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Innovation Management

Lecture at the TU Darmstadt for iCE (Information and Communications Engineering) and all other students interested in the subject

8./16./22. March 2011

Dr. Juergen Deicke


Innovation Management / JD 1

About Juergen Deicke


2000 to date: IBM Systems and Technology Group Mostly in Mainz, Germany 2003 2005: San Jose, California 10+ years in Product Development Current job role: Business Development 2009: MBA degrees from Duke University (North Carolina, USA) and Frankfurt University 2000 Ph.D. (Dr.-Ing.) in Electrical Engineering at Darmstadt University of Technology. Subject: Multimedia Communications 1996 Dipl.-Ing. (diploma degree) in Electrical Engineering / Communications at Darmstadt University of Technology 2003: Certified Project Management Professional (PMP) with the Project Management Institiute (www.pmi.org) 2007 to date: Lecturer Innovation Management at Darmstadt University of Technology, Darmstadt, Germany 2002 2003: Lecturer Introduction in Computer Science at the Bingen University of Applied Science in Bingen, Germany
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Acknowledgments
I am grateful to Prof. Horst Geschka for the permission to re-use the material he has used for several years during lectures at Darmstadt University of Technology.

Geschka & Partner


Unternehmensberatung

I also very much appreciate the support I have received from several of my colleagues at IBM either providing me some of their material or pointing me to very valuable material publicly available.

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Housekeeping
Breaks Coffee breaks in the morning and in the afternoon Lunch break (~1 hour) No mobile phones please. Most of this material can be downloaded @http://www.ies.tudarmstadt.de/media/fachgebiet_ies/pdf/studiumundlehre_3/vorlesungen/vorlesung_innovationma nagement/deicke2010.pdf Some slides will only be shown to you and/or are developed at the blackboard (will let you know when to draw). Interactive sessions: Beginning of day 1: your expectations End of day 1: what was good, what could be better Beginning of day 2: open questions from day 1 End of day 2: what was good, what could be better Beginning of day 3: open questions from day 2 End of day 3: overall feedback, what was good, what could be better Please ask anytime if you dont understand me or something I said!

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Exam
When: March 25th 2010 9:00am Where: tbd How long: 60 minutes When again: probably March 2012 There will be an exam in fall 2011 (probably an oral exam) How to register: Hopefully already doneif notplease contact me

When and where will the results be published: tbd

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Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Most important, as the Internet and globalization widen the pool of new ideas, it's about selecting and executing the right ideas and bringing them to market in record time.

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Basic Definitions according to Wikipedia (I): Invention, Innovation, Management


An invention is an object, process, or technique which displays an element of novelty. An invention may sometimes be based on earlier developments, collaborations or ideas, and the process of invention requires at least the awareness that an existing concept or method can be modified or transformed into an invention. However, some inventions also represent a radical breakthrough in science or technology which extends the boundaries of human knowledge. Legal protection can sometimes be granted to an invention by way of a patent. The classic definitions of innovation include: the process of making improvements by introducing something new the act of introducing something new: something newly introduced (The American Heritage Dictionary). the introduction of something new. (Merriam-Webster Online) a new idea, method or device. (Merriam-Webster Online) the successful exploitation of new ideas (Department of Trade and Industry, UK). change that creates a new dimension of performance Peter Drucker(Hesselbein, 2002) A creative idea that is realized [(Frans Johansson)] (Harvard Business School Press, 2004) Management is the act of directing and controlling a large group of people for the purpose of coordinating and harmonizing the group towards accomplishing a goal beyond the scope of individual effort. Management encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management can also refer to the person or people who performs the act of management. The verb Manage comes from the Italian maneggiare (to handle especially a horse), which in turn derives from the Latin manus (hand). The French word mesnagement (later mnagement) influenced the development in meaning of the English word management in the 17th and 18th centuries. Innovation Management / JD 8

Basic Definitions according to Wikipedia (II): Project Management, Skunk Works


Project management is the discipline of organizing and managing resources in such a way that these resources deliver all the work required to complete a project within defined scope, quality, time and cost constraints. A project is a temporary and one-time endeavor undertaken to create a unique product or service, that brings about beneficial change or added value. This property of being a temporary and a one-time undertaking contrasts with processes, or operations, which are permanent or semi-permanent ongoing functional work to create the same product or service over and over again. The management of these two systems is often very different and requires varying technical skills and philosophy, hence requiring the development of project management. The first challenge of project management is to ensure that a project is delivered within defined constraints. The second, more ambitious challenge is the optimized allocation and integration of inputs needed to meet pre-defined objectives. A project is a carefully defined set of activities that use resources (money, people, materials, energy, space, provisions, communication, quality, risk, etc.) to meet the pre-defined objectives. Skunk works is a term used in engineering and technical fields to describe a group within an organization given a high degree of autonomy and unhampered by bureaucracy, tasked with working on advanced or secret projects.

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Basic Definitions according to Wikipedia (III): Bootlegging


In economics and business administration literature, K. Knight introduced the notion bootlegging in 1967. Bootlegging is defined as research in which motivated individuals secretly organise the innovation process. It usually is a bottom-up, non-programmed activity, without the official authorisation of the responsible management, but for the benefit of the company. It is not in the departments action plan nor are there any formal resources allocated towards it. Quite a few firms have their own specific term for it: English firms call it: Friday afternoon work, work behind the fume cupboard, free lance work, under the counter work, under the table work, pet-project, discretionary research, free wheeling, illicit research, scrounging , renegades work, work in the shadow- or underworld. American firms call it moonlighting. German firms call it: UBoot Forschung, or graue Projekte. The main reason for the occurrence of bootlegging is the lack of free space for creativity. In particular rigid planning ignores the nature of experimental trial and error research. Bootlegging, as a kind of self-regulating element, bridges the mechanistic world of organisation with the chaotic world of creativity and innovation. Bootlegging should not be confused with skunk works: skunk work is defined as a sort of elite, working officially on a given project alongside the formal organization to solve problems more efficiently.

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Inventions, Patents and Innovation


Invention is the source of a patent Patents give exclusive rights to the inventor(s) Not all inventions are patented Not all inventions are patentable Innovation might come from patents or sole inventions Transforms the idea into a products, service, tool or process

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What is a Patent ?
Exclusive right granted to the inventors for a fixed period of time.

Must be applicable and useful.

Patent

Must be novel.

Must be non-obvious.

Exclusive right is the right to prevent or exclude others from making, using, selling, offering or importing the claimed invention. Innovation Management / JD 14

So, what can be patented?


