Comments for Develop innovative networks and collaborations: never walk alone Bougria Oussama Defauw Sébastien Nzembela Kayembe Tshilenge 5 May 2020 (Article) Andrew, J. P., & Sirkin, H. L. (2003). Innovating for cash. Harvard Business Review, 81(9), 76-83. In the paper written by James Andrew and Harold Sirkin the issue raised is the fact that the majority of new products do not generate a financial return, despite the fact that companies are very involved in innovation. As we all know, new products and “cool” products is not enough to sustain success. The goal is not to be innovative but…Read moreIn the paper written by James Andrew and Harold Sirkin the issue raised is the fact that the majority of new products do not generate a financial return, despite the fact that companies are very involved in innovation. As we all know, new products and “cool” products is not enough to sustain success. The goal is not to be innovative but to be an innovative enterprise in order to generates cash. The paper provides us three approaches to innovation. The author described an innovation approach as “a broad management framework that helps companies turn ideas into financial returns”. The three approaches are: – Integrator: Manage all the steps necessary to generate profits from an idea. The capital needed is high and it is suitable when speed-to-market is not critical, technology is proven, customer tastes are stable, and innovation is incremental. – Orchestrator: Focus on some steps and link with partners to carry out the rest. The investment is medium, and it is best used when there is a mature supplier/partner base, intense competition (a need for constant innovation), when strong substitutes exist and when technology is in early stages – Licensor: License the innovation to another company to take it to market. The capital needed is low. It’s recommended to use this approach when there is strong intellectual property protection, when the importance of innovator’s brand is low, and the market is new to the innovator. Finally, not that there are different level of investments, so the companies have to analyze the cash flows, risks, and returns before the development of new products. An important idea that we must remember is that there is no black box algorithm that tells the best strategy to use. However, a manager can try to find a good solution by assessing 3 factors. First, the manager must find answers to different question relative to the industry. The first quest concerns the physical assets needed to enter the industry. (For example, how heavily will we need to invest in factories?). The second question concerns the supply chain. Are partners working with competitors? Are they complexe or unsophisticated?) The third question is relative to the importance of brands. (Will our brand provide a permanent or temporary Advantage? And finaly the intensity of rivalry. (What strategies will rivals use to respond to our entry?) The second main factor is the nature of the he Innovation. Indeed, the characteristics of the product plays an essential role in the choice of strategy. By instance, the product life potential life cycle indicates the window available to recoup the investment and gives clues about whether we should choose a short term or a long-term strategy. Other innovation characteristics to take into account are the product’s complements and the infrastructure needed for its functioning. Finally, the last main factor a company should consider before picking a strategy are the risks. They fall in four categories. The first risk is relative to the technical performance of the product. Can the product actually work and perform like it promises? The second risk is that the product might not attract the customer even it is performant. The breakthrough or the incremental improvement may not be thrilling enough for consumers, and they may not buy it. Substitutes represents the tird risk, obviously the more substitutes on the market the less margins there will be. Finally, the fourth element that will risk profile is the magnitude of the investments that need to be done in order to commercialize the product. Once this assessment is done, there are a few advices a manager must keep in mind First, we must consider the composite picture and be mindful not to focus on one dimension of the framework. The goal of this broad perspective is to match the innovation’s needs for commercial success with the marketplace conditions. Moreover, as said above choosing the right strategy is not a backbox process and it must be seen as more of a “best guess”. Secondly it is not enough to get a sense of which strategy to adopt toward an opportunity, The firm’s internal skills must also match the approach. If there is not a good match between the organization and the approach, or if the company can’t use the desired approach, managers have two options. They can either use a less-attractive strategy to take the product to market. Or, they can invest funds and time in order to develop the skills needed for implementing the optimal strategy. The biggest limitation is that they don’t have a blackbox to help the manager to choose the right approach to launch a product on a market. That’s what they actually let the reader understand further in the article. However, we can note that they give us a path to do it like we have seen in the previous section with the four factors a company can use to analyze the