Current status of topic at home and abroad

Innovation management
Vlcek in his book Value for customer defines innovation management as complete, integrated managerial tool to manage effectively innovation process in entrepreneurship unit. (p. 69) e further adds that only competitive advantage in one field is currently not enough for successful company. !ompanies should try to achieve multidimensional competitive advantage. "s a managerial tool it gives tools and frame#ork to different levels of managers through the company. $op management takes steps in innovation processes on strategic level. %iddle management manages preparation and implementation of comple& innovations. 'perative activities are steered by line managers.

(nnovation management relates to many other fields of study due to its nature #hich consists of kno#ledge in different fields. (n broad terms, natural sciences enables innovation management to use scientific kno#ledge base and civic sciences offer information streams. )ith other management fields has innovation management tighter relations, especially #ith general management, management of change, marketing management, strategic management and total *uality management. Vlcek also defines structure of innovation management methodology of preparation and implementation of innovations, managerial innovative activities, managerial innovative behavior.

(Vlcek, p. 69 + ,-)

Definition of innovation
"ccording to %olnar (doc. (ng. .avol %olnar, !sc + (nnovation management, /konom, 0ratislava -112 (304 516--76858867, p. 88) 9(nnovation is defined as 9every change in the organism (product, service, technology, organi:ational structure, etc.) in the company #hich tends to its ne# stage. "fuah defines innovation as 9the use of ne# technological and market kno#ledge to offer a ne# product or service that customers #ill #ant. (afuah, (nnovation management, p. 2) $his approach

suggest that there are t#o types of kno#ledge #hich determine innovations + market kno#ledge and technological kno#ledge. (n%, p. 8;) %arket kno#ledge is aour presents innovation as invention converted into a product, and industrial process or a service for the marketplace. ( aour, (n., p. 8) Vlcek concentrates on value innovations #hich he defines as changes in source or structure of economic sub<ects #hich are focused on ma&imi:ation value for customer in current gro#th of company value. $hese innovations are reached using t#o approaches + functional and value approach. "t the same time, Vlcek adds that successful innovations do not need to ma&imi:e utility for customer but optimi:e it and at the same time optimi:e total cost #ith tendency to minimi:e them. (Vlcek, % (,p. 8,768,6) .itra defines innovation as ne# #ay of use of e&isting sources of organi:ation in order to gain ne# entrepreneurial e&perience + to find ne# opportunities for increase of profit from entrepreneurial activities. (.itra, p. -6) $echnological kno#ledge is related to 9components, linkages bet#een components, methods, processes, and techni*ues #hich are embedded in product or service. (afuah,

Definition of competitiveness
!ompanies naturally tend to perform as good as they can on the market, among competitors. $o achieve this never6fading goal, firms use different techni*ues #hich assess their position and abilities= 3)'$ analysis, financial analysis, value theory, 0!> matri&, >/ matri&, "nsoff?s gro#th model, 0alanced score card and many others, #hich should lead to increase in competitiveness. (@imo, p.9) "s the #ord competitiveness itself tells us, it is related to ability to compete #ith other players on the market. "ccording to @imo and .orter competitiveness consists of identification and use of competitive advantages in a #ay that take into consideration idiosyncrasies of national economy and industry of company activities. (@imo, p.9) .itra (-116, p. ;16;8) e&plains that achieving and keeping high level of competitiveness re*uires follo#ing actions= innovate regularly products and service, moderni:e production technologies, distribution channels and effectively use

communication technologies, innovate business processes by organi:ational changes inside the company, and ensure *uick re6stocking of missing resources and capabilities of company by

<oining strategic alliance. !ompany competitiveness is a result of business decisions of company management, #hich result in right business strategy.

Relation between innovations, innovation management and competitiveness

"s %olnar noted, 9(nnovation, as it is used today, includes successful side only. 3uccess on the market is the only criterion of positive innovative processes. doc. (ng. .avol %olnar, !sc + (nnovation management, /konom, 0ratislava -112 (304 516--76858867, p. 88) aour considers innovation to be the Aife6blood of competitiveness ( aour, Bin., p.8) and further claims it is the opportunity to stop decreasing gains from products if only production efficiency is involved. .itra states that evaluation of success of current business strategy of organi:ation has to focus on ho# changes level of its competitiveness. (.itra, p. ;1) ence, as #e can see from these and previous opinion on competitiveness from .itra, innovations are considered to be crucial part of business competitiveness. !urrent market situation re*uire use of comple& innovative strategies and other initiatives related to innovative activities. %anaging such activities is ma<or role and purpose of innovation management. $herefore, innovation management, its tools and techni*ues should be adopted by any company heading to succeed on local or global marketplace.

Types of innovation
Coseph 3chumpeter classified innovation into five types (Dagererg, = ne# products ne# methods of production ne# sources of supply the e&ploitation of ne# markets ne# #ays to organi:e business

"fuah mentions several types of innovation. $alking about nature of the innovation there are technical and administrative innovation. Technical innovations are innovations of the product itself and the processes related to its production. (n publication Besolving the (nnovation .arado&, aour focuses only on this kind of innovation and companies #hich represent it, considering them key source of value creation. "ccording to 0orovsky and >al, technological innovations usually influence= cost reducing, increases in *uality, launch of ne# products. (0orovsky, >al8 p. 5) 'n the other hand, administrative innovations include internal processes of company, organi:ational structure, #hich may but also may not influence technical processes. (afuah, (n%, p. 82) %ore e&plicitly administrative innovations may include= form, style and *uality of communication to#ards customers, cutting time of continuous processes, increase in productivity and cutting costs, increase in *uality of products. (0orovsky, >alE p. 5) "nother type of innovation discuss effect on previous production of company. )e talk about radical innovation if such innovation renders obsolete former kno#ledge and techni*ue of production. (n this case the change in kno#6ho# is so big that company cannot use older facilities to produce ne# products or service. o#ever, not all innovations are radical. )e kno# also incremental innovations #hich introduce ne# techni*ues and processes step6by6step and hence, do not affect previous technology as hard. (afuah, (n%, p. 82) Fnlike "fuah, %arkides nad >eroski distinguish four types of innovation related to its radicalism. $hey introduce matri& #hich e&plains these four types on relation bet#een effect of innovation on customers habit and behavior and effect of innovation on contemporary firm competences and assets. $he more each factor goes to its e&treme, the more radical the innovation is.

/ffect innovation behaviors

of on %a<or %a<or (nnovation Badical (nnovation

consumer habits and

%inor

(ncremental (nnovation /nhances

3trategic (nnovation Gestroys

/ffect of innovation on established firms? competences and complementary assets 3imilar approach undertook also >ovindara<an and $rimble #ho distingueshed other four types of innovations= continuous process improvement, #hich includes small incremental innovations, process revolution, improves company #ith ma<or innovation, product or service innovation, means ideas #hich do not alter established strategic innovation, #hich involve yet unproven business models.

business models, and (>ovindara<an,, $rimble, -117, p. &&i)

Sources of innovation and their environment

(nnovations do not come to the business by themselves. Dor successful development and implementation of innovation it is necessary to prepare environment suitable for gro#ing nad developing innovational opportunities. 3uch ambient then boost research and development and underlie future innovative ideas. (n follo#ing te&t #e #ould like to focus on sources of innovation and parts of company environment and describe ho# these can help an innovation to arise. "fuah ((n%, p. 69) distinguishes t#o ma<or types of innovation sources= functional and circumstantial.

Functional sources
Dunctional sources describe proper source of the innovation or idea, #hether it comes from inside or outside of the company. $his sources may be according to him ((n%, p. 69)= 8. -. ;. 2. 7. companyHs o#n internal value chain functions, companyHs e&ternal value added chain of suppliers, customers and complementary university, government, and private laboratories, competitors and related industries, other nations or regions.

innovators,

Durther in this chapter #e #ill discuss these sources more detailed.

Internal value chain as a source of innovation Value chain of a company is a concept #hich #as introduced by .orter (citation neededI) and means activities undertaken in company to deliver a product to customer. (nnovations can be observed and found in every step of this chain and later developed. Fsually, firms have also special research and development departments #hich should e&amine potential innovative ideas and prepare them for use in

production.

o#ever, not all innovations rise up there. %any innovations come from improving ideas

from other departments and are used directly in their functions to render production or other processes more effective. $hese innovations are also called process innovations. ("fuah, (n%, p. ,1) E ternal value chain of suppliers, customers, and complementary innovators (nnovations often arise in ideas of customers, suppliers or complementary innovators #ho seeks their o#n benefit. "lthough it might seem that their benefit can damage benefits of the producing company, sometimes these innovations help the company to move further and upgrade their products. !ustomers usually seek for better features and let kno# producer about these demands. .roducing company can then #ork on design or service #hich satisfy these needs. 3uppliers? intention is to sell as much their supplies as they can. $herefore, they may come up #ith ideas #hich can support both demand for their products and also increase effectiveness or enhance features of buyerHs products. !niversity, government, and private laboratories $hese facilities perform basic research #hich has to find ne# characteristics and relations among researched ob<ects in order to gain scientific kno#ledge or for kno#ledgeHs o#n sake. $hese findings are later published in <ournal papers or introduces on conferences to general kno#ledge. 'n such findings is later based applied research. (nstitutions as universities, government and private laboratories are involved also in applied research and co6operate #ith innovating companies in development and practical use of the innovation. Competitors and related industries (nnovational ideas often may come from activities of competitors and inspire companyJs o#n innovations. 3uch situation #hen companies use kno#ledge or process actually invented by its competitor is called spillover. Dor certain companies are spillovers main strategy of ac*uiring ne# ideas. $hey take innovations or ideas of competitors and together #ith o#n sources and market kno#ledge use them for o#n sake. (t might arise *uestion #hether it is still profitable for companies to perform their o#n research if competitors are about to use their inventions. o#ever, imitating innovations depends not only on easiness of innovation, but it is also a function of ho# much of the related kno#ledge it has, that is, it is a function of the firmJs absorptive capacity.("fuah. (n%, p. ,8) "ther nations or regions !ertain countries and regions are kno#n for their good innovation capacities in some industries.

$hese innovations are often #orld6reno#ned and later copied and imitated by other companies. $herefore, observation of these regions and analy:ing their processes and relations bet#een particular entities involved in innovations can be very useful source of innovative ideas.

Circumstantial sources of innovation

!ircumstantial sources of innovation e&plore in #hat situations a ne# idea can be found and ho# to e&ploit it at most. $here also several subtypes of this source #hich "fuah mentions (in%, p. ,2)= 8. -. ;. planned firm activities, une&pected occurrence, creative destruction.

