High-Involvement Innovation: Building and Sustaining Competitive Advantage Through Continuous Change

Overview

Provides a framework for thinking about and organizing a culture of continuous innovation.
* Based on ten years of research with over 200 organizations.

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Overview

Provides a framework for thinking about and organizing a culture of continuous innovation.
* Based on ten years of research with over 200 organizations.

Read More Show Less

Product Details

  • ISBN-13: 9780470847077
  • Publisher: Wiley
  • Publication date: 6/9/2003
  • Edition number: 1
  • Pages: 258
  • Product dimensions: 9.00 (w) x 6.00 (h) x 0.58 (d)

Meet the Author

John Bessant is Professor of Innovation Management in the School of Management at Cranfield University. Prior to joining Cranfield, John was Director of Brighton University’s Centre for Research in Innovation Management. He is also an Honorary Professor at SPRU, Sussex University and a Visiting Fellow at several UK and international universities. Together with Joe Tidd and the late Keith Pavitt, John is co-author of Managing Innovation (published by John Wiley & Sons Ltd.), the second edition of which was awarded the Best Book Prize by the European Association for Creativity and Innovation in 2001.

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Read an Excerpt

High-Involvement Innovation

Building and Sustaining Competitive Advantage Through Continuous Change
By John Bessant

John Wiley & Sons

ISBN: 0-470-84707-7


Chapter One

'MANY HANDS MAKE LIGHT WORK!'

1.1 Innovation - A Survival Imperative

Change is a pre-requisite for survival amongst individual human beings and even more so in the organizations which they create and in which they work. Put simply, if an organization does not change what it offers the world-its products or services-and the ways in which it creates and delivers those offerings, it may not survive. In a competitive environment this implies a continuous race, well captured by the character of the Red Queen in Lewis Carroll's Through the Looking Glass, as she explained to Alice: '"A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"'

The pressure for such constant innovation means that creativity is a key resource. But the image we often have of the creative act is one involving artists or composers, working alone and inspired by the desire to create something to leave to posterity. Whilst 'creative arts' of this kind have their cast of determined and individualistic characters, they only represent the tip of an iceberg. We may not all be a Leonardo or a Beethoven but there is a strong drive in human beings, whichfinds expression in all sorts of creative ways-we want to make and do new things and we want to improve the things we already have and do.

In organizational terms there is a second powerful force at work, which puts innovation centre stage. In a competitive environment there is a kind of simple Darwinian process at work-from the earliest days in the caves it was the people who worked out better ways of hunting, foraging and fire-making who stood the best chance of survival. Sad though it is to reflect upon, it was those who were most innovative in warfare-in, for example, weapons and tactics-who won battles and wars and came to dominate. On a more positive note, it was the drive to innovate in fields like health care and social welfare which meant that the species grew.

In particular, in the economic field this pattern emerged strongly. Societies that were open and exploring grew and prospered through developments in what they traded and how they carried that trade out-for example, new ships, new methods of navigation, new products and new financial mechanisms to handle transactions. Similar patterns underpin the periods of high growth that accompanied moves like that from an increasingly efficient agricultural sector towards city life and the 'Industrial Revolution' in Europe.

1.2 The Range of Innovation

Sometimes change needs to be radical. In the year 2000 a German company achieved its best ever financial performance and came to dominate the European tourism industry via a string of airlines, travel agencies, currency and insurance service businesses. Yet Preussag began life less than a century earlier as the Prussian state mining and smelting company, a public sector body set up to manage the lead mines in north-east Germany! Its journey from lead ore to leisure has been tortuous, a mixture of luck and strategy, which has taken it through such unlikely places as steel manufacturing and mouthwash sales and distribution! One constant theme though is that of change-if this giant had not found ways to shift its offerings and its delivery processes it would not have survived.

Alternatively, take the case of the Mannesmann brothers working in the small German town of Solingen in the late nineteenth century. Their invention of the seamless steel tube was to revolutionize the way in which pipes and tubes of all shapes and sizes were made-instead of their being welded together along a seam with the risks of bursting or leakage, pipes could now be produced that were perfect. The development of their business took the Mannesmann brothers into steel and metals manufacturing and into various applications of pipes and tubes-in construction, in distribution, in boiler making and in other fields. From the 1960s, after a strategic review of the business, they concentrated more on the higher value applications and on making engineering equipment to help use and work with tubes and other metal products. Their interests in control and instrumentation led them to learn about communications and from this they were able to make a bid-successful as it turned out-for one of the German licences for mobile telephony. By the late 1990s they had built up a large operation in mobile telephones, but their progress was eventually halted by a hostile takeover-at the time the biggest in history-by Vodafone-Airtouch.

