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INNOVATION MANAGEMENT Jiri Vacek Department of Management, Innovations and Projects UWB, Faculty of Economics Summer semester 2007/8

Lesson 1 : 

Lesson 1 Introduction Basic concepts Importance of innovations


CHARACTERISTICS OF SUCCESSFUL INNOVATING COMPANIES - 1 Systematic collection of all impulses that could lead to innovation Creativity of employees Ability to evaluate the possibility of the innovation idea Good team work Project-based approach and ability to manage projects


CHARACTERISTICS OF SUCCESSFUL INNOVATING COMPANIES - 2 Cooperation with external experts (universities, research laboratories…) Proper rate of risk-taking Employees’ motivation (the employees are willing to improve the product and the operation of the whole company) Continued education of employees Ability to finance the innovation activities

Definition of innovation - 1 : 

Definition of innovation - 1 “Technological innovations are defined as new products and processes and major technological modifications to products and processes. An innovation is considered performed if it is introduced to the market (product innovation) or implemented in the production process (process innovation). Innovation includes many research, technological, organizational, financial and commercial activities.

Definition of innovation - 2 : 

Definition of innovation - 2 R&D represents only one of these activities and can take place during various stages of the innovation process. It can play not only the role of the original source of the innovation ideas but also the role of problem solution framework, which can be turned to at any stage of the implementation.„ OECD, Frascati Manual 1992

Slide 7: 

Technological innovations – based on specific technology, invention, discovery, Social innovations – in critical historic periods more important than technological ones (mail, educational systém, social systém, health care, …)


DEGREE OF NOVELTY Incremental innovations Radical innovations Systemic innovations


INNOVATION PROCESS Research and development (R&D) Production Marketing Innovation is an opportunity for something new, different. It is always based on change. Innovators do not view any change as a threat but as an opportunity


FOCUS Use the limited resources in the most effective manner; focus on one of the following: Operational output Top-quality products Perfect knowledge of customers


RECOMMENDATIONS Solve the correct problem correctly – be effective and efficient Manage innovation as a project Analyze risks Use models, scenarios, computer simulation Study examples of succesful and unsuccesful innovation projects


WHAT TO DO Start with analysis and study of opportunities. Go among people, ask questions, listen Effective innovations are surprisingly simple. They must be focused on specific needs and on specific final products. Effective innovation start on a small scale. A successful innovation always tries to win a leading position, otherwise you create opportunities for your competitors.


WHAT TO AVOID Don’t try to be too “clever”. All that is too sophisticated will almost certainly go wrong. Don’t try to do too many things at once. Focus on the core of the problem. Don’t try to make innovations for the future but for today. An innovation can have a long-term impact but there must be an immediate need for it.

Three conditions for innovations : 

Three conditions for innovations Innovation means work, hard, concentrated and thorough work. If these qualities are lacking then there is no use for the big talent, cleverness or knowledge. Successful innovations must build on your strong points. The innovation must be important to the innovator. Innovation must focus on a market, must be controlled by the market (market-pull).

Lesson 2 : 

Lesson 2 Disruptive and open innovations

Innovation categories : 

Innovation categories sustaining – better products that can be sold with higher margin to demanding customers; incumbents win disruptive – commercialization of simpler, more user-friendly products, which are chepaer and targeted to new or less demanding customers; new entrants win

Key elements of disruption : 

Key elements of disruption Customers at each market has limited absorption capacity Technological progress usually is faster that the ability of the market to employ it. Companies focus on better products to be sold with higher margin to unsatisfied customers.

Sustaining vs. disruptive : 

Sustaining vs. disruptive Sustaining: focused on demanding customers; both incremetal and radical. Incumbents have resources and motivation. Disruptive: introduce products and services not as advanced as existing ones, but offering other advantages (simpler, chepaer, more user friendly, ...) and focus on new or less demanding customers.

Slide 19: 

Clayton M. Christensen: The Innovator´s Solution, Harvard Business Press, 2003

Slide 20: 

Due to technological progess the trajectory of the disruptive innovation after some time crosses the trajectory of demands of more demanding customers and starts to replace incumbents who are not principally ready to react adequatelly, as they are motivated to suceed at „better“ markets, not to defend themselves on „inferior“ ones.

Slide 21: 

Clayton M. Christensen: The Innovator´s Solution, Harvard Business Press, 2003

Slide 22: 

Clayton M. Christensen: The Innovator´s Solution, Harvard Business Press, 2003

Slide 23: 

Clayton M. Christensen: The Innovator´s Solution, Harvard Business Press, 2003

Slide 24: 

Clayton M. Christensen: The Innovator´s Solution, Harvard Business Press, 2003

Conditions of success - 1 : 

Conditions of success - 1 Disruption is successful, as it is easier to defeat competition that tries to escape than the competition who fights Innovace must be disruptive for all companies in the industry Ex. Internet – for Dell sustaining, they sold computers formerly by mail, phone, etc.

Conditions of success - 2 : 

Conditions of success - 2 Following the trajectory upwards to market tiers where it is possible to attain higher margins is what good manager is expected to do. Each company therefore prepares its own disruption. This is the innovator´s dilemma, but also the start of innovator´s solution. The advice to new, growing firms: focus on products and markets ignored or neglected ba incumbents.

