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Transforming Invention into Innovation: The Conceptualization Stage (Burgelman and Sayles, 1986)

Conceptualization of New Business Opportunities:

History: Sole R&D → R&D + Ad-Hoc Market Specialists → R&D + Formal Business Research Function

Management Initiatives at Exploratory Stage of R&D:

• “Demand-Pull” (Research directed at promising markets)
• “Technology-Push” (Search for new technologies with market potential)
• “Cooperation” (Scientific and marketing specialists work together)

“Technology Push”: Researcher preoccupation with understanding and solving technological problems leads to a tendency to focus on market applications that are able to be easily researched and evaluated, further, tech driven products are likely to get ‘locked-in’ to a particular technical solution – putting the means before ends.
Additionally, a focus on ‘atypical users’ in order to validate the technology as a new business opportunity may lead to resources being used to design a solution for which there is no significant problem.
Moreover, it is often the case that scientific specialists do not have the training/experience needed to properly/subtly investigate market potential.

“Need Pull” Dominance:
Market needs must be defined in a way that is neither too broad nor too narrow – the process of achieving this may, however, confuse R&D specialists. Current market opportunities may block-out more long-range trends. Further, excessive market-oriented compromises can ruin a basically sound idea and users
who can’t express their own needs or follow ‘conventional wisdom’ may derail a potentially successful invention.
Additionally, there is a risk of not being able to develop the technology to meet the need.

The possible absence of an idea champion who has an emotional investment in the idea may be the biggest weakness of this strategy. Researchers who achieve a sense of identity, or prestige from being associated with new discoveries or research have more to gain from the success of a project than do analysts for whom a product idea is but one of many identified commercial opportunities.

The Double Linking Required:
Both the above processes are vital for successful innovation. ‘Researcher-conceptualizers’ who can view solutions to technical problems as both feasible, and within the relevant domain of corporate interest. On the other hand, recognizing the interrelationships between existing or potential technological breakthroughs and market needs is essential.

Corporate Interests:
While new fields of interest tend to develop out of operational level projects they must still, at some stage, be ratified by higher management. It is thus important that supporters of new ventures know what is important to those ‘higher up’ in the company (and to stay away from projects which would be considered undesirable). Accordingly, new business definition tends to come from group leaders, who generally have sufficient experience at R&D, business and organizational levels to comprehend technical issues and market needs, while understanding how these fit within the context of the firm.

Effective Conceptualization:
In the milieu of simultaneous and often competing and conflicting technical streams, business commitments and market needs, the linking of technology to market needs (customer requirements, competitive pressures, size and durability of demand, opportunities for synergies and economies of scale) is often neglected. Further, even when both tech and market perspectives are aligned, however, success is not guaranteed.

A Classification Scheme:
See Exhibit 4, original text

Innovation Traps:

The Need for Flexibility:
In general, enabling flexibility and modification leads to better products of innovation. Innovative technology leads to commercial application search, while at the same time the commercialization process facilitates improvements in the original technology. Thus, researchers/scientists need to maintain a flexible mindset, and this quality can be included in the evaluation of personnel.

The Danger of Flexibility:
At the same time, an over-willingness to be flexible can lead to problems on (1) the market side – where acquiescing too easily to ‘what the market (supposedly) demands’ can lead to unreasonable expectations and unattainable goals, and (2) the technical side – where scientists rush to fill management defined gaps with possibly under-tested and questioned technology, or attempt to find answers to too problems which
are too broadly defined.

Conceptualization Trap:
Betting the success of a development on a potentially variable market characteristic, presently scarce (or plentiful) resource can lead to innovation which cannot survive when the environment changes.

Original Text:
in Strategic Management of Technology and Innovation (Burgelman, Christensen and Wheelwright)
Strategic Management of Technology and Innovation