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Fachhochschule Köln

Cologne University of Applied Sciences

Systematic Innovation Managementas a Marketing Strategy for Libraries

Prof. Dr. Ursula GeorgyCologne University of Applied Sciences

Athen / Thessaloniki 2014



© Prof. Dr. Ursula Georgy

Content

Innovation Management an Service Innovation

Trend Reports: Gartner (Hype Cycle) and

Horizon Report

Open Innovation

Open Innovation and Knowledge (Management)

Open Innovation Survey (2010)

Outlook



Innovation Management

and

Service Innovation




Introduction

Service innovation has become a necessary choice

and management technique in service industries.

Services now are making up about 70% of the

GDP (Gross Domestic Product) in OECD countries.

Libraries are part of the service industry and have

to implement new technologies and services to

improve satisfaction to their users and customers.

Therefore libraries have to build up and to

implement a new kind of innovative culture –

original, not copied.




Customer Satisfaction and Innovation

Management

The product and service sector has to be aimed at the

customer needs so that each customer as an individual

is satisfied while however the entrepreneurial goals are

accomplished simultaneously.

In the context of service innovation this means that new

services must custom-fitly be tailored to the customer.

Till now good ideas of one's own, however, are too

often realized without analyzing, if the customer needs

these services or if the market is ripe to this.



Customer Satisfaction and Innovation

Management

Customer desires ideally are taken into account

in a way as extensive as possible.

Putting customer desires into action (service)

may seem trivial; but: the customer can

formulate wishes and problems but normally not

solutions.

The challenge for libraries lies in the conversion

of customers` desires into corresponding

customer requirements and fitting services.





The Innovation Process

Innovation management must be a systematic

process as an executive function to collect, review,

evaluate, and manage ideas and to bring them as

user-friendly products or services to market.

In the area of libraries systematic innovation is less

developed and one gains the impression that libraries

don´t take strategic action and that innovations are the

result by chance. Attempts of innovative thinking will be

often killed or nipped in the bud.




The Innovation Process

Komninos, 2005




Types of Innovations



Types of Service Innovation

The four dimensions of service innovation:

„product“ – the service offering

„process“ – how that offering is created and

delivered

„position“ – the target market segments, the

underlying positioning via brand etc.

„paradigm“ – the underlying mental models

about

what kind of business „we“ are and the rules of

the game: business model innovation Bessant et al. 2014, S. 5





Bessant et al. 2014, S. 6

The Innovation Space




http://www.apo-tokyo.org/productivity/pmtt_022.jpg

The Service Innovation Framework




http://www.bi.edu/PageFiles/214077/Service%20Innovation%20Triangle%20Booklet.pdf?epslanguage=en

The Service Innovation Triangle




Diffusion of Innovations

to Market (Model)

Rogers 1983: Diffusion of Innovations




Diffusion of Innovations

to the Market (Model)Diffusion of Innovations

and Market Share

http://matthewsonmarketing.files.wordpress.com/2012/11/chap-1-fig-2-everett-

rogers-diffusion-innovation-model1.png



Trend Reports:

Gartner (Hype Cycle)

Horizon Report




Gartner Hype Cycle

„Hype Cycles help organizations understand the

landscape of technology maturity and markets, and to

decide which technology innovations to adopt,

postpone or ignore, and when is the time to adopt.“

For libraries it seems to be conceivable first to identify

where a particular librarian-relevant technology lives

along the curve and then to map out where libraries

and librarians live and where they tend to live in that life

cycle.




Phases of Gartner Hype Cycle

Fenn 2010)




Gartner Hype Cycle

http://www.virtualtravelog.net/wp/wp-content/gallery/2011-04-hype-cycles/dynamic/Gartner-Hype-Cycle-

Phases-nggid03294-ngg0dyn-600x0x100-00f0w010c010r110f110r010t010.png




Gartner Hype Cycle of Emerging Technologies 2012

Gartner, 2012




Gartner, 2013






2013

Gartner, 2014




Horizon Report 2014

The New Media Consortium, 2014




Horizon Report 2014 – Headlines (Extract)

The New Media Consortium, 2014



Open Innovation




Need and Solution Information

Customer oriented innovation requires:

Need information

Information about market and customer wishes / needs.

found out by customer or non-customer interviews.

