Unique innovation and organizational learning approach to business model. Also provided simple quantitative and qualitative analysis approaches that become the fundamental innovation and creation process model for business performance.

1. Innovative
Learning
Organization
Business
Model
D R . C . C . TA N E T A L . ( 2 0 1 3 )
SCHOOL OF MANAGEMENT
M A E FA H L U A N G U N I V E R S I T Y

2. Innovation:
 “As the development and implementation of new ideas by people who over time engage in
transactions with others within an institutional order.” (van de ven, 1986, p. 590)
 “As the successful implementation of creative ideas within an organization.” (Amabile,
1996, p. 1)
 Innovation involves various activities aimed at providing value to customers and a
satisfactory return to the organization (Ahmed, 1998).
 Business organizations view innovation as a means toward achieving and sustaining
strategic competitive advantage (Marques and Ferreira, 2009).
 Ahmed, P.K. (1998), “Culture and Climate for Innovation,” European Journal of Innovation
Management, 1(1), pp. 30-43.
 Marques, C.S. and Ferreira, J. (2009), “SME Innovative Capacity, Competitive Advantage
and Performance in a Traditional Industrial of Portugal,” Journal of Technology
Management & Innovation, 4(4).
 Van de ven, A.H. (1986), “Central Problems in the Management of Innovation,”
Management Science, 32(5), pp. 590-607.
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3. Innovation is needed:
 The current situation of the environment (e.g. uncertainty, high risk, and volatility)
involves that firms need to develop innovation in order to maintain or increase their
competitiveness.
 The capacity to innovate is among the most important forces that impact business
performance (Hurley and Hult, 1998).
 Innovativeness provides flexibility for firms to choose different options to satisfy their
customers on a sustainable basis so that this will provide a basis for the survival
(Banbury and Mitchell, 1995).
 Innovativeness is a process of turning opportunities into practical use (Tidd, Bessant &
Pavitt, 1997) and being really adopted in practice (Schumpeter, 1934).
Banbury, C.M. and Mitchell, W. (1995), “The Effect of Introducing Important Incremental
Innovations on Market Share and Business Survival,” Strategic Management Journal, 16,
pp. 161-182.
Hurley, R. and Hult, G.T.M. (1998), “Innovation, Market Orientation, and Organizational
Learning: An Integration and Empirical Examination,” Journal of Marketing, 62(3), pp. 4254.
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4.  Innovativeness is an iterative process in which firms interact both with
customers and suppliers and with knowledge institutions (Freeman, 1987).
 Innovation has been recognized as a key element of dynamic efficiency and
competition of markets since the work of Schumpeter (1934).
 Innovativeness is a competitive instrument essential for firm‟s long-term success
and survival (Deshpande, Farley and Webster, 1993).
Deshpande, R., Farley, J.U. and Webster, J. (1993), “Corporate Culture, Customer
Orientation and Innovativeness in Japanese Firms: A Quadrad Analysis,” Journal of
Marketing, 57(1), pp. 22-27.
Freeman, C. (1987), Technology Policy and Economic Performance: Lessons from
Japan, London: Pinter Publisher.
Schumpeter, J.A. (1934), Theory of Economic Development: An Enquiry into Profits,
Capital, Interest and the Business Cycle, Harvard.
Tidd, J., Bessant, J. and Pavitt, K. (1997), Managing Innovation, Chichester: Wiley.
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5. Innovation:
 The relationship between business growth and innovation is widely understood by
executives today as has been written by a number of consultants and business scholars
such as Richard Foster (1986), James M. Utterback (1994), Clayton Christensen (1997),
and Richard Leifer (2000). These authors agree that incremental innovation can keep the
company competitive with current platforms, but only radical innovation can provide a
platform for the long-term growth that corporate leaders seek (Foster, 1986; Utterback,
1994; Christensen, 1997; and Leifer, 2000).
 Foster, R. (1986), Innovation: The Attack‟s Advantage, New York: Summit Books.
 Utterback, J.M. (1994), Mastering the Dynamics of Innovation, Harvard Business School
Press, MA.
 Christensen, C. (1997), The Innovator‟s Dilemma, Harvard Business School Press,
Boston, MA.
 Leifer, R. (2000), Radical Innovation, Harvard Business School Press, Boston, MA.
 Heskett, J. (1997) Design for Profit, in D. Steenstra (ed.), Design for Profit Report:
Proceeding Report of the Design for Profit Seminar, held on 25 June 1997, at the Design
Council in London, The University of Warwick Print Service, UK. (1997)
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6. Innovation:





John Hestkett (1997) proposed 4 design innovation strategies:
(1) No change
(2) Incremental detail change
(3) Radical redefinition of basic concepts
(4) Fundamental innovation
 According to Heskett (1997), design projects usually begin with business objectives,
which fall into one of the 4 innovative strategies, based on market situation, a company‟s
willingness to spend and capability to innovate.
Company‟s Business Objectives (Purpose)
Innovation Strategies
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7. Innovation Construct:
(Stream 2)
Process
Content
Innovation
(Stream 1)
Purpose
(Stream 4)
 A typical 2P-2C dimensions to strategic
management (CC Tan, 2013) match well with the
four research streams in organizational innovations
(Lin and Chen, 2007):
 Stream 1 – Typology of innovation, i.e.
technological innovation, administrative
innovation, strategic innovation, and process
and product innovation.
 Stream 2 – Diffusion of innovation
Context
 Stream 3 – The antecedents or determinants of
organization innovation, i.e. structure, processes
(Stream 3)
and people influencing the development of new
products, etc.
 Stream 4 – Utility of innovation, i.e.,
performance, new improvement and
development.
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8. Content: Types of Innovation
 Resource Innovation, Production Innovation, Product and Service Innovation,
Demand Innovation
Process:
Resource
Flow Fast
Idea Generation
 Value-Curve




Idea
Conversion
Idea
Diffusion
SLL and DLL
Schumpeterian Learning and Newtonian Learning
Kolb‟s Experiential Learning
Data-Information-Knowledge-Wisdom





The Innovation Infrastructure, HRM and Culture, Structure and
Systems, and Policies / Strategies, Objectives, Vision and Mission
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(Context)
Purpose:
Innovate faster
First-to-Market
Revenue Stream
Cost Structure
Long-Term
Company‟s
Value

9. Resources:
 Within-Units
 Cross-Units
 External –
Competitors, Partners,
Customers
 Opportunities, Lost
Opportunities, Wastes
Resource
Idea
Conversion
 Systems of
activities to
create the
value
generated
Cost Structure
Idea Generation
Value
Curve
OL
Idea Diffusion
 Knowledge
spillover
 Stimulate spinoffs
 CRM/Distribution
to deliver value
generated
Purpose:
 Targeted
Segments
Revenue Stream
 ROI (Return on Idea)
 Long-Term Shareholder Values
 3P (Profit, Planet, People)
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10. Let‟s Look at the Innovative Learning Organization Model gradually:
 How it is formed?
 Any theoretical background?
 Process Aspect of Innovation: Page 5-18
 Purpose Aspect of Innovation: Page 19
 Content Aspect of Innovation: Page 20-36.
 Contextual Aspect of Innovation: Structure (Day 1), HRM Practices
and Systems, and Culture (Previous Section), Culture (Final
Examination), Some other Contextual Issues on Innovation in
particular, Page 37-40
 Conclusion: Page 41-43
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11. In the academic domain, innovation could be a
direct result of seeing the “Patterns” of Relation
systematically and holistically:
Quantitative Data Analysis
Qualitative Data Analysis
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12. Qualitative Data Analysis
 Follows data  information  knowledge  wisdom model
 It is not linear – many feedback loop required at every step
Selective Coding:
 Scan across the entire interview scripts and
select relevant chunks discussions that fit into
the themes (constructs, variables) and their
pattern of relationship. This helps “validates”
the theoretical model you proposed in your axial
coding step.
Axial Coding: Look axially and make connection
among themes.
External Factors
Internal Factors
Strategy
Performance
relative to
competitors and
the industry
Open Coding: Locate themes and assign initial
codes to condense the mass of data into categories





Strategy
Performance
Internal Factors
External Factors
Order of Fit on Activities
Interview Scripts: obtained from your interview
Wisdom
Showing evidences that
knowledge is really applicable
to various contexts or cases
Knowledge
Information
Data
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Interview Scripts: obtained from your interview