Networking Processes (Software)

Chemical Compounds or Processes Manufacturing Processes

Business and Services

Mechanical or Electrical Design or Processes Design Appearance

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Patent Lifecycle inside an Enterprise


Invention Disclosure
Enter in companys DB, Review, FILE Assessment Approx. 3 6 month Patent Application is written (professionally) and sent to national patent office Approx. 3 month Patent application is published After approx. 18 month Patent office issues patent after checking After approx. 30 month

Patent Application

Published Patent Application

Issued Patent

Expired Patent

Up to 20 years after issuing patent Patent is deleted


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Value for an Enterprise


Strategic Secure exclusive rights for technology, products and services Tactical Defend products and technology by gaining exclusive rights Prevent other companies from using patented technology. Economical / Financial Divest patents to other companies for money Reputation Be known as an innovative company Donation to other organizations (e.g. open source)
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Patent-Codex
Do not steal ideas. Involve everybody who contributed to the idea. Do not get listed as inventor if there was no contribution. Do not disclose your idea to others before it has been submitted. Other countries have different policies for filing. Be honest and investigative when assessing prior art and other patents. Be friendly and polite to reviewers and other authorities.

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Generic Patent Process


Enter Idea in Invention Database Patent Review Publication in Research Disclosure Bulletin, idea can be used but not patented by someone else.

Idea

Search? Professional search for prior art is conducted.


Y

Publish?
Y

Assessment of Search Results


N May Be

File?
Y

Finalize Patent Doc. With Patent Office Patent Award

Finalize Publish Doc. (max. 2 pages) Patent Award Close & Save 19

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Invention Database
Repository for all ideas Structured data base providing links to Products Services Business Processes Market Trends Technologies Can be used to search on ideas Can be linked to development processes Link between marketing requirements and existing ideas
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Invention Disclosure Submission


Three sections in Invention Database 1. Background Section Introduction to the area of invention Description of prior art Description of problem being solved. 2. Summary Section How the problem is solved Summary of the core idea (novel, non-obvious, practical) 3. Detail Section Detailed description of idea (Text and pictures) Include different embodiments
The better the description the easier the review!!
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Patent Review
Three aspects are important to the review team: 1. What problem is solved ? Prior Art Problem / Deficiency Solution of the problem your idea Shall not be obvious What is novel ! 2. Is it practical? Based on prior art 3. Business value for an Enterprise? Usable for products and services Licensable to other companies Future value for the enterprise
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Patent review is a sales event: Sell your idea to the reviewers!

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Sources for Ideas


Comparison to competitive products and trends

Functional deficiencies in our products

New Technology

Daily problems

Look for trends and strategies in the market and within the company Motivation to invent

Thing which annoys us: Something like this should exist Innovation Management / JD

Combination of different methods and technologies may form a new idea 23

Patent-Thinking Pattern
What is the problem? Generate ideas to resolve it!

Multiple independent and distinct ideas can form separate patents Recommendation: place all relevant ideas in one disclosure to safe time. It will be sorted out later.

What is the key idea? What is novel? Does it exist?

Is the idea applicable in practice?

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Searching Prior Art


US Patent Database
includes all US patents since 1976, allows advanced search http://www.uspto.gov/patft/index.html

Delphion
Search engine to look for prior art (patents, publications, etc) http://www.delphion.com/

Google Patent Search (beta version)


Searches US patent data base http://www.google.com/patents
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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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What is a Technological Innovation?


Technological innovation is the utilization of technical inventions or technological know-how for economic purposes.

A technological innovation is a new or considerably improved product or a new or considerably improved production process.

The process of innovation includes all activities leading to the innovation: Starting with the perception of an unsolved need, the generation of an idea, R&D to solve the problem, through setting up new production capacities and ending with the introduction and widespread diffusion in the market.
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Characteristics of Innovations
Innovations are new products, processes or services aimed to be commercialized. Innovations can be offered in the market (products or services) or applied within a firm (mainly as processes). Innovations result in a considerable benefit or increase of efficiency (leap in progress); this distinguishes them from improvements. Innovations generate substantial benefits for the users. Within innovations we differentiate between incremental and radical innovations. Radical innovations are breakthroughs with a major impact on production and application patterns. (i.e. drive by wire, biodegradable packages) Innovations include high risks. Innovations need long time to ripe and enter the market. The emergence of innovations is in most cases a complex process.
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The Process of Technological Innovation


Science and Technology
Technology Push

Innovations driven by Technology


Provision of Production Capacities 29

Idea Generation

New Technological Opportunities Synthesis: Innovation Idea Problems, Needs Problem Solving Concept

R&D Systematic Problem Solving Design Prototype

Planning of Manufacturing Production Tool Prototype Construction Plant Construction

Marketing-Concept

Preparing Market Introduction


rk Ma In et

Demand Pull

Innovations driven by Demand


Individual and Societal Needs
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Impulses for Innovations

Need stimulated/driven: Pull innovations Technology stimulated/driven: Push innovations

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Innovations within Systems or System Products


Two types of innovations: breakthrough (leap) of the system: new generation important subsystems or components are considerably improved or functionally extended or new innovative components are added.

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Innovation Management
Innovation management means management of innovation processes. Innovation management is: setting up the internal environment and conditions for innovation processes designing a frame and a standard innnovation process carrying out the individual innovation projects
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Innovation Management
Two phases:
1. Idea management To find the right product/project (effectivity)

2. Project management

To develop the product efficiently, i.e. to achieve the goals, targeted costs and schedule (efficiency)
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Effectivity and Efficiency (according to Peter Drucker)


To be successful with innovations effectivity and efficiency have to be ensured. Effectivity: To do the right things. Efficiency: To do the things right,
(i.e. in a good effort/result relation)

Efficiently organized innovation processes only pay out, when the strategically right topics and projects have been chosen (effectivity).
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Closed Innovation & Open Innovation


Traditional product development often follows a more closed development model. Open innovation requires new thinking overcoming NIH (not-invented here) syndromes and opening up the requirements process to external partners The Open Source Software Community is one of the most evident examples of Open Innovation
Closed Innovation Product ideas Ideas in productization product Open Innovation Internal product ideas Idea exploited by somebody else Ideas in productization

product

NIH

Good external ideas

Idea productized in collaboration with an external party

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Innovation is a Social Process


What innovation collaboration is taking place? How widespread is invention? Who are new inventors? Who are potential inventors? Who should be interacting with whom? Who should be innovation mentors? Who are crucial innovation partners?
Carl Andy Frank Indojit

Karen Darren Sam Ming

Neo Earl Gerry Harry Jeff

Leo

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On Innovation management
An Organization that is designed to do something for the millionth time is not good at doing something for the first time. Therefore, organizations that want to innovateneed two organizations, an operating organization and an innovating organization. Galbraith (1982), page 6

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Results of Old Empirical Studies on Innovation Success Still Relevant


Two thirds of all successful innovations come from market impulses (Myers, Marquis 1968). Successfully innovating companies understand the needs of customers better (SAPPHO 1974). They use more external sources and experts (SAPPHO 1974). Project responsibility lies higher in the hierarchy and project managers have more competencies (SAPPHO 1974). A couple of "Machtpromotor" and "Fachpromotor" is a crucial prerequisite for the implementation and the success of an innovation (Witte 1978). When innovations fail this is mostly due to non-technical reasons (Mansfield, Gerstenfeld 1970s).