#lanned firm activities (nnovation as a planned activity is usually outcome of planned research and development processes, or other value and distribution chain operations of product. !ne pected occurrence "n opposite to planned firm activities to boost innovation is an une&pected occurrence. Fnprevised circumstance can then serve as a great source of innovating ideas,#hich can move the innovation to#ards ne# directions. 'ften failure is such event, #hich helps innovators to think about ne# #ays of use or proceedings. Creative destruction !hanging situation in e&ternal environment, #hich completely turns over previous status and order can be also e&ceptional good source of innovations. Dirms are forced to ad<ust their products to these ne# conditions on market. $his means upgrade product to level desired by customers or add ne# features, or even invent completely ne# product #ith ne# technology or to satisfy ne# demand. (mportant thing to remember is not only focus on each potential source alone, but also consider their relations and intersections among them. 3uch points can then help to better understand and e&ploit the source in companyJs best interest.("fuah, (n%, p. ,;6,2)

Grucker also distingueshes various sources of innovation opportunities (Grucker, 8957, p. ;-) Fne&pected (ncongruities .rocess 4eed (ndustry and %arket 3tructures Gemographics !hanges in .erception 4e# Kno#ledge

$ow to overcome obstacles of innovation

(n previous chapter #e discussed many obstacles that may arise in process of innovation. 4o# #e #ould like to suggest some points #hich may help to avoid failure of innovation implementation and transfer. "fuah ((n%, p.5865-) suggests that company needs an organi:ational structure, strategies, systems, and people in order to fulfill follo#ing functions= 8. -. and ;. reduce the impedance mismatch bet#een transmitter and receiver that has been created by physical, cultural, national, and kno#ledge gaps bet#een the t#o entities. $hese factors can be designed on various levels to get results= cross6functional, cross6organi:ational, cross6national. *uickly spot ideas or innovations, boost the absorptive and transmission capacities of receiving and transmitting entities,

!ross6functional design allo#s lo#er impediments of innovation by changes in functions along

the value chain of company. (t can contain changes in organi:ation structure and on #ork place to ensure proper spread of information about the product innovated. 'ther #ays to facilitate innovation transfer though organi:ational functions are motivation and performance management systems, and information technologies #hich enable better communication inside the company. !ross6organi:ational design is a design #hich focuses on relations #ith e&ternal environment of company and #ays to keep the transmission of information on high level, especially the flo# inside the firm. Fsually, it is handled by establishing of position #hich controls and searched information and potential innovative ideas, and brings them inside the firm if relevant and further. 3ometimes, such services are supplied by e&ternal companies #hich may have advantage of non6biased look and thinking, on the other hand it may be difficult to e&plain #hat e&actly company is looking for and there is also high risk of trading information to competitors. !ross6national design + on this level there are several #ay to reduce obstacles of innovation. /ither, employees of receiving company get training in the country of origin of the innovation, in order to learn and build capabilities to absorb incoming ideas. $his training #ould also help to develop relations #ith the culture #hich produced the idea. Beceiver also needs some kind of gatekeeper #ho understands both languages and cultures and takes care of capturing and delivering innovative ideas to the company. 'ther possibility to overcome cross6national obstacles is to create <oint6ventures, or other alliances #here transmitter and receiver company #ould meet. $he transmission of innovation #ould then take place during the actual functioning of the business. "sheim and >ertler argue (in '&ford andbook of (nnovation, p. -986-9;) that location,

geography of innovation is crucial for the success of innovation process. $his statement is based on observations and researches #hich sho#ed that companies of related industries tend to group in certain localities. (n such places is after#ards easier transfer of tacit kno#ledge and it leads to faster innovation in that field. $his phenomenon is very interesting also from the point of vie# of globali:ation. 'pponents of this opinion claimed such arrangements #ould disappear #ith spread of information and telecommunication technologies #hich enable communication over long distances. $his #as actually not proven in reality. "sheim and >ertler (in '&ford -9;) mention t#o reasons for this= 8. $acit kno#ledge, #hich is crucial for many innovations, is determined by the location and andbook of (nnovation, p.

cultural conte&t of location #here it takes place. 3uch kno#ledge is after#ards hard to be transferred #ithout these determinants. -. (nnovations are often outcomes of social interactions and learning from each other and this is not possible if innovators are distributed in broad areas. /ven though this approach is logical and obviously #orking, no#adays companies cannot remain isolated and #ork only #ith innovations of their location. !urrent companies need to #ork also #ith other sources of kno#ledge, although they might be less successful in utili:ing them than in case of local kno#ledge and innovation. ("sheim and >ertler, (n '&ford andbook of (nnovation, p. ;81)

%in&s between innovation and 'uality

$he main ob<ective of the company is to generate profit. Fsually, companies try to achieve this goal by satisfying needs and #ants of customers. >enerally, #e can say that customers buy goods of highest *uality level #hich they are #illing and able to pay. $herefore, success on market and conse*uently turnover and profit of the company is highly dependent on *uality of their products, ho#ever #ith other influences as #ell. !urrent companies are re*uired to offer their customers higher *uality that it is on the market at the moment. Dirms should try to foresee future customer e&pectations. $his is the moment #here innovations come to talk. (t is necessary to enhance product or services of ne# parameters #hic are currently unkno#n, but have potential to be accepted by customers. (doc. (ng. .avol %olnar, !sc + (nnovation management, /konom, 0ratislava -112 (304 516--76858867, p. -,) (n order to determine the underdeveloped areas of the product, process or service there are used different methods. )e #ill mention couple of them to inform reader about possibilities.

Review of innovation and 'uality management systems and strategies

"s #e mentioned in previous chapters, innovations are currently one of crucial parts of companies. "s such important feature they re*uire to be treated #ith special carefulness and emphasi:e. Fsually, successful implementation re*uires commitment from top managerial levels

#hich is provided in form of support to strategic frame#orks that include innovation as ma<or or at least side effect of functioning. $hese re*uirements can be fulfilled by various business strategies and systems of processes #hich are also regulating other processes in the firm and hence coordinate both categories to #ork in harmony. (n follo#ing sub6chapters #e #ill discuss these strategies more closely, #ith focus on managing innovations. Total 'uality management $otal *uality management ($L%) as a term has been adopted since 89,1s. $he approach claims that *uality is not only a matter of control or technology, but it should be approached throughout the company and accepted from top to bottom. 0asic principles of $L% #hich create a baseline are (.rakash, 3ingh, -115, p. -72)= 8. -. ;. 2. 7. 6. processes ,. top management involved and committed to the company #ide effort to provide high6 *uality goods and services $otal *uality management is also connected #ith change in organi:ational culture due to evolution from simple *uality managing tool to comple& system #hich underline customer satisfaction. Gue to this change other actions took place and no# are also part of $L% approach (.rakash, 3ingh, -115, p. -97)= 8. -. ;. basis. 2. 7. (ncreased efforts to make better use of skilledd personnel through teams and #orkgroups (mprove communication channels and information systems the the organi:ation to focusing on #aste reduction in all areas. =%easure customer satisfaction and ensure such measures #ere applied to improve (mprove leadership in all areas of the business. %ove planning to a longer term, *uality basis, rather than the short term cost driven operations efficiency. committing to continuous improvement #orking to reduce variation #ithin processes aiming to get it right for internal and e&ternal customers the first time eliminating #aste and all forms of errors in processes setting appropriate ob<ectives and measures for the output of processes investing the necessary resources in training and development of staff #ho run

ensure timely and efficient provision of re*uired data to operations areas. 6. place. 0uild a culture #here continuous *uality and customer satisfaction improvement takes

%ean management $erm lean management, as #e kno# it today, #as introduced by $oyota company in 89,1?s by its $oyota .roduction 3ystem and subse*uently spread across their distribution system. (.rakash, 3ingh, -115, p. 26). Very simply e&plained 6 manufacturers should use less resources more effectively to create higher value for customer. tasks to fulfill and processes to adopt. Dive core concepts of lean systems (.rakash, 3ingh, -115, p. 29)= 6. ,. 5. 9. 81. specify value throuh the eyes of the customer, identify the value stream and eliminate #aste, make alue flo# by the pull of the customer involve and empo#er employees, continuously improve in the pursuit of perfection. o#ever, implementation of this system re*uires slightly difficult

>enerally, company adopting lean management strategy should see itself as a part of supply chain. $his leads to strategic thinking #hich goes over the boundaries of the company alone. !onse*uently, all the organi:ations involved need to step to certain kind of agreement regarding the common goals, rules and #aste management.(.rakash, 3ingh, -115, p. 26) $he firm has to recogni:e key value streams of the supply chain #hich flo# through the company and build the #hole organi:ation around these.(.rakash, 3ingh, -115, p. 26) $he key point to consider inlean manufacturing is value and #aste definition. (n manufacturing the term value has slightly different meaning than #e are usually used to in sales. (n manufacturing, it needs to be taken into account that only very small part of the manufacturing process actually enhances the value for final customer. 'nce determining these value6fractions, in lean management approach, #e can target all other activities as a #aste. )aste should be eliminated in order to improve productivity and customer service. (.rakash, 3ingh, -115, p. 2,) (t sounds great and easy, the implementation, ho#ever, is more difficult to e&ecute. (nstead of

internal activities #hich are organi:ed into successive departments, these tasks needs to be re6organi:ed in a streamlined process of value6adding steps. 4umber of instruments is used for securing the continuous flo#. "ctions are synchroni:ed to move product to#ards ne&t step only #hen re*uired. (.rakash, 3ingh, -115, p. 2,625) $his flo# is a key factor of lean production and the #hole concept, as it reflects the progressive achievement of tasks along the value stream. $he value shouldbe added as *uickly as possible, in order to not creating the #aste, e.g. time consuming. (.rakash, 3ingh, -115, p. 25) "nother key factor is pull of the demand. (t means that nothing is done unless, and until, a do#nstream process re*uires it. (.rakash, 3ingh, -115, p. 25) $his in fact stops production based on predictions, but makes it reacting on the e&plicit demand from the customer and it solves problem of *ueues and batches, #hich tend to hide the problems inside and let them gro# big. $he concept of lean production is to let the problems sho# as soon as they arise to deal #ith them immediately. (.rakash, 3ingh, -115, p. 25) Aean management and production contains lots of tools #hich are used in processes, most of them are in Capanese, due to origin of the system. $hose relating to innovations and innovation management at most are <idoka, kaikaku and kai:en. Cidoka is e&plained as human6automati:ed process #hich is immediately stopped in case some error occurs. .roblem is solved right a#ay and people closest to the task are involved in solution seeking. (.rakash, 3ingh, -115, p. 78) Kai:en is already #idely kno#n term. (t means continuous incremental improvement of products #hich remain long6term based in company processes. 3uccess of kai:en is based on organi:ational culture #hich promotes approach of active search for #aste reduction and elimination. (.rakash, 3ingh, -115, p. 7-) Kaikaku or kai:en blit: is radical change leading to #aste elimination. (t is a focused action #hich involves tight cooperation of people from one department or target area. $ogether they implement fast and radical change in process. (.rakash, 3ingh, -115, p. 7867-) $here are also other terms and approaches #hich help to understand Aean management better= Kanban helps to control and monitor pull system of a lean company. (n strict sense, kanban mean signal card #hich signali:e that part of the system is ready to receive input. 4o#adays, it might be also any other type of signal.(.rakash, 3ingh, -115, p. 7-67;) %uda means #aste or activity #hich does not create any value for the product. (f #e reduce this

