5.1. Structuring the Activities of Innovation

The term 'innovation' as used in this chapter refers to sustained product innovation in complex organizations, not to R&D management per se, technological evolution, start-ups, IT, or networks of alliances, except as these may be directly tied to product innovation. 'Product innovation' concerns bringing new products and services into customers' use, and encompasses the whole process of conceptualizing, developing, designing, manufacturing, marketing, and distributing new products. Research demonstrates that successful product innovation requires collaboration from people with diverse functional expertise who are skilled at appreciating and anticipating issues and constraints in other functions (Souder, 1987; Clark and Fujimoto, 1991). New product teams are more successful when they have a clear product concept, strong managerial support, resources, priorities, and autonomy of action within strategic guidelines (Adams, 2004). New products themselves are more successful if they meet customers' core needs (Cooper, 1998). 'Sustained' product innovation refers to continually generating streams of new products for a variety of markets with varying degrees of innovativeness over time, so that the firm can continually adapt to shifting customer needs or competitive encroachments, take advantage of new technologies, and create new opportunities (Tushman and O'Reilly, 1997). Sustained product innovation therefore is a 'scale up' of single projects ...

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