Innovation Management

A New Paradigm in Innovation Management

Thomas Edison

I have not failed, Ive just found 10,000 ways that wont work.
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How Innovative are you??

Creativity and Innovation

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Solve the problem

Remove three sticks to leave four

See this figure?

Divide the figure below into as many pieces as you can by making four straight cuts with a long knife

2 Dimensions=11
Cuts and pieces

3 dimensions=14
imagine its a cake

Another Perspective
Fold it after each cut=16

Steps to Personal Creativity

1. Accept that you can be creative 2. Question traditional assumptions 3. Expand your problem-solving styles 4. Employ creativity techniques 5. Practice thinking in new ways 6. Learn when your creative thinking is best

Relevance to Globalization
In a rapidly changing global world, managers must use all their abilities to anticipate opportunities and threats

Key Concepts in Innovation Management

The aim of innovation... Depends on the type of firm Goal is mostly to survive, to grow, to make profit R&D departments generally strive for the best technical solution... ... but what matters for innovation is how it influences survival chances, profit and growth opportunities!

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

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Schumpeters distinction between Invention and innovation

An invention is an idea, a sketch or model for a new or improved device, product, process or system. It has not yet entered to economic system, and most inventions never do so.
An innovation is accomplished only with the first commercial transaction involving the new product, process, system or device. It is part of the economic system.

What is Creativity & Innovation?

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

Why we need IM?

More and more enterprises find that innovation is becoming the critical source and driver for enterprises survival and development. The paradigm of IM 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.

EVOLUTION of INNOVATION MANAGEMENT

Practice of innovation management has gone through two stages:
1. Technology & Innovation Centered Management: At this stage, the center task of enterprises innovation management is to pay too much attention to product innovation or process innovation separately 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 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

Practice of innovation management has gone through two stages:
2. Portfolio innovation management. At present, it is the dominant paradigm for innovation management both home and abroad. 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

Different types of innovation

Major
Effect of innovations on consumer habits and behaviors

Major Innovation

Radical Innovation

Minor

Incremental Innovation

Strategic Innovation

Enhances

Destroys

Effect of innovations on established firms competences and complimentary assets

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Forces of Innovation: Market Pull - R&D Push

Market pull
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

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

IM FRAMEWORK & CHARACTERISTICS

There are three layers on total innovation:
1) Involves innovation in all functional area, including organizational, cultural, institutional, process, etc. 2) It covers the whole space-IM 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.

TM FRAMEWORK & CHARACTERISTICS

The remarkable difference between the traditional management of innovation and total innovation is that it breaks through the past framework of innovation confined only in R&D department.

TM FRAMEWORK & CHARACTERISTICS

IM promotes tag lines such as:

NOW EVERYONE CAN INNOVATE EVERYONE IS INNOVATOR

INNOVATE BY EVERYONE AT EVERYWHERE, ON EVERYTHING AND AT ANYIME

TM FRAMEWORK & CHARACTERISTICS

IM ELEMENTS: 1) Strategy: Organizational strategy should be
develop IMely and kept in dynamic balance.

2) Technology: Technology innovation is the key

source for enterprises to accumulate core competence and accordingly to obtain the competitive sustainable advantage.

3) 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.

TM FRAMEWORK & CHARATERISTICS

IM ELEMENTS: 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.

IM FRAMEWORK & CHARATERISTICS

IM ELEMENTS:
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.

IM FRAMEWORK & CHARATERISTICS

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 IM.

IM FRAMEWORK & CHARATERISTICS

IM SCOPE/DIMENSION:

1) 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). 2) 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 BUSINESS processes, and no one is really responsible for customers.
3) 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 IM

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

External sources for IM

Customers Suppliers Competitors Consultants, R&D institutions Schools, universities Professional publications, Internet Exhibitions, fairs, specialized seminars and conferences Advertising agencies Investors Media Authorized testing laboratories, certification agencies State institutions, public sector Legislation Globalization

IM FRAMEWORK & CHARATERISTICS

CHARACTERISTICS OF SUCCESSFUL IM 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 external experts (universities, research laboratories) 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

IM FRAMEWORK & CHARATERISTICS

DISCUSSION: Can you give other examples of successful innovative companies? How do they do it?

The context of IM formation

1) Environmental impetus - The
requirement of the complex and changeable Internet environments.

2) The practice needs - The

requirement of total innovation practice in firm.

3) Cultural foundation - agree with

innovative culture.

Some of IM formation tools

IM Policy Implications & Future Research Directions

1) IM 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. 2) IM is about corporate survival and growth, therefore, involvement from the top management is important for the success of IM implementation. 3) IM is a long-term process of organizational learning. In conclusion, IM is a very significant path to reinvent and revitalize the company competing at the 21st century.

Summary of IM in Mind Map

New Challenge
A company manufactures glassware. The last step of the process is to wrap glasses individually in used newspapers and then place them in a specially designed box. The box is then sealed. Management notices low productivity with this last step, observing that workers occasionally stop to read the newspapers? What can management do to increase productivity?

Stimulants to Work Creativity*

1) FREEDOM in deciding work to do or how to do it 2) CHALLENGE to work hard on important projects 3) RESOURCES needed to do the work 4) ENCOURAGEMENT from a supervisor who is a good work model, sets appropriate goals, supports and has confidence in the work group 5) WORK GROUP SUPPORTS such as diverse skills, people who communicate well, are open to new ideas, constructively challenge one anothers work, trust and help each other, and feel committed to their work 6) ORGANIZATIONAL ENCOURAGEMENT in a culture that supports creativity and communicates a shared vision of organization

Obstacles to Work Creativity

1) ORGANIZATIONAL IMPEDIMENTS such as internal political problems, harsh criticism of new ideas, destructive internal competition, avoidance of risk and overemphasis on the status quo 2) WORKLOAD PRESSURES such as extreme time pressure, unrealistic expectations, or distractions