#aste activities, it means #e increase profitability. $here are eight types of #aste= defects, overproducing, movement and transporting, #aiting, inventory, motion, over6processing and skills. (.rakash, 3ingh, -115, p. 72) .oka6yoke is translated as mistake6proofing. (t is used to prevent defects in processes in manufacturing, but also in other processes. $he ma<or idea is to make process #ithout mistakes by elimination of any opportunity for mistakes. (.rakash, 3ingh, -115, pp. 72) )hen company decides to change to lean organi:ation, it is necessary to consider volume and variety of outputs. Volume means number of people, information and components to be used. igher volumes indicate mass production. Variety, on the other hand, means different types of re*uirements for outputs. $herefore higher variety means use of more skilled #orkforce. 3ome companies use both approaches in a hybrid system, #hen they are capable of mass production and orders, but also accept orders for small number of products #ith variations. (.rakash, 3ingh, -115, p. 72677) 'rgani:ational issues #ork closely #ith employment and approach to employees. "s employees have responsibility for *uality of products, it is necessary to make their #ork motivating and appealing. 3ome organi:ations use cellular layout for smaller parts of the process lines. (n this layout, several stations of the same process is grouped together and employees may rotate among the stations. 3uch layout prevents people from frustration of the same type of #ork and also provides single employees #ith overvie# of other tasks. Gifferent people doing different task provides also opportunity for improvement ideas from more sources. (.rakash, 3ingh, -115, p. 77676) "nother approach to employees is empo#erment. /mpo#erment gives employees higher responsibility and allo#s them make decisions related to their task. $his is important step #hich enhances company fle&ibility. /mployees performing the <ob have often more detailed kno#ledge of the problem, therefore are assigned to find solutions on problems arising on their stations. (.rakash, 3ingh, -115, p. 7,675)

Si Sigma 3i& 3igma is a system introduced in 8951?s by %otorola and later adopted and amended by >eneral %otors, Dord, oney#ell, "00 and "merican /&press. $hese companies started to use methodology to strive *uality of their products and better customer service. (.rakash, 3ingh, -115, p. ;8-) %ethodology of 3i& 3igma seeks to eliminate variations #hich create different levels of *uality and therefore inconsistent customer satisfaction. )e can say scope of 3i& sigma is optimi:ation of processes and increasing their efficiency. (3tamatis, -11;, pp. 8,) $he tool focuses on four ma<or goals (3tamatis, -11;, pp. 8-)= 8. -. ;. 2. Gefects reduction, Mields improvement, !ustomer satisfaction improvement, and 3hareholder value increase.

3i& sigma uses statistical methods to measure and compare effectiveness of production and percentage of production #hich does not reach acceptable *uality. (n statistic representation, si& sigma means that company must not produce more than ;.2 defect per million opportunities. !ompanies (http=NN###.isi&sigma.comNne#6to6si&6sigmaNgetting6startedN#hat6si&6sigmaNE ,.-.-18-)

previously follo#ed three sigma performance, and it may be still used in various industries, ho#ever, it means that such companies have had 9;.;-O long6term yield, #hile si& sigma companies reach long6 term yield of 99.99966O. (3tamatis, -11;, pp. 82E .rakash, 3ingh, -115, p. ;8-) 3tatistical methods re*uire *uite large amount of data to be collected and analy:ed, therefore is 3i& 3igma used only in standardi:ed processes or processes ready to be standardi:ed. 'n the other hand, standardi:ed procedures does not mean 3i& sigma is applicable only in manufacturing. "dministration and services may be also analy:ed by this method and improved. ($oepfer, -115, pp.26) 3i& sigma uses t#o basic models to address processes of company and improve them according to methodology. G%"(! model focuses on problem resolution and stands for Gefine, %easure, "naly:e, (mprove and !ontrol. (3tamatis, -11;, pp. 86) Gefine is stage in #hich team has to identify problem and its scope, find out customers of the pro<ect and their e&pectations of product *uality. (t is important to note that problem has to be reduced to level #hen it may be completely controlled by the team. "t this stage has to be also performed cause and effect prioriti:ation. )hile clearing these matters, team has to organi:e itself appropriately for the

pro<ect and roles of team members. "s a final step of Gefine stage comes detailed problem statement. (3tamatis, -11;, pp. ;9628) %easure stage is designed to establish techni*ues for collecting data about current performance that highlights pro<ect opportunities and provides a structure for monitoring subse*uent improvements. )hen this stage finished, data collection plan is be available #hich specifies types of data and collection techni*ue. .art of the plan is also validated measurement system to ensure accuracy and consistent data. 3ufficient sample for data analysis and set of preliminary analysis results to provide pro<ect direction are also part of the plan. $he plan is closed by baseline measurement of current performance. (3tamatis, -11;, pp. ;9) "naly:e stage is an outcome of the second stage. "t this point team analy:es data collected by measurements and looks for improvement opportunities. (t may happen at this stage, that pro<ect team finds une&pected data #hich #ill re*uire collecting additional information. (3tamatis, -11;, pp. 22) "fter defining pro<ect, creating measurement bases and techni*ues, and analysis of the data, (mprove stage is moment #hen solutions are about to come up. "t this point solution ideas, design, pilot and implementation of improvements are delivered. (deas are created according to data analysis and chosen according to criteria stated by team. 3hould be process map is prepared. (t represents best possible improvement of given problem the pro<ect team is able to implement. !onse*uently, Dailure %ode and /ffect analysis should be prepared or revie#ed. $his document should be continuously updated. $he ne&t step is !ostN0enefit analysis and .ilot. .ilot is a trial implementation of suggested improvements and it is tested on a small scale. (t is closely observed and outcomes are used for additional refinements of the solution. "t last improvement is validated. 'ne of possible #ays to validate improvement is to compare the sigma values before and after the changes have been made. (3tamatis, -11;, pp. 27626) $he last stage is !ontrol #hich has to embed the result of improvement into company processes and monitor performance after#ards. .art of this is process of transition of the improved process from team to original o#ner. $o ensure all this, detailed control plan is elaborated #here is stated #hat is measured, #hat are the performance parameters, #ho is in charge of controlling process and #hat corrective measures must be performed in case of problem. (3tamatis, -11;, pp. 2662,)

G!'V is another model #hich concentrates more on prevention. (t is acronym for Gefine, !haracteri:e, 'ptimi:e and Verify. (3tamatis, -11;, pp. 86) (n some sources #e may find this model under acronym G%"GV as Gefine, %easure, "naly:e, Gesign and Verify (.rakash, 3ingh, -115, p. ;87) ho#ever, for purpose of this #ork, #e #ill use G!'V model for e&planation. G!'V is more

complicated task for companies than G%"(! model. "s it is a design #hich should prevent future complications and defects, the design must seek future problems and ho# to treat them. $herefore, design for si& sigma or G!'V model is considered as higher level of si& sigma methodology and re*uires other capabilities than G%"(!. (3tamatis, -11;, pp. 78) Gefine in G!'V means that !ritical to 3atisfaction drivers and output specification are identified and selected. "s a second part of this stage is established operating for output specifications for ne# and aged conditions. (3tamatis, -11;, pp. 61) !haracteri:e stage consists of t#o steps + system design and functional mapping. $hese steps split output specifications to the smallest parts and describe robustness of opportunities in order to link !ritical to 3atisfaction specifications #ith !ritical t Luality parameters and optimi:e strategy to deliver it. (3tamatis, -11;, pp. 61) 'ptimi:e, the third phase of the model is also developed in t#o steps= design for robust performance, design for producibility.

Gesign is mostly focused on improvement of robustness in order to prepare it for long service and minimi:ation of product sensitivity to usage conditions. .roducibility step characteri:es capability and stability of current process and it is developed simultaneously #ith the first step. (3tamatis, -11;, pp. 68) (n Verify stage team assesses throughout Gesign for 3i& sigma and later tests and verifies stage. 'b<ective of these steps is to control that capability and product integrity are in line #ith customer e&pectations. (n first step, sigma is estimated for process capability and product function over time. $he second step is to assess actual performance, reliability, and manufacturing capability, as #ell as to demonstrate customer correlated (real #orld) performance over time. (t is imperative to understand that if the results of design for robust performance, design for producibilityE assessment and testing are not satisfactory, the model may revert back to the previous stage or even further in the functional mapping stage. (3tamatis, -11;, pp. 6-66;) "ll the tasks and procedures related to 3i& sigma are developed #ithin a pro<ect. .ro<ect represents

single item of focus #hich is to be addressed by 3i& sigma methodology and it is core to achieving e&pected gains. .ro<ect should result in specific improvement and before start should be assessed on reaching high return on investment and customer satisfaction after finishing. .ro<ect usually contain these steps (3tamatis, -11;, pp. 89)= .roblem definition (statement), problem ob<ective, !ost of .oor Luality (!'.L) parameters, !ritical to Luality (!$L) identification N 'perational definitions. $ools used to measure the current status and to prioriti:e the input variables that contribute to the problem as defined, validation improvement to determine the relationship of MPf(&), (nstitutionali:ation of the results in such #ay that the gains are sustained. 3i& sigma is a very comple& methodology and re*uires throughout kno#ledge. "s a conse*uence #e cannot e&pect users to be familiar #ith the topics immediately and become e&pert in fe# days. $he methodology consists of several levels of proficiency #hich cover different roles in organi:ation and pro<ect aligned to 3i& 3igma. (3tamatis, -11;, pp. 8,) !ritical claims on si& sigma approach revealed lo#er performance of certain companies using the approach than performance of companies #ithin the same industry #hich #ere not using si& sigma. Durther studies found that program #as not #ell6accepted by employees and they #ere not committed to this initiative. (t illustrates that #ithout this it is very unlikely to achieve e&pectations. (.rakash, 3ingh, -115, p. ;86) %ean Sigma Aean si& sigma is combination of lean principle of continuous elimination of #aste and *uality driven customer orientation of si& sigma. (http=NN###.moresteam.comNne#6to6lean6si&6sigma.cfmE 89.-.-18-) %ichael >eorge, #ho introduced the term in -11- defined it as the activities that cause the customer?s critical6to6*uality issues and create the longest time delays in any process offer greatest opportunity for improvement in cost, *uality, capital, and lead time. (>eorge, %ichael A., pp.2) 3implified, lean speciali:es on eliminating #aste and si& sigma on customers and *uality, ho#ever, there #as no common platform to target process #hich add ma<or *uality to customers #ith lean

principles of #aste elimination. Aean manufacturing can improve processing but it does not provide tools for statistical control. 'n the other hand, si& sigma is orientated on *uality improvement but cannot intensively speed up processed or save costs. $his creates the need to merge these t#o approaches into one compact methodology. (>eorge, %ichael A., pp.,) Aean si& sigma provides ans#ers for *uestions such as= #hich processes should be targetedQ )hich of these should be improved as firstQ )hat order #ould be given to other onesQ o# can #e *uickly improve *uality, save costs and time Q (>eorge, %ichael A., pp.2)