13. Quantitative Data Analysis
Generalizability – Applicable to wide population
Wisdom
Theme 2
Analyzing the relationships of the themes –
Hypothesis and Theory Confirmation/Rejection
Knowledge
*
* *
*
*
Theme 1
Describing the Themes – Descriptive
analysis of the themes involved (where
themes could be identified through literature
review or / and factor analysis)
Information
Quantitative survey data
Var 1 Var 2 Var 3 Var 4 --- --- --- Var n
Data 1
Data 2
…
Data
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14. Quantitative Data
Analysis
Qualitative Data Analysis:
 Literature Review
 Interviews, etc.
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15. For the Process of Innovation:
 We will use this simple model to build “absorptive
capability” similar to a research process
 Innovation is research commercializable.
Data
Information
 Codification
 KPIs
Tomato Grading:
 7 Attributes initially codified:
 Weight
 Size
 Color
 Texture
 Shape
 Hardness
 Taste
3 Decision-Scales:
 Good, Average, Unacceptable
Knowledge
 Abstraction
 Product Pricing
 Strategy Maps
Wisdom
 Diffusion
 Market acceptance
Positive correlation:
 Size and Weight
 Color, Hardness and
Taste
 From 7 to 4
 2 Scales: Acceptable or
Unacceptable
 Thus, From 37 (2,187) to
24 (16 Selections)
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16. Data
 Codification
 KPIs
Idea Generation
Information
Knowledge
 Abstraction
 Product Pricing
 Strategy Maps of
KPIs
Idea Conversion
Wisdom
 Diffusion
 Market acceptance
Idea Diffusion
Actually: the Value-Chain Model introduced by:
 Hansen, M.T. and Birkinshaw, J. (2007), “The Innovation Value Chain,” Harvard
Business Review, June.
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17. Reflective Observation
Data
Abstract Conceptualization Active Experimentation
Information
 Codification
Knowledge
 Abstraction
 Product Pricing
Wisdom
 Diffusion
 Market acceptance
Explicit
Implicit
Concrete Experience
 D-I-K-W matches Kolb‟s Experiential Learning Theory (1985) and
Boisot‟s (1999) I-Space, Schumpeterian Learning and Newtonian
Learning.
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18. Kolb, D. (1984), Experiential Learning, Englewood Cliffs, NJ: Prentice-Hall.
Concrete Experience
(Feeling)
Accommodating (Feel and
Do) CE/AE
Diverging (Feeling and
Watch) CE/RO
Reflective Observation
(Watching)
Active Experimentation
(Doing)
Converging (Think and Do)
AC/AE
Assimilating (Think and
Watch) AC/RO
Abstract Conceptualization
(Thinking)
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19. Reflective Observation
Data
Abstract Conceptualization Active Experimentation
Information
 Codification
 Problem Solving
Explicit
Knowledge
 Abstraction
 Product Pricing
Wisdom
 Diffusion
 Market acceptance
S,W  Strategies
Concrete Experience
Impacting: Embedded into artifacts, work instructions,
behavioral patterns, and technical, organizational rules.
Newtonian
Learning
Schumpeterian
Learning
Absorption
O,T
Scanning
Implicit
 In contrast to N-learning, it sees the S-Learning as continuing its
course beyond “Diffusion” (or Region A‟ in the Information-Space),
and moving down once more into those un-codified and highly local
concrete regions.
 Boisot, M.H. (1999), Knowledge Assets: Securing Competitive
Advantage in the Information Economy, Oxford: Oxford University
Press.
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20. Data-Information Dimension
A‟
Textbook
Knowledge
Personal
Knowledge
A
Common
Sense
Un-codified
Codified
Proprietary
Knowledge
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21. Some pragmatic aspects of “Diffusion” neglected:
Specifically about “leading by adoption”:
 Diffusion is defined as the process by which an innovation is adopted and gains
acceptance by members of a certain community. The four major factors that
influence the diffusion process are the innovation itself, how information about the
innovation is communicated, time, and the nature of the social system into which
the innovation is introduced (Rogers, 1995). Diffusion research, in its simplest
form, investigates how these major factors, and a multitude of other factors,
interact to facilitate or impede the adoption of a specific product or practice among
members of a particular adopter group, including the customers.
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22. Rogers, E.M. (1995), Diffusion of Innovations, 4th Edition, New York: The Free Press.
 The Individual Innovativeness Theory (Rogers, 1995) states that individuals who are
predisposed to being innovative will adopt an adoption earlier than those who are less
predisposed.
 The Figure above shows the bell shaped distribution of Individual Innovativeness and the
percentage of potential adapters theorized to fall into each category.
 On one extreme of the distribution are the Innovators. Innovators are the risk takers and
pioneers who adopt an innovation very early in the diffusion process.
 On the other extreme are the Laggards who resist adopting an innovation until rather late
in the diffusion process, if ever.
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23.  Rogers‟ (1995) theory of Rate of Adoption, states that innovations are diffused over time in a
pattern that resembles an s-shaped curve.
 Rate of adoption theorizes that an innovation goes through a period of slow, gradual growth
before experiencing a period of relatively dramatic and rapid growth.
 The theory also states that following the period of rapid growth, the innovation‟s rate of
adoption will gradually stabilize and eventually decline.
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24. Perceived attributes:
 The Theory of Perceived Attributes (Rogers, 1995) states that potential
adopters judge an innovation based on their perceptions in regard to five
attributes of the innovation.
 These attributes are:
 Trialability
 Observability
 Relative Advantage
 Complexity
 Compatibility
 The theory holds that an innovation will experience an increased rate of
diffusion if potential adopters perceive the innovation: 1) Can be tried on a
limited basis before adoption, 2) Offers observable results, 3) Has an
advantage relative to other innovations (or the status quo), 4) Is not overly
complex, and 5) Is compatible with existing practices and values.
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25. In summary: Process of Innovation in the Literature:
 Input-Transformation-Output:
 Idea Generation:
 Breadth of process – Open innovation system versus closed
innovation system (Chesbrough, 2003)
 Innovation as a dynamic process that requires creativity input to
develop new or improved ideas (Majoro, 1992)
 Incorporating customers‟ suggestion for service innovation
(Victorino et al. 2005)
 Ideas Conversion:
 New ways of doing things (Strategic mindset in innovation)
(Porter, 1990)
 Diffusion:
 Adoption of ideas new to the organization (Roger, 1983)
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26. Purpose:
 Innovation is the process of taking creative ideas to
“market” or to “usefulness”.
 Being an innovative organization, i.e. The word
“innovation” is appearing in corporation mission and vision
statements and core capability lists.
 Better operational performance (Cooper 1998)
 Improved business performance (Oke et al. 2007)
 Securing worldwide competitiveness (Lin & Chen 2007)
 Enhanced ability to offer valued choices to customers (Peter
2003)
 Commercialization of invention (Schumpeter, 1942)
 Adopting innovation outcomes to drive organizational
performance (Roper and Love, 2002)
 Create differentiated services (Agarwal et al. 2003)
 Different tiers of actions in innovation, as developers,
leading by adopting, and following (Chesbrough, 2003)
Innovative Organizations
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27. Content of Innovation:
Strategic Management
 Organization Innovation (Business Model, Org. Innov. Control Variables)
Product-Market Side:
Positioning Position
Supply Side:
Resource Position
As long as possible
Resources:
 Acquire
 Exploit
 Develop
 Absorptive Capacity
S, W
 Disruptive

 Discontinuous

 Incremental

 Value-Innovation
 Making sense through Value-Curve
 To create real Value, not to waste and
 Strategies.
 Technological
O, T
New Market
Rent Generation
Value
Curves
Service Innovation
Product Life Cycle Management
Demand Innovation
Non-Value-Added
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28. Content:
 Schumpeter (1939):
 New product (Production-Innovation-Development of completely new
products, or changes in existing ones, or combinations of existing products
into new ones)
 New process (technological process innovation and organizational
innovation, e.g., investments in systems, technology, people, culture, new
approaches)
 New sources of supply
 The exploration of new market, and
 New ways to organize business
New process
New source
of supply
New
business
models
New products
New markets
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29. Content:
 Oke et al. 2007: Service innovation (a
prototype for service, covering the need
of the customer and the design of
service, Edvardsson and Olsson, 1996,
p. 149), process innovation (i.e.
methods of R&D, production, service,
administrative operations and CI), and
product innovation (gaining wider
customer reward through introducing
new products featuring more
differentiated characteristics)
 Four types of product innovations:
product-line extension, product
improvement, new product for current
market served, and new product for an
established market in which the
business offering the innovation is not
typically recognized as a vendor
(Salavou and Avlonitis, 2008; Thomas
D. Kuczmarski, Kellogg School of
Management)
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30. Content: Different Manifestations:
 Tangible and intangible composition (Henard and Dacin, 2010)
 Innovation outcome: Innovation as newness to the organization (Drucker, 1999): What is
new, how new, new to whom? Often the newness of innovation is depicted on a scale ranging
from Incremental to Radical (cf. Dedrick et al. 2007), on which radical stands for
paradigmatic technological change impacting on, and changing large parts of the economy.
 Cautions: For two reasons, such an approach is not very applicable when doing firm-level
research. First, the generation of truly radical innovations is extremely rare; therefore,
using this definition would lead to the absence of observations at that end of the scales.
 Second, this definition takes an “objective” macro perspective in which external experts
have to determine the level of newness of an innovation and its related economic and
societal impact, which basically makes it inapplicable when conducting large firm-level
research.
 Therefore, newness of innovation can be practically defined as “to what extent
technologically products are improved versions of products that were already produced by
the firm, products that are new to the firm, or products that are new to the firm‟s market.”
This somewhat more fine-grained distinction allows for a more detailed analysis.
Innovation Inputs:
 R&D:
 R&D intensity of the firm (% of total
workforce engaged in R&D)
Innovation Outputs:
 Newness
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31. Content: Different Manifestations:
 Breadth of content and why innovation is important –
 Innovation plays a key role in product life cycle management – both in extending the
lifespan of products and, in some cases, responding to the inevitable demise of others by
preparing their replacement (i.e., cf. life-cycle evolution, Westerman et al. 2006)
 Innovation can allow you to create or enter new markets – enabling a business to grow
even when its primary market is static, i.e. through Modular innovation (Argyres and
Bigelow, 2010), or innovation that differentiates businesses from competitors (Buenstorf
and Klepper, 2010)
 Innovation is about doing things differently, for the commercial gain of the customers or the
supplier – or both, i.e. Aldi supermarkets. In management economics terms, successful
innovation should give rise to increased added value for the vendor or the purchaser when
compared to existing alternatives.
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32. Incremental Innovation
Breakthrough Innovation:
Disruptive
Discontinuous
Innovation
Innovation
Sustaining Innovation
 Types of innovation:
 Apparently from now, there are many different types of innovation and also many different
ways to talk about it.
 For instance, Harvard Professor Clayton Christensen contrasts “disruptive” with
“sustaining” innovation, while
 Gary Hamel talks about the distinction between “breakthrough” and “incremental”
innovation. Incremental or continuous innovation is typical of companies with R&D
departments. It delivers gradual improvements like enhancing software, improving battery
life, miniaturizing hardware, improving the taste of frozen sea food products, and is a result
of spending time on the systems, processes and technologies involved. It‟s about gradual
evolution rather than a revolutionary step-change. Ultimately, it enables firms to keep up-todate with the market and, ideally, to edge ahead. This notion has given rise to the term
“sustaining innovation.”
 Other observers such as Geoffrey Moore prefer to think in terms of “discontinuous” versus
“continuous” (or continuing) innovation.
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33.  Disruptive innovation is commonly associated with Harvard Professor Clayton
Christensen. He uses the term “disruptive” because it turns the conventional
paradigm of the market on its head, not by improving on competitors‟ offerings, but by
actually reducing functionality.
 If this sounds like a crazy idea, think about for a moment. How many times from
personal experience have we found ourselves faced with an incremental innovation
that offered functionality that we couldn‟t actually use. They ability to store 2 million
songs instead of one million, perhaps? Or take photographs at eight-megapixel
resolution instead of three? Disruptive innovation challenges the commonly-accepted
trajectory of rising functionality, i.e. examples: Aldi in the consumer space, and ATMs
which provided a very restricted product compared to computer service, and
Southwest Airlines in no-frill services business models.
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38. In short:
 If you‟re looking at a market (or are already part of a market) that contains overserviced customers, then there is likely to be an opportunity for disruptive
innovation.
 For example, where you can identify an existing market (let‟s say an airline
industry) that can be served more relevant to a greater range of customers by being
simplified, then it‟s time to consider if there may be an opportunity for disruptive
innovation.
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39. Discontinuous Innovation:
 Discontinuous innovation involves a radical seismic shift, a significant leap upwards in
functionality.
 Products like Skype and iPod are in this category although they are frequently (and
incorrectly) described as “disruptive innovations” because they have revolutionarized their
markets (or arguably even created new ones). But Skype and iPod are discontinuous rather
than disruptive since they offer new features and benefits instead of cutting back on those
of their predecessors.
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40. Transforming Resources
Listen to Customers
“Demand Innovations”
 Because much continuing innovation is about incremental improvement (a smaller
computer, faster hard disk, bigger CD player, louder speaker, more convenient food choices
etc.), it doesn‟t require a great deal of external stimulus to direct it. Not so for other types
of innovation. Successful discontinuous and disruptive innovations tend to follow from
some kind of customer insight or customer understanding.
 Adrian Slywotzky and Richard Wise, the authors of How to Grow When Markets Don‟t,
introduce the notion of “demand innovation” – essentially the idea that there is an
inherent customer requirement for innovation, since many customer needs are going
unmet
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41. Note:
Service innovation:
 Kotler (2006) – market offerings include products together with services. As such,
market offering can be treated as service innovation.
 Services are different from products in four ways (Zeithami et al. 1985):
 Intangibility – Services cannot be inventoried, cannot be patented, cannot be
readily displayed or communicated. Pricing is difficult.
 Heterogeneity – Service delivery and customer satisfaction depend on employee
actions. Service quality depends on many uncontrolled factors. There is no sure
knowledge that the service delivered matches what was planned and promoted.
 Simultaneous production and consumption – Customers participate in and affect
the transaction; customers affect each other; employees affect the service outcome;
decentralization may be essential; mass production is difficult.
 Perishability – It is difficult to synchronize supply and demand with services, and
services cannot be returned or resold.
Zeithaml, A., Parasuraman, A. and Leonard, L.B. (1985), “Problems and Strategies in
Services Marketing,” Journal of Marketing, 49, pp. 33-46.
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42. Note:
Technological innovation:
 Refers to a process in which enterprises apply innovated knowledge, new technology
and new processes, and adopts new modes of production and management to improve
product quality, develop new product, and provide new services to capture the
market and realize market value (Liu and Tang, 2010).
 Technological innovation is the integration of technology, knowledge, and the market,
a complex process, which includes conception development, promotion and
application of new technologies (Liu and Tang, 2010).
 Radical or incremental technological innovation (Dedrick et al. 2007):
 Breakthrough that change the nature of products and services
 Minor changes to existing products, which cumulatively improve the
performance of products and services.
time
Technological innovation
Competitiveness
Competitive advantage
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43. Note:
Organization innovation:
 Organization innovation pertains to all parts of the organization, optimizing
organization structure by promoting corporate culture (Laforet and Tann, 2006),
i.e., and to all aspects of its operations, which bring improvement and
development to the performance of the organization (Damanpour, 1992).
 Three organization innovation characteristics (Salavou et al. 2004):
 Internal strategy-driven characteristics: Market orientation, learning,
technological policy of the company.
 External competition-related characteristics: Refer to the type of business
and barriers to business (In essence, the business models)
 Control variables: Refer to firm size, firm age, market share, capital
ownership, administrative intensity, product categories.
Internal strategy-driven OI
External competitionrelated OI
Control Variables
=
Value-Creation
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44. Context:
 Infrastructural information technology
systems as catalyst to the development and
adoption of innovation (Thong and Yap, 1996)
 Individuals, groups, and organizational levels
– Favorable personality traits, employee
involvement, operational excellence and
competitiveness (Kavoos 2007; Oke et al.
2007).
 HRM Strategies, Systems, and Practices (CC
Tan, 2013)
 Market orientation culture (Dilani et al. 2007)
 Leadership, team support, the process of
innovation as the contextual factors (Shone,
1985)
 Team members support each other
Innovative Organizations
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45. Contextual:
 In discussing the personnel of an innovative organization, the social scientists
considered such matters as personal and job security, educational processes,
decision-making criteria, and group norms, among others (Dr. Becker, University of
Chicago).
 They agreed that psychological and job security are both necessary for creativity.
Only a man who is personally secure can deviate from the group solution and
suggest the novel approach.
12/18/2013

46. Contextual:
 Diversity of educational upbringing is thought to be positively related to innovation
in the following way (Dr. Becker, University of Chicago):
 If the members of a decision-making group in an organization all had been exposed
to the same educational discipline they would tend to consider the same sorts of
alternatives as possible solutions.
 The “far-out” idea has much less chance of inclusion or survival in the set of
possible solutions than it would have if the members had been educated in diverse
disciplines – disciplines which might utilize different approaches to problem
solving.
 Increasing the probability of accepting an innovative solution by diversifying the
backgrounds of group members seemingly affects all kinds of organizational
innovation equally.
Diversity of
backgrounds of
group members
Better
innovative
outcomes
12/18/2013

47. Contextual:
(Dr. Becker, University of Chicago):
 Perhaps related to the individual‟s education, but more probably a personality
factor, is the kind of decision-making criteria he employs.
 See also CC Tan (2013, HRM Modules, Thanapoom Thongsamoot et al. 2013 ThirdYear Student Project, Accepted for the 29th National Graduate Research Conference,
2013, Mae Fah Luang University).
 One of the social scientists thought it crucial to innovation whether an individual
uses abstract or concrete decision-making criteria. The scientist asserted that there
is a tendency to decide in favor of the alternative which can be supported by
objective, countable, quantifiable attributes. Alternatives supported by abstract
criteria dealing with the unverifiable and the future tend to be disregarded. If, as
he argued, there is a general preference for the concrete over the abstract, then
surely that preference will bias decisions against innovation. Here, perhaps we can
make a useful distinction (ibid, p. 4-5).
 Almost all decisions in the product and marketing areas could be based on abstract
criteria, while some of the decisions in the process area only can be based on
concrete criteria (i.e. what kind of punch process to use). Thus, increasing the use of
abstract decision-making criteria will lead to greater product and marketing
innovation relative to process innovation (ibid, p. 5).
12/18/2013

48. In summary:
Well-managed process and systems of innovation:
 Technological level – Laboratory for experimentation, IT, FMS
 Operational level – functional innovation to achieve competitive
priorities, i.e., cost, quality, delivery (speed and dependability),
flexibility, innovativeness in market offering (both products and
services)
 Organizational level – strategic and administrative (SHRM enabled),
culture, PMS (Performance Measurement Systems) and OL
(Organizational Learning)
 Individual and group levels – team structure, problems-solving,
brainstorming, focus group
 External level – business incubator systems / market knowledge
sourcing, communities of practice, market competition intensity and
industry clusters.
 At root level – SKA (Skill, Knowledge, and Attitude) Levels:
Individuals, Groups, and Organizational Levels.
 Products-services-process-systems-structure (and 7S innovation)
12/18/2013

49. Structure
Hard S:
Strategy
Systems
Shared
Values
Skills
Soft S:
Styles
Skills
12/18/2013

50.  In general, the best organizational designs are adaptive, self-correcting, and become more
robust over time. The resilient organizational model comes closest to this ideal by
incorporating the healthiest parts of the innovative organization‟s building blocks.
 They combine an aligned structure, logical and streamlined and innovative decision
rights, appropriate motivators, and rapid flow of information. These characteristics allow
an innovation organization to make quick, effective trade-offs between priorities,
integrating elements from diverse functions, extended past the boundaries of the firm
itself to suppliers, customers, and partners.
12/18/2013

51. Matches with the Componential Theory of Creativity of Professor
Teresa M. Amabile, Harvard Business School since 1983 at individual
creativity level, extended to organizational level in 1988:
Amabile, T. M. (1983), Social Psychology of Creativity: A
Componential Conceptualization, Journal of Personality and Social
Psychology, 45, pp. 997-1013.
Amabile, T.M. (1988), A Model of Creativity and Innovation in
Organizations, in B.M. Staw and L.L. Cummings (Eds.), Research in
Organizational Behavior, 10, pp. 123-167, Greenwich, CT: JAI Press.
Amabile, T.M. (1996), Creativity in Context, Boulder, CO: Westview
Press.
Amabile, T.M. and Mueller, J.S. (2008), Studying Creativity, Its
Processes, and Its Antecedents: An Exploration of the Componential
Theory of Creativity, in J. Zhou and C. E. Shalley (Eds.), Handbook
of Organizational Creativity, pp. 33-64, New York: Lawrence
Erlbaum.
12/18/2013

52. Componential Theory of Creativity:
 In this theory, four components are necessary for any creative response:
 Three components within the individual – domain-relevant skills, creativityrelevant processes, and intrinsic-task motivation, and one component outside the
individual – the social environment in which the individual is working (Amabile,
1983).
 Domain-relevant skills: Expertise in the relevant domain or domains (Content
Expertise)
 Creativity-relevant processes: Cognitive and personality processes conducive to
novel thinking
 Intrinsic task motivation and social (surrounding) environment: Contextual
and Purposive factors. Specifically, intrinsic motivation is to engage in the
activity, out of interest, enjoyment, or a personal sense of challenge.
 Extended to “Within-Organization Components” and “External Environment.”
(Amabile, 1988)
 Parallel to our “Innovative OL” driven Business Model (CC Tan et al. 2013):
Context-Content-Process-Purpose (2C-2P).
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53. Purpose:
Creativity must be appropriate to the task to be
completed or the problem to be solved. That is, it
must be “valuable, correct, feasible, or somehow
fitting to a particular goal.”
The theory of creativity specifies that creativity
requires a confluence of all components; creativity
should be highest when an intrinsically motivated
person with high domain expertise and high skill
in creative thinking works in an environment
high in supports for creativity (Amabile, 1983,
1988, 1996; Amabile and Mueller, 2008).
12/18/2013

54. Creativity-Relevant Processes:
Creativity-relevant processes (originally called creativity-relevant
skills) include a Cognitive Style and Personality Characteristics that
are conducive to Independence, Risk-Taking, and Taking New
Perspectives on Problems, as well as a Disciplined Work Style
(“Conscientiousness”) and Skills in Generating Ideas.
These cognitive processes include the ability to use Wide, Flexible
Categories for Synthesizing Information (“Open to Experience and
Reflective Observation”) and the ability to break out of Perceptual and
Performance Scripts (“Reflective Observation”).
The personality processes include Self-Discipline and a Tolerance for
Ambiguity.
Dr. CC Tan (2013): Kolb‟s Experiential Learning Styles + Personality
Traits for a new Definition on HRD, implications for Team and
Individual Performance.
12/18/2013

55. Task-Motivation:
Intrinsic task motivation is passion: The motivation to undertake a
task or solve a problem because it is interesting, involving, personally
challenging, or satisfying – rather than undertaking it out of the
extrinsic motivation arising from contracted-for rewards, surveillance,
competition, evaluation, or requirements to do something in a certain
way.
A central tenet of the componential theory is the intrinsic motivation
principle of creativity.
People are most creative when they feel motivated primarily by the
interest, enjoyment, satisfaction, and challenge of the work itself – and
not by extrinsic motivators.
Purpose
Contextual
Feedback
12/18/2013

56. The Social Environment:
 The outside component is the Work Environment or, more generally, the
Social Environment.
 This includes the “Extrinsic Motivators” that have been shown to undermine
“Intrinsic Motivation”, as well as a number of other factors in the
Environment that can serve as “Obstacles” or as “Stimulants” to “Intrinsic
Motivation and Creativity.”
 Research in organizational settings has revealed a number of work
environment factors that can block creativity, such as norms of harshly
criticizing new ideas, political-problems within the organization, an
emphasis on the status quo, a conservative, low-risk attitude among top
management (Uncertainty
Avoidance), and excessive time pressure.
Intrinsic Motivation:
The Inner/States-of-Mind / Personal Environment
Extrinsic Motivation:
Social Environment
12/18/2013

57. The Social Environment:
Other factors can stimulate creativity, such as a sense of
positive challenge in the work; work teams that are
collaborative, diversely skilled, and idea-focused; freedom in
carrying out the work; supervisors who encourage the
development of new ideas; top management that supports
innovation through a clearly articulated creativity-encouraging
vision and through appropriate recognition for
creative work; mechanisms for developing new ideas; and
norms of actively sharing ideas across the organization
(Diffusion).
Foster Cross-Pollination of Ideas. When there is a high degree
of psychological safety, where people spout “wacky” ideas
without fear of ridicule. Moreover, a range of resources
facilitates experimentation.
12/18/2013

58. Environment:
 Social-organizational environment, i.e. work environment
 Physical environment
 Economic environment, i.e. economic fluctuations
 And other outside factors, i.e. consumer preferences
12/18/2013

59. Iteration:
 The creative process often recur iteratively until a creative outcome has been
attained.
 If rewards or other motivators are presented in a controlling fashion, leading
people to feel that they are being bribed or dictated to, the undermining
effects are likely to occur.
 However, if rewards confirm people‟s competence (for example, by
recognizing the value their work), or enable them to become more deeply
involved in work they are excited about (for example, by giving them more
resources to do the work effectively), intrinsic motivation and creativity
might actually be enhanced. This process is termed “motivational synergy.”
(Amabile, 1993).
12/18/2013

60.  The theory of creativity is applicable at multi-levels, encompassing
creativity in single individuals, teams, and entire organizations.
 The componential theory‟s basic elements, and the creative process it
describes, are similar in the aggregate to other theories of creativity in
both psychology and organizational studies, although with different
emphases and somewhat different proposed mechanisms.
 At their core, all contemporary scholarly theories of creativity rely on
the definition of creativity as a combination of novelty and
appropriateness. Most theories describe a process by which an
individual produces creative ideas, and most (but not all) include both
skill and motivational elements. Some include the social environment.
12/18/2013

61. Creativity:
 Novelty + Appropriateness
Successful implementation of the creative ideas within an
organization, that are valued by customers and the
markets in large-scale.
12/18/2013

62. Innovative Organizational Learning driven Business Model:
Double-Loop Learning:
Purpose
Content
Context
Process
Explicit: Schumpeterian Learning
Resources
Idea
Generation
Idea
Conversion
Diffusion
Performance
Absorption
Scanning
Implicit: Newtonian Learning
Impacting
12/18/2013

63. Six P‟s of Creativity:
The aspect or facet of creativity emphasized:
 Traditionally the 4Ps (Rhodes, 1961; Runco, 2004) + More recently the Six Ps (e.g., Runco,
2007)
 Process
 Product
 Person (or Personality)
 Place (or Press)
 Persuasion (Simonton, 1990)
 Potential (Runco, 2003)
 Rhodes, M. (1961), An Analysis of Creativity, Phi Delta Kappan, 42, pp. 305-310.
 Runco, M.A. (2003), Education for Creative Potential, Scandinavian Journal of Education, 47,
pp. 317-324.
 Runco, M.A. (2004), Everyone has Creative Potential, in R.J. Sternberg, E.L. Grigorenko, and
J.L. Singer (Eds.), Creativity: From Potential to Realization, pp. 21-30, Washington, DC:
American Psychological Association.
 Runco, M.A. (2007), Creativity: Theories and Themes: Research, Development, and Practice,
New York: Academic Press.
 Simonton, D.K. (2007), Creative Life Cycles in Literature: Poets versus Novelists or
Conceptualists versus Experimentalist? Psychology of Aesthetics, Creativity, and the Arts, 1,
pp. 133-139.
12/18/2013

64. Theories of Creativity:
Persuasion
Place and Person
Explicit:
Implicit:
Process
Product
Performance
Potential
12/18/2013

65. Process theories:
 Typically specify different stages of processing (Wallas, 1926). Some key issues in the
study of the creative process include the extent to which creative thinking involves the
same basic cognitive mechanisms as non-creative thinking, the relative roles of conscious
versus unconscious processes, the relative contributions of chance or stochastic processes
versus more controlled and guided processes, and the nature and reliability of evaluative
processes during the process of creation.
Products:
 Probably the most objective approach to creativity focuses on products: Works of art,
inventions, publications, musical compositions, and so on.
 Products can usually be counted, thus permitting considerable quantitative objectivity,
and they are often available for viewing or judging, so inter-rater reliability can be readily
determined – two substantial advantage.
 A down side is that when studying a product, little can be directly said about the process
leading to it or the creator‟s personality. Inferences are thus necessary to inform the
creative process or person.
 Wallas, G. (1926), The Art of Thought, New York: Harbourt Brace and World.
12/18/2013

66. Person (Personality):
 Several traits cut across creative potential. These include intrinsic motivation, wide
interests, openness to experience, and autonomy (Helson, 1972).
Place (Press: Press from Pressure):
 Place or press factor is especially useful in defining such interactions between persons
and environments.
 There are individual differences in terms of preferred environments, but again also
general tendencies.
 Creativity tends to flourish when there are opportunities for exploration and independent
work, and when originality is supported and valued (Amabile, 1990).
 Amabile, T.M. (1990), Within you, Without you: The Social Psychology of Creativity and
Beyond. In M.A. Runco and R.S. Albert (Eds.), Theories of Creativity, pp. 61-91, Newbury
Park, CA: Sage.
 Helson, R. (1972), “Personality of Women with Imaginative and Artistic Interests: The
Role of Masculinity, Originality, and Other Characteristics n their Creativity,” Journal of
Creative Behavior, 6, pp. 295-300.
12/18/2013

67. Persuasion:
 Creative people change the way others think, so they must then be persuasive to be
recognized as creative. The notion of creativity as persuasion shares assumptions with the
social perspective (Amabile, 1990) and Csikszentmihalyi‟s (1988) systems model. In the
last of these, persusive individuals are the ones who are likely to influence the direction
taken by a domain.
Performances and Potentials:
 Runco (2008) recently suggested to add creative performances versus creative potentials.
 The former is divided into products and persuasion theories, and any other perspectives
that focuses on manifest, unambiguously creative behavior. The latter is divided into
creative personality and places, and any other perspective that appreciates yet-unfulfilled
possibilities and subjective processes.
 Csikszentmihalyi, M. (1988), Society, Culture, and Person: A Systems View of Creativity,
in R.J. Sternberg (Ed.), The Nature of Creativity: Contemporary Psychological
Perspectives, pp. 325-328, New York: Cambridge University Press.
 Runco, M.A. (2008), “Creativity and Education,” New Horizons in Education, 56, pp. 107115.
12/18/2013

68. Theories of Creativity:
 The claim usually worded “moderation in all things” applies to many
aspects of creativity.
 For instance:
 Autonomy is good or creativity and its development, but too much
autonomy, and there may be no direction, no focus (Albert & Runco,
1989). The same can be said about competition, challenges, constraints,
attention, experience, and many other potential influences on creativity
(Runco, 2001).
 Albert, R.S. and Runco, M.A. (1989), “Independence and Cognitive Ability
in Gifted and Exceptionally Gifted Boys,” Journal of Youth and
Adolescence, 18, pp. 221-230.
 Runco, M.A. (2001), Creativity as Optimal Human Functioning, in J.M.
Bloom (Ed.), Promoting Creativity across the Lifespan, pp. 17-44,
Washington, DC: Child Welfare League of America.
12/18/2013

69. Innovative Organizational Learning driven Business Model:
Double-Loop Learning:
Purpose
Applicable as a Policy Learning Model:
Content
Context
Process
Explicit: Schumpeterian Learning:
Data
Information
Value-Curve
SSC
Knowledge
DSC
Wisdom
LTV: Rev. Streams - Cost
Discovery
Resources
Dream, Design
Destiny
Co-Research
Envision, Engage
Unfreeze
Idea
Generation
Co-Development
Transform
Move
Idea
Conversion
Distribution
Refreeze
Refreeze
Scanning
Diffusion
User Zones. Grass-Root Participation and Involvement.
Social Entrepreneurship, Internalization
Implicit: Newtonian Learning:
Impacting
12/18/2013
Performance
Innovation
Absorption

70. Use of Appreciative Inquiry (Participatory Action Research) as an approach to
leverage organizational cultural capital which could add value in terms of the
potential to deliver a competitive advantage.
AI approach has the potential to enhance an organization‟s human, social, and
psychological capital (Luthans & Youssef, 2004). This indicates that the discovery
of cultural capital could yield far greater returns over and above leveraging the
organization‟s inner strengths, if an appreciative methodology is adopted.
Spill-Over:
Human capital
(tacit knowledge)
Leverage
organization
‟s cultural
capital
through AI
Psychological capital,
i.e. hope, confidence,
and optimism.
Potential Outcome:
Competitive Advantage
Social capital
(networking)
12/18/2013

71. Luthans, F. and Yussef, C.M. (2004), “Human, Social, and now Positive
Psychological Capital Management: Investing in People for Competitive
Advantage,” Organizational Dynamics, 33(2), pp. 143-160.
12/18/2013

72. The 4-D Appreciative Inquiry Cycle:
Cooperrider, D.L., Whitney, D. and Stavros, J.M. (2003), Appreciative Inquiry Handbook,
Bedford Heights, OH: Lakeshore.
Cooperrider‟s doctoral dissertation titled “Appreciative Inquiry: Toward a Methodology for
Understanding and Enhancing Organizational Innovation,” was completed in 1986, at Case
Western Reserve University, Ohio. In 1987, Cooperrider and Srivastva used the term
Appreciative Inquiry for the first time in a professional publication: “Appreciative Inquiry in
Organizational Life,” (Magruder Watkins & Mohr, 2001).
Cooperrider, D.L. and Srivastva, S. (1987), Appreciative Inquiry in Organizational Life,
London: JAI Press Inc.
Magruder, W.J. and Mohr, B.J. (2001), Appreciative Inquiry: Change at the Speed of
Imagination, San Francisco: Jossey-Bass.
12/18/2013

73. AI‟s theoretical origins are grounded in the following eight principles (Whitney and
Trosten-Bloom, 2003):
 The constructionist principle: Words create worlds. Through language and
conversations, reality is co-created. “Constructionism is an approach to human science
and practice which replaces the individual with the relationship as the locus of
knowledge, and thus is built around a keen appreciation of the power of language and
discourse of all types.
 The principle of simultaneity: Inquiry and change are simultaneous events. Discoveries
are made by asking questions that invite storytelling and the sharing of peak experience
from which a desired future is envisioned and socially created.
 The poetic principle. Unlike a machine, an organization is considered an open book of
which its story is constantly co-authored. Furthermore, like a well-written piece of
poetry, an organization is open to endless interpretation.
 Whitney, D. and Trosten-Bloom, A. (2003), The Power of Appreciative Inquiry, San
Francisco: Berrett-Koehler.
12/18/2013

74. AI‟s theoretical origins are grounded in the following eight principles (Whitney and
Trosten-Bloom, 2003):
 The anticipatory principle: A positive image inspires positive action. A workforce‟s
collective imagination of a desired future is a positive source of energy and motivation
behind everyday actions. Cooperrider and Whitney (2003) stated that the artful creation
of positive imagery on a collective basis might be the most prolific thing any inquiry
could do.
 The positive principle: Building and sustaining momentum for change requires large
amounts of positive effects and social bonding. The more positively the questions are
framed, the longer lasting and successful the change effort (Cooperrider & Whitney,
2003).
 The wholeness principle: Wholeness brings out the best in people, relationships,
communities, and organizations, while inviting people to focus on higher ground.
Wholeness fosters the understanding and acceptance of individual differences.
 Cooperrider, D.L. and Whitney, D. (2003), Social Construction: Appreciative Inquiry,
London: SAGE.
12/18/2013

75. AI‟s theoretical origins are grounded in the following eight principles (Whitney and
Trosten-Bloom, 2003):
 The enactment principle: Be the change you want to see. This principle suggests that
positive change is realized as images and visions of a desired future are enacted in the
present.
 The free choice principle: Free choice is an essential element of being human while
fostering performance. Thriving organizations are characterized by employees who are
free to choose their terms of contribution, which in turn generate enthusiasm and
commitment.
 Cooperrider, D.L. and Whitney, D. (2003), Social Construction: Appreciative Inquiry,
London: SAGE.
12/18/2013

76. A brief outline and summary of each phase of the AI‟s 4D-Cycle (Magruder Watkins and
Mohr, 2001; Cooperrider et al. 2003):
Appreciative Inquiry (AI) is a form of participatory action research is uniquely oriented
toward the creation of productive outcomes. Action research is a democratic and datadriven form of inquiry:
Phase 1: Topic Choice
 Human systems grow in the direction of what they choose to study.
 The AI interview questions are framed around topics people want to see grow and
flourish in their organization
 Use of AI as a method to leverage cultural capital, and to explore the opportunity of
initiating systems wide AI intervention
 The questions are unconditionally positive.
 The participation and data collection strategies are decided upon
 The project management structure is developed.
12/18/2013

77. Phase 2: Discovery:
 The AI interviews are conducted to identify the life-giving forces at the core of the
organization.
 These life-giving forces and structures that are present when the organization is functioning
at its best, begin to surface through storytelling and the sharing of peak experiences, values,
and wishes for the organization.
 Hope grows and organizational capacity is enriched.
Phase 3: Dream
 Practical – through storytelling, participants create a shared and desired image of their
future that is grounded in the organization‟s positive past.
 Generative – the mind naturally begins to wonder and envisions new possibilities by
amplifying the organization‟s positive core.
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78. Phase 4: Design
 The organization‟s social architecture, wherein the exceptional becomes everyday and
ordinary, is crafted in the form of an inspirational statement or a provocative proposition
wherein the organization‟s cultural capital is reflected.
 This phase requires in-depth dialogue about the best structure and processes to support the
new systems.
Phase 5: Destiny
 Through continuous learning, innovation and creativity, the organization evolves to enhance
and sustain its positive core (cultural capital) by breathing life into its provocative
proposition.
 Changes never thought possible are democratically mobilized as individuals and business
units commit to a course of positive action.
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79. The workshop commenced with a 30-minute interview experience between
pairs (five pairs in total). Each participant had 15 minutes to interview his
or her partner using the standard AI interview protocol (Cooperrider et al.,
2003):
1. Describe a high point experience in your organization, a time when you
felt most alive and engaged.
2. Without being modest, what is it that you value most about yourself, your
work, and your organization?
3. What are the core factors that give life to your organization, without
which the organization would cease to exist?
4. What three wishes do you have now to enhance the health and vitality of
your organization?
Having experienced the power of asking the unconditional positive question,
a small discussion followed after which the group unanimously embraced the
idea of a system-wide AI and an agreement was made to involve the whole
organization.
12/18/2013

80. Topic Choice:
Leveraging organizational culture capital
Discovery (Workshop One):
 Presentation;
 AI overview and brief introduction to action research
 Topic: Leveraging organizational culture capital in relation to the 4-D cycle
 Brainstorming:
 What do you think is this organization‟s positive core?
 AI – an alternative approach (from problem solving) to discovering the
organization‟s positive core
 One-to-one interviews:
 Participants debriefed and invited to attend the second workshop.
 Their thoughts on the AI interview protocol?
 Data capturing:
 Interview guides collected and stored by the researcher for further content
analysis
12/18/2013

81. Discovery (cont.) and dream – Workshop Two:
 Storytelling and theme analysis:
 Participants share peak experience stories in smaller groups and identify
underlying themes
 Feedback:
 Sub-groups share selected stories and emerging themes with larger group.
 Discovering cultural capital:
 Participants prioritize the most important themes (cultural capital)
 Images of the future:
 Leveraging organizational cultural capital: What could be; images shared.
 Painting Exercise:
 Creating a common vision for the future through art
 Explanations of each artwork.
 Homework:
 How business units could leverage cultural capital?
12/18/2013

82. Design:
 Overview (4-D Cycle, Topic Choice, and Cultural Capital)
 Facilitated group process to co-construct the organization‟s social architecture:
 Definition and guidelines on writing a provocative proposition
 Individual provocative proposition‟s integrated.
 Discussion:
 Operationalizing the provocative proposition
 “Selling” the provocative proposition to the organization.
Destiny (Workshop Three):
 Overview (4-D cycle, topic choice, cultural capital, selected outcome)
 Provocative proposition shared with the group
 Small group discussions:
 How to leverage the organization‟s cultural capital embedded within the provocative
proposition
 Business units share commitments with the larger group.
12/18/2013

83. Example:
Theme One: A culture of humanity and teamwork
“We are innovative, creative, hard working people who work as a team.”
Theme Two: Continuous Learning
“I was given the opportunity to exploit my ability in designing the X programme.
This also gave me insight into a different field. I was excited as it was something
new, a learning curve that had to be and was conquered.
Theme Three: Continuous flow of communication
“A peak experience for me was the monthly staff meetings the company used to
have. Although a newsletter and the intranet have now taken its place, I enjoyed
the personal experience and richness of information that was coming straight from
the director. Being kept in the loop was a high point for me.”
Theme Four: Creative freedom
“When I was running the X department, I was able to use all my abilities to make
the department work. I felt I was given the opportunity to help myself, and the
freedom t run the department with available resources.
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84. Example:
Theme Five: Open Style of management
“The work taught me independence; to take responsibility for my decisions, and
broadened my knowledge base.”
Theme Six: Developing people through trust
“I was surprised at the amount of development I could do in such a short space of time.
Others were supportive, gave me positive feedback, trusted me, and relied on my
decisions – which made me aware of my abilities. I worked very hard. I immersed
myself in the job.”
Theme Seven: Staff support
“A high point for me was when I started a project which worked ! I had to market and
educate people on the programme … I was excited. I received a lot of support and
encouragement. I worked hard on the programme, and it was a big success.”
12/18/2013

