Since the R&D Games of Innovation is such an important way to understand many of the strategic options a company has this work will be discussed in more detail. The work was done at McGill University in Canada and found that there were eight games of innovation typically played by corporations with large R&D programs and technical product development. These eight games are summarized in the “Eight Games of Innovation” figure.
Reorienting R&D for a Horizontal Future
The reason for going to such lengths to understand business models is that when one formulates a strategy it is very much dependent on the type of business you are in. Past work has failed to make this distinction and as a result some of the generalized findings of earlier studies are confusing and conflicting. Breaking business, technical, and intellectual property strategies out into the elements highlighted by these innovation games allows greater clarity as to what an appropriate strategy is for each business, technical, and intellectual property component. This is shown graphically in the “Reorienting R&D for a Horizontal Future” figure. Here integrated manufacturers are finding that they moving towards becoming three separate innovation organizations that are centric to customer value, product value, and production. Each organization is thus playing its own “game”.
Refocusing of Innovation by Large Integrated Manufacturers
The outcome of large companies refocusing their efforts is also changing the way innovation is managed. When companies are vertically integrated their strategies are focused up and down the value chain from base materials, to components, to modules, to subsystems, through to finished products. This is seen in the “Refocusing of Innovation by Large Integrated Manufacturers” figure.
In the early 2000’s vertical and horizontal innovation systems existed. This mix has been evolving towards a horizontal landscape were many base materials suppliers will be accessed through open innovation discussed later in this book, as well as many suppliers at the component, module, and subsystem level. This changing organization clearly affects one’s innovation strategy.
Before getting too discouraged with the diversity of models is important to think of the similarities between them. Basic strategy and project management methodologies for business, technical, and intellectual property do exist across the eight innovation games for old vertically integrated and newer horizontally integrated models alike. It’s these common features that we’re going to work on and highlight in this book. Nuances come about from companies playing different games of innovation. The R&D and IP nuances described in the later chapters can most easily be understood by remembering the R& D game being played.