industry. But no tools have been proposed to clearly chose one aspect or to analyze the innovation or the risk dimension. So, there is clearly a room for freedom and companies cannot be sure they have chosen the best approach even if they apply the few advices present in this article. Another big limitation is that they suggest only 3 approaches. There is no other approach proposed. In fact, in reality it exists way more than 3 approaches. Furthermore, if your company identifies itself that some aspects fit more in the Integrator and others in the licensor but not really in the orchestrator approach, the manager has then to freeride and choose by himself where the company will situate to adapt one approach. Finally, we have to keep in mind that it is only theory and even if for some companies these approaches might be working it might not be the case for every single company. Further resources: – Jalalabady, F. Sameri, A. Reece, EM. (2018). Product development: from concept to market. US National Library of Medicine, National Institute of Health. Online article from: https://www.ncbi.nlm.nih.gov/pubmed/30357046 – Yoon, E. Lochhead, C. (2020). 5 Ways to stimulate cash flow in a downturn. Harvard Business Review. Online article from: https://hbr.org/2020/04/5-ways-to-stimulate-cash-flow-in-a-downturn?referral=03759&cm_vc=rr_item_page.bottom Show less Reply DE POTTER D'INDOYE Séverine; GILSON Marie; SCHOCKAERT Evrard. 3 May 2020 "(Article) Gassmann, O., Enkel, E., & Chesbrough, H. (2010). The future of open innovation. R&D Management, 40(3), 213-221." 1. Key Insight Open Innovation is based on these different streams of research organised into nine different perspectives : (1) The spatial perspective leads to research on the globalisation of innovation. (2) The structural perspective shows that the division of labour has increased in innovation. (3). The user perspective. (4) The supplier perspective. The downstream side of innovation has…Read more1. Key Insight Open Innovation is based on these different streams of research organised into nine different perspectives : (1) The spatial perspective leads to research on the globalisation of innovation. (2) The structural perspective shows that the division of labour has increased in innovation. (3). The user perspective. (4) The supplier perspective. The downstream side of innovation has been less intensively researched, but has a strong impact on innovation. (5) The leverage perspective (6). The process perspective. There are three essential processes in the openness of the innovation process: outside-in, inside-out and coupled. (7). The tool perspective. (8) The institutional perspective. Open innovation can be seen as a private-collective model of innovation. (9). The cultural perspective. Openness of the innovation process starts with a mindset. The question is how far open innovation will go and how long it will last. A genuine paradigm shift is irreversible and differs from trends in fashion and science in its long-term impact. (1). Industry penetration: from pioneers to mainstream. (2). R&D intensity: from high to low technology. (3). Size: from large companies ﬁrms to SMEs. (4). Open innovation is also encouraged by a parallel trend in innovation processes. (5). Structure: from autonomy to alliances. (6). Universities: from ivory towers to knowledge brokers. (7). Process: from amateurs to professionals. (8). Content: from products to services. (9). Intellectual property: from protection to inalienable property. 2. Implications First of all, in order to be able to switch to open innovation practices, the innovation processes will have to evolve in parallel. While back in the 80’s and 90’s the stage-gate process was dominant, mainly for new product developments. Managers now have to adopt an interactive probe and learn process. But what’s the difference and what are the pro’s and cons of this evolution? So, the stage-gate process is composed of 5 stages, each separated with different quality assessment gates. The Gates go as follows; first a SCOPING gate (where the feasibility of the project is assessed) then the BUSINESS CASE CREATION (where the business is simulated) then a DEVELOPMENT stage ( where the focus lies on design) the fourth stage is TESTING AND VALIDATION ( here, the product is tested in labs) and finally the LAUNCH PHASE ( where the product is put on the market). The main advantages of this method is that it helped structure the process and provide a clear schedule to follow. The decision -making happens more fluently and risk is minimized. But, at the end of the 90’s. Lynn found out that some high-tech companies, who launched products in a discontinuous and less structured way, operated with a different process. This is where the Probe and Learn process found birth. The process happens as follows; first there is a PROBE stage (where a product is brought as an experiment into the market) then there is a STUDY THE MARKET RESULTS stage, next you LEARN from that experiment and you ITERATE with other experiments. This way of processing innovation can be compared with the Lean Startups method used nowadays in many companies. So that’s the first implication, in order to surf on the wave of open innovation, processes needed to be adapted and will continue to evolve in the future, back in the days we talked more about Probe and Learn, now we talk about Lean Startups. 