13-1 Innovation, Intrapreneurship, and Creativity Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

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Innovation, Intrapreneurship,

and Creativity

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall


Describe how innovation and technological change affect each other

Discuss the relationship among innovation, intrapreneurship, and creativity

Understand the many steps involved in creating an organizational setting that fosters innovation and creativity

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Identify the ways in which information technology can be used to foster creativity and to speed innovation and new product development

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Innovation: Process by which new goods and services or new production and operating systems are developed Enables better response to customer needs

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Quantum technological change: A fundamental shift in technology that revolutionizes products or the way they are produced Quantum innovation: New products or operating

systems that incorporate quantum technological improvement

These can cause major changes in the environment

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Incremental technological change: Technological change that represents a continual refinement of some base technology Incremental innovations: Products or operating

systems that incorporate refinements of some base technology

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Innovation is expensive and needs to be protected Patents Copyrights Trademarks

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Intrapreneurs: Entrepreneurs inside an organization who are responsible for the success or failure of a project Notice opportunities Manage product development May leave organization if their ideas are not

supported Become entrepreneurs

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Creativity: Ideas going beyond the current boundaries, whether those boundaries are based on technology, knowledge, social norms, or beliefs May involve combining and synthesizing new

things Knowledge-creating organization: An

organization where innovation is going on at all levels and in all areas

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Creative destruction - The widespread technological changes brought about by increasing global competition that generate new innovations It leads older, less-forward looking companies to

become uncompetitive or driven out of business by new, more innovative ones

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Product life cycle: The changes in demand for a product that occur over time Demand for most successful products passes through

four stages: The embryonic stage The growth stage The maturity stage The decline stage

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Determinants of the length of the product life cycle Rate of technological change

Faster the rate of change, the shorter the product life cycle

Role of fads and fashion Determine the attractiveness of products to customers

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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall13-13


Project management: The process of leading and controlling a project so that it results in the creation of effective new or improved products Project: A subunit whose goal centers on

developing the products or service on time, within budget, and in conformance with predetermined performance specifications

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Effective product management begins with a clearly articulated plan Takes a product through the concept, initial test,

modification, and manufacturing phases

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Project manager’s (PMs) tasks are different from regular managers Manages high proportion of highly skilled and

educated professionals Balances team members creative efforts with

cost and time considerations Maintains the momentum of the project Key to a PM’s success - The ability to think

ahead and conduct effective advance planning

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Quantitative modeling PERT/CAM network or GANTT chart - Flowcharts

of a project that can be built with many proprietary software packages

These software packages focus on: Modeling the sequence of actions necessary to reach a

project’s goal Relating these actions to cost and time criteria Sorting out and defining the optimal path for reaching

the goal

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Critical path method (CPM) Goal is to determine:

Which particular tasks or activities of the many that have to be performed are critical in their effect on project time and cost

How to sequence or schedule critical tasks so that a project can meet a target date at minimum cost

Optimal sequencing of tasks is often worked out by a team

Analysis is an important learning tool

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Stage-gate development funnel A structured and coherent innovation process

that improves control over the product development effort

Forces managers to make choices among competing new product development projects so that resources are not spread thinly over too many projects

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Stage 1: Funnel has a wide mouth to encourage as many new product ideas as possible from both new and established project managers

Stage 2: Specify all of the information required to make a decision about whether to go ahead with a full-blown product development effort

Stage 3: Proceed to development phase

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Cross-functional teams Coordinating R&D function with other functions

is critical but often difficult New product development teams

Marketing, engineering, and manufacturing need to be core members of product teams

Core members - A nucleus of three to six people who bear primary responsibility for the product development effort

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Team leadership Having cross-functional teams is not sufficient

for innovation – they have to be managed properly

Lightweight team leader - A mid-level functional manager who has lower status than the head of a functional department

Heavyweight team leader - A true project manager who has higher status within the organization

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Skunk works - a temporary task force that is created to expedite new product design and to promote innovation by coordinating the activities of functional groups An island of innovation located away from the

organization Dissolved when the product is brought to

market

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New venture divisions - A self-contained, independent division given the resources to develop a complete set of value-creating functions to manage a project from beginning to end Assumes full responsibility for the

commercialization of the product Balance of control between the division and the

corporate center is problematic

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Joint venture Allows organizations to combine their skills and

technologies and pool their resources to embark on risky R&D projects

Partners may disagree over future development plans

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Creating a culture for innovation Organizational structure - Creating the right

setting is important to fostering innovation People – Organizations need to guard against

too much similarity Property rights – Create career paths to show

that success is closely linked with future promotion and rewards

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Information efficiencies: The cost and time savings that occur when IT allows employees to perform current tasks at a higher level Enables employees to assume additional tasks Enables employees to expand their roles in the

organization due to advances in the ability to gather and analyze data also allows information efficiencies

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Information synergies: The knowledge building created when individuals or subunits pool their resources and collaborate across boundaries

Boundary-spanning activity: The interactions of people/groups across the organizational boundary to obtain valuable information and knowledge from the environment to help promote innovation

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IT affects the innovation process through its many effects on organizational structure IT gives lower-level employees more detailed

and current knowledge of consumer and market trends and opportunities

IT can produce information synergies Facilitates increased communication and

coordination between decentralized decision makers and top managers

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IT means that fewer levels of managers are needed to handle problem solving and decision making

IT provides lower-level employees with more freedom to coordinate their actions Information synergies may emerge as

employees experiment and find better ways of performing their tasks

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IT facilitates the sharing of beliefs, values, and norms Allows for the quick transmission of rich and

detailed information between people and subunits

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13-1 Innovation, Intrapreneurship, and Creativity Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

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