Two types of disruption : 

Two types of disruption New markets: compete with non-consumption: simpler, more user frindly, can be used by less sophisticated customers (PC, transistor radio, desk copiers). Low-end: focus on lower tiers of main markets (minimills, discount stores, Korean auto-makers); motivate incumbents to leave the market


OPEN INNOVATION Chesbrough, H., “Open Innovation”, Harvard Business School Publishing, Boston MA, 2003 Closed innovation - requires control Open innovation companies use external as well as internal ideas and both external and internal ways to market internal ideas can be taken to the market through external channels to generate additional value

Slide 36: 

Chesbrough H.W.: The Era of Open Innovation, MIT Sloan Management Review, Spring 203, p. 35 - 41

Business model : 

Business model Formulate value proposition, i.e. the value delivered to the customer by the product based on specific technology. Identify market segment, ie. users to whom the technology brings value and performs the job to be done. Define structure of the value chain, required for the product creation and distribution. Value creation is necessary, however not sufficient condition of profitability; value creation is conditioned by: balance of forces among our business, suppliers and competitors presence of complementary assets (e.g. in production, distribution, etc.) necessary for supporting the company position in the value chain.

Business model– cont´d : 

Business model– cont´d Specify the mechanism of profit creation and evaluate product cost structure and target margin Describe the company position in the value network that connects suppliers and customers, including identification of potential alternative producers and competitors. Formulate competitive strategy enabling to the innovative company to gain and keep competitive advantage.

Product architecture : 

Product architecture Hierarchy of connections between disparate functions within a system

Interdependent Architecture : 

Interdependent Architecture

Interdependent Architecture : 

Interdependent Architecture changing one component requires changes in all other parts of the system, because the relationships between the parts are not clearly understood can be best managed through internal processes

Modular Architecture : 

Modular Architecture

Modular Architecture : 

Modular Architecture components could change without causing any change in other components modular design enables to assemble system more easily, from “plug and play” components whose interfaces are well understood modular architecture makes it easy for many companies to innovate components without worrying about possible impact on other parts of the system


IMPLICATIONS FOR NPD extended circle of company stakeholders - customers, NGOs, local and regional governments not only superior quality, but also environmentally friendly, aesthetically appealing new products designed for X, where X can be quite large and multi-faceted set after-sale service plays an increasing role – and brings increased turnover and profit

Lesson 3 : 

Lesson 3 Assessment of company innovation potential


COMPANY INNOVATION POTENTIAL A company with high innovation potential scores high in the following areas: Strategy and planning Marketing Technological process Quality management Logistics Human resources


INNOVATION POTENTIAL ASSESSMENT For a company, it is important to know its innovation potential. It can use the questionnaire For every of the six areas, there are six question, each with four possible answers. The answers are formulated so that they reflect the existing situation in the company.


A. STRATEGY AND PLANNING Idea about the company future Vision and employees Company innovation programs Plan modifications Financial indicators of the plan Project management


B. MARKETING Monitoring of current market trends Evaluation of the market competition position Customer-orientation Monitoring of customers’ attitudes to the company product Market information flow inside the company Marketing and financial control


C. TECHNOLOGICAL PROCESS Future company’s competitiveness in the industry Changes of technologies Collection of impulses for implementation of technology changes Evaluation of the return on investment Calculation of production costs and their monitoring Creation of resources for development


D. QUALITY, ENVIRONMENT Monitoring of changes conditioning the quality management in the company Employees’ personal contribution to the quality system External quality audit in the company Monitoring of the environmental impact Impact of quality monitoring on the company processes Covering of costs resulting from modifications of standards, regulations and legislation in the sphere of quality and environment


E. LOGISTICS Organization of purchase and distribution channels in the company Optimization of the company logistics Information and communication flows between the company and its partners Flexibility of logistics processes Introduction of innovations in logistics Logistics and financial control


F. ORGANIZATION AND HUMAN RESOURCES Employees satisfaction Employees motivation Management and communication Conflict resolution Company information system Company culture

Lesson 4 : 

Lesson 4 Company innovation system


COMPANY INNOVATION SYSTEM Company strategy Collection of innovation impulses Setting of priorities Looking for innovation ideas and their discussion Feasibility study Decision about project preparation Project preparation Project implementation Monitoring of innovation performance




REGULAR „INNOVATION“ MEETINGS Sort collected impulses according to their topics Select the technique for development of innovation proposals Present generated innovation proposals and prepare their preliminary evaluation Submit results to the management for the decision about the feasibility study performance for selected proposals Report the feasibility study results to the management for the decision about the project development Report on the state of the projects under development the state of the currently implemented projects the monitoring of already implemented projects

Lesson 5 : 

Lesson 5 Innovation impulses


SOURCES OF INNOVATION IMPULSES Internal environment Own R&D Technical divisions – design, technology Production divisions (production, provision of services) Marketing and sales Logistics (purchase and supplies) Guarantee and post-guarantee service Owners


SOURCES OF INNOVATION IMPULSES External environment Customers Suppliers Competitors Consultants, R&D institutions Schools, universities Professional publications, Internet Exhibitions, fairs, specialized seminars and conferences Advertising agencies Investors Media Authorized testing laboratories, certification agencies State institutions, public sector Legislation Globalization


MARKET PULL - R&D PUSH Market pull looking for the best way of satisfying a newly emerging customer demand improvement of the existing products, extension of the existing offer or decrease of price impulses for continuous, incremental innovations or for process innovations Research and development push looking for commercial use of new impulses resulting from the R&D results generating of new markets for conceptually different products