3. Limitations For open innovation to truly become a main paradigm, more SMEs have to adopt an open innovation strategy. Given that they represent a large portion of enterprises and not enough of them have actually opted for this shift. Why is that? SMEs face number obstacles that stop them from actually going for an open strategy Loss of revenue Licensing is an important strategy for organizations knowledge oriented. It allows them to secure a revenue. Losing that revenue would be quite difficult for them as they do not have the resources of big compagnies and they rely on that revenue to survive. Furthermore, companies have tax incentive with patenting. Policies encourage IP protection through tax benefits. You may gain scale but you still need to find the right partner Another obstacle is the difficulty to find the right partners Simply deciding to choose an Open Innovation strategy is not enough to make it successful. Organizations still need to find the right partner for them. When collaborating, they need to make sure that objectives of each party involves align. Knowledge is a crucial asset for SMEs and patenting is a very important strategy. Many SMEs fear losing their competitive advantage if they go for an Open Innovation strategy and share their knowledge to potential competitors. Managerial complexity + Coordination costs Furthermore, the shift from a closed to an open business model comes along with increasing complexity for managers and increases the costs of coordination of internal and external resources. Finding the right balance between technological knowledge revealing and resources sharing represents a critical task for successful open innovation strategies. An additional challenge comes from the alignment of partners’ incentives while retaining technology control. Managers have to keep every stakeholder happy and make sure their goals are a match. Rigidity and knowledge lock in In addition, the evolution of alliances inside a focused business model exposes SMEs to the risk of remaining locked-in to the development of specific technological knowledge and not being able to move away from a nonscalable business model. They could find themselves locked in to the available technological knowledge. This would result in an adaptability loss which is one of the strength of SMEs. Loss of focus Finally, search strategies aimed at exploring new solutions that involve multiple partners in the early stages of technology development can result in distraction of resources, lack of focus, and failed attempts to find synergies between the new project and the core business of the company. This loss of focus could to lead rising search cost and low return on R&D investments. Let’s now look at our second limitation which relates to the Intellectual Property system. Given that the IP system has been there for a quite some time, it is well established and gives strong incentives to protection strategies. Patent system: Tax incentive As said before, enterprises have tax benefits when they patent an innovation. Policies are favoring protection Given that the IP system is as established, policy makers often favor protection by for example extending the length of patent (e.g. pharmaceutical products) or IP rights (e.g. Mickey) Way to monetize knowledge For many enterprises, licensing is an important source of revenue. Other alternative if patents are too expensive: i-depot 4. Further References (Sev) Huizingh, E. K.R.E. (January 2011). Open innovation: State of the art and future prospects. Technovation. Elsevier, Volume 31, Number 1, pages 2-9. de Araújo Burcharth, A. L.; Praest Knudsen, M.; Alsted Søndergaard, H. (March 2014). Neither invented nor shared here: The impact and management of attitudes for the adoption of open innovation practices. Technovation. Elsevier, Volume 34, Issue 3, Pages 149-161. Show less Reply Abedinaj Alban, Bouvry Clément, Balgobin Martin, Camacho-Fernandes Théotim, Vande Berg Guillaume 30 April 2020 Pisano, G. P., & Verganti, R. (2008). Which kind of collaboration is right for you. Harvard business review, 86(12), 78-86. This article deals with the topic of collaboration and the tools that help managers make the right decisions about the collaborations their company performs. Potential partners and ways to collaborate with them have both increased a lot. However, selecting the best options remains quite difficult. Indeed, companies that choose the wrong mode risk falling behind in the race to develop…Read moreThis article deals with the topic of collaboration and the tools that help managers make the right decisions about the collaborations their company performs. Potential partners and ways to collaborate with them have both increased a lot. However, selecting the best options remains quite difficult. Indeed, companies that choose the wrong mode risk falling behind in the race to develop new technologies, designs, products and services. The first key insight is the importance of participation in collaboration. Collaboration networks differ significantly in the degree to which membership is open to anyone who wants to join. How open or closed should your firm’s network of collaboration be? The second key insight is about the importance of governance in collaboration within the company (hierarchical vs. flat). Who should decide which problems the network will tackle and which solutions will be adopted? The third key insight is the fact that a company’s strategy must be consistent with its type of collaboration. The