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Success Factors of Innovation Performance


1. Efficient innovation process implemented 2. Clear and communicated innovation strategy 3. Sufficient resources for innovations 4. Commitment of higher management for innovations 5. Entrepreneurial climate for innovations 6. Strategic focus and realization of synergies 7. Cross-functional high-performance teams
Quelle: Cooper, Kleinschmidt 1995

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Key Success Factors of Product Innovation


1. A superior product that delivers unique benefits to the user 2. A well-defined product and project prior to the development phase. 3. Technological synergy 4. Quality of execution of technological activities 5. Quality of execution of pre-development activities 6. Marketing synergy 7. Quality of execution of marketing activities 8. Market attractiveness

Source: Cooper, Kleinschmidt 1990


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Why do Product Innovations fail?


Insufficient market analysis Unsystematic or superficial marketing No or too late cost and price calculations Costs too high Strong competition Technical deficiencies or shortcomings

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Frontloading: Intensive Analysis and Concept Development in the Prephase


Possibilities to influence High influence potential

Low effort

Concept finding

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Concept design

Development

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Effort

The Phases of the Innovation Process

1
Concept finding

2
Development of innovation components

3
Getting ready for the market

4
Market launch

Innovation Project Innovation Process


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Innovation Planning Process


1. Strategic Orientation
Derived from company analysis or strategic plans: Goals and frame conditions Project design and strategy

2. Selection of Search Fields


Analysis of strengths and competencies Selection of attractive market segments

Definition/Selection of Search Fields


Search Field 1 Search Field 2 Search Field 3 Search Field 4

3. Generation
For the Single Search Field: Need assessment Collection of ideas Creativity workshops Licence investigations

4. Selection and Further-Development of Ideas


Concept Development - Concretization - Design of details - Additional elements - Overall concept

Evaluation and Selection in Steps


Culling Screening Selecting Check of rentability

Information - Subjective judgements - Information collection - Experts questioning - Market research

Concept for 2 - 4 New Products resp. Business Fields


5. Realization Plan

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6. Implementation

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The Concept Finding Phase


The prephase of the innovation process starts with Strategic Orientation and lasts until the decision to start a project of technical development: = concept finding phase = fuzzy front end = predevelopment phase Range, volume and professionality of these activities and structuredness of procedures in the concept finding phase are success factors for innovations.

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Concept Finding Phase of the Innovation Process


Strategic Orientation Idea Generation Idea Selection and Conceptual Further-Development Pre-Projects Projects

Technology Monitoring Technology Roadmaps Scenarios Laying down directions and fields for innovation Need assessment Creativityworkshops Creative climate of the company

Screening Evaluation criteria Idea assessment Idea further-development Idea management system Inquiries Analysis of requirements Specifications

Project management Multiproject-management R&D-controlling

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Strategic Orientation/Strategic Plannning


Innovations are an important part of a companys strategy. That means: for defining and conceptualizing innovation strategic orientation is necessary.
Strategic planning is an organizations process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. The outcome is normally a strategic plan which is used as guidance to define functional and divisional plans, including Technology, Marketing, etc.
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Methods Supporting Strategic Orientation


Long-range demand trends Competition analysis SWOT Analysis (Strategic) Gap Analysis Product-Market Matrix (Ansoff) Search-Field Matrices Scenarios

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SWOT-Analysis
Strengths

Weaknesses Opportunities Threats


SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture or in any other situation of an organization or individual requiring a decision in pursuit of an objective. It involves monitoring the marketing environment internal and external to the organization or individual. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from the Fortune 500 companies. Innovation Management / JD 52

Strategic Gap Analysis


sales product differentiation product variants product improvements marketing new business fields new products
- planned sales

strategic gap

A business field A

- accumulated sales

business field B C business field C business field D D

today Innovation Management / JD

In 10 years

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Product-Market-Matrix (Ansoff)
Ansoff, Igor, Strategies for Diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957, pp.113-124

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Product-Market-Matrix (Ansoff)
Ansoff, Igor, Strategies for Diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957, pp.113-124 Market Penetration (existing markets, existing products): Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service, with advertising or other promotions. Product Development (existing markets, new products): A firm with a market for its current products might embark on a strategy of developing other products catering to the same market. For example, McDonalds is always within the fast-food industry, but frequently markets new burgers. Frequently, when a firm creates new products, it can gain new customers for these products. Hence, new product development can be a crucial business development strategy for firms to stay competitive. Market Development (new markets, existing products): An established product in the marketplace can be tweaked or targeted to a different customer segment, as a strategy to earn more revenue for the firm. For example, Lucozade was first marketed for sick children and then rebranded to target athletes. This is a good example developing a new market for an existing product. Diversification (new markets, new products): Virgin Cola, Virgin Megastores, Virgin Airlines, Virgin Telecommunications are examples of new products created by the Virgin Group of UK, to leverage the Virgin brand. This resulted in the company entering new markets where it had no presence before.

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Search-Field-Matrix
. . .
Precision manufacturing
Technological Strengths

Sensor technology

Attractive Market Segments

...
Security systems Office automation CIM Waste treatment Maintenance

...

System simulation

. . .

. . .

The search-field-matrix supports the process of identifying new business fields. It is formed by crossing in a matrix the technological or functional strengths with attractive market segments.
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Search-Field-Matrix
Sensor technology

Attractive Market Segments

...
Security systems Office automation CIM Waste treatment Maintenance

a b a a b

System simulation

. . .

Precision manufacturing

Technological Strengths

. . .

. . .

A search-field is formed by one (or more) technologymarket-combination(s). It is supposed to be promising as it combines company strengths with attractive markets. A search-field is a potential new business line.

c d
Search-field a: Search-field b: Search-field c: Search-field d: Innovation Management / JD advanced warning systems flexible manufacturing systems special locking systems forecasting machine lifetimes 57

...

Forecasts in a stable Environment


Conventional forecast methods assume that correlations between the impacting factores (independent variables) and the topic factors (dependent variables) detected for the past are also valid for the future.
Future Past

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Forecasts in a Turbulent Environment


When the influencing environment on a topic is changing forecasts cannot be based on correlations valid for the past. The influencing factores of the future have to be identified and characterized with respect to strength and direction; then the impacts on the topic have to be deducted.
Future Past

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What is a Scenario?
A scenario is the depiction of a possible future situation and an outline of the development lines leading into the future

Today
Pathways into the future

Tomorrow

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Model for Scenarios


Unexpected disruptive event

Scenarios

Time Today Time horizon

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Philosophy of the Scenario-Technique


Defining the topic Take off from topic

Designing pictures of the future

Developing alternative projections/assumptions

Drawing consequences and conclusions

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How a Scenario is developed?