7 SOURCES OF INNOVATION IMPULSES (Drucker) INTERNAL unexpected event contradiction change of work process change in the structure of industry or market EXTERNAL Demographic changes Changes in the world view New knowledge

1. Unexpected event : 

1. Unexpected event Unexpected success 1.      What will the use of the offered opportunity mean to us? 2.      Where will its introduction take us? 3.      What do we need to do for its implementation? 4.      How can we achieve that? Unexpected failure Unexpected external event

2. Contradiction : 

2. Contradiction Non-compliance with economic reality Contradiction between reality and anticipations about it Contradiction between the anticipated and real behavior of customers and their values

3. Change of process : 

3. Change of process realize the necessity of change, identify the weak point of the chain be convinced that if something does not work the way it should, then it is necessary to attempt a change the solution must be convenient for those who will implement it. It must place moderate and feasible requirements

4. Change in the structure of industry and market : 

4. Change in the structure of industry and market Rapid growth of the industry Identification of new market segments Convergence of technologies (e.g. use of computers in telecommunications) Rapid change of the industry and resulting need of a structural change

5. Demography : 

5. Demography easiest to describe and to predict influence what will be bought, who and in which amounts will purchase

6. Change of attitudes : 

6. Change of attitudes change in the approach to health: health-care, food, spending the leisure time “upper-middle class”: a chance to offer non-standard services at non-standard prices increasing migration, feminism, regionalism etc Timing is essential - to be the first

7. New knowledge : 

7. New knowledge Based on convergence or synergy of various kinds of knowledge, their success requires, high rate of risk Thorough analysis of all factors. identify the “missing elements” of the chain and possibilities of their supplementing or substitution; Focus on winning the strategic position at the market. the second chance usually does not come; Entrepreneurial management style. Quality is not what is technically perfect but what adds the product its value for the end user


IMPULSES FROM THE MARKET ENVIRONMENT Customers product presentation realistic simple, demonstrative and precise moderate representative sample of customers Suppliers Competitors


INNOVATION IMPULSES OF THE R&D identification research: to monitor the scientific, technical and economic information and identify innovation impulses applicable in the company basic research applied research: acquire knowledge and means applicable for the meeting of specific, beforehand-defined goals development: systemic use of knowledge and means acquired in the applied research for the creation of a new or improvement of the existing product or for the creation or modification of processes


INTERNAL IMPULSES usually combined with external sources supported by creative techniques innovation tools REGISTER OF IMPULSES

Lesson 6 : 

Lesson 6 Innovation management tools INNOMAT (unless otherwise mentioned)

General Innovation Tools : 

General Innovation Tools









Slide 85: 

Specific techniques useful at the different change management process steps. INNOVATION MANAGEMENT TOOLS







Product Innovation Tools : 

Product Innovation Tools



„X“ - examples : 

„X“ - examples



House of Quality : 

House of Quality Interrelationships Technical Features Relationship between Customer Desired Traits and Technical Features Importance of Technical Features Importance of Traits to Customer Assessment of Competition Voice of the Customer

House of Quality:Steps for Generation : 

House of Quality:Steps for Generation 1. Identify Customer Attributes 2. Identify Supporting Technical Characteristics 3. Correlate Customer Attributes with Supporting Technical Features 4. Assign Priorities to Customer Requirements and Technical Features 5. Evaluate Competitors’ Stances and Products 6. Identify Technical Characteristics to Deploy in the Final Product Design

Managerial Innovation Tools : 

Managerial Innovation Tools



Slide 97: 


Slide 98: 






ISO 9000 : 

ISO 9000 ISO14000 refers to procedures for ensuring sustainable and environmentally friendly operations EIA – Environmental Impact Assessment



Process Innovation Tools : 

Process Innovation Tools











Lesson 7 : 


Innovation and creativity : 

Innovation and creativity creativity is manifested in the production of a creative work (for example, a new work of art or a scientific hypothesis) that is both original and useful innovation begins with creative ideas, creativity by individuals and teams is a starting point for innovation; the first is a necessary but not sufficient condition for the second

Slide 111: 

creativity results: in producing or bringing about something partly or wholly new; in investing an existing object with new properties or characteristics; in imagining new possibilities that were not conceived of before; and in seeing or performing something in a manner different from what was thought possible or normal previously.

Slide 112: 

Many creative ideas are generated when somebody discards preconceived assumptions and decides on a new approach or method that might seem to others unthinkable Serendipity - effect by which one accidentally discovers something fortunate, especially while looking for something else entirely

Quotations on serendipity : 

Quotations on serendipity "In the field of observation, chance favors only the prepared mind." Louis Pasteur "Serendipity. Look for something, find something else, and realize that what you've found is more suited to your needs than what you thought you were looking for." Lawrence Block "The most exciting phrase to hear in science, the one that heralds new discoveries, is not 'Eureka!', but 'That's funny …'" Isaac Asimov "In reality, serendipity accounts for one percent of the blessings we receive in life, work and love. The other 99 percent is due to our efforts." Peter McWilliams "Serendipity is looking in a haystack for a needle and discovering a farmer's daughter." Julius Comroe Jr. "Serendipity is putting a quarter in the gumball machine and having three pieces come rattling out instead of one—all red." Peter H. Reynolds "--- you don't reach Serendib by plotting a course for it. You have to set out in good faith for elsewhere and lose your bearings ... serendipitously." John Barth, The Last Voyage of Somebody the Sailor "Serendipity is the art of making an unsought finding." Pek van Andel (1994) source: wikipedia


BASIC CONCEPTS Creative thinking represents a combination of logic and intuitive approaches Being creative means dealing with the aspects and possibilities of today and tomorrow That requires a person to be open to everything new, do not stick to things that we are all used to, do not adhere to yesterday so much Creativity does not mean dreaming, it means productive managing of specific tasks. Only a creative approach to the problem solution can be successful.