Aean si& sigma also focuses on increasing shareholder value. $ool and methods of Aean si& sigma decrease inventories and capital e&penditures, and increase operating profit related to improved *uality of products and service. (>eorge, %ichael A., pp.81) Fnlike 3i& sigma, Aean si& sigma uses mainly priciples of G%"(! methodology. $his is caused mainly by adding Aean concept to the model as G%"(! model is targeting e&isting processes and their improvement, similarly to lean approach. (>eorge, %ichael A., pp.,86,-) (http=NN###.si&sigmainstitute.comNleansigmaNinde&Rleansigma.shtmlE 89.-.-18-). (lue ocean strategy 0lue ocean strategy is an approach #hich focuses on radical innovations #hich create ne# markets for its producers rather than continuously compete #ith other rivals #ithin the same market. (n the blue ocean terminology, usual marketplace #here is huge number of competitors seeking to catch the same customers is called red ocean. $he blue ocean is created #hen you make other competitors irrelevant, because you provide something totally uni*ue and different from all the other players on the market. $his is great strategy as it not only provides you #ith market entirely for you, but the uni*ueness of the products allo#s you to charge higher prices than you could on market limited #ith other competitors. 0asically, if successful, 0lue ocean strategy gives you temporally advantage of monopoly position on market. (Kim, ).!han and %auborgne, Benee + Value (nnovation= " Aeap into the 0lue 'cean, in= !rafting and /&ecuting 3trategy= $e&t and readings, 87th edition, p. 71-671,) "lthough, it might be considered only a corporate management strategy, 0lue ocean strategy intuitively brings you to idea of innovations. "s it #as e&plained earlier, blue oceans are created by differing from competitors and such differences are innovations on products or services. $herefore, #e can say that blue ocean strategy is highly innovative and recommended to manage innovations

successfully. Theory of Constraints (n 8957, /li >odratt introduced book $he >oal #ith the ma<or concept of $heory of !onstraints. (http=NN###.be&cellence.orgN$heory6of6!onstraints.htmlE 89.-.-18-) (http=NN###.pinnacle6strategies.comN$heoryO-1ofO-1!onstraints.htmE 89.-.-18-) $his theory offers key idea of businesses and their results #hich are affected by outcomes of single constraints in operations. $here are t#o underlying concepts in theory of constraints= 3ystem as chains + this concept sees system as collection of single smaller actions. $hese action use outputs from preceding action as inputs and develop then. "ltogether, these actions #ork to#ards higher goal. .roblem appears #hen not all parts of chain are e*ually strong and hence the #eakest link prevents #hole chain from reaching better results. (f this link is fi&ed and becomes stronger, #hole chain becomes stronger. other part of chain o#ever, the ne# strength is not unlimited. $he #eakest point <ust moves to and creates ne# constraint. (http=NN###.be&cellence.orgN$heory6of6

!onstraints.htmlE 89.-.-18-) $hroughput, (nventory, and 'perating /&pense + the second underlying concept focuses on three system measurements= increasing $hroughput, and decreasing (nventory and 'perating /&pense. "s there is higher potential to increase throughput than the other t#o measurements, the concept concentrates mainly on this idea. (http=NN###.be&cellence.orgN$heory6of6!onstraints.htmlE 89.-.-18-) $heory helps to address these main constraints= )here is the constraintQ )hat should #e do #ith the constraintQ o# do #e implement the changeQ (http=NN###.be&cellence.orgN$heory6of6!onstraints.htmlE 89.-.-18-) $heory of constraints contains various applications for use in businesses. 'ne of most important is series of five steps necessary to focus on ongoing improvement (http=NN###.pinnacle6 strategies.comN$heoryO-1ofO-1!onstraints.htmE 89.-.-18-) (http=NN###.be&cellence.orgN$heory6of6 !onstraints.htmlE 89.-.-18-)= 8. (dentify the systemJs constraint + company needs to identify #eakest point of the #hole process chain. -. Gecide ho# to e&ploit the systemJs constraint + design ho# to use #hole constraining point but

#ithout e&pensive changes. ;. 3ubordinate everything else to the prior decisions + other parts of chain should be ad<usted to enable changed constraint #ork at ma&imum efficiency. 2. /levate the systemJs constraint + in case that in steps - and ; #as not achieved ma&imum efficiency, these should be repeated. (n case the constraint reached its highest limit, company may skip this step and pass to step 7. 7. >o back to step one + #hen one constraint is eliminated, company may start to focus on the ne&t point #hich slo#s do#n #hole process. Crowdsourcing !ro#dsourcing is an innovation model in #hich <ob #hich actions traditionally performed by one agent + employee or selected outsourcing company + are outsourced in form of open call and undefined number of people may react on this call. (http=NNcro#dsourcing.comNE -6.-.-18-) $erm cro#dsourcing #as introduced for the first time in -116 by Ceff o#e in acticle $he Bise of !ro#dsourcing published in )ired maga:ine. (http=NN###.#ired.comN#iredNarchiveN82.16Ncro#ds.htmlQpgP8StopicPcro#dsStopicRsetPE -6.-.-18-). (n the article o#e points on shift from outsourcing and one kno#n reliable supplier to models #here unlimited number of suppliers may provide o#n services and fulfill the task. (t has usually t#o main ob<ectives + problem6solving or productNservice design. "lthough not being described earlier, the principle of cro#dsourcing had been kno#n earlier. $he approach #as used mainly in industries based on technical kno#ledge #here creativity is used to find most appropriate solutions + such as engineering and architecture, information technologies, not6 for6profit and public institution tenders. 4o#adays, this model is mostly used in information technology industries as it is highly connected #ith use of media and information technologies. functions. "lthough the concept remains the same, there are many designs #hich may be used for the model. $he first decision to be focused on is #hether the cro#dsourcer #ants to solve a problem or improve current status of product of service, ergo #hether the problem is kno#n or not to the company. $he ne&t decision relates to the necessity of splitting the task into smaller microtasks or offer it as a #hole and the community #ould deal #ith it on their o#n. o#ever, gradually more and more companies start to use features or #hole designs of cro#dsourcing also in other industries and other

)oal of paper
>oal of this paper is to assess the process of innovation management in situation #hen method of cro#dsourcing is used in different stages of the process. )e #ant to determine differences bet#een of innovation management under common tools and tools related to this relatively ne# approach. "s a result #e #ant to point out those areas #hich might be crucial to decide #hether to use cro#dsourcing methodology or not in order to achieve higher competitiveness of the company.

*ethodology
(nformation used in the thesis #ere gathered from te&t books, <ournals, maga:ines and #ebsites oriented on topic of innovation, *uality management, strategy and cro#dsourcing. Gifferent sources #ere researched in order to achieve familiarity #ith the topic and current trends. 0ased on these, author after#ards established several topics to be researched more deeply and their potential for development into thesis #ith added value to scientific or managerial kno#ledge. )hen final decision of focusing on cro#dsourcing and

Results of wor& and discussion

#rocess of implementing innovation
"ccording to @imo ((n%, -181), #e need to look at the process of managing innovation from several points of vie#. (nnovation process is a = 6 6 6 6 6 6 part of comple& business strategy, part of marketing activities, choice and implementation of comple& innovation strategy, specific re*uest for risk financing, re*uest for capacity planning, pro<ect management and organi:ing employees, process of implementation of innovation.

$his vie# suggest #e can look at process of innovation management as a pro<ect of implementing single innovation into product or business procedures, or as a continuous #ork to#ards capturing and developing innovative ideas in a company. (f #e #ant to e&amine process of implementing single innovation idea. )e have to follo#

#rere'uisites of innovation process

%anaging innovation is a big decision #hich re*uires several condition to be fulfilled in order to make process of innovation happen. "uthors focused on innovation management suggest different conditions and prere*uisites to be considered before the innovative process begins. (nnovations and innovation management need to be accepted thought the company to #ork out. (f #e #ant to spread this approach around the #hole company, it re*uires interests and desire from the highest levels of management that this system #ill #ork. $herefore, the base for successful management of innovations is commitment of senior management to this strategy. )ithout true commitment of management every strategy or activity is only a bureaucratic act #hich is very unlikely to succeed. $op managers need to prove to employees that the initiative is necessary and important for company and also for them personally to #in the attention of employees for the activity. (citation needed, .earsonQ) Dor good management of innovative ideas it is necessary to create proper environment. 3uch

environment #orks as a place #here ne# ideas are #elcome and appreciated. 'n the other hand, top management needs to make clear that potential failure can take a place as #ell. "bsence of such reassuring can brake interesting ideas due to fear of conse*uences. !hristensen and Baynor illustrate reasons #hich brake innovative thinking in corporations. %iddle managers are important part of innovation process through the company, ho#ever they do not present all the ideas #hich could be potentially leading to future gro#th. $hey apply self6censoring related to little information about performance of future arrangement. >enerally, middle managers are not #illing to propose ideas #hich might not be accepted by top managers and hence their give up on presenting them. $his is connected also #ith organi:ational system as middle managers often rotate around company functions, each managing only for several years. $his results in un#illingness to propose ideas #hich may bring result after their period in function, because it might influence choice of their future post. "t last, innovative managers often censor their proposals according to successful ideas #hich #ere chosen before and therefore is top management more likely to approve them. (Pearson,
Tough-Minded Ways to Get Innovative) Andrall E.:

Gytrt and 3triteska emphasi:e four ma<or rules for effective and successfully implemented innovations + continuity, comple&ity, timeliness and consistency. (-119, p. 65) !ontinuity is important as a reaction on changing e&ternal environment. !ontinuous actions help to prepare company for innovative initiatives by analy:ing environment and looking for potential innovative ideas or threats #hich needs to be addressed #ith innovations. Gisruptive actions related to innovative activities help to solve unfavorable e&ternal situations, but they often come too late to prevent the (Gytrt, 3triteska, -119, p. 696,-) !omple& process are usual feature of corporations and innovation cannot make an e&ception. (nnovations therefore should not be e&ecuted alone, but make part of more comple& innovative net#ork throughout the company. $he net#ork may have several levels and it is necessary to ensure single level of this net#ork create synergy. (Gytrt, 3triteska, -119, p. ,-6,2) Dactor of timeliness gives to other factors point of vie# of time. $he ma<or goal is to prevent losses or damage by early or timed implementation of innovative actions. $imeliness consists of t#o dimensions= solving problem on time, and prepare solution in order to prolong successful market presence of the product or company. 'ther important task related to time is the timing or reali:ation of the activity. (Gytrt, 3triteska, -119, p. ,,6,5) !onsistency conclude prere*uisites according to Gytrt and 3triteska as it helps to monitor and evaluate all the actions used in innovative initiatives. )hen evaluating consistency of innovations it is

necessary to use synthesis and analysis, depending on level of management in #hich is the innovation #e #ant e&amine. (t is recommended to use determinants established by the manager himself better than copy determinants from other innovation systems or from other managers, because such determinants may not describe entirely the particular managed system. (Gytrt, 3triteska, -119, p. ,56 ,9)

Innovation transfer and obstacles of innovation process

(n this chapter #e move on in the process of implementation of innovation. )e analy:ed all sources of innovation and picked up some ideas #hich may be interesting for the company #e might fall into naive state of #inning. Gespite the fact the most important part is done, no# #e need to focus on steps #hich are also very important as they shape the future outcome and determine the success of the innovation. (t is necessary to e&amine potential of organi:ation to implement the innovation and steer to desired end. .rocess of innovation can be also influenced by different obstacles #hich may interrupt or even stop it, therefore, it is very important to determine and analy:e them before the process begin or in early stage in order to avoid such occurrences or diminish potential harm. "fuah mentions t#o types of transfer based on type of boundaries being passed. /ach of this type then contain number of boundaries, #hich should be considered #hen preparing for an innovation. $ypes of boundaries= Dunctional and 'rgani:ational 0oundaries contain boundaries of

absorptive and transmission capacities + this boundary relates to current kno#ledge company possess in order to absorb and use ne# kno#ledge. "lso, it is tied #ith assets company can use for appropriate e&ploitation of ne# idea. $rasmitting capacities include delivery ability too. (t means that for successful introduction of an innovation is necessary not only have the right kno#ledge and assets, but also capacity to e&plain and argument the positives of an innovation.("fuah, (n%, p.,76 ,6) difference in culture + in functional approach #e talk about corporate culture and sub6 culture #hich shape attitudes of employees to#ards ne# ideas. " dichotomy bet#een such cultures can substantially slo# do#n adoption of an innovation. $herefore, it is necessary to e&amine the culture in

company and implement idea in a #ay #hich is in harmony #ith the culture and subcultures.("fuah, (n%, p.,66,,) nature of innovation + #hen implementing innovation it is very important to adapt the process to type of the innovation. 0asic *uestion to ask are #hether innovation is radical or incremental, #hether it re*uires kno#ledge or it is bulk processing. )e also have to kno# if it is going to be simple or more comple& innovation and ho# tacit information it is needed to develop it. >enerally, the more tacit kno#ledge is necessary or more comple& an innovation is, the tougher transmission of innovation is. igher amount of kno#ledge is also slo#ing do#n the process as lots of absorptive capacity is re*uired. ("fuah, (n%, p.,,) $iming + it may seem that time is not as important #hen talking about innovations and implementation of ne# ideas. o#ever, it can play very important role in adoption of innovation on marketplace. $ime as a boundary of innovation transfer is tightly linked to events and occurrences in e&ternal environment of the company and relates to actions of other competitors. "n innovative product might be better that the one competitors offer, but if is delivered on the market significantly later, customers perhaps #ill not like to s#itch to it due to inconvenience related to learning ne# systems of usage, the dominant design #as already established. $iming is connected to innovation life cycle, in early stages there is a lot of uncertainties related to innovation #hich may block the innovation transfer due to small amount of information available. Aater the amount of kno#ledge about the ne# idea rises and therefore also transfer is more effective than before. ("fuah, (n%, p.,,6,5)

