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‘Is the model of the innovative firm close or radically opposed to R&D? ’
Can the model derived from the Tefal case be used in other firms? Let's imagine our Innovation Manager's reaction.
‘The model is highly instructive and confirms some of my intuitions. But above all, it gives me a language to help understand and explain to my colleagues that traditional solutions, however attractive some of them may still seem, cannot be used in a context of intensive innovation. For instance, take the case of “blockbusters”, miracle products or services that are supposed to secure a firm's growth for many years ahead. The idea is really tempting for innovation departments like ours. But the blockbuster model focuses solely on static returns to design, with no question of reusing excess knowledge. It is therefore a risky model as it ignores learning rents.’
‘The same applies to the random model, where the innovation department simply tries to balance a project portfolio between large and small and long-term and medium-term projects. Once again, the model manages the returns to each project but does not take into account learning rents and possible interdependencies between the different projects.’
‘The Tefal model also shows the limitations of a model based purely on expertise. It shows that growth is always the result of a combination of expertise (in expansion) and a design process. Innovation departments can't just manage experts and knowledge, but must address the problem of how to combine knowledge management and the process for designing products and services.
The second type of innovation field involves regenerating functions. It covers a variety of relatively classic situations such as the use of promising technologies, reforms to functions, renewals in competencies, front-end functions or, more generally speaking, forms of ‘innovative D’. It entails issues such as developing innovative technologies, solving recurrent problems, moving away from ‘amateur’ solutions, inventing ‘creative compromises’ (Weil 1999), launching technical ‘monsters’ and creating alliances and new interfaces between functions. In all these situations, the key focus is on knowledge production.
However, there are restrictions to such explorations as the aim is to limit the impact on the object to be designed, to avoid challenging neighbouring functions and to change the object's identity as little as possible. The context is similar to the design of complex systems, where one of the challenges is precisely to separate out, confine and reuse known solutions and avoid spreading constraints. The exercise entails renewing knowledge whilst changing only a minimum number of the object's attributes.
Examples of δC-ΔK
The predominant feature of δC-ΔK is an expansion in knowledge which has a significant impact but is mainly confined to value. This ‘intuitive’ situation has had wide coverage in economic literature and in the history of science and techniques. There are numerous examples of technical changes in an apparently stable functional perimeter, such as the change from cathode ray tubes to flat screens, from silver film to digital film photography, from steam to electric railways, from iodine lamps to transistors, from wind-up to quartz watches and from gas to electric lighting. […]
A number of practical questions immediately arise when we look at innovation as a field of action rather than purely a phenomenon. Take the case of the new ‘innovation management’ function that has been introduced in many firms in recent years. What exactly do innovation managers or directors do? What is the scope of their activities and how do they organize their teams and divide the work between the different members? How do they interact with the other functions in the firm, the factories, research laboratories and engineering and design departments? How is their work evaluated, on what basis and with which criteria?
Confronted with the issue of managing the ‘action of innovation’, we can begin by seeing whether or not the notions mentioned above can be considered as means of action. Should innovation managers organize ‘communities of practice’? Should they collect ideas and consult lead-users? Should they finance R&D by allocating optimal budgets and resources? Should they distinguish between incremental and radical innovation? Should they consider new business specializations for radical innovation? For innovation managers, and indeed for all the other players concerned, are these notions actionable? Before that question can be answered, we need to know the aim of the action itself. What is the innovation in question? Are we talking about changing the colour of a product or introducing a new technology? Who will judge the ‘novelty’, the customer or the professionals? What is ‘good’ innovation? How can the efficiency of processes be evaluated?
As in previous chapters, we begin with a few practical comments and questions from the Innovation Manager. ‘I agree with the idea that innovative design is a specific activity, different from activities in the engineering and design or research departments. This distinction clarifies the role of D and R and their interdependency with I. All too often, confusion between I and R&D has meant that I-type projects have been undertaken without having the right resources, with the result that they have been judged as bad research or bad development projects. I also agree that “innovation fields”, which enable projects to be launched without necessarily thinking about the final product, favour exploratory approaches, both in terms of value and competencies, and help evaluate the work on the basis of new criteria.
‘But R and D already have sophisticated management tools to organize and steer them, and we need to find similar management methods for innovative design. This raises a number of questions regarding evaluation criteria and organization, particularly with respect to interactions with R&D and with the other designers. Also, how can innovation fields be structured and how can any excess knowledge be reused? Do we already have any methods, tools, good practices or models?’
Models of activity and organization of the I function in large firms
In recent years there has been a massive increase in the number of ‘innovation departments’, in the form of business development units, innovation-oriented centres, departments for research, innovation and preliminary projects, etc.
In Chapter 1 we mentioned a number of real cases of players directly involved in innovation. In this chapter, we introduce an imaginary Innovation Manager who has just been appointed to a large firm and who will serve as a guide for the concrete problems facing managers on an everyday basis. He begins with some very practical questions. ‘In the current system of innovation-intensive capitalism, how can we manage our firm's design capacities when we have uncertain object identities and limited resources? My company has just created the job of Innovation Manager and knows that there is an urgent need to address the issue, but how do I go about it in practice? Where can I find the new techniques we need to manage innovation?’
To answer these questions, we needed to study innovation ‘from the inside’, but the first problem was to decide where to look and what to describe. There were hosts of examples of workshops with state-of-the-art prototypes, of open-plan offices with the muffled hum of CAD workstations. There were also scores of visionary leaders and distraught managers, not to mention the thousands of anonymous engineers and doctors designing the cars, microprocessors, drugs, food products or services of the future. They could tell us about their successes and failures, the palace intrigues and all that went on behind the scenes, but were their experiences relevant to the problem of managing design capacities? The greatest prudence was required.
