Transactional Leadership and Innovation Strategies: A Comprehensive Guide - Prof. Canterin, Sbobinature di Leadership e comunicazione

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LEADERSHIP L1) Leadership vs Management: Leaders manage, and managers lead, but the two activities are not synonymous Management: Get things done through other people in organisations - Functions of a manager (Fayol): Planning, organizing directing and controlling activities and resources - Roles of a manager (Mintzberg) ▪ Interpersonal: ceremonial/symbolic duties ▪ Informational: collect/transfer information ▪ Decisional: choose between alternatives - Skills of a manager (Katz) ▪ Technical: apply specialised expertise ▪ Human: work with other people ▪ Conceptual: diagnose complex situations Leadership: Influence (group of) individuals toward the achievement of a vision or goals - Create and communicate a vision: Inspire, set the tone, articulate a vision, communicate and align - Manage people: Motivate, influence, changing behaviors - Provide support for performance achievement. Leadership is a process whereby an individual influences a group of individuals to achieve a common goal 1. leadership is a process between a leader and followers 2. leadership focuses on goal accomplishment 3. leadership involves social influence 4. leadership occurs at multiple levels in an organization ❖ LEADERSHIP FUNCTIONS Purpose: (qual è lo scopo dell’azienda?) ▪ Envision ▪ Align (communicate) ▪ Establish direction People: (come raggiungono questo scopo a livello di persona?) ▪ Engage, inspire, motivate ▪ Lead by example ▪ Empower, support, coach Performance: ▪ Stimulate ▪ Challenge ❖ LEADERSHIP TRAITS (caratteristiche genetiche) Leaders were born with some inborn abilities to lead. A leader trait is a physical or personality characteristic that can be used to differentiate leaders from follower, like intelligence, dominance, self-confidence, level of energy and activity, task-relevant knowledge. There is no study that was able to identify a statistical correlation between personality traits and leadership effectiveness (si può solo dire che nella maggior parte dei casi I leaders hanno come caratteristica la ”openness to experience”) The Trait Theory of leadership is a concept that leaders are born with distinct characteristics. In other words, leaders have inheritable traits. Early research introduced that this theory of leadership innately lives within certain people. The 5 big Personality Dimensions are: • Extraversion: Outgoing, Talkative, Sociable, Assertive, Optimistic, Warm (vs Introversion: Private, Independent, Work alone, Reserved) • Agreeableness: Trusting, Humble, Tactful, Good-natured, Cooperative, Soft-hearted (vs Disagreeableness: Sceptical, Questioning, Tough, Rude) • Conscientiousness: Dependable, Responsible, Achievement oriented, Persistent, Orderly, Neat (vs Unscrupulousness: Impulsive, Careless, Irresponsible) • Emotional stability: Relaxed, Secure, Unworried, Rational, Unresponsive, Guilt-free (vs Emotional instability: Excitable, Worrying, Reactive, High strung, Alert) • Openness to experience: Intellectual, Imaginative, Curious, Broad-minded, Original (Vs Tight-mindedness: Unimaginative, Dull, Literal minded) Can leadership be learned? Yes, you can learn how to be a leader, as any other talent or skill. Through practice, learning, dedication and motivation it is possible to overcome nature. ❖ LEADERSHIP BEHAVIOURS Two main dimensions: 1. CONCERN FOR PEOPLE (Y axis) → Relationship-oriented behaviors Focus on people’s wellbeing, interest in promoting collaborative interaction among organizational members and supportive social climate. 2. CONCERN FOR PRODUCTION (X axis) → Task-oriented behaviors Focus on tasks, interest in structure, control and routines to attain organizational goals and objectives. ➢ MANAGERIAL GRID – Blake & Mouton (when these behaviors have positive effects in a company) High task orientation would work better if we have an unpopular decision and if time is a serious issue ▪ Country-club management: A friendly climate brings people to fair productivity. 2L) TRANSACTIONAL LEADERSHIP: involves motivating and directing followers primarily through appealing to their own self-interest. Sequence of transactions where the actions of subordinates result in either a reward or a punishment. (contingent reward system with a goal, reward and punishment) Clarifying expectation and appealing people self- interest. He helps the people in setting their individual goals. Transactional Leadership is effective to reach expected outcomes Leadership in cui vengono usate ricompense in cambio di prestazioni, il leader si avvale di ricompense (bonus e elogi se lavorano duramente) e punizioni per motivare i dipendenti a raggiungere gli obiettivi dell'organizzazione. (si adatta ai leader che hanno poca autorità e per coloro che vogliono semplicemente garantire operazioni quotidiane senza intoppi) (Example: focus on achieving clear and well-defined results) Contingent rewards: leader collegano l'obiettivo alle ricompense, chiariscono le aspettative, forniscono le risorse necessarie, stabiliscono obiettivi concordati reciprocamente e forniscono vari tipi di ricompense per prestazioni di successo. Transactional leaders link the goal to rewards, clarify expectations, provide necessary resources, set mutually agreed upon goals, and provide various kinds of rewards for successful performance. Active Management by Exception: Leader monitora il lavoro del team dando direttive e azioni correttive per prevenire errori e assicurare un alta performance Transactional leaders actively monitor the work of their team/subordinates/final output, watch for deviations from rules and standards and provides specific instruction/corrective action in order to prevent mistakes to ensure high performances. Passive Management by Exception: Leader interviene solo se gli standard non sono raggiunti, possono usare un sistema di punizioni