1.4 Architectural and modular innovations

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En provenance du cours de Erasmus University Rotterdam

Innovation Management

425 notes

Erasmus University Rotterdam

Innovation Management

425 notes

What is innovation management? How do firms bring in new business models and get new products and services to the market? Go on a nine-week journey through innovation management concepts, theories of idea generation, selection, strategy formulation and implementation in this MOOC in Innovation Management. In it, you will also learn the tools for implementing innovation projects yourself. Guided by world-class academics, you will develop an innovative mindset and expertise in how firms successfully create new ideas for marketing new products. The syllabus also includes sessions about innovation strategy, idea management and social networks. During this course, you will learn how to: • use the main innovation management terminology and concepts • explain the adoption life cycle and innovation adoption at the individual level • define creativity and explain how creativity can be stimulated • recognise and describe three types of idea management systems • explain what an innovation strategy is and why it is important • describe what a product portfolio is • explain how innovation projects should be selected and managed • explain the importance of teams, team structures and networks for innovation. Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s leading business schools, and ranked among the top three for research. RSM’s primary focus is on developing business leaders with international careers who carry their innovative mindset into a sustainable future. Go to www.rsm.nl for more information. This nine-week MOOC in Innovation Management is taught in English. There is no fee to participate in the programme.

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Introduction

After this week’s studies and the associated exercise, you will understand the meaning of innovation and innovation management. Also, you will learn to identify and differentiate between various types of innovation. As a result, you will become acquainted with basic terminology that will help you to better process and understand the course content of the following weeks.

About this course4:03

1.1 What is innovation management?5:02

1.2 Product, service and process innovations6:29

1.3 Incremental and radical innovations2:48

1.4 Architectural and modular innovations5:57

Rencontrer les enseignants

Serge Rijsdijk
Assistant Professor
Rotterdam School of Management, Erasmus University
Jan van den Ende
Professor
Rotterdam School of Management, Erasmus University
Sandra Langeveld
Teaching and research coordinator
Rotterdam School of Management, Erasmus University
Murat Tarakci
Assistant Professor
Rotterdam School of Management, Erasmus University
Stefano Tasselli
Assistant Professor
Rotterdam School of Management, Erasmus University
Daan Stam
Associate Professor
Rotterdam School of Management, Erasmus University
Dirk Deichmann
Assistant Professor
Rotterdam School of Management, Erasmus University

Hi there.

This is the last video in types of innovation.

In the previous videos we discussed product, service and

process innovations and we also looked at incremental and radical innovations.

The third and last distinction is the one between modular and

architectural innovation and we will discuss it in this video.

We will conclude the video with a short summary

of all the types of innovations that we've discussed so far.

Modular innovation is about changing a component

without changing how a system is configured.

And architectural innovation refers to a change

in the configuration of the entire system and how its components interact.

As you may understand, the distinction between modular and architectural

innovation is mostly applicable to relatively complex technical systems.

But we can explain the distinction using the example of a standard bicycle.

For instance, in the past bicycle engineers were not able to build

the change that contemporary bicycles have between the front gear wheel and

the rear gear wheels.

The first bikes either had no pedals or as you see in this slide

they used to have pedals attached directly to the axle of the front wheel.

If you compare that historic bike to a modern bike you can say that the pedals

interact with other parts of the bike in a different manner.

Once the way in which components within a system are reconfigured and the way

in which they interact changes, then we speak of an architectural innovation.

Modular innovation means that just a single part of the bicycle has changed,

but not the way it interacts with the rest of the bike.

For example, one could change the seat, or

the light, or the handlebar and change nothing else about the bike.

A somewhat more complex example is that of a photo camera.

For the camera that you see here on the slide, a firm could design a new lens,

a new flash, or a new user interface.

If it would only be that part,

that component, we would speak of a modular innovation.

However, imagine that the firm decides to redesign the camera on the left

into the action camera on the right.

You can imagine that individual components will have to be redesigned, however,

because of the different shape of the action camera and the other requirements

it has to meet the way the different components interact will change too.

Innovation in the configuration of a product and

how components of a system interact is referred to as architectural innovation.

Now you may wonder why this distinction is important.

Well, what often happens once companies develop

products with a certain architecture is that they tend to organize the firm

around the structure of that product.

So you would have departments focusing on the development of a lens and

this department may interact a lot with the department that designs the body of

the camera because in the end product all lenses should properly fit into the body.

In the case that the firm builds the new action camera with a completely

different architecture, the organization may not be ready to develop that product.

The way that the firm is organized and

how routines and processes work are tailored to the old architecture, and

the firm therefore needs to invest a lot of time and effort into reorganizing

itself and working in a way that will fit with the new action camera.

So, as you may understand,

modular innovation is much easier to conduct than architectural innovation.

This is something that innovation managers should be aware of.

So, after watching the last three videos,

you should now be able to recognize the following types of innovations.

Product innovations and

service innovations both concern new output of firms.

Products are physical and tangible, you can touch them.

Remember the example of the shoes, smart phone, motor bike and flip flops?

Services are intangible.

Remember the examples of the supermarket delivering groceries?

And next to news website.

Process innovations concern innovation in our firm conduct it's activities.

Remember the examples, the HR department changing the way it keeps track

of the employee performance and the assembly line by forth.

The distinction between incremental and radical innovations concerns the extent to

which an innovation is different from things that already exist.

If an innovation concerns just a small change we call it incremental innovation.

Remember the design change.

If the change is major we call it a radical innovation.

Remember the 3G network.

Finally, modular innovation concerns a change

in one of the components of a product.

Innovating the way in which the product is configured and changing the way

in which components interact is called architectural innovation.

Remember the examples of the bicycle and the camera.

That's it for this video.

You now have a refined view of the types of innovations that exist.

Hopefully, you will now also recognize these types of innovation

in your daily life.

But most importantly, you'll now also understand the difference

between these types of innovations while we talk about them throughout this MOOC.

Thanks for watching.

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