TR Associates Ltd

 

flexible cauldron, spiral staircase and fertile field style firm flexible type of innovation

 

 

2017-09-16

InnoSurvey- Basic report

 


 


Contents

1  About this basic Report


2  Qualitative and Quantitative Analysis


3  Recommendations


4  The InnoSurvey™ innovation framework


5  A Review of current thinking


5  Reference list


1  About this basic Report

1.1   The InnoSurvey™ - Basic Report (Individual measurement)

Congratulations, you now hold an “InnoSurvey™ Basic Report” in you hand!
The InnoSurvey™ Basic Report is automatically generated from your individual answers to the innovation capability survey.

The report provides a set of evidence based, standard recommendations for improving your innovation capability, based on our innovation capability framework and comparisons (benchmark) with relevant data from our large innovation database.

We hope you will find this report both awakening, interesting and useful.

1.2   About Innovation 360 Group

Innovation 360 Group help companies to sharpen their innovation capability, generate and re-innovate their value propositions as well as speeding up their global goto market projects. We do this by means of research based innovation capability measurement, our global innovation database, evidence based analysis and recommendations on concrete execution plans for increased innovation capability, profit and growth. Our specialities are Innovation capability development and innovative improvements of our clients profit and growth through strategy, business modelling, ideation, prototyping, commercialization and transformation of our clients organization models and their capability to execute and launch with excellence.

The Innovation 360 Group’s founding team has long term experience from working with innovative clients on the international market. As a firm we work primarily with organisations with high ambitions and strong international focus on innovation, profit and growth.

Our mission is to support and strengthen the global innovation capability needed to address humanity’s grand challenges: Food, Energy, Water, Security, Global Health, Education, Environment, Poverty and Space. Our aim is therefore to help 1,000,000+ entrepreneurs, companies, executives and scientists all over the world to become world class innovators through providing our unique innovation measurement tool and database, InnoSurvey™ as a free-to-all digital on-line service complimented with an enterprise tool and consultancy services by our consultants as well as through licensed practitioners all over the globe.

1.3   The InnoSurvey™ Enterprise Solution and Report

Please note: The InnoSurvey™ Basic Report presents the result of an individual measurement only!
A full corporate innovation capability measurement would require the “InnoSurvey™ Enterprise Solution”, and is set up with 8-10 external and internal respondents as well as in-depth interviews and provides a full fledge innovation capability analysis and insight. The Enterprise Report contains more specific analysis, a wider set of relevant benchmarks and a larger set of specific and more precise recommendations, as defined by our innovation expert consultants. The Enterprise Report therefore provides you with a ready-to-go strategic starting point for sharpening your Innovation Capability and thus assuring the future success of your business!

If you are interested in doing an Enterprise measurement on your company, please feel free to contact us at info@innovation360.se, or visit our web at www.innovation360group.com
for individual contact persons.

 

2   Qualitative and Quantitative Analysis

2.1   Quantitative analysis of the company

Overall, the relevance check, regarding whether the company applies innovation thinking and practice, is 100 %, and indicates how relevant it is to measure the innovation strategy, leadership, capabilities, culture and type of innovation.

2.1.1   Innovation strategy

Most of the world's 1000 innovation top-spenders can be described as belonging to one of three categories, in accordance with their innovation strategy: need seekers, market readers and technology drivers (Jaruzelski & Dehoff, 2010). These categories are described in more detail in section 5.6 below.

The company's strategy can be described as:

•  The organisation is driving innovation to gain and maintain a superior profit level.

•  The organisation is driving innovation in order to grow and/or to strengthen its competitive position.

•  The strategic innovation direction is unclear.

•  The organisation uses incremental innovation. In contrast to radical innovation, incremental innovation does not create new markets, technologies or business models but rather only evolves existing ones. Incremental innovation may be either "discontinuous"(i.e. "transformational" or "revolutionary") or "continuous" (i.e. "evolutionary"). See [1].

•  The organisation applies radical innovation, referring to innovation that creates new markets, technologies or business models. The term is used in the literature to describe innovations that improve a product or service in ways that the market does not expect, often by designing for a different set of consumers or creating first-in-kind applications for a new market.

2.1.2   Leadership style

Figure 1: Leadership style with peer benchmark data


•  The organisation has a cauldron style of leadership, which is an entrepreneurial style where the business model is frequently challenged. The cauldrons unleash entrepreneurial energy in a concentrated mixture of talent, ideas and resources. Internal markets for new ideas are created, a venture capital model of internal entrepreneurs seeking funding from both internal and approved external sources is encouraged, and peers, rather than bosses, are used to screen and evaluate the opportunities that are stimulated. The entrepreneurial innovators, the cauldrons, are, according to our research, most convinced that they keep the competitors out by innovations.

2.1.3   Type of innovation

•  The organisation applies service innovation, meaning the development of new or improved services, e.g, Internet-based services, mobile-based services and embedded services in home electronics and cars.

•  The organisation applies business model innovation meaning the development of new or improved business models and value propositions.

•  The organisation applies production innovation, meaning the development of new or improved production systems, such as Quality circles, just-in-time (JIT) manufacturing systems and new production planning software, for the manufacturing of its products..

•  The organisation applies management innovation, meaning the development of new or improved management systems such as quality systems, organisational frameworks and performance management systems.

•  The organisation applies organisational innovation, meaning the development of new or improved organisation and communication structures and systems, e.g. a new venture division or a new kind of collaborative platform.

•  The organisation applies process innovation, meaning the development of new or improved processes, e.g. manufacturing processes.

•  The organisation applies product innovation, meaning the development of new or improved products.

Figure 2: Type of innovation with peer benchmarks.

2.1.4   Innovation footprint

Figure 3: Overall innovation footprint with peer benchmark.


2.1.4.1  Value Proposition (What)

The organisation has a strong capability for Value Proposition innovation. Value Propositions describes customers' gain, pain and job to be done. According to Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz (MIT Sloan Management Review, Spring 2006, Vo 47, No 3) innovation along this dimension requires the creation of new value propositions that are valued by customers reducing their pain as well as creating a gain — getting their “job done” in a better and smarter way. For example, consider Procter & Gamble's Crest SpinBrush. Introduced in 2001, the product became the world’s bestselling electric toothbrush by 2002. A simple design and the use of disposable AA batteries translated into ease of use, portability and affordability. Moreover, Procter & Gamble’s no-frills approach enabled the SpinBrush to be priced at around $5, substantially cheaper than competing products. Another example is Sony's business model for the Playstation 2 (PS2), one of the three leading game consoles at the time besides the Microsoft Xbox and the Nintendo. It was what Kim and Mauborgne call a red ocean until Nintendo disrupted the industry with the Wii — what Kim and Mauborgne call a blue ocean. Wii introduced casual players and Wii Remote Control, raised the fun factor, and eliminated the cables, hardcore gamers and subsidies (for using advanced technologies). It also reduced the processor speed, the R&D cost and the graphics, making it much simpler.

2.1.4.2  Platform

The organisation has a strong capability for platform innovation. A platform is a set of common components, assembly methods or technologies that serve as building blocks for a portfolio of products or services. Platform innovation involves exploiting the “power of commonality” — using modularity to create a diverse set of derivative offerings more quickly and cheaply than if they were stand-alone items. Innovations along this dimension are frequently overlooked even though their power to create value can be considerable. Platform innovation, for example, has allowed Nissan Motor Co. to resurrect its fortunes in the automotive industry (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3)

2.1.4.3  Products

The organisation has a strong capability for product innovation. Product innovation is defined as the development of new products, changes in the design of established products, or use of new materials or components in the manufacture of established products. Numerous examples of product innovation include introducing new products, enhanced quality and improving of overall product performance. Product innovation, cost-cutting innovation and process innovation are three different classifications of innovation that aim to develop a organisation's production methods. Thus product innovation can be divided into two categories of innovation: radical innovation, which aims at developing a new product, and incremental innovation, which aims at improving existing products.

2.1.4.4  Services

The organisation has a strong capability for service innovation. Service innovation can be defined as "a new or considerably changed service concept, client interaction channel, service delivery system or technological concept that individually, but most likely in combination, leads to one or more (re)new(ed) service functions that are new to the firm and that change the service/good offered on the market and require structurally new technological, human or organisational capabilities of the service organisation". This definition covers the notions of technological and non-technological innovation. Non-technological innovations in services mainly arise from investment in intangible inputs ( Van Ark et al., 2003).

2.1.4.5  Customer Insights (Who)

The organisation has a strong capability for customer insights innovation. Customers are the individuals or organisations that use or consume a company’s offerings to satisfy certain needs. To innovate along this dimension, the company can discover new customer segments or uncover unmet (and sometimes unarticulated) needs. Virgin Mobile USA was able to successfully enter the US cellular services market late by focusing on consumers under 30 years old — an underserved segment. To attract that demographic, Virgin offered a compelling value proposition: simplified pricing, no contractual commitments, entertainment features, stylish phones and the irreverence of the Virgin brand. Within three years of its 2002 launch, Virgin had attracted several million subscribers in the highly competitive market (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.6  Customer Experience

The organisation has a strong capability for customer experience innovation. This dimension considers everything a customer sees, hears, feels and otherwise experiences while interacting with an organisation at all moments. To innovate here, the organisation needs to rethink the interface between the organisation and its customers. Consider how the global design firm IDEO, headquartered in Palo Alto, California, has helped health care provider Kaiser Permanente to redesign the customer experience provided to patients. Kaiser has created more comfortable waiting rooms, lobbies with clearer directions and larger exam rooms with space for three or more people and curtains for privacy. Kaiser understands that patients not only need good medical care but also need to have better experiences before, during and after their treatments (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.7  Customer Engagement

The organisation has a strong capability for customer engagement innovation. Knowing your customers’ behaviour is a better starting point than looking for opportunities through internal lenses. But even that isn’t enough – you have to understand the "why" behind their purchasing behaviour. This understanding can only come from enabling a consistent, two-way dialogue between you and your customers. Transactional and behavioural data reveal what people do, but it is only by continuously engaging customers that you can use consumer insights to drive innovation. Four ways in which consistently engaging customers helps to drive innovation are: 1) Get feedback from knowledgeable people. When it comes to engaging people in the innovation process, you’ll save a lot of time if you talk to people who already know or who are aware of your brand or industry. 2) Implement smaller-scale activities. To get people to change their habits, you first need to get them to participate. But with people’s attention spans getting shorter, expecting them to do time-consuming activities at one sitting is unrealistic. Asking people to do little activities – validating and qualifying ideas along the way – is a good approach to getting people’s feedback frequently without overwhelming them. 3) Get a longitudinal view. If you want customers to adapt to new values, skills and vocabularies, it’s imperative to have a deep understanding of who they are. And it’s not enough to know about their current habits. By grasping how customers evolve, you have a better shot at influencing how they might change in the future. 4) Close the feedback loop. Consumers are often asked for input, but how often are they informed of the impact of their feedback? For example, when people participate in crowdsourcing activities or when they respond to companies on social media, do they actually see their input having tangible results? By engaging customers through tools such as insight communities, you can get back to people and let them know how their input shapes your new product or service. A newsletter or video posted to your insight community can help you to inform customers about what impact their participation is having on the company’s decision making. When you close the feedback loop, people feel more appreciated and will be more likely to continue to participate and contribute.

2.1.4.8  Value Capture

The organisation has a strong capability for value capture innovation. Value capture refers to the mechanism that an organisation uses to recapture the value it creates. To innovate along this dimension, the organisation can discover untapped revenue streams, develop novel pricing systems and otherwise expand its ability to capture value from interactions with customers and partners. Edmunds.com, the popular automotive website, is a case in point. The company generates revenues from an array of sources, including advertising; licensing of its tools and content to partners like The New York Times and America Online; referrals to insurance, warranty and financing partners; and selling to third parties of data on customer buying behaviour that it collects through its website. These various revenue streams have significantly increased Edmunds’ average sales per visitor (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.9  Process (How)

The organisation has a strong capability for process innovation. Processes are the configurations of business activities used to conduct internal operations. To innovate along this dimension, an organisation can redesign its processes for greater efficiency, higher quality or faster cycle time. Such changes might involve relocating a process or decoupling its front-end from its back-end. That’s the basis of the success of many information technology services firms in India, including companies like Wipro Infotech and Infosys Technologies Ltd. that have created enormous value by perfecting the model of delivering business processes as an outsourced service from a remote location. To accomplish this, each process is decomposed into its constituent elements so that cross-functional teams in multiple countries can perform the work, and the project is coordinated through the use of well-defined protocols. The benefits are flexibility and speed to market, access to a competitive pool of talent (the highly educated and relatively low-cost Indian knowledge worker) and the freedom to redirect resources to core strategic activities (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.10  Organisation

The organisation has a strong capability for organisational innovation. Organisation is the way in which a company structures itself, its partnerships and its employee roles and responsibilities. Organisational innovation often involves rethinking the scope of the firm’s activities as well as redefining the roles, responsibilities and incentives of different business units and individuals. Thomson Financial, a New York City-based provider of information and technology applications for the financial services industry, transformed its organisation by structuring around customer segments instead of products. In this way, Thomson was able to align its operational capabilities and sales organisation with customer needs, enabling the company to create offerings like Thomson ONE, an integrated work-flow solution for specific segments of financial services professionals( Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.11  Learning Capabilities

The organisation has strong learning capabilities for innovation. Innovative organisations require a strong learning orientation to gain competitive advantage generating higher profit and/or market shares. Based on in-depth interviews with senior executives and a review of the literature, four components of learning orientation have been identified as critical for driving innovations: 1) commitment to learning, 2) learning from mistakes, 3) open-mindedness, and 4) intra-organisational knowledge sharing.

2.1.4.12  Supply

The organisation has a strong capability for supply chain innovation. A supply chain is the sequence of activities and agents that moves goods, services and information from source to delivery of products and services. To innovate in this dimension, an organisation can streamline the flow of information through the supply chain, change its structure or enhance the collaboration of its participants. Consider how the apparel retailer Zara in La Coruña, Spain, was able to create a fast and flexible supply chain by making counterintuitive choices in sourcing, design, manufacturing and logistics. Unlike its competitors, Zara does not fully outsource its production. Instead it retains half in-house, allowing it to locate its manufacturing facilities closer to its markets to cut product lead times. Zara eschews economies of scale by making small lots and launching a plethora of designs, allowing it to refresh its designs almost weekly. The organisation also ships garments on hangers, a practice that requires more warehouse space but that allows new designs to be displayed more quickly. Thanks to such practices, Zara has decreased the design-to-retail cycle to as short as 15 days and is able to sell most merchandise at full price (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.13  Channel (Where)

The organisation has a strong capability for channel innovation. Points of presence are the channels of distribution that a company employs to take offerings to market and the places where its offerings can be bought or used by customers. Innovation in this dimension involves creating new points of presence or using existing ones in creative ways. That’s what Titan Industries Ltd. did when it entered the Indian market with stylish quartz wristwatches in the 1980s. Initially, Titan was locked out of the market because the traditional watch retailing channels were controlled by a competitor. But the company took a fresh look at the industry and asked itself the following fundamental question: Must watches be sold at watch stores? In answering that, Titan found that target customers also shopped at jewellery, appliance and consumer electronics stores. So the company pioneered the concept of selling watches through free-standing kiosks placed within other retail stores. For service and repair, Titan established a nationwide aftersales network through which customers could get their watches fixed. Such innovations have enabled Titan not only to enter the Indian market but also to become the industry leader (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.14  Linkages

The organisation has a strong capability for linkage innovation. An organisation and its products and services are connected to customers through a network that can sometimes become part of the firm’s competitive advantage. Innovations in this dimension consist of enhancements to the network that increase the value of the organisation’s offerings. Consider how Mexican industrial giant CEMEX was able to redefine its offerings in the ready-to-pour concrete business. Traditionally, CEMEX offered a three-hour delivery window for ready-to-pour concrete with a 48-hour advance ordering requirement. But construction is an unpredictable business. Over half of CEMEX’s customers would cancel orders at the last minute, causing logistical problems for the company and financial penalties for those customers. To address this, CEMEX installed an integrated network consisting of GPS systems and computers in its fleet of trucks, a satellite communication system that links each plant and a global Internet portal for tracking the status of orders worldwide. This network now allows CEMEX to offer a 20-minute time window for delivering ready-to-pour concrete, and the company also benefits from better fleet utilisation and lower operating costs (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.4.15  Openness

The organisation has a strong capability for open innovation. The open innovation paradigm can be interpreted as going beyond just using external innovation sources such as customers, rival organisation's and academic institutions. Instead, it can be as much about changes in the use, management and employment of intellectual property as it is about the technical and research driven generation of intellectual property. In this sense, it is understood as the systematic encouragement and exploration of a wide range of internal and external sources for innovative opportunities, the integration of this exploration with firm capabilities and resources, and the exploitation of these opportunities through multiple channels.

2.1.4.16  Brand

The organisation has a strong capability for brand innovation. The brand comprises the symbols, words and/or marks through which the organisation communicates its promises to customers. To innovate in this dimension, the company leverages or extends its brand in creative ways. London-based easyGroup has been a leader in this respect. Founded by Stelios Haji-Ioannou, easyGroup owns the “easy” brand and has licensed it to a range of businesses. The core promises of the brand are good value and simplicity, which have now been extended to more than a dozen industries through various offerings such as easyJet, easyCar, easyInternetcafé, easyMoney, easyCinema, easyHotel and easyWatch (Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz , MIT Sloan Management Review, Spring 2006, Vo 47, No 3).

2.1.5   Innovation process

Figure 4: Innovation process with peer benchmark.

2.1.5.1  Ideation

The organisation has a working ideation phase (in the innovation process). The organisation seems to engage suppliers and distributors in the ideation process, bringing independent competitive insights from the marketplace as well as driving open innovation, capturing ideas at any point in the process. The organisation also seems to have a detailed understanding of emerging technologies and trends, as well as deep consumer and customer insights and analytics.

2.1.5.2  Project Selection

The organisation has a working project selection phase (in the innovation process). Strategic decision making and transition plans seem to be in place. Technical risk assessment/management are possibly being applied, and rigorous decision making around portfolio trade-offs and resource requirements forecasting and planning is perceived as working. Ongoing assessment of market potential is also established and is perceived as working.

2.1.5.3  Development

The organisation has a working development phase (in the innovation process). Reverse engineering, supplier–partner engagement in development, design for specific goals, product platform management and engagement with customers to prove real-world feasibility are perceived to be working.

2.1.5.4  Commercialisation

The organisation has a working commercialisation phase (in the innovation process). Diverse user group management, production ramp-up, regulatory/government relationship management, global enterprise-wide product launch, product lifecycle management and pilot-user selection/controlled rollouts are perceived to be working.

2.1.6   Personas

Figure 5: Personas with peer benchmark.

2.1.6.1  Experience Architect

The organisation has experience architects. The experience architect is a person that relentlessly focuses on creating remarkable individual experiences. This person facilitates positive encounters with their organisation through products, services, digital interactions, spaces, or events. Whether an architect or a sushi chef, the experience architect maps out how to turn something ordinary into something distinctive – even delightful – every chance they get.

2.1.6.2  Cross-Pollinator

The organisation has cross-pollinators. The cross-pollinator draws associations and connections between seemingly unrelated ideas or concepts to break new ground. Armed with a wide set of interests, an avid curiosity, and an aptitude for learning and teaching, the cross-pollinator brings in big ideas from the outside world to enliven their organisation. People in this role can often be identified by their open-mindedness, diligent note-taking, tendency to think in metaphors, and ability to reap inspiration from constraints.

2.1.6.3  Experimenter

The organisation has experimenters. The experimenter celebrates the process, not the tool, testing and retesting potential scenarios to make ideas tangible. A calculated risk-taker, this person models everything from products to services to proposals in order to efficiently reach solutions. To share the fun of discovery, the experimenter invites others to collaborate, all the while making sure that the entire process is saving time and money.

2.1.6.4  Set Designer

The organisation has set designers. The set designer looks at every day as a chance to liven up their workspace. They promote energetic, inspired cultures by creating work environments that celebrate the individual and stimulate creativity. To keep up with shifting needs and foster continuous innovation, the set designer makes adjustments to a physical space to balance private and collaborative work opportunities. In doing so, this person makes space itself one of the organisation's most versatile and powerful tools.

2.1.6.5  Storyteller

The organisation has storytellers. The storyteller captures our imagination with compelling narratives of initiative, hard work and innovation. This person goes beyond oral tradition to work in whatever medium best fits their skills and message: video, narrative, animation, even comic strips. By rooting their stories in authenticity, the storyteller can spark emotion and action, transmit values and objectives, foster collaboration, create heroes, and lead people and organisations into the future.

2.1.6.6  Caregiver

The organisation has caregivers. The caregiver is the foundation of human-powered innovation. Through empathy, they work to understand each individual customer and to create a relationship. Whether a nurse in a hospital, a salesperson in a retail shop, or a teller at an international financial institution, the caregiver guides the client through the process to provide them with a comfortable, human-centred experience.

2.1.6.7  Collaborator

The organisation has collaborators. The collaborator is the rare person who truly values the team over the individual. In the interest of getting things done, the collaborator coaxes people out of their work silos to form multidisciplinary teams. In doing so, the person in this role dissolves traditional boundaries within organisations and creates opportunities for team members to assume new roles. More of a coach than a boss, the collaborator instills their team with the confidence and skills needed to complete the shared journey.

2.1.6.8  Director

The organisation has directors. The director has an acute understanding of the bigger picture, with a firm grasp on the pulse of their organisation. Subsequently, the director is talented at setting the stage, targeting opportunities, bringing out the best in their players, and getting things done. Through empowerment and inspiration, the person in this role motivates those around them to take centre stage and embrace the unexpected.

2.1.6.9  Hurdler

The organisation has hurdlers. The hurdler is a tireless problem-solver who who gets a charge out of tackling things that have never been done before. When confronted with a challenge, the hurdler gracefully sidesteps the obstacle while maintaining a quiet, positive determination. This optimism and perseverance can help big ideas to upend the status quo as well as turning setbacks into the organisation's greatest successes – despite doomsday forecasting by shortsighted experts.

2.1.6.10  Anthropologist

The organisation has anthropologists. The anthropologist is rarely stationary. Rather, this is the person who ventures into the field to observe how people interact with products, services and experiences in order to come up with new innovations. The anthropologist is extremely good at reframing a problem in a new way, humanising scientific method to apply it to daily life. Anthropologists share such distinguishing characteristics as the wisdom to observe with a truly open mind; empathy; intuition; the ability to "see" things that have gone unnoticed; a tendency to keep running lists of innovative concepts worth emulating and problems that need solving; and a way of seeking inspiration in unusual places.

2.1.7   Strengths and weaknesses in relation to explicit strategy, leadership and type of innovation

This section describes, with diagrams, the company's strengths and weaknesses in relation to explicit strategy, leadership and type of innovation. This has been done by an advanced correlation analysis of innovation capabilities in relation to explicit strategy, leadership and type of innovation. It is useful to understand what the correlations are in the most successful combinations in order to out-compete the competitors.

Capability name

Description

Score

Benchmark

Idea Diffusion

The organisation’s structure and/or supporting systems allow you to capture, generate and take advantage of new ideas.

4,24 

Speed to Market

When the organisation decides, it quickly gets new innovations to the market.

4,01 

Format Development

The organisation studies and analyses other industries' delivery formats as well as innovating its own new ways.

4,03 

DNA Focused

People within the organisation discuss and analyse regularly what employees are really good at and what differentiates its customer value proposition, far beyond traditional customer specifications and evaluations.

4,29 

Common Platform & Standard Creation

The organisation cooperates with external stakeholders including clients to develop platforms such as open source, common markets, common standards, etc.

4,16 

Product to Market

The organisation regularly launches new product types to stay ahead of its competitors and to strengthen its customers' loyalty through an innovative approach.

4,10 

Demand Generation

The organisation creates demand before its innovations are launched.

3,71 

External Knowledge Sharing

The organisation publishes information and insights in order to share and gain knowledge.

3,98 

Design for Reuse

The organisation thinks in modules and reuses and further develops other finished parts as complete subsystems for internal or external delivery.

3,98 

Cross-Function

Collaboration between functions or departments works well and continually generates new ideas.

4,21 

Open Innovation

The organisation works regularly with innovation in open environments, for the exchange of ideas and experiences.

4,06 

Social Science

The organisation has an anthropological style studying human behaviour to gain accurate and new customer insights.

3,33 

Set the stage

The organisation has staff who create innovative environments, internally as well as externally.

4,47 

Systematic Service Innovation

The organisation is working systematically to find new services that will offer competitive advantage.

4,40 

Technology Watch

The organisation learns about new technology on a regular basis even if the company does not know how to use it.

4,21 

Community Approach

The organisation works systematically with "communities" that allow customers to contribute ideas and evaluate new innovations.

4,07 

Innovation Priority

The management prioritises innovation efforts.

4,39 

Opportunistic

The organisation has employees who often take up new opportunities and are encouraged to do so.

4,47 

T-Shaped

The organisation comprises a number of T-shaped people, i.e. those who are broad in their way of thinking and in their education, but capable of acting in only one or two specialist areas.

4,28 

Automated Experience and Usages Analysis

The organisation builds in automatic evaluations of how customers use and experience innovations, which it then analyses and evaluates to take the next step.

3,80 

Ramp-Up

The organisation is able to scale up a launch internationally.

3,95 

External Rewards

The organisation has a reward system in place for customers to help the organisation in its innovation efforts.

3,36 

Clear Vision

Employees are all aware of the company's innovation vision, understand it and work towards it.

4,47 

Innovation Benchmarking

The organisation buys and tests innovations from competitors and other industries.

3,69 

Idea Generation

The organisation systematically looks for new ideas.

4,65 

Customer Co-Creation

The organisation engages its customers in its own development.

4,28 

Innovation Measuring

The organisation measures and systematically evaluates its innovation efforts.

4,17 

Patent Exchange

The organisation exchanges technology patents with others in the same or other industries.

3,29 

Service Improvement Tracking

The organisation tests new services and compares the outcomes with old services before they are launched.

4,00 

Experiential Customer Insights

The organisation evaluates its services through unannounced real customer situations that are logged, analysed and evaluated to result in concrete improvements.

4,25 

A and B Innovation Testing

The organisationcarries out regular A and B testing of new innovations that systematically compare different variants of the same innovation and studies customer reactions and differences between A and B variants.

3,44 

Real Need Focus

The organisation tries to satisfy its customers' real needs and not what the customers states on a direct question.

4,52 

Evaluative

The organisation assigns sufficient time and resources to evaluate projects after they are launched.

4,22 

Pilot Testing

The organisation tests pilots and learns from them, adapting quickly to the outcomes prior to final launch.

4,28 

Sharing through telling

People within the organisation are good at talking about its success and history.

4,47 

Prototyping

The organisation has a process in place to evaluate and prototype ideas.

4,20 

General Involvement

People, both externally and internally, feel appreciated and involved.

4,34 

Channel Development

The organisation innovates its distribution channels, e.g. shop-in-shops, pop-up-stores, mobile offices and fast home deliveries.

3,82 

Offer Reinforcement

The organisation ensures that all customer accounts reinforce what they really offer the market.

4,44 

Goal Orientation

The organisation has a goal-oriented leadership style.

4,61 

Knowledge Rewarding

The organisation’s employees are not rewarded and encouraged to bring in new knowledge.

4,29 

Relationship Building

There are people creating a trustworthy atmosphere building internal and external relationships.

4,57 

R&D Cost Control

The organisation is able to drive its innovation projects on or under budget.

3,94 

IP Protection

The organisation systematically protects its intellectual property rights.

4,22 

Cross-Learning

The corganisation’s employees learn from each other and from their customers.

4,60 

Documented Product Development Process

The organisation has a documented process in place to design, develop, test and launch products.

4,07 

Linkages for development

The organisation involves external partners, such as universities, in its development.

4,22 

Innovation Reward System

There is no internal reward system in place for innovation work.

3,69 

External Innovation Engagement

The organisation engages its suppliers and partners in the innovation process.

4,38 

Consumption Development

The organisation is continuously studying and analyzing new consumption patterns on the market. I.e. how end-users consume products and services in reality.

4,32 

Talent Management for Innovation

The organisation is constantly looking for new talent that may contribute to its growth and development.

4,56 

Supplier Scanning and Involvement

The organisation analyses and innovates all aspects of finding and developing suppliers to the company, and those that deliver to the customer and the customer's customer.

4,19 

Understanding of Customers' Decision-Making Processes

The organisation has a deep understanding of and insight into customers' decision-making processes.

4,37 

Customers' Behaviour Insights

The organisation studies and analyses customers' actual behaviour in order to segment the market in innovative ways.

4,38 

System for Project Selections

The organisation has a system to select the projects to be launched.

4,08 

Efficient Test Methodology

The organisation has a testing methodology in place to find and fix errors as early as possible in the innovation process.

4,24 

Core Focus

The organisation does all kinds of things including non-core work.

3,94 

Product Lifecycle Management

The organisation has an effective product management system in place.

4,14 

Partner Development

The organisation continually scans the market for partners.

4,25 

Reverse Engineering

The organisation works with reverse engineering, i.e. buying competitors' products and disassembling them to understand and learn from how they are engineered).

3,38 

Advantage Visualisation

The organisation is adept at clarifying its advantage over competitors.

4,39 

Evaluation of Competitors' Products

The organisation continually evaluates competitors' products in order to keep ahead of them, learn from them and ultimately beat them.

4,28 

Pricing System

The organisation evaluates and adjusts its pricing methodology on a regular basis, based on price testing or other methods.

4,05 

Risk Assessment

The organisation makes systematic risk assessments.

4,08 

Market Regulation Insights

The organisation analyses laws, regulations and other external circumstances before deciding to launch an innovation project.

4,40 

Market Research

The organisation undertakes frequent independent market research and assesses the market potential.

3,90 


Table 1: Strengths of capabilities (total of 67) in relation to type of strategy (Incremental or Disruptive).



Capability name

Description

Score

Benchmark

Market Research

The organisation undertakes frequent independent market research and assesses the market potential.

3,90 

Systematic Service Innovation

The organisation is working systematically to find new services that will offer competitive advantage.

4,40 

Evaluation of Competitors' Products

The organisation continually evaluates competitors' products in order to keep ahead of them, learn from them and ultimately beat them.

4,28 

Customers' Behaviour Insights

The organisation studies and analyses customers' actual behaviour in order to segment the market in innovative ways.

4,38 

Service Improvement Tracking

The organisation tests new services and compares the outcomes with old services before they are launched.

4,00 

Market Regulation Insights

The organisation analyses laws, regulations and other external circumstances before deciding to launch an innovation project.

4,40 

Understanding of Customers' Decision-Making Processes

The organisation has a deep understanding of and insight into customers' decision-making processes.

4,37 

Risk Assessment

The organisation makes systematic risk assessments.

4,08 

Documented Product Development Process

The organisation has a documented process in place to design, develop, test and launch products.

4,07 

Idea Generation

The organisation systematically looks for new ideas.

4,65 

Experiential Customer Insights

The organisation evaluates its services through unannounced real customer situations that are logged, analysed and evaluated to result in concrete improvements.

4,25 

Innovation Measuring

The organisation measures and systematically evaluates its innovation efforts.

4,17 

Consumption Development

The organisation is continuously studying and analyzing new consumption patterns on the market. I.e. how end-users consume products and services in reality.

4,32 

Advantage Visualisation

The organisation is adept at clarifying its advantage over competitors.

4,39 

A and B Innovation Testing

The organisationcarries out regular A and B testing of new innovations that systematically compare different variants of the same innovation and studies customer reactions and differences between A and B variants.

3,44 

Automated Experience and Usages Analysis

The organisation builds in automatic evaluations of how customers use and experience innovations, which it then analyses and evaluates to take the next step.

3,80 

Evaluative

The organisation assigns sufficient time and resources to evaluate projects after they are launched.

4,22 

Community Approach

The organisation works systematically with "communities" that allow customers to contribute ideas and evaluate new innovations.

4,07 

Pricing System

The organisation evaluates and adjusts its pricing methodology on a regular basis, based on price testing or other methods.

4,05 

Format Development

The organisation studies and analyses other industries' delivery formats as well as innovating its own new ways.

4,03 

External Rewards

The organisation has a reward system in place for customers to help the organisation in its innovation efforts.

3,36 

Efficient Test Methodology

The organisation has a testing methodology in place to find and fix errors as early as possible in the innovation process.

4,24 

System for Project Selections

The organisation has a system to select the projects to be launched.

4,08 

Product to Market

The organisation regularly launches new product types to stay ahead of its competitors and to strengthen its customers' loyalty through an innovative approach.

4,10 

Innovation Reward System

There is no internal reward system in place for innovation work.

3,69 

Clear Vision

Employees are all aware of the company's innovation vision, understand it and work towards it.

4,47 

Ramp-Up

The organisation is able to scale up a launch internationally.

3,95 

Product Lifecycle Management

The organisation has an effective product management system in place.

4,14 

Channel Development

The organisation innovates its distribution channels, e.g. shop-in-shops, pop-up-stores, mobile offices and fast home deliveries.

3,82 

IP Protection

The organisation systematically protects its intellectual property rights.

4,22 

Offer Reinforcement

The organisation ensures that all customer accounts reinforce what they really offer the market.

4,44 

Customer Co-Creation

The organisation engages its customers in its own development.

4,28 

Cross-Function

Collaboration between functions or departments works well and continually generates new ideas.

4,21 

Innovation Priority

The management prioritises innovation efforts.

4,39 

Knowledge Rewarding

The organisation’s employees are not rewarded and encouraged to bring in new knowledge.

4,29 

Goal Orientation

The organisation has a goal-oriented leadership style.

4,61 

Partner Development

The organisation continually scans the market for partners.

4,25 

Prototyping

The organisation has a process in place to evaluate and prototype ideas.

4,20 

Cross-Learning

The corganisation’s employees learn from each other and from their customers.

4,60 

Real Need Focus

The organisation tries to satisfy its customers' real needs and not what the customers states on a direct question.

4,52 

Idea Diffusion

The organisation’s structure and/or supporting systems allow you to capture, generate and take advantage of new ideas.

4,24 

Social Science

The organisation has an anthropological style studying human behaviour to gain accurate and new customer insights.

3,33 

General Involvement

People, both externally and internally, feel appreciated and involved.

4,34 

Speed to Market

When the organisation decides, it quickly gets new innovations to the market.

4,01 

Supplier Scanning and Involvement

The organisation analyses and innovates all aspects of finding and developing suppliers to the company, and those that deliver to the customer and the customer's customer.

4,19 

Technology Watch

The organisation learns about new technology on a regular basis even if the company does not know how to use it.

4,21 

Talent Management for Innovation

The organisation is constantly looking for new talent that may contribute to its growth and development.

4,56 

Demand Generation

The organisation creates demand before its innovations are launched.

3,71 

DNA Focused

People within the organisation discuss and analyse regularly what employees are really good at and what differentiates its customer value proposition, far beyond traditional customer specifications and evaluations.

4,29 

T-Shaped

The organisation comprises a number of T-shaped people, i.e. those who are broad in their way of thinking and in their education, but capable of acting in only one or two specialist areas.

4,28 

Innovation Benchmarking

The organisation buys and tests innovations from competitors and other industries.

3,69 

Sharing through telling

People within the organisation are good at talking about its success and history.

4,47 

Relationship Building

There are people creating a trustworthy atmosphere building internal and external relationships.

4,57 

Common Platform & Standard Creation

The organisation cooperates with external stakeholders including clients to develop platforms such as open source, common markets, common standards, etc.

4,16 

Open Innovation

The organisation works regularly with innovation in open environments, for the exchange of ideas and experiences.

4,06 

Pilot Testing

The organisation tests pilots and learns from them, adapting quickly to the outcomes prior to final launch.

4,28 

Set the stage

The organisation has staff who create innovative environments, internally as well as externally.

4,47 

Design for Reuse

The organisation thinks in modules and reuses and further develops other finished parts as complete subsystems for internal or external delivery.

3,98 

Linkages for development

The organisation involves external partners, such as universities, in its development.

4,22 

External Innovation Engagement

The organisation engages its suppliers and partners in the innovation process.

4,38 

Patent Exchange

The organisation exchanges technology patents with others in the same or other industries.

3,29 

R&D Cost Control

The organisation is able to drive its innovation projects on or under budget.

3,94 

External Knowledge Sharing

The organisation publishes information and insights in order to share and gain knowledge.

3,98 

Reverse Engineering

The organisation works with reverse engineering, i.e. buying competitors' products and disassembling them to understand and learn from how they are engineered).

3,38 

Opportunistic

The organisation has employees who often take up new opportunities and are encouraged to do so.

4,47 

Core Focus

The organisation does all kinds of things including non-core work.

3,94 


Table 2: Strengths of capabilities (total of 67) in relation to the strategic direction of the innovation work.

 

Capability name

Description

Score

Benchmark

Idea Diffusion

The organisation’s structure and/or supporting systems allow you to capture, generate and take advantage of new ideas.

4,24 

Innovation Priority

The management prioritises innovation efforts.

4,39 

Speed to Market

When the organisation decides, it quickly gets new innovations to the market.

4,01 

Systematic Service Innovation

The organisation is working systematically to find new services that will offer competitive advantage.

4,40 

Common Platform & Standard Creation

The organisation cooperates with external stakeholders including clients to develop platforms such as open source, common markets, common standards, etc.

4,16 

Cross-Function

Collaboration between functions or departments works well and continually generates new ideas.

4,21 

Format Development

The organisation studies and analyses other industries' delivery formats as well as innovating its own new ways.

4,03 

DNA Focused

People within the organisation discuss and analyse regularly what employees are really good at and what differentiates its customer value proposition, far beyond traditional customer specifications and evaluations.

4,29 

Knowledge Rewarding

The organisation’s employees are not rewarded and encouraged to bring in new knowledge.

4,29 

Open Innovation

The organisation works regularly with innovation in open environments, for the exchange of ideas and experiences.

4,06 

Service Improvement Tracking

The organisation tests new services and compares the outcomes with old services before they are launched.

4,00 

Partner Development

The organisation continually scans the market for partners.

4,25 

Idea Generation

The organisation systematically looks for new ideas.

4,65 

General Involvement

People, both externally and internally, feel appreciated and involved.

4,34 

Clear Vision

Employees are all aware of the company's innovation vision, understand it and work towards it.

4,47 

Social Science

The organisation has an anthropological style studying human behaviour to gain accurate and new customer insights.

3,33 

Customers' Behaviour Insights

The organisation studies and analyses customers' actual behaviour in order to segment the market in innovative ways.

4,38 

Experiential Customer Insights

The organisation evaluates its services through unannounced real customer situations that are logged, analysed and evaluated to result in concrete improvements.

4,25 

Relationship Building

There are people creating a trustworthy atmosphere building internal and external relationships.

4,57 

Demand Generation

The organisation creates demand before its innovations are launched.

3,71 

A and B Innovation Testing

The organisationcarries out regular A and B testing of new innovations that systematically compare different variants of the same innovation and studies customer reactions and differences between A and B variants.

3,44 

External Knowledge Sharing

The organisation publishes information and insights in order to share and gain knowledge.

3,98 

Real Need Focus

The organisation tries to satisfy its customers' real needs and not what the customers states on a direct question.

4,52 

External Rewards

The organisation has a reward system in place for customers to help the organisation in its innovation efforts.

3,36 

Innovation Reward System

There is no internal reward system in place for innovation work.

3,69 

Design for Reuse

The organisation thinks in modules and reuses and further develops other finished parts as complete subsystems for internal or external delivery.

3,98 

Pricing System

The organisation evaluates and adjusts its pricing methodology on a regular basis, based on price testing or other methods.

4,05 

Automated Experience and Usages Analysis

The organisation builds in automatic evaluations of how customers use and experience innovations, which it then analyses and evaluates to take the next step.

3,80 

Set the stage

The organisation has staff who create innovative environments, internally as well as externally.

4,47 

External Innovation Engagement

The organisation engages its suppliers and partners in the innovation process.

4,38 

T-Shaped

The organisation comprises a number of T-shaped people, i.e. those who are broad in their way of thinking and in their education, but capable of acting in only one or two specialist areas.

4,28 

Customer Co-Creation

The organisation engages its customers in its own development.

4,28 

Offer Reinforcement

The organisation ensures that all customer accounts reinforce what they really offer the market.

4,44 

Evaluation of Competitors' Products

The organisation continually evaluates competitors' products in order to keep ahead of them, learn from them and ultimately beat them.

4,28 

Community Approach

The organisation works systematically with "communities" that allow customers to contribute ideas and evaluate new innovations.

4,07 

R&D Cost Control

The organisation is able to drive its innovation projects on or under budget.

3,94 

Channel Development

The organisation innovates its distribution channels, e.g. shop-in-shops, pop-up-stores, mobile offices and fast home deliveries.

3,82 

Supplier Scanning and Involvement

The organisation analyses and innovates all aspects of finding and developing suppliers to the company, and those that deliver to the customer and the customer's customer.

4,19 

Cross-Learning

The corganisation’s employees learn from each other and from their customers.

4,60 

Opportunistic

The organisation has employees who often take up new opportunities and are encouraged to do so.

4,47 

Product to Market

The organisation regularly launches new product types to stay ahead of its competitors and to strengthen its customers' loyalty through an innovative approach.

4,10 

Innovation Benchmarking

The organisation buys and tests innovations from competitors and other industries.

3,69 

Technology Watch

The organisation learns about new technology on a regular basis even if the company does not know how to use it.

4,21 

Advantage Visualisation

The organisation is adept at clarifying its advantage over competitors.

4,39 

Innovation Measuring

The organisation measures and systematically evaluates its innovation efforts.

4,17 

Understanding of Customers' Decision-Making Processes

The organisation has a deep understanding of and insight into customers' decision-making processes.

4,37 

Prototyping

The organisation has a process in place to evaluate and prototype ideas.

4,20 

Core Focus

The organisation does all kinds of things including non-core work.

3,94 

Consumption Development

The organisation is continuously studying and analyzing new consumption patterns on the market. I.e. how end-users consume products and services in reality.

4,32 

Patent Exchange

The organisation exchanges technology patents with others in the same or other industries.

3,29 

Evaluative

The organisation assigns sufficient time and resources to evaluate projects after they are launched.

4,22 

Pilot Testing

The organisation tests pilots and learns from them, adapting quickly to the outcomes prior to final launch.

4,28 

Risk Assessment

The organisation makes systematic risk assessments.

4,08 

Goal Orientation

The organisation has a goal-oriented leadership style.

4,61 

IP Protection

The organisation systematically protects its intellectual property rights.

4,22 

Sharing through telling

People within the organisation are good at talking about its success and history.

4,47 

Market Research

The organisation undertakes frequent independent market research and assesses the market potential.

3,90 

Documented Product Development Process

The organisation has a documented process in place to design, develop, test and launch products.

4,07 

Efficient Test Methodology

The organisation has a testing methodology in place to find and fix errors as early as possible in the innovation process.

4,24 

Ramp-Up

The organisation is able to scale up a launch internationally.

3,95 

Linkages for development

The organisation involves external partners, such as universities, in its development.

4,22 

Reverse Engineering

The organisation works with reverse engineering, i.e. buying competitors' products and disassembling them to understand and learn from how they are engineered).

3,38 

System for Project Selections

The organisation has a system to select the projects to be launched.

4,08 

Talent Management for Innovation

The organisation is constantly looking for new talent that may contribute to its growth and development.

4,56 

Market Regulation Insights

The organisation analyses laws, regulations and other external circumstances before deciding to launch an innovation project.

4,40 

Product Lifecycle Management

The organisation has an effective product management system in place.

4,14 


Table 3: Strengths of capabilities (total of 67) in relation to leadership style.

 

Capability name

Description

Score

Benchmark

Product to Market

The organisation regularly launches new product types to stay ahead of its competitors and to strengthen its customers' loyalty through an innovative approach.

4,10 

Documented Product Development Process

The organisation has a documented process in place to design, develop, test and launch products.

4,07 

Evaluation of Competitors' Products

The organisation continually evaluates competitors' products in order to keep ahead of them, learn from them and ultimately beat them.

4,28 

Idea Generation

The organisation systematically looks for new ideas.

4,65 

Product Lifecycle Management

The organisation has an effective product management system in place.

4,14 

Prototyping

The organisation has a process in place to evaluate and prototype ideas.

4,20 

Systematic Service Innovation

The organisation is working systematically to find new services that will offer competitive advantage.

4,40 

IP Protection

The organisation systematically protects its intellectual property rights.

4,22 

Opportunistic

The organisation has employees who often take up new opportunities and are encouraged to do so.

4,47 

Advantage Visualisation

The organisation is adept at clarifying its advantage over competitors.

4,39 

Ramp-Up

The organisation is able to scale up a launch internationally.

3,95 

Pilot Testing

The organisation tests pilots and learns from them, adapting quickly to the outcomes prior to final launch.

4,28 

Design for Reuse

The organisation thinks in modules and reuses and further develops other finished parts as complete subsystems for internal or external delivery.

3,98 

Efficient Test Methodology

The organisation has a testing methodology in place to find and fix errors as early as possible in the innovation process.

4,24 

Innovation Priority

The management prioritises innovation efforts.

4,39 

Idea Diffusion

The organisation’s structure and/or supporting systems allow you to capture, generate and take advantage of new ideas.

4,24 

Technology Watch

The organisation learns about new technology on a regular basis even if the company does not know how to use it.

4,21 

Channel Development

The organisation innovates its distribution channels, e.g. shop-in-shops, pop-up-stores, mobile offices and fast home deliveries.

3,82 

Experiential Customer Insights

The organisation evaluates its services through unannounced real customer situations that are logged, analysed and evaluated to result in concrete improvements.

4,25 

Cross-Function

Collaboration between functions or departments works well and continually generates new ideas.

4,21 

Innovation Benchmarking

The organisation buys and tests innovations from competitors and other industries.

3,69 

Linkages for development

The organisation involves external partners, such as universities, in its development.

4,22 

Pricing System

The organisation evaluates and adjusts its pricing methodology on a regular basis, based on price testing or other methods.

4,05 

Demand Generation

The organisation creates demand before its innovations are launched.

3,71 

A and B Innovation Testing

The organisationcarries out regular A and B testing of new innovations that systematically compare different variants of the same innovation and studies customer reactions and differences between A and B variants.

3,44 

Reverse Engineering

The organisation works with reverse engineering, i.e. buying competitors' products and disassembling them to understand and learn from how they are engineered).

3,38 

Market Regulation Insights

The organisation analyses laws, regulations and other external circumstances before deciding to launch an innovation project.

4,40 

Set the stage

The organisation has staff who create innovative environments, internally as well as externally.

4,47 

Open Innovation

The organisation works regularly with innovation in open environments, for the exchange of ideas and experiences.

4,06 

Speed to Market

When the organisation decides, it quickly gets new innovations to the market.

4,01 

Consumption Development

The organisation is continuously studying and analyzing new consumption patterns on the market. I.e. how end-users consume products and services in reality.

4,32 

Customers' Behaviour Insights

The organisation studies and analyses customers' actual behaviour in order to segment the market in innovative ways.

4,38 

Knowledge Rewarding

The organisation’s employees are not rewarded and encouraged to bring in new knowledge.

4,29 

Market Research

The organisation undertakes frequent independent market research and assesses the market potential.

3,90 

Community Approach

The organisation works systematically with "communities" that allow customers to contribute ideas and evaluate new innovations.

4,07 

DNA Focused

People within the organisation discuss and analyse regularly what employees are really good at and what differentiates its customer value proposition, far beyond traditional customer specifications and evaluations.

4,29 

Real Need Focus

The organisation tries to satisfy its customers' real needs and not what the customers states on a direct question.

4,52 

Sharing through telling

People within the organisation are good at talking about its success and history.

4,47 

R&D Cost Control

The organisation is able to drive its innovation projects on or under budget.

3,94 

Service Improvement Tracking

The organisation tests new services and compares the outcomes with old services before they are launched.

4,00 

Innovation Measuring

The organisation measures and systematically evaluates its innovation efforts.

4,17 

System for Project Selections

The organisation has a system to select the projects to be launched.

4,08 

Risk Assessment

The organisation makes systematic risk assessments.

4,08 

General Involvement

People, both externally and internally, feel appreciated and involved.

4,34 

Innovation Reward System

There is no internal reward system in place for innovation work.

3,69 

External Innovation Engagement

The organisation engages its suppliers and partners in the innovation process.

4,38 

Goal Orientation

The organisation has a goal-oriented leadership style.

4,61 

Social Science

The organisation has an anthropological style studying human behaviour to gain accurate and new customer insights.

3,33 

Clear Vision

Employees are all aware of the company's innovation vision, understand it and work towards it.

4,47 

Common Platform & Standard Creation

The organisation cooperates with external stakeholders including clients to develop platforms such as open source, common markets, common standards, etc.

4,16 

Talent Management for Innovation

The organisation is constantly looking for new talent that may contribute to its growth and development.

4,56 

Format Development

The organisation studies and analyses other industries' delivery formats as well as innovating its own new ways.

4,03 

Supplier Scanning and Involvement

The organisation analyses and innovates all aspects of finding and developing suppliers to the company, and those that deliver to the customer and the customer's customer.

4,19 

Customer Co-Creation

The organisation engages its customers in its own development.

4,28 

Automated Experience and Usages Analysis

The organisation builds in automatic evaluations of how customers use and experience innovations, which it then analyses and evaluates to take the next step.

3,80 

T-Shaped

The organisation comprises a number of T-shaped people, i.e. those who are broad in their way of thinking and in their education, but capable of acting in only one or two specialist areas.

4,28 

Offer Reinforcement

The organisation ensures that all customer accounts reinforce what they really offer the market.

4,44 

Patent Exchange

The organisation exchanges technology patents with others in the same or other industries.

3,29 

External Knowledge Sharing

The organisation publishes information and insights in order to share and gain knowledge.

3,98 

Relationship Building

There are people creating a trustworthy atmosphere building internal and external relationships.

4,57 

Partner Development

The organisation continually scans the market for partners.

4,25 

Evaluative

The organisation assigns sufficient time and resources to evaluate projects after they are launched.

4,22 

Cross-Learning

The corganisation’s employees learn from each other and from their customers.

4,60 

Core Focus

The organisation does all kinds of things including non-core work.

3,94 

External Rewards

The organisation has a reward system in place for customers to help the organisation in its innovation efforts.

3,36 

Understanding of Customers' Decision-Making Processes

The organisation has a deep understanding of and insight into customers' decision-making processes.

4,37 


Table 4: Strengths of capabilities (total of 67) in relation to type of innovation.

 

3   Recommendations

This section has 3 recommendations, each of them numbered in accordance to a specific part of Innovation 360's Innovation Framework.

3.1  Recommendation #1 refering to potential weakness in 'Knowledge Rewarding'

Start encouraging and rewarding employees to bring in new knowledge.

3.2  Recommendation #2 refering to potential weakness in 'Innovation Reward System'

Implement an employee incentive system for contributions to innovation.

3.3  Recommendation #3 refering to potential weakness in 'Core Focus'

Identify non-core process suitable for outsourcing, find suitable suppliers and start outsourcing those processes to them.

4   The InnoSurvey™ innovation framework

The InnoSurvey™ innovation capability measurement, as presented in this report, is based on a combination of our underlying innovation framework and our large innovation database. The innovation framework is defined by five strategic questions (see figure 1), and it is based on decades of research and practices and therefore a very powerful tool and foundation for InnoSurvey™ . Here is a brief introduction to the InnoSurvey™ innovation framework:

 

Figure 6:  The Innovation 360 Group´s innovation Framework (Source: Penker, 2011)

4.1   Why Innovate?

The simple question: Why Innovate? lead us to examine the strategic nature of innovation.  We know that innovation is a strategic necessity, because the purpose of innovation is to ensure that your organisation survives, and the evidence overwhelmingly shows that any organisation that doesn’t innovate probably won’t stay in business for long.  Hence, your innovation process should be aligned with your organisation’s strategy, and innovation should be a key actor that defines how your strategy will be realised. This is an essential cornerstone of the innovation framework.

4.2   What to innovate?

When we ask the question: What to innovate?  We recognise that the unpredictable nature of change requires us to prepare for many types of innovation options for a wide range of possible futures. Therefore we define seven different types of innovation in our framework, and they are all equally important and relevant aspects of our innovation capability measurements.

