Teaching

Resources
and
Instructors’
Guidelines
Chapter 15: Capturing learning from innovation

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 By the end of this chapter you will have:

Reviewed and consolidated the key themes in

the book.

Explored key influences on how to manage the

Learning innovation process effectively.

objectives Identified key skills at individual, team and

organizational levels associated with effective
innovation.

Developed the ability to review how well

individuals and organizations manage the
process.

Practised taking an audit approach to improving

innovation and entrepreneurship.

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 What we have learned about managing innovation
• Learning and adaptation are essential in an inherently
uncertain future – so innovation is an imperative
• Innovation is about interaction of technology, market, and
organization
• Innovation management is the search for effective routines
• Innovation management is about good all-round performance

• Three essential ingredients in innovation strategy:

• Position of the firm, in terms of its products, processes,
technologies, etc.
• Technological paths open to the firm, given its accumulated
competencies.
• Organizational processes followed by the firm to integrate
strategic learning across functional and divisional
boundaries 3
 Key themes
• Innovation needs
effective Innovation as a process
implementation
mechanisms, Patterns of behaviour
supporting which become embedded
in routines – structures,
organizational procedures, policies – for
context, etc. making innovation happen
• Key challenges:
manage ‘beyond the Varies between
steady state’ and organizations – particular
culture – ‘the way we do
‘beyond boundaries’ things round here’

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 Successful Innovation
• is strategy-based;
• depends on effective internal and external
linkages;
• requires effective enabling mechanisms for
making change happen;
• only happens within a supporting
organizational context.

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 Dynamic capability
• The ability to review and change the way innovation is managed.
• Competitive advantage – the ability to win and to do so continuously –
demonstrate ‘timely responsiveness and rapid product innovation,
coupled with the management capability to effectively co-ordinate and
redeploy internal and external competencies’
• Problems due to:
– failing to recognize or capitalize on new ideas that conflict with an
established knowledge set – the ‘not invented here’ problem;
– being too close to existing customers and meeting their needs too
well – and not being able to move into new technological fields early
enough;
– adopting new technology – following technological fashions –
without an underlying strategic rationale;
– lacking codification of tacit knowledge

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 Learning to manage innovation
• We need to:
• capture and reflect on our experiences, trying to distil patterns
from them about what does and does not work
• create models of how the world works (concepts) and link
these to those we already have
• use our revised models to engage again in innovation – trying
new things out.
• Unlearning
• Constructed crisis
• ‘Core competencies’ should become ‘core rigidities’

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 Kolb’s learning cycle
• Learning requires the following:
• Structured and challenging reflection on the process
• Conceptualization
• Experimentation
• Honest capture of experience (even if this has been a costly failure) so we
have raw material on which to reflect

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 Aids to learning
• Rather than simply stepping back for a reflective pause we
could employ some structured question frameworks.

• We can develop our own concepts, but we can also use, adapt
and try out new ideas developed elsewhere.

• Similarly, we don’t have to make all the mistakes ourselves. We

can learn from other’s experiences

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 The value of failure
• Innovation is all about trying new things out – and they may not always work
• Experimentation and testing, prototyping and pivoting are all part and parcel
of the innovation story, and it is through this process that we gradually build
capability

Provides insights about what not to do

Failure helps build capability

Failure helps others learn and build capability

So how to learn?
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 Approaches to enable learning
• Post-project reviews: project debrief
– Structured review or postproject audit
– Requires the climate where people can honestly and
objectively explore issues that the project raises
– Not suitable for small scale day-to-day activity
• Procedural learning
– ‘know-how’ and ‘know-why’ of a machine in a single page
– Document how processes are managed, controlled and
improved, like quality area under ISO 9000 or
environmental area under ISO 14000
– Commitment to learn is required
• Agile innovation methods: Controlled experimentation is the
core idea
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 Approaches to enable learning
• Benchmarking: Comparing
– Powerful motivator; provides structural methodology for
learning; powerful focus for the operation of ‘learning
networks’
– Benchmarking can take several forms: within the same
organization; in different divisions of a large organization;
in different firms within a sector; in different firms and
sectors
• Capability maturity models
– Auditing and reviewing process is done against ideal-type
or normative models of good practice

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 The innovation fitness test
• If you don’t measure it, you can’t improve it
• Two dimensions in innovation audit:
– How well do we perform in terms of innovation results?
– How well do we manage (in terms of the underlying
capability to repeat the innovation trick)?
• Offers a framework of questions to explore these issues
• What do low scores mean?
• What can be done improve performance in these areas?
• Offers opportunities for learning from others and ‘splicing’ in
useful routines

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Audit frameworks to help reflect and learn

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Success routines

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Measuring innovation

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 Innovation strategy
• A clear roadmap for change
• Does the innovation we are considering help
us reach the strategic goals which we have set
ourselves?
• Do we know enough about this to pull it off?

