Some useful models

Although the idea of ‘innovation’ may appear to be a relatively new area to the business world, it has been an evolving concept since the 1950’s and has passed through six generations to become one of sophistication and high complexity. Such early aspects include the works of Taylor with ‘Scientific Management’; concentrating on products, processes and of course, innovation itself.

There have been many theories to counter for the numerous generations and stages of innovation. The ‘push’ and ‘pull’ mechanisms symbolise whether a business is consumer-led (market-led) or product-led. Over the decades, the emphasis has changed to a greater focus on the needs and wants of consumers. Whereas previously businesses would create a product and then use marketing as a way to persuade customers that they ‘need’ the product (creating perceived needs), organisations today need to constantly monitor and analyse its target market to keep up-to-date and adapt its products to suit their consumers’ needs. Below is a summary of the models to be discussed;

1950s/1960s – Technology Push model

1970s – Market Pull or Need Pull model

1980s – Coupling model

1980s/1990s – Interactive model

2000 – Network model

Although the above can be criticised for being abstract and broad, the models enable us to understand innovative businesses in terms of the co-ordination with the external environment. The models shown above are referred to as ‘linear models’ because they describe innovation as a linear sequence of events.

Technology Push

The ‘technology-push’ model depicts that innovation arises from “technological developments within innovative organizations” (Conway, S. and Steward, F. 2009:66). This argues that innovation is achieved through the investments in technology focusing on the ‘supply side’ of economics rather than the later models which highlight the importance of the market and consumer needs. This model assumes that scientists make unexpected discoveries which are then developed into prototypes for testing before manufacturing and marketing. Such an assumption is relevant to industries, such as pharmaceutical, but harder to generalise to other industries due to the nature of the work and the way in which innovations are created (Trott, P. 2002:17).

Market Pull

The formulation of this framework was initiated by the findings from studies carried out in the 1960s and 1970s that found the innovation process can be influenced by the marketplace (von Hippel, 1978 cited in Trott, P. 2002:18). This led to a developed focus on consumer needs and strategies were to be devised to satisfy these following on from thorough research and development into the target market. From this research, products and services can be manufactured to match the needs of the market; improving success and competitive advantage. This model highlights the importance of close relationships with consumers and successfully satisfying their needs within a marketplace of intense competition between rival businesses to gain market share. Feedback can also be retrieved from consumers in order to improve existing products to further satisfy its market.

An example to illustrate this could be that of Dyson. Who’d have though of a bagless hovering system?! Although Dyson’s invention was soon replicated by many other rivals, he was the first to enter the marketplace with this great innovation. ‘Market-pull’ is all about creating an opportunity and then developing it. The diagram below is taken from Conway, S. and Steward, F. (2009:67).

However, the above models are out of date and not a true reflection of the innovation process by illustrating what drives innovation rather than how it occurs (Galbraith, 1982 cited in Trott, P. 2002:18). Since the mid 1970s, several other models were developed to compensate for these changes.

Coupling and Interactive models

A more updated framework is the ‘simultaneous coupling’ model which suggests innovation occurs from the combined knowledge of three organisational functions: manufacturing, research and development and marketing. Knowledge within all three of these vital business functions is vital for innovation to work. As argued by Drucker (2007:87), knowledge is a “major creator of wealth”. According to Rothwell and Zegveld (cited in Conway, S. and Steward, F. 2009:68), this ‘third generation’ model process of innovation “represents the confluence of technological capabilities and market needs within the framework of the innovating firm”. The target market can be observed and focus groups set-up to allow a better understanding of consumer needs and expectations, gain customer insight and to provide an improved basis in which to base innovation. This framework focuses on integrating research and development and marketing. Managers are required to create formal and informal relationships as well as facilitating interaction within the internal and external environment; the science base, innovative organisation(s) and the market. The diagram below is taken from Trott, P. (2002:18).

The ‘interactive’ model is a development of the ‘simultaneous coupling’ framework linking technology-push and market-pull frameworks; emphasising the critical interaction between “the marketplace, the science base and organisation’s capabilities” (Trott, P. 2002:19). It can be divided into “a series of functionally distinct but interacting and interdependent stages (Rothwell and Zegveld, 1985 , cited in Trott P. 2002:19). Although the model appears to be linear, the flow of communication is not restricted; allowing for feedback. This framework illustrates that there is no clear starting point implying that innovations can be created from a variety of areas; allowing for great flexibility. The target market can be observed and focus groups set-up to allow a better understanding of consumer needs and expectations, gain customer insight and to provide an improved basis in which to base innovation. The diagram below is taken from Trott, P. (2002:19).

Both frameworks require managers to create formal and informal relationships as well as facilitating interaction within the internal and external environment; the science base, innovative organisation(s) and the market.

Network model

This most recent model, developed in 2000, places an emphasis on external linkages. There are external inputs affecting each business function; marketing and sales, finance, engineering and manufacturing and research and development. The co-ordination and integration between and within each function allows for the accumulation of knowledge over time as a catalyst for innovative ideas to be created. The diagram below is taken from Trott, P. (2002:218) and clearly illustrates the interaction with the external environment.

Overall, it is clear to see how innovation has evolved over time from a historical perspective to one of the modern world. Each model compensates for the changes in the marketplace at the time as we live in a dynamic environment.

References:

Conway, S. and Steward, F. (2009) Managing and Shaping Innovation, New York: Oxford University Press Inc.

Drucker, P.F (2007) Managing in the Next Society, Revised Edition, Oxford: Butterworth-Heinemann

Trott, P. (2002) Innovation Management and New Product Development, 2^nd Edition, Essex: Pearson Education Ltd