MGMT 738 (2025 Fall Term 1)
Managing Innovation
https://people.duke.edu/~jcumming/mgmt738/

[also on Canvas for registered students]

Professor Jonathon Cummings
jonathon.cummings@duke.edu

I. COURSE OVERVIEW

This course is designed to do two things. First, to give you a sense of why building a rich understanding of innovation is both exciting and critical to modern managerial practice, and second, to give you a solid grounding in the tools and metrics necessary to manage it in large, established organizations. In particular, there is no "one best way" to manage innovation -- for example, the tools and metrics appropriate to managing incremental innovation are quite different from those appropriate to managing radical innovation. Taking a management perspective, this course complements approaches in marketing and strategy by focusing on organizational structure and process issues related to innovation in a wide range of multi-national firms.

After introducing the managing innovation matrix in class 1 (dimensions: technology, market, & organization; stages: discovery, development, & delivery), the remaining classes will cover five themes to help you decide when to best apply particular tools and metrics to the innovation being managed:

Judging Innovation (class 2 and 3): Building on the pre-assigned cases of Iridium and Apple, topics include how to assess creativity (e.g., novelty, usefulness, and feasibility of product), how to evaluate successful implementation (e.g., technological, market, and organizational innovation), how to take different perspectives on innovation (e.g., your experience vs others, today vs a decade ago, best feature vs holistic view), and how to use an S-curve to classify innovations over time (e.g., ferment, takeoff, maturity)

[In-class companion cases: SpaceX Rockets and Sweetgreen; Innovation Tools: Creative Divergent Thinking (Disney) and Paper Prototyping (OpenAI)]

Incremental Innovation (class 4 and 5): Building on the pre-assigned cases of BMW and Google, topics include how to identify competence-destroying change vs competence-enhancing change, how to overcome competency traps, how to distinguish between autonomous change and systemic change, and how to weigh the tradeoffs of using different organizational structures to manage innovation (e.g., R&D Units, Innovation Centers, Cross-Functional Teams)

[In-class companion cases: Waymo One Robotaxi and Adobe Firefly; Innovation Tools: Innovation Stakeholder Mapping (TikTok)] and AI Automation vs Augmentation (Spotify)

Radical Innovation (class 6 and 7): Building on the pre-assigned cases of Impossible Foods and Amazon, topics include how to simultaneously manage core businesses in the short term and grow new businesses in the long term (e.g., an ambidextrous organization), how to reduce the tension between the desire for entrepreneurial drive and the need for control and coordination, and how to set up structures to support innovation ventures (e.g., corporate ventures, joint ventures, internal ventures)

[In-class companion cases: Chobani and Duolingo; Innovation Tools: HIT (Heuristic Ideation Technique) Matrix (Instacart) and Impending Disruptions (New York Times)]

Innovation Development (class 8 and 9): Building on the pre-assigned cases of Alibaba and Venmo, topics include how to build a systematic innovation process that is also flexible (e.g., innovation funnel or stage-gate process), how to assess individual projects within a broader portfolio, how to balance the flow of new ideas with the stability of project membership, and how to think about service innovations relative to product innovations

[In-class companion cases: Shopify Ecommerce and Robinhood Investing; Innovation Tools: Innovation Experimentation (Netflix) and Competitor Innovation Profiling (Acorns)]

Open Innovation (class 10 and 11): Building on the pre-assigned cases of Patagonia and Airbnb, topics include how to evaluate whether to source ideas from inside or outside (e.g., customers, suppliers, users) of the firm, how to evaluate whether to develop ideas inside (make) or outside (buy) of the firm, and how to use open innovation approaches (e.g., communities, contests)

[In-class companion cases: Golden Goose and Peloton Cycling; Innovation Tools: Innovation Storyboarding (Gates Foundation) and Open Business Model Canvas (NBA)]

II. COURSE REQUIREMENTS

Class Participation: (20%) Your individual participation grade is based on the quality of in-class discussion (10 points, determined by professor), completion of the pre-course survey (5 points), and completion of the post-course survey (5 points).

