Archive | May, 2012

Design-Driven Innovation

30 May

Design plays an important role in business.  It creates value (Bry, 2012). Looking at The Design Ladder from Danish Design Center (DDC) shows how this topic became crucial in business recently. The three important levels of designs are: style, process and strategy. Design as style more focuses on a beauty of products whereas design in processes focuses on efficiency of delivering products and services to the market. However, design as strategy means pushing business activities in a way to make users more satisfied. Recently, design in innovation became an important topic as well.

Verganti in 2009 introduced Design-Driven Innovation. Design-Driven Innovation discusses that every product or service has a special meaning. Firms should go beyond the real features and functions of products and services and give new meanings to them (Verganti, 2009). For instance, few years ago Philips came up with a new product which is called “Wake-up Light”. The product itself is not just a normal wake-up call. Philips went beyond the real features and performance of the product as a means of waking you up and more focuses on creating another meaning for this product; wake you up in a pleasant way and make you feel better by bringing the sound of birds and light to your bedroom.

Design-Driven Innovation came from a radical innovation of meanings. Through radical innovation processes, normally those products and services were created that did not follow existing standards and more impose completely new meanings. Customers might not even expect of some products or services that their meanings are radically innovated but once they experience them, they enjoy them (Verganti, 2009).

In conclusion, companies follow different innovation strategies to achieve competitive advantage. Some firms innovate the product itself by adding more and different features to it and some other companies go further and innovate meanings of products. These firms want to gain a competitive advantage through Design-Driven Innovation and they see design not only as a style but also as a strategy.

Sara Chaharmahali

sara.chaharmahali@innovationbeats.com

Design thinking; a solution for Innovator’s Dilemma!

30 May

In 1997 Christian discussed an important issue in business which was called “The Innovator’s Dilemma”. This topic discussed difficulties and challenges for firms to engage both in exploration and exploitation.  The topic was followed by other scholars (Tushman & O’Reilly, 1996; O’Reilly & Tushman, 2008) in order to find a solution for this challenge.

However, later on a new concept came up which was called “design thinking” (Martin, 2009). Design thinking brings a long term competitive advantage for firms. It is the mixture of thinking analytical and intuitive. Analytical thinking through data analysis and logical thinking reflects more exploitative activities. On the other hand, intuitive thinking through feelings, predicting the future and sensing capabilities more focuses on exploratory activities (Martin, 2009).  As a result, firms through design thinking are able to satisfy both exploitative and exploratory sides. Design thinking brings a desired structure for a company that Duncan was discussing in 1976; a dual structure which follows both adaptation and alignment activities.

Sensing Capabilities = Innovation Success

26 May

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There are some emerging marketplace trajectories that are easy to recognize, therefore innovation’s success is higher. In microelectronics this might include miniaturization, greater chip density, and compression and digitization in information and communication technology. However, most emerging trajectories are hard to discern (Teece; 2007).

The group of activities a firm performs to identify oportunities, interpret new developments and take actions from it, it is what Teece (2007) calls sensing capabilities.  Day (1994) reinforces the link between firm’s decisions and the market by mentioning that the failure to anticipate a change in competitive forces or customer requirements results from a deficient market-sensing capability or inadequate links to key customers.

Market sensing activities are made possible by an organization’s internal capabilities to understand, process and use this information (Heusnikvel et al.; Kok et al., 2003). Cravens, Piercy and Prentice (2000) taking a more market oriented approach described market sensing when referring to the importance of identifying potential shifts in customer preferences. Trends such as changing life styles, population shifts, and other demographics often forecast critical transitions in consumer markets. Changes in business-to-business markets may be signaled by actions of industry leaders, changes in business designs, and other initiatives. In order to track these trends, executives should employ market-sensing processes to identify and respond to these market changes. Cravens, Piercy and Prentice (2000)

In order to better understand the market trajectories a firm must traduce the market sensing process into activities so they can develop successful products aligned to these trajectories. In accordance with Teece (2007) sensing (and shaping) new opportunities, is very much a scanning, creation, learning, and interpretive activity. Investment in research and related activities is usually a necessary complement to this activity. This activity not only involves investment in research activity and the probing and reprobing of customer needs and technological possibilities; it also involves understanding latent demand, the structural evolution of industries and markets, and likely supplier and competitor responses.

Jesus Mascareno

jesus.mascareno@innovationbeats.com