Creativity in organizations : 

Creativity in organizations Amabile: to enhance creativity in business, three components are needed: Expertise (technical, procedural & intellectual knowledge), Creative thinking skills (how flexibly and imaginatively people approach problems), and Motivation (especially intrinsic motivation). Nonaka: creativity and knowledge creation are important to the success of organizations. In particular, he emphasized the role that tacit knowledge has to play in the creative process.

Creativity and economics : 

Creativity and economics Joseph Schumpeter: creative destruction - the way in which old ways of doing things are endogenously destroyed and replaced by the new. Paul Romer: the recombination of elements to produce new technologies and products and, consequently, economic growth. Creativity leads to capital, creative products are protected by intellectual property laws. The creative class as important driver of modern economies. Richard Florida in The Rise of the Creative Class, 2002 popularized the notion that regions with "3 T's of economic development: Technology, Talent and Tolerance" also have high concentrations of creative professionals and tend to have a higher level of economic development. Important aspect to understanding Entrepreneurship.

Stages of creative process : 

Stages of creative process Orientation: Need identification, intention to create Preparation: Information collection, problem formulation Incubation: seeking solution, evaluation of variants, unconscious thinking Illumination (Eureka!): synthesis, creation of ideas Realization: transformation of the idea into reality Verification: evaluation, learning, improvement

Barriers to creativity - 1 : 

Barriers to creativity - 1 The value of getting things right time can induce a fear of mistakes and experimentation. So can a blame culture where people become afraid of making mistakes. Managers who are not as secure as they should be can resist or block ideas that are not their own or which they see as threatening. A culture that over emphasizes cost containment, processes, consistency or efficiency. A reward system that too exclusively celebrates getting things done fast with no mistakes. A general fear of risk taking, wanting to analyze everything to death, to wait and see what others do in the market before acting.

Barriers to creativity - 2 : 

Barriers to creativity - 2 A lack of explicit funding for experimentation. A strict requirement to demonstrate the value of an idea before it has a chance to prove itself. A tendency to shoot down novel ideas as a way of scoring points. An over allegiance to past successes, proven experience and tried and tested methods. A suspicion of novelty, a fear of the unproven. A resistance to learning from mistakes or trial and error, a tendency to blame external factors or other people for failures rather than to learn from them. Short termism - a drive to meet short term financial goals rather than to invest in the future.

Barriers to creativity - 3 : 

Barriers to creativity - 3


CREATIVITY STIMULATION Keep in touch with creative people Accommodate the effort to the targets Evaluate and appreciate the effort Protect creative employees Leave them peace and time Provide them with security Tolerate failures Maintain creative atmosphere Evaluate the creative ideas quickly Be persistent - nothing comes for free

Fostering creativity : 

Fostering creativity Establishing purpose and intention Building basic skills Encouraging acquisitions of domain-specific knowledge Stimulating and rewarding curiosity and exploration Building motivation, especially internal motivation Encouraging confidence and a willingness to take risks Focusing on mastery and self-competition Promoting supportable beliefs about creativity Providing opportunities for choice and discovery Developing self-management (metacognitive skills) Teaching techniques and strategies for facilitating creative performance Providing balance


METHODS OF CREATIVE ACTIVITY increasing the individual’s or team’s creative potential contributing to the improvement of the creative work conditions facilitating the problem solution

Creative Process : 

Creative Process Problem Definition - including problem analysis, redefinition, and all aspects associated with defining the problem clearly. Idea Generation - The divergent process of coming up with ideas. Idea Selection - The convergent process of reducing all the many ideas into realistic solutions Idea Implementation - Turning the refined ideas in reality. Processes - Schemes and techniques which look at the overall process from start to finish (or at least 3 of the above 4 areas)..

Brain hemispheres : 

Brain hemispheres

Convergent vs. divergent thinking : 

Convergent vs. divergent thinking Convergent thinking involves aiming for a single, correct solution to a problem Divergent thinking involves creative generation of multiple answers to a set problem.


CREATIVITY TECHNIQUES trial and error brainstorming Inspirational questions psychological-cognitive, such as: Osborn-Parnes Creative problem solving (CPS) Synectics; Lateral thinking (courtesy of Edward de Bono), the highly-structured, such as: TRIZ (the Theory of Inventive Problem-Solving); ARIZ (the Algorithm of Inventive Problem-Solving), both developed by the Russian scientist Genrich Altshuller; and Computer-Aided Morphological analysis.

Trial and error : 

Trial and error select a possible answer, apply it to the problem and, if not successful, select (or generate) another possibility that is subsequently tried. The process ends when a possibility yields a solution. more successful with simple problems, often resorted to when no apparent rule applies. the approach need not be careless, for an individual can be methodical in manipulating the variables in an attempt to sort through possibilities that may result in success. Nevertheless, this method is often used by people who have little knowledge in the problem area

Trial and error - features : 

Trial and error - features solution-oriented: trial and error makes no attempt to discover why a solution works, merely that it is a solution. problem-specific: trial and error makes no attempt to generalise a solution to other problems. non-optimal: trial and error is an attempt to find a solution, not all solutions, and not the best solution. needs little knowledge: trials and error can proceed where there is little or no knowledge of the subject.

