Chapter 3
- 1. BY M. AZIZUL HAKIM E-mail hakimazizulsis646@gmail.com
- 2. Product innovations are embodied in the outputs of an organization—its goods or services. For example, Honda’s development of a new hybrid electric vehicle is a product innovation. Process innovations are innovations in the way an organization conducts its business, such as in the techniques of producing or marketing goods or services. Process innovations are often oriented toward improving the effectiveness or efficiency of production by, for example, reducing defect rates or increasing the quantity that may be produced in a given time. For example, a process innovation at a biotechnology firm might entail developing a genetic algorithm that can quickly search a set of disease-related genes to identify a target for therapeutic intervention. In this instance, the process innovation (the genetic algorithm) can speed up the firm’s ability to develop a product innovation (a new therapeutic drug).
- 3. One of the primary dimensions used to distinguish types of innovation is the continuum between radical versus incremental innovation. A number of definitions have been posed for radical innovationand incremental innovation, but most hinge on the degree to which an innovation represents a departure from existing practices.Thus radicalness might be conceived as the combination of newnessand the degree of differentness. A technology could be new to the world, new to an industry, new to a firm, or new merely to an adopting business unit. A technology could be significantly different from existing products and processes or only marginally different. The most radical innovations would be new to the world and exceptionally different from existing products and processes.
- 4. Innovations can also be classified as competence enhancing versus competence destroying. An innovation is considered to be competence enhancing from the perspective of a particular firm if it builds on the firm’s existing knowledge base. For example, each generation of Intel’s microprocessors (e.g., 286, 386, 486, Pentium, Pentium II, Pentium III, Pentium 4) builds on the technology underlying the previous generation. Thus, while each generation embodies innovation, these innovations leverage Intel’s existing competencies, making them more valuable.
- 5. An innovation may entail a change to individual components, to the overall architecture within which those components operate, or both. An innovation is considered a component innovation(or modular innovation) if it entails changes to one or more components, but does not significantly affect the overall configuration of the system. In the example above, an innovation in bicycle seat technology (such as the incorporation of gel-filled material for additional cushioning) does not require any changes in the rest of the bicycle architecture.
- 6. Though the dimensions described above are useful for exploring key ways that one innovation may differ from another, these dimensions are not independent, nor do they offer a straightforward system for categorizing innovations in a precise and consistent manner. Each of the above dimensions shares relationships with others—for example, architectural innovations are often considered more radical and more competence destroying than component innovations. Furthermore, how an innovation is described on a dimension often depends on who is doing the describing and with what it is being compared. An all- electric vehicle, for example, might seem like a radical and competence destroying innovation to a manufacturer of internal combustion engines, but to a customer who only has to change how they fuel/charge the vehicle, it might seem like an incremental and competence-enhancing innovation. Thus, while the dimensions above are valuable for understanding innovation, they should be considered relative dimensions whose meaning is dependent on the context in which they are used.