Case study assignment
This is a case company assignment. This company wants to become a leader in radical innovation. Your assignment is to design an appropriate business process, which can support the company’s current and future innovation activities. Your assignment is to improve the innovation management process in the company. Specifically, you have two tasks:
1. Describe the stages and activities that enable innovation in a company in general and in the case company specifically. What are the strengths and weaknesses of the current situation in the company?
2. Design an initiative, which can strengthen incremental and radical innovation in the company. This new process should enable the use of innovation management techniques.
For Task (2) you should provide not only a description and rationale of the new innovation management process and the supporting innovation management techniques but also a proposal outlining how the company should implement this new innovation management process.
As a strategy designed to help companies succeed, innovation is rising to the top of organisations’ agenda. For the first time, according to PwC’s 14th Annual Global CEO Survey, CEO’s say they are as likely to focus on innovation to achieve growth, as they are to exploit existing markets.
In this paper I will define innovation, outlining its importance in modern business and describe innovation enablers. I will then discuss the strengths and weaknesses of Lonza, the organisation outlined in the case study. Finally, I will present how I believe Lonza can develop, implement and embed radical and incremental innovation within its business so that it, like many organisations as described by PwC, can achieve growth.
“Innovation is driven by the ability to see connections, to spot opportunities and to take advantage of them” according to Tidd & Bessant (2009). However the challenge is not simply identifying opportunities, but making these work technically and commercially – it’s the “successful exploitation of new ideas” that counts (Innovation Unit, Department of Trade and Industry, 2004).
Companies that do not innovate put their future at risk – they are unlikely to prosper and will eventually be unable to compete (Australian government). New, innovative products and services are essential to retain market share, increase profitability and build credibility. Schumpter (1950), described as the Godfather of innovation studies, states that entrepreneurs seek new products and services to gain strategic advantage. Initially they will get ‘monopoly profits’ but soon after, their innovation will be imitated and so the cycle will repeat itself. He describes ‘creative destruction’ as new innovations destroy the old rules and create entirely new ones. This is why innovation cannot be viewed as a single activity: it must be an on-going process even if it is made up of individual projects.
The types of innovation that exist can be summarised in three main categories: i. Technical revolution, where a completely new product is brought into play (new-to-the-world: this is very rare, according to Ettlie (1999) and is just 6-10% of all projects) ii. Radical innovation, where a major new development is made. “Radical innovations create such a dramatic change in products, processes or services that they transform existing markets or create new ones” says Leifer et al (2000) iii. Incremental innovation is where an improvement is made to an individual product. Studies of incremental development (e.g. Hollanders famous study of DuPont rayon plants,) suggest that cumulative gains can often be greater over time than those, which come from occasional radical ideas. Continuous improvement programmes such as ‘lean’ thinking and six sigma have received a lot of attention due to their success in supporting business efficiency and growth, however they are very different to the methods that lead to radical innovation....
References: Abernathy, W. & Utterback, J. (1975) Patterns of industrial innovation. Technology Review 1975
Australian Government (2012) Sectors/science innovation [Online]
Cooper, R.G. (2008) Perspective: The Stage-Gate Idea –to-launch Process – Update, What’s new, and NexGen Systems. The Journal of Product Innovation and Management
Ettlie, J. (1999) Managing Innovation. New York: Wiley & Sons Ltd.
Francis, D. & Bessant, J. (2005) Targeting innovation and implications for capability development. Technovation 25, p171-183
Hollander, S. (1965) The Sources of Increased Efficiency: A study of DuPont Rayon Plants. Cambridge, MA: MIT Press
Porter, M.E. (2004) Competitive Strategy. New York: Free Press
Schumpter, J. (1950) Capitalism, Socialism and Democracy. New York: Harper & Row
Van de Ven, A. (1999) The Innovation Journey. Oxford: Oxford University Press
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