Impacting (exogenous) factors

Topic

Development of most social or economic topics as well as markets and technologies are essentially determined by external (exogenous) factors.
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How a Scenario is developed?


Forecasts of the impacting factors
Impacting factors

Topic

The future situation of a topic is derived from the future projections of its impacting factors. Forecasts of the single factors are made.
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How a Scenario is developed?


Alternative projections
Impacting factors

Topic

For the single impacting factors alternative projections are possible and can be justified reasonably.
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How a Scenario is developed?


Consistent picture of the future (scenario) Impacting factors

Topic

The forecasts generated independently are partly contradictory or inconsistent. A consistent picture of the future (scenario) has to be built up.
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How a Scenario is developed?


Impact scenario

Impacting factors

Future picture of the topic

From the scenario of the impacting environment a future picture of the topic is derived
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The Eight Steps of the Scenario-Technique


Step 1
Defining and structuring the topic

Step 5

Development and interpretation of selected impact scenarios

Step 2

Collection and structuring the impacting factors

Step 6

Introduction and impact analysis of unexpected disruptive events

Step 3

Formulation of descriptors; projections and assumptions

Step 7

Writing the topic scenarios resp. deducting consequences for the task

Step 4

Formation and selection of alternative sets of assumptions

Step 8

Development of measures and (strategic) plans

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Questions to work on include:


What ist the best future scenario? Try to describe in as great detail as possible what your (companys) world will look like, given the best case external environment assumptions. What is the worst possible scenario of the future of your companys external environment? What are some relevant dimensions that characterize these scenarios?

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Characteristics of the Scenario-Technique


Not a better forecasting method; another approach Dealing with uncertainties, but not reducing them Complex methodology combining analytic and creative elements Qualitative aspects are treated as well as quantitative factors Results are alternative pictures of the future for a topic (not for single indicators) The development of scenarios is transparent in all phases Training in bold and flexible thinking

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Scenario Technique Terminology


Scenarios are distinctly structured views of the future that are self-consistent and plausible. Factors (aka issues, trends) can either be controllable factors or non-controllable. Scenarios are defined by non-controllable factors. A Strategy can be defined as a set of potential actions in response to controllable as well as non-controllable factors. A Robust strategy is a strategy which could lead to success whatever the future holds, i.e. in more than one scenario. Strategy is to decide what not to do.

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Scenario Technique Resulting Matrix


Scenarios

Todays Scenario More of the Same


Strategies

Scenario 2

Scenario 3

Scenario 4

Strategy 1

Strategy 2 Strategy 3
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Case 1: New Impulses for R&D-Planning

Situation The R&D head of a consumer brand producer was not satisfied with the yearly composed R&D plan. Most proposals were extensions of ongoing projects or went into further details of well-known research fields. Scenarios should help to bring fresh ideas and topics into the planning procedure.

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Case 1: New Impulses for R&D Planning


Scenario Development A core team was formed: Two department heads of R&D, R&D planner, R&D controller, two marketing specialists from different divisions, market researcher moderator. Two sessions to define the topic and task and to analyse the fields of exogenous influence. Then experts were chosen: 13 internal and external specialists. In two workshops of two days duration the essential inputs for the scenario-technique were worked out. The core group did all the detail work. The group met eight times.

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Case 1: New Impulses for R&D Planning


Conclusions and transfer of scenario contents The scenarios were presented to the head of R&D. Then several transfer actions were decided: - Presentation to the management board - Workshop with the middle management of R&D with the objective to formulate porposals for R&D projects - Workshops with the two marketing categories with the objective to develop marketing strategies and actions Results The scenarios triggered a totally new research area and a number of new views to known problem fields. They confirmed most ongoing research lines and brought up many improvement ideas for current projects.
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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Creativity as a type of thinking


Creative Thinking is generative not analytical Creative Thinking is divergent not convergent Creative Thinking is concerned with possibility not probability Creative Thinking is diffused not focused Creative Thinking is subjective not objective Creative Thinking looks for an answer not the answer Creative Thinking usually says yes and not yes but

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Positive attitudes for Creativity


Curiosity. Enjoying challenge. Not giving up easily: persevering to find a solution. Comfortable with imagination / Flexible imagination. Being optimistic about the possibility of solutions.

Negative attitudes for Creativity


Learned helplessness. Functional fixation / Prejudice. Psychological blocks negativity, over confidence, etc. The best answer/solution/method has already been found. Every problem has only one solution (or one right answer).
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Ways to increase your personal Creativity


1. 2. 3. 4. 6. 7. 8. 9. Stimulate your artistic side through other mediums. Set up a dedicated work space. Become part of a Creative Community. Play! Have Fun! Allow for float time. Be intentional about creativity Meditation / Yoga / Stress Reduction. Just do it dont think too much about it!!!

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Sources of Ideas
Customers Market (competitors, fairs, other countries) Creative staff members Project team members Analysis of technologies Idea generation in special sessions or workshops with the help of creativity techniques

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Sources of Ideas
IBM Institute for Business Value, CEO Study 2006
Employees Business partners Customers directly Consultants Competitors Associations Internal Sales & Service Units Internal R&D Academia Think-tanks Labs and/or other institutions

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

idea generation also takes place in special sessions or workshops with the help of creativity techniques

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Creativity Definition
Creativity is the ability of overcoming old-established structures and modes of thinking and combining elements of knowledge and experience from various areas in such a way as to come up with novel/new and useful ideas. Creativity in companies is normally directed to solve problems.

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A Group Setting Enhances the Creative Potential

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Creative Performance vs. Group Size


Efficiency in idea generation

Group size, number of participants

10

11

Reasons for an optimum group size:

Additional group members increase knowledge only incrementally.


Direct communication between all group members must be possible. Conformity pressure is lower in small groups. Individual responsibility for good results is decreasing with size.
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Idea Generation Methods as an Element in the Problem Solving Processes


Problem analysis and formulation

Idea generations methods

Search for solutions

Evaluation and selection of ideas

Realization

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The Problem Solving Cycle


Divergent Thinking Convergent Thinking

Task

Result

Problem

Solution

Open Everything is allowed Topic is explored Many ideas


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Easy to implement Advantages Economical Few suggestions


86

Systematic Problem Solving Single Problem Solving Cycles are Being Worked Through Sequentially
n tio tra en nc Co
ide n W ratio plo ex

Topic

Selected direction for solution

Deepening the information base, definition and specification of the new, subsequent task

In each cycle the following steps are run through: Definition and specification of the task Wide, creative search for solutions Selection and focusing on one (few) direction(s) for solution Deepening the information base Definition and specification of the subsequent task
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Parallel and Subsequent Problem Solving Cycles Form the Innovation Process
X

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The five Phases of the Creative Process


???