managerial implication of the first key insight is that the manager should try to make the best decision for his company and its objectives. It is therefore essential for them to understand when it is necessary to have a large or a small number of problem solvers and thus to position oneself in an open or closed network. Firstly, by using a closed mode, it follows that the manager should identify the knowledge domain from which a potential solution to his problem would come. Then, the manager should identify the people competent in this knowledge domain. In the open approach, it is not necessary to identify the areas of knowledge where the solution could come from. It also follows that it is not necessary to identify the potential people capable of solving your problem. In fact, once a problem is posed, the open network makes it possible to attract a large number of potential solutions from different problem solvers. For the second managerial implication, if the manager thinks that the governance of his organization is hierarchical, he must make sure that it has the necessary capacities and knowledge to define the problem and evaluate the proposed solutions. Indeed, this type of governance requires a good understanding of the technologies and markets concerned (thus an ability to understand the needs and requirements of users), to define the system configuration in order to coordinate the work of the various collaborators. On the other hand, an organization can also have flat governance, in which case the manager must ensure that the organization does not have the necessary breadth or capacity because the advantage here is the ability to share (burden of innovation) with others the costs, risks and technical challenges of innovation. The challenge will therefore be to get the contributors to converge to a profitable solution for the company. For the third key insight, the manager must ensure that the choice of collaboration is always in line with the organization’s strategy in relation to the rapidly changing environment and current technologies. In order to develop an effective collaboration approach, it is important for a company to have a clear understanding of the adopted strategy. Regarding the limits, your collaboration level will depend on your company. Indeed if your company’s competitive advantage is based on a secret trade, then it is likely that you will not move towards collaboration. Because you have to trust your employees, and this is often easier internally. Therefore, not every creative mode is suitable for every project. Some projects are by their nature or size dedicated to certain modes. Small projects where all the necessary knowledge is already present do not require collaboration for their creation. Finally, if you want to attract talents in your collaborative projects. you must be known enough and offer them something in return or nobody will apply. Further references: (article) Prusak, L. (2011). Building a collaborative enterprise. Harvard Business Review, 89(7-8), 94-101. (article) Nidumolu, R., Ellison, J., Whalen, J., & Billman, E. (2014). The collaboration imperative. Harvard business review, 92(4), 76-84. (article) Henttonen, K., Hurmelinna‐Laukkanen, P., & Ritala, P. (2016). Managing the appropriability of R&D collaboration. R&d Management, 46(S1), 145-158. Show less Reply Mathilde Delsarte, Eva Guiducci, Oriane Symon, Léa Van Hamme 28 April 2020 Emden, Z., Calantone, R. J., & Droge, C. (2006). Collaborating for new product development: selecting the partner with maximum potential to create value. Journal of Product Innovation Management, 23(4), 330-341. The process presented is divided in 3 key phases. The first phase is called the technological alignment. It will give managers an idea about possible opportunities. They need to ensure that the partners have either an innovative technology or a specific expertise (technological capability), that the partners complement one another (resource and market knowledge complementarity) and that they share some…Read moreThe process presented is divided in 3 key phases. The first phase is called the technological alignment. It will give managers an idea about possible opportunities. They need to ensure that the partners have either an innovative technology or a specific expertise (technological capability), that the partners complement one another (resource and market knowledge complementarity) and that they share some overlapping knowledge to assess the value of the potential partner’s competencies. The second phase of strategic alignment exists to assess if the strategies of the partners are compatible on two main points: the motivations and purpose of each partner need to correspond. However, they do not have to be the same but only to be compatible. Finally, the third phase is about relational alignment. Firstly, as the collective behaviors and the decision process are shaped by the organizational culture, those of the potential partners have to fit together. Secondly, a propensity to adapt is also needed for the success of the collaboration. Finally, both firms need to have a long-term orientation to ensure success and accept to make some short term sacrifices. Concerning the implications, you have to be careful about three aspects to select a good partner for your co-development alliances. First, do not approach the co-development like any other kind of partnerships. When firms collaborate for