Pre-Class Assignments: (35%) Submitted individually via Canvas the night before class. Each assignment is worth up to 3.5 points. The assignment consists of a combination of case innovation judgments, write-ups to the decision point question justifying your option selected, and responses to innovation tool questions. To incentivize completing the pre-class assignments, even if you are unable to complete them on time, there is only a 1 point deduction for late assignments submitted prior to the start of class (i.e., earn up to 2.5 points instead of 3.5 points).

For your case innovation judgments, you will indicate the strongest and weakest innovation dimensions based on the evidence presented in each case.

For your brief write-up to the decision point question for each case, you will justify the option you selected (i.e., 'option a' or 'option b'). The decision point will be used in class to guide the case debate (e.g., by randomly selecting a few people to start off discussion).

For your responses to questions about an innovation tool, you will first skim the background material and then report how you would approach the problem presented in the instructions. Each activity will give you exposure to a tool that organizations have used to help generate and evaluate new ideas.

Team Analyses: (15%) You will be on two different teams: a practice team that will submit via Canvas a 1-page handout (5 points) half-way through the term, and a final project team that will submit a 2-page handout (10 points) via Canvas the night before class 11. Both handouts are single-spaced with 12-pt font, 1-inch margins on all sides of 8.5" x11" document with references/supplementary material on the last page, and are based on recent examples of innovation in a global organization. I will form your practice team immediately after the drop/add date (using background information and random assignment) and you will form your final project team midway through the term.

Final Exam: (30%) There is a 24-hour individual (open note) “take-home” final exam administered via Canvas, where you choose 12 (out of 13) questions to answer about a corporate intrapreneurship initiative relevant to you. Each question is worth 2.5 points, for a total of 30 points. There will be a review session prior to the final exam for Q&A.

As with other electives at Fuqua, this course follows the recommended grade distribution (i.e., no more than 30% SP, 45% HP, and at least 25% P or LP).

III. COURSE SCHEDULE

Class 1 - Introduction to Managing Innovation

(Thursday, September 4)

Pre-Course Survey - due via Canvas by 11:59pm on Saturday (Sept 6)

In-Class Discussion

Managing Innovation Matrix - Discovery, Development, & Delivery x Technology, Market, & Organization (In-class cases: Nike Flyknit, Zoom Video, and IKEA Augmented Reality)

Course Overview

Class 2 - Judging Innovation

(Monday, September 8)

Pre-Class 2 Assignment - due via Canvas by 11:59pm the night before class (Sept 7)

Iridium Case (available in coursepack):

The Rise and Fall of Iridium (HBS#601040)

Reading efficiency tip: Skim case introduction, read about Iridium system architecture, launching the venture, and case conclusion section, and only look at exhibits if you have time

Decision Point Question: If you were the new CEO of Iridium Communications Inc., which purchased the $5 Billion Iridium satellite system for $25 Million in Chapter 11 bankruptcy proceedings, which revenue opportunity would you target to maximize growth over time: (a) US and foreign governments (e.g., defense departments, intelligence agencies, military operations, emergency services) or (b) industrial businesses (e.g., energy, construction, oil and gas exploration, mining, forestry, shipping)? Why?

In-class companion case: SpaceX Rockets

Innovation tool: Creative Divergent Thinking (Disney)

Class 3 - Judging Innovation

(Thursday, September 11)

Pre-Class 3 Assignment - due via Canvas by 11:59pm the night before class (Sept 10)

Apple Case (available on Canvas):

Apple Watch and Health (Live Case)

Reading efficiency tip: Skim case introduction, read about market landscape, competitors, evolution of fitness and diagnostics, and case conclusion section, and only look at exhibits if you have time

Decision Point Question: If you were CEO of Apple, would you direct Apple Watch developers to prioritize sensors in subsequent “mainstream” watch models that appeal more to (a) personal fitness users (targeting health-focused consumers who use the watch to track exercise activities) or (b) diagnostic tool users (targeting health-focused professionals who use the watch to track patient medical diagnostics)? Why?