Transactional leaders intervene only when standards are not met or when the performance is not as per the expectations. They may even use punishment as a response to unacceptable performance. (Example: NO passive manag. Leader actively monitors their work, intervening before Paola could make mistakes.) Laissez-faire: leader fornisce un ambiente in cui il team prende decisioni. Il gruppo spesso manca di direzione, il leader stesso abdica alle responsabilità ed evita di prendere decisioni. The leader provides an environment where the subordinates get many opportunities to make decisions. The leader himself abdicates responsibilities and avoids making decisions and therefore the group often lacks direction. TRANSFORMATIONAL LEADERSHIP leaders take an active role in encouraging change, and they often look for ways to challenge and change the existing structure in order to foster growth. Characteristics are: Individualized consideration and Intellectual stimulation. Transformation Leadership is used to reach “performance/goal beyond expectations” È uno stile di leadership basato sulle relazioni/ sulla costruzione di una squadra attraverso la collaborazione e la motivazione dei subordinati. leader guarda avanti rispetto alla semplice gestione delle operazioni quotidiane e ha il desiderio di cambiare il suo team, cerca di connettersi con i dipendenti nel tentativo di formare un legame emotivo e cerca di sviluppare relazioni con i dipendenti nonostante li tratti in modo equo. Fornisce incoraggiamento ai dipendenti che ripongono la loro fiducia e fede nel leader. (si adatta ai leader che hanno carisma e influenza e desidera il cambiamento nei dipendenti per il bene dell'organizzazione) (example: trait tra push people to reach goal beyond expectation) Characteristics of Transformational Leadership are: - Individual Consideration (IC): Transformational leaders demonstrate genuine concern for the needs and feelings of followers. This personal attention to each follower is a key element in bringing out their very best efforts. (HOW: empowerment, Support and encouragement, coaching) (example: “taking care of individual’s problems and dedicating his time to each of them“) (example: which kind of problems are affecting the project?, I’m always available to talk if needed! You can have some days off and take some time for yourself if this can help you. You know we have time) - Intellectual Stimulation (IS): the leader challenges followers to be innovative and creative. A common misunderstanding is that transformational leaders are "soft," but the truth is that they constantly challenge followers to higher levels of performance. (HOW: Encourage employees to challenge the status quo and seek innovative and creative solutions) (example: Let’s see if you can make the miracle! Let’s see if you can surprise the customer so much to change his own very conservative nature.) - Inspirational Motivation (IM): Transformational leaders have the ability to inspire and motivate followers. Combined these first two I's are constitute the transformational leader's charisma. (HOW: Attractive vision communicated with emotional arguments) (example: (“inspiring and motivating Content’s employees with his vision “) - Idealized Influence (II): the leader serves as an ideal role model for followers; the leader "walks the talk," and is admired for this. (HOW: Sacrificing for the good of the group, Being a role model, Ethical behavior) (example: is a model to be followed) “walks the talks” → transformational leadership LAISSEZ FAIRE LEADERSHIP Leadership che permette ai follower di prendere le proprie decisioni in autonomia senza interventi e guida da parte del leader Is a type of leadership style that allows followers to operate independently and make their own decisions without much guidance or intervention from the leader. It’s based on the idea that people are capable of making their own decisions and should be allowed to do so, as long as it doesn’t contradict the values of the organization. is a popular choice in team environments because it allows members to work at their own pace and encourages creativity, may lead to higher productivity and better morale. This kind of leader has an inspiring vision for the future, motivates employees to achieve high standards, provides support and encourages collaboration among team members. give employees the freedom to make decisions. Laissez faire leaders are typically seen as passive observers who allow events to happen without interfering and they tend to avoid conflict and rely on the status quo FULL-RANGE MODEL: from laissez-faire to transformational leader (Avolio and Bass 1991) Transformational leadership → Inspire followers to transcend their own self- interests and who are capable of having a profound and extraordinary Effect on followers. Transactional leadership → Guide followers in the direction of established goals by clarifying role and task requirements. SERVANT LEADERSHIP →“The Servant-Leader is servant first. . .. It begins with the natural feeling that one wants to serve, to serve first”. Leader si concentra sui bisogni degli altri prima di considerare i propri. La sua preoccupazione è quella di servire prima di tutto, non di mettere se stesso al centro e permettere il rendimento e la crescita dei “seguaci” A servant leader focuses on the needs of others, especially team members, before he considers his own. Servant leadership is a leadership approach that puts serving others above all other priorities. A servant leader is concerned with making followers grow; his concern is towards serving first of all, not puttig himse lf at the center and enable performance and growth of the “followers”. Rather than managing for results, a servant leader focuses on creating an environment in which their team can thrive and get their highest-impact work done. You acknowledge other people's perspectives, give them the support they need to meet their work and personal goals, involve them