Our study of innovation would not be complete without mentioning the economic, marketing, cognitive, organizational and managerial dimensions that come into play. The aim of this appendix is to summarize the extensive literature on each of these aspects. We will look at the five disciplines in turn: economics, sociology, the cognitive sciences, organization and management. For each discipline, we will focus on three characteristics:
The genealogy of the research questions. A number of concepts have been proposed in each of the five disciplines, but to understand how they came into being and their impact, they have to be placed in the genealogical context of the different streams of research. For each concept, we will look at the type of question it dealt with and the context that led the different disciplines to address the issue and to produce the different models and theories. By studying when and why the new concepts emerged, we will have a clearer picture of the different questions which researchers were confronted with over the years.
The key notions and their links with action. In the past, research was very much affected by the discipline it belonged to. In many cases, innovation as such was not the subject of the research but reflected a tactical stance: the authors used a description of phenomena relating to innovation to challenge their disciplines' established theories. This perspective led to progress in studying the phenomena involved in innovation but, contrary to a management approach, did not focus on the generation of new forms of collective action. This is why the concepts sometimes appear inadequate compared with the challenges involved in managing the economic, marketing, organizational or cognitive aspects of activities designed to encourage innovation.
It gives me great pleasure to preface this book on innovation. In 1994, a young student contacted me because he wanted to do a PhD thesis on innovation at Tefal. I agreed, but on the condition that he took an active part in designing new products. Vincent Chapel was more successful than I had ever imagined. He managed some very interesting innovations for Tefal and then went on to create several innovative start-ups, one of which is described here. Also, his PhD, directed by Armand Hatchuel, gave me the opportunity to get to know and appreciate the research presented by the authors of this book.
As a company director, the necessity for innovation seems quite natural to me. It is not just one priority among others, as all the rest depends on it. First, economic survival, of course, but also the social well-being of the personnel, which, in my view, is the main purpose of firms. In the different companies I have managed over the years, I have always personally committed myself to exploring all the possible paths for new developments. I believe this is part of a manager's responsibilities. If all we have to propose are efforts to increase productivity, we can hardly expect members of staff to be really committed to the firm. It was doubtless this frame of mind which encouraged us to adopt design reasoning and business decisions in favour of innovation.
In the preceding chapters, we have shown that innovation must be seen from a different angle, i.e. as the result of an actively sustained, voluntary process that can be organized, rather than as an ex post judgement. Firms wishing to innovate must manage ‘innovation capabilities’, but what exactly does this mean? Which activities are involved, who should lead them and how can their performance be evaluated?
The aim of this chapter is to show that firms which try to develop their innovation capabilities must place a new emphasis on design activities. These must be carefully organized and managed, especially in the case of innovative design. Although they play a central role in most major industrial firms today, relatively little is documented about these design activities, which leads us to believe that they have not been studied in any great detail.
There are several reasons for focused exploration and analysis of design activities. If we try to identify the actors who contribute to innovation capabilities, we automatically think of the researchers and engineers in R&D departments, whose mission is indeed to contribute to innovation by designing products and processes. However, unless we want to restrict our study to technological innovation, we should also include industrial designers, a rapidly expanding category which has an increasing influence within firms today. We should also mention specialists in communications and semiotics, such as advertisers, brand designers, etc., and in certain cases user groups should also be included. All these actors have one thing in common: they design things.
The impact of globalization goes way beyond the issue of relocations of manufacturing plants. It throws firms into a new arena where competition is no longer based on product performance alone but also on the overall effectiveness of their innovation strategies. The authors' experience and the numerous discussions we had the privilege of taking part in over the past ten years enabled us to be involved in and put into practice many of the recommendations found here. The notion of organizing intensive innovation, the structuring of lineages of innovative products and the organizing of constantly evolving technological sectors have become management methods that place this ‘RID’ at the heart of the firm's strategy. One of its main advantages is to structure the long-term view whilst also giving the management sufficient confidence to manage the short and medium term.
Until the 1990s, teams in charge of managing innovation – the R&D and marketing departments – were expected to deliver results whilst roughly keeping to the specifications, timetables and budgets. This operating method was often project-based; it brought new products onto the market in satisfactory conditions and helped to keep challengers at bay. In western countries, companies managed to maintain their growth and profitability. However, outsiders then started to improve their performance: they acquired technological capacities and were quick to learn, meaning they were able to almost catch up with the innovators, who were then obliged to speed up the rate of product renewals. At the same time, the growing number of new technologies that firms had to master led to an explosion in the financial burden of innovation, introducing the need for far more rigorous management of R&D resources.
What do we know about innovation? Apart from inherited ideas and a host of scientific articles on the subject, do we now have a clear picture of the problems raised by innovation in firms today? To introduce the issue from a concrete foundation, we shall begin by describing a number of real case examples in which the authors have been personally involved and which became the starting point for several of the ‘innovation adventures’ described in greater detail later on in the book.
Contemporary innovation: received ideas versus facts
Mad ideas? Yes, but well-managed ones!
In the early 2000s, at Linköping University, Sweden, several research teams were working on a project to design unmanned aerial vehicles (UAVs) for traffic surveillance. For the project's promoters, the WITAS project was a ‘blue sky project’, i.e. aimed at stimulating the researchers' imaginations rather than designing a commercial product. The researchers' first objective was to venture off the beaten track usually trodden within their disciplines in the hope that such explorations would lead to the discovery of new concepts and alternatives for products or technologies. The research project had a substantial budget, sufficient to last several years, even though it did have a specific target for direct industrial application.