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Edison's Style Of Innovation Management

Edison made innovation more of a science than an art by systemizing the innovation process into certain steps. His innovation factory transformed the image of the sole inventor working in his or her lab to a team working together to transform an idea into a product. Edison and his team con­ducted research, brainstormed new ideas, experimented with new product concepts, and devel­oped them into marketable products, laying the basis of the NPD process as we know it today. Edison's NPD process included the following stages:

• Conducting the necessary research. In Edison's words: "First study the present con­struction. Second ask for all past experiences . . . study and read everything you can on the subject."2

•   Applying imagination to the problem and comparing alternative solutions. At this stage, brainstorming with various concepts is undertaken. In Edison's words: "Result? Why man, I have gotten a lot of results. I know several thousand things that won't work."3

•   Developing new product concepts where various prototypes are created and tested for technological and design feasibility.

•   Scanning the environment. This practice is designed to determine the requisite and desir­able conditions required for the new product to succeed. It may involve investing in changing the environment in cases in which the change introduced by the innovation is radical.

•   Commercializing the product. This involves forging a number of alliances to exploit the product across related markets and multiple distribution channels.

Maybe Edison was not the greatest inventor of the time, but he certainly was a great innovator. His invention of the light bulb was not the most superior in technological terms, but he knew how to innovate. First, he bought fields of bamboo, what is called in business terms vertical or back­ward integration, to ensure a constant supply of raw materials.4 That was not enough since the existing infrastructure did not support his invention in a society accustomed to gas lamps. To solve this problem, Edison bought a small electrical company and transformed it to provide elec­tricity to domestic outlets. Thus, he adopted another strategy of vertical forward integration— buying the distribution channels. Edison also invested in educating customers as to the utility of the light bulb and created one of the best social innovations of the twentieth century.

Starting in the 1960s, the NPD process has been streamlined across and within industries to a major extent, with divergence detected only between the "best" and the "rest" of organizations.5 A survey by the Product Development Management Association (PDMA) in 1997 of the NPD stages used by 600 U.S. firms revealed that 60 percent use a formal NPD process consisting of six stages,6 very similar to Edison's. Even those firms that had no formal NPD process developed their new products through similar stages. These stages consist of "exploration, screening, business analysis, development, testing, and commercialization."7 While the goods manufacturing industry often uses more than six stages, companies in the service industry tend to use fewer stages, discounting the manufacturing and testing stages.8 Furthermore, the six stages have also been found to be con­sistent regardless of the level of innovation (i.e., whether it is incremental/evolutionary or radi­cal/revolutionary). This confirms that the generic NPD stages used today, illustrated in Exhibit 7.1, have been substantially the same since the dawn of the twentieth century.

Though the structure of the NPD process and the main stages remain substantially the same, that does not at all mean that IM has not been transformed by the IC concept. The shift in the knowledge economy to IC as a source and means for value extraction transformed innovation

 

Idea Generation	-- p--	Concept Development	-- P--	Feasibility Assessment
Commercialization		Market Testing	<---	Prototype/Pilot Demo

EXHIBIT 7.1    Generic NPD Stages

 

management in many ways taking it away from the Edison model in substance, if not in form. The most prominent change is the emergence of a new business model for IM that is used by the most innovative organizations regardless of industry - the network-based innovation model.

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