Once again this is a story of luck and strategic judgement. There were times when the future of the company was very much in doubt and times when its fortunes shone. But the company's long-term survival depended on the ability of the organization to change and to keep changing itself in a highly turbulent and competitive world.

Not all organizations need to make such radical changes to survive. For many it is a case of continuing to do what they are good at and supporting this with a steady stream of changes and improvements. Rather than a 'great leap forward', most innovation is gradual, moving incrementally forward with a sequence of little, cumulative improvements. For example, although the invention of the electric light bulb was a dramatic breakthrough, little improvements in the design of the bulb and in the process for manufacturing it led to a fall in price of over 80% between 1880 and 1896 (Bright 1949). In recent times the dramatic growth and success of the Japanese car manufacturing industry are primarily the result of a 40 year programme of systematic and continuous improvement of product and process design (Womack et al. 1991). Even the Internet, which appears to be driven by fast and radical change, is actually the convergence of many incremental developments, which go back to networking amongst scientists in the nuclear physics community in the 1980s (Berners-Lee 2000).

Most innovation falls into this pattern of occasional breakthroughs followed by long periods of improvement and development within the space created by the breakthrough (Utterback 1994). 3M-a company that recently celebrated its 100th birthday and so is clearly a long-term survivor-illustrates this well. Although we can point to many famous breakthrough innovations-for example, 'Scotch tape', 'Post-It notes' and 'Scotchgard'-most of 3M's business success comes from being able to exploit these breakthroughs through extended incremental innovation. It sets itself the ambitious goal of achieving up to 50% of its sales from products that it has developed during the previous three years-a stretching target when we consider that the product range extends to over 50 000 items! Feeding this is the ability tomanage innovation, not only in product development, but also in creating and refining the processes underpinning those products (Gundling 2000).

In similar fashion many other long-term survivor firms can point to a pattern of careful innovation management covering both breakthrough and incremental improvement within the envelope of those breakthroughs-examples include Corning Glass, Philips and General Electric (Graham and Shuldiner 2001; Welch 2001).

1.3 'But That's Not Really Innovation ...'

One of the difficulties we face in trying to manage innovation is that we make assumptions about its nature. For example, we focus on the 'breakthrough nature' and discount the value of small increments of change whose impact only appears in cumulative form. Or else we confuse 'invention'-coming up with a bright idea-with 'innovation'-the whole process of taking that idea into successful implementation and use. We often assume that, once a breakthrough has been made, innovation stops and imitation begins-and in doing so we neglect the fact that adoption of something new in a particular context can still have a marked effect, even if the original innovation took place decades ago. For example, the impact of medical techniques in the developing world is still significant even though many of them date back a long time.

Throughout this book we will try and adopt an approach to innovation that sees it as a spectrum of activity. At one end of this continuum are radical and even breakthrough innovations of the dramatic kind that we see as headlines in the media. But at the other end are those tiny incremental improvements that often fall off the radar screen but whose effect over time and in cumulative form can still be significant. We will also look at innovation not in terms of absolute novelty-newness to the world-but rather in relative terms; is it an innovation that makes a difference in a particular situation? For example, the adoption of a simple shop-floor layout approach like the 5-S programme (described in Chapter 5) might appear to most people to be trivial, but its impact on a factory where there is a chaotic layout, where people work without basic discipline or standard operating procedures and where there is regard only for output rather than quality can be dramatic.

Much of the thrust of this book is about involving people who have not normally been considered part of the creative resources available to the organization. In this respect their ability to contribute to breakthrough innovation is likely to be limited, at least in the short term. But they are, nonetheless, capable of making a contribution via such incremental improvements and these can, over time, have a major impact on the fortunes of the firm.