4ational 0oundaries can bring these obstacles=

difference in culture + corporate culture is often determined by national culture. Gifferent cultures may have different approaches to similar situation and these may underline as boundary to adoption of an innovational ideas. $herefore, for multinational corporations should be e&amination of culture differences bet#een country of origin of innovation and destination country one of basic steps to take. absorptive and transmission capacities + similar to functional approach, these capacities link to kno#ledge #hich is possible to possess in the country. $he differences bet#een educational systems, *uality of education, *uality and stage of development of market and market relations, all these influence transmission capacities of countries and build the obstacles of innovation in case the differences are too high in certain fields.

 timing + in case of crossing national obstacles of innovation means timing type of innovation + as #e mentioned in previous te&t, innovation may be radical or incremental, ho#ever, sometimes happens that innovation is incremental in certain countries #hereas radical in other due to lack of investments and related kno#ledge. $his may be an obstacle in innovation process because radical innovations usually re*uire higher investments. $hus, such innovations are some#hat less interesting and more risky for company in one country than in other countries. co6opetitors 6 co6opetitors are all the entities of the supply chain of the product as #ell as others #ho help or other#ise influence company and its ability to adopt innovations. )hen transferring innovations through the national borders it is important to reali:e that market and entities e&isting on it may function in completely different #ay than in country of origin of innovation. $he e&tent to #hich co6opetitors matter is a function of the comple&ity of innovation. (...) $he more comple& the innovation, the more likely it is that co6opetitors #ill play a critical role in the receiving nation.("fuah, (n%, p.51658) 3ituations of sender and receiver of an innovation should be analy:ed and compared in order to find similar and diverse points. .oints of differences can be later treated to reach desired situations. all (Bogers) also provided determinants of diffusion of innovation. Besearches sho#ed different characteristics #hich influence the diffusion process and speed of it. Dirst of all, attributes #hich influence potential adopters can be categori:ed five groups= -. ;. 2. 7. 6. $he relative advantage of the innovation, (ts compatibility, #ith the potential adopterJs current #ay of doing things and #ith social $he comple&ity of the innovation, $rialability, the ease #ith #hich the innovation can be tested by a potential adopter, 'bservability, the ease #ith #hich the innovation can be evaluated after trial.

norms,

((n, '&ford andbook of (nnovation, p. 268) Boger also named the factors #hich may accelerate or brake the diffusion process= 8. -. o# is decision made + collectively, by individuals, or by central authority, !ommunication channels used to ac*uire information about innovation, #hether mass media or

interpersonal,

;. 2.

$he nature of the social system in #hich the potential adopters are embedded, its norms, and the $he e&tent of change agentsJ (advertisers, development agencies, etc.) promotion efforts ((n,

degree of interconnectness, '&ford andbook of (nnovation, p. 26-) /vent though, this factors and attributes are very persuasive and often describe the situation properly, these categories are based on assumptions that innovative products as #ell as older one are not changing in the time and the ne# one is better than the older product. $his does not have to be true in reality, because increase of user feed6back brought higher competitiveness and last gasp innovations of older products #hat often means slo#er diffusion of ne# products. ((n, '&ford (nnovation, p. 26-) andbook of

#rocess+es, of innovation management .rocess of implementing innovations into usual company business routine may seem to be the same implementation plan as for any other pro<ects. o#ever, proper implementation of innovation has some particularities #hich are not common for other pro<ects. $herefore, #e decided to dedicate a part of this #ork to make clear ho# should business proceed in order to deliver fully functional and efficient innovations in #ork. Ceffrey .aul 0aumgartner defined (-119) steps of innovation process (cycle) as follo#s= 8. -. ;. 2. 7. 6. ,. 0egin #ith a problem !onvert the problem into a challenge !hallenge colleagues to suggest creative solutions !ollaborative idea generation !ombine and evaluate ideas Gevelop ideas (mplement ideas

(n other article, 0aumgartner adds to previous steps one more + 4o. 5 + Bevie#. $his last point provokes ne# ideas and problems to be targeted in ne&t innovation cycle.

Cames >osling (.rocess of innovation, -188) divided the process of innovation into t#o main

phases + !reation and Gelivery. $his division is in line #ith other models, <ust generali:ed up to ma&imum. (n this #ork #e #ould like to focus on the former phase of creation. ( http=NNbooks.google.comNbooksQ idP9F8K7A<F'#/!SprintsecPfrontcoverSd*PdiffusionTofTinnovationsTbyTeverettTm. TrogersShlPenSeiP&-!h$v*' 7>%s#bvlb3i"#SsaPUSoiPbookRresultSctPresultSresnumP2Sve dP1!GkL6"/#"#VvPonepageS*PdiffusionO-1ofO-1innovationsO-1byO-1everettO-1m. O-1rogersSfPfalse pp.8;, + $he innovation development process)

Did this process change due to crisis- $ow- .hat has changed- Is there any way how to lin& previous and current processes9$he e&tent and type of innovation should be determined by current business performance and future e&pectations and by an organi:ationJs tolerance to risk. $he diagram belo# encapsulates the idea that there are essentially ; types of innovation strategies. $he (nnovation .rocess (nnovation should be built into business routines at three distinct levels + at the "nnual 0usiness .lanning ("0.) process, through structured WthemedJ Luarterly (nnovation )orkshops (L()s), and ad hoc day to day activities. 3ome of the routines are WproactiveJ by nature + a conscious focus on bringing ideas and concepts for#ard into the innovation process + such as "0. meetings and L()s. 3ome routines are WpassiveJ or WreactiveJ, such as creating a culture of innovation #here day to day activities and management seek to enable innovations to flourish. (n all cases ideas and innovations should be driven by market, customer or competitor insights (%!(s) and progress revie#ed on a monthly basis. " robust pro<ect management process is often a prere*uisite for effective implementation and communication. http=NN###.<pb.comNcreativeNipm.php http=NN###.frost.comNprodNservletNcpoN8,5225957 III veXmi dobrY 6 grafy http/00www1innovation2creativity1com0managing2innovation1html

Types of innovation management development +In2house, "utsourced, %icensing, Crowdsourced, In2house development of innovations
$raditionally, #hen company sought for innovation of its products or processes it #as a task for internal research and development department. (nnovations are tightly connected #ith research and development, as upgrades and ne# products created by the company internally provide $he task is to come up #ith ne# solution or upgrade for e&isting situation. (n6house innovations, ho#ever, are *uite e&pensive in nature as they re*uire a lot of resources in cash, kno#ledge, time, etc. $o these it is necessary to add also resources in form of internal capability of the company to absorb ne# kno#ledge and develop it further. ("fuah, (n%, pp.99) "dditional costs may be those of risk of research #hich does not lead to any potential innovation, therefore, funds #ould not be recovered by inventions. )hen looking for change in product, these may be <ustified as necessary, as products are related to later direct profit of the company. 'n the other hand, #hen company needs process change, investing in research of ne# design may be regarded as unnecessary as process changes may be reached incrementally and assessed continuously. Gevelopment of innovations in6house is an

%icensing of innovations
%any companies no#adays cannot afford highly risky investments into products and process innovations. o#ever, they understand importance of upgrading performance and introducing ne# products. $herefore, such companies try to find a #ay to balance these t#o ma<or constraints. 'ne of possible solutions is licensing. Aicensing means ac*uiring intellectual property from other sources and use it for innovative solutions. (%olnar, (n%, pp. 69) " licence is permission or agreement to use intellectual property of one company by another one. "s #e are talking about situation #here our company buys license from other, this is called passive licensing, as #e do not are cash income from this transaction. (%olnar, (n%, pp. 69) $he process of implementing innovation in form of license is characteri:ed by high e&penses in the first years of use of the intellectual property. o#ever, inlike in6house developed innovations, the break6even point usually comes earlier #ith ac*uired kno#ledge. "lso incomes from sales of products resulting from licensing rise faster and reach higher than average of in6house developed innovations. $his is caused mainly by the fact, that companies ac*uire licenses #hich are already proven as successful. 3uch actions also diminish risk of unsuccessful innovations and instead of risky e&pense in

research and development represents more or less investment for ac*uiring company. (%olnar, (n%, pp. ,16,-)

"pen innovation, outsourcing and crowdsourcing of innovations

(nnovative approaches introduced in previous sub6chapters are traditional and have been used for updating products since the beginning of innovative initiatives. o#ever, due to their 'utsourcing is generally defined as using e&ternal sources and partners for e&ecution of activities. '/!G defines it as 3 Gelegating (part of) activities to an outside contractor. (http=NNstats.oecd.orgNglossaryNdetail.aspQ(GP2971E -9.-.-18-) 0asis for such decision are usually financial effectiveness and orientation on core processes. Besources are key for companies and therefore they try to use them #isely. 'utsourcing offers solution for this constraints. "s companies usually have only fe# core activities, they tend to cut cost on those not as important for them, especially in case #hen transaction costs are lo#. 'utsourcing is here one of option ho# to save these costs and focus more on processes #hich are for the company crucial. 'utsource processes and non6 core activities is also related to risk management, as in many cases activities represent high risk #hich is not acceptable for companies. (Gvoracek, -181, pp. 5681)

