INNOVATION

MANAGEMENT
Jiří Vacek
vacekj@kip.zcu.cz
Department of Management, Innovations
and Projects
UWB, Faculty of Economics
Summer semester 2009/10
 Lesson 1

Introduction
Basic concepts
Importance of innovations
 CHARACTERISTICS OF SUCCESSFUL
INNOVATING COMPANIES - 1
• Systematic collection of all impulses that
could lead to innovation
• Creativity of employees
• Ability to evaluate the possibility of the
innovation idea
• Good team work
• Project-based approach and ability to
manage projects
 CHARACTERISTICS OF SUCCESSFUL
INNOVATING COMPANIES - 2
• Cooperation with external experts
(universities, research laboratories…)
• Proper rate of risk-taking
• Employees’ motivation (the employees are
willing to improve the product and the
operation of the whole company)
• Continued education of employees
• Ability to finance the innovation activities
 Definition of innovation - 1
• “Technological innovations are defined as new
products and processes and major technological
modifications to products and processes. An
innovation is considered performed if it is
introduced to the market (product innovation)
or implemented in the production process
(process innovation). Innovation includes
many research, technological, organizational,
financial and commercial activities.
 Definition of innovation - 2
• R&D represents only one of these activities and
can take place during various stages of the
innovation process. It can play not only the role
of the original source of the innovation ideas but
also the role of problem solution framework,
which can be turned to at any stage of the
implementation.„

OECD, Frascati Manual 1992

 Oslo Manual
• Product innovation
– A good or service that is new or significantly improved. This
includes significant improvements in technical specifications,
components and materials, software in the product, user
friendliness or other functional characteristics.
• Process innovation
– A new or significantly improved production or delivery method. This
includes significant changes in techniques, equipment and/or
software.
• Marketing innovation
– A new marketing method involving significant changes in product
design or packaging, product placement, product promotion or
pricing.
• Organisational innovation
– A new organisational method in business practices, workplace
organisation or external relations.
• Technological innovations – based on
specific technology, invention, discovery,
• Social innovations – in critical historic
periods more important than technological
ones (mail, educational systém, social
systém, health care, …)
 DEGREE OF NOVELTY
• Incremental innovations
• Radical innovations
• Systemic innovations
 Classification of innovations
SYSTEM New series of New generation Steam engine,
cars, planes, (MP3 and ICT,
computers, TV download as biotechnology,
substitution of nanotechnology
CD)
Improvement of New Advanced
components components for materials
existing systems improving
component
COMPONENT properties
INCREMENTAL RADICAL
„do better what „new for the „new for the
we already do“ company“ world“
 INNOVATION PROCESS
• Research and development (R&D)
• Production
• Marketing
Innovation is an opportunity for something
new, different. It is always based on
change.
Innovators do not view any change as a
threat but as an opportunity
 FOCUS
• Use the limited resources in the most
effective manner; focus on one of the
following:
– Operational output
– Top-quality products
– Perfect knowledge of customers
 RECOMMENDATIONS
• Solve the correct problem correctly – be
effective and efficient
• Manage innovation as a project
• Analyze risks
• Use models, scenarios, computer
simulation
• Study examples of succesful and
unsuccesful innovation projects
 WHAT TO DO
1. Start with analysis and study of opportunities.
2. Go among people, ask questions, listen
3. Effective innovations are surprisingly simple.
They must be focused on specific needs and
on specific final products.
4. Effective innovation start on a small scale.
5. A successful innovation always tries to win a
leading position, otherwise you create
opportunities for your competitors.
 WHAT TO AVOID
1. Don’t try to be too “clever”. All that is too
sophisticated will almost certainly go
wrong.
2. Don’t try to do too many things at once.
Focus on the core of the problem.
3. Don’t try to make innovations for the
future but for today. An innovation can
have a long-term impact but there must
be an immediate need for it.
Three conditions for innovations
1. Innovation means work, hard, concentrated
and thorough work. If these qualities are
lacking then there is no use for the big talent,
cleverness or knowledge.
2. Successful innovations must build on your
strong points. The innovation must be
important to the innovator.
3. Innovation must focus on a market, must be
controlled by the market (market-pull).
CASE STUDIES
Linet Želevčice
• Hospital products
• Hospital beds, intensive care beds, medical
furniture and other equipment increase the
comfort of patients and help the nurses.