1.4 Managing the Innovation Agenda

The risk is that, even if firms recognize and accept the need for continuous innovation, they may find difficulties in framing an appropriate innovation agenda. With limited resources they may find themselves putting scarce eggs into too few or the wrong baskets. Innovation can take many forms-from simple, incremental development of what is already there to radical development of totally new options. It can range from changes in what is offered-product or service-through to the ways in which that offering is created and delivered (process innovation). It can reflect the positioning of a particular offering; for example putting a well-established product into a new market represents a powerful source of innovation. And it can involve rethinking the underlying mental models associated with a particular product or service (Francis 2001). (This distinction has similarities with the 'value chain' approach, which sees upgrading via product and process change, change in position within the value chain and moving to a different value chain (Kaplinsky and Morris 2001).)

The challenge is for firms to be aware of the extensive space within which innovation possibilities exist and to try and develop a strategic portfolio that covers this territory effectively, balancing risks and resources. Table 1.1 maps out some options.

1.5 Learning, Knowledge Management and Innovation

'Innovation has nothing to do with how many R&D dollars you have ... it's not about money. It's about the people you have, how you're led, and how much you get it.' (Steve Jobs, interview with Fortune Magazine, cited in Kirkpatrick (1998))

What an organization knows at any moment in time is deployed in the products or services that it offers and the processes whereby it produces that offering. As Figure 1.1 shows, knowledge provides the fuel for innovations-the changes that help it catch up and sometimes move ahead. This is the heart of the 'core competence' argument, which suggests that organizations need to work at building and managing their knowledge resources (Kay 1993; Prahalad and Hamel 1994; Coombs and Metcalfe 2002).

This puts a premium on the processes that it has in place for learning and knowledge management. Not for nothing do people speak of 'the knowledge economy' or of 'competing on knowledge' (Teece 1998). In a world where access to information is fast and widespread, those organizations that can create and use their own knowledge are likely to be able to build and sustain competitive advantage. So organizations need to become good at learning-and occasionally forgetting (letting go of knowledge that they no longer need).

If learning and knowledge management are so important, then we should look at who is involved in this core renewal process. And here we reach an interesting conclusion. Organizations themselves don't learn-it is the people within them that do that (Hedberg 1981). This does not mean that managing learning at the level of the organization is unimportant; organizations provide the stage on which individual learning can take place and some stages are more supportive than others. In the end learning is essentially a human process involving individuals and groups in different configurations.

Whether people are skilled and competent at learning or not is a variable, as are the conditions under which they operate within the firm. Those organizations that invest in developing the specific knowledge and skills of their employees and the general capability to learn, those that provide opportunities and space for interaction and shared learning, those that emphasize effective communication and sharing of information, those that recognize and reward learning behaviour-these are likely to be the organizations that succeed in developing into the kind of learning organization that is much talked about but hard to achieve.

So in this sense people really are the organization's most valuable assets-not because this phrase makes good publicity in the annual report or mission statement, but because people actually do represent the powerhouse for learning. Without actively committed and focused learning, any organization is likely to stagnate and will struggle to create the steady stream of change it needs to survive. Investments in assets like buildings, equipment or IT systems may help the business, but without a core learning capability the long-term future must be in doubt.

1.6 The Innovation Paradox

The paradox that this raises is simple to express but hard to understand. Organizations need creativity and active learning in order to survive in a hostile environment. In today's turbulent times with challenges coming from all directions -uncertainty in competing in a global market, unpredictability in political and social stability, technological frontiers being pushed back at a dizzying pace-the one certainty is that we need all the creativity and learning capacity that we can get.

Yet the majority of our organizations still throttle back their capabilities in this direction by only looking to a relatively small group of specialists to provide this. Individuals and groups are 'licensed' by virtue of their specialist training or position in the organization-as 'R&D', 'engineering', 'market research', 'systems design', etc.

Continues...


Excerpted from High-Involvement Innovation by John Bessant Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Acknowledgements.

'Many Hands Make Light Work!'

Is it Worth it?

What's the Problem?

A Model for High-Involvement Innovation.

Getting the Innovation Habit.

Systematic High-Involvement Innovation Capability.

Strategic Innnovation.

Autonomous Innovation.

Learning Organizations.

Doing it!

Further Challenges.

Appendix: Details on the High-Involvement Innovation ReferenceModel.

Index.

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