What is Innovation?

-> DEF: implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations.

1. Schumpeter (1934) = innovation is the implementation of new combinations. Innovation is a source of competitive advantage and the main source of progress through a process of “creative distruction”
2. Freeman (1974) Innovation is different from Invention! Invention is “an idea, a sketch or a model for a new or improved device, product, process or system”. Innovation (in the economic sense) = “it is accomplished only with the first commercial transaction involving the new product, process”
3. Managerial point of view: innovation is to shift the trade-off among performance to better fulfill existing needs or to generate new performance dimensions for new needs

-> CHAR:

• Pace: time available before the full impact of innovation is shorter and shorter
• Pervasiveness: is smth everyday and everybody, not episodic or sporadic
• Openess: sources of innovation are more and more outside the company boundaries with actors that in many cases are non- contractible by the company (Carliss Baldwin)

INVENTOR: who invented something

• The innovator is able to Learn and Replicate the innovation process

INNOVATOR:

• Many times are nothing more than (very) smart Technology/Solution Brokers.

Product System:

-> PS = Product + Service + Communication

Types of Innovation:

-> TYPE of INNOVATIONS:

• Incremental vs. radical
• Architectural vs. component based
• Competence enhancing vs. competence destroying

Incremental VS Radical:

• INCREMENTAL: gradual improvements and refinements to existing products, services, or processes,
• RADICAL: focuses on introducing significant and transformative changes that disrupt industries and create new paradigms.
  • More risky;
  • More expensive
  • Less acepted from market.

Architectural VS Component Based:

• ARCHITECTURAL: involves changing how certain features are combined;
• COMPONENTS: involves improving one or more features of a product.

📌The overall architecture of the product lays out how the components work together

-> DEF:  Impact of a service depends on the perception of it by customers.

• The perceived value depends on requirements of customers.
• Requirements are not the same.

-> TYPE of REQUIREMENTS:

• MUST HAVE: if they are high we wouldn’t even notice.
• LINEAR: services that increase the value with the performance linearly: at high value is required high performance.
• DELIGHTER: smth that is not expected and surprise and delight customer (add a lot of value), but if there are not, customers wouldn’t think about it.

Omnitel Case:

-> Olivetti developed Infostrada and Omnitel.

-> Service Innovation: Omnitel change the meaning of call center.

Spot -> They wanted to make customers curious (there’s nothing else than Megan Gale and Bilbao Museum) and call the number given there.

• Was the only new call center (called Contact Center) that was not for just complaining.
• In this case the operator was trained and motivated, open 24/7, and answer at the second ring.

Innovation 🔗 Competences:

• Toilet paper & chopping board.

COMPETENCE-DESTROYING: discontinuities require new skills, abilities and knowledge in either process or product design. Skills needed for core technology shift causing power and structure shifts in organization.

COMPETENCE-ENHANGING: discontinuities are “order–of–magnitude improvements in price-performance that build on existing know-how within a product class” and tend to consolidate industry leadership.

Typologies of Innovation:

• Incremental vs. radical
• Architectural vs. component based
• Competence enhancing vs. competence destroying

📌F.F.F. Families Follow Fiction -> wanted to create objects that were like characters, actors in a ‘fiction’, storytellers of relation”

Innovation Strategies:

TECHNOLOGY-PUSH	MARKET-PULL	DESIGN-PUSH
-> DEF: Process driven by scientific or technological competencies Product/process innovation that typically revolve around the physical attributes of the product.	-> DEF: Innovations that typically involve the way in which the product is commercialized in terms of organization, distribution and/or advertising: Product presentation Distribution channel innovations Incremental product performance innovations sales process innovations…	-> DEF: Process driven by socio-cultural and semantic competencies Product/process innovation that typically revolve around intangible attributes of the product

Challenges:

-> People and Companies find themselves inadequate: