Innovation management has become an urgent need for researchers and firms to survive in the competitive world, where economical environment, market dynamics and emerging technologies are changing rapidly (Drejer, 2002). In my opinion, understanding the process of innovation management from beginning to end might facilitate finding more innovative solutions, as Schilling (2005) argues many innovative ideas may fail to commercialize because of wrong attempts done in the process. In this report, I will start discussing the innovation process by defining the product, process and service innovation and their relationships. After that, I will review sources of innovation to understand where the ideas come from and how they are linked to product, process and service innovation. Then, I will analyze the relationship between innovation and knowledge sharing to reach the sources of innovation. Afterward, I will continue to describe Stage-Gate model to comprehend how companies adopt innovative ideas and discuss team types used widely in innovative processes. Lastly, I will argue the Stage-Gate model in-depth to figure out the innovativeness level of it, because I think commercialization of innovative ideas has the potential to improve our daily lives and environment.
2. Reviewing Innovation Management
2.1. Product, Process, and Service Innovation
Product, process and service innovations have definitions differentiating each from others. Product innovation is about improving the tangible products in different levels, which can be seen as incremental improvements, additional features to product families, future products and inventive products (O’Sullivan and Dooley, 2009). Process innovation is about integrating innovation to key processes of the business, and it has a significant effect on not only decrease in cost and time, but also increase in quality and flexibility (Davenport, 1993). Service innovation is an adoption of novel services to the new or existing clients, or providing existing services to the new client (Damanpour, Walker and Avellaneda, 2009). Despite their distinctive definitions, they have interrelations. I will discuss these relations by comparing product and process innovation, and product and service innovation.
To begin, the product and process innovation might benefit from each other. The process innovation sometimes has an accelerator effect on product innovation of a firm by decreasing the errors and increasing the quality, or vice versa (Schilling, 2005). For example, a new production method is found for curing hair loss by the R&D department of a medical firm, and the new product is created with the help of this process. It means that the new developments in the process innovation can not only speed up the process, but also make the final product innovative in a radical way. Moreover, as Schilling (2005) states in the UPS example, in which more effective distribution system is seen as a product innovation by the firm, but a process innovation by the customers, product and process innovation can be perceived differently from different customer segments.
Moreover, as it was stated in the Lecture 2, product and service innovation have differences in terms of intangibility, simultaneity, and perishability (Dolfsma, 2015). According to O’Sullivan and Dooley (2009), the product innovation is tangible and it finishes after selling the product making the customer involvement less than the service innovation. Also, unlike service innovation, it can be stored in terms of perishability (Dolfsma, 2015). For instance, Samsung smartphones are perceived by the customers as tangible and inperishable products, and they use these phones to the end of their life cycles without any expectation of development. However, the Android system used in these smartphones is perceived as a service, and they expect continuous development after the purchase. As it can be seen in this example, product and service innovation are linked to each other, and they can be used together in the same concept to benefit from each other.
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