Based on the new innovation product and the stage gate process been considered.  Discuss how to source your project and what customers should be engaged when developing the product.

chApter 4

sourcing for innoVation

The previous two chapters have dealt mostly with methods, tools, and processes for new product and service development with the aim to con- vert ideas and inventions into innovations. What has been left out is that people, working independently or in organizations, have originated many of these ideas and inventions. Merely enhancing the generation of ideas and inventions is key to creating commercially successful products and services, but at the same time, not enough. A report by Targeting Inno- vation (2008, p. 14) states: “good management with average technology is preferable to average management with good technology”. Neverthe- less, any innovation starts with an idea or invention. An invention can be described as a unique or novel device, method, or process, either as an improvement upon a machine or product or a new process for creating an object or a result. An invention that achieves a completely unique function or result may be a radical breakthrough. No matter how the term invention sounds, serendipity plays but a small role in innovations. A case in point is the story of the negative feedback amplifier by Harold Stephen Black in the 1920s, though documented later (Black 1977); it was only through many steps, rethinking, and hard work that the concept of this specific amplifier was realized. These inventions are based on ideas; Subsection 1.2.2 has shown how many ideas are necessary for one successful product or service. Hence, getting ideas that might result in inventions is not enough, but a starting point. To this purpose, this chapter also discusses how actors can be best involved for generating ideas and inventions.

Who are behind the ideas and inventions, and thus are sources for innovations, and how they can be involved in new product and service development are the topics of this chapter. Section 4.1 starts with the inventors, a category of people who easily grab the attention when speak- ing about innovation. The following section, 4.2, pays attention to users. In addition, it looks at how customers and users can be best involved in the

C o p y r i g h t 2 0 1 8 . M o m e n t u m P r e s s .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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development of new products and services. Section 4.3 discusses suppli- ers and commercial research organizations as source of innovation; how suppliers are best integrated in new product and service development is also presented. Universities are another source of innovation, and Section 4.4 will look at their role. Section 4.5 considers how employees contribute as source of innovation. Section 4.6 will contemplate on the dual role of competitors for generating ideas and inventions.

4.1  inventors

The first group that ideas and technological advancements can come from are inventors. Examples of famous inventors are abound; in addition to those mentioned in the introductory chapter, a few more are listed here. The first one to mention is Thomas Alva Edison (1847–1931), who was an American inventor and businessman. He developed many devices that greatly influenced life around the world, including the phonograph, the motion picture camera, and the long-lasting electric light bulb. Another inventor is Johannes Gensfleisch zur Laden zum Gutenberg (1398–1468), a German blacksmith, goldsmith, printer, and publisher, who introduced printing to Europe. His introduction of the mechanical movable-type printing to Europe started the printing revolution and is widely regarded as the most important event of the modern period. Yi Xing (683–727), born Zhang Sui, was a Chinese astronomer, mathematician, mechanical engi- neer, and Buddhist monk of the Tang dynasty (618–907). His astronomical celestial globe featured a clockwork escapement mechanism, the first in a long tradition of Chinese astronomical clockworks. Abū al-Qāsim Khalaf ibn al-‘Abbās az-Zahrāwī (936–1013), popularly known as Al-Zahrawi, was an Arab Muslim physician and surgeon who lived in Al-Andalus. He is considered the greatest medieval surgeon to have appeared from the Islamic World and has been described as the father of surgery. His great- est contribution to medicine is the Kitab al-Tasrif, a 30-volume encyclo- pedia of medical practices. His pioneering contributions to the field of surgical procedures and instruments had an enormous impact in the East and West well into the modern period, where some of his discoveries are still applied in medicine to this day. These are just examples of inventors whose inventions have been documented, and they show to some extent the diversity of inventions and innovations.

