Before trying out our model for innovative firms on cases that are very different from Tefal, we shall begin by putting it to the test in the specific context of an innovative start-up, Avanti.

Avanti was created by Vincent Chapel using the Tefal model. He had been fascinated by his work with Tefal and by the model he had discovered there; he was keen to test the model's coherency, efficiency and feasibility and to see whether, by putting it into practice, he could ‘manufacture’ a new Tefal. In 2000, just two years after its creation, Avanti won a National Trophy for Innovation. In this chapter, we shall see how this came about and how Avanti used the model to fit its own circumstances.

Innovative design: a key growth factor for start-ups

Start-ups go hand in hand with innovation, at least in the literature. The new economy provides plenty of stories of lively start-ups outperforming sluggish organizations in the old economy, although there are, of course, a few counterexamples too. Nonetheless, start-ups do seem to be a form of organization that can compete with large firms in terms of innovation, and this is reason enough to study them here.

There are in fact two reasons for taking a closer look at start-ups. First of all the question of innovation in a new company comes down to the question of innovative design.

‘All these elements will help me manage our innovative design projects and I am keen to put them into practice in our firm. But one last point is bothering me: I don't think we will be able to carry out all our explorations inside the firm. Quite a few of the innovation fields I have in mind will involve outside partners. Can you give me any advice on this matter?’

Our Innovation Manager is right, of course; this is a key point.

In previous chapters we have focused on exploring and structuring innovation fields, the main challenge being to understand the type of design reasoning involved. We showed that significant progress was possible in terms of constructing, sharing and evaluating this reasoning and also in organizing the collective action required to do so. In our view, it was crucial to begin by mastering the design reasoning even though it meant that the organizational perimeter of the explorations had to be put to one side. In practice, of course, it is relatively unusual for innovation fields to be explored within the strict perimeter of a single firm.

In most cases, innovative design requires outside resources. This explains the situation often described in the literature: open innovation (Chesbrough 2003). More fundamentally, the revision of object identities, inherent in innovative design, also revises firms' relationships to their environment. Stable identities enable dominant designs to emerge, industries to be structured, design work to be divided out and performance to be stabilized.

‘These theoretical frameworks and specific examples will be of great help in organizing innovative design and in finding effective instruments. I must say I was surprised by how technical the examples are. First, the objects have to be modelled very carefully and precisely, with a hands-on approach, but second, I was struck by how much knowledge is economized by the formal framework, as only knowledge that serves the reasoning comes into play. Nonetheless, the formal C-K framework illustrates the nature of the strategic reasoning needed for innovative design and makes the technical aspects easier to understand.’

‘I now have a better idea of how to manage innovative design, but there is still one point which worries me. Can you explain the notion of “return to rule-based design”, or the traditional system of R&D?’

Once again, the Innovation Manager's questions help us explain a vital point: there is no question of innovative design seeking to replace rule-based design. On the contrary, the greater the efforts made in rule-based design, the better the chances of being able to fully exploit the product lineages stemming from the innovation fields. Rule-based design is therefore vital in terms of return on investment. We shall now see how innovative design can prepare for rule-based design.

From the exploration of an innovation field to rule-based design

In formal terms, rule-based design reasoning can be explained by the C-K design theory (see Figure 14.1).

The third type of innovation field concerns projects for designing what we call science-based products (SBP). These products combine two difficulties: working on a functional definition whilst at the same time producing scientific knowledge on the main phenomena associated with the product. SBPs do not involve applied research, in which prior research results are applied to often well-identified functions; for SBPs, the functions are not specified and the phenomena to be investigated emerge during the process. Nor do SBPs involve fundamental research, which consists of working on a given phenomenon, with no target applications; SBPs have product development objectives with high (albeit ill-defined) stakes in terms of functions.

In this type of innovation field, there is a large expansion in both concepts and knowledge. It is not easy to make the distinction between ‘techniques’ and ‘values’. Whereas the creation of new lineages (ΔC-δK) puts the priority on value (the techniques either being considered of secondary importance or already acquired) and the regeneration of functions (δC-ΔK) has to be content with minimum value explorations to produce knowledge, for SBPs, value and competencies must always be designed simultaneously. There are also some special cases when ΔC-δK and δC-ΔK follow on from each other.

Examples of ΔC-ΔK

Saint-Gobain Sekurit is one of the leading automotive glass manufacturers in the world. Each year, more than 12 million vehicles are equipped with Sekurit glass, representing nearly 20 per cent of the world market and 50 per cent of the European market. At the front end of the glazing supply chain, Saint-Gobain manufactures glass from raw materials, an activity which demands heavy investment and involves delicate techniques. Saint-Gobain Sekurit is recognized for its leading savoir faire; less than a dozen companies in the world are capable of producing such complex products.

In 1997, Saint-Gobain Sekurit was the archetype of the large R&D-based firm, with none of the characteristics of an industry where one would expect to find a system of intensive innovation. At the time, there was no newcomer competing through innovation, there was no contact with final users requiring innovation, there was no pressure for innovation, apart from costs and a clearly identified level of performance. So why, in the space of just a few years, did the firm switch to intensive innovation?

In the following pages, we study the birth, or rather the ‘morphogenesis’, of the new I function and see how Saint-Gobain Sekurit adopted RID.

In the first part, we explain why the R&D-based organization tended to prevent an I function from emerging. We focus on the scale of the transformation, which affected the firm's products (which became complex and multi-functional) and also its basic functions and technologies (in a few years, Saint-Gobain Sekurit switched from traditional thermomechanics to microelectronics).

There is now widespread agreement that innovation holds the key to future economic and social prosperity in developed countries. Experts studying contemporary capitalism also agree that the battle against unemployment and relocations can be won only through innovation. It is the great challenge of the day and, for many specialists, the only possible solution to the problems facing western societies and to the current recession. Whether it is studied from a local or a global standpoint, innovation is the only way of satisfying the social, environmental and economic facets of growth, and of increasing levels of education whilst also creating value, jobs and purchasing power. It also seems to be the only way of reconciling, at least temporarily, employees, managers, consumers and shareholders.

In the face of such unanimity, governments in developed and in emerging economies have set up various incentive schemes designed to promote innovation, including special subsidies and aids for investment in R&D. Initiatives such as the EU common policy aimed at ‘building a knowledge-based economy’, notions such as ‘lifelong learning and key competencies’ and even the ‘information society’ all translate the same imperative for innovation. But is enough being done to meet the challenge?

A great deal of research has been carried out by firms and government departments, but what do we actually know about innovation? For instance, do we know which factors enhance a firm's innovation capability and whether financial incentives guarantee effective innovation? Can we use the traditional views of innovation to build the innovative firms and regions of the future?

‘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