1. Formation of a problem consciousness 2. Intensive problem solving effort 3. Relaxation and estrangement
Thats it!

Perception of a problem Identification with the problem State of knowledge Analyses Partial, but unsatisfactory solutions Frustration Urge for finding a convincing solution

Local distance Relation, no stress The subconsciousness is mulling the problem Subconscious comparisons Idea flash (in view of unrelated subjects or thoughts) Applicability of perceived principles comes into mind Presentiment of a solution object Vague, fleeting ideas

4. Idea flash

5. Follow-up

Precise formulation of the idea Working out details n Overcoming obstacles tio olu s Achieving acceptance Innovation Management / JD

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Idea Generation Techniques


Techniques of free association Brainstorming Ring exchange technique Pincard technique Mind mapping Confrontation techniques Synectics excursion Stimulating word analyses Visual confrontation Picture cards brainwriting Outdoor confrontation Check of invention principles (TRIZ) Imagination techniques Try to become the problem Take a picture of the problem Guided fantasy journey

Techniques of structured association Walt Disneys chairs Six-hats method Combination techniques Morphological tableau Morphological matrix Attribute listing

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Idea Generation Techniques


Techniques of free association Brainstorming Ring exchange technique Pincard technique Mind mapping Confrontation techniques Synectics excursion Stimulating word analyses Visual confrontation Picture cards brainwriting Outdoor confrontation Check of invention principles (TRIZ) Imagination techniques Try to become the problem Take a picture of the problem Guided fantasy journey

Techniques of structured association Walt Disneys chairs Six-hats method Combination techniques Morphological tableau Morphological matrix Attribute listing

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Classical brainstorming The four basic rules


1
Dont criticize!
Criticism

Listen and take up ideas! (associations)

3 4

Let your thoughts wander! (free wheeling) Try to produce as many ideas as possible!
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Typical Structure of Idea Flow in a Brainstorming Session


Number of ideas per minute
7

unloading existing and obvious ideas generation of new ideas

6 5 4 3 2 1

original ideas

10

15

20

25

Minutes

Recommendation: Stretch the process even into a phase of feeling uncomfortable


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Brainstorming is probably the most important/known/popular creativity technique


The method was first popularized in the late 1930s by Alex Faickney Osborn Although brainstorming has become a popular group technique, researchers have generally failed to find evidence of its effectiveness for enhancing either quantity or quality of ideas generated. Because of such problems as distraction, social loafing, evaluation apprehension, and production blocking, brainstorming groups are little more effective than other types of groups, and they are actually less effective than individuals working independently Although traditional brainstorming may not increase the productivity of groups, it has other potential benefits, such as enhancing the enjoyment of group work and improving morale. It may also serve as a useful exercise for team building.
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Brainwriting
Difficulties with Brainstorming: Not enough time for mulling an idea and thinking it over. Unskilled moderators. Inadequate minutes; ideas were not described precisely. The concept of Brainwriting tries to overcome these deficiencies: Ideas are written down by the generators. The written ideas are exchanged to stimulate the other participants. Different ways to exchange written ideas lead to several Brainwriting variants.

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Ring-Exchange Technique
1. A 3-column form is drawn up. 2. Each participant writes down an idea at the top of each column 3. The forms are passed clockwise as soon as all participants have stated these ideas. 4. Each participant writes down an idea in each column, taking his righthand neighbors ideas as a basis fr association. If no association occurs, a new idea should be thought of. 5. The forms are passed again after all participants have filled out associated ideas, however after the five minute maximum time is up. 6. The exchange process is repeated five times.

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Ring-Exchange Technique
Problem: New applications for self-adhesive luminous polymer films
School children on the road Labels For childrens handicraft in the Kindergarden Marking of medicine chests

Marking of bestsellers in a bookshop Price tags on used cars Safety jackets Price tags on special offers Safety exit signs

Marking of flashlights

Marking of the ignition lock


Dont forget your brace!
1996

Life jackets Entrance guides in department stores

Reminder

Treasure trove

Marking of building or road construction and farm vehicles Innovation Management / JD

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Pin Card Technique


Phase I: Idea Generation on Circulating Cards
Write one idea on a card and put the card to the right.

Pick neighbors card, read, associate, and put all cards to the right.
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Pin Card Technique


Phase II: Clustering the Ideas

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Pin Card Technique


Phase III: Priorizing by Distribution of Dots

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Pin Card Technique


Description and definition of the problem. 5 - 7 persons jot down ideas on individual cards (one card per idea). The cards are passed on clockwise. A participant who has no more new ideas reads the cards which his right-hand neighbor passed on to him, and if he associates new ideas he writes these down on separate cards. The process is discontinued after 20 to 30 minutes and the cards are roughly sorted. They are then clustered according to topics, double entries are eliminated, and the cards are put on a pin wall. The cards are usually moved several times until the clusters are consistent. The various clusters are given headings.

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Mindmapping - Concept
With Mindmapping strictly analytical thinking and linear rectangular mapping are replaced by a natural way of structuring. Both hemispheres of the brain are used simultaneously; pictorial-spatial thinking is activated; the capacity for remembering is strengthened. The mindmap follows the analogy of a slice through a tree. The topic forms the tree trunk, subtopics, aspects and ideas are divided into main branches, branches and twigs. The mindmap emerges from an alternation between the branches and twigs. It can be complemented and differentiated at any time afterwards.
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Mindmapping - Proceeding
Material Plain white sheets of paper, DIN A4 landscape format Pencils in various colors, thick and fine Procedure Write down the topic as one word, symbol or picture in the middle of the page. Draw a circle or box around it. Write down your first thought as a keyword on a thick line (branch) top right (position at one oclock). The keyword has to be on top of the line and readable horizontally. Further thoughts are to be integrated dependent on whether they are associated with the already existing branch or describing a new main thought. For new main thoughts new main branches are established clockwise. Associations are added as finer lines (branches or twigs).
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Mindmapping - Proceeding
Let your thoughts flow freely, also crazy thoughts are welcome. When the streaming of thoughts slows down one should break up and complement, correct, and restructure the map. Further aspects should be looked for at a later time. Further rules Preferably use only one single keyword or symbol per line. Insert pictures and symbols wherever possible. Draw your first creative maps rather with pencil and eraser. Use various colors. The lines of branches and twigs all have to be interconnected.