85. Example:
The organization‟s provocative proposition:
We are young, hip, and fresh. Through the fostering and nurturing of strategic values,
we are a formidable force. Our management and staff believe in creating a culture of
continuous learning and development through trust. This culture allows for the
creative freedom to achieve long-term goals. Our cornerstone is progress through
communication, providing a humanistic environment by communicating through
teamwork.
Business Unit – Development:
We are committed to sharing technology and ideas to improve work performance in
each department. From the company, we request you to share with us those areas with
which you are struggling. Maybe we could help in terms of available technology that
no one in the company, besides the development team, is aware of. We will also place a
suggestion box on the intranet.
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86. Purpose:
 Social Entrepreneurship (Ellis et al. 2012):
 Health
 Livelihood Development, i.e. welfare outcomes.
 Education: Build human capital
 Capitalize full economic and social integration
 Long-term improvements in technological, social and environmental indicators.
 Enhance long-term systems efficiency.
 Scanning:
 Identifying constraints
 Potential entry points for development intervention
 Risk management issues – across the entire value innovation chain, i.e. production risk,
technology risk, and market risk.
 Diffusion:
 Rationale for diffusion – monetary (i.e. buyer needs, cost reduction, higher market price, and
reduced production risk) versus non-monetary drivers (i.e. peer pressure, protection of the
environment).
 Ellis, W., Ratanawaraha, A., Diskul, D. and Chandrachai, A. (2012), “Social Entrepreneurship as
Mechanism for Agro-Innovation: Evidence from Doi Tung Development Project, Thailand,”
International Journal of Business and Social Science, 3(23), pp. 138-151.
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87. Envision: Enable service
assets and readiness
 Assess service opportunity
 Formulate service strategy
Engage: Plan service
availability
 Develop service concept
 Develop service catalogue
Transform: Implement service
support
 Develop services
 Manage service delivery
Optimize: Continual service
improvement
 Manage service metrics
 Improve service delivery
 Optimize service capacity
Envision
Engage and Transform
Optimize
Uhl and Gollenia (2012)
Uhl, A. and Gollenia, L.A. (2012), A Handbook of
Business Transformation Management Methodology,
Gower Publishing Limited.
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88. Envision:
 Envision is formulated via service strategy in identifying service innovation
opportunities that contributes to the business values.
 In this stage, the market spaces that the service will thrive in to deliver business
value must be evaluated and formulated as overall strategy.
 The scope of envision is understood as “the process of translating business vision and
strategy into effective enterprise change, by creating, communicating, and improving
the key requirements, principles, and models that describe the enterprise‟s future
stage and enable its evolution (Uhl and Gollenia, 2012).
 This stage needs to prepare the organization to build the service assets that will
enable the capability development in the later stages, as a necessary for service
innovation delivery.
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89. Engage:
 Engage is enabled via Develop Service Concept, Service Catalogue, and Plan for Service
Availability.
 In developing a clear understanding of what is the innovation concept that is required,
why it is required, how it is to be achieved and measured, and who is responsible. This
stage starts out with involvement and collaboration throughout middle management and
employees in generating and brainstorming ideas.
 Innovative ideas are coming from uncovering employees‟ ideas and voices of customers
such as open innovation, and lead user innovation.
 In this stage, the idea generation methods and design of experiments are using for
developing the concept. Such methods that widely used and recommended are
Brainstorming, Brain-writing, TRIZ, Cognitive Modeling, Perceptual Mapping, Scenario
Analysis, Morphologic Analysis, Divergent and Tangent Thinking, Concept Screening,
Feasibility Determination, Ethnography, Excursion and Empathic Design.
 The methods in evaluating the service innovation concepts are Balanced Scorecard,
Benchmarking, Best Practice, Concept Testing and Value Analysis. The concept
evaluation is aimed at providing a list of plausible service innovation concepts that is
valuable for both business organizations and customer values, and implementable with
the organization capabilities.
 The service availability plan is then a part of the development to summarize the
performance capacity of all services in reflections of the current and future needs of the
business.
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90. Transform:
 Transform is implemented via Develop Services, Manage Service Delivery, and
Implement Service Support.
 In this stage, the organization builds its capabilities through developing new business
processes and enhancing employee competencies to enable service delivery,
collaborating for value co-creation, and driving service-value networks i.e. service
systems.
 With the clearly defined service concept in prior stage, the service development could
be implemented with a focus on the customer-centricity, aimed at converting the
efforts in each service delivery to increase the customer relationships and tangiblize
as a long-term customer values.
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91. Optimize:
 Optimize is emphasized via Manage Service Metrics, Improve Service Delivery, and
Optimize Service Capability.
 The goal is to optimize the performance of service delivery and reducing overall costs
caused by poorly managed services.
 In value-based competitive paradigm, service optimization requires a clearly defined
and measured service performance metrics as elements of customer value.
 By having service standards and reliable metrics, the business organizations can
optimize all the dynamic elements needed to deliver service value.
 Well-defined, value-based service measures can enable an organization to evaluate the
return on investment of existing services and to calculate the expected return from
new service designs and new service innovation.
 Service value optimization goes beyond tracking the discrete customer-centric metrics
and finding an ideal balance among the many other dynamic variables in the value
equation. It requires the ability to access, integrate, and analyze information across
multiple business functions – creating a holistic view of service delivery across
different sales and service channels – to assess and optimize customer value – to
mobilize resources around specific service demands and dynamically predict customer
value before committing resources.
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92. Adoption:
 New technologies are favored if they:
 (a) Have zero or low capital requirement
 (b) Can be readily adopted by unskilled farmers with a low level of risk
 © Can create social / environmental, as well as, individual benefits (Ellis et al. 2012)
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93.  We are not necessarily advocating for the development of such models
into grand unifying theories, although such efforts might be inspired.
 Rather, we are suggesting that scholars better situate their theories in
the broader theoretical and empirical landscape of the domain,
acknowledging and, when possible, incorporating the plurality of
perspectives that have taken root and flourished.
 At the very least, this requires that scholars acknowledge the contested
nature of their own theoretical assumptions and perspectives. By doing
so, they may discover areas of overlap between seemingly contested
positions, which not only advance the standing of their own theoretical
perspectives, but also enrich our broader knowledge of creativity.
 Inclusive-systems-based theoretical context for innovation
 Value-curve is the center-stage for actors and participators, e.g. grassroots innovation and adoption of new technologies or approaches.
12/18/2013

94. New idea:
 Is a
thought
about
something
new or
unique
Invention:
 Making
that idea
real is an
invention
Innovation:
 Innovation is
an invention
that has a
socioeconomic
effect.
 Innovation
changes the
way people
live (Williams,
1999)
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95. Chayutsahakij, P., Human Centered Design Innovation, Department of Industrial Design,
School of Architecture, Chulalongkorn University, Bangkok 10330, Thailand.
Williams, A. (1999), Creativity, Invention and Innovation, Australia: Allen & Unwin.
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96.  User information is an
important source of new
product ideas (of what
should be designed), which
has the potential to redirect
a company‟s technology
capabilities toward an
entirely revolutionary
innovation (Chayutsahakij
, Chulalongkorn Unviersity)
User Research Zone
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97. User Research Zone Scanning:
Useful ways to Establish Value-Curves for New Products, New Markets, or New
Technology, or Mixture of all these and Known Technology, Known Market, etc.:
 Key to innovative design is an understanding of the “users”.
 In the past, directions for design development were based on “Marketing
Research,” which limits innovation to its evolutionary form.
 Because traditional marketing research builds upon opinions of current
experience and already present technologies, it is generally unhelpful for design
that is “not tied to a familiar consumer paradigm.”
 Recently, a few forward thinking companies started deriving their design
direction from user research, which helps uncover unarticulated or emerging user
needs.
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98. User Research Characteristics:
 The user research characteristics semantic is developed by Jay Melican‟s (2000).
Research Characteristics:
Semantic Scales:
1.
2.
3.
4.
5.
6.
7.
Predesign
During
Generative
Open-ended
Conceptual
Cultural
Social/Group
Immerse Observe Listen
Experience
Tactile
Visual
Phase of application
Research aim
Research structure
Analytic perspective
Generalization
Mode of collection
Media of delivery
Post-Design
Evaluative
Prepared
Perceptual
Individual
Participate
Verbal
Melican, J. (2000), Describing User-Centered Designing: How Design Teams Apply User Research
Data in Creative Problem Solving, doctoral dissertation, Institute of Design-Illinois Institute of
Technology, Chicago.
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99. Investigation Models:
 The investigation Model Semantic used in the study is developed based on Beyer
and Holtzblatt‟s (1998) five models of user-behavior analytic perspective, in
combination with other analytic approaches including Spradley‟s (1980)
dimensions, Pena‟s (1969) framework for information gathering, Owen (1989),
and Chayutsahakij‟s (2001) analysis matrix.
 The seven investigation models used in this study are:
 Flow model
 Activity model
 Sequence model
 Ergonomics model
 Artifact model
 Physical model
 Cultural model
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100. Investigation Models:
Semantic Scales
1.
2.
3.
4.
5.
6.
7.
Not related
Not related
Not related
Not related
Not related
Not related
Not related
Flow Model
Activity Model
Sequence Model
Ergonomics Model
Artifact Model
Physical Model
Cultural Model
Related
Related
Related
Related
Related
Related
Related
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Critical
Critical
Critical
Critical
Critical
Critical
Critical