Whereas there are many inventions that have been turned into com- mercial success, there are also many inventions that did not make it. The fact that many ideas and inventions do not end up in commercialization is captured by the innovation funnel (see Subsection 1.2.2 and Figure 1.4);

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subsequent stages of new product and service development see only infea- sible ideas and inventions being weeded out. For the first stages of the innovation process, this means that, although an inventor may have ideas for new products, new services, or improvements to existing processes, these are not considered an innovation until the ideas have been trans- formed into something real, such as a prototype with the potential for practical application. Even then, some of these are not commercialized; Box 4.1 captures some failed inventions and ideas. This shows that market acceptance plays a large role for the success of an invention turned into an innovation (see also Subsection 3.3.5).

These are just a few example of inventions that failed for a variety of reasons:

AVE Mizar, a roadable aircraft based on combining the rear of a Cessna Skymaster to a Ford Pinto, built between 1971 and 1973. Inventor Henry Smolinski and the Vice President of AVE, Harold Blake, were killed in a crash during a test flight; this was attributed to the right wing strut base mounting attachment to a body panel of the car that failed.

The Bell Rocket Belt was a very promising invention for the U.S. army in the 1950s and 1960s. The rocket pack was designed so that it helped a person leap for a short distance. President John F. Kennedy was even given a personal demonstration, but the belt only put a person in the air for 21 seconds at a time, enough to reach a mere 120 meters. So, along with the limited potential altitude, the army also lost interest.

Cinerama was the predecessor to the modern-day IMAX screens, but it was more complicated. Projecting the movie required three per- fectly synchronized projectors all aligned with each other. This was in the age before digital technology, so it meant that three very skilled projectionists has to sit in the projector boxes to make everything work. Most theaters did not want to put up the investment to upgrade nor did they want to have to pay more staff to play a movie. Ultimately, few movies were ever recorded in this format and this invention soon died.

Thomas Alva Edison invented an electric pen, which would make copies of documents people were writing by creating stencils as they wrote. It had some initial success, but could not compete with other inventions, such as the typewriter. The basic design was later reused for another invention, a much less efficient way of creating documents: the first electric tattoo needle in 1891.

Box 4.1. Examples of Failed Inventions

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Perhaps, for this reason, some inventors just remain inventors, whereas others become entrepreneurs and founders of corporations. For example, Thomas Alva Edison did not only invent, he also turned these inventions into business opportunities for his own company. Other well- known inventors who have become founders of large corporations include Alexander Graham Bell (founding the Bell Telephone Company, later AT&T), George Eastman (Eastman Kodak Company), and the Wright brothers (airplanes, Wright Company, later successively, Wright-Martin, Wright Aeronautical, Curtiss-Wright). That some do get involved in firms can be attributed to the very different nature of inventing and innovat- ing. Due to the nature of their work, inventors are technology- and solu- tion-oriented, and thus tend to work autonomously, whereas innovators focus on markets and stakeholders (including investors), and are therefore collaborative-oriented. This different orientation might explain why only few inventors eventually found firms based on their own inventions.

Even if inventors, for whatever reason, are not commercializing the products and services themselves, it is still beneficial to involve inventors during the later stages of the innovation process. Studies by Braunerhjelm and Svensson (2010) and Fahimi-Steingraeber (2015) point out that the involvement of the original inventor during the successive stages of devel- opment of patents is of paramount importance to successful commercial- ization. The study by Braunerhjelm and Svensson (2010) even suggests that commercialization of inventions might have more chances of being successful when the original inventor is not involved in the commercial- ization. Hence, the involvement of the inventor during commercialization stages of the innovation process should be considered with care.

The Intellivision is Mattel’s video game console creation released in 1979 in order to compete with the Atari 2600. The console was not exactly the worst thing in the world, but it ended up failing and almost bankrupting the company.

The ill-fated Smell-o-Vision gimmick, funded by Mike Todd Jr. in 1960, was an elaborate system that allowed a film reel to trigger the release of bottled scents that were piped to the audience in sync with pivotal moments in the movie. The only film to make use of Smell- o-Vision was 1960’s Scent of Mystery, written specifically with the gimmick in mind. The results, predictably, stunk, and Smell-o-Vision was never used again.