Inspirational questions - 1 : 

Inspirational questions - 1 What can I substitute to make an improvement? What if I swap this for that and see what happens? How can I substitute the place, time, materials or people? What materials, features, processes, people, products or components can I combine? Where can I build synergy? What part of the product could I change? And in exchange for what? What if I were to change the characteristics of a component? What happens if I warp or exaggerate a feature or component? What will happen if I modify the process in some way? What other market could I use this product in? Who or what else might be able to use it? What if I did it the other way round? What if I reverse the order it is done or the way it is used? How would I achieve the opposite effect?

Inspirational questions - 2 : 

Inspirational questions - 2 Who else has solved this problem? What similar area of expertise might have solved this problem? Is there anyone else in the company who knows how to solve this? What else could we use to solve the problem? Where else might this problem have been solved? What other companies might know how to solve this? What similar problems have been solved, and how? What other industries face the same problem and what do they do about it?

Inspirational questions - 3 : 

Inspirational questions - 3 How would they think? What objects and items would they be using? Where would they be doing it? How would they see the problem? What action would they take? How would they explain the problem? How would they solve the problem? What does your situation or your problem remind you of? What other areas of life/work experience similar situations? Who does similar things but not in your area of expertise?

Inspirational questions - 4 : 

Inspirational questions - 4 What would my perfect solution be? What effect would my ideal solution have? What if money/morals/laws did not matter at all? What would I do if I had unlimited power and resources? What would my ideal solution look like? Source:Wikipedia


CPS (OFPISA) six stage process, each with a divergent and a convergent phase. Objective Finding (or Mess Finding): Sensitise yourself for issues that need to be tackled. Fact Finding: Gather information about the problem. Problem Finding: convert a fuzzy statement of the problem into a broad statement more suitable for idea finding. Idea Finding: generate as many ideas as possible Solution finding: Generate and select obvious evaluation criteria and develop the short-listed ideas from Idea Finding as much as possible in the light of these criteria. Then choose the best of these improved ideas for further development Acceptance finding: How can the suggestion you have just selected be made up to standard and put into practice?

Synectics : 

Synectics problem solving approach that stimulates thought processes of which the subject is generally unaware. developed by William Gordon, central principle: "Trust things that are alien, and alienate things that are trusted." Encourages fundamental problem-analysis and, on the other hand, the alienation of the original problem through the creation of analogies It is thus possible for new and surprising solutions to emerge. Synectics is more demanding of the subject than brainstorming, as the many steps involved mean that the process is more complicated and requires more time and effort.

Synectics - steps : 

Synectics - steps Analysis and definition of the problem Spontaneous solutions Reformulation of the problem Creation of direct analogies Personal analogies (identification) Symbolic analogies (contradictions) Direct analogies Analysis of the direct analogies Application to the problem Development of possible solutions

Lateral thinking : 

Lateral thinking de Bono methods of thinking concerned with changing concepts and perception; reasoning that is not immediately obvious, ideas that may not be obtainable by using only traditional step-by-step logic shifting of thinking patterns, away from entrenched or predictable thinking to new or unexpected ideas. A new idea that is the result of lateral thinking is not always a helpful one, but when a good idea is discovered in this way it is usually obvious in hindsight, which is a feature lateral thinking shares with a joke We may need to solve some problems not by removing the cause but by designing the way forward even if the cause remains in place

Lateral thinking vs. critical thinking : 

Lateral thinking vs. critical thinking Critical thinking is primarily concerned with judging the truth value of statements and seeking errors. Lateral thinking is more concerned with the movement value of statements and ideas. A person would use lateral thinking when they want to move from one known idea to creating new ideas. Critical thinking is like a post-mortem while lateral thinking is like diagnosis.

Lateral thinking - inspiration : 

Lateral thinking - inspiration Random Entry: Choose an object at random, or a noun from a dictionary, and associate that with the area you are thinking about. Provocation: Declare the usual perception out of bounds, or provide some provocative alternative to the usual situation under consideration. Prefix the provocation with the term 'Po" to signal that the provocation is not a valid idea put up for judgement but a stimulus for new perception. Challenge: Simply challenge the way things have always been done or seen, or the way they are. This is done not to show there is anything wrong with the existing situation but simply to direct your perceptions to exploring outside the current area.

Six de Bono hats : 

Six de Bono hats White hat (Blank sheet): Information & reports, facts and figures (objective) Red hat (Fire): Intuition, opinion & emotion, feelings (subjective) Yellow hat (Sun): Praise, positive aspects, why it will work (objective) Black hat (Judge's robe): Criticism, judgment, negative aspects, modus tollens (objective) Green hat (Plant): Creativeness, Alternatives, new approaches & 'everything goes', idea generation & provocations (speculative/creative) Blue hat (Sky): "Big Picture," "Conductor hat," "Meta hat," "thinking about thinking", overall process (overview)

Example - meeting : 

Example - meeting The meeting may start with everyone assuming the Blue hat to discuss how the meeting will be conducted and to develop the goals and objectives. The discussion may then move to Red hat thinking in order to collect opinions and reactions to the problem. This phase may also be used to develop constraints for the actual solution such as who will be affected by the problem and/or solutions. Next the discussion may move to the (Yellow then) Green hat in order to generate ideas and possible solutions. Next the discussion may move between White hat thinking as part of developing information and Black hat thinking to develop criticisms of the solution set.