101. Flow Model:
 Takes into account the interaction between key stakeholders. It explains people‟s roles and
helps define how people communicate to get a job done.
Activity Model:
 Activity model helps better understand recognizable patterns of activities people do in
everyday life and / or around the design system.
Sequential Model:
 Sequential model helps better understand work task order over time and the steps people
take for a purpose.
Ergonomics:
 Ergonomics model takes into account the physical, cognitive, social, and organizational
factors in order to make design compatible with the users‟ needs, abilities, and limitations.
Physical Model:
 Physical model helps better understand the physical context of the potential user and the
product or service.
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102. Cultural Model:
 The cultural model helps define expectations, desires, values, and the whole approach people
take in their context.
 The essentialness of the investigation models are compared on the semantic scales ranging
from “not related” on the left end, to “related” in the middle, and to “critical” on the right
end.
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103. Example:
Customer Category
New Technology
Known Technology
New Market
Known Market
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104. Investigation Models:
1. Flow Model
2. Activity Model
3. Sequence Model
4. Ergonomics Model
5. Artifact Model
6. Physical Model
7. Cultural Model
NTNM
NTKM
KTNM
KTKM
Research Characteristics:
1. Phase of Application
2. Research Aim
3. Research Structure
4. Analytic Perspective
5. Generalization
6. Mode of Collection
7. Media of Delivery
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105. NTNM:
 The critical objective of user research for NTNM design innovation is to match the unarticulated
needs of users with technological possibilities.
 User research is usually conducted as a “Pre-Design Service” to support “Design Decisions” at
the strategic level. Designers and design researchers apply user information in generating new
project definition for a new context of use and/ore new mission. In order to do so, it is essential to
understand the users‟ experience holistically by encompassing psychological, physiological,
cultural, and social forces.
 User research for NTNM situation begins with questions developed based mainly five
investigation models:
 Flow model to investigate key stakeholders, who they are, what they do, and how they
interact with each other, in order to restructure the flow process and to create opportunities
for new product functionality.
 Activity model to better understand recognizable patterns of activities people do in everyday
life and/or around the design system in order to restructure consumer segmentation.
 Artifact model to better understand how people select, create, use, and modify things in
order to identify hidden intents that might be undetected and unsupported previously.
 Physical model to investigate the physical context of the potential user and the product or
service in order to define both the constraints imposed by the physical environment and the
structure people create within the constraints for their purposes.
 Cultural model to better understand the common aspects of culture that pertain within and
across user groups, and to define expectations, desires, values, and the whole approach
people take in their context.
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106. NTNM:
 The NTNM design innovation usually arises from holistic understanding about users through
conceptual analytic perspective.
 Immersion and observation techniques provide the holistic understanding about users and holds
the greatest potential benefit for addressing problems with new technological capacity that are
not tied to a familiar consumer paradigm.
 It is critical that research is open enough to capture user‟s experience holistically, and put
together the studies of many users associated with the same community to describe cultural
norms.
 It is important to note that traditional participatory and interview techniques such as userparticipatory design, focus group, and customer interviews are reported not useful for NTNM
innovation since users are so accustomed to current conditions and do not think to ask for a new
solution even if they have real needs that could be addressed.
 User information for NTNM innovation is presented both in verbal and diagrammatic formats,
mixed with visual media, including video or photographic imagery.
 In addition, user information is also delivered in the form of direct experience by engaging team
members or clients in the field study.
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107. NTKM (New Technology and Known Market):
 The critical objective of user research for NTKM design innovation is to identify design scope
and directions based on the “Emerging Needs” for new technology and / or functionality.
 Designers apply user information in generating new product definition “What to design?” and /
or “What kinds of components should be in the system? (for systems design).
 User research for NTKM innovation is conducted to increase understanding of the users in the
market, uncover unmet needs useful for restructuring product processes, and to help inform the
direction iteratively in the late design process.
 User research begins with “Research Questions” developed based mainly on “Flow Model” and
“Sequence Model.” Flow model is used to investigate key stakeholders in order to restructure the
flow process and to create opportunities for new product functionality.
 Sequence model shows the detail structure of tasks that need to be supported, suppressed, or
replaced which helps identify the emerging needs for new technology and/ore new functionality.
 In addition, Research Questions are sometimes developed based on “Activity Model” and
“Physical Model.”
 As NTKM innovation deals with existing users in the market, the research supporting NTKM
innovation is focused on the “activity around the design system” rather than on “the everydaylife activity level.”
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108. NTKM:
 Research supporting NTKM innovation is usually semi-structured, asking a few openended questions such as “Why are you doing that?”
 Or researchers may carry a list of questions to prompt the observation, for example,
“What problem is the user encountering?
 Most researchers develop an understanding of behaviors typical to a social group or an
organizational group to which that individual belongs with a procedural analytic
perspective.
 As designing a new class of product or service changes the way people live or perform
in the market, and there is no existing product to use a guideline. The direction of
design needs to be developed through detailed understanding of the existing process /
activity in the prospective context in order to define the “intent” that people are trying
to achieve. This is usually done by gathering data on people achieving their intent with
current tools and looking at how people perform, interact with the tools, and whatever
else is available to help them do what they need to do in order to identify problems.
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109. NTKM:
 Similar to NTNM situation, traditional participatory and interview techniques are
reported not useful to NTKM innovation, while immersion and observation are usually
employed as they hold the greatest potential benefit for addressing the problems with
new technological capacity that is not tied to a familiar consumer paradigm.
 And the user information is usually presented in verbal and diagrammatic formats
mixed with visual media, including video or photographic imagery.
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110. KTNM:
 The critical objective of user research for KTNM design innovation is to identify design
scope and directions based on the potential new market / new context of use for the
existing technology.
 Designers and design researchers apply user information “generatively” in decisionmaking about “new context of use and new market,” “What is the potential new context
of use?”, “Who are the target users?”, “For what market?”, “What does technology mean
to them?”, etc.
 User research plays an important role in the decision on re-branding and re-positioning
which are related to visual communication and design language to communicate the
knowledge technology to the new market. Searching for a new market, user research
is used in combination with (or prior to) marketing research.
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111. KTNM:
 User research for KTNM situation begins with questions developed based on 4 investigation
models: Activity Model, Artifact Model, Physical Model, and Cultural Model.
 User research for KTNM innovation is open-ended, and usually captures the users‟
experience and life styles.
 The important questions for use research in KTNM situation include:
 What does the product, service, or technology mean to users?
 What circumstances prompt people to use the product or service?
 Does the customer turn to the offering when and in the way the company expected? If not,
there may be opportunity to explore.
 By interacting with the user‟s environment: how could the new technology product or service
fit into the user‟s system? The research usually puts together the studies of many users
associated with the same community to describe cultural norms with focus on a conceptual
perspective.
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112. KTNM:
 User research for KTNM innovation provides both an in-depth understanding of how
people behave, and also uncover the reason, the meaning, the emotion, and the
motivation behind what people do.
 Research supporting KTNM innovation is usually ethnographically oriented, aiming at
understanding people in their natural social and cultural context by spending a
significant amount of time with them.
 The user-participatory modes of data collection are also used, as the participants can
refer to an existing product class as a foundation on which to formulate their opinions for
the KTNM innovation.
 As KTNM innovation emphasizes symbolic meaning aspects of design, user information
is usually presented essentially in visual form, and deliverables are enhanced with the
inclusion of artifacts collected in the research process.
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113. KTKM:
 User research for KTKM innovation is usually done after the decision about the
project definition “What to design” is made.
 Designers and design researchers only have opportunities to contribute in decisionmaking about new design criteria and/or new solution. However, user research for
KTKM innovation is not only conducted for “Post-Design Evaluation” but is also
used during “the Iterative Design Process,” to set “design goals with both Utility
and Aesthetic/Symbolic Aspects.”
 It is important to note that the 2 aspects of design goals are derived from different
approaches with different inquiry bases. Thus, user research supporting 1) Utility
Development, and 2) Design Language Development (where the concern is on
symbolic meaning) are separately further discussed.
 User research for utility development provides direction for design criteria, with the
goal to make the product and service More Efficient. It provides directions for:
“What should the design do? What are the problems to be eliminated? How can the
product or service be improved or made more effective? In what way could it be
better than the present or previous situation?”
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114. KTKM:
 User research for KTKM utility development begins with Research Questions
developed based on Sequence Model, Physical Model, and Ergonomics Model which
helps deriving design direction compatible with Needs, Abilities, and Limitations of
People.
 In addition, Research Questions are also developed based on cultural model and
artifact model focusing on the existing objects used in the system.
 A research in this situation is conducted in order to identify problems to eliminate
and unmet need of users to be fulfilled by design, the research is usually done with
a procedural physical setting.
 Research techniques used for KTKM utility development is usually a combination of
ergonomic oriented research, empathetic design, and user-participatory design.
 In addition, prototyping techniques are also used iteratively during design and for
the evaluation of design solutions, in order for participants to better understand the
design and formulate their opinions for utility development.
 As KTKM innovation deals with a “Known” product in the Marketplace, competitive
products are already established. User research is also done by gathering data on
the basic practice of the market / competitors, and using existing customer feedback
channels to help set Design Scopes and Direction.
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115. KTKM:
 User information for KTKM innovation is presented in verbal and diagrammatic
formats mixed with visual media.
 In the case of user participatory design, user data is also given in the form of tactile
presentation, which involves the use of prototypes constructed by subjects.
 Prototyping is very useful to classify the concept of the new product or service for
the design team, communicate the concept within and beyond the team, and
stimulate reaction among potential users.
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116. KTKM:
 User research for KTKM innovation provides direction for design solution of “How
the design should look and feel?” and “What it should mean?”, etc.
 In this situation, user information is applied in decision making on branding and
brand identity in relation to the look and feel of the product, visual communication,
packaging, retail environment, etc.
 It is critical that designers / design researchers understand the intangible
attributes of the products or services, and address influencers in the user‟s culture.
Thus, research is conducted to focus on a conceptual perspective, concentrating on
understanding users‟ beliefs and attitudes toward a product, service, or situation in
order to uncover the motivations and expectations behind the behaviors that users
display.
 User research for KTKM design language development begins with questions
developed based mainly on 4 investigation models: Activity Model, Artifact Model,
Physical Model, and Cultural Model to define expectations, desires, values, and the
whole approach people take in their context. In addition, Flow Model are sometimes
also investigated in order to better understand key stakeholders and to better
communiciate with them.
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117. KTKM:
 User research for KTKM design language development is usually semi-structured
(is prepared and developed based on hypotheses for preference testing) and is
ethnographically oriented.
 In addition, the user-participatory design techniques and prototyping techniques
are also used iteratively during design and for the evaluation of design solutions, in
order for participants to better understand the design and be able to formulate their
opinions for design language development of how the design should look and feel.
 User information is usually presented essentially in visual form.
 Deliverables are also enhanced with the inclusion of artifacts collected in the
research process.
 Prototyping is also a very useful data delivery technique to communicate within the
design team and to stimulate reaction among potential users.
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118. Innovation:
NTNM
NTKM
KTNM
KTKM
Utility
KTKM
Design L
Investigation Models:
Flow
Activity
Physical
Cultural
Flow
Sequence
Activity
Artifact
Physical
Cultural
Sequence
Ergonomics
Physical
Activity
Artifact
Physical
Cultural
Phase of Application:
Pre-design
Research Aim:
Generative
Pre-Design
During-D
Generative
During D
Post-D
Evaluative
Research Structure:
Analytic Perspective:
Unstructured
Somewhat
Conceptual
Cultural level
Immerse
Observe
Listen
Visual
Verbal
Tactile
Experience
Pre-design
During-Design
Somewhat
Generative
Semi-Structured
Procedural
Unstructured
Conceptual
Semi-S
Procedural
During D
Post-D
Somewhat
Generative
Semi-S
Conceptual
Social Level
Immerse
Observe
Listen
Visual
Verbal
Experience
Cultural Level
Participate
Observe
Listen
Visual
Verbal
Tactile
Social L
Observe
Listen
Social L
Observe
Listen
Visual
Verbal
Experience
Visual
Verbal
Generalization:
Mode of Collection:
Media of Delivery:
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119. Beyer, H. and Holtzblatt, K. (1998), Contextual Design: Defining CustomerCentered Systems, Morgan Kaufmann Publishers, San Francisco.
Chayutsahakij, P. (2001), “Value-Framing: Enhances Design Team‟s Internal and
External Affective Performance,” Proceedings of the International Conference on
Affective Human Factors Design, Asian Academic Press, London.
Owen, C.L. (1989), Structured Planning: A Method for Developing Design
Concepts, CAD/CAM, Robotics and Factories of the Future, Springer-Verlag,
Berlin, Vol. 1, pp. 3-9.
Pena, W.M. (1987), Problem Solving: An Architectural Programming Primer, AIA,
Houston.
Spradley, J.P. (1980), Participant Observation, Harcourt Brace Jovanovich Inc.,
Orlando.
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120.  Co-Creation
at the FrontEnd: A
Systematic
Process for
Radical
Innovation
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121. Front-End Co-Creation:
Transforming Resources:
 Front-End Co-Creation
Ideas Generation
 Within the innovation process, the most significant action is at the front-end where
companies try to identify opportunities, obtaining and maximizing the benefits of internal
and external ideas that lead to new concept offerings (Shan and Zhang, 2009)
 Co-creation is important – the open innovation sources. Via the method of co-creation,
innovating with users has expanded its territory to include other groups such as “Experts”
and “All Stakeholders within the Value Chain” (Sanders and Stapper, 2008).
Pichyangkul, C., Nuttavuthisit, K. and Israsena P. (2012), “Co-Creation at the Front-End: A
Systematic Process for Radical Innovation,” International Journal of Innovation, Management
and Technology, 3(2), pp. 121-127.
Sanders, E.B.N. and Stapper, P.J. (2008), “Co-Creation and the New Landscape of Design,”
CoDesign, Vol. 4, pp. 5-18.
Shan, W. and Zhang, Q. (2009), “Extension Theory and Its Application in Evaluation of
Independent Innovation Capability,” Kybernetes, 38, pp. 457-467.
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122. Front-End Co-Creation / Preparation:
 Before a concrete idea enters into the formal new product development stage, this predevelopment phase, namely, front-end of innovation, must be thoroughly researched and
managed.
 Studies have shown that companies can improve the value and success probability of such
opportunities if the front-end of innovation is managed efficiently and effectively. (Liao et al.
2009)
 Nevertheless, unwise management of the process may result in poor definition of customer
requirements and unfeasible product concept (Heng, 2011).
 Hence, there have been many attempts to structure the front-end of innovation for more
productive results. Among these is “user innovation,” which aims to integrate users‟ ideas
into the innovation process (Gassman, Enkel & Chesbrough, 2010)
Gassman, O., Enkel, E. and Chesbrough, H. (2010), “The Future of Open Innovation,” R and
D Management, Vol. 40, pp. 213-221.
Heng, T. (2011), “The Empirical Analysis of Enterprise Scientific and Technological
Innovation Capability,” Energy Procedia, 5, pp. 1258-1263.
Laio, S.H. et al. (2009), “Imbalance between Market Orientation and Innovation Capability:
an Empirical Study on Taiwan, IEEE.
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123. Front-End Co-Creation / Preparation:
 “User Innovation” has been applied and is most effective within the context of incremental
innovation (Lettl, Herstatt & Gemuenden, 2008), which represents modified development
based on a company‟s existing expertise in technological core concepts and within known
system linkages (Christensen, 1997).
 While companies may be able to rely on these minor enhancements for a while, they need to
be prepared for any disruptive changes based on entirely new knowledge and technology
that will finally emerge as a cycle of Radical Innovation (Smith, 2006).
Christensen, C. (1997), The Innovator‟s Dilemma: When New Technologies Cause Great Firms to
Fail, Boston, MA: Harvard Business Press.
Lettl, C., Herstatt, C. and Gemuenden, H.G. (2008), “Exploring how lead users develop Radical
Innovation: Opportunity Recognition and Exploitation in the Field of Medical Equipment
Technology,” IEEE Transactions on Engineering Management, 55, pp. 219-233.
Smith,D. (2006), Exploring Innovation, New York, NY: McGraw-Hill Education, Chapters 1-3.
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124. Front-End Co-Creation / Preparation:
 There have been many arguments as to whether or not the user innovation approach can be
beneficial during this front-end development of radical innovation.
 Some argue that users may be caught in today‟s context and not capable of generating
tomorrow‟s needs or solutions (Hamel and Prahalad, 1994). Thus, by innovating with users,
companies may end up with minor-enhanced offerings that do not create sufficient impact to
sustain long-term corporate vision (Smith, 2006).
 Additionally, users, in general, lack the ability to understand and foresee highly
sophisticated technology fields (O‟Connor and Veryzer, 2001), while the disruptive
technology derived from an entirely new knowledge platform is essential in order to shift
away from the existing paradigm and enter into the development of radical innovation
(Anderson and Tushman, 1990).
Anderson, P. and Tushman, M. (1990), “Technological Discontinuities and Dominant Designs:
A Cyclical Model of Technological Change,” Administrative Science Quarterly, Vol. 35, pp. 604633.
Hamel, G. and Prahalad, C.K. (1994), Computing for the Future, Boston, MA: Harvard
Business Press.
O‟Connor, G.C. and Veryzer, R. (2001), “The Nature of Market Visioning for Technology-based
Radical Innovation,” Journal of Product Innovation Management, Vol. 12/18/2013 231-246.
18, pp.

