Modul 1: Insights

Question 1

2

Answer 1

The life expectancy of companies continues to decline.
* With their innovations and their pursuit of a (temporary) monopoly, innovative entrepreneurs destroy the equilibrium state of the economy (“storms of creative destruction”). The interplay of innovation and imitation is the driving force of competition.
* In order to survive companies must launch their own innovations in time (be alert to the Kodak moment!)

Question 1

1

Answer 1

• We have to expect resistance to any innovation
• An intrapreneur can enhance the chance of his innovation idea surviving by engaging the key stakeholders early on in his innovation effort.
• Companies can enhance the chance of innovation ideas surviving resistance by:
  o Providing promoters for support
  o Explicitly fostering the openness of the organization to change and innovation

Question 2

3

Answer 2

• You can check whether your company is really serious about innovation by asking three key questions.
  o Are you trained to become an innovator?
  o How easy is it for you to get the time and resources to experiment?
  o Do you really feel responsible for innovation, and is it clear to you that the people above you are accountable for innovation?
• Innovation is increasingly recognized by the companies as a top priority.
• Companies in the emerging markets prioritize innovation higher than firms in mature markets.
• Innovation pays out financially.

Question 3

4

Answer 3

• Innovation comprises invention, introduction and successful diffusion, and is therefore much more than pure invention.
• Amount of R&D spendings, number of inventions and number of patents are insufficient indicators of innovativeness.
• The value of an innovation idea alone is minuscule compared to the value that can be extracted through the scaling and power-marketing of a global first-mover.
• Over the life-cycle of an innovation, the key capability required shifts from discovery/exploration to delivery/exploitation. We need ambidexterity in innovation management, i.e. the capability to handle both exploration and exploitation

Question 4

5

Answer 4

• Product life cycles become ever shorter. The reasons for this are manyfold. Key reasons are the technological progress, the software-ization/ digitization of innovations, and the accelerated diffusion of innovations
• Technological progress, which in most cases follows an exponential function (example: Moore´s Law or the Carlson Curve), is vastly underestimated.

Question 5

6

Answer 5

• There are many very successful innovations such as Aldi or Zara that are NOT based on technological innovations (e.g. business model innovations that combine existing technologies) but on a great understanding of the customers and the market-place.
• But if technological innovation provides a TRULY relevant customer benefit it is great to have it as it strengthens the competitive advantage, in particular if protected by Intellectual Property (IP).
• Technological innovations are prone to underestimating or neglecting the market. Technology push and market pull have to overlap (product-market fit) for a successful innovation. Corollary: market contact needs to be established early on
• Whatever can be digitized will be digitized. Digitization will affect nearly all types of innovations.

Question 6

7

Answer 6

• There are different ways to determine the most innovative companies of the world. I will use the BCG Innovation Surveys as the main tool
• We are interested in role model companies that continuously launch successful innovations, and that are not one-hit wonders but serial innovators
• There are outstanding role models of innovation champions such as Apple, Tesla, Amazon, Google / Alphabet etc. from which we can learn enormously
• The large share of digital companies amongst the most valuable companies and amongst the top innovators underscores the value contribution and importance of digitization.

Question 7

8

Answer 7

• The leaders of a company have to handle several conflicts that affect innovation
• Ambidexterity is required, e.g. in handling the conflict between the management of the daily business and innovation management.
• Great companies that last are able to handle the conflict between an ethic of entrepreneurship and a culture of discipline.