TRIZ, ARIZ ?????? ??????? ???????????????? ?????” (Teoriya Resheniya Izobretatelskikh Zadatch) = Theory of inventive problem solving Inventing is the removal of a technical contradiction with the help of certain principles

TRIZ process for creative problem solving : 

TRIZ process for creative problem solving

Contradictions : 

Contradictions Inventive problems stem from contradictions (one of the basic TRIZ concepts) between two or more elements, such as, "If we want more acceleration, we need a larger engine; but that will increase the cost of the car," that is, more of something desirable also brings more of something less desirable, or less of something else also desirable. These are called Technical Contradictions. Physical or inherent contradictions: More of one thing and less of another may be needed. For instance, a higher temperature may be needed to melt a compound more rapidly, but a lower temperature may be needed to achieve a homogeneous mixture.

Matrix of Contradictions : 

Matrix of Contradictions 40 inventive principles rows: 39 system features that one typically wants to improve, such as speed, weight, accuracy of measurement and so on. columns: typical undesired results. matrix cell: points to principles that have been most frequently used in patents in order to resolve the contradiction.

Morphological analysis : 

Morphological analysis designed for multi-dimensional, non-quantifiable problems where causal modeling and simulation do not function well or at all Fritz Zwicky (1967, 1969) - exploring all the possible solutions to a multi-dimensional, non-quantified problem complex

Morphological analysis - steps : 

Morphological analysis - steps The problem to be solved must be very concisely formulated. All of the parameters that might be of importance for the solution of the given problem must be localized and analyzed. The morphological box or multidimensional matrix, which contains all of the potential solutions of the given problem, is constructed All the solutions contained in the morphological box are closely scrutinized and evaluated with respect to the purposes that are to be achieved. The optimally suitable solutions are selected and are practically applied, provided the necessary means are available.

Example 1 - energy conversion : 

Example 1 - energy conversion

Example 1 - continued : 

Example 1 - continued K->E->C: hydroelectric generation which is then stored in a battery. C->T->K: internal combustion engine (chemical energy transformed into thermal energy) leading to energy being stored in a flywheel.  E->C->T: common refrigerator

Example 2 – cardboard packaging : 

Example 2 – cardboard packaging solution: throwaway beverage packaging

Think outside the box : 

Think outside the box

16 dots, 6 lines : 16 dots, 6 lines

Dots and lines - generalization : 

Dots and lines - generalization a three-dot-by-three-dot puzzle requires four lines. a four-dot-by-four-dot puzzle requires six lines, a five-dot-by-five-dot puzzle requires eight lines, and an n-dot-by-n-dot puzzle requires 2(n – 1) dots.

Puzzle Archive : 

Puzzle Archive

Lesson 8 : 

Lesson 8 TEAM WORK


TEAM DEFINITION group of people whose individual members share a common goal their expert skills and personal abilities are complementary its members work activities and skills are purposefully and smoothly linked together.


TEAM EFFECTIVENESS dynamic balance among Necessity to perform a joint task Individual needs of team members Necessity to maintain a team synergic effect: every member contributes to performance of the mutual task adopts specific roles necessary for the effective team functioning. contributes to the satisfaction of the individual needs of other team members

Successful team characteristics : 

Successful team characteristics Team members identify themselves with the team There is relaxed, non-bureaucratic atmosphere, interest in achieving joint goals, optimistic work mood. Tasks and goals are clear to all members and all identify themselves with them. Differences in opinions are accepted. Disputable points are discussed and a solution is looked for. Communication is open, spontaneous, and fluent. Team members are sincere to each other, listen to each other. Criticism is constructive and it is not taken personally. Team management is of participative, eventually consulting, character. Rules are clearly defined.

Unsuccessful team characteristics : 

Unsuccessful team characteristics Team members do not identify themselves with team. Strained atmosphere, blocked communication is. Team members hide their real feelings and opinions. Autocratic supervision, discussion about goals and tasks not allowed. Diversity of opinions leads to conflicts. Disagreement is not openly expressed; the decision is undermined. Personal issues are settled by means of criticism. People gossip. The rules are not clearly defined.

Team structure and organization : 

Team structure and organization Formal: clearly visible, represents distribution of work among the team members in order to ensure performance of certain functions. Informal: influences procedures, in which things are actually done – prestige of people, their influence, power, seniority, ability to convince others play roles there.


TEAM DEVELOPMENT Forming Storming Norming Performing Dissolving


ROLES IN THE TEAM Initiator Company employee Chairman Forming person Operational employee Coordinator Resource researcher Observer Team worker Finisher Orienting member Energy supplier Recorder Harmonizer

Advantages and disadvantages of team work : 

Advantages and disadvantages of team work (+) Mutual cooperation and support (?) teams often accept more risk than individuals (+) can produce high quality ideas by accepting the conflict and exploring differences in the individual members’ opinions

Group cohesion : 

Group cohesion (+) larger degree of cooperation, better communication, higher resistance against frustration, lower fluctuation and absences, lower level of tolerance towards lazy people (-) difficult for new members, limited possibility to enforce new ideas, opposition against changes in work procedures, often overprotective against outsiders

Team forming by a manager : 

Team forming by a manager

Lesson 9 : 



DECISION PROCESS Identify the problem Specify objectives and decision criteria Develop alternatives Analyze and compare alternatives Select the best alternative Implement the chosen alternative Monitor the results