in decisions where appropriate, and build a sense of community within your team. This leads to higher engagement, more trust, and stronger relationships with team members and other stakeholders. It can also lead to increased innovation. (example: leader provides empowering and accountability, humility, interpersonal acceptance and direction. He shows high supportive behaviors.) Need to serve and motivation to lead. (Is the person who gets at the disposal of the people that he is supposed to lead Aiutano/guidano le persone a scalare le montagne, sono come dei coach che supportano il team a dare il meglio) Characteristics/Behaviours of a Servant Leadership: • Empowerment: fostering a proactive (favorire), self-confident attitude among followers and five them a sense of personal power • Humility: put one’s own accomplishments and talents in proper perspective, Servant-leaders admit they can learn from other’s experience 1. Self-Actualization (autorealizzazione): ability to express our potential, to grow and learn new things. Make career and have responsabilities 2. Esteem (stima): the fact that we are recognized, ability to achieve some performances that are recognized by other people. 3. Social: need to socialize with other people, to belong in a group 4. Safety (sicurezza): being/feeling safe, safe place to live and a stable work (indeterminato) 5. Physiological (fisiologici): all those needs that are related to our survival (food, money..) As the basic needs are satisfied, individuals seek to satisfy higher needs. If the basic needs are not met efforts to satisfy higher needs are postponed. The behavior of individual is determined by his strongest need. Satisfied needs will no longer motivate. Motivating a person depends on knowing at what level that a person is on the hierarchy. MCCLELLAND’S MOTIVATIONAL NEED THEORY McClelland identified three types of basic motivating needs classified as: • Need for Achievement (n/ACH): The Need to excel and succeed People with a high need for achievement/risultato seek to excel and tend to avoid both low risk and high-risk situations. Has a strong need to set and accomplish challenging goals. Takes calculated risks to accomplish their goals. Achievers need regular feedback in order to monitor the progress of their achievement. They prefer either to work alone or with other high achievers. • Need for Affiliation (n/AFF): The need for friendly and close interpersonal relationships Wants to belong to the group, need to feel accepted by other people. Wants to be liked and will often go along with whatever the rest of the group wants to do. Favors collaboration over competition. Doesn't like high risk or uncertainty. • Need for Power (n/PWR): The need to influence the behaviour of others Wants to control and influence others, likes to win arguments, enjoys competition and winning and Enjoys status and recognition. A person’s need for power can be one of two types, personal and institutional. Those who need personal power want to direct others, and this need often is perceived as undesirable. Persons who need institutional power want to organize the efforts of others to further the goals of the organization. Managers with a high need for institutional power tend to be more effective than those with a high need for personal power. HERZBERG’S TWO FACTOR THEORY/ HYGIENE THEORY OF MOTIVATION The opposite of satisfaction is not dissatisfaction, and he believes that removing dissatisfying characteristics from a job does not necessarily make the job satisfying. @ Hygiene factors produce no growth in workers output, they only prevent losses in workers performance. When Hygiene factors are adequate, people will not be dissatisfied (neither they will be satisfied). Hygiene factors are necessary to maintain a reasonable level of not-dissatisfaction in employees. – Any increase beyond this level will not provide any satisfaction to the employees. – Any cut below this level will dissatisfy them. @ Motivational Factors factors are responsible to increase the satisfaction levels of employees. – An increase in these factors will satisfy the employees; however, any decrease in will not affect their level of dissatisfaction. – These increased level of satisfaction in the employees, can be used in motivating them for higher output. ADAM’S EQUITY THEORY OF MOTIVATION The ration Output/input must be equal! People are motivated because they compare input and outcomes of themselves with those of other people People are motivated to maintain fair relationship between their performance and reward in comparison to others. ➔ INPUT: Individual’s contribution to an Organization. (Time, Effort, Loyalty, Hardwork, Commitment, Abilities) ➔ OUTCOMES: Organization’s return to an Individual (Job Security, Salary, Employee benefits, Recognition, Reputation, Sense of achievement) Equity theory works on two assumptions: – Individuals make contribution (inputs) for which they expect certain rewards (outcomes). – Individuals decide if a particular exchange is satisfactory or not, by comparing their inputs and outcomes with those of others. And try to rectify any inequality (correggere qualsiasi diseguaglianza). EXCHANGE RELATIONSHIP may be of 3 types: ▪ Underpaid inequity: The person perceives that his outcomes are more as compared to his inputs in relation to others. – In this case person experience dissonance (senso di insoddisfazione). ▪ Overpaid Inequity: The person perceives that his outcomes are more as compared to his inputs in relation to others. – In this case person experience guilt feeling. ▪ Equity: The person perceives that his outcomes in relation to his inputs are equal to those of others. – In this case person experience satisfaction Consequences of Inequity: when employees perceive an inequity, they can be predicted to make one of six choices: Δ They change their inputs. Δ They change their outcomes. Δ They distort perceptions of self. (distorcono la percezione di sé) Δ They distort perceptions of others. Δ They choose a different referent. (scelgono un referente diverso) Δ They leave the field. (lasciano il campo) MBO MANAGEMENT BY OBJECTIVES (Popular Technique of Appraisal of managerial performance.) A process whereby superiors and subordinates jointly identify the common objectives to make best of organizational resources. DEF: Management Model based on Objectives that are agreed on between Management and Employees The aim is to reach overall Strategic Goals for the Organization but also Individual Goals for the Employees This Model integrates Employees in the planning process what leads to Participation, Motivation and Commitment. ADVANTAGES: - Improves employee motivation - Improves communication in the organization - Flags up and highlights training needs required to achieve objectives - Improves overall performance and efficiency DISADVANTAGES - Requires the cooperation of all employees to succeed - Can be bureaucratic and time consuming - Can encourage short-term rather than long-term growth L4) Le slide da ora fino a quando segnalato non fanno parte dell’esame Team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable. Wholebrain Model: To identify strenghts and weaknesses of individuals, allocate roles and adjust our communication approach Tuckman model: 5 stages of team development, illustrating specific dynamics, problems and behaviors for each phase (forming, storming, norming, performing, adjourning) Thomas-Kilmann model for Conflict Management: Framework that identifies 5 different approaches to conflict management (avoiding, accommodating, collaborating, compromising, competing) FEEDBACK, The purpose is to help, not to hurt. It is specific, and focused on behaviour that can be changed. Feedbacks should be clarified to avoid misunderstanding ▪ Corrective Feedback 1. Describe the behaviour 2. Effects of the behaviour 3. Positive alternative behaviour 4. Why it is better ▪ Supportive Feedback 1. Describe the behaviour 2. Effects of the behaviour How to give proper feedback: - Seek for neutral disposition - Avoid generalization - Avoid feedback sandwich: compliment, criticism, compliment Ora riprende la parte oggetto d’esame ORGANIZATIONAL CHANGE: Process by which an organization modifies its present condition by identifying new arrangements for its value creation system in order to increase its effectiveness (is the change that we need to introduce inside the organization to help that company to exploit, implement and develop that particular innovation pdt/process…) CHANGE MANAGEMENT: «A systematic approach to addressing change in an organization as a whole and the individuals that composing it» It consists of a set of processes, tools and techniques aimed at prepare the company for change, plan and control the change, and make change effective in the organizational context» Change management capabilities are crucial for success and survival of the companies in the longterm. BARRIERS TO CHANGE: - Individual sources of resistance: Habit, Security, Economic factors, Fear of the unknown, Selective information processing - Organisational sources of resistance: Structural inertia, Limited focus of change, Group inertia, Threat to expertise, Threat to established power Why change projects fail? - People Engagement Low 44% - Culture not open to change 41% - Top management sponsorship Low 35% - Low change capabilities of internal change agents 30% Where companies with the highest success rates are different from the others? 1) They Involve people in change (59% vs 32%) 2) They create urgency, but without causing fear and anxiety (52% vs 35%) 3) They invest in an agile organization (40% vs 25%) Individuals facing change: how individuals react to change -People passively accept change when involved 57% -When involved people support change showing commitment 24% -People are mainly indifferent to change 7% -People resist and oppose change 7% -People are fully engaged and proactively propose and promote change 6% DIMENSIONS OF CHANGE  Cognitive: People have not only to understand, but also to appreciate the reasons behind change  Emotional: The dissatisfaction for the status quo should be higher than the investment necessary to questioning it  Strategic: The end goal, and the different actions to be accomplished should be focused and shared  Relational: Change is not individualistic/ autonomous, but basically occurs through organisational relationships  Operational: It is necessary to translate the end goal in a logic chain of actions/targets for day-by-day activities  Experiential: It is necessary to find practical evidence of the positive effects associated to change  Motivational: The target should be motivating— something which is better than the status quo Resilience: Individual's ability to adapt in the face of adverse conditions. It represents a composite characteristic reflecting high self-esteem, optimism, and an internal locus of control It is positively associated with recipients’ willingness to accommodate or accept a specific organizational change LEADING ORGANIZATIONAL CHANGE: 2 modelli  LEWIN’S MODEL: Is composed by the phases: - Unfreezing: Set the stage - Movement: Make it happen - Freezing: Make it stick  KOTTER’S MODEL: spiega nello specifico le varie fasi del Lewin’s model o Set the stage - Create a sense of urgency: (is the first thing to do) Unfreeze the organisation by creating a competing reason for why change is needed (HOW: Creating anxiety and dissatisfaction for status quo, Identifying the several inertias to change, Referring to ideal situations, Disavow the current operating model) - Pull together the guiding team: Create a cross-functional, cross-level group of people with enough power to lead change (piramide Sponsors, change agents and stakeholders) - Develop a change vision strategy: Create a vision and strategic plan to guide the change process with key performances and external scenarios (example: unfreezing the context: setting the