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Prof.

Gran Roos

Australia is today the highest operating-cost


environment in the world, having surpassed Norway
and Switzerland late 2012, at around 160% of the US
operating cost environment level [at the C11 level it is
closer to 200%]

Copyright Gran Roos 2013

OECD

USA
Japan
Finland
Sweden
Korea, Republic of
Singapore
Netherlands
Denmark
France
Germany
United Kingdom
Belgium
Norway
Australia
Canada
Spain
Italy
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Hourly labour
productivity

Unit labour costs


(national currency)

5.2
3.3
4.5
4.4
6.6
3.2
2.8
3.1
2.5
1.8
3
1.8
2.7
1.9
0.9
1.5
-0.1

-1.4
-3.2
-1
-1
1.4
-1.7
0.5
1.1
0.6
0.2
1.4
1
2.2
2.5
1.6
2.2
3.2

Real hourly
compensation
(national currency)
1.3
0.3
2
1.6
4.9
-0.3
1.2
2.1
1.4
0.5
1.6
0.7
2.9
1.3
0.4
1
0.9

US Bureau of Labor Statistics, International Comparisons of manufacturing productivity and unit labor cost trends, 2010.

Those that were set up on the premise of a low cost operating


environment
No Future

Those, normally capital intensive, firms that were set up with


the ability to operate successfully in any environment but that
used the depreciation for dividends instead of keeping the
plant and equipment continuously leading edge
Have dug their own grave

Those, normally smaller, firms that have the capacity to do


well but do not know what it takes or what good looks like in
this new operating environment
Need handholding and guidance

Those, normally younger or highly innovative, firms that are


already doing well
Can do with some encouragement and recognition
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Copyright Gran Roos 2013

http://eagleman6788.wordpress.com/2012/10/

Imitation
&
Efficiency Focus

Innovation
&
Effectiveness Focus
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Innovation
&
Effectiveness Focus

Imitation
&
Efficiency Focus

Continuous focus on cost


reduction and
productivity
improvement

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Continuous focus on
integrated innovation
and productivity
improvement

In the ability to identify changes and promote


rapid reactive and proactive responses
In the abilities that produces higher
productivity, efficiency and effectiveness in the
firms operations and processes

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In the ability to produce different


products and achieve different goals
using the same manufacturing plant:
In the ability to be fast

Moura, DA. & Botter, RC. 2012. Can a shipyard work towards lean shipbuilding or agile manufacturing? in Rizzuto & Guedes
Soare eds. Sustainable Maritime Transportation and Exploitation of Sea Resources Taylor & Francis Group. London.

Effectiveness Improving Innovations and


Business Model Based Innovations

Through

Innovation to Appropriate Value

Innovation Management
Innovation Strategy &
Innovation Management System

Innovation to Create Value


Through

Efficiency Improving Innovations, Technology Based


Innovations, Design Based Innovations, Art Based
Innovations and Hermeneutic Based Innovations

Copyright Gran Roos 2013

Roos, G., Integrated Innovation The necessary route to profitability, in B+I Strategy
(ed.), Estrategia, Bilbao, Spain, December, 2011, pp. 51-58

Resources

Resource Deployment System

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An articulation of problems, as yet unsolved, that if solved would


dramatically improve the performance of the firm but the firm do not know
how to solve them

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CEO
Decision
Corporate Head of Innovation

STRATEGY
Innovation
Meeting

Innovation Office

Innovation Groups

Suggestions from all parts of the organisation


&
Membership from all parts of the organisation

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External
Proposals

External
Proposals

Description

Where used

Lean
Where fast results are needed
A way of working which
Where shorter lead times and
identifies and eliminates waste
improved flexibility are critical
to deliver improved value and Where large numbers of front line
service
staff work together
Where limited performance data is
available
Six Sigma
To reduce costs or increase volume
A structured approach to data Where mature data analysis is in
driven problem solving
place
Where time exists to analyse the
right data
Where specific training can be set
up and supported
Where IT is likely to be the main
BPR
An approach to transforming
driver of change
activity through process change Change is often done out of line

Kaizen
An approach to continuous
incremental improvement,
creating more value and less
waste
Benchmarking
A comparison with external
organisations to highlight and
develop best practices
TQM
A way of working which focuses
all participants on quality,
driving long term success
through customer satisfaction
EFQM
An organisational framework
designed to improve
competitiveness using the
fundamental concepts of TQM
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Focus

Tools

Benefits

Implementation

Traditional
High potential cash savings
management tools Moderate potential for soft savings
Statistical Tools
Improvement in service delivery

External support required


Moderate time from initiation to
results
Moderate implementation costs
Significant staff engagement

Process
Customer
Defect reduction

Traditional
Moderate potential cash savings
management tools High potential for soft savings
Statistical Tools
Improvement in service delivery

Process

Traditional
High potential cash savings
management tools Moderate potential for soft savings
Improvement in service delivery

Where fast results are needed


Where the right group of people
can be coordinated for a blitz
approach

Process
Customer
Defect reduction
Waste reduction

Traditional
High potential cash savings
management tools Moderate potential for soft savings
Statistical Tools
Improvement in service delivery

Moderate time from initiation to


results
High implementation costs
Significant staff engagement for
short periods
Short time from initiation to results
Low implementation costs
Significant staff engagement for
short periods

Where time exists to analyse


external performance data
Where other improvement
strategies are required
Where refocus on customer needs
is required
Where formal management
systems are already in place

Process
Customer
Defect reduction
Waste reduction
Process
Customer
Defect reduction

Traditional
Moderate potential cash savings
management tools Low potential for soft savings
Improvement in service delivery

Short time from initiation to results


Low implementation costs
Some staff engagement

Traditional
Moderate potential cash savings
management tools High potential for soft savings
Improvement in service delivery

Where self assessment and peer


reviews are valued and repeated
periodically

Process
Customer
Defect reduction

Traditional
Moderate potential cash savings
management tools Moderate potential for soft savings
Some Improvement in service
delivery

Moderate time from initiation to


results
Moderate implementation costs
Some staff engagement

Process
Customer
Defect reduction
Waste reduction

External support required


Long time from initiation to results
Moderate implementation costs
Some staff engagement

External support required


Long time from initiation to results
Moderate implementation costs
Significant staff engagement

Emotional
Experience
Practice

Copyright Gran Roos 2013

Roos, G., Integrated Innovation The necessary route to profitability, in B+I Strategy
(ed.), Estrategia, Bilbao, Spain, December, 2011, pp. 51-58

Trajectories of Existing Core Technologies


Trajectories for potential substitute technologies
Technology Convergence

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What can you do with


this?

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INCREASING COMPLEXITY

Increasing
Value Added

John Kettle, Gran Roos, Nafty Vanderhoek, Ali Harlin and Bruce Allender, 2012, Is the
Australian Pulp and Paper Industry still at the crossroads?, APPITA Journal, In Press

The objective of Design is to


achieve behavioural change
in the user which is:
Desirable from the users point of view [i.e.
they are better of in their own opinion
after the change]
Beneficial to the supplier
Positively impacting other stakeholders

Copyright Gran Roos 2013

Nyberg, M. and Lindstrm, M. (2005), Muotoilun Taloudelliset Vaikutukset, ETLA, Discussion papers No. 982, p. 20.

Art has numerous


opportunities to add value to
business. In consumer goods
art can add to the perceived
authenticity of the good and
thereby increase its value in
the eye of the consumer.
This is critical in the luxury
goods end of the spectrum.

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