REASONS FOR POOR DECISIONS Mistakes in the decision process quick decisions failure to recognize consequences manager´s ego – unwillingness to admit mistake, unability to make a decision Bounded rationality limits – not optimum, but satisfactory solution Suboptimization departmentalization


MODELS Model: abstraction of reality, adequately portrays real-life phenomena Physical Schematic Mathematical Computer


USE OF MODELS The purpose of the model How to use model to generate results How results are interpreted and used What assumptions and limitations apply


BENEFITS OF THE USE OF MODELS Easy to use, less expensive Require to organize and quantify information, indicate need of additional information Provide a systematic approach to problem solving Increase understanding of the problem Enable to ask „what if …?“ Require users to be very specific about objectives Serve as a consistent tool for evaluation Enable to bring power of mathematics Provide standardized format for problem analysis


LIMITATIONS OF MODELS Overemphasis of quantitative over qualitative information Incorrect application, misinterpretation of results Highly sophisticated models in hands of users who cannot fully comprehend the conditions and limitations of the model use Model building as an end to itself


QUANTITATIVE APPROACHES Linear programming Queing techniques Inventory models Project models (PERT, CPM, TOC) Forecasting models Statistical models Quantitative methods are typically more difficult to understand without a fair amount of explanation and demonstration


TRADE-OFFS List advantages and and disadvantages of opposing courses of action to gain better understanding of the consequences of potential decisions. Example – quality control


SENSITIVITY ANALYSIS How sensitive the solution is to a change in one or more parameters Example: ? = (A2 – A1) / 0,5*(A2 + A1)


THE SYSTEM APPROACH interrelations among subsystems and/or elements system boundary – environment Feedback Consequence: evaluate „optimal“ solutions in terms of larger framework


DECISION ENVIRONMNENTS CERTAINTY – relevant parameters have known values RISK – certain parameters have probabilistic outcomes UNCERTAINTY – it is impossible to assess the likelihood of various possible outcomes


DECISION THEORY Identify possible future conditions – states of nature Develop a list of possible alternatives Determine or estimate payoff associated with each alternative for every possible state of nature Estimate the likelihood of every possible state of nature (if possible) Evaluate alternatives according to decision criterion and select best alternative



Decision making under certainty : 

Decision making under certainty Choose the alternative with the highest payoff

Decision making under uncertainty : 

Decision making under uncertainty Maximin – determine the worst possible payoff for each alternative, and than choose the alternative with the „best worst“ Maximax – determine the best possible payoff, and choose the alternative with this payoff Laplace - determine the average payoff for each alternative, and choose the alternative with the best average Minimax regret - determine the worst regret for each alternative, and than choose the alternative with the „best worst“

Slide 186: 

Maximin: worst payoffs are the best is 10 - choose small facility Maximax: the best overall payoff is 16 – choose large Laplace: The best average is 10,33 - choose medium

Slide 187: 

Minimax regret: Opportunity loss, regret: subtract every payoff in a column from the largest positive payoff in that column The lowest regret is 4 – choose medium

Decision making under risk : 

Decision making under risk Expexted monetary value (EMV) criterion: calculate expected value (EV) for each alternative and select one with the highest EV Appropriate when decision maker is risk-neutral




DECISION TREES Particularly useful for situations that involve sequential decisions Nodes: decision points ? chance events ? Branches leaving ? alternatives ? states of nature




EXPECTED VALUE OF PERFECT INFORMATION (EVPI) Option: postpone a decision, purchase additional information Question: is the cost of the option less than the expected gain? upper limit decision maker should be willing to spend to obtain perfect information

EVPI - example : 

EVPI - example expected payoff under certainty = 0,30*10 + 0,50*12 + 0,20*16 = 12,2 EVPI = 12,2 – 10,5 = 1,7



Sensitivity Analysis : 

Sensitivity Analysis


LINEAR PROGRAMMING (LP) Objective function – maximization or minimization Decision variables Constraints – feasible solution space Parameters – fixed values


LP - ASSUMPTIONS Linearity (objective function &constraints) Divisibility (non-integer values of variables acceptable) Certainty (values of parameters known, constatnt Non-negativity (negative values of variables unacceptable)


LP – EXAMPLE 1 Decision variables: x1, x2, x3 – quantities of products to produce Maximize profit 5 x1 + 8 x2 + 4 x3 Subject to constraints: Labor 2 x1 + 4 x2 + 3 x3 ? 250 hours Material 7 x1 + 6 x2 + 5 x3 ? 100 pounds Product 1 x1 ? 10 units Non-negativity x1, x2, x3 ? 0

LP – solution 1 : 

LP – solution 1

LP – Graphical method : 

LP – Graphical method For two-variable problem, graphical method can be used Example: Minimize P = 8x + 12y Subject to 5x + 2y = 20 4x + 3y = 24 y = 2 x, y = 0 Solution: x = 4,5, y = 2, P = 60

LP – Graphical method : 

LP – Graphical method

Lesson 10 : 


Conflict management : 

Conflict management Conflict cannot always be avoided, but it can be managed Sources of conflicts: Aggressive or conflict-prone personality Ambiguous or conflicting roles, interdependence Difference in objectives, values, perceptions Inadequate authority, oppressive management Inadequate resources Unsatisfactory communication

Conflict consequences : 

Conflict consequences Positive: Competition tends to enhance the general welfare, if the conflict level is not too high Loyalty increases when people unite against a common foe If problems are recognized, solutions may be forthcoming Negative: Activities, not results, become important Attack individual rather than problem Blocked communication Need of strong leaders