Solution information

Information how customer needs can be implemented

efficiently and precise.

seldom found out by questionnaires.

What have libraries to do?




Definition of Closed Innovation

http://www.nansenneuro.net/images/stories/articles/closed_innovation_en.jpg




Technology Push versus Market Pull

http://www.b4development.com/wp-content/uploads/2011/01/aiPULLvsPush-e1295867991208.jpg




Definition Open Innovation by Chesbrough

„Open Innovation is a paradigm that assumes that

firms can and should use external ideas as well as

internal ideas, and internal and external paths to

market, as the firms look to advance their technology.

Open Innovation combines internal and external ideas

into architectures and systems whose requirements

are defined by a business model.“

http://images.businessweek.com/ss/09/03/0312_game_changing_timeline/image/11_2000.jpg




Extension of the Definition 2006 by Chesbrough

„Open innovation is the use of purposive inflows and

outflows of knowledge to accelerate internal

innovation, and expand the markets for external use

of innovation, respectively.“




Definition of Open Innovation by Chesbrough

http://www.hokkaido-vc.com/english/open_innovation/open_innovation_en.JPG




Open Innovation

One estimates that depending on line of business 10

to 40 % of all customers are ready to participate

active in innovation processes.

In the result, however, this means that numerous lines

of business not nearly exploit this potential.

Libraries normally don´t see open innovation as a

strategic instrument

Very different roles are conceivable, a customer can

be involved in the process of innovation. His

independence rises continuously from the interview

up to the independent innovation.




Closed Innovation versus Open Innovation

Chesbrough, H. 2003




Open Innovation Projects

https://nbry.files.wordpress.com/2014/06/3d-printing-what-ideas-airwolf3d-com.jpg




Well-known Open Innovation Projects:

Toolkit Jewellery Design Competition of Enlightened

Swarovski Elements





Lego Digital Designer





Procter & Gamble: connect + develop



Open Innovation

and

Knowledge (Management)




External Knowledge Inflow by Open Innovation

“Open innovation is about knowledge exchange.

Everything else is secondary.” Hansford 2011

©iStockphoto.com/alwyncooper




The Strategic Knowledge Framework

Zack 1999




Strategic Gap – Knowledge Gap

Zack 1999




Open innovation: the KM dimension of P&G

„For a company famed for its ability to continuously

offer products that match customers’ most current

needs, Procter & Gamble takes pride in the success of

its innovation processes. Mike Addison describes the

essential role knowledge management plays in P&G’s

Open Innovation strategy that looks internally and

externally for new ideas and opportunities.“Inside Knowledge: posted 10 Jun 2004 in Volume 7 Issue 9

The percentage of new P&G products that include

elements developed outside of the firm has increased

to over 35%.




Innovation / Knowledge and Human Resource

Capacity

„You need a great team of people with diverse skills to

perform a symphony well, but no team has ever written a

great symphony!

While cross-functional teams are key players in defining

and implementing incremental innovation projects,

cross-functional disruptive individuals tend to be key

players in defining radical innovation projects”. Leifer et al. 2000




Human Resource Capacity and Libraries

Libraries have a large number of customers

and partners from all sectors and branches.

They have the potential to become and to be a

vital space to engage in collaborative innovative

projects creating and sharing (new) knowledge.

Therefore especially customers of libraries

can be potential knowledge and innovation

creaters.




Professional Behaviours finding Innovative Structures

AUA, 2009




Impact of an organization's ability to innovate

Schnell, 2008




The Continuous Innovation Process

Tomorrowlab, 2009




Crowdsourcing

http://memeburn.com/2011/09/9-examples-of-crowdsourcing-before-%E2%80%98crowdsourcing%E2%80%99-existed/




Crowdsourcing: Starbucks




Open Innovation and Libraries

“Thousands of libraries in Germany are run by just one

librarian. [...] Here we have a single person doing all the

work that is normally shared between several people in

larger libraries. A one-person librarian thus requires a

very wide range of skills in order to be able to do the job

successfully.“

These aspects are not only typical for one-person

libraries, they are typical for many mid-sized (public)

libraries.




Open Innovation and Libraries

Technological innovations are introduced to the library

with the intention of providing better library services and

increasing efficiency of library work.

„The library profession attracts individuals of varying

ages, varying degrees of experience, and a range of

technological capabilities, all of which influence the way

they perceive new information and communication

technologies. It is the role of librarians to introduce new

technologies to library users.“ Rubin 2004

Rabina, Walczyk 2007




Advantages Sharing Knowledge in the Sense of

Open Innovation

Using the experience and knowledge of customers

Increase market acceptance of new products /

services

Improving the image

More personalized services

Early awareness of new (market) trends

Increased consumption of the entire range of

services

Increased customer loyalty

Reduction of development costs

Reduction of acquisition costs




Potential Risks

High coordination effort by the library

Ignorance (knowledge) of the external innovators

Innovations of the external innovators based on

their own benefit only

Lack of involvement of the external innovators

(quantitative)

Lack of engagement of the external innovators

Lack of project and time management of the

external innovators

Lost of know-how, for example to competitors.




Conclusion

Modern innovation and knowledge management

requires integrated structures in the sense of open

innovation.

Social community network structures can promote

innovation and knowledge management in the

sense of open innovation.

Only by cooperation and integrating external

partners it will be able to develop customized

innovations for the customer in future. Otherwise

libraries will run the risk developing innovations

not wanted and not used by their customers.



Open Innovation

Survey (2010)




Survey and Results

More than 30 institutions were interviewed in

Germany. Libraries and information centers of

various size: state libraries, academic libraries,

public libraries, special libraries and documentation

departments in public ownership.

The survey was addressed to the head of the

institutions and in almost all cases it was directly

answered by these persons.

Qualitative expert interviews (ca. 45 min.) on the

basis of a highly structured questionnaire.

Georgy, 2010




Do you know the term Open Innovation?

Yes 6

No clear idea 3

Only vague idea 10

No 17

Although the term open innovation is not well

known, almost all institutions integrate their

customers to varying degrees into the innovation

processes and are willing to intensify the integration.




Associations with the term „Open Innovation“




What motives have customers to play a part in

innovation? (Multiple answers possible)

Own dissatisfaction with the current range of services 20

Intrinsic (e.g. enjoyment, pride) 18

Social (e.g. membership in a group) 13

Obtaining personal benefits through

implementation and use of innovation 11

Extrinsic (e.g. money) 2




Word Cloud: What kind of customer integration in

the various stages of the innovation process would

you prefer?




Do chances or risks rather arise from open

innovation in your opinion?

Only chances 14

Only risks 1

Both 19

I do not know 2




Risks that may result from open innovation (Multiple answers possible)

High coordination effort by the own organization 19

Ignorance (knowledge) of the external innovators 13

Innovations of the external innovators based

on their own benefit only 11

Lack of involvement of the external innovators

(quantitative) 7

Lack of engagement of the external innovators 6

Lack of project and time management of the

external innovators 2

Loss of know-how, for example to competitors 2




Opportunities that may result from open innovation (Multiple answers possible)

Using the experience and knowledge of customers 22

Increase market acceptance of new products / services 18

Improving the own image 15

More personalized services 12

Early awareness of new (market) trends 11

Increased consumption of the entire range of services 10

Increased customer loyalty 8

Reduction of one's own staff needed 0

Reduction of development costs 0

Reduction of acquisition costs 0




If you would use open innovation, which groups

would be involved? (Multiple answers possible)

Even selected "lead users"

(demanding, critical, advanced customers) 28

Customers with expertise 17

In addition, even non-customers, but with knowledge

in library and / or information science

11

Winner of an idea competition initiated by one´s own 6

Members of other innovation communities,

even without knowledge of the industry 5

No limit 3

Own customers without restriction 2



Outlook




Outlook

Next to once, it is particularly necessary to do

everything for a systematic innovation

management.