new product development, they do so with several different types of organizations. Moreover, co-development implies both integration and a certain level of competitiveness between the partners, and each party contributes to a significant portion of the end solution. Secondly, the order in which the constructs are practiced is important. First, develop a mutual understanding of technologies and their implications in the market, then stablish a team to develop the initial co-development project specifications and finally, determine financial and legal feasibility of co-development project and create organizational acceptance. To conclude, do not forget to combine the 3 essential phases. By the technological alignment with a partner, you maximize the transfer and integration of know-how and create technological synergies. But, trust the significance of strategic and relational alignments, because they allow to ensure the transfer of the know-how and the collaboration, as well as the sustainability of the partnership. With regard to limitations, we have identified two main ones in our article. The first one is that finding a partner who matches all the criteria is not always enough. In some cases, even if a company has taken care to ensure that each of the steps described above in finding a good partner are successfully completed, the partnership may prove to be complex. Firstly, it is impossible to know for sure that our partner will not deviate from the collaboration to obtain a greater personal advantage. Secondly, we operate in a VUCA environment where the future is uncertain and change is omnipresent. The partnership may therefore work for the best in the situation where the deal was made, but it may degenerate if unexpected external elements are added (ex : coronavirus crisis). The second limitation is that this type of partnership does not only include those who decide to join forces. Indeed, suppliers, competitors, customers, and other stakeholders are all impacted by the deal. It is therefore necessary to think further and analyze the case of each of the stakeholders before starting a collaboration for the development of a new product. Further references : Hu, Y., McNamara, P., & Piaskowska, D. (2017). Project suspensions and failures in new product development: Returns for entrepreneurial firms in co-development alliances. The Journal of Product Innovation Management, 34(1), 35-59. doi:http://dx.doi.org.proxy.bib.ucl.ac.be/10.1111/jpim.12322 Gattringer, R., Wiener, M., & Strehl, F. (2017). The challenge of partner selection in collaborative foresight projects. Technological Forecasting and Social Change, 120, 298. Retrieved from https://search-proquest-com.proxy.bib.ucl.ac.be:2443/docview/1936519378?accountid=12156 Bhaskaran, S. R., & Krishnan, V. (2009). Effort, revenue, and cost sharing mechanisms for collaborative new product development. Management Science, 55(7), 1152-1169. Retrieved from https://search-proquest-com.proxy.bib.ucl.ac.be:2443/docview/213194453?accountid=12156 Show less Reply TIMPERMAN QUENTIN, GRIBAUMONT Bastien, CLOQUET Guillaume, DE WOOT Brice, SCHYNS Martin, BARBIERE Robin 7 May 2019 (Article) Poetz, M. K. & Schreier, M. (2012). The value of Crowdsourcing: Can users Really Compete with professionals in Generating New Product Ideas? 29(2), 245-256. Key Insights A. Firstly, the article defines the concept of crowdsourcing by the act of generating ideas of new products or services, or ideas of improvements for existing products or services by collaborating with end users. B. Afterwards, this paper tries to differentiate the two main types of users input. On the one hand, there are user needs not yet fulfilled by currently commercialized…Read moreKey Insights A. Firstly, the article defines the concept of crowdsourcing by the act of generating ideas of new products or services, or ideas of improvements for existing products or services by collaborating with end users. B. Afterwards, this paper tries to differentiate the two main types of users input. On the one hand, there are user needs not yet fulfilled by currently commercialized products. This kind of information is called “needs-based information”. On the other hand, the second type of user input named “solution-based information”, which relates to consumers directly proposing potential ways to solve their revealed needs. C. Finally, in order to understand how effective crowdsourcing is compared to traditional idea generation processes, the article explains the results of a case study confronting professionals and end users. Their ideas are judged on the criteria of novelty, customer benefit and feasibility. Implications A. The optimal solution should be a combination of the two extremes. In order to be properly innovative on the current markets, innovation should lie in a combination of crowdsourcing and usage of professional techniques and knowledge. First, managers should focus on gathering new ideas from their users, that could bring effective customer benefit. Secondly, they should rely on their skilled teams of professionals to transform these ideas into feasible products that can be commercialized. B. There exist different types of crowdsourcing based on the targeted skillset. Therefore, management teams have to identify beforehand which type of user input they expect in order to discover which type of audience they target through their crowdsourcing. Two types are particularly highlighted