Box 4.1. (Continued)

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4.2  custoMers And users

The second group that might bring about technological advances are customers and users. In the context of this book, user-led innovation refers to innovation by intermediate users (for example, firms that are using out- put of another firm, such as machinery) or consumer users (for instance, individual end-users or user communities, those who are buying the products and services), rather than by suppliers (producers or manufactur- ers). Customers might be individual people buying a product or organiza- tions when asking for new requirements and functions to be fulfilled by a product or service; an example of the latter is a firm buying an enterprise resource planning system and requiring it is tailored to its business model.

4.2.1 uSeR-leD innovaTion aS Beneficial

During the commercialization as the final stage of development, con- sumers and users start engaging with new product and services. Some of these products and services may have been initiated by users, and some- times, these new products and services are not entirely fit for purpose. This leads to many products and services being at least refined, and some developed, by customers and users, at the site of implementation and use (see Von Hippel 2001). Often, user innovators will share their ideas with manufacturers and providers in the hope of having them produce the product or service, a process called free revealing. Consequently, these ideas and modifications are fed back into the network of product and service development. A case in point is the European manufacturer of manipulators for foundries and forges (85 employees). Most of its inno- vative solutions are generated on request by firms in this supply chain to automate the production processes; for this reason, it does not have its own R&D department, though the solutions are often very innova- tive. This means that the concept of user innovation is a core part of the argument against the linear innovation model (Williams and Edge 1996, p. 893), the first-generation innovation process (see Section 3.4), that is, new products and services are generated through research and develop- ment, then marketed and diffused to users and consumers. Instead, new product and service development is a non-linear process involving actors with possible innovation occurring at all stages. This means that users and consumers can constitute a base for the generation of new ideas and their involvement might be happening during all stages of new product and service development.

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There are some compelling examples of user-led innovation. The development of Linux is one of the most prominent examples of free and open-source software collaboration. The underlying source code for the software may be used, modified, and distributed—commercially or non-commercially—by anyone under the terms of its respective licenses. Its origins can be traced back to the development of the operating sys- tem Unix in 1969, and it was a result of MINIX developed by Andrew Tanenbaum that Linus Torvalds started developing Linux as open-source software in the beginning of the 1990s. The development of the software now depends on developer and user communities, even though compa- nies build commercial applications on it; the Android operating system for mobile applications is a case in point. Another example is the implemen- tation of enterprise resource planning systems by organizations; enterprise resource planning is software that allows organizations to use integrated applications to manage processes across procurement, manufacturing, service, sales, finance, and human resources. This software is often pur- chased from vendors who deliver standard or standardized applications. Often, organizations have to integrate this software in their business processes, leading to adaptations and complementary applications (for example, shop floor scheduling). This has led to the large vendors of enter- prise resource planning systems to make their software modular so that applications developed by customers can be better integrated, and even- tually these vendors taking on the development of these applications. The final example here is sports. Von Hippel (2001, pp. 82–83) provides the example of using foot straps for windsurfing to control the surfboard when in the air. Thus, the three examples show that user innovation can lead to innovations in products and services.

Lead users have a particular place in user-led innovation. Von Hip- pel (1986) advocates the lead user method that can be used to system- atically learn about user innovation in order to apply it in new product and service development. Lead users are to be seen as those users who present needs that will become more spread among a class of users in the future. In this view, in addition to trying to fill the needs they experience, they might also provide firms with new product and service concepts and data for designing these; hence, these users are positioned to benefit significantly by obtaining a solution to their needs. Figure 4.1 shows the steps for involving lead users (derived from von Hippel 1986; Urban and von Hippel 1988). An example is the development of hygienic protec- tive coverings and a microbial-treated incision foil that was developed by working together with doctors, particularly surgeons, and users in analogous fields, such as micro-biologists and make-up artists. Another specific type of lead user is the creative consumer (Long 2004, p. 65).

