1

Transforming Invention into Innovation:

The Conceptualization Stage

2

Outline

What is “Innovation”? Conceptualization of new business opportunities “Technology Push” and “Need Pull” Corporate interests Effective conceptualization Innovation traps

3

Innovation

“Innovation” involves welding marketplace opportunities with inventive technology and new technical knowledge. Substantial skill

Three elements: Technical competency Market need Corporate interest

4

Conceptualization of New Business Opportunities

Marketing-oriented managers can direct scientists into what appear to be exciting markets with assured high demand. Demand pull

Here, innovation is father to (or mother to) the new “invention”.

Scientists, attuned to the realities of the corporation’s interests, look for new technologies and scientific breakthroughs with good commercialization potential. Technology push

Marketing and scientific specialists work together, bringing their own skills to a joint endeavor to develop new technology with sound market possibilities.

5

Technology Push

Require a great deal of technical knowledge and experience Technological lock

Unique patentable technologies

Link up their conception of what ideas are marketable with new technological discoveries coming both from within and outside of their own laboratory

R&D personnel should have the ability not only to conduct relevant research but to monitor and link up with other relevant work wherever it may be going on, and to see some overall pattern or implication in these diverse streams.

6

The Scheme of Technology Push

Internal scientificand technical knowledge

Technical issues and problems

Technical solutions

3↓

External scientificand technical knowledge

External market needs

1

2 4

5

1 2

7

Problems with “Technology Push”

Start with what can be easily researched and evaluated. Get locked into a particular technical solution. Address the needs of the atypical user and invoke their

acceptance of the new product as evidence for the existence of a new business “opportunity.”

8

Need Pull

R&D can be targeted by specific market in advance. The definition and exploration of markets are handled by

business / marketing-trained specialists.

9

The Scheme of Need Pull

Internal scientific and technical knowledge

External scientific and technical knowledge

External market needs

Technical issues and problems

Technical solutions

4

3 2

2 5

3 1

10

Problems with “Need Pull”

Danger of two extremes: Superficial broad generalizations Very narrow applications with limited potential

Too many market-oriented compromises can destroy a basically sound innovative idea.

Have greater risk of not being able to generate the required technology to solve an existing problem.

11

The Double Linking Required

Technical-linking and need-linking are both necessary for successful innovation. Technical linking requires someone who can combine a promising

technical problem with external and/or internal scientific knowledge.

Taking a “logical” step forward.

Need linking represents the ability to perceive interrelationships between the existing or potential technical breakthroughs and actual or potential market demand.

12

“Technology Push” and “Need Pull” Models Compared

Technology Push Start with what easily can

be researched and evaluated.

Address the needs of the atypical user.

Get locked into one technical solution.

Need Pull Look at needs that are easily

identified but with minor potential.

Continue to change the definition of the “opportunity”; “miss the opportunity.”

Lack a “champion” or “true believer.”

13

Corporate Interests

The corporate long-range plan for the new-venture division read:

Instead of dealing with an ever-growing number of separate arenas, attention should be focused on a critical few major fields, within each of which arenas may be expanded, grouped together, or added.

A group leader who usually turned out to be the driving force in the definition of a new business opportunity.

14

Three Elements Requiring Linkage

Relevant “problems” As defined by top management’s professed “interests” Problems of operating divisions New opportunities created by external events

Technology sources Researcher’s personal interests Existing corporate expertise New technological developments

Market demand Marketer’s personal search Areas of customer dissatisfaction Potential for new need satisfaction

15

Effective Conceptualization

Successful managers are synthesizers, able to put together and link ongoing technical streams with existing corporate commitments and directions and then to relate these to market needs. Example: Steve Jobs of Apple Computer visiting PARC

Even with the two processes — technology and market linkages —combined, there is no guarantee of success.

16

Emphasis on “Technical Linking” and “Need Linking”

IV

I

Technology Push

II

Need Pull

II

Technology Push

Low

Low

High

HighEmphasis on “technical linking”

Em

phasis on “need linking”

17

A Classification Scheme

The most successful ventures appeared to be those in quadrant II (double linking).

Most new ventures in R&D-oriented corporations appear to be in the domain of technology.

18

Innovation Traps

More realistically better definitions are made when there is flexibility and modification. For such flexibility to be present during conceptualization it is

important that scientists maintain their perspective.

Often the alternatives can turn out to be even more worthwhile than the original breakthrough.

There can also be too much flexibility. Too much flexibility on the technical side. When the market success of the innovation is too dependent

on a potential variable environmental component of the market.

19

Conclusion

Always think about the 3 elements at strategy formulation. Both technology push and need pull have their advantages

and disadvantages. Proponents of new ventures must consider the corporate

interests. The classification scheme can help us know how to do

right. Be care of the innovation traps.