in this paper. On the one hand, User Innovation which consists in making a call to the wide crowd in order to help you develop a project. One famous example is the open source operating system Linux. On the other hand, Innovation Tournaments which can be illustrated with the concept of “hackathons” in which people competing against each other are experts in the domain related. Limitations A. The first limitation concerns the minimum knowledge required to innovate in a certain field. Indeed, it can be a real barrier to propose ideas in certain industries in which the theoretical and technological background required is so huge that the organizations can only rely on experts to manage their products. B. Another factor influencing the effectiveness of crowdsourcing methods is the willingness of the crowd to share their findings. As a matter of fact, the crowd is not always inclined to share those ideas. Further References A. Estellés-Arolas, E., Gonzàlez-Ladrón-de-Guevara F. (2012). Towards an integrated crowdsourcing definition, Journal of Information Science, 38(2), 189-200. B. Wilmot, R. (2015). Crowdsourcing Innovation: Changing the world one idea at a time. Tedx Talks. Online video (10 min). Show less Reply Students 14 May 2018 Dahlander, L., & Gann, D.M. (2010). How open is innovation?. Research Policy, 39(6), 699-709 These authors tried to find the magic recipe for a culture that best supports innovation. In order to find it, they studied in detail 4 companies who received the prize of “the best culture supporting innovation”. In the beginning of the article, they tried to define the word “culture” and found 164 different definitions in the literature. They decided to use this definition:…Read moreThese authors tried to find the magic recipe for a culture that best supports innovation. In order to find it, they studied in detail 4 companies who received the prize of “the best culture supporting innovation”. In the beginning of the article, they tried to define the word “culture” and found 164 different definitions in the literature. They decided to use this definition: “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems” The first key insight that resorted from this paper is that social innovation precedes technical innovation. Technical innovation regarding products or services proposed by the firm is possible only if social innovation (innovations regarding the firm’s culture and the different relationship within the firms that constitute its hierarchy) has been done beforehand. For a manager, an implication regarding this key insight is to be “ambidextrous”. That means to be able to exploit current and existing social innovation possibilities while, simultaneously, dealing with new and different opportunitiesthat can have a positive impact for the company’s culture in the future. A limitation to this managerial implication is that it seems to be unrealistic to ask all the stakeholders to develop a chameleon attitude such that they’re able to adapt permanently to change of culture. The role of leadership is not only to inspire but also to create and transform the culture of the company in order to have a culture supporting the innovation objectives of the firm. For a manager, that implies that he needs to know what’s the culture now and so to review the existing culture. Then, a second essential thing is to take the strategy and the structure of the company into account in order to create the right culture that will fit with the goals of the company in terms of innovation. Another thing is also to realize that transforming the culture takes a lot of time and energy and that it is personal so that means that it is specific to your company. Sometimes, when the leadership creates or transform the culture there is a feeling with the employees that it comes only from above and they are not integrated in the process. So, these employees will not be motivated and invested in their work. The culture will maybe not fit with their own values, so it can create problems (living the company). That’s why communication is really important. If you put the innovation into the culture, it will be a value, and an automatism in the work of your employee. However, pay attention to letting your employee express this “non-negotiable dimension of the work” freely. You should motivate and push some other values that will help this innovative culture to have an effective innovative company such as authorise and reward the risk taking. Then when you think about implementing that innovative culture in order to have an innovative company, do not push this innovation too much, you don’t want to have employees thinking about innovation all day long and being stressed about finding “the big new idea”. Further references : • Mulgan, G. (2012). The theoretical foundations of social innovation. In Social innovation (pp. 33-65). Palgrave Macmillan, London. • Barsh, J., Capozzi, M. M., & Davidson, J. (2008). Leadership and innovation. McKinsey Quarterly, 1, 36. • Sciulli, Lisa M. “How organizational structure influences success in various types of innovation.” Journal of Retail Banking Services, Spring 1998, p. 13+. Academic OneFile, Accessed 28 Apr. 2018. • The Four Behaviors Of Innovative Leaders | Forbes (Video) Show less Reply Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Reference Identify the bibliographic reference you are commenting. 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