Two-dimensional model of a conflict : 

Two-dimensional model of a conflict

Conflict resolution styles - 1 : 

Conflict resolution styles - 1 Avoidance: no assertiveness, no cooperation – problem solution postponed Accommodation: no assertiveness, cooperation – give in Collaboration: assertiveness and cooperation -problem solving, win-win Competition: assertiveness, no cooperation -win-lose, adhere to rules, do not seek to harm the other’s self-image, impulse to change and improve the organization Authoritarianism: aggression, no cooperation

Conflict resolution styles - 2 : 

Conflict resolution styles - 2 Smoothing: low assertion, low cooperation – focus on similarities, seeks resolution, move parties to a common goal Superordinate goals: increasing assertiveness, increasing cooperation – attempt to find a common set of objectives, forget the differences Bargaining (compromise): moderate assertion, moderate cooperation – give-and-také, both parties satisfy some of their needs

Lesson 11 : 

Lesson 11 COMPANY INNOVATION CULTURE „Successful companies address the human needs and give them priority“ Thomas J. Peters, Robert H.Waterman


COMPANY CULTURE Organization culture: a pattern of ideas, opinions and attitudes that majority of people in the company understands, respects, acknowledges, adopts and relates to them. Influences the company’s economic success and competitiveness

Main elements of the company culture : 

Main elements of the company culture Behavior standards Key values Management and leadership style Roles Organizational structure and diversification Influenced by: Organization’s strategy Organization’s system Level of cooperation between the individual organization structures Employees’ abilities

Four types of company orientation : 

Four types of company orientation Organizations preferring power roles tasks human side of their processes and people


MANAGEMENT STYLES shift from directive to participative style of management 4 basic management styles: Exploiting authoritative Benevolent authoritative Consultative Participative

Slide 213: 

Motivation / performance cycle (MPC)

Motivation / performance cycle (MPC) : 

Motivation / performance cycle (MPC) Are the individuals´s needs satisfied? / Need creation Are organization and manager aware of needs? Are they willing and able to offer need satisfiers? Organization and manager offer extrinsic and intrinsic need satisfiers and rewards The individual searches for alternatives, evaluate the consequences of possible actions, makes a decision

MPC- continued : 

MPC- continued The individual is motivated to expend effort and does so Does the individual have appropriate training, abilities, and tools, and know the objective? Performance Does the individual receive need satisfier? Do the organization and manager provide need satisfier?

MPC- continued : 

MPC- continued Does the individual reassess the situation? Will the individual be motivated in the same way? Note: normal – individual italic – organization and manager

Hierarchy of needs (A. Maslow) : 

Hierarchy of needs (A. Maslow) Physiological needs – immediate survival, food, shelter, clothing, bodily needs Security needs – stability, protection, freedom from fear, provisions for the future Social needs – acceptance, affection, affiliation, love, interaction Esteem needs – self-esteem, esteem of others, status, power, autonomy, competence, prestige, recognition Self actualization – achieving one’s full potential, personal growth, creative fulfillment

Characteristics of peak performers : 

Characteristics of peak performers Vision and the ability to plan strategically The drive to surpass previous level of performance High levels of self-confidence and self-esteem A high need for responsibility and control Strong communication and salesmanship skills

Characteristics of peak performers - 2 : 

Characteristics of peak performers - 2 The habit of mentally rehearsing before critical events Little need for outside praise or recognition A willingness to take risks The ability to accept feedback and make self-corrections An ownership attitude toward their ideas and products

Need satisfiers : 

Need satisfiers Frederick A. Herzberg Hygiene factors – dissatisfiers, extrinsic (pay, supervision) Motivators – satisfiers, intrinsic (achievement, recognition for performance)

The management challenges : 

The management challenges Recognizing needs The changing nature of individual needs, expectations The impact of cultural diversity on a manager’s ability to recognize needs Being able to choose the right satisfiers and then being able to obtain and offer them Managing the process aspects of the cycle

Lesson 12 : 


Paradigm shifts : 

Paradigm shifts Information and knowledge society Lifelong learning Lean companies, networking Information and communication technologies (ICT) e-business, e-commerce, e-learning, e-government, e-…, m-…

Learning organization : 

Learning organization The education that does not follow the specific objective and does not improve the results is a luxury the company cannot afford. Learning has been effective if a person knows something he has not known earlier and he can do something what he has not been able to do earlier The mission of the managerial education is the development of the competencies and performance of managers Learn by doing - follow what your more experienced colleagues (but experiment as well)


KEY COMPETENCIES technical qualification - technical knowledge, skill, talent and attitudes related technologic, economic, financial, structural and procedural aspects of work Soft skills, behavior and acting - related to work with people, influencing the communication and dealing with individuals and groups both within and outside the company.

Company training programs : 

Company training programs Training programs content, methods and goals must take into account the basics of the managerial work in real situations; Attention should be paid to the improvement of behavior and motivation and not only to acquisition of technical skills; The active training methods should be preferred before passive ones. The abstract concepts should be rooted in the practical experience of companies.

Design of training programs : 

Design of training programs Define before the start of the training: What we want to achieve (goals) How we want to achieve the goals (methodology) How the progress will be monitored (monitoring) How the results will be evaluated (evaluation)

Lesson 13 : 


Slide 230: 

Adapt the knowledge to your culture, local conditions, … But at the same time, do not over-adapt, try also to affect your environment Good luck

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