In-class companion case: Sweetgreen

Innovation tool: Paper Prototyping (OpenAI)

Class 4 - Incremental Innovation

(Monday, September 15)

Pre-Class 4 Assignment - due via Canvas by 11:59pm the night before class (Sept 14)

BMW Case (available in coursepack):

BMW AG: The Digital Car Project (A) (HBS#699044)

Reading efficiency tip: Skim case introduction, read about product design and engineering, the evolution of development at BMW, and case conclusion section, and only look at exhibits if you have time

Decision Point Question: If you were CEO of BMW, would you (a) use the derivative 3-Series project for implementing the new development process, or (b) drive change more aggressively through the flagship 7-Series project? Why?

In-class companion case: Waymo One Robotaxi

Innovation tool: Innovation Stakeholder Mapping (TikTok)

Class 5 - Incremental Innovation

(Thursday, September 18)

Practice Team Progress Checklist - due via email to professor by 11:59pm the night before class (Sept 17)

Pre-Class 5 Assignment - due via Canvas by 11:59pm the night before class (Sept 17)

Google Case (available on Canvas):

Google and the Internet of Things (Live Case)

Reading efficiency tip: Skim case introduction, read about the Internet of Things (IoT), Android software development, Google IoT hardware products, and case conclusion section, and only look at exhibits if you have time

Decision Point Question: If you were CEO of Google, which kinds of non-Pixel products would you emphasize more in the Internet of Things portfolio: (a) non-hardware Android (e.g., Wear OS, Android TV, Android Auto) or (b) non-Android hardware (e.g., Nest, Google Home, Fitbit)? Why?

In-class companion case: Adobe Firefly

Innovation tool: AI Automation vs Augmentation (Spotify)

Class 6 - Radical Innovation

(Monday, September 22)

Pre-Class 6 Assignment - due via Canvas by 11:59pm the night before class (Sept 21)

Impossible Foods Case (available in coursepack):

Impossible Foods (HBS#9520046)

Reading efficiency tip: Skim case introduction, read about the plant-based meat-alternative trend, the story of impossible foods, and case conclusion, and only look at exhibits if you have time

Decision Point Question: If you were CEO of Impossible Foods, would you push to grow the business through (a) entering new international markets with the impossible burger (e.g., China or Europe) or (b) introducing new substitutes for other animal proteins (e.g., pork, steak, fish, or dairy) to existing impossible burger markets? Why?

In-class companion case: Chobani Yogurt

Innovation tool: HIT (Heuristic Ideation Technique) Matrix (Instacart)

Class 7 - Radical Innovation

(Thursday, September 25)

Practice Team 1-page analysis handout - due via Canvas by 11:59pm the night before class (Sept 24)

Pre-Class 7 Assignment - due via Canvas by 11:59pm the night before class (Sept 24)

Amazon Case (available on Canvas):

Amazon Go and Just Walk Out (Live Case)

Reading efficiency tip: Skim case introduction, read about the evolution of Amazon Go, competition in the market for frictionless checkout, and case conclusion section, and only look at exhibits if you have time

Decision Point Question: If you were CEO of Amazon, which go-to-market strategy would you push harder for in smaller format retail: (a) Vertical-Focused Enterprise Integration (e.g., airports, sports venues, healthcare facilities, educational institutions) or (b) Open Platform Ecosystem (e.g., comprehensive APIs, SDKs, and developer tools along with self-service implementation options)? Why?