4.3   How to innovate?

The answer to this question is that a rigorous innovation process is essential.  The process must be driven by strategic intent, the “why” of innovation, so in fact the innovation process itself begins with strategy. The second step is the “what” of innovation; this is a highly strategic question and not just a happening. Many organisations believe this is one of the first steps, but in reality it is in the middle of a strategic, well-implemented innovation process. The framework is based on the conception that a rigorous innovation process is necessary in order to be a world-class innovator, and the framework therefore stipulates that there can be five different styles, ten different roles, 67 capabilities and four different process steps to consider in a well defined, rigorous innovation process.

4.4   Who innovates?

We have seen that while everyone participates in a robust innovation culture, there are three distinct roles to be played in achieving broad and consistent innovation results; The Innovation Director, The Innovation Ideator and The Innovation Champions. However, these roles must be in harmony with the personalities (personas) of those participating in the innovation work.

4.5   Where to innovate?

An Innovation process is realized by; the tools and infrastructures that support it and the people involved in the innovation process, be they internal and/or external to the company or organization.  There are four elements to consider relating to innovation infrastructure; these are:

·         The type of innovation, e.g. open innovation, engaging people internally and externally.

·         Collaborative platforms to support agile and fast value creation.

·         The physical work place, where people are engaged and motivated.

·         Methods to support and encourage the innovation process.

4.6   When to innovate?

The simple answer to the “When” question is all the time! However, everything needs to be measured to fully understand its impact, especially creative work such as innovation. It is imperative to really understand what is driving value and to measure the work effort and the end results, in order to optimise the outcome of the innovation work. In the innovation framework we therefore assume that innovation will take place constantly and at high pace and that it will be guided and monitored by metrics and coached for value and results.


5    a Review of current thinking

According to the Encyclopedia Britannica (1974) an innovation is the introduction of new technologies, held by some writers to be a primary factor in economic growth, which is the core of my research question. Innovations are driven by opportunities and capabilities. Drucker (1998) pointed out four areas of opportunity that exist within a company: unexpected occurrences, incongruities, process needs and industry and market changes.

Outside the company, there are three additional sources of opportunity: demographic changes, changes in perception and new knowledge. It is also possible to consider the linkage to other organisations as an asset in itself. Tovstiga and Birchall (2005) argue that firms are nodes in lager networks that create value by transforming opportunities into businesses by strategic deployment of capabilities.

Moreover, they argue that firms are continuously looking for opportunities within the environment, turning them into a competitive advantage through transformation innovation, and ultimately gaining profitable growth. To summarise, innovation can be seen from two perspectives: from the internal perspective of a firm’s capabilities, and from the external market perspective where the performance can be measured and success judged (Tovstiga & Birchall, 2005).

Companies can be categorised into three types according to the kind of innovation strategy that they adopt: need seekers, market readers and technology drivers. The need seekers look for potential opportunities by applying superior understanding of the market and rapid go-to-markets, market readers capitalise on existing trends and understanding of markets, while technology drivers drive for breakthrough innovations based on new technology (Jaruzelski & Dehoff, 2010). New reports based on more than ten years of measurements show that need seekers who have aligned their strategies with their capabilities are the most successful in generating return on investments in R&D (Jaruzelski, Staack, & Goehle, 2014).

In current thinking, there are several types of innovations that are discussed, as well as what is called strategic innovation and innovation of business models. Another trend, known as open innovation, is where innovations are driven in symbiosis with external parties. Many practitioners, as well as academics, emphasise the importance of building the right capabilities and adopting the right leadership style, as well as understanding and developing corporate culture in a way that maximises the value of innovation work.

5.1   Types of innovation

Innovation can be categorised by the level of aggregation, from the first level where there are improvements on an individual level, to the second level (functional level) which includes changes to processes, to the third level (company level) which typically concerns the value chain and radical product and service innovations, to the last and the fourth level (industry level), typically concerning breakthrough innovations changing the playing field. Another way of categorising innovation is according to whether it is aiming at a new market or not as well as its level of aggregation, or scope, which can be combined as illustrated in Figure 6: Innovation Framework (Source: Assink, 2006)Figure 6 (Assink, 2006).

The nature of innovations can be described by their scope in combination with either a quantifiable outcome or a non-quantifiable outcome (Tovstiga & Birchall, 2005). Tovstiga and Birchall (2005) and Assink (2006) both point out scope or aggregation level as one of two characteristics, and the market or the outcome as the other characteristic.

Tovstiga and Birchall (2005) point out quantifiable and operational scope as institutional innovations while Assink (2006) points out technology, concept or product innovations with existing means in an existing market as incremental innovations. Moreover, Tovstiga and Birchall (2005) call non-quantifiable and strategic scope radical innovations, while Assink (2006) describes new technology, concept or product innovations in a new existing market as breakthrough innovations (see also Figure 6).

 

Figure 7: Innovation Framework (Source: Assink, 2006)

 

5.1.1   Blue Ocean Strategy

Kim and Mauborgne (1997, 2005), the authors of the international bestseller Blue Ocean Strategy argue that the conventional approach to staying ahead of competitors is less successful than making the competitors irrelevant by applying what they call ‘value innovation’, which is also the cornerstone of their ‘blue ocean strategy’ concept. Kim and Mauborgne (1997) define conventional logic as a ´Red Ocean´ where the current industry logic companies apply towards gaining competitive advantages as well as for keeping existing customers and expanding the customer base through linear expansions. As opposed to the Red Ocean, a Blue Ocean strategy means that companies makes the competition irrelevant by innovating new, uncontested market-spaces, where they can operate successfully, grow and increase their profit.

There are three platforms for innovating new Blue Oceans (value innovation): product, service and delivery platforms. According to Kim and Mauborgne (2015), when applying blue ocean strategy based on value innovation, there are eight principles to follow:

 

Formulation principles:

·         Reconstruct market boundaries

·         Focus on the big picture, not the numbers

·         Reach beyond existing demand

·         Get the strategic sequence right

 

Execution Principles:

·         Overcome key organisational hurdles

·         Build execution into strategy

·         Align the value, profit, and people propositions

·         Renew Blue Oceans

5.1.2   Innovation Topology

Except for the dimensions of scope and market innovation, these might be categorised within a typology defined and illustrated by Trott (2008).

 

Type of Innovation

Example

Product Innovation

The development of a new or improved product.

Process Innovation

The development of a new manufacturing process.

Organisational Innovation

A new venture division; a new internal communication system; introduction of a new accounting procedure.

Management Innovation

TQM (total quality management) systems; BPR (business processes re-engineering).

Production Innovation

Quality circles; just-in-time (JIT) manufacturing systems; new production planning software.

Commercial/Marketing Innovation

New financing arrangements; new sales, delivery innovations in sales, market approaches, e.g. direct marketing. This is also referred to as business model innovation, meaning the development of new or improved business models and value propositions.

Service Innovation

Internet-based financial services.

 

Table 5: Typology of innovations adopted with explanations and examples (Source: Trott, 2008)

 

Understanding the typology of innovations will contribute to the investigation when structuring the data collection and analysing the collected data.

5.2   Strategic innovations

Strategic moves, as described by Kim and Mauborgne (2015), are managerial actions and decisions that fundamentally change the business, opening new markets and resulting in large leaps in demand. Moreover, Kim and Mauborgne (2015) argue that strategic moves give the possibility of profitable growth instead of getting stuck in the red ocean, as described earlier in this section.

Govindarajan and Trimble (2005) point out that strategic innovations and entrepreneurship are imperative to success in a globalised world where the economic environment is rapidly changing. Moreover, it is in the process of strategic innovations that potential customers are explored, delivery of value is conceptualised and analysed, and the end-to-end value chain explored and redesigned.

Strategic innovations are like experiments, characterised by the fact that they obtain leverage on an organisation’s existing capabilities but are not line extensions, are launched ahead of competitors, require at least some new capability and knowledge, are unprofitable during the first period of time and are initially hard to judge where successful or not. Strategic innovations are driven as projects and use existing business as a platform, while management innovations are about changing the platform and the principle of the business.

A management innovation creates long-lasting advantage when it meets one or more of three conditions: the innovation is based on a novel principle that challenges management orthodoxy; it is systemic, encompassing a range of processes and methods; and it is a part of an on-going program of invention, where progress compounds over time (Hamel, 2006: p.74).

Management innovation is about management process innovation while other innovation is about business processes such as the supply chain and customer support. Typically managerial work is setting goals, coordinating the use of resources and activities, acquiring knowledge, identifying and developing talents, as well as building and nurturing relationships. According to Hamel (2006), the elements of management innovation are:

·         Commitment to a big management problem

·         Novel principles that illuminate new approaches

·         A deconstruction of management orthodoxies

·         Analogies from atypical organisations that redefine what’s possible

A business model ‘consists of four interlocking elements that, taken together, create and deliver value’ (Johnson et al., 2008: p.52), and is one of several possible areas for management innovation. According to Teece (2010), new product development should be complemented by a new business model, that defines the go-to-market strategy and the value-capture strategy in order to secure profitability.

Teece (2010) points out two extremes of business models: an integrated business model at one extreme and an outsourced business model at the other. The integrated business model suggests that all activities are done in-house, from design and manufacturing to sales and distributions. The outsourced model suggests focusing on the core capabilities and outsourcing the rest; one example mentioned is Dolby (high fidelity noise reduction), which is a pure licensing model where everything is outsourced.

One of the major reasons why new business models does not generate new growth is that the current business model is not understood by the management, making it hard to judge whether to use the current business model or to reinvent it. Johnson et al. (2008) explain that the elements of a business model consist of a profit formula, key resources and key processes.

The profit formula is defined as a revenue model, cost structure, a margin model and resource velocity, which refers to the inventory turnover and other aspects of how to utilise resources. The key resources concern what’s needed to operate while the key processes concern how to operate and measure.

Strategic innovation leading to competitive advantages and profitable growth is one of the aspects to be considered when investigating the current research questions.

5.3   The evolution of Business Model Generation and Value Proposition Design

An emerging de facto standard for Business Model Generation and Value Proposition Design are the two “canvases” proposed by Osterwalder and Pigneur et.al. (2010). The two canvases represent a visual modelling standard for innovating new business models and/or value propositions, and they are also very tightly connected to one-another.  It is a structured way of working with value innovation, starting in the ideation phase, as a brainstorming/workshop tool and leading all the way to strategic development projects and implementation. The techniques support all types of innovation, and integrate smoothly with e.g. Blue Ocean Strategy, and have a strong focus towards in depth understanding of customer “gains”, “pains” and “jobs to get done”, i.e. customer anthropology. Hence, the relatively new role of the “anthropologist” is becoming crucial to understanding your customers, to increase your innovation capability and to design and implement new blue ocean strategies.

