PRESENTATION ON INNOVATION

MANAGEMENT

WHAT IS INNOVATION MANAGEMENT

Innovation is the process of transformation of creative ideas into desired outputs.

EVOLUTION OF INNOVATION MANAGEMENT

Practice of innovation management has gone through two stages:
1. Technology & Innovation Centered Management: y At this stage, the center task of enterprises innovation management is to pay too much attention to product innovation or process innovation separately y It concentrates on products innovation first, then pays more attention to process innovation, and finally reaches the steady balance between product innovation and process innovation y What's more, the innovation activities only depend on the R&D function and R&D people, other sources of innovation are generally ignored

EVOLUTION OF INNOVATION MANAGEMENT

2. Portfolio innovation management. y At present, it is the dominant paradigm for innovation management both home and abroad. y It concentrates on products innovation first, then pays more attention to process innovation, and finally reaches the steady balance between product innovation and process innovation

TOTAL INNOVATION MANAGEMENT

The term Total Innovation Management (TIM) is define as the innovation synergy among technology, organization and culture and oriented to building up innovation competence for an organization.

WHY TOTAL INNOVATION MANAGEMENT?

The traditional innovation management has provided the innovation synergy pattern between different products, but it limits itself to product innovation.

WHO STARTED TO DEVELOP TIM?

This paradigm was developed and popularized by Institute of Management Science & Strategy of Zhejiang University and a group of scholars in American advisory company of Stanford University (SDG).

FROM WHERE DID THE IDEAS TO DEVELOP TIM CAME FROM?

The ideas to develop TIM was inspired by the thoughts of system and biology, the complex and changeable internet environment, and the observations of some leading Chinese firms and famous transnational companies innovation practices, like Haier, Legend, Baosteel, 3M and HP.

WHY WE NEED TIM?

More and more enterprises find that innovation is becoming the critical source and driver for enterprises survival and development. The paradigm of TIM provides a basis for an upgraded, a more unified and better view of innovation management. Its not enough to focus on technological context of innovation, some non-technological factors, such as the organizational structure, cultural characteristics, market, innovation strategy, and management style may also have an important influence on innovation performance.

FORCES OF INNOVATION: MARKET PULL - R&D PUSH

Market pull
y y y

looking for the best way of satisfying a newly emerging customer demand Improvement of the existing products, extension of the existing offer or decrease of price Impulses for continuous, incremental innovations or for process innovations

Research and development push

y y

looking for commercial use of new impulses resulting from the R&D results generating of new markets for conceptually different products

TIM FRAMEWORK & CHARATERISTICS

There are three layers on total innovation:
1) Involves innovation in all functional area, organizational, cultural, institutional, process, etc. including

2) It covers the whole space-time dimension and continuous innovation in every department by, everybody (all as innovators), at anytime to innovate, including the whole value chain innovation.

3) The innovation synergy among innovative elements.

TIM FRAMEWORK & CHARATERISTICS

TIM ELEMENTS:

Strategy: Organizational strategy should be develop timely and kept in dynamic balance. Technology: Technology innovation is the key source for enterprises to accumulate core competence and accordingly to obtain the competitive sustainable advantage. Management: This refers to the innovation of managerial theory, thought, paradigm, mechanism, and tools, et al. For example 6 Sigma management mode of GE is one of typical management innovation.

CONTINUE
4) Organization: Organizational structure must be
adjusted correspondingly according to the demand of innovation.

5) Culture: Changes in mind set and culture is the

prerequisites to carry out all innovation. In 3M for instance there is a strong innovative culture to encourage innovation and tolerating failures.

6) System: System innovation means the innovation of

rules and regulations about enterprises routine, performance evaluating, staff rewards and punishments, salary system, training and promotion and so on.

CONTINUE..

7) Market: Market innovation means the innovation of marketing channel, the operational ways et al., by which to create new market, new channel and new ways, such as using Blue Ocean Strategy. (Show video of BOS) It is necessary to synergize all of this elements systemically. Synergy of all the innovation agents has becoming the dominant paradigm of innovation management both native and abroad since 1980s, and its the basic approach to realize TIM.

TIM FRAMEWORK & CHARATERISTICS

TIM SCOPE/DIMENSION: Time: Enterprises must make every effort to realize 24/7 innovation (namely innovates throughout 7 days of every week, 24 hours of every day) (Stephen M. Shapiro, 2002). Innovative enterprises should encourage immediate innovation (like writers or musicians improvisation).

Places: Traditional organizational processes are based on function and specialization, which often lead to processes separate from each other. As a result, no one is responsible for the whole processes, and no one is really responsible for customers. People: For implementing innovation at anytime and everywhere, it is necessary to have all the people inside and outside firms to participate the innovation. Life taught us that everyone possesses the capability to deal ,with complexity and interconnection. Their creativity and commitment are the greatest resources for innovation.

INTERNAL SOURCES FOR TIM

Own R&D Technical divisions design, technology Production divisions (production, provision of services) Marketing and sales Logistics (purchase and supplies) Guarantee and post-guarantee service Owners QCC and QIT

EXTERNAL SOURCES FOR TIM

Customers Suppliers Competitors Consultants, R&D institutions

Advertising agencies Investors Media Authorized testing laboratories, certification agencies State institutions, public sector Legislation Globalization

Schools, universities Professional publications, Internet Exhibitions, fairs, specialized seminars and conferences

CHARACTERISTICS OF SUCCESSFUL TIM COMPANIES:

Systematic collection of all impulses that could lead to innovation Creativity of employees Ability to evaluate the possibility of the innovation idea Good team work Project-based approach and ability to manage projects Cooperation with laboratories) external experts (universities, research

Proper rate of risk-taking Employees motivation (the employees are willing to improve the product and the operation of the whole company) Continued education of employees Ability to finance the innovation activities

SOME OF TIM FORMATION TOOLS

TIM POLICY IMPLICATIONS & FUTURE RESEARCH DIRECTIONS

TIM is a journey to heighten competence of company, not a destination of company. It isnt an annual, quick fix, slogan-based strategy, but a long-term, competence-based strategy for achieving the sustainable competitive advantage involving all people at every level of organization. TIM is about corporate survival and growth, therefore, involvement from the top management is important for the success of TIM implementation. TIM is a long-term process of organizational learning. In conclusion, TIM is a very significant path to reinvent and revitalize the company competing at the 21st century.

CONCEPT AND DEVELOPMENT OF IRIDIUM

Motorola engineer first gets the idea behind Iridium in 1985. Satellites would allow subscribers to make phone calls from any global location. Motorola established Iridium as a separate company in 1991 and had its initial service in November 1998. Motorola experienced declining sales and needed technological success to protect its reputation. Motorola invests $6,6 billion for satellite design, launch operations and management. Strong top management team with many years experience from Motorola.

THE LAUNCH

Spectacular launch Nov 1, 1998 Handset costs: $ 3, 000 Cost per minute: $ 3 - $ 8

RESULTS

Devastating results by April 99 Only 10,000 subscribers CEO quits before quarterly results Bankrupt August Friday 13, 1999

REASONS FOR IRIDIUMS COLLAPSE

1.

Cellular build-out reduces need for Iridium

From concept to development: 11 years

3.

Manufacturing problems
Launching of service before enough phones were available

2.

Technological limitation and poor design

Unable to use phone indoors Phone the size of a brick

3.

Insufficient marketing and sales plans

Delay in marketing teams in foreign countries