125. Front-End Co-Creation:
 Here, users no longer perform “Passive Roles” as “Research Subjects” but “are
Actively Involved in the Creative Process of Innovation with the help of Other
Stakeholders as well as Providing Idea Generative Techniques.” (Prahalad and
Ramaswamy, 2004).
 The right mix of people is encouraged to trigger learning behavior and team
performance. According to van der Vegt and Bunderson (2005), moderate diversity of
social category, such as age, gender, ethnicity, and level of expertise, is recommended
in order to utilize different perspectives.
 The brainstorming sessions can be used to trigger an individual‟s new ideas or build
on the ideas of others while focusing on a specific topic without criticizing other
people‟s ideas.
Transformed Resources:
 Perspectives
Ideas Generation
Prahalad, C.K. and Ramaswamy, V. (2004), “Co-Creation Experiences: The Next
Practice in Value Creation,” Journal of Interactive Marketing, Vol. 18, pp. 5-14.
Van der Vegt, G.S. and Bunderson, J.S. (2005), “Learning and Performance in
Multidisciplinary Teams: The Importance of Collective Team Identification,” The
Academy of Management Journal, Vol. 48, pp. 532-547.
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126. Front-End Co-Innovation Sources:
 There is consensus that advanced knowledge from experts is crucial to anticipate
radical opportunity recognition (Kendall et al. 1992).
 Thus, it is important to involve experts of different categories to explore promising
future technologies and investigate the possible impact of social changes.
 For example (Pichyangkul, Nuttavuthisit & Israsena, 2012):
 The use of dishwashing detergent involves cutlery and coating substances.
Therefore, expert opinion from material scientists and chemists is extremely
valuable.
 For the mobile companies, in-depth interview with professors who specialize in
digital media and content is crucial to uncover future changes.
 A sociologist or environmentalist can be of significant help when the companies
search for future behavioral shift in beverage drinking. Companies may also want
to convene material scientists and dig into the frontier of materials technology to
produce beverage cans.
Kendall, J.E., Kendall, K.E., Smithson, S. and Angell, I.O. (1992), “SEER: A Divergent
Methodology applied to Forecasting the Future Roles of the Systems Analyst,” Human
Systems Management, Vol. 11, pp. 123-135.
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127. Front-End Co-Innovation Sources:
 Apart from experts who can provide highly sophisticated future trends,
understanding users‟ unmet needs is crucial.
 Thus users‟ characteristics may be very important factor to consider.
 According to Herstatt (2002), if the ideas are to improve existing product
performance, gathering input from “normal users or typical users” is adequate to
identify new needs. However, some companies may turn to lead users who are a group
of users facing new needs ahead of today‟s markets and strongly benefiting from
innovations that provide solutions to those near future needs (Luthje and Herstatt,
2004)
Herstatt, C. (2002), “Search Fields for Radical Innovations involving Market Research,”
International Journal of Entrepreneurship and Innovation Management, Vol. 2, pp. 473484.
Luthje, C. and Herstatt, C. (2004), “The Lead User Method: An Outline of Empirical
Findings and Issues for Future Research,” R and D Management, Vol. 34, pp. 553-567.
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128. Front-End Co-Innovation Sources:
 Given the different types of users, Schuurman et al. (2010) proposed user typologies
based on the use-diffusion model, and debated that users who possess “a certain
degree of rate of use and variety of use” can influence the “ideation process.”
Schuurman, D., Moor, K.D., Marez, L.D. and Evens, T. (2010), “Investigating User
Typologies and their Relevance within a Living Lab-Research Approach for ICT
Innovation,” in Proc. Of the 43rd Hawaii International Conf. on Systems Sciences, Hawaii.
12/18/2013

129. Front-End Co-Innovation Sources:
 The study by Rogers (2003) regarding diffusion of innovation model also reflects the
unique characteristics of users based on rate of adoption. They are innovators, early
adopters, early majority, late majority, and laggards depended upon how fast the
users adopt certain products.
 However, there have been no empirical investigations of whether these groups of
users can provide useful input for Radical Innovation Process.
Rogers, E. (2003), Diffusion of Innovations, New York, NY: The Free Press.
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130. Front-End Co-Innovation Sources:
 Extreme users, in general, are those who reside at the extreme edge of any aspect of
research in question: the poorest versus the richest, the tallest versus the smallest, or
the oldest versus the youngest, etc. They may represent consumers who live in
extreme conditions, at the border of society, excluded from everyday normality, who
cannot afford to pay for a certain product or service, or those who choose not to
consume it.
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131.  A look at Southwest Airline‟s strategic profile (next Graph) illustrates how these 3
qualities underlie the company‟s effective strategy in reinventing the short-haul airline
industry in value innovation.
Southwest Airlines created a blue
ocean by breaking the trade-off
customers had to make between
the speed of airplane and the
economy and flexibility of car
transport.
To achieve this, Southwest
offered high-speed transport with
frequent and flexible departures
at prices attractive to the mass of
buyers.

132. Ratan Tata:
 Break wealth barrier
 < USD 2,500
 Profit Formula
 Cost Structure
Hilti:
 Moving to a contract management program required shifting assets
from customers‟ balance sheets to its own and generating revenue
through a lease/subscription model.