stage for the change to begin and in particular starting from the “creation of a sense of urgency”, as suggested by the Kotter and Lewin models as the very first thing to do at the beginning of change. He is creating anxiety and dissatisfaction for status quo (“if we don’t change immediately the way of doing things and our cost structure, the company will go bankrupt at the end of this month, there isn’t any chance to save it”). He is disavowing the current operating model (“beauty does not pay the bill: profit does”).) o Make it happen - Communicate for buy in: Create and implement a communication strategy that consistently communicates the new vision and strategic plan - Empower others to acts: Eliminate barriers to change, and use target elements of change to transform the organisation (encourage risk taking) - Produce quick wins: Plan and create short-term “wins” or improvements recognising and rewarding people who contribute to these wins - reduce resistances to change through the focus on top management commitment o Make it stick - Consolidate gains: Additional people are brought into the change process as change cascades throughout the organisation - Create a new culture: Reinforce the changes by highlighting connections between new behaviours, process and organisational success Desperation valley is usually a typical phenomenon of the re-freeze phase/make the change stick Forces for continuous change: • Internal forces: - HR resource problems/prospects: Unmet needs, Job dissatisfaction, Absenteeism and turnover, Productivity, Participation/suggestions - Management behaviour/decisions: Conflict, Leadership, Reward systems, Structural reorganisation • External forces - Demographic characteristics: Age, education, skill level, gender, immigration - Technological advancements: Manufacturing automation, Information and communication technologies - Customer and market changes: Changing customer preferences, Domestic/ and international competitions - Social and political pressures: war, values, leadership Leading continuous change: you can’t go step-by-step. È composta dalle fasi: o Discovering: Stepping back, scanning, visioning o Deciding: Diagnosing, focusing and prioritizing, scoping and designing o Doing: Communicating, engaging, piloting, and implementing o Discerning: Aligning and integrating, assessing, adjusting INNOVATION I1) INNOVATION: New combination of existing technologies,new product in the market Is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations Innovation is more than simply coming up with good ideas; it is the process of growing them into practical use. Innovation is composed by two parts: – (1) idea generation (value creation) – (2) conversion of new idea in business opportunity (value appropriation) Innovation vs Invention → Innovation = Invention * Exploitation TYPES OF INNOVATION OF SOLUTIONS: RADICAL INNOVATION: sviluppo di una tecnologia completamente nuova, in grado di fornire un prodotto che non è mai stato disponibile prima. Si riferisce a innovazioni rivoluzionarie che creano nuovi mercati, rivoluzionano le industrie esistenti o trasformano le nostre vite e il nostro lavoro. The core idea of the radical innovation is the development of a completely new technology, which can provide a product which has never been available before. It refers to breakthrough innovations that create new markets, disrupt existing industries, or transform our lives and work. can improve the performance in a higher and significant way in a shorter period. (Discontinuous Innovation) (Examples of radical innovations include the personal computer, the internet, the smartphone, and the electric car) INCREMENTAL INNOVATION: aggiunge piccole migliorie a prodotti esistenti migliorando le sue performance it adds small improvements in existing products or operations, it refers to continuous improvements that enhance the performance, quality, or efficiency of existing products, services, or processes. enhancement of existing performance attributes. the incremental changes simply enabled new usages of the product. It is simply an improvement of previous versions of that product. Incremental innovations are often based on existing technologies, business. They cannot guarantee a significant improvement like the radical innovation but It’s easier to be implemented. (Continuous Innovation) (Examples of incremental innovations include software updates, product features, process optimizations, and customer service.) ARCHITECTURAL INNOVATION: combina in un nuovo modo tecnologie esistenti per ottenere un nuovo pdt/servizi it combines in a new way existing technologies to provide a new pdt/service. Technology or process changes to fundamentally change a component or element business ROGERS DIFFUSION OF INNOVATION (users), diversi tipi di consumatori ▪ Innovators: sono disposti a correre dei rischi, hanno lo status sociale più elevato. La loro tolleranza al rischio consente loro di adottare tecnologie che alla fine potrebbero fallire are willing to take risks, have the highest social status. Their risk tolerance allows them to adopt technologies that may ultimately fail. ▪ Early adopters: hanno il più alto grado di leadership d'opinione tra le categorie di adottanti. Sono più discreti nelle scelte di adozione rispetto agli innovatori. These individuals have the highest degree of opinion leadership among the adopter categories. They are more discreet in adoption choices than innovators. ▪ Early Majority: Adottano un'innovazione dopo un periodo di tempo variabile che è significativamente più lungo rispetto agli innovatori e ai early adopters. Hanno uno status sociale superiore alla media They adopt an innovation after a varying degree of time that is significantly longer than the innovators and early adopters. Early Majority have above average social status ▪ Late Majority: Questi individui si avvicinano a un'innovazione con un alto grado di scetticismo e dopo che la maggior parte della società ha adottato l'innovazione. La tarda maggioranza è tipicamente scettica riguardo a un'innovazione They adopt an innovation after the average participant. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation. ▪ Laggards: Sono gli ultimi ad adottare un'innovazione, mostrano poca o nessuna leadership di opinione. I ritardatari in genere tendono a concentrarsi sulle "tradizioni". They are the last to adopt an innovation. individuals in this category show little to no opinion leadership. Laggards typically tend to be focused on "traditions". DOMINANT DESIGN: è l'architettura vincente sul mercato, che sintetizza le innovazioni dei prodotti precedenti e diventa l'archetipo del prodotto nella mente dell'utente. Il design dominante non è sempre il migliore, dunque prestazioni inferiori non sono correlate al fatto di non essere un design dominante. The dominant design is the architecture winning on the market, which summarizes innovations by previous products and becomes the archetype of the product in the user’s mind. It gives an answer to the need of a large number of people is the one that wins the allegiance (fedeltà) of the marketplace, the one to which competitors and innovators must adhere if they hope to command significant market following. It is the architecture winning on the market. The dominant design is not always the best, but often only the supposedly best solution for a problem inferior performances are not related with not being a dominant design. (example:The dominant design is not always the best, but often only the supposedly best solution for a problem. The Dash earphone is not the dominant design as it does not serve the need of the majority of the market and it is not t he winning architecture. Inferior performances are not related with not being a dominant design)  Winning architecture able to summarize innovations introduced by previous products  Archetype of the product in both the designer and the user imagination  It gives an answer to the need of a large number of people  It reduces the number of requirements to be satisfied  It may imply constraints (vincoli)  It normally freezes the socioeconomic context How does the DD emerge? The drivers are: – Complementary assets: distribution, brand, services, capacity… – Strategic Maneuvering – Better understand of the customer needs – Rules and laws Networks effects in Technology based Innovation: Δ Metcalfe’s Law – Number of unique connections=n*(n-1)/2 Δ Network externalities are the effects on a user of a product or service of others using the same or compatible products or services. Positive network externalities exist if the benefits are an increasing function of the number of other users Δ Lock-in effect – When the cost for switching is higher than the benefit Δ Critical mass-bandwagon effect – When the benefit from externalities outperforms the benefit from product usage Two-Sided Markets sono mercati in cui una o più piattaforme consentono interazioni tra utenti finali e cercano di coinvolgere le due (o più) parti con particolari meccanismi in termini di prezzo (mette in contatto consumatori e venditori, esempio: Visa) Collegano due parti che entrano in una transazione diretta tra di loro Are markets in which one or several platforms enable interactions between end-users and try to get the two (or multiple) sides on board with particular mechanisms in terms of price (puts in contact consumers and sellers, example: Visa) They link two sides that enter in a direct transaction among them Innovation dynamics: ABERNATHY-UTTERBACK This model is used to understand what happens from a company point of view when we want to propose a new technology innovation in relation to the fact that we are offering a dominant design or not. Product Innovation è il processo di creazione di un nuovo prodotto, o di miglioramento di uno esistente, per soddisfare le esigenze dei clienti in modo nuovo. is the process of creating a new product—or improving an existing one—to meet customers’ needs in a novel way. It includes improvements in components and materials, incorporated software, technical specifications, and other functional characteristics like user-friendliness It refers to the creation and introduction of a product or service that is new to the market or a substantial and novel iteration of an existing product. After the Dominant Design has been identified, product innovation rate starts to decline/decrease: Process Innovation: È la combinazione di strutture, competenze e tecnologie utilizzate per produrre, fornire e supportare un prodotto o fornire un servizio. It is the combination of facilities, skills, and technologies used to produce, deliver, and support a product or provide a service. Once the dominant design is reached companies move their focus from pdt innovation to process innovation. Find an innovative way to have our processes more efficient and effective [Slide da 48 a 52: Cyclic model for Innovation: technology innovation can be seen as a jump over time from one cycle to the other one] DISRUPTIVE TECHNOLOGIES: (ex Netflix, TikTok) tutte quelle innovazioni capaci di rivoluzionare il funzionamento di un mercato o di un settore arrecando danno alle grandi aziende consolidate preesistenti. è un'innovazione che crea un nuovo mercato e una rete di valori e alla fine interrompe un mercato esistente e una rete di valori, sostituendo aziende, prodotti e alleanze leader del mercato. (in inglese: all those innovations capable of revolutionizing the functioning of a market or a sector causing damage to the large pre-existing consolidated companies. it is an innovation that creates a new market and value network and ultimately disrupts an existing market and value network, displacing market-leading companies, products and alliances.) BIG BANG DISRUPTION: (ex. Pokemon-go ha avuto boom di consumi che è durato molto poco) are faster and «bigger» innovation. TECHNOLOGY EPIPHANY: combina le tecnologie esistenti per consentire un nuovo