5.4   Open innovation

Open-market innovation is about the free trade of innovations involving external parties within the innovation process. Innovation exchange, innovation databases, access to venture capital and innovation agents are driving open-market innovation with positive impacts on the organisation, such as insights into what the core business actually is, improved employee retention and potential increased revenues through licensing fees (Rigby & Zook, 2002).

Henry Chesbrough, a well-known champion of open innovation, argues that open innovation can be seen as outside-in or inside-out: outside-in is where a company uses external ideas in its business, and inside-out is where companies offer open platforms and technologies to the market.

Examples are Amazon, where internal web-based systems are offered to be used by customers driving revenue, and LEGO, which opened up to allow external parties to develop their new concept of programmable toy robots (MindStorm™). The key to competitive advantage is to understand the service value web where the company and the market interact creating value (Chesbrough, 2011). Another more recent move by LEGO is that they got seriously involved in the market for business modelling and business model innovations by launching their new LEGO-kit: LEGO SeriousPlay®. LEGO SeriousPlay® lends itself directly to Business Modelling in general, but also directly to business modelling acc. to the two canvases of Osterwalder and Pigneur et.al. (2010).

Figure 2 shows the new service value web according to Chesbrough (2011), who argues that the focus should be on what creates primary value and complements the weak spot of Michel Porter’s Value Chain, namely the customer interaction part of the value chain.

Figure 8: Service Value Web

 

Huston and Sakkab (2006) point out that external parties, or ‘networks’, are not guarantees of earning money. These are more like systems that, depending on how they are used, can bring ideas and capabilities together – e.g. Proctor & Gamble’s innovation model, ‘Connect and Develop’.

Nambisan and Sawhney (2007), on the other hand, argue that ideas and/or market-ready concepts can very well be bought, which is a kind of outsourcing in itself. When shopping for ideas or market-ready concepts, industry factors as well as company factors both have to be taken into consideration. Industry factors that typically need to be taken into consideration are the pace of technological and market change, innovation potential, and costs.

Typically, the company factors to be considered are the purpose of the innovation, product capabilities, company size and risk appetite. One example of outside innovations, where external parties drive innovations, is the hardware game console manufacturer Nintendo, which encourages third party businesses to develop and sell games on their platform (Boudreau & Lakhani, 2009).

Boudreau and Lakhani identified three critical issues that managers should take into account when they make the decision to start with open innovations. Specifically, the discussion must look at: (1) the type of innovation, (2) the motivation of the individual innovating and (3) the nature of the platform business model (Boudreau & Lakhani, 2009: p.70).

The motivation of external innovators can be divided into extrinsic and intrinsic motivations, as explained by Boudreau and Lakhani (2009), where open markets (e.g. iTunes) are driven by extrinsic motivations such as money and need for development while communities (e.g. Linux) are driven by intrinsic motivations such as identity, fun and intellectual challenges.

There are three kinds of platforms: integrator platforms, product platforms and two-sided platforms. The integrator platforms are platforms such as iTunes and iPhone where customers get in contact with innovators through the platform, while product platforms such as Gore-Tex offer external innovators the possibilities of innovation and selling to customers, and the two-sided platform is typically an affiliate programme where external innovators directly interact with customers.

However, there are issues such as intellectual property rights, which might be tricky to handle when people outside the organisation generate ideas, and there is the concern that many companies have difficulties using the results (Brinkinshaw, Bouquet, & Barsoux, 2011).

Within the investigation, the open innovation market was one of the possibilities to explore in order to gain competitive advantages in an oligopolistic market. Moreover, the linkage to the business model was of interest to the investigation.

5.5   Leadership and culture

Rigby et al. (2009) argue that creative fashion businesses are virtually always led by a right-brain individual with imagination, in partnership with a left-brain individual with analytical skills. Another possibility of getting the right dynamics is to ‘assemble small incubation teams to help directors refine their own ideas’ (Catmull, 2008). According to Leonard and Straus (1997), the mix of the teams is important, and ‘if you want an innovative organisation, you need to hire, work with, and promote people who make you uncomfortable … you need to understand your own preferences so that you can complement your weaknesses and exploit your strengths’ (Leonard & Straus, 1997).

According to Kelly & Littman (2005), there are ten typical personas needed to drive creativity through an organisation: ‘The Devil’s Advocate may never go away, but on a good day, the ten personas can keep him in place’ (Kelly & Littman, 2005). The idea is to create a climate and culture stimulating innovative working, from idea to results. One person might have one or several personas and the important thing is to make sure all profiles are present within an organisational context to stimulate and support the innovation processes.

The ten personas are divided into learning personas, organisational personas and building personas. The learning personas are individuals digging for new sources and knowledge, while the organisational personas are the ones structuring, challenging and orchestrating the work. The building personas are typically the intellectual architects, the storyteller and the caregiver as well as the one setting up a proper environment.

People, team composition and leadership are all important components as well as the process of running the creative work. Breakthrough thinking is about orchestrating the brainstorming process and asking the right questions, not just letting people brainstorm without any guidance.

Generally speaking, people are not very efficient when running unstructured and abstract discussions without clear goals or at slicing data in all kinds of ways. Instead, exploring unexpected success, looking at other trades with similar challenges and boundaries as well as examining binding constraints are more effective ways of orchestrating the creative processes (Coyne, Clifford, & Dye, 2007).

Moreover, people need to be motivated and encouraged. Motivation may be both intrinsic and extrinsic, however extrinsic motivation alone is not enough, and if not complemented with intrinsic motivation, it can actually destroy creativity as people might feel controlled. Intrinsic motivation is the strongest and gives the work meaning. It can be achieved by assigning appropriate tasks to the most suitable people, giving freedom, allocating resources and encouraging work (Amabile, 1998).

A well-known innovative practitioner, Steve Jobs, has developed seven principles for breakthrough thinking and success. Gallo (2011) has documented Steve Job’s seven principles:

’Principle 1: Do What You Love’ (p. 13)

’Principle 2: Put a Dent in the Universe’ (p. 43)

’Principle 3: Kick-Start Your Brain’ (p. 79)

’Principle 4: Sell Dreams, Not Products’ (p. 103)

’Principle 5: Say No to 1000 Things’ (p. 135)

’Principle 6: Create Insanely Great Experience’ (p. 173)

’Principle 7: Master the Message’ (p. 197)

A key part of the problem is that different kinds of innovation problems call for different kinds of solutions. Just a few different styles of strategy innovation seem to solve innovation problems in the most successful firms (Loewe, Williamson, & Wood, 2001). Five styles are given metaphoric names:

The Cauldron:

An entrepreneurial style where the business model is frequently challenged.

The Spiral Staircase:

A style where you climb upwards without losing the overall goal.

The Fertile Field:

A style where the organisation tries to use existing capabilities and resources in a new way.

The PacMan:

A style where you invent, outsource and finance start-ups.

The Explorer:

A style where you explore possibilities and invest time and money in them without demanding short-term profit.

 

Govindarajan & Trimble (2005) have pointed out the importance of letting strategic innovations become new ventures where they borrow resources from the corporation (mother company) but are not influenced by past success or ideas about dos and don’ts.

Ventures might be spin-offs, strategic experiments or innovations with business models, and all have in common that they are strategic innovations driven as separate ventures founded, financed and deployed with resources (staff, systems, structures, culture) by the corporation but are autonomic and eventually led by externally hired management (Govindarajan & Trimble, 2005).

According to Day (2007), innovations can be structured and managed within a portfolio to handle risk and revenue: ‘By managing potential revenue and risk within a portfolio of innovation projects, better return can be reached over time’ (Day, 2007).

According to the literature reviewed, it seems that leadership, culture, how teams are put together, risk and portfolio management of the innovation process, and potential and controlled spin-off of strategic innovation projects are in combination fundamental to success. Insights gained in this part of the literature review can be used to structure the data collection within the investigation in order to understand and explore how innovation work can be (and is) structured in terms of leadership style, culture, team composition, portfolio and risk management, as well as how creativity is stimulated.

5.6   Strategy, capabilities and key success factors

Jaruzelski and Dehoff (2010) state that most of the world’s 1000 innovation top-spenders can be described as belonging to one of the three following categories, in accordance with their innovation strategy:

Need seekers – companies actively working with their end-customers in understanding how to develop and offer superior value to the market.

Market readers – watching and analysing market trends and capitalising on proven trends.

Technology drivers – using new technologies to solve problems, sometimes not articulated; can be disruptive as well as leading to improvements.

 

Organisations need to renew themselves and today’s business environment is especially demanding and is characterised by rapid changes in demand, technology and competition. Innovation is driven by technology competence as well as customer competence such as customer insights, distribution channels, communication and brand as well as reputation management (Danneels, 2002). The ability to learn about customers and new technology is a critical capability in today’s competitive landscape.

A capability ‘represents a distinctive and superior way of allocating, coordinating, and deploying resources’ (Amit & Schoemaker, 1993; Schreyogg & Kliesch-Eberl, 2007, cited by Flynn, Wu, & Melnyk, 2010: p.247). Moreover, capabilities are company-specific, emerge step-by-step, are tacit, dependent upon the decision maker and are empirically validated over time (Flynn, Wu, & Melnyk, 2010).

Tovstiga and Birchall (2005) argue that successful innovation is strongly linked to capabilities of gaining knowledge, learning and change. They state that ‘the firm’s capabilities are the internal competitive activities with which the firm intend to fulfil and deliver on the key success factors [related to the specific industry]’ (Tovstiga & Birchall, 2005: p.266). However, smaller firms tend to outsource their core organisational competencies, while medium-sized firms tend to outsource non-core activities (Haq & Sen, 2011).

Driving for disruptive innovation is related to external factors as well as internal factors and certain capabilities. Assink (2006: p.219) states that disruptive innovation capabilities are ‘the internal driving energy to generate and explore radical new ideas and concepts, to experiment with solutions for potential opportunity patterns detected in the market´s white space and to develop them into marketable and effective innovations, leveraging internal and external resources and competencies’. Moreover, Assink (2006) has identified five clusters of key inhibitors of those disruption capabilities:

Adoption barriers, where many successful enterprises lose their innovation edge through only working with improvements and not working with disruptive innovations and out-of-the-box thinking.

Mindset barriers, where many firms have problems to unlearn.

Risk barriers, where there is the typical not-invented-here syndrome and a focus on old experience and knowledge that was relevant and true in the past.

Nascent barriers, where there is a lack of motivating people being innovative and creative as the company grows.

Infrastructural barriers, where at first there are challenges with standards and after-launch challenges with conservatisms on the market.

