Innovation and design

in services and products

LESSON #4
 OBJECTIVES
q Discuss the impact ofinnovation on design
qExplain why good service and product
design is important
qEnumerate and explain the stages in service
and product design
qDiscuss the benefits of interactive design
Ø(Oxford English Dictionary)
it is ‘a new method, idea, product, etc.’
Ø(Peter Drucker, a well-known management writer)
‘change that creates a new dimension of performance’
Ø(the American Heritage Dictionary)
‘the act of introducing something new’
Ø(Webster Online Dictionary)
‘a new idea, method or device’
• Innovation is simply about doing something new.

• ‘Design’ is to ‘ conceive the looks, arrangement,

and workings of something”

Innovation creates the novel idea; design makes it

work in practice.
Incremental and radical innovations differ in how they use knowledge.
§ Radical innovation often requires completely new knowledge and/or
resources, making existing services and products obsolete.
§ Radical innovation focuses on introducing significant and
transformative changes that disrupt industries and create new
paradigms.

§ Incremental innovation builds upon existing knowledge and/or

resources.
§ Incremental innovation involves making gradual improvements and
refinements to existing products, services, or processes,
 Innovation S-curve – episodic evolution
• Due to weak focus on innovation
lifecycles as a series of S-curves,
incumbent firms fail at the discontinuity,
giving the opportunity to new entrants to
rise.
• Innovation S-curve refers to the
formation and growth of innovations
reaching maturity. As human beings,
upon birth, innovations keep evolving
through stages. The evolution takes
place because of (i) the advancement of
the underlying technology core, (ii)
progressive revealing of user
requirements, (iii) unfolding externalities,
(iv) availability of complementary
technologies, and (v) competition.
 Major Phases of innovation S-curve:
1. Ferment
• At the ferment stage, new products get
born. Many innovators get busy innovating
products around th e n e w l y e m e r g e d
technology core.
• During the fermentation stage, the product
is primitive, the cost is high, and the
industry has insignificant market power.
But in some instances, due to primitive
emergence, there could also be only a few
customers and producers.
• Hence, despite the potential and low
competition, due to primitive emergence,
often, innovators suffer from loss.
 Major Phases of innovation S-curve:
2. Take off stage
• Upon crossing the ferment stage,
innovations start revealing latent potential,
in terms of rapidly increasing quality and
decreasing cost. As a result, innovations
start diffusing in the early majority and late
majority segments.
• Due to the growing market and profit-
making opportunity, the competition gets
intensified.
 Major Phases of innovation S-curve:
3. Maturity:
• Slow performance growth, decreasing
R&D productivity, and growing mergers
and acquisitions indicate reaching the
maturity stage of the innovation S-curve.
Hence, growing monopolistic market
power and stagnancy in innovation are
indications of maturity. Due to the growing
market and profit-making opportunity, the
competition gets intensified.
• At this stage, cost-cutting from process
innovation and outsourcing for labor cost
reduction get the priority.
 Major Phases of innovation S-curve:
Discontinuity:
• At the maturity stage, the availability of
emerging technology core having the
potential of finding alternatives encourages
reinvention.
• Consequentially, the maturity of the current
innovation S-curve is followed by a
reinvention wave, creating discontinuity.
• Disruptive innovation means interrupting
the existing state of affairs by offering
better alternatives.
 Innovation S-curve – episodic evolution
• Subsequently, music innovation S-
curve of music CD reached
maturity, and iPod out of MP3 and
Internet technology core emerged
creating discontinuity. This iPod
creative wave turned into
disruptive innovation, causing
destruction to Sony’s portable
music business.
• Music innovation lifecycle unfolds
as successive innovation S-curves,
creating the success of new
entrants and making giants
failures: wonderful lessons for
managers and innovators
Innovation can come from many different sources.
Innovation can come from many different sources.
If the development process takes longer than expected (or even
worse, longer than competitors’) two effects are likely to show.

Ø
A number of factors have been suggested which can
significantly reduce time to market for a service or product,
including the following:
THANK YOU
https://www.the-waves.org/2022/03/13/innovation-s-curve-episodic-innovation-
evolution/#:~:text=Examples%20of%20innovation%20S%2Dcurve%3A&text=Notable%20examples%2
0of%20innovation%20S,disruptive%20innovation%20out%20of%20discontinuity.