In the consequence changes of the organization

principles possibly require also courageous

individual decisions by e.g. unconventional

structures.

Increasing competition intensity and a high

dynamics of library services force service

providers to develop solutions and services for the

customer to build up a positive image to the

customer.




Outlook

Modern innovation management requires

integrated structures in the sense of open

innovation.

Social community network structures can promote

innovation management in the sense of open

innovation.

Only by cooperation and integrating external

partners it will be able to develop innovations

for the customer in future. Otherwise

libraries will run the risk developing innovations

not wanted and used by the customers.




There´s a lot to be said about

Open Innovation:

„Innovation happens elsewhere“

and

„Everyone together is smarter than your

group alone.“Bill Joy, Sun Microsystems



Thank you for your attention!

Ursula Georgy

ursula.georgy(at)fh-koeln.de

mailto:[email protected]




Citations

AUA (2009): Continuous Professional Development Framework for Staff Working in Professional

Services in Higher Education

Bessant, J.; Lehmann, C.; Moeslein, K.M. (2014). Driving Service Productivity. Heidelberg.

Springer

Chesbrough, H.W. (2003): Open Innovation: The new imperative for creating and profiting from

technology, Boston: Harvard Business School Press.

Chesbrough , H.W. (2006). Open Innovation: A New Paradigm for Understanding Industrial

Innovation. In: Chesbrough et al.: Open Innovation: Researching a New Paradigm, Oxford:

Oxford University Press.

Fenn, J. (2010): Hype Cycle 2010: Tips to Optimize Your Technology Portfolio (21. September

2010)

Gartner Inc. (2014): Gartner's 2014 Hype Cycle for Emerging Technologies

http://www.gartner.com/newsroom/id/2819918 (08.11.2014)








Citations (cont.)

Gartner Inc. (2012). Why Gartner

http://www.gartner.com/technology/why_gartner.jsp (08.11.2014)

Georgy, U. (2010): Erfolg durch Innovation – Strategisches Innovationsmanagement in

Bibliotheken und öffentlichen Informationseinrichtungen. B.I.T.online – Innovativ, Band 29, Dinges

& Frick Wiesbaden

Hansford, M. (2011). The right knowledge management strategy is essential to open innovation.

Mike Hansford´s Blog, 26.04.2011

http://mikehansford.wordpress.com/2011/04/26/the-right-knowledge-management-strategy-is-

essential-to-open-innovation/ (08.11.2014)

Johnson, L., Adams Becker, S., Estrada, V., and Freeman, A. (2014). NMC Horizon Report: 2014

Library Edition. Austin, Texas: The New Media Consortium.

Komninos, N. (2005): Intelligent Innovation. In: Virtual Innovation Environments.

http://www.urenio.org/category/virtual-innovation-environments/ (08.11.2014)

Leifer, R.; O'Connor, G.; Rice, M.; McDermott, C.; Peters. L.; Veryzer, R. (2000). Radical

Innovation: How Mature Companies Can Outsmart Upstarts. Boston: Harvard Business School

Press.

Plieninger, J. (2012). A Singular Approach: One-Person Libraries. May 2012




Citations (cont.)

Rabina, D.L.; Walczyk, D.J. (2007). Information professionals' attitude toward the adoption of

innovations in everyday life. Information Research 12/4 October 2007.

Rogers, E.M. (2003): Diffusion of Innovations, 5th Edition, New York: Free Press

Rubin, R.E. (2004). Foundations of library and information science. 2nd ed. New York: Neal-

Schuman

Schnell, E. (2008): Libraries Visioning Task Forces, Summer 2008. Innovation Task Force Final

Report

Zack, M.H. (1999). Developing a Knowledge Strategy. California Management Review, Vol. 41,

No. 3, Spring, 1999, pp. 125-145.

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