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These are consumers who adapt, modify, or transform a proprietary offering as opposed to creating completely new products and often have deep knowledge about products, services, and the context they are used in; some home owners fall in this category. However, innovation ini- tiated by lead users differs from user-led innovation, because for the first companies develop new and products and services, whereas for the latter, the users are the actual developers. Henceforth, the identification of lead users and creative consumers may assist companies in identify- ing future needs for products and services, finding novel concepts for products and services, and learning about new applications for existing products and services.

While the lead user methodology has its merits, there are contexts in which it may be less effective for product and service development. For example, it will be less applicable to highly secretive industries where lead users may not feel comfortable or may not be able to disclose infor- mation and knowledge. Also, the lengthy nature of user-led innovation can prevent this method from being applied effectively in industries with short-term cycles for new product and service development or where short time-to-market is required. Hence, the method is better suited to meet the needs of the industrial goods market, rather than consumer goods market as lead users of industrial goods can typically be identified more reliably than lead users of most consumer goods. Whereas the lead user method can lead to breakthroughs, adopting the approach can be difficult for some organizations and within specific contexts.

4.2.2 PaRTiciPaToRy DeSign

Different but somewhat similar to user-led innovation, participatory design, also called co-design, is an approach to new product and service development that attempts to actively involve all stakeholders in the design process to help ensure the result meets their needs and is usable; these stakeholders span from employees, partners, customers, citizens to end users. Originally, it was called co-operative design, mainly used for the design of information systems, particularly their interfaces (Bødker et al. 2000). The approach is used in a variety of fields, for example,

Figure 4.1. Method for involving lead users.

Stage 1 Start-up

• Interdisciplinary team • Definition target market

• Goals of lead user involvement

Stage 2 Identification of needs and trends • Interviews with experts markets • Interviews with technological experts • Scanning of literature, databases, etc. • Selection of most attractive trends

Stage 3 Identification of lead users

• Networking-based search • Investigation of analogous markets

• Screening of first ideas and solutions (generated by lead users)

Stage 4 Design of concepts • Workshop with lead users to generate or improve product concepts • Evaluation of concepts

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architecture, graphic design, health care, landscape architecture, prod- uct design, software design, sustainability, and urban design. Participa- tory design is an approach that is focused on processes and procedures of design and is not a design style. For some, this approach has a political dimension of user empowerment and democratization. In this sense, it has parallels with critical systems thinking (see Dekkers 2017, pp. 291–93; Ulrich 2000). For others, it is seen as a way of abrogating design responsi- bility and innovation by designers. This means that participatory design is a useful method for eliciting ideas and requirements from users and other actors, but also that it requires adequate product and service development, not solely relying on these sources.

An example of participatory design is the Whittington Hospital Pharmacy (Design for Europe 2017). The Whittington Hospital employs 4,000 staff who provide care for more than 500,000 people across North London; the chief pharmacist knew that collecting a prescription at the hospital was not a pleasant experience for patients. They entered the pharmacy often feeling unwell and anxious, and these feelings were exacerbated by long waiting times and lack of communication. Previous efforts to improve the situation, such as user questionnaires, had resulted in poor levels of patient participation and provided no clear insights into what should be changed. A designer began by introducing core design concepts to patients, staff, doctors, and senior management. From this, larger groups were engaged until a shared definition of the problem was developed in addition to establishing consensus on the priorities for improvement:

• Enhancing the patient experience. • Developing ways to use the space to promote health care messages. • Offsetting expenditure by increasing pharmacy sales.