significato del prodotto. La tecnologia esistente viene applicata da un campo diverso per dare un nuovo significato (esempio: Nintendo Wii) combine existing technologies to enable a new meaning of the product. Technology epiphany means that users give a novel meaning to a new technology. A new technology is exploited to provide a new meaning to the consumers Existing technology is applied from a different field to give a new meaning, hint (cenno) to a change in the meaning (example: from “dimming/oscurare the light” to “producing clean air”) are defined as the discovery of quiescent meanings in new or existing technologies. Is the intersection between the technology push strategy and the design driven innovation. Are all those technologies that enable the discovery of a new meaning of pdts or services for the final marketing. I3) MARKET PULL: Process driven by the explicit and evident demand and needs of the customers. Innovations that typically involve the way in which the product is commercialized: •Product presentation •Distribution channel innovations •Incremental product performance innovations • Sales process innovations... Customer needs are the key drivers of innovation CUSTOMER: Someone who buys goods or services USER: Someone who uses goods or services USER NEEDS ANALYSIS: ▪ Explicit Needs → What people say - Questionnaires - Interviews - Focus Groups ▪ Observable Needs → What people do Osservo cosa fanno I consumer con i miei pdts - Ethnographic research ▪ Tacit Needs → What people test (difficile da osservare perché i consumatori non stanno ancora usando questo prodotto) ▪ Latent Needs → What people dream (quello che la gente sogna, difficile da capire) Tacit Needs + Latent Needs → What people make - Lead user analysis - Beta testing Methods for innovating with users: If the needs are ‘subtle/impercettibile’ and ‘difficult to observe’ Questionnaires/focus groups and ethnographic research are unlikely to capture this type of user needs. - Questionnaires and Interviews: launch a questionnaire, Personal | Email | Telephone interviews. no - Advice and consultancy: the provider gives advice on its most efficient use. For example: advice on the organizational structure of the team using the product, optimizing the logistics in a factory where the product is used - Use oriented: Il modello tradizionale gioca ancora un ruolo centrale, ma il modello di business non è orientato alla vendita di prodotti. La proprietà rimane al fornitore e il prodotto viene messo a disposizione dell'utente. The traditional model still plays a central role, but the business model is not geared towards selling products. The ownership stays with the provider, and the product is made available to the user. - Product lease: the provider has ownership and is often responsible for maintenance, repair and control. The lessee pays a regular fee for the use of the product to have unlimited and individual access to the leased product. - Product renting or sharing: same as product use, but the difference is that the user does not have unlimited and individual access. Others can use the product too at other times. (BikeMi, Enjoy) - Product pooling: same as product renting or sharing, but there is simultaneous use of the product. (es. BlaBla Car uso contemporaneo del servizio) - Result oriented: l'utente e il fornitore concordano su un risultato e non è coinvolto alcun prodotto predeterminato, the user and the provider agree on a result and there is no pre-determined product involved - Pay-per-service: the user does not buy the product but buys the output of the product according to the level of use. For example: payper-print and pay-per-wash - Functional result: the provider agrees with the user the delivery of a result. The provider is completely free to as to how to deliver the result. Product-service systems can: 1. Encourage manufacturers to take into account the product life cycle cost. This in an incentive to optimize energy/materials and to reuse/recycle/etc. wherever feasible/fattibile 2. Increase the use intensity (es noleggio) 3. Lead to a considerably lower usage of energy and auxiliary materials in the use phase (The same use of energy and auxiliary materials is shared by more users) 4. Enable much more efficient technologies because of economies of scale. 5. Provide an incentive to develop radically different products/services Sustainable business model archetypes of Bocken - Adopt a stewardship role: impegnarsi in modo proattivo con le parti interessate per garantire la loro salute e sicurezza a lungo termine. pro-actively engaging with stakeholders to ensure their long-term health and safety. - Encourage sufficiency: costo del ciclo di vita del prodotto (riutilizzo/riciclo/ecc.) Vengono raggiunti diversi sotto-archetipi di incoraggiamento alla sufficienza: educazione del consumatore e uso prolungato delle bottiglie (simile alla moda lenta), privilegiare i benefici ambientali rispetto a quelli economici product life cycle cost (reuse/recycle/etc.) Several sub-archetypes of encourage sufficiency are reached: consumer education and longer use of the bottles (similar to slow fashion), prioritize environmental benefits over economic benefits - Repurpose for society/environment (stretta collaborazione tra azienda e comunità locali e altri gruppi di stakeholder), (close collaboration between the firm and local communities and other stakeholder groups) FRUGAL INNOVATION → More with Less, try to use not many resources Low material consumption, limited resources, cost reduction, simple lifestyle, more value from limited resources, reuse what we already have, optimized performance levels. We have 3 types of frugal innovation: - Resource constraints: ▪ Jugaad innovation (es. Frigorifero senza elettricità) ▪ Reverse engineering (Prendo un pdt e lo scompongo nelle sue parti e min chiedo ogni paarte da cosa è fatta) ▪ Bricolage (fai da te) - Institutional voids: ▪ Social movements/social entrepreneurship - Affordability: ▪ Design thinking (quando non si hanno i soldi per pagare qualcosa, analizza il problema e trova una soluzione) Reasons why are we not sustainable yet?  