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Confrontation Techniques - Characteristics


Basis of the confrontation techniques is the individual creative process. The common mechanism of these techniques is the triggering of ideas through unrelated objects, processes or any other impressions or thoughts. Idea generation through confrontations requires an uncommon way of thinking. Therefore one has to get familiarised or even trained in this form of creative thinking. Confrontation techniques should be applied when really original ideas are searched for. Typically the results from these techniques vary considerably with respect to relevance, concreteness and level of consideration, but there is a good chance that totally new solution ideas emerge.
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Visual Confrontation
Problem
Methods: Visual confrontation in groups Picture cards brainwriting Outdoor confrontation

Principals: 1. Estrangement and relaxation by means of pictures 2. Confrontation with picture elements

Solution
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Visual Confrontation an Example


Problem: A new concept for garden furniture should be developed overcoming weaknesses of actual furniture. Pictures are shown and analysed. Desk with a drawer: Sliding elements are integrated in the furniture pieces. They can be pulled out and fastened on the opposite side thus forming a tarpaulin. Furniture designed in a way that the pieces are joined in a compact way. A cover protects the pack against bad weather. Garden shed matching the furniture in its style. The furniture can be stored quickly and compactly.
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Stacked pales of straw:

Shelter in the mountains:

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Visual Confrontation in the Group

Phase I: Clarification and Definition of the Problem


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Visual Confrontation in the Group

Phase II: Relaxation and Estrangement


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Visual Confrontation in the Group

Traffic Light 1. Lights off/on 2. Sequential 3. Color Code 4. PC Tire 1. Continuous 2. Tread Pattern 3. Pressure 4. Inflate Switch 1. Push Bottom

Phase III: Idea Generation by Intuitive Confrontation with Picture Elements


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Steps of Visual Confrontation in the Group


1. Clarification of the Problem Explanation Questions and answers Precise, narrow definition 2. Unloading the Mind Quick brainstorming Check of brainstorming ideas Reformulation of the problem, if necessary 3. Relaxation and Estrangement Looking at soft pictures Exposed to background music Dreaming away
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4. Development of Ideas from Picture Elements Analyzing pictures with respect to inherent priciples Deriving ideas from principles by transferring them to the problem 5. Further Development of the Ideas Screening Combining Detailing

Steps of Picture Cards Brainwriting


1. Explanation and analysis of the problem; precise problem definition by the group (20 - 30 minutes) 2. Quick brainstorming (ca. 5 minutes) 3. Check and possibly reformulation of the problem definition (ca. 5 minutes) 4. Idea generation with picture cards (ca. 20 minutes) Special pictures are distributed to the participants (ca. 30 pictures per group) They are analysed individually: From principles seen in the pictures ideas are derived and written down on pincards. The pictures are exchanged among the participants. 5. Afterwards: Idea generation by passing the cards around (ca. 10 minutes) 6. Sorting the idea cards on a table (ca. 15 minutes) 7. First spontaneous evaluation by sticking dots (ca. 10 minutes)
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Morphological Tableau
1. Identification of the elements of the problem (parameters) to be listed in the first column 2. Search for partial solutions (options) for each parameter 3. Development of overall solutions by connecting elements through lines; each line representing a possible solution 4. Analysis and pinpointing of the optimum overall solution, e.g. B
P
P1 P2 P3 P4

P
P1 P2 P3 P4

P
P1 P2 P3 P4

P
P1 P2 P3 P4

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Application of the Morphological Tableau


Application In general: Whenever a task, process or function can clearly be divided into independent parts, subfunctions, elements Complex problems Especially suited for: machines devices organizational tasks (organizing a conference) processes (with phases of different functions)

Situation in problem solving: After intensive open idea generation in order to structure the material and to separate between essential and less conceptual ideas (especially in workshops) Weaknesses The solution stays within the established frame-work. Breakthrough-ideas can not be expected! Difficulty to maintain an overview over attractive solutions. Abstractive thinking required.
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Morphological tableau for a coffee machine


Parameters ..boil water ..dispense coffee powder ..filter ..keep warm ..pour coffee Solutions (examples) Potential solutions (values; here limited to three for each problem) heating coil (built in) hot plate or open flame (external) chemical reaction producing hot water integrated dispensing electrostatic precipation heat retaining hood second container, pour out
K2 boil = heating coil dispense = integrated unit filter = filter paper keep warm = heat addition pour = second container 115

by hand, with spoon built-in measuring cup filtering paper heat insulating material tap porous porcelain addition of heat pumping unit

K1 boil = chemical reaction dispense = integrated unit filter = ceramic filter keep warm = insulating hood pour = tap Innovation Management / JD

Morphological Tableau: Fairytales


Parameter
Main actor

Options
Little girl Turkish boy Tennis ball boy Grandpa and grandma Auntie Margot A dwarf Handicaped child The little people Caretaker .....

Friends

Neighbourhood Dachshund child Witch Magpie

Pumuckl

.....

The evil

Big dog

.....

Embodiment of good Place of the action Mysterious event

Fairy

Grandma

Pigeon Family excursion

Gardener

Lady from the castle Kindergarden Reading mind Shrill noises

.....

Big city

On the beach

Ship Serialized dreams

.....

Cake/Coke is Switch into Gliding over a growing again another world moonlight ray
Noses are growing all over the body

.....

Danger

Deep fall

Arrested

Evil giant cat

.....

Happy-end

A wish comes true

Parents come home

Big party

The cat is back again

Balloon ride

.....

Fairytale A

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What Creativity Techniques achieve


Establish a clear focus Planned, organized process vs. spontaneous intuition Uses normal, competent staff vs. only highly creative Ensure discipline for cooperative group work Provide predictable results within a given time Does these things by - stimulating the creative process - compressing it in the time

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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The Situation after Idea Generation


A big number of ideas are listed, however only a few can be realized. Most ideas are only vaguely described. The information about the individual ideas is generally low. In a rather short period of time a few ideas have to be selected for further investigation and development.

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Problems for the Evaluators


A judgement has to be given on the basis of incomplete information and insufficient knowledge of details. Evaluation needs also fantasy and creative thinking on - the final product and - the social, economic and technical environment of usage of the product.

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Wrong Interpretation because of Limited Insight

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Widespread Failures in Screening


Strategic aspects are forgotten (e.g. areas excluded by company policy); management brings in these aspects late in the process killing many ideas. Criteria are distributed to knowledgable persons; all work parallel. Screening is done by committees; from session to session ideas are rejected without additional information collection in the meantime. The most important criteria are applied first (market data; ROI); they require high effort and can nevertheless not be applied satisfactorily. No decision rules are layed down beforehand. One is anxious to reject ideas that in fact might be valuable. (The aim of the screening process is to select a short list of ideas that have a potential; the objective is not to verify that all rejected ideas are bad.)
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Information Status during the Screening Process


number of ideas information per idea

degree of maturity

ideas

time
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Why Idea Selection in Steps?