Case analysis 2 $en&el

enkel #as established in 85,6 by Drit: enkel and his t#o partners as enkel S !ie. $he first product #hich company offered #as universal #ashing po#der based on silicate. $he uni*ue feature of the product #as packaging as at the time all #ashing po#ders #ere sold loose. $his caused lot of problems as people did not kno# ho# much po#der they should use #hen #ashing. enkel solved this problem and sold detergent in small packages in amounts necessary for one use. $he company succeeded and in 8551 bought land to build a plant in GZsseldorf. Aater in 8552 enkel ac*uired plant for #ater6glass in order to ensure continuous flo# of ra# materials to main plant. )ater6 glass plant #as completely moved to GZsseldorf and re6constructed. enkel products #ere highly demanded, hence, second #ater6glass furnace #as built in 8555 and ne# #arehouse in 8591. (n 8591 company sales #ere about 785,111 %arks and in 8599 sales passed one million %arks. !ompany had great number of customers, in 8596 already in -51 cities around >erman /mpire. "lthough there #as potential for further gro#th, enkel #as limited by location of the plant. 4e&t

development of plants and company alone depended on connection #ith rail#ays and other means of transport as amounts carried #ere constantly gro#ing and started to be undeliverable by carries #ith horses. $herefore, in 8599 ne# land near Bhine #as obtained and construction started. .roduction began in 8911 and after first year reached increase of 66O of production compared to the previous plant. (n 8595 the company launched ne# product + %artellin a potassium fertili:er. $his #as a by6product of #ater6glass production #hich sho#ed to be great for tobacco, #ine and hops plants. Dertili:er became one of most successful products of enkel and in 891- the product line #as #idened by fertili:er for flo#ers. $he company, ho#ever, did not #ant to keep attached to previous successes and in 8916 started research in field of detergents #hich ended up in 891, in launch of .ersil, the ne# type of detergent. Bevolution of .ersil #as in effectiveness it brought to #ashing. (nstead of repetitive bleaching, rubbing and boiling, one boiling #ith .ersil #as <ust enough to get clean and fresh laundry. $he success of the product #as huge, despite the fact that similar o:one based detergent #as launched by competitor at the same time. "fter one year, production of .ersil reached 2,,11 tons. (n five years from market launch, in 898-, .ersil accounted for 21O of enkel production. )ith the outbreak of the )orld )ar, company had to deal #ith different constraints. 3hortage or complete lack of ra# material led to research of adhesive based on #ater6glass. .roduction of .ersil, on the other hand, had to be stopped due to limited resources and instead of that substitute #as offered. (n 89-1, standard *uality of supplies for .ersil #as available and the detergent #as re6launched. (n 89-8, enkel offered enko, a bleaching soda, #hich filled gap in #ashing product line of enkel. enko, together #ith .ersil and 3il (introduced in 8985), covered #hole #ashing process. (ndustry of #ashing po#ders and detergents had been continually upgraded at enkel and innovative #ays of production #ere presented continuously. 4e# plant for detergents #as developed in 89-1s in >enthin. 4e# machinery for e&tracting fatty alcohol #as built in 89;8 in GZsseldorf and in 89;,, ne# factory for distillation of fatty acids #as built together #ith microbiological laboratory. 'utbreak of #as in 89;9 meant catastrophe for detergents product line of enkel. Gecree of >erman government limited heavily types of #ashing po#ders to be sold and hence more than -11 products (including .ersil #hich #as re6launched in 8971) had to be either stopped from production or changed. (n spite of this unfavorable situation as #ell as other event #hich hurt the family business, enkel continued in research in field of detergents and launched ne# detergent for fine and colored te&tile in 892-, ne# method of obtaining fatty acids from fungus and line to use #aste from #ater6glass production in 892;. "lthough, the company plants #ere not damaged severely during the #ar, the GZsseldorf plant #as

occupied by "merican and 0ritish troops in 8927, enkel family and managers #ere interned #ith rehabilitation coming in 892,. $he operations in enkel and other companies in industry #ere re6 started only in small steps after permission from army. "fter successful avoiding of plant dismantling in 892,, enkel leapt into ne# products introduction. (n 8929, .er#oll and Aasil #ere introduced to the market as the first synthesis6based detergents from enkel. (n 8971s enkel continued in launch of ne# products, among most important = Da soap #hich later #ould become umbrella term for #ide range of toiletries, .atte& + adhesive #ith broad scale of use, Gi&an + the first detergent for drum6type #ashing machines and .ersil 79 + innovation of .ersil, suitable for all types of #ashing used at the time, not affected by #ater6hardness. 4e&t decade brought enrichment of detergent portfolio of the company. 4e# all6purpose, heavy6duty, light6duty, specialty, pre6#ash and hospital detergents, as #ell as 3omat, the automatic dish#asher detergent, #ere launched. (n 89,1s, one or t#o ne# products #ere introduced each year, most of them as a result of o#n research and development, e.g. 3asil + a phosphate substitute for detergents used in .rodi&an, or polyurethane assembly foam marketed in "ssil %ustang detergent. 3asil #as later used also in )iesser Biese and .ersil detergents. (n 8951s, the company continuosly decrease amount of phosphates in its detergents until 895; and 8956, #hen Gi&an and .ersil (respectively) #ere introduced in phosphate6free versions. Getergent continued to be flagship retail products of enkel also in 8991s. (n 8991 it #as introduced .ersil in version for colored fabrics for the first time, e&tra strong detergent in form of %egapearls reached customers in 8992, and .ersil $abs #as launched in 8995. 89,9 #as breaking year for enkel in personal care, as company introduced first toothpaste and entered this ne# market. 'rientation to#ards personal hygiene and cosmetics continued in 8951s #hen the company ac*uired facial care brand "ok, and 8991s, #hen in ma<or ac*uisition in this sector took over 3ch#art:kopf cosmetics company in 8997. (n 8995, a hair6dye cr[me covering gray hair #ith natural color #as introduced #orld#ide. (n 8999, Aaboratoires 3Yrobiologi*ues >roup, Drench ma<or producer of ra# material for cosmetics #as ac*uired and added to enkel group. 4e&t year, facial care brand Giadermine became available on >erman market. %a<or changes in home and personal care #ere introduced in late -111s= $erra"ctiv + production line of household cleaners #ith emphasi:e on sustainability of environment, !oloriste + ne# hair color #ith fast application, 3yoss + professional hair care product line available to retail customers, .ersil "ctic.o#er + innovative detergent #hich cleans laundry at 87 degree !elsius.

4dhesives
3ince 89--, enkel has been present also in industry of adhesives. "lthough at first only for internal purposes, only one year later, adhesives #ere sold to other company as #ell. "t the time, decision to e&tend operating industries by adhesives, and later also surface treatments, appeared. %arket position in this segment #as enforced in 89-5 #hen dry6paste glue for decorators, #hich offered ne# feature + it #as soluble in cold #ater. $he follo#ing year brought innovation in use of phosphates for cleaning and polishing #hich #as offered for industrial and domestic purposes. 89;1s brought ne# #ave of ra# material shortage, this time for adhesives. "s a result, enkel developed use of cellulose and de&trin as ra# material for adhesives. $his ne# approach turned out to be base of enkel?s future success in adhesives industry. "t this time, use of potato starch and grain for industrial products #as prohibited by state. Fnlikely, )orld )as (( offered ne# potential for enkel as .ressal glue and cellulose derivates #ere produced during this time. (n 8971 enkel reformed market of adhesives. "dhesin #as based on polyvinyl acetate and hotmelt adhesives based on synthetic resins #ere also introduced for the first time. 8961s #ere signed by introduction of adhesives and surface treatments for metal surfaces and plastic pipes, and upgrading #all6covering products. !ompletely ne# segment #as targeted #ith Aiofol foil adhesive product, #hich could be used in food industry and readily reacted on demand for food safety products. (n 8969, enkel started to market .ritt, a glue stick, #hich subse*uently have become one of the #orld#ide flag products of enkel and leading brand of stationary and office products. Aate 89,1s and early 8951s #ere also very important for adhesives and surface treatments industry. $hrough ac*uisitions enkel added several ne# products and technologies to its range= copper e&traction products, polyamides and epo&y hardeners, anaerofobically curing adhesives. "nother ac*uisitions e&tended range of products to#ards adhesives and sealants used in automotive industry. "t the beginning of 8991, adhesives from enkel reached another ne# sector + soft drinks plastic bottles. Bising usage of these bottles led enkel to idea to develop and introduce special adhesives for ./$ bottles labeling. $hroughout 8991s and -111s, enkel oriented attention on building and strengthening of markets tr adhesives around the #orld. %a<or innovations therefore came from ac*uired companies and products. (mportant innovation in adhesives appeared in -11- in the F3, (ndermil, a tissue adhesive helping to close #ounds, #as introduced to the market. $he same year #as also opened technology centre in Capan, #hich offers tailored products for business customers in "sia6.acific region. "fter these busy years, adhesives and technology industry enkel #as restructured in -11;. Aate -111s #ere marked by continuous #ork to#ard #orld#ide market leader in adhesives and sealant

technologies. .osition in F3" and !hina #as supported by ne# investments in -115 and -119, respectively.

Subsidiaries and international development of $en&el

enkel #idely used salesmen to reach customers in foreign cities. (n 8557 the company participated at international fair in "msterdam for industrial companies and in 8556 opened the first foreign office in Vienna, "ustria. (n 8559 customers in the 4etherlands and 3#it:erland #ere served for the first time. enkel developed ne# approach for sales in distant areas + traveling sales staff #as assigned to certain areas (districts) and toured them continuously #ith products. !ustomers in more distant cities #ere served up to four times a year thank to this design. o#ever, the first foreign subsidiary #as established only in 898; in 3#it:erland. Doreign e&pansion #as stopped by )orld )ar, ho#ever, in 89-; ne# subsidiary in !openhagen #as opened, follo#ed ne&t one in 3tockholm, 3#eden, in 89-7. Drom 89-5 enkel has e&ported adhesives to near countries and since 89-9 also to "ustralia and 3outh "merica. Guring 89;1s , enkel established number of foreign subsidiaries in Dinland, the 4etherlands, (taly and 0elgium. 0efore )orld )ar ((, enkel also possessed production facilities in "ustria, 0elgium, !:echoslovakia, Genmark, >ermany, ungary, (taly, 4etherlands, 4or#ay, .oland, 3#eden and 3#it:erland, but most of them #ere e&propriated after the #ar. "s political and economic situation in >ermany #as getting #orse, enkel appointed ne# entity in 3#it:erland to take care of all the plants and offices of enkel outside >ermany. "fter #ar, in 8978, first overseas subsidiary #as established in 3outh "frica and in 8979 ne&t one, in %e&ico #as added. (n 8961, enkel ac*uired 3tandard !hemical .roducts (nc in the Fnited 3tates and started development on this market. 4e# branches and ac*uisitions took place during 8961s in $urkey and "rgentina, and (ran in 89,1. Dollo#ing years brought strong e&pansion around the #orld and restructuring in home and foreign markets. 4e# subsidiaries #ere established in Aondon, "thens, %ontreal, ong Kong, 0angkok and Aagos, and plants and companies producing toiletries for enkel #ere merged in one in 89,8. (n 89,-, similar consolidation took place in adhesives sector of the company. Durther e&pansion in the F3 (and indirectly also in 0ra:il, Capan and (reland), "ustralia, FK, "ustria and states of !entral and 3outh "merica continued throughout 89,1s and 8951s. enkel in >ermany transformed to commercial partnership company limited by shares in 89,7 and in 8957 started to offer preferred shares on stock e&change.