Working with the Whittington team, the designer turned these priorities into a detailed design brief. Contracting an architectural co-design expert Studio TILT and a service design agency meant the designers’ focus was on allowing pharmacy users to collaboratively create a space that would work best for them. This began by establishing a program of workshops with representatives from patient, staff, and management groups; 38 patients and staff took part in codesign workshops. Together, they came up with new ideas for how the space could work; see Figure 4.2. These ideas were then tested and retested; first in model form, then at half scale, and finally, at full scale within the pharmacy itself. The feedback from the project was overwhelmingly positive, providing new insights and lessons that have changed how the pharmacy space is used. As a result, the queue of patients at the registration area has been shortened, prescription tracking has been introduced, and new areas for confidential

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consultations have been created. The work has measurably improved the patient experience, boosting staff morale, and increasing sales at the pharmacy. This case of the co-design of a hospital does not only show the merits of participatory design, but also that it should be approached from a process perspective.

4.2.3 cuSTomeR involvemenT

In a more generic sense, the involvement of customers in new product and service development will have positive effects. The potential bene- fits from customer involvement (Koukou, Dekkers, and Jespersen 2015) reported are:

• Better identification of customers’ needs and requirements. • Increased engagement of customers during new product and service

development results in increased adoption of these new products and services.

• Reduced uncertainty of product and service designs. • Increased number of ideas and solutions (see also previous

subsection). • Improved planning of new products and services through improved

insight. • More relevant prioritization of product and service requirements.

Figure 4.2. Mock-up for early design.

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• More adequate analysis of competitive products and services. • Reduced cost for development of new products and services. • Reduced time-to-market. • Identification of new markets. • Enhanced communication between departments involved in new

product and service development and their commercialization. Though these potential benefits are many, how they are achieved depends on how new product and service development is undertaken.

Customer involvement in new product and service development can take many forms; moreover, the methods and tools are applied in different phases of this process. The overview of methods and tools for customer involvement related to the phases of new product and service development is found in Table 4.1. It is distinguishing three categories for the interaction. The first one is the class of indirect methods, which

Category/ method

Idea generation

Product concept

Develop- ment

Testing Launch

Indirect methods Feedback • • Interviews • • • • Observation • • Questionnaires • • • Surveys • • • • User clinics • • •

Direct methods Brainstorming • • Evaluation sessions

• •

Focus groups • • Inspirational stories or cards

• • •

Living labs • Mock-ups and prototype testing

• •

Table 4.1. Overview of methods for customer involvement for each phase of development

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means that there is no direct interaction with the users to generate ideas or concepts. Besides interviewing, conducting surveys, and using feedback, it features observation of users and user clinics. The latter are where potential users are introduced to the subject by experienced moderators at sequentially arranged stations; generally, there is support from prod- uct managers, engineers, psychologists, or marketing experts from the innovating company. The second category is the direct methods, in which there is face-to-face contact with product and service designers. In addi- tion to brainstorming, focus groups, presentations, and workshops, this includes the use of inspirational stories (and visualization with picture cards) and living labs; the concept of living labs is discussed in the next subsection. The third category is that of those methods that are enabled by using web technology. There are indirect methods in this category, such as interviews, surveys, and for a, but also specific ones to this class, for example, open-source software, virtual design platforms, and wikis. Though these methods can be beneficial to the effectiveness of new prod- uct and service development, they also take time, and therefore may impede the time-to-market.

4.2.4 living laBS

A specific method for user involvement is the concept of living labs (see also Subsection 9.3.1.). The emergence of these living labs originates in the need for evaluating computing and information technologies during the 1990s (e.g., Intille et al. 2005) and later expanded into a wider concept for innovation with user involvement (see Dekkers 2011, p. 59). Now, it

Presentations • • Workshops • • •

Web-based methods Online forums • • • • Online interviews

•

Online surveys • Open source software

• •

Virtual design platform

• •

Wikis • •

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includes user-centered, open-innovation ecosystems, often operating in a territorial context (e.g., cities, agglomerations, and regions), integrating concurrent research and innovation processes, often in a public- private partnership. The concept is based on a systematic user co-creation approach integrating research and innovation processes. These are integrated through the co-creation, exploration, experimentation, and evalu