Example: From 100 idea 1 has to be identified as the best. Budget: $100 000 A: Selection in one step For each idea $1 000 are spent to collect information. On the basis of this information the selection is made. B: Selection in several steps Step reduction of ideas costs/idea 1 100 30 100 2 30 10 500 3 10 5 2 000 4 5 3 5 000 5 3 1 10 000 17 600 costs/step 10 000 15 000 20 000 25 000 30 000 accumulated costs 10 000 25 000 45 000 70 000 100 000 -

For the final 3 ideas $17 600 were spent for information collection.
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Idea Selection in Steps


(unprecise) ideas (approx. 150) 1. Culling (interpreted) ideas (approx. 50) 2. Rating (more concrete) ideas (approx. 20) 3. Scoring (further developed) ideas (approx. 9) 4. Business Analysis Concepts (approx. 4) 5. Decision by higher management 2 projects implemented

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Principles of Cost Efficient Idea Screening


The selection should be made in steps; 3 - 4 steps have proved to be practicable. On the basis of an evaluation ideas are eliminated in each step, allowing to concentrate on the remaining ideas in the following steps. The evaluation is made on the basis of criteria The criteria can be applied one after the other. Criteria requiring lowest effort on information should be applied first; then one should go on with criteria requiring higher efforts. From step to step additional and more profound information for evaluating the criteria are needed. Rules for decisions must be established prior to idea elimination.

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Principles for Screening


Criteria can be applied sequentially (one after the other). The sequence of the criteria is determining costs. Best cost effectiveness is achieved when the criteria are applied in the order of the ratio C/PF. It is sufficient to rank the criteria according to a relative judgement. For practical purposes a screening procedure in four steps has proved effective: - Culling - Rating - Scoring - Business analysis The percentage of rejected ideas should be high in the first steps (>60%) and then be reduced (<50%).
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Types of Criteria
There exist criteria with different character. This has to be considered when applying them. Categorial criteria: Sorting into different categories, i.e.: Yes, no, incomplete, more information needed, dont know Gradual criteria: Judgements about fulfilment on a score scale Integral criteria: Calculation of economic metrics on the common basis of money, i.e.: ROI, ROA, NPV, break even

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Idea Evaluation and Selection in four Steps


Step 1: Sorting and Screening (Culling, Rating) Structuring, summarizing, references Negative selection based on must and should criteria Step 2: Pre-selection (Scoring) Scoring models Ranking according to overall scores Best ideas are followed on (positive selection) Step 3: Analyses Risk analysis Success factor analysis Analysis of costs Concept and detail improvements Step 4: Business Analysis and Presentation for Decision Rentability calculations Portfolio analysis Business Plan
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Example: Scoring Model


Criteria
Weight factors Market volume Intensity of competition Market growth Investment volume Synergetic use of existing know-how Time for development and setup Recognition on the part of the consumer Scale of scores: 1,2,3,4,5 1,0 0,85 0,7 0,65 0,5 0,4 0,3 Overall value Suggestion A
Score Value

Suggestion B
Score Value

Suggestion C
Score Value

3 4 2 1 3 3 3 =

3,0 3,4 1,4 0,65 1,5 1,2 0,9 12,05

5 1 2 3 4 1 3 =

5,0 0,85 1,4 1,95 2,0 0,4 0,9 12,5

2 4 3 4 2 5 3 =

2,0 3,4 2,1 2,6 1,0 2,0 0,9 14,0

C provides the relative best suggestion. If the bound is set at 13 only suggestion C is followed up. Innovation Management / JD 130

Example: Ranking by Pairwise Comparison


Ideas 1 2 3 4 5 6 0 0 1 0 0 0 1 1 0 1 1 0 0 0 0 1 2 1 3 1 1 4 0 0 0 5 1 0 0 1 6 1 1 1 1 1
Number of preferences Rank

4 2 1 5 3 0

II IV V I III VI

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From Ideas to Product Concepts


Idea Generation

List of Ideas

more information more details

increased evaluation effort more persons and functions involved

Product Concepts
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Evaluation of Ideas
The in-depth evaluation of ideas is to be based on criteria. A great variety of methods is available for evaluation: profiling technique, distribution of points, catalogue of pros and cons, advocating technique, cost benefit analysis, economic assessment From stage of stage
the number of ideas to be further processed is reduced, the information about the more promising ideas increases, more sophisticated evaluation methods are used, the number of involved people increases, the ideas are gradually concretized and elaborated (development of ideas into concepts).
Innovation Management / JD 133

Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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The Phases of a Workshop


Prephase Planning Preparation Execution Warming-up Introduction (background, objectives) Overview, agenda Working on main task (e.g. idea generation) Planning the next steps Closing (summary, feedback, outlook) Follow-up Minutes Implementation of planned tasks

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Roles within the Workshop Group moderator(s) assistant and writer problem owner(s) expert(s)

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The Ideal Moderator


Preparation: Selection of participants (as agreed with the problem owner) Invitation Organisation (rooms, equipment) Designing the agenda Moderation of session: Ice-breaking (short exercise or game) Introduction of participants (Presentation of the problem by the problem owner) Explaining the rules Keeping records on a flipchart (shortening the statements without loosing the specifics)
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The Ideal Moderator


Observe the group (tensions, conflicts, desires, frustration, etc.) Stop lengthy discussions and lead back to the main path Restimulate idea flow when slowing down Finish a single step and introduce to the next step Stay within the planned time schedule Ensure breaks Handle conflicts Follow-up: Make sure that minutes are made and are distributed Observe follow-on activities

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Workshop Rules
Do not block! Listen to others, relate to others. No debate. We do not have to reach consensus on all topics. There is no right or wrong. Concentrate work, no side-talks! Humor is welcomed; share jokes with all. Short and precise statements. Stay with the agenda points; do not jump! Do not go down rat holes. Be open; unusual, brave ideas are welcome. Be tolerant, nobody is perfect. The role of the facilitator is to lead through the process, to achieve the aims of the session. Therefore he may shorten discussions, change procedure or take other actions. No Blackberries. No open laptops (besides facilitators). No dial-in option. Cell phones in silent mode only.

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Central Idea Collection and Structuring


All idea sources should be used!