In-class companion case: Duolingo

Innovation tool: Impending Disruptions (New York Times)

Class 8 - Innovation Development

(Monday, September 29)

Pre-Class 8 Assignment - due via Canvas by 11:59pm the night before class (Sept 28)

Alibaba Case (available in coursepack):

Agile Consumer Product Innovation with Alibaba's Tmall Innovation Center (HBS#9820087)

Reading efficiency tip: Skim case introduction, read about agility in large consumer products companies, the Chinese retail market, the next generation of retail for Alibaba, and pilot examples in the Tmall Innovation Center (Mars and Mondelēz), and only look at exhibits if you have time

Decision Point Question: If you were CEO of Mars or Mondelēz, and strived to gain greater Chinese retail market share, would you (a) shift all new product development to the Tmall Innovation Center (e.g., relying more on their services) or (b) continue building more product development capabilities in house (e.g., reorganizing internal business processes to facilitate more agile, cross-functional teams across organization)? Why?

In-class companion case: Shopify Ecommerce

Innovation tool: Innovation Experimentation (Netflix)

Class 9 - Innovation Development

(Thursday, October 2)

Pre-Class 9 Assignment - due via Canvas by 11:59pm the night before class (Oct 1)

Venmo Case (available on Canvas):

Venmo and Social Payments (Live Case)

Reading efficiency tip: Skim case introduction, read about social payments, Venmo's model and technology development, and case conclusion section, and only look at exhibits if you have time

Decision Point Question: If you were CEO of PayPal, what would you want to invest more into for growing Venmo as a business: (a) "Pay with Venmo" partners/merchants or (b) integration with other Venmo financial services (e.g., paycheck direct deposit, cryptocurrency purchases, teen accounts)? Why?

In-class companion case: Robinhood Investing

Innovation tool: Competitor Innovation Profiling (Acorns)

Class 10 - Open Innovation

(Monday, October 6)

Final Project Team Progress Checklist - due via email to professor by 11:59pm the night before class (Oct 5)

Pre-Class 10 Assignment - due via Canvas by 11:59pm the night before class (Oct 5)

Patagonia: Closing the Loop on Packaging Pollution (BerkeleyHaas Case #B5933)

Reading efficiency tip: Skim case introduction and Patagonia history of innovation and sharing, read about single use packaging solutions, supply chain challenges, and small-scale and startup advantages, and only look at exhibits if you have time

Decision Point Question: If you were CEO of Patagonia, would you approach single use packaging solutions via: (a) supply chain (e.g., manufacturing novel packaging materials) or (b) funding emerging technologies (e.g., environmentally and socially responsible startup companies)? Why?

In-class companion case: Golden Goose

Innovation tool: Innovation Storyboarding (Gates Foundation)

Class 11 - Open Innovation

(Thursday, October 9)

Final Project Team 2-page analysis handout - due via Canvas by 11:59pm the night before class (Oct 8)

Pre-Class 11 Assignment - due via Canvas by 11:59pm the night before class (Oct 8)

Airbnb Case (available on Canvas):

Airbnb and the sharing economy (Live Case)

Reading efficiency tip: Skim case introduction, read about the Airbnb model, sharing economy, and case conclusion section, and only look at exhibits if you have time

Decision Point Question: If you were CEO of Airbnb, which new growth opportunity would you prioritize: (a) expanding hospitality from business-to-consumer (B2C) to business-to-business (B2B) or (b) expanding from hospitality to non-hospitality (e.g., helping people 'share' services) in the sharing economy? Why?

In-class companion case: Peloton Cycling

Innovation tool: Open Business Model Canvas (NBA)

Class 12 - Conclusion

(Monday, October 13)

Course Wrap-up

Post-Course Survey - due via Canvas by 11:59pm the following night (Oct 14)

Final Exam Review Session (October 14, 7-8pm, Classroom/Zoom TBD)

Final Exam (Open Note): can be completed on Canvas during any continuous 24-hour period between Wednesday, October 15 @ 12:01am and Saturday, October 18 @ 11:59pm