Kavala Innovation Management Fees 2012.Ppt

Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 1 Innovation Management

Prof. Dr. Werner Fees

Georg-Simon-Ohm University of Applied Sciences Nuernberg/Germany

INNOVATION MANAGEMENT


Georg-Simon-Ohm University of Applied Sciences

n One of the largest Universities of Applied Sciences in Germany n  Full scope: 12 faculties, 7 institutes and competence centers n Bachelor, Master of Arts, Master of Science, MBA programs, further education

programs and dual study variants. n  Intensive research: most research-active of all Bavarian Universities of Applied

Sciences and leading in third-party funds n Worldwide partnerships: 130+ partner universities, 1,100 foreign students from 96

nations.

Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 3 Innovation Management 3Georg-Simon-Ohm Management-Institute | www.gso-mi.com

page

An application-oriented University with a 185-year tradition - top modern

  1st Railway in Germany in 1835 (Scharrer)

  Ohm's Law of Physics

  Bronze Casting for Art Applications (Burgschmiet)

  1st Steel Construction Bridge in Germany (Kuppler)

  Synthetic Colour Ultramarin (Leykauf)

  1st Industrial Electric Power Transmission (Boveri)

  Special Effects Oscar 1996 for "Independence Day" (Schopper)

  Bavarian Innovation Award 1999 (Poisel)

  Special Effects Oscar 2004 for "Lord of the Rings" (Design Faculty Graduate)

Georg-Simon Ohm President 1839 - 1849

Georg-Simon-Ohm University of Applied Sciences


Your Lecturer in this Course: Prof. Dr. Werner Fees

§  Academic background: §  Degree in business administration (Dipl.-Kfm.) at Nuremberg university §  PhD in business management (strategic management)

§  Professional experience: §  10 years management experience in telecommunications industry

(Philips, Lucent Technologies) as Head of Strategic Planning, Head of Product Management, Vice-President Controlling

§  10 years experience as Management Consultant and Trainer (e.g. for Ericsson, Lucent Technologies, Deutsche Telekom)

§  Professor of Management at GSO University Nuremberg §  Academic Director of GSO Management Institute §  Visiting Professor at US-, Chinese, and Greek Universities §  Contact: [email protected], Tel. 5880-2893


Content

1.  Innovation – what it is and why it matters 2.  Innovation as a core business process 3.  Building the innovation organization 4.  Sources of innovation 5.  Building the innovation case 6.  Creating new products and services 7.  Capturing the benefits of innovation


© 2009 John Wiley & Sons Ltd. www.managing-innovation.com

Joe Tidd and John Bessant ISBN: 978-0-470-99810-6

6


Chapter 1

Innovation – what it is and why it matters

7



Innova&on and Performance

What is innova-on? “Companies achieve compe&&ve advantage through acts of innova&on. They approach innova&on in its broadest sense, including both new technologies & new ways of doings things”

-‐  Michael Porter (emphasis added)

8 © 2009 John Wiley & Sons Ltd. www.managing-innovation.com



Innova-on has to be ac-vely managed: “Innova&on is the specific tool of entrepreneurs, the means by

which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being prac&ced” -‐ Peter Drucker (emphasis added)



What is an Innovation?

Innovation =

Theoretical Conception

+ Technical Invention

+ Commercial Exploitation



Innova-on has an inherent variability, but rate of success can be improved through beEer & different management:

  85% of new ideas never reach a market   60% of R&D projects are market failures   40% of consumer products & services fail   20% of business products & services fail



Models and Modes of Innova&on

Dimensions of ‘innova-on space’:   product – changes in the things (products/services) which an

organiza&on offers,   process – changes in the ways in which they are created and

delivered   posi7on – changes in the context in which the products/

services are introduced   paradigm – changes in the underlying mental & business

models which frame what the organiza&on does



© 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd

The 4Ps of Innova&on Space

Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 14 Innovation Management 14 © 2009 John Wiley & Sons Ltd.

www.managing-innovation.com


Exercise

Give examples for the 4 Ps of Innovation and its character (incremental vs. Radical)

Product Process Position Paradigm

Incremental

Radical

Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 16 Innovation Management © 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd




What do we have to manage?

  Systematic scan and analysis of the environment  Monitor macro- and microeconomic environment   Analyze new trends and breakthrough innovations

  Strategically oriented selections from the set of potential triggers for innovation  Most difficult!! Which ides should be selected?   Analyze fit with strategy, culture, competences

  Providing resources to exploit it  Only talking and planning is too less!   Change innovation strategy if no resources are available (=>

imitation?)

  Implement it – from idea to final launch   Consequent realization!   Announce innovation manager / champion


Key questions in Innovation Management

1.  How do we structure the innovation process appropriately?

2.  How do we develop effective behavioral patterns (routines) which define how it operates on a day-to-day basis?

3.  How do we adapt or develop parallel ones to deal with the different challenges of “steady-state” and discontinuous innovation?


The ambidextrous challenge

Radical

Incremental

Doing new things, maybe cannibalizing The old ones?

Doing the old things, just better ...




Chapter 2

Innovation as a core business process



Systems Innova&on

24

How innovation happens?

Success (?)Process



Systems Innova&on

25

How it really happens …..