Customers needs and problems

Suggestions of staff with customer contacts Future analyses - scenarios - roadmaps

Actions of competitors

Idea collection office


Technological developments
Structuring,placing Forwarding ideas to be evaluated

Active idea search


- workshops - idea-chats - expert interviews

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Management of Idea Flow


Diverse Sources custumers competition staff analyses Systematic Idea Generation Idea generation sessions Creativity workshops Idea Collection structuring

Idea Evaluation and Selection several steps standardized methods Established evaluators Project Suggestions

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Management of Idea Flow


Idea Evaluation and Selection several steps standardized methods established evaluators

Project suggestion

Assessment of Project Suggestions (Pre-Projects) technical experiments Inquiry of requirements determining specifications rough project planning

Integration of new R&D-projects

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General Idea Flow Model


Search fields

A. Open idea collection B. Strategic idea generation


Input Rejection: formal criteria not fulfilled Reference to ongoing projects or activities

Processing and editing by idea collection office

Strategic guidelines for innovations

Clustering

Multifunctional idea evaluation team


Strategic filter

Frame of orientation

Preliminary check
strategy fit must-criteria assignments

Rejection: strategic guidelines not fulfilled Rejection: must-criteria not fulfilled Feedback to the idea author

Idea promoter
Budgets

Ranking by scoring methods Check of success factors

Rejection: too high need of resources Rejection: not attractive Rejection: general success factors not met

Elaboration of project proposal

Idea memory

Project decision by higher management

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Prerequisites for a Successful Idea Management System


The procedure of the system is obligatory Wide tunnel opening Different treatment of different types of ideas Methods and decision rules are layed down Narrow tunnel neck All steps are transparent and understandable Srategy fit is most important criterium Competent evaluators Promotors introduce and stabilize the system
Source: 12 cases in North America and Germany

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Pre-Projects
Objectives: - Reducing information deficits and uncertainties - improved basis for decision - Getting ready for project work Projects on proof Gathering detailed information on technologies, markets, customers, sales channel, etc. Technical pre-tests Marketing strategy Determining the specifications Feasibility study Risk analysis
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Pre-Projects
Business plan (rough time schedule) Suggestion for project team Decision by top management after presentation Setting-up innovation project (project management) Organizational forms: - none (often) - part of standardized process with a preliminary project leader - length: 2 - 6 months

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Summing-up: The Stages of the Concept Finding Phase


1. Strategic Orientation Guidelines, focus areas Innovation fields Communicated to marketing and R&D staff involved in innovation search. 2. Idea Generation Central office collecting ideas Passive idea collection: any source Active idea generation: - workshops - consumer groups - expert interviews - future studies Classification and distribution of ideas
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Summing-up: The Stages of the Concept Finding Phase


3. Idea Selection and Further Development Evaluation and selection process in several steps (4) Different methods and evaluators per step Prescribed criteria, weights and priorities derived from strategies, goals and restrictions Stepwise deepening and further-development 4. Pre-projects One investigator for each proposal under consideration Reducing uncertainty by information collection; clarifying specific questions Project design and rough planning Presentation of project proposal to higher management Project decision
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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Business Processes
Business processes begin and end at the customer.
firm customer

Main business processes: Marketing process Product innovation process Tender process Order processing process
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Standardized Processes in R&D


In a company similar products are permanently developed. Very similar activities and chains of actions take place. Therefore many companies have layed down standard processes for product development and innovation. They fulfill the following purposes: - Guideline and check.list for the project team - High transparency for the project environment - Fixed structures and milestones make project controlling easier. The standard process does not replace project planning; it gives however a structure which has to be filled in specifically.
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Conventional Standard Processes for Product Development


Often only technical development Sequential sequence of activities The process phases are dominated by the functional divisions (development, manufacturing, marketing) No cross-functional teams

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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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The Concept of Project Management

Project 1

Project 2

Project 3

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Management of (Innovation) Projects Organizational Set-up


Top management

Project steering commitee


Top manager Division head Section managers

Departments
Procurement R&D Manufacturing Personnel Administration Marketing/Sales

Project team Project manager Team members

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Phases of an R&D Project


Project start Project planning Project set-up procedure Project monitoring and controlling
Target Actual status

Project end

Project proposals

Deviation Actions Project documentation

Project final

Implementation

Project decision

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Specialities of Innovation Project Management


Special set-up procedure High degree of situative management Detailed planning up to the next milestone; remaining phases are only roughly planned Difficulty to monitor the progress in achieving the technical objectives Special controlling High importance of internal coordination - multifunctional teams - multifunctional steering committee - high frequency of project team sessions High relevance of soft factors Selection, prioritization and phase-in of projects into R&D Multi-project-management
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Innovation Management Outline (WS 2010/2011)


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Prologue: Invention, Patent, and Innovation Introduction: some definitions and basic phenomena; innovation management Empirical findings: success factors Basic concepts of innovation management Strategic orientation; scenario technique Idea generation Idea evaluation and selection Creativity/Innovation workshops Idea management Pre-project-stage Standardised innovation process Project management for R&D-projects Selected Publications
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Selected Publications
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Juergen Hauschildt: Innovationsmanagement (in German), Verlag Vahlen, 3rd Edition, Munich, 2004. Charles A. O-Reilly III and Michael L Tushman: The Ambidextrous Organization. Harvard Business Review, April 2004 Michael L. Porter: What is Strategy? Harvard Business Review, November-December 1996 David A. Garvin and Lynne C. Levesque: Emerging Business Opportunities at IBM (A). Harvard Business School. February 2005 Scott G. Isaksen, Mary C. Murdock, Roger L. Firestien, Donald J. Treffinger (eds.): Nurturing and Developing Creativity: The Emergence of a Discipline. Ablex Publishing Corporation, 1993 Keith Goffin and Rick Mitchell: Innovation Management. Palgrave Macmillan. 2005 Gifford Pinchot III: Intrapreneuring. Harper and Row Publishers. 1985 Robert G. Cooper: Winning at New Products, Basic Books, 3rd Edition, 2001. Clayton M. Christensen: The Innovators Dilemma, HarperBusiness Essentials, 1997 Geoffrey Moore: Crossing the Chasm, CollinsBusiness Essentials, 2002. Harvard Business Review on Innovation, Harvard Business School Press, 2001 Philip Kotler and Kevin Lane Kelle: Framework for Marketing Management, 3rd edition, Pearson Education, 2006 Arie de Geus: Planning as Learning, Harvard Business Review, 1988 Anthony Hodgson: Strategic Thinking with Scenarios, Discussion Paper, Decision Integrity Limited, 2003 Robert M. Grant: Contemporary Strategy Analysis, 6th Edition, Blackwell Publishing, Malden/MA, 2008 Robert Kaplan and David Norton: Strategy Maps, Harvard Business School Press, Boston/MA, 2004 Innovation Management / JD 161

Abstraction Layers of Innovation Management


(Deicke)

Innovation for the world and mankind Innovation and corporate strategy, innovation as a competitive advantage for a corporation (e.g. product leadership, reputation as innovator) Innovation Management and formal organizations Innovation Management in the classical sense
Idea management Innovation project management

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Thats it! Have a good time and see you at the exam! Thanks!

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