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Lesson 5

1-1

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as Prentice Hall

Chapter 12

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© © 2015 5 Pearson Education, Inc. . Publishing as Prentice Hall

New business models (e.g., Amazon,
iTunes).
New products and services (e.g., tablets,
mobile banking).
New or improved processes (e.g., ERP,
supply chain).
Cost savings (e.g., self-service, offshore
sourcing).

12-3

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Comes about through organizational
change

Frequently involves experimentation

Is necessary for long-term organizational
survival

12-4

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Sustaining Innovation – improves a
product or service for existing customers.

Disruptive Innovation – targets
noncustomers and delivers a product or
service that differs from the current
product portfolio. It must create and
capture new value.

12-5

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Continuous Change – Frequent,
relentless and endemic to the firm.

Punctuated Equilibrium – assumes
long periods of incremental change,
interrupted by brief periods of radical
change.

12-6

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Innovation in an organization lies at the
intersection of the answer to three
significant questions:

What is viable in the marketplace?

What is desirable to the business?

What is possible with technology?

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Figure 12.1 The Organization’s Strategic for Innovation with Technology

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1. Ideation

2. Advocacy

3. Proof of Concept

4. Trial or Pilot

5. Transition or “go to market”

10-9

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Communication of value is essential to
ensuring innovation is sustainable. From
this perspective, value has two
components:

1. Is it desirable?

2. Does it build our innovative capabilities?

10-11

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Motivate: Establish rewards for innovation.

Support: Create infrastructure to sustain
innovation.

Direct: Manage innovation strategically.

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Experimentation is risky.

Incentives and rewards must be provided
to support experimentation.

Good ideas can come from any source.

12-13

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Infrastructure is needed to support IT
innovation and experimentation.
Some organizations create formal centers
(or laboratories).
Intranets are being used to solicit new
ideas.
Financial support is frequently provided
through internal venture support.

12-14

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