TECHNOLOGY and INNOVATION MANAGEMENT

TECHNOLOGY AND INNOVATION

Technological change is a combination of two activities invention and innovation. Invention is the development of a new idea that has useful applications. Innovation is a more complex term, referring to how an invention is brought into commercial usage. The distinction between the two is very important. As an example, Henry Ford did not invent the automobile; companies in Europe such as Daimler were producing cars well before Ford founded his company. Henry Ford instead focused on the innovation of automobiles, creating a method (mass production) by which cars could be manufactured and distributed cheaply to a large number of customers.

The practice of technology management and the development of technology strategy require an understanding of the different forms of innovation and the features of each form.

• Incremental innovations exploit the potential of established designs, and often reinforce the dominance of established firms. They improve the existing functional capabilities of a technology by means of small-scale improvements in the technology's value, adding attributes such as performance, safety, quality, and cost.
• Generational or next-generation technology innovations are incremental innovations that lead to the creation of a new but not radically different system.
• Radical innovations introduce new concepts that depart significantly from past practices and help create products or processes based on a different set of engineering or scientific principles and often open up entirely new markets and potential applications. They provide new functional capabilities unavailable in previous versions of the product or service. More specifically related to business, radical innovation has been defined as "the commercialization of new products and technologies that have strong impact on the market, in terms of offering wholly new benefits, and the firm, in terms of its ability to create new businesses." (O'Connor and Ayers)
• Architectural innovations serve to extend the radical-incremental classification of innovation and introduce the notion of changes in the way in which the components of a product or system are linked together.

There are two important steps required to properly manage corporate innovation. First is to correctly identify a project as a new product vs. a technological innovation, so a proper development process can be used (the first may be a more traditional stage-gate process; the second should be more cyclical and iterative). Second, managers need to identify what category an innovation falls under, since each type of innovation has its own challenges. In the aircraft industry, for example, an improvement in the construction of a wing is an incremental innovation. Such a new technology can be introduced relatively easily and integrated with existing products. An example of a generational innovation is the introduction of the Boeing 777, a new class of aircraft different from previous models. While similar in appearance to the 767 and its predecessor, the 777 introduced a whole new set of technologies and capabilities, requiring tremendous investment by Boeing and its business partners. A radical innovation in aircraft was the introduction of the jet engine, which completely changed the performance of aircraft compared to propeller-driven airplanes. Finally, the concept of a flying machine as envisioned by the Wright Brothers exemplifies an architectural innovation. Prior to the Wright brothers, the concept of mechanical flight had been invented and discussed. The Wright brothers actually developed and demonstrated a design that made human flight a reality.

INNOVATION MANAGEMENT

Invention is an activity often identified with a single engineer or scientist working alone in a laboratory until he or she happens upon an idea that will change the world, like the light bulb. In reality, industrial invention, at least since the time of Edison, has involved many people working together in a collaborative setting to create new technology. Innovation requires an even broader set of people, including manufacturing engineers, marketing and sales managers, investors and financial managers, and business strategists. The methods for organizing this set of people to bring a new idea from the laboratory to the marketplace form the basis of the discipline of innovation management.

Innovation traditionally has been viewed as a linear process, which involves several stages in sequence: research, development, manufacturing, marketing, and ultimately, reaching the customer.

In each step, a group of employees take the idea as it is passed to them from the previous stage, modify it to accomplish a specific function, and pass it on to the next stage. Each team involved in the process has a clear function. Researchers are responsible for creating a working demonstration of the technology, developers and engineers turn it into something that can be produced, manufacturing engineers actually turn out the product, and marketers sell it to customers.

This linear model of innovation has proven to be a misconception of the process, however. For example, problems during the manufacturing process may require researchers to go back and change the technology to facilitate production. The technology may reach the marketing stage, only to turn out to be something no one wants to buy. Technology cannot be handed off between stages like a baton in a relay race. In any case, managing innovation in a sequential process would take a very long time, especially if each stage needs to perfect the technology before it can move on to the next stage. Some models simply add on to the linear stage-gate development approach, adding R&D discovery or planning phases to the front end of the process.

An alternative to the linear model of innovation was offered by the expanded, chain-linked model of innovation. This model captures the interactions between the different stages of innovation in a more complete fashion. Some of the important aspects of innovation highlighted by this model are:

• Technologies can move both forwards and backwards in the process, for example going back to the lab if further development is needed.
• Downstream stages (such as marketing) can be consulted for input at earlier stages (such as design and test).
• Scientific research and engineering knowledge contributes to every stage in the innovation process.
• Most firms create technology platforms, which are generic architectures that become the basis for a variety of technology-based products and services.
• The knowledge and skills needed for innovation are developed by communities of practitioners, not by individuals, and many of those communities exist outside of a particular firm (for example, in universities).
• Users of technology can be an important source of ideas for improvements or even new innovations with substantial market potential.

While the chain-linked model of innovation is more difficult to comprehend and analyze than the linear model, it is ultimately more rewarding as it tracks more closely to the way that innovations actually progress on their way from the laboratory to the marketplace.

Another innovation process suggested was new technology exploitation (NTE), as suggested by Bigwood, which resides somewhere between new product development and "pure science." He defined NTE as "the testing of novel technical approaches specifically aimed at achieving a pre-defined result (target performance, cost reduction, etc)." It is an iterative process, allowing for the more cyclical learning process of scientific discovery, but clearly working toward tangible goals and benefits.

Another technology management process, Strategic Technology Roadmapping (TRM) was discussed by Rachel Wells et al in Research Technology Management. Technology road mapping is both a process and a communication. TRM aims to "integrate technology issues considerations with the strategic business context, to identify those technologies that have the greatest potential to meet business goals, and to accelerate the transfer of technology into products." TRM makes use of visual aids to show links between R&D programs, capability targets, and requirements. It also seeks to help coordinate technology plans at a strategic level, and to help senior managers make better technology investment decisions. It also helps to manage conflicts between technology "push" and market "pull," which are discussed in more detail below.