This technical note provides a framework on innovation as a process ("how"), rather than just an outcome ("what"). It explains that innovation is a set of activities, incentives, and metrics that, when structured and implemented effectively, maximize the potential for novel ideas to be transformed into valuable solutions. By framing innovation as a process, decision-makers and leaders within organizations can actively manage this process to create new products, services, and business models. This note introduces insights from the operations management and new product development perspective as well as provides actionable levers to identify and manipulate the activities, incentives, and metrics that support the creation of new solutions.
ZS Associates, a global consultancy, has been hired by the head of marketing at the global pharmaceutical firm Rensselaer to identify a promising strategy to protect and grow Rensselaer's oncology business. Currently, Rensselaer is a large player in the market, but its intention is to grow this business into the "largest" in the industry within the next decade. Combined with this long-term ambition, Rensselaer faces the acute, near-term worry that one of its key products (generating almost one-fifth of sales) is facing patent expiration. Anna Schumacher is charged with presenting a recommendation to Rensselaer. She has identified several promising drug candidates (assets) that Rensselaer could pursue in its project-development portfolio. Now she must decide which of the assets Rensselaer should prioritize, given the firm's current strategy and objectives and the competing interests of several departments within the company. This disguised field-based case is taught at Darden in the second-year MBA elective "Managing Innovation." It can also be adapted for courses on new product development, core strategy, and project/program management. The case is also suitable for Executive MBA and Executive Education audiences, which are likely to have experienced portfolio decision-making. Given its content and context, it can also be particularly applicable for audiences in the consulting industry or with a background in the pharmaceutical industry or biological sciences.
Arnie Katz, chief product and technology officer at StubHub (SH), was helping to lead a contest intended to result in innovative and valuable new ideas. Product managers presented more than 100 new business initiative proposals to create new value for customers and provide additional revenue streams and differentiation opportunities. The secondary-ticket (resale) market in the United States was becoming increasingly fragmented, and SH was losing market share. It was imperative to move SH from being a trusted platform for conducting ticket-resale transactions to becoming an integral part of fans' experience of live events. This case is intended to be used in conjunction with a technical note on product-market alignment (PMA): ""Product-Market Alignment"" (UVA-OM-1706). Katz and his teams conduct successive rounds of investigation and data gathering across the three dimensions of PMA: defining the customer need, identifying business value, and evaluating operational capabilities. This case also presents a bridge between high-level operations strategy and a more granular discussion of process capabilities. Agile software development is discussed. This case is suitable for operations-management classes focusing on Agile, scale-up, product and project management, emerging technology, and new product development. It can be used with a graduate, undergraduate, or executive education audience.
The ability to achieve product-market alignment (PMA) differentiates businesses that will thrive from those that will fail. Yet many find it difficult to create-and sustain-products that continuously generate value, even as their markets change. Traditionally, managers seeking to develop new products or reexamine current offerings have relied on frameworks that compare customer views on the desirability of various product features to the financial potential of those features. This note expands this common approach to explicitly include the consideration of operational resources and capabilities. This includes the resources needed to develop the product or service and to deliver it. An organization's operational capabilities can dictate whether, how, and which potential new products can be built, so it is important to understand the interplay among marketing, finance, and operations when developing new products or refreshing existing ones. The framework in this note is useful both when developing new products and reexamining existing offerings. This note can stand alone, but works well when used with a case, ""Product Development at StubHub: Don't Stop Believin'"" (UVA-OM-1705), that explores a company's efforts to innovate and create new value for its customers.
This interactive exercise emulates a process wherein a virtual Card is created in a series of steps. It can be used to expose students to ideas and concepts in process analysis, management, and improvement. It may be used in classes focusing on operations management, project management, and software development. The simulation is run on the project-management web application Trello. It allows for simultaneous, real-time observation and collaboration between players. Students can observe other students working at the same time they are performing specific tasks. This exercise is suitable for students in either full-time or executive MBA programs, as well as executive education programs.