• Nursing-care products
• Nursing beds, bed accessories, bedside
cabinets, mattresses and other furniture.
No comment …

1990

2005
 TOSHULIN
Development of new machines:
1. Customized – the machines developed
for the specific customer according to
its requirements – market pull
2. Prototypes – there is no specific
customer – market push
35
3 0 ,2 2
30 2 8 ,8

2 5 ,7
25 2 2 ,7

ti me of del i v ery (i n
20
months )
1 4 ,9
15
12
1 0 ,7 1 0 ,8 cus tomi zati on coeffi ci ent
10 8 ,5 8 ,8
9 ,6 9 ,5 9 ,6 9 ,4
8 ,3
9 ,5
(%)
6 ,8 6 ,9

0
1998 2000 2002 2004 2006
 Types of design engineers

spouter of system designer finisher of routine attendance

ideas ideas engineer engineer

suggests designs examines all ideas elaborates efficient and performs routine
and problem and thoughts independently in reliable engineer; tasks
solutions without systematically details the ideas however, without
detailed which he gets to creative approach
consideration of all elaborate
possible results and
consequences

[1%] [5%] [54%] [30%] [10%]

Contipro

Connective
tissue
products

RNDr. Vladimír Velebný, CSc.

Holding – current state
167 employees

sales (2008) – 242 mil Kč

export – 98% of total sales

one of the biggest produces of
hyaluronanu inthe world
30% of the world market
60% of the European
market

Customers in 43 countries
Sales in regions
 3 pillars of success

1. Maximum attainable quality

2. Sharing expenses with customers
3. Development of original products
 3M and post-it notes

http://www.3m.com/us/office/postit/pastpresent/history_ws.html
 More about 3M

A Century of Innovation The 3M Story

http://solutions.3m.com/wps/portal/3M/en_US/Ab
out/3M/
iGO – distribution of bateries
• Bateries and accessories for notebooks,
mobiles, cameras and other equipment
• Vision: to develop and sell simple and elegant
solutions, facilitate the use of electronic
devices
• online catalogue, e-commerce, CRM
• Customer - targeted marketing, flexibility
• Growth of sales by 80% in the first year, by
100% in the following year
http://corporate.igo.com/about_us.aspx
 Adaptors

• Patented technology iGo Technology,

powering of mobile electronic devices using
single (universal) adaptor;
• Power Technology Patent Brochure (PDF)
 Bang & Olufsen
• www.bang-olufsen.com
• VISION: „Courage to constantly question the ordinary in
search of surprising, long-lasting experiences.“
• Founded in 1925 in Struer, Denmark, Bang & Olufsen a/s is
world renowned for its distinctive range of quality audio, video
and multimedia products that represent our vision: Courage to
constantly question the ordinary in search of surprising, long-
lasting experiences. Bang & Olufsen employs over 2.550 staff
members and had a turnover of DKK 4.092 million (EUR 548,6
million) in the 2007/2008 financial year.
• Bang & Olufsen manufactures a highly distinctive and exclusive
range of televisions, music systems, loudspeakers, telephones,
and multimedia products that combine technological excellence
with emotional appeal. Bang & Olufsen products are sold by
over 1.200 dealers in more than 100 countries in an extensive
network of retail stores. Approximately 65% of these stores are
B1-stores, which exclusively sell Bang & Olufsen products. The
B1 stores account for 81% of the total turnover.
• Production also in the Czech Republic
Bang & Olufsen – products
 More case studies

• IBM Case Studies:

http://www.ibm.com/search/?en=utf&v=14&lang=en&cc=u
s&lv=c&q=case+study+innovation&x=13&y=5
• Industry podcasts: Midsized clients and
experts in seven industries share their insights -
http://www-
1.ibm.com/businesscenter/smb/us/en/mbpodcasts?&ca=s
mbIndustryPodcasts101706&tactic=&me=W&met=inli&re
=smbibmcomTopPagesIndustriesPromo1usen101706
 More case studies
• Sustainable energy (hydrogen, fuel cells,
biofuels, zero emission, …
http://ec.europa.eu/research/energy/nn/nn_pu/ar
ticle_1078_en.htm
• http://www.zoner.com/
• http://www.kerio.com/
 The most important innovations
in last 30 years

• http://www.pbs.org/nbr/site/features/specia
l/subdir/top-30-innovations_slide-show/