS The Influence of Product Features; The Adoption Life Cycle Summary^ . 3 60 CONTRASTING SERVICES WITH MANUFACTURING Introduction The Importance Of Services Service and the Economy; R&D.in Services; Manufacturers Need Services Characteristics Of Services Terminology of Services and Manufacturing; Service Delivery; The Servicescape; Service Characteristics and Innovation; Managing Quality in Services Innovation In Services The Need.for Innovation; Managing Service Innovation; New Service Development Processes Services And Innovation Management Summary 65 65 66 4 DEVELOPING AN INNOVATION STRATEGY Introduction Innovation Strategy And Stakeholder Satisfaction Kano's Feature Analysis < Technology: The Capability Ceiling • The Technology CS' Curve; An Alternative Perspective: Dominant Design; Evolution of Strategy as Technology Matures Customer Satisfaction: Feature Fatigue Disruptive Innovation; Responses to a Disruptive Threat Competition Value Innovation: Blue Ocean Strategies; Protecting the Value Open Innovation Strategic Issues Linking The Components Of Strategy Roadmapping; Scenario Planning The Success Trap Summary 93 93 97 5 GENERATING CREATIVE CUSTOMER-FOCUSED^ IDEAS Introduction ' Creativity Types of Business Creativity; Individual Creativity; Team Creativity and Culture; Creativity Techniques for Innovation Triz Managing Knowledge Nature of Knowledge; Capturing Tacit Knowledge; Promoting Knowledge Transfer .' Ideas And Innovation 70 80 85 86 101 109 115 119 123 131 132 139 139 140 149 150 154 TABLE OF CONTENTS Identifying Customer Needs - Traditional Approaches; Hidden Needs Analysis; Empathic Design; Lead Users; Experimentation; Virtual Communities; Identifying Priorities - Conjoint Analysis; Choosing the Correct Approach to Market Research Protecting Ideas Copyright; Design Right; Trademarks; Patents Summary 6 SELECTING AND MANAGING AN INNOVATION PORTFOLIO Introduction Principles Of Portfolio Management The Need for a Process; Elements of a Good Portfolio Valuing Individual Projects Types of Project; Financial Valuation Methods; Single-Stage Projects; Estimating Probabilities in Projects; Multistage and Network Projects; Comparing the Values of Risky Projects; Valuing Large and Small Portfolios of Projects; Non-financial Methods; Choosing a Valuation Method Choosing And Managing A Portfolio Ranking Projectsfor Selection; Balance The Management Process ' People Issues; Selecting the Tools Summary 7 IMPLEMENTING INNOVATIONS Introduction Project Management Techniques Setting Project Aims and Tradeoffs; Work Breakdown Structure; The Project Schedule; The Resource; Plan; Agile Project Management Managing Project Risks Collecting Risk Information; Appraising the Risks: The FMEA Process Linking Customer Needs To Product Design Embedding the Features: Quality Function Deployment; Defining and Delivering Service Products Managing Stakeholders Managing An Innovation Department Phase Gates; Managing Simultaneous Projects; Managing Collaborations Summary 8 CREATING AN INNOVATIVE CULTURE Introduction Organizational Culture And Innovation IX 175 181 187 187 188 191 210 216 222 227 227 229 236 239 248 250 259 265 265 266 TABLE OF CONTENTS Understanding and Assessing Culture; Applying the Cultural Web; Studies of Innovation Culture Managing Innovation Teams Team Structures; Making Project Teams Work Managing People For Innovation Recruiting and Job Assignment; Managing Performance; Development of Employees Summary • BOOSTING INNOVATION PERFORMANCE Introduction Performance Improvement '» Assessing Current Performance Performance Measures; The Innovation Audit Priorities And Linkages Priority Areas; Considering Linkages Actions To Boost Performance Change Management and Innovation; Making a Breakthrough; The Role of an Innovation Manager Summary 282 297 306 311 311 312 313 323 329 337 10 THE FUTURE OF INNOVATION MANAGEMENT Introduction: The Innovation Environment Customers Implications for Innovation Management Technology Implications for Innovation Management Competition Implications for Innovation Management The Business Environment Open Innovation; The Dangers of Open Innovation; Implications for Innovation Management Conclusion Summary 343 343 343 Appendix References and Notes Index 365 369 391 350 352 354 360 360
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