Innovation Management - 2 - Types of Innovation

Dr Joseph K.K. Ho
Types of
Innovation
Managing Innovation
& Technology
Transfer

NAME OR LOGO 2
©2019DrJosephK.K.Ho
4 Types of Innovation
• Sustaining Innovation
• Breakthrough Innovation
• Disruptive Innovation
• Basic Research
Dimensions of Innovation Space
• Product
• Process
• Position
• Paradigm

NAME OR LOGO
Greg Satell
Reference:
Greg Satell (2017) “The 4 Types of Innovation and the Problems They Solve”
Harvard Business Review
https://hbr.org/2017/06/the-4-types-of-innovation-and-the-problems-they-solve
creates Innovation Matrix to
identify the right type of
strategy to solve a problem,
by asking
• How well can we define
the problem?
• How well can we define
the skill domain(s) needed to
solve it?
3

NAME OR LOGO
Sustaining Innovation
Reference:
Greg Satell (2017) “The 4 Types of Innovation and the Problems They Solve” Harvard Business Review
4
• Have a clear idea of what problems need
to be solved and what skill domains are
required
• Improve existing capabilities in existing
markets
© 2019 Dr Joseph K.K. Ho

NAME OR LOGO
UBER
5
originating in high-end and
existing market footholds,
superior service to existing
taxis, incumbents facing
threats from sustaining
innovations.
Reference:

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APPLE
6
debuted in 2007 in the
smartphone market –
targeting at the same
customers coveted by
incumbents
Reference:

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Breakthrough Innovation
7
• A well-defined problem but hard to solve,
need to explore unconventional skill
domains
• Thomas Kuhn: the problem may be
resolved fairly easily within the paradigm
of an adjacent domain.
Reference:

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Paradigm Shift
8
• a concept identified by Thomas Kuhn, is
a fundamental change in the basic
concepts and experimental practices of a
scientific discipline
• Fundamental change in an individual's or
a society's view of how things work in
the world.
• Examples: Transistors and the discovery
of the structure of DNA
References:
Greg Satell (2012) “4 Types of Innovation (and how to approach them)” Digitaltonto.com
https://www.digitaltonto.com/2012/4-types-of-innovation-and-how-to-approach-them/
Wikipedia | Paradigm Shift
https://en.wikipedia.org/wiki/Paradigm_shift
Businessdictionary.com | Paradigm Shift
http://www.businessdictionary.com/definition/paradigm-shift.html
normally science moves
forward under fairly strict
paradigms based on what is
known at the time. Eventually
though, things run their course
and science becomes stuck
until a paradigm shift enables a
new wave of advancement.

NAME OR LOGO 9
• expose the problem to diverse skill
domains
• crowd sourcing for fresh viewpoints, think
out of dominant logic
• utilize the ideas and strength of the
people outside their organization to make
improvements in the internal processes
or products
References:
Greg Satell (2013) “4 Ways Open Innovation Can Drive Your
Business Forward” Digitaltonto.com
https://www.digitaltonto.com/2013/4-ways-open-innovation-
can-drive-your-business-forward/
Nesli Nazik Ozkan (2015) “An Example of Open Innovation: P&G”
Procedia - Social and Behavioral Sciences, Volume 195, 3 July
2015, Pages 1496-1502
https://www.sciencedirect.com/science/article/pii/S1877042815039
294?via%3Dihub
Open Innovation
Atizo’s platform allows companies to
generate ideas, evaluate ideas and
develop the ideas into marketable
concepts.
Well-regarded firms like Swisscom,
Mammut, Google or BMW have used
Atizo’s platform for open innovation to
find new solutions.
Blog.business-model-innovation.com | Open Innovation:
Does it work?
http://blog.business-model-innovation.com/2010/08/open-
innovation-does-it-work/

NAME OR LOGO 10
• shift from research and development
(R&D) to connect and develop (C&D)
with Open Innovation
• established more than 2,000 successful
agreements with innovation partners
around the world
Reference:
Nesli Nazik Ozkan (2015) “An Example of Open Innovation: P&G”, Procedia -
Social and Behavioral Sciences, Volume 195, 3 July 2015, Pages 1496-1502
https://www.sciencedirect.com/science/article/pii/S1877042815039294?via%
3Dihub
P&G’s
Connect +
Develop Program
PGScience.com | What is C+D?
http://www.pgscience.com/home/connect_develop/wha
t_is_cd.html
P&G launched Connect+Develop, a
systemic, company-wide open
innovation program charged with
bringing the outside in, and taking the
inside out.
C+D collaborates for innovation
solutions and includes a global team
that searches for solutions to
business needs via external
networks, preferred suppliers and
existing partners.

NAME OR LOGO
Disruptive Innovation
11
• Originate in low-end or new-market footholds,
starting by appealing to low-end or unserved
consumers and then migrate to the mainstream
market
• Low-end footholds: provide those low-end
customers with a “good enough” product.
Reference:
Clayton M. Christensen Michael E. RaynorRory McDonald (2015) “What Is Disruptive Innovation?”, Harvard Business Review, DECEMBER 2015 ISSUE
https://hbr.org/2015/12/what-is-disruptive-innovation

NAME OR LOGO
iPhone
12
• Subsequent growth is better explained by
disruption
• Achieved not merely through product
improvements but also through the
introduction of a new business model.
• CHANGED THE GAME: building a facilitated
network connecting application developers
with phone users.
• CREATED A NEW MARKET for internet
access; challenging laptops as mainstream
users’ device of choice for going online.
References:
Clayton M. Christensen Michael E. RaynorRory McDonald (2015) “What Is Disruptive Innovation?”
Harvard Business Review, DECEMBER 2015 ISSUE
https://hbr.org/2015/12/what-is-disruptive-innovation
Debuted in 2007 was more sustaining than
disruptive. Progressively, Apple had been
more and more disrupting the market
effectively by constantly updating and adding
creative and innovating features
Wang Xin Yuan (2014) | UBC Blog Site
https://blogs.ubc.ca/xinyuanwang/2014/11/02/the-disruptive-innovation-of-apple/

