Spring 2009

Innovation Extracts provides a quick look at current thought regarding leadership and management of planning and improvement initiatives.

If you have any questions or comments about what you read here, or if you would like to suggest items for future Innovation Extracts, please contact Louise Sandmeyer, Executive Director of the Office of Planning and Institutional Assessment, at 814-863-8721 or psupia@psu.edu.

Quality Endeavors Issue No. 118 March 2009

Innovation Extracts:
Innovations: How to Nurture, Respond, and When to Adopt

We often think of inventions as something created by one person from nothing. In reality, new ideas are usually the result of teams working together and reassembling already existing concepts. When these reassembled pieces are put to use, they become innovations, new ways of doing things.

Ideally, we work in an organizational climate that encourages innovation, and all innovations come from within our organization. But how do we establish that climate or culture? How do we respond when peer or competitive organizations innovate and impact our environment? And whether they come from internal or external sources, how do we evaluate innovations and make a decision about whether or when to adopt or implement them?

In How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Harvard Business School Press, 2003), Andrew Hargadon points out that the only consistent finding in research into innovation is that there is no consistent finding and little evidence that innovative behavior is innate. Hargadon points instead to the importance in innovation of networking, bridging between weakly linked communities, and assembling new ideas from pieces of what was already known. This can be facilitated by work practices that capture good ideas and keep them alive, and a culture that includes learning, helping others, and being able to ask others for help. While we think of Thomas Edison as a lone inventor, he was most productive while working with a group of about 15 other innovators in his Menlo Park lab.

Taking risks to explore new ideas is only the first part of innovation. The second part is determining how to make the best use of these ideas. Clayton M. Christensen, Scott D. Anthony, and Erik A. Roth identify two types of innovation in Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change (Harvard Business School Press, 2004) and based on this, provide ideas on how organizations can strategize about innovation. Organizations establish a position with their products, and move along a growth path with those products, based on their resources, processes, and values. Sustaining innovation involves existing organizations developing better or enhanced products for existing customers or stakeholders. Following this path, there may be markets that these organizations miss, and there may be consumers who want less than they offer.

Disruptive innovation produces new products, finds new markets, or reshapes existing markets or organizations. New products can bring new consumers into the market, or can undercut and take consumers from existing markets. Christensen et al give several examples of this from higher education. The University of Phoenix and Concord Law School created new markets by using technology to reach non-consumers who had not participated in traditional higher education formats. Community colleges can provide focused education, and undercut the existing market of traditional residential campus-based education. Corporate training can also provide focused training for consumer groups that were overshot by traditional broader business administration programs and undercut their market. Christensen et al see a possible future disruption in higher education of branding by instructor – a famous author or professor – replacing branding by university. In this case, institutions would have three alternatives: ignore the disruption, adopt the disruption by attracting famous faculty, or be disruptive themselves and seek out alternative new products, consumer groups or markets. While not mentioned by Christensen et al, the ‘no frills’ colleges now getting some attention may also be a disruptive innovation.

Jackie Fenn and Mark Raskino address when to adopt innovations in Mastering the Hype Cycle: How to Choose the Right Innovation at the Right Time (Harvard Business Press, 2008). The Hype Cycle curve evolved through Fenn’s observations of technology innovations while working at Gartner. It is built on the integration of Everett Rogers’ S curve, (Diffusion of Innovatons, 5th ed., Free Press 2003) in which new ideas or products go through four stages (embryonic, emerging, adolescent, and mainstream), with a rate of adoption that increases and then decreases (http://en.wikipedia.org/wiki/Diffusion_of_innovations ) and the bell curve of enthusiasm, which also increases and then decreases. There are five stages in the Hype Cycle (http://www.gartner.com/it/products/research/methodologies/research_hype.jsp):

  1. Innovation trigger – initial interest in the innovation
  2. Peak of inflated expectations – limited application of the innovation, but media attention that generates unrealistic and excessive expectations for what the innovation will deliver
  3. Trough of disillusionment – the innovation falls out of favor due to failure to meet inflated expectations
  4. Slope of enlightenment – continued development, refinement and application of the innovation by some organizations
  5. Plateau of productivity – actual benefits of the innovation are demonstrated and the innovation is more widely adopted

With the Hype Cycle there are four traps regarding timing of adoption of an innovation: adopting too early, giving up too soon, adopting too late, and hanging on too long once the innovation has lost value. Organizations need to be able to assess the value of the innovation to the organization, the maturity of the innovation, and the culture of the organization with regard to taking risks. The innovation should be evaluated in terms of what function it serves, not as an end in itself.