Costs: - high upfront investments: Investments needed for new sustainable business models can be high and may have long payback times which is not attractive for businesses - past investments: need to be earned back before new investments can be made. - uncertain economic outlook: Will an investment still be considered ‘sustainable’ in the future? - costly products: User fees might be higher for users than having their own pdt (bike).  Willingness: Who needs to take action in the value chain? Willingness for a collaborative effort?  Technical barriers: Many new techniques are still in their infancy  Government support: - supportive legislation: Legislation can push firms for sustainable development. Legislation can help firms to put more sustainable products in the markets - subsidies: Subsidies can trigger firms to invest in sustainable innovations. subsidies are often limited or hard to get  External awareness: - subsidies are often limited or hard to get: Customers may not be aware of unsustainable practices from firms. Often caused/enabled by visibility/traceability issues. (non so come è stata fatta la mia maglia di cotone) - NGO and media awareness: NGOs can put pressure on organizations to become more sustainable. There can be a cost related to not being sustainable such as damaged reputation (lost sales, penalties) in case of scandals Collaborative sustainable business models Three sources of prices pressure: • Upstream price pressure: Low output prices • Downstream price pressure: Rising input prices • Vertical price pressure: Intense competition Sustainable business models: VALUE MAPPING TOOL 1: What is the purpose? I.e., what is the current value proposition? (value that I want to offer to my customers 2: Who are the stakeholders? 3: Which value is captured with the current value proposition? 4: What is the value destroyed? I.e., value provided but not wanted (unintended negative outcomes). 5: What is the value missed? I.e., value created but not captured and/or value wanted but not delivered. 6: What are the new value opportunities? The sustainable innovation process: By using upstream thinking and back casting we aim to avoid the risk that we solve today’s problems by creating new problems • Upstream thinking: tackle sustainable problems by removing underlying sources instead of by “fixing” problems once they occur. • Backcasting: envision a desirable future, and then plan what to do now to move towards that point. To be sustainable, nature’s functions and diversity are NOT systematically subject to violate the following conditions: I. Increased material extraction II. Increased production III. Physical impoverishment (over-harvesting) IV. While ensuring that resources are used fairly and efficiently in order to meet basic human needs THE FOUR-STEP PROCESS to avoid the walls of the funnel and reach its opening 1. Awareness and Vision (upstream thinking): How can the product/service be provided without violating the four conditions? Use Science Based Targets and Be aware of the complexity of sustainability 2. Baseline analysis (backcasting): How and to what extend are we contributing to the violation of the system conditions? 3. Creative solutions: What are possible solutions? Circular economy, Frugal innovation, Product-service systems 4. Decide on priorities: Identify low hanging fruits and start from there. Upon the implementation of the innovation, new long hanging fruits will appear. I5) Innovation ≠ Invention → Invention is when you solve a problem using advanced technical or scientific knowledge An invention combines novelty and value (innovation requires the appropriation of this value). INNOVATION is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations. 3 Characteristics of innovation are Novelty, Value, Happens Value → : The extent to which a good or service is perceived by its customer to meet his or her needs or wants, measured by customer's willingness to pay for it. It commonly depends more on the customer's perception of the worth of the product than on its intrinsic value. Innovation Strategies: From existing value drivers to New value drivers When we analyse a pdt we can identify 2 levels of value drivers: - Innovation of Solution: How (Function/Technology) - Innovation of Meaning: Why (Meaning) [Radical improvement: new value in terms of functional engagement Incremental improvement: optimize a given product Radical change: envision a radical change of the meaning Incremental change: reinforce the existing meaning] Technology Substitution Strategy: (Technology Push or Market Pull) "...Possiamo sostituirla con una vecchia tecnologia per soddisfare meglio le esigenze esistenti dei clienti?" “…Can we substitute this for an old technology to better address customers’ existing needs?” Technology Epiphany Strategy: significato nascosto, dal significato esistente al significato quiescente “... Questa nuova tecnologia ci consentirà di creare prodotti e servizi che le persone trovano più significativi delle offerte attuali? Trascenderà le esigenze esistenti e darà ai clienti una ragione completamente nuova per acquistare un prodotto?...” hidden meaning, from existing meaning to quiescent meaning “… Will this new technology enable us to create products and services that people find more meaningful than current offerings? Will it transcend existing needs and give customers a completely new reason to buy a product?...” Innovation of Meaning: From Existing Meaning (of a Product-Service Category)… To New Meaning (of a Product- Service Category)… - Inside-out: prima osservi cosa vuole il cliente, poi trovi e offri la soluzione. In the outside-in strategy, you first observe what the customer wants, then find and offer the solution - Outside-in: prima sviluppi il prodotto o il servizio, poi ne crei il desiderio nei clienti.