8951s #ere crucial for e&pansion into "sian countries. (n 8958 enkel entered %alaysia in a <oint venture and later established subsidiary in 3ingapore to coordinate all asian actions. o#ever, greatest success came in 8955 #hen enkel opened its first office in 0ei<ing, after some#hat complicated negotiations #ith !hinese government. Dall of communism meant ne# opportunities for enkel in 8991s. $he company took steps to enter these strategically interesting markets and #ent to <oint venture in detergent business in Bussia in 8991. /&pansion to .oland and other !entral and /aster /uropean countries came right after. Dor better coordination of investing activities in this region, enkel set up head*uarters in Vienna, "ustria, #hich had control over all activities. "lso other geographical areas re*uired attention as the competition gre#. (n 8991s, enkel follo#ed line of investing into respected brands and factories across all targeted industries. 0y this, the company built strong positions in most important markets, e.g. hotmelts, automotive adhesives, metal surface treatments, household adhesives (Aoctite) and hair care in the F3, packaging adhesives and various other segments in "sia6.acific. 3imilar path like in 8991s is taken in -111s, enkel strengthen positions on F3 and Aatin "merica markets through ac*uisitions of #ell6established companies. 0iggest ac*uisition occurs in -112, #hen enkel bought $he Gial !orporation in "ri:ona, F3", a producer of detergents and consumer products. $ogether #ith other ac*uisitions undertaken in the F3 in this and follo#ing years, about -7O of enkel?s profit came from F3".

Sustainability
$he company has understood necessity of #ell prepared #orkers and since 89-7 apprentices have been accepted to the company to ensure tailored preparation for company re*uirements. Aater, in 896,, enkel opened teaching laboratory near its GZsseldorf plant #here technical and later also sales staff #as trained.

Internal innovation at $en&el

!ore of innovation at enkel is definitely innovation coming from inside of the company. "s a stable market player #ith long6term history on market of chemicals natural that the ma<or po#er to bring ne# ideas has to come #ithin the company. enkel started to develop o#n research and innovation center in early years of operation and keeps on emphasi:ing importance of internal BSG.

!urrently enkel has 9 o#n research sites around the #orld #here o#n research is conducted. $he company currently focuses on polymer research, surface modification and innovative packaging. $hese issues are important for all three business sectors in #hich the company.

o#ever, enkel encourages also employees from other departments to formulate their innovative ideas and improve either products or processes of the company.

"pen innovation at $en&el

Drom the history of company #e may see, that enkel pursued strong gro#ing strategy throughout its #hole history. "t first, innovative ideas #ere sourced only internally, in strong research department. Aater #hen company became stable and successful on the market, ne# ideas and products #ere ac*uired #ith ne# production facilities. )ith opening markets and globali:ation, pressure on introducing constantly ne# products rose. $his necessity led to start of cooperation bet#een enkel and e&ternal companies. /&ternali:ed research had been part of innovation strategy of the company for a long time before, but only since -115 enkel starts to use term open innovation to address all the activities related to gaining ideas and conducting research outside the company. (see "nnual report for -11, and -115, pp. 'f research and development) 'pen innovation of enkel contain large scale of activities= research and development cooperation #ith e&ternal businesses, research and development cooperation #ith universities and research centers, design cooperation #ith businesses ("lessio + 0ref), public design competitions for consumer products, student competitions on product innovation, engagement of suppliers and customers in innovation. $he company also encourage its supply chain partners to speak up if they see potentially for improvement suitable for both parties andNor for customers. 3elected partners are annually invited for meeting #here innovation compatibility bet#een them and enkel is sought.

(n follo#ing parts #e #ill briefly describe some of mentioned activities and their e&ecution in conte&t of enkel. 4ot all activities are possible to be analy:ed in detail if unless information from companies involved. $his is often sub<ect of trade secret and therefore it is not directly available. Research and development cooperation with e ternal businesses 0ased on long6term presence on the market and kno#ledge of o#n market, enkel established cooperation #ith other businesses #hich might help to research and develop innovations useful for both parties. o#ever, open innovation in this case is not about letting everyone interested kno# #hat #e have and #hat #e #ant or need to research. Gecision to innovate through e&ternal businesses re*uires deep kno#ledge of businesses involved. (t is necessary to make clear #hether level of kno#ledge related to the issue is similar on both sides. (n addition, although kno#ledge related to innovation might be on the same level, absorptive capability of one or another company might be different and block potential cooperation. $here are several #ays of conduct of such cooperation depending stage of research. (n some cases, innovative idea is already kno#n and it is necessary only to find use for it or suggest ho# to implement innovation into current product or systems. $his task might seem easy, but often it is the toughest one. Dinding right #ay of use and implementing of innovation into systems and products #hich #ere already set re*uires lot of kno#ledge on Design cooperation with businesses .roduct design is no#adays one of crucial factors #hich determine #hether customer buys product or not. 'n the other hand, in case design is attractive but inconvenient for use due to any reason, it may be a very e&pensive for the company, due to development and production e&pense #hich #ould be not covered from sales. $herefore, products for home use, especially for cleaning, are only rarely designed #ith other purpose than hygiene and easiness of use. (n -117, enkel teamed up #ith designer company "lessi and launched completely ne# concept for market of toilet cleaners and blocks. "lessi is one of reno#ned designer houses in (taly and enkel assigned it to develop package for )! block 0ref #hich #ould be attractive and useful at the same time. "lessi came #ith idea of surfer. $he block consisted of t#o parts (as other regular )! blocks from enkel portfolio), each filled #ith li*uid of different color. o#ever, the block #as not in traditional rectangular shape. 'ne part presented a surfer and the other #as his sail. $he block #as launched on retail market in -117 and sales and market figures for the -116 sho#ed very good performance in the segment of home care products.

#ublic design competitions for consumer products 3imilarly to previous part, enkel uses also single customers to source ideas of potential design innovation. 3uch competitions are held mostly on internet, #here stand6alone #ebsite is created for the specific contest. )ebsite ofter serves as a main communication tool for contestants and the company. .articipants are re*uired to register and submit their ideas. Gepending on particular type of the contest, proposals are revie#ed by the company, but in many cases also by other participants to provide feed back. (n more simple alternative, revie#ers may not give feed back on the options, ho#ever, they are encouraged to vote for interesting and attractive ideas. $his is very important part of such a competition, as it does not provide only pool of ne# ideas and solutions, but it can also tests #hether the idea #ould be successful on the market. $#o most interesting e&amples of public design competitions at enkel are .ril contest and .ack design contest. %ein .ril + %ein 3til contest took place in -188. $he idea behind #as to let customers to create o#n design (the vignette) of the .ril dish #ashing detergent bottle and vote for the best one. $he top ten designs #ould be assessed by the <ury from enkel and the t#o #inning designs #ould be after#ards used for .ril in sale of limited edition of the detergent. "ll the ideas gathered on #ebpage of the product and anyone could vote for his or her favorite design. !ontroversy of the contest appeared #hen une&pected and some#hat inappropriate designs #ere added to the gallery of proposals, such as .ril + $aste of !hicken #ith clumsy picture of roasted chicken, or .ril + ermann?s >rill 3eason #ith sausage pictured in similar manner as the chicken. $hese became very popular on the social media and their votes started to rise rapidly. enkel unsatisfied #ith the development of reacted by change of terms and conditions of the game, and introduced checks to all submitted proposals. "ny ne# idea had not been published #ithout consent of enkel since then. Voting #as also ad<usted to decrease such an e&treme prevalence of single proposals. $his created ma<or bu:: among the voters and participants, as the number of votes changed suddenly and the difference bet#een the highest ones and the follo#ing #as not so big anymore. .eople involved in the game started to deride the contest and company alone for their inability to cope #ith the situation. Dinally, enkel chose t#o designs #hich #ere produced and sold in limited number. o#ever, voters disapprove it due to results of the vote according to #hich the chosen designs accounted for appro&imately 7,-11 votes altogether, #hile the #inning design accounted for more than ;7,111 votes. enkel tried out also a very small limited edition of the #inning (inappropriate) design, as an e&periment, #hich did not end up #ell.

$otal amount of submitted designs #as higher than 71,111. 'n the other hand is an e&ample of highly elaborated ans subse*uently successful contest is the .ack design contest, #hich took place on the #ebsite= http=NN###.packdesign6contest.com. $he aim of the contest #as to gather ideas on adhesive packaging design. .articipants and revie#ers registered on the #ebsite in order to submit, give feed back and vote for their favorite ideas. $he design to be submitted needed to fit in one of four categories= 8. "dhesive Gosage S "pplication -. -6!omponent6"dhesives S %i&ing ;. 'pening and !losure 2. 'ther .ack design contest re*uired contestants to provide much more detailed information on proposed idea. "s the design may be totally ne# or upgrade of any currently used design, participants #ere supposed to submit picture or graphical scheme of design. /ach entry should be entitled and functional and usage information provided by the author, as #ell as information on technologies and materials used for production. $he proposal should also include summary of benefits of the design for future users. Fnlike %ain .ril + %ein 3til competition, this contest not only provided contestants #ith more detail and information on the game, it also offered cash pri:es for the three best ideas according to <ury (;,111, 8,711 and 711 /FB) and non6monetary pri:e for the most valuable participant. $he pri:es #ere to increase attractiveness of submitting of ideas and providing feed back and comments to other proposals. "nother difference related to the votes + all submissions #ere assessed by fello# participant and <ury on scale from 8 to 7 (7 being the best one) in follo#ing dimensions= 8. 3ustainability= %aterial, $ransport, 3torage, BecycleNBeuse -. (nnovativeness= $echnical solution ;. !onvenience= ealth S 3afety, /asy to use, 3elf e&plaining 2. .erformance= !ontribution to solution 7. "esthetical appeal= "ttractiveness (for purchase)

Student competitions on product innovation

$en&el Innovation Challenge case

enkel (nnovation !hallenge ( (!) is a competition oriented on students of colleges and universities . $he competition has taken place for five years already and since the beginning provides added value to participating students as #ell as to the company and participating branches. $he game provides participating branches of enkel not only fresh ideas related to product and technology development, but also aims on identification of key talents for future recruitment. Rules of the game $he competition is targeted on university students of any ma<or. $hey create teams of t#o and compete #ith their vision of enkel product in year -1;1. $here is not set #hich kind of product or product line should be innovated, ho#ever, it should be definitely based on currently used product or target need #hich is currently satisfied by other enkel product. $he competition consists of three rounds= 8. -. ;. 51 3ubmission 4ational finals (nternational finals Submission (! terminology, are free to formulate and submit ideas of product or

(n -188N-18-, submission round took place from 3eptember to Gecember -188. Guring this period teams, called tandems in technology used in -1;1 according to their e&pectations. $he registration form provides outline for process of innovation by asking guide *uestions. $hese serve as frame#ork #hich leads participant through comple&ity of innovations and into creation of compact picture of future. $he *uestions in this round are= a) $ell us your vision of life in -1;1= #hat future trends do you e&pectQ b) )hat #ill the market needs be in -1;1 according to your visionQ c) )hat is your innovationQ Gescribe your idea for a enkel product or technology. d) o# does your idea contribute to promoting sustainable development in at least one focal areaQ state your motivation to participate. (http=NN###.henkel.comNcpsNrdeN&chgNhenkelRhicNhs.&slN;87R (!R $%A.htmE -;.-.-18-) $he last *uestion helps assessors of the competition identify interest of participant in the company and select possible candidates for future vacancies. e) .lease

-.