There are several dimensions to successful innovation. An organization needs to know itself, as well as being able to evaluate and choose wisely, to develop and use innovations most effectively.

Quality Endeavors Issue No. 117 February 2009

Innovation Extracts:
An Entrepreneurial Approach

In The Entrepreneurial Mindset: Strategies for Continuously Creating Opportunity in an Age of Uncertainty (Harvard Business School Press, 2000), Rita Gunther McGrath and Ian MacMillan define entrepreneurs as those who “detect…and exploit the…opportunities that arise from uncertainty.” ‘Habitual’ entrepreneurs:

  1. Seek new opportunities - passionately
  2. Pursue new opportunities - with discipline
  3. Carefully evaluate opportunities, limit their choices, and pursue only the best
  4. Focus on execution, and adapt as the opportunity develops
  5. Use their networks and involve many people

Based on their research, McGrath and MacMillan developed the ‘discovery-driven’ approach to planning, based on “convert[ing] assumptions to knowledge at the lowest possible cost.”In developing your plan, don’t get into detailed planning beyond where you have assumptions but no data and knowledge. However, don’t over analyze. Get started. Then use what you learn as you proceed to refine the future steps in your plan.

Six activities enable discovery-driven planning.

  • Frame the project: Ensure your project or contribution will be worthwhile. Start your planning with where you want to finish, and develop the plan working backward to determine what it will take to accomplish your goal.
  • Benchmark your environment: Ensure that your goals are realistic.
  • Specify intermediate deliverables: Convert your objectives into specifics: what needs to be done and what skills are needed. Determine not just how you will measure your final results, but what specific accomplishments you will need to see at milestones through the plan to reach your final goals.
  • Test the assumptions in your plan: As early as possible, gather data and convert assumptions to knowledge; conduct planned learning.
  • Set milestones through the plan: Test and validate assumptions before moving to the next milestone.
  • Be parsimonious with resources: Avoid taking on new and fixed expenses until assumptions have been tested and expected results are confirmed. This allows you to maintain flexibility and keep your options open.

Organizational leadership plays a key role in entrepreneurial initiatives. McGrath and MacMillan identify one of the functions of the leader as helping the others working on the project to deal with the unknowns and uncertainty by providing specific guidelines based on the best information available. In Intrapreneuring in Action (Berrett-Kohler, 1999), Gifford Pinchot and Ron Pellman identify a number of components of an organizational climate that can encourage intrapreneurs (entrepreneurs within a larger organization). These components include having a clear vision and strategies that focus on those the organization serves, making time for innovation, crossing organizational boundaries and using cross-functional teams with the authority to make decisions, identifying measures that encourage innovation, and tolerating risk, mistakes, and failure.

Pinchot and Pellman provide a tool to assess the organizational climate for intrapreneuring, with suggested initiatives to improve it. McGrath and MacMillan provide several checklists to evaluate the project and project team, and questions that the leader can ask as the project progresses. Their bottom line: not all projects or initiatives will succeed. Doomed projects should be identified as early as possible, reasons for failure determined, and positive outputs from failures identified and reused.

Quality Endeavors Issue No. 116 January 2009

Innovation Extracts:
Letters to the Next President

In Letters to the Next President: Strengthening America’s Foundation in Higher Education, Stephen Joel Trachtenberg, president emeritus of George Washington University, invited academic leaders representing the full range of institutions to write a letter to the next president of the United States regarding the key issues in higher education. In letters from 20 leaders, recurring issues for the incoming president to address include: collaboration with government and business; integration with K-12 education; science, technology, engineering and mathematics (STEM) education; international literacy; and maintenance of diverse formats of higher education, including distance learning, single sex schools, and community colleges, to meet the needs of a diverse student population. Individual letters also mentioned the importance not just of research and development, but delivery of technology to business and society; the transformation of a baccalaureate degree from a terminal to a preparatory degree; and the need for higher education to develop a means for outcome-based rather than input-based (SAT scores, for example) assessment. All of these factors contribute to the United States maintaining its position as the world leader in higher education. The book is available, online at no cost, at http://ebooks.kornferry.com/letters/vcab.swf.

 

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