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Wikipedia
13
• Provides free, online access to over 5 million articles
with most of them updated more frequently.
• Former market leader Encyclopedia Britannica ended
its print production after 244 years in 2012.
• Not only disrupted printed paper encyclopedias; but
also disrupted digital encyclopedias (Microsoft's
Encarta, once a major rival to Britannia)
Reference:
Wikipedia | Disruptive Innovation
https://en.wikipedia.org/wiki/Disruptive_innovation

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Basic Research
14
• Pathbreaking innovations always begin with the
discovery of some new phenomenon, i.e. turning
academic research into profits
“Basic research leads to new knowledge. It provides scientific capital. It creates the
fund from which the practical applications of knowledge must be drawn. New
products and new processes do not appear full-grown. They are founded on new
principles and new conceptions, which in turn are painstakingly developed by
research in the purest realms of science.” - Vannevar Bush (1945)
Reference:
Greg Satell(2016) “How Smart Businesses Are Turning Academic Research Into Profits ”, DigitalTonto.com
https://www.digitaltonto.com/2016/how-smart-businesses-are-turning-academic-research-into-profits/

NAME OR LOGO
Basic Research
15
Reference:
IBM
• “we invent things that matter
to the world. Today, we are
pioneering the most promising
and disruptive technologies
that will transform industries
and society, including the
future of AI, blockchain and
quantum computing...”
P&G
• “start with basic research,
driven by scientific interest to
further our internal knowledge
in our 11 core competencies.
Examples of our basic research
include identification and
sequencing of genes...”

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Basic Research
16
Reference:
Experian
DataLabs
• “encourage researchers and
engineers to go to conferences
and hold internal seminars on
what they learn.”
Google
• “invites about 30 top
researchers to spend a
sabbatical year at the company
and funds 250 academic projects
annually.”

NAME OR LOGO
Francis
and Bessant
References:
Francis and Bessant (2005) “Targeting innovation and implications for capability development”
Technovation Volume 25, Issue 3, March 2005, Pages 171-183
https://www.sciencedirect.com/science/article/pii/S0166497204000525
Knowledge-innovation.purot.net | Dimensions of innovation
https://knowledge-innovation.purot.net/dimensions-of-innovation
have invented how
organizations can map
innovations
The 4Ps of
INNOVATION
SPACE
17

NAME OR LOGO
Dimensions of
Innovation Space
• Product – changes in the
things (products/services)
which an organization
offers
• Process – changes in the
ways in which they are
created and delivered
• Position – changes in the
context in which the
products/services are
introduced
• Paradigm – changes in the
underlying mental & business
models which frame what the
organization does
References
18

NAME OR LOGO
Product
• Do Better - CD replacing vinyl records
• Do Different - Spotify (music streaming
services), changing from own collection to
renting a library of music
References
19

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Process
• Do Better - Improved retailing logistics
• Do Different – Online Shopping
References
20

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Position
• Do Better - Airline segmenting services
offering for different passenger groups,
Premium Economy
• Do Different – Low-cost airlines opening
up air travel to those previously unable to
afford it
References
21

NAME OR LOGO
Paradigm
• Do Better - Redefining market of high-end
products (Dyson vacuum cleaner)
• Do Different – Redefining industries
(Amazon-retailing, Google advertising,
Skype-telecoms online)
References
22

NAME OR LOGO 23
"The Innovator's Dilemma" by Clayton
Christensen - VIDEO BOOK SUMMARY
https://www.youtube.com/watch?v=yUAtIQD
llo8
What are the 4P’s of Innovation
https://www.youtube.com/watch?v=AuW
KbEjPlHY&t=120s

NAME OR LOGO
The innovation process of Uber
https://www.youtube.com/watch?v=1m5uo-
EGHYc
Design Thinking and Innovation At Apple
https://www.youtube.com/watch?v=ir3E-
TEUk48
24

NAME OR LOGO
Kuhn's Paradigm 4 mins
https://www.youtube.com/watch?v=tasV
TgZc9Gw
Open Innovation And Crowdsourcing
https://www.youtube.com/watch?v=jzjLO
BsQ57k&fbclid=IwAR3dwCB6X4246DREo
FZoRhyXfyrMZ8Em25G7bJA_aeMp1pnrn0
R2naXkH0o
25

NAME OR LOGO
Innovation at P&G
https://www.youtube.com/watch?v=MpO
Q_x-lrbk
How Apple changed Music - Market
Disruption
https://www.youtube.com/watch?v=KZW
ENOGdxQY
26

NAME OR LOGO
How Google & Wikipedia killed
Encyclopedia Britannica– Missing
Disruptive Innovation – Adam Hartung
https://www.youtube.com/watch?v=2vlhf
JOjWqo
HK’s Science Park facilitates startup
growth & innovation in HK
https://www.youtube.com/watch?v=S1VC
Ff_ot2I&t=37s&fbclid=IwAR0OLZeCc41ez
_a0irMcbEPopA7FyCkvzUyVW9mbak7kwql
cVraRx4E0fxA
27

What’s more in
Managing Innovation &
Technology Transfer
• Innovation Leadership
• Innovation Culture
• Technology Transfer
28

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josephkkho.com

Innovation Management - 2 - Types of Innovation

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