4ational finals enkel offers to these teams opportunity to contact a mentor #hich

$op ten teams #hich provided most interesting and elaborated idea in submission round are selected and invited for national finals. supports them #ith preparation for final presentation and #hole idea consistency. %entors are usually managers of business units in the country and there are several of them. %entors are associated #ith teams according to relevancy of idea to the business unit of mentor. (t means that team suggesting innovation for toiletries #ould be mentored by manager from this department. /ach team may use up to t#o personal meetings #ith mentor for ma&imum of 61 minutes or similar e*uivalent. (n case of unavailability to meet in person, for e&ample due to distant location of participants, mentors are #illing to contact and coach mentees via electronic devices, such as 3kype of >oogle talk. Gespite the fact that participants are provided #ith only t#o hour6long meetings, mentors are often very helpful and #illing to help above the promised e&tend via email communication or over the phone to consult issues in more detail. $eam are re*uired to prepare a presentation of their innovative idea and present their vie# of life and consumer trends in -1;1. )hole presentation should not e&ceed 81 minutes. .articipants are encouraged to use supporting materials #hich help to sho# the idea or persuade the <ury. "fter these <ury and audience may ask *uestions in order to clear up any matter #hich they find vague or #hich needs more e&planation. ;. (nternational finals %ost successful teams from all participating countries and enkel branches around the #orld take part in international finals in .oland. "s this part is highly prestigious, all the selected teams receive also special training and mentoring from senior e&ecutives of the company. $he finals represent also #onderful opportunity for students to meet other like6minded individuals, share e&perience and net#ork during three day session. Dor #inners of international final is prepared attractive pri:e + ticket for <ourney around the #orld and pocket money for each of #inning team members. "dditionally, the top three teams #ill meet !/' of the company and spend day at enkel head*uarters in GZsseldorf in >ermany.

Competitiveness of $en&el
"s #e mentioned previously, competitiveness is a comple& determinant #hich does not have customary formula to be calculated or determined. "uthor usually agree on linkages bet#een market performance in form of market6share on specific market, sales of the company, profitability and stock price

performance over certain period of time. "lthough #e are not able to define precise connection among these indicators, #e may see trends and correlations in certain moments. $hese points then may serve us as a guiding line to establish competitiveness of enkel. Financial performance of $en&el Aast 6 years represented successful development for the company in terms of sales and net income (profit). )hile sales increased from -116 to -188 by 85,2O net income rose by ;-,8O. Mear6to6year comparisons are, ho#ever, more interesting. "verage increase of ;,5O bet#een -116 and -188 comprises relatively usual gro#th of -,6O and ;,;O in -116 and -188 respectively, but also e&tremes related to financial crisis in data for years -1156-181 #hen high gro#th of ,,7O in -115 preceded 2,8O decrease in sales in -119. "dditionally, -181 presented e&treme gro#th of 81,8O #hich is ho#ever, based on smaller base of year -119. 4et income figures present similar tendency #here average of ;-,8O gro#th bet#een -116 and -188 is split in moderate gro#th of -11, and -188 and e&treme numbers in -115, -119 and -181. Getailed information are in table UU. Dinancial situation of enkel #as according to annual reports most influenced by development on

markets #here company operated. "s ma<ority of the

Discussion
(n analytical part #e discussed different applications of open and closed innovation in history and no#adays in enkel. $he company provides great e&ample of evolving of innovation management. (n fact, story of enkel is impressive in many #ays. Drom #hat #e have learnt in the previous chapter, the company progressed by very thoughful steps. (n first years and decades, innovation #as driven by gaps on the market and customer needs perceived by the company, as #e may see in e&ample of the first product enkel launched + measured and packaged #ashing detergent. $his is very important enkel, #here one of triggers of innovations #as point #hich evolves throughout all other history of

specific customer demand. Fni*ueness of this approach is most visible in conte&t of the period about #hich are #e talking. )e need to reali:e that at the time, marketing approach #as to be invented yet and if companies used some strategy, it #as targeted on selling products already made #ithout systematic interest in customer needs. "fter initial years, it is obvious that company reali:ed potential of cost benefits through decreased costs and less #aste. (n the history of company #e may observe couple of e&amples #hen ne# product #ere invented or current one upgraded due to use of #aste from other production. (t is a natural solution not only in times of crisis and lo# supplies, as in UUU case. o#ever, it is very useful tactics also in times of prosperity #hen budget needs to be carefully #atched due to many ongoing development pro<ects. "nother dimension of innovation management in ac*uisition activities. 4umber of ac*uisitions enkel comes from #ide and strong enkel had made so far is over#helming and it is

certainly not declining as ne#s reported recently. (nnovation by buying competitors and suppliers is highly successful strategy. (t allo#s buyer assess not only potential of specific innovation and its use for o#n products, it also develops market position and presence of the company on different markets. $his is particularly convenient in case of 3ince the )orld )ar (( #e may have observed constantly accelerating speed of innovations #hich come to the market. (f before #as normal to launch completely ne# product in business sector once in couple of years, no#adays the average time of innovation in the same business sector shrank to fe# months. !ompanies are no longer able to keep pace #ith such a rapid change only #ith their o#n resources of ideas, even the biggest ones. (n search for ideas to use in their products

 .o:ri tuto knihu=Yuri

Ijuri and

o!ert "a#ren$e %uhn, New Directions in Creative and Innovative

Management: Bridging Theory and Practice, &allinger Pu!lishing '()**) W.+.A!ernathy, (),*, -&.

Peter Ferdinand Drucker

(strany)

- Innovation and Entrepreneurship HarperBusiness, 2006 - 277 strn

Joseph Tidd, J. R. Bessant, Keith Pavitt

market and organizational change; John

- Managing innovation:

integrating technological,

ile! and "ons, #$$% & %'# str(n )stran!*

+ark Rogers, +el,ourne -nstitute o. /pplied 0conomic and "ocial Research 6 The
definition and measurement of innovation. +el,ourne -nstitute o. /pplied 0conomic and "ocial Research, 122' & #3 str(n )stran!*
/ager!erg, +an0 Mo#ery, 1avid 2.0 3elson, i$hard .: The 456ord -and!oo7 o6 Innovation, 3e# Yor7, =ro$ess o6 iBanagerial 456ord 8niversity Press, 9::;0 <;< =ages, I.&3: :-()-)9<>;;-> ? tu =o@ri tieto 7a=itoly:,(<, (,, 20.3, htt=:AA6a$ulty.london.eduAj!ir7insha#AassetsAdo$uBentsA;:C>>9()<).=d6 innovation

tieto publik\cie '/!G po:ri v kni]nici 3/K= 6 6 6 $he '/!G (nnovation 3trategy 6 >etting a ead 3tart on $omorro# Knowledge management - %easuring Kno#ledge %anagement in the 0usiness 3ector= Dirst 3teps http=NN###.oecdbookshop.orgNoecdNdisplay.aspQsf8PidentifiersSst8P96-11;1-8.8 'pen (nnovation in >lobal 4et#orks http=NN###.oecd.orgNdataoecdN25N;7N28,-8;2-.pdf http=NN###.oecd.orgNdocumentN81N1,;;2;,enR-629R;2219R228-1181R8R8R8R8,11.html http=NN###.oecdbookshop.orgNoecdNdisplay.aspQsf8PidentifiersSst8P9,59-62152,12

Pou@ita literatura: 8ra!e, %uniyoshi0 2hild, +ohn0 %agono, Tadao ? Innovation and BanageBent: International $oB=arisons, &erlin, 3e# Yor7: de Gruyter ()** I.&3: C-((-:((::,-; A6uah, Allan: Innovation ManageBent ? strategies, iB=leBentation, and =ro6its, 9nd ed.3e# Yor7, 456ord 8niversity Press, 9::C, C): =ages, I.&3: :-()-;(>9C:-C -aour, Georges: esolving the Innovation Parado5: Enhan$ing Gro#th in Te$hnology 2oB=anies0 Palgrave Ma$Billan0 9::> -aB=shire, 3e# Yor70I.&3: (->:C)-(<;>-C 2iBo, +o@e6: Inova$ny Bana@Bent, E7onoB, &ratislava, 9:(:, 99<=., I.&3: ),*-*:-99;-C:;,-< /ager!erg, +an0 Mo#ery, 1avid 2.0 3elson, i$hard .: The 456ord -and!oo7 o6 Innovation, 3e# Yor7, 456ord 8niversity Press, 9::;0 <;< =ages, I.&3: :-()-)9<>;;-> 1ru$7er, Peter: Innovation and entre=reneurshi=0 2lassi$ 1ru$7er 2olle$tion edition 9::,, &utter#orth-eineBann,,9;C =ages, I.&3: ),*-:-,;:<-*;:* Pearson, Andrall E.: Tough-Minded Ways to Get Innovative in .eeing di66erently: Insight on InnovationA edited #ith an introdu$tion !y +=hn .eely &ro#n, ()),, -arvard &usiness ,;;-9, 2hristensen, 2layton M., Dl$e7, *:-,9<(-(<>-; &orovs7y, +uraj and Gal, Peter: Inova$ie a trans6er te$hnologii, Eurounion, &ratislava, 9::;, ,* =ages, I.&3: *:-**)*>-*<-< Pitra, E!yne7: ManageBent inova$ny$h a7tivit, Pro6essional Pu!lishing, Praha 9::<, >C* =ages, I.&3: *:*<)><-(:-F .aBson, 1anny0 .ingh, Pra7ash +.: 4=erations ManageBent: An integrated A==roa$h0 3e# Yor7, 2aB!ridge 8niversity Press, 9::*, I.&3: ),*-:-;9(-,::,,-( Govindarajan, Dijay0 TriB!le, 2hris: (: 0aumgartner, C.D.E $he (nnovation ules 6or .trategi$ Innovators: /roB Idea to E5e$ution0 9::;, .rocess ^#ebpage_, -119 E retrieved on 86.8.-18-arvard &usiness .$hool Press, 8nited .tates o6 ABeri$a,I.&3:(-;)(C)-,;*-* (htt=:AA###.j=!.$oBA$reativeAinnovation=ro$ess.=h=) Gyrtr, `. and 3triteska, %.= /fektivni inovace= odpovednost v managementuE .rahaE !omputer .ressE -119E (304= 9,56516-786-,,868 3tanfordFniversity, -188. $he .rocess of (nnovation. vHr3C/E%Tgd :b ^Betrieved 86 Canuary -18-_. $homsom, ".".E 3trickland (((, ".C.E >amble, C./.= !rafting and /&ecuting 3trategy= $e&t and readings, 87th editionE 4e# MorkE %c>ra#6 ill, -11,E (30468;=9,56161,6881,7665 ^video online_ "vailable at=ahtt=:AA###.youtu!e.$oBA#at$hG aynor, Mi$hael E.: The Innovators solution: $reating and sustaining su$$ess6ul gro#th0 -arvard &usiness .$hool Pu!lishing 2or=oration, 9::C, C:> =ages, I.&3: (-;,*;(-*;9-: adiB: ManageBent hodnotovy$h inova$i, ManageBent Press, Praha, 9::*, 9>: =ages I.&3: ),*evie# !oo7, 9>; =ages, I.&3: :-*,;*>-

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+444.aea4e,.org5assa5#$$%5$1$361$1%6$7$2.pd.; 29.2.2012) J. 8. L"i@"is!"r, 8. ):9"r, A. *r"!s$hn"id"r, un" ). Kr$@ar: L"v"raging (roBdso:r$ing' 7$!iva!ion-2:ppor!ing $o@pon"n!s for 1T-9as"d id"as $o@p"!i!ion, ournal of Management Information Systems JMIS, Vol. -6, 4r. 8 (-119) , p. 89,6--2. h!!p'CCp:@a.:niass"l.d"C9i9!"0C+6fD559$/fD$d/f",9d""+/6a..-/f$5/Ci!"g