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Components of an innovative organization
• shared vision, leadership and the will to
innovate
• appropriate structure
• identifying and supporting key individuals
• effective team working
• high involvement innovation
• creative climate
• external focus.

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 Measuring Innovation Performance
• Two aspects:
• How much we put in (time, money, skilled resources, etc.)
• What the outputs from the process are
• Inputs are important:
• Spending on R&D or market research
• Investing in training and development
• Amount spent on open-ended or ‘blue-sky’ exploration
compared with ‘mainstream’ innovation activities
• Outputs (innovative performance):
• Number and range of patents and scientific papers
• Customer satisfaction surveys
• Strategic impact attributed directly or indirectly to
innovation
• Performance measures: average lead time for introduction
or use measures of continuous improvement 19
 Measuring Innovation Management Capability
• Core questions include:
• How well do we search for opportunities?
• How well do we manage the selection process?
• How well do we manage implementation of innovation
projects, from inception to launch and beyond?
• Do we have a supportive innovative organization?
• Do we have a clear and communicated innovation strategy?
• Do we build and maintain rich and diverse external
linkages?
• How well do we capture learning from the innovation
process?
• Organization and management of new service development
and delivery can be assessed by five components: strategy,
process, organization, tools/technology, and system (SPOTS)
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 Measuring Innovation Management Capability
• Strategy provides focus; process provides control; organization
provides co-ordination of people; tools and technologies
provide transformation/transaction capabilities; and system
provides integration
• Performance is analysed as a total index and as three
subscales: (1) innovation and quality, (2) time compression in
development and cost reduction in development/delivery and
(3) service delivery

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 Developing Innovation Capability
• Instead of engulfed in “what and how to measure innovation”,
we must reflect upon and improve the management of the
process
• Format of audit tool is not important but the ability to use it to
make a wide-ranging review of factors affecting innovation
success and failure and how management of the process might
be improved.
• Key questions:
• What do we need to do more of, strengthen?
• What do we need to do less of, or stop?
• What new routines do we need to develop?

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 Developing Innovation Capability
• an audit framework to see what the organization did right and
wrong in the case of particular innovations or as a way of
understanding why things happened the way they did;
• a checklist to see if they are doing the right things;
• a benchmark to see if they are doing them as well as others;
• a guide to continuous improvement of innovation
management;
• a learning resource to help acquire knowledge and provide
inspiration for new things to try;
• a way of focusing on subsystems with particular problems and
then working with the owners of those processes and their
customers and suppliers to see if the discussion cannot
improve on things.

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Developing innovation management
capability

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 Challenges and need to develop capability
• open innovation and the changing landscape for searching
• user innovation and the growing importance of active
stakeholder involvement in innovation
• discontinuous innovation
• developing and emerging economies and the way the innovation
game is changing as these places become the central focus for
economic and social growth
• social innovation
• sustainability-led innovation.

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 Summary
• Wherever innovation happens – big firm, small firm, start-up business, social
enterprise – one thing is clear: successful innovation won’t happen simply by
wishing for it. This complex and risky process of transforming ideas into
things which make a mark needs organizing and managing in strategic
fashion.
• A wide range of structures, tools and techniques exist for helping think about
and manage the core elements of the innovation process. The challenge is to
adapt and use them in a particular context – essentially a learning process.

• The major requirement is for a commitment to undertake such learning, but

it can also be enabled by the use of tools and reflection aids. In particular,
the chapter looks at various approaches to innovation auditing and offers
some templates for reviewing and developing capability across the process
as a whole and in particular key areas.

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 Summary
• At the heart of such audit approaches are some key questions:
• Do we have a clear process for making innovation happen and effective
enabling mechanisms to support it?
• Do we have a clear sense of shared strategic purpose and do we use this
to guide our innovative activities?
• Do we have a supportive organization whose structures and systems
enable people to be creative and share and build on each other’s
creative ideas?
• Do we build and extend our networks for innovation into a rich open
innovation system?

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