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Framework for Supporting Innovation Strategy Implementation and Measurement
Master’s Thesis Presentation, 7.5.2010
Author: Minh-Hai NguyenSupervisor: Docent Timo O. KorhonenInstructor: Docent Marja Toivonen, MSc Juha Hulkkonen
Case Organization: Local unit of Global IT Business Services Firm (Application Development&Management, Consultation and System Integration)
Contents
Background Motivation Research Problem Research Approach and Methods Case Organization Results Conclusions
Background and Motivation
Innovation is seen as the key strategic factor that enables success and competitive edge 95% of CEOs list innovation among their top 10 strategic priority Although companies pursue innovation, fewer company measures it based on the
same study
In case organization being innovative and prospector is highly valued and mentioned strategically, but.. There are no indicators on how the organization is performing from innovation
perspective Measurement is seen as supportive guidance to implementing strategic plans
Why isn’t innovation measured? Abstract and fuzzy concept… Lack of clear innovation measurement frameworks Number of studies for explicit innovation measurement models and frameworks in
service organization is relatively small Most studies concentrate on clear R&D process (invention to be commercialized)
Research Questions
Main Research Problem: How to measure implementation of strategy that pursues innovativeness and
innovations in a service organization?
Sub-questions: What is innovation and innovativeness in service organization and how are they
managed? What are the factors that affect organization’s innovation activities?
Research Output: Suggestion on Measurement Framework for Supporting
Implementation of Innovation Focused Strategy
Research Method
Theoretical Part Literature Review
Definitions regarding innovation and innovation management State of the art of innovation performance measurements
Empirical Part Case Study
Observation of Local Unit of Global IT Business Services Firm (AD&M, C&SI) Survey conducted for the personnel of the case organization
Theoretical Framework Regarding Determinants Affecting Creativity and Innovation
Strategic vision and missionCustomer focus (external environment)
Means to achieve objectivesManagement processes
Employee needs and objectivesInterpersonal relationships
Leadership
DIMENSIONS MEASURED TO DESCRIBE ORGANIZATIONAL CULTURE
DETERMINANTS OF ORGANIZATIONAL CULTURE THAT INFLUENCE CREATIVITY AND INNOVATION
STRATEGY
• Vision and mission• Purposefulness
STRUCTURE
• Flexibility• Freedom• Autonomy• Empowerment• Decision Making• Cooperative Team and
group interaction
SUPPORT MECHANISMS
• Reward and recognition
• Availability of resources
• Time• Information technology
• Creative people
BEHAVIOR THAT ENCOURAGES INNOVATION
• Mistake handling• Idea generating• Continous learning
culture• Risk taking• Competitivenes
COMMUNICATION
• Open communication
CREATIVITY AND INNOVATION
Strategic vision and missionCustomer focus (external environment)
Means to achieve objectivesManagement processes
Employee needs and objectivesInterpersonal relationships
Leadership
DIMENSIONS MEASURED TO DESCRIBE ORGANIZATIONAL CULTURE
DETERMINANTS OF ORGANIZATIONAL CULTURE THAT INFLUENCE CREATIVITY AND INNOVATION
STRATEGY
• Vision and mission• Purposefulness
STRUCTURE
• Flexibility• Freedom• Autonomy• Empowerment• Decision Making• Cooperative Team and
group interaction
SUPPORT MECHANISMS
• Reward and recognition
• Availability of resources
• Time• Information technology
• Creative people
BEHAVIOR THAT ENCOURAGES INNOVATION
• Mistake handling• Idea generating• Continous learning
culture• Risk taking• Competitivenes
COMMUNICATION
• Open communication
CREATIVITY AND INNOVATION
Organizational D
eterminants
affectin
g creativity
and innovatio
n
Source: Martins & Terblanche ()
Theoretical Framework Regarding Innovation Strategy Execution
Critical Tasks
Formal Organization
People Culture
•Component tasks•Work Flows/Processes
Executive Leadership•Competencies•Demography•Group Progress
•Norms, values•Communication Networks•Informal Roles•Informal Power
•Strategic Grouping •Formal Linking•Rewards•Information Systems•HR Management Systems•Career Systems
•Human Resource Capabilities•Competencies
Strategic Choices•Strategy•Objectives•Vision
Critical Tasks
Formal Organization
People Culture
•Component tasks•Work Flows/Processes
Executive Leadership•Competencies•Demography•Group Progress
•Norms, values•Communication Networks•Informal Roles•Informal Power
•Strategic Grouping •Formal Linking•Rewards•Information Systems•HR Management Systems•Career Systems
•Human Resource Capabilities•Competencies
Strategic Choices•Strategy•Objectives•Vision
Critical Tasks
Formal Organization
People Culture
Critical Tasks
Formal Organization
People Culture
•Component tasks•Work Flows/Processes
Executive Leadership•Competencies•Demography•Group Progress
•Norms, values•Communication Networks•Informal Roles•Informal Power
•Strategic Grouping •Formal Linking•Rewards•Information Systems•HR Management Systems•Career Systems
•Human Resource Capabilities•Competencies
Strategic Choices•Strategy•Objectives•Vision
Strategy Executio
n Model
Driving fo
r Innovatio
n
Results – Measuring Innovation Pulse
Critical Areas Idea Implementation Support Risk Taking Mistake Handling Rewarding and Recognition Strategy Alignment
Results – How to foster innovation?
Pay attention for creating environment where individuals can be creative Assure alignment with strategy and clear communicaton Encourage by providing right resources, motivate with right rewards and
recognition Learn from mistakes Leadership commitment
Communication and Networking Client intimacy Cross line innovating
Innovative organizations can also be operative ones Structures and formalities support in larger organizations
Results – Measurements Proposed
Lot of responses arguing the need for measuring innovativeness and innovation activities
Proposed measurements linked to idea generation vs idea implementation
Measurements need to be done for different levels
In addition to input or output, the context and environment need to be measured
Conclusions
Shift in business from products to services require different metrics for innovation, as the nature is more intangible
Implementation of innovation focused strategy in services is difficult to be measured, for improving visibility, companies need to Define and frame what is innovation for them, align it with existing strategy,
define goals and objectives Create portfolio and structures Create receptive and fertile ground for innovation and assuring involvement
of management
Measuring provides visibility and can help in management, but the basic building blocks need to done as well Organization needs to assure right conditions for innovating are
provided and foster the culture