 

As earlier stated, Jaruzelski and Dehoff (2010) pointed out three kinds of innovation strategies, with the technology drivers having the disruptive strategy. All three strategies are shown in Figure 8, which also shows how Jaruzelski and Dehoff (2010) link critical categories of capability to the three different strategies, where the success of disruptive technology drivers is especially linked to the capability of understanding emerging technologies and trends as well as product life-cycle management.

According to this literature review, it seems that different strategies call for different capabilities and that these capabilities are linked to the fulfilment of key success factors in the trade. Technology driven strategies call for a culture of motivation, unlearning, challenging, opportunism, high focus on product life-cycle and infrastructural issues as well as being able to allocate, coordinate and deploy resources (Tovstiga & Birchall, 2005; Assink, 2006; Flynn et al., 2010; Jaruzelski & Dehoff, 2010).

Figure 9: Critical and Specific Capabilities by Strategy (Source: Jaruzelski & Dehoff, 2010)

 

The concept of KSFs can be used in several ways and one of these ways is ‘as a description of the major skills and resources required to be successful in a given market’ (Grunert & Ellegaard, 1992: Executive Summary). KSFs can be divided into perceived and actual key success factors. The perceived KSFs are measured with interviews and actual KSFs by collecting objective or semi-objective data that shows correlation between cost and perceived value.

There are several sources of KSFs, which can be identified within the industry, the competitive strategy and the company’s position. If a KSF matches a firm’s strength, i.e. one of its capabilities, this will cause a positive impact on the performance of the firm within the market place. However, to be successful the company must be able to use it in a cost effective way, otherwise it will just be slack (Grunert & Ellegaard, 1992).

Tovstiga and Birchall (2005) state that ‘examples of key success factors include the ability to:

·         Deliver superior value through products and services

·         Carry out competitive manufacturing and commercial process reviews

·         Attract superior talents, employees with critical expertise and skills

·         Grow the business through competitive pricing and marketing image

·         Establish and maintain a long-term relationship with satisfied customers …’

Moreover, Tovstiga and Birchall (2005) also point out that not all capabilities are always fully exploited and might have a strong or a weak impact on the performance of the firm.

Jaruzelski and Dehoff (2010) point out that innovative companies are coherent with the capabilities shown in table 2 and are in general more differentiated and have higher margin (EBITDA) as well as higher market capitalisation relative to their competitors.

 

Category

Capability

Ideation

 

Supplier and distributor engagement in ideation process;

Independent competitive insights from the marketplace;

Open innovation/capturing ideas at any point in the process;

Detailed understanding of emerging technologies and trends;

Deep consumer and customer insights and analytics.

Project selection

 

Strategic disruption decision making and transition plan;

Technical risk assessment/management;

Rigorous decision making around portfolio trade-offs;

Project resource requirement forecasting and planning;

Ongoing assessment of market potential.

Product development

 

Reverse engineering;

Supplier–partner engagement in product development;

Design for specific goals;

Product platform management;

Engagement with customers to prove real-world feasibility.

Commercialisation

 

Diverse user-group management;

Production ramp-up;

Regulatory/government relationship management;

Global, enterprise-wide product launch;

Product life-cycle management;

Pilot-user selection/controlled rollouts.

 

Table 6: The most important innovation capabilities (Source: Jaruzelski & Dehoff, 2010)

 

Within the investigation the concept of KSFs, capabilities and strategies, Jaruzelski and Dehoff’s (2010) framework of the most important capabilities for innovation can be used to structure data collections as well as serving as a tool for analysing the collected data.

5.7   The innovation process

Managing innovation work is related to uncertainty and, according to Trott (2008), there can be uncertainty within the process or the outcome or a combination. Application engineering is a typical innovative product development managed by a well-defined process, while development engineering is more unstructured but with a well-defined goal. Exploratory research is also referred to as ‘blue sky’, as it is ‘up in the clouds’ working with new not fully understood technologies, with a fuzzy goal or idea of what is to be achieved (Trott, 2008).

Figure 10: Pearson's uncertainty map (source: Pearson, 1991, cited by Trott, 2008)

 

There is a lack of a general innovation process, covering all aspects of innovation management. However, new-product-development processes are most common and the general steps are:

·         Idea generation: initial screening and preliminary assessment

·         Definition: market analysis and preliminary financial analysis, decision on business case

·         Development

·         Post-review

·         Validation: including in-house tests and pre-commercialisation decision

·         Commercialisation

·         Post-implementation review

Projects typically have a sponsor and an executive team that make decisions about each tollgate. Often projects are organised in portfolios, which are managed to create maximum impact at a defined level of risk (Tovstiga & Birchall, 2005).

The value of innovation, generated within an innovation process, can be measured by applying Key Performance Indicators (KPIs) as shown in Table 3. The KPIs are divided into three groups: idea generation, conversion and diffusion of the innovation (Hansen & Birkinshaw, 2007).

 

Idea Generation

Conversion

Diffusion

In-House

Cross-Pollination

External

Selection

Development

Speed

Do people in our unit create good ideas on their own?

Do we create good ideas by working across the company?

Do we secure enough good ideas from outside the firm?

Are we good at screening and funding new ideas?

Are we good at turning ideas into viable products, businesses, and best practices?

Are we good at diffusing development ideas across the company?

Number of high-quality ideas generated within a unit.

Number of high-quality ideas generated across units.

Number of high-quality ideas generated from outside the firm.

Percentage of ideas generated that end up being selected and funded.

Percentage of funded ideas that lead to revenues; number of months to first sale.

Percentage of penetration in desired markets, channels, customer groups; number of months to full diffusion.

Table 7: Innovation management KPIs (Source: Hansen & Birkinshaw, 2007)

 

‘The stage gate process at Agilent’ (Tovstiga & Birchall, 2005) and the ‘Innovation Radar’ (Sawhney, Wolcott, & Arroniz, 2006) are generic process steps which, as well as Hansen and Birkinshaw’s (2007) KPIs, are usable tools when discussing KSFs and looking at how to measure and manage them. 

5.8   Market structure and competition

Thirty-five years ago, Michael Porter introduced his ‘Five Forces’ framework (Porter, 1980) and the concept that competition is made up of the following five forces: entry of new competitors, threats of substitutes, bargaining power of buyers, bargaining power of suppliers and rivalry among the existing competitors (Porter, 1980).

According to Porter (1990, 1996), competitive advantage is gained by pressure and challenge, and sustainable competitive advantage is gained based on something distinctive and different within a company, not just excellence in operation and cost cutting, which will always converge within the industry.

The market today is global and hyper-competitive, while no competitive advantage is sustainable and all competitive advantage erodes. Companies must actively aim to disrupt their own as well as their competitors’ competitive advantages in order to cope with the hyper-competitive market, and to that end, a new 7S’s model has been developed to be used to identify the company’s own strengths and weaknesses as well as for analysing the industry and the competitors (D'Aveni, 1995). Figure 10 shows D’Aveni’s (1995) 7S’s model.

Figure 11: The new 7S’s model (Source: D’Aveni, 1995)

 

However, oligopolistic market structure has an inherited dualistic nature. It provides a company with a competitive advantage but competitors will imitate this and the company needs to innovate over and over again, leading to less growth than in a market with more competition and/or a larger population (Shrieves, 1978; Le, 2008).

When it comes to innovation of business models, they can be copied by competitor´s, as the market when launched knows them. When launching a new business model it should always be calculated what competitors’ moves will be: either reduced prices or new business models (Casadesus-Masanell & Zhu, 2010).

D’Aveni et al. (2010) point out that in a world of hyper-competition, sustainable competitive advantages might not exist anymore or at least cease to exist over time and as one single competitive advantage. They comment that temporary competitive advantages are increasing in importance and perceived sustainable competitive advantages are decreasing in importance as the market becomes more complex and it gets increasingly easier to imitate and/or disrupt previous competitive advantages. They suggest using chaos theory models, as well as the theory of complex systems, to deal with the new situation, while at the same time they open for the possibility that temporary competitive advantages might just be a special case of Porter’s five forces, where low barriers and low entries are combined with high power of suppliers and buyers leading to a hyper-competitive industry rivalry with many short competitive advantages. Their conclusion is that firms must build their ability to search for and adopt temporary competitive advantages while being able to handle multiple strategies to gain and keep market share.         

When answering the research questions and designing the data collection method, it is of relevance to take the market structure and its complications into consideration.

5.9   Conclusions

According to Tovstiga and Birchall (2005), innovation is used to differentiate firms based on their capabilities to gain a competitive advantage on the market, and the perspective of innovation can either be internal factors (capabilities) or external factors (whether an innovation, based on supply and demand, will succeed or not). In the literature review, it is clear that innovations can be incremental and disruptive, and that there are several kinds of possible innovation strategies, such as those of need seekers who look for potential opportunities by applying superior understanding of the market and rapid go-to-markets, market readers who capitalise on existing trends and understanding of markets, and technology drivers who drive for breakthrough innovations based on new technology (Jaruzelski & Dehoff, 2010).

Internally, according to Kelly and Littman (2005), Coyne (2007), and Loewe et al. (2001) for example, possible capitalisation of capabilities seems to be dependent upon leadership style as well as personalities of the people and the organisation. Moreover, according to Jaruzelski and Dehoff (2010), each strategy calls upon different capabilities for success.

The capabilities for success, or KSFs, can also be divided into actual and perceived KSFs (Grunert & Ellegaard, 1992). Actual KSFs are the ones that by certainty lead to expected results, while the perceived ones are expected to lead to certain results. There are also several kinds of innovation possibilities according to the literature review. Trott (2008), for example, states that there are eight kinds of innovations.

According to current thinking it seems clear that innovation might provide competitive advantages, but researchers such as Le (2008) and Shrieves (1978) say it is a dualistic relationship between innovation and oligopolistic market structures, providing a competitive advantage which competitors will imitate, requiring the company to innovate over and over again and leading to less growth than in a market with more competition and/or larger population.


6   Reference list

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Assink, M. (2006). Inhibitors of disruptive innovation capability: a conceptual model. European Journal of Innovation Management , 9 (2), 215-253.

Boudreau, K. J., & Lakhani, K. R. (2009). How to Manage Outside Innovation. MIT Sloan Management Review , 50 (4), 69-77.

Brinkinshaw, J., Bouquet, C., & Barsoux, J. (2011). The 5 Myths of Innovation. MIT Sloan Management Review , 52 (2), 43-50.

Casadesus-Masanell, R., & Zhu, F. (2010). Business Model Innovation and Competitive Imitation.

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Issued by               Innovation 360 Group AB

Contact                  Magnus Penker

Telephone             +46 708 200 244

Email                      magnus.penker@innovation360group.com

 

 



[1] The benchmark data is selected based on strategy, industry, market and company size.