Innova&on Process

Generic phases of the innova&on process:  Searching & scanning the internal & external environments

 Filtering & selec0ng poten-al opportuni-es  acquiring the technical, financial & market resources

 implemen0ng development & commercialisa-on  reviewing & learning from experience





Innova&on Process

Scanning the external environment:  iden-fy, segment & exploit lead customers  iden-fy, segment & involve key suppliers  explicit criteria for selec-ng alliance partners  clear objec-ves & guidelines for licensing & out-‐sourcing

 involve all relevant par-es e.g. financial & regulatory

 use formal exploratory techniques to iden-fy future trends



Innova&on Process

Selec&ng & filtering the opportuni&es for innova&on:   Strategic e.g. ‘fit’   Capabili-es e.g. relatedness   Commercial e.g opportunity & compe--on   Risk/Reward e.g. probability, scale   Financial e.g. NPV, op-on value



Innova&on Process

Resourcing the chosen innova&ons:

  Scope of innova-on – internal versus external resources   Structure of project – e.g. alliances, joint ventures, licensing



Innova&on Process

Implemen&ng the innova&on:   Func-onal integra-on & group structure   Roles of suppliers, users & other stakeholders   Timing & degree of involvement   Project management   Suppor-ng tools & techniques



Chapter 3

Building the innovation organization



Innova&ve Organiza&on

Leadership, shared vision & climate:   innova-on leadership, not senior management   broad vision, not detailed strategy   organiza-onal climate -‐ ‘the way we do things around here’




Characteris&cs of an innova&ve climate:   Challenge & involvement   Freedom & autonomy   Trust & openness   Idea -me & support   Playfulness & humour   Conflict & debate   Risk-‐taking




Key individuals, strong teamwork:   inventors, champions, entrepreneurs, gatekeepers   job rota-on, cross-‐func-onal teams   strong project management



Innova&ve Teams

Teams can be innova&ve, but beware of:

  ‘group think’ -‐ restricts interpreta-on & response, homogeneity limits innova-on

  ‘siege mentality’ -‐ group vs. organiza-onal goals, commitment to sub unit vs. organiza-on

 means vs. ends -‐ aEachment to social system, not course of ac-on




Appropriate structure:   No ‘one best way’ e.g. flat structure   Depends on task & environment i.e. con-ngencies e.g. uncertainty

& complexity   Ideal configura-ons for different contexts




External focus:   customer focus, not customer driven   sensi-ve to & ac-vely scan for external opportuni-es   use formal tools e.g forecas-ng, QFD   design & par-cipate in diverse networks



In a nutshell …

Strategy

Learning

Linkages

Organization

Processes

Key areas relevant for successful innovation management:


Strategy

 Does the company have a strategic approach to innovation?

 How is the competitive position of the company?  What are potential chances and risks?  What innovation advantages derive from the NIS

(National Innovation System)?  What is the technological competence of the

company?  What is the importance of R&D in the company?


Organization

  Supportive organizational context?   Centralization of Decision Making?  Open and effective Communication?   Involvement of workforce in innovation?   Adequate rewards for innovation?   Strong Teamwork?


Processes

  How are new ideas found?   How are new ideas translated into practise?

  Is there any systematic approach?

  Is there a chance that new ideas are accepted even if they “cannibalize” the running business?


Linkages

 Are there good relationships to suppliers and customers?

 Are there discussions with supplier / customers about innovation?

 Are there links to Universities and other research institutions?

 Are there links / collaborations with other companies?


Learning

  How is the workforce qualification?

  How is the experience of the workforce?

  Is there a systematic / permanent further education of the workforce?


Exercise

Develop a concept: how would you build up a company in the field of ... e.g. tourism, engineering, retail, ... Use the 5 dimensions from Tidd et al.!


Chapter 4

Sources of innovation





Internal Sources: Climate & Crea&vity

“Innova0on is the specific tool of entrepreneurs, the means by which they exploit an opportunity for a different business or service” – Drucker

  Crea-vity = ideas, concepts & inven-ons   Entrepreneurship = couples opportuni-es & resources   Innova-on = process of development & commercialisa-on



Crea&vity

Strategies for idea/concept genera&on:   research & analysis   imitate or adapt   seek inspira-on   consult ‘crea-ve’ types   apply systema-c crea-vity methods & tools



Crea&vity

Business crea&vity training is not:

  logic, research, analysis or intelligence   ar-s-c crea-vity / right-‐brain   being crazy / a rebel   removal of structures, inhibi-ons or fear   brainstorming or team building



Crea&vity

Some structured approaches to crea&vity:   spider diagrams -‐ visualisa-on of issues  mind maps -‐ make assump-on explicit   laddering -‐ review goals/level of analysis   yes and (vs. ‘either/or) -‐ keep op-ons open   lateral thinking -‐ reverse logic, intermediates   brainstorming -‐ non-‐evalua-ve idea genera-on



Brainstorming (from Wikipedia)

Two principles contribute to "ideative efficacy," these being "1. Defer judgment," and "2. Reach for quantity.” Following these principles were his four general rules of brainstorming, established with intention to reduce social inhibitions among group members, stimulate idea generation, and increase overall creativity of the group.   Focus on quantity: This rule is a means of enhancing divergent production, aiming to

facilitate problem solving through the maxim quantity breeds quality. The assumption is that the greater the number of ideas generated, the greater the chance of producing a radical and effective solution.

  Withhold criticism: In brainstormingcriticism of ideas generated should be put 'on hold'. Instead, participants should focus on extending or adding to ideas, reserving criticism for a later 'critical stage' of the process. By suspending judgment, participants will feel free to generate unusual ideas.

  Welcome unusual ideas: To get a good and long list of ideas, unusual ideas are welcomed. They can be generated by looking from new perspectives and suspending assumptions. These new ways of thinking may provide better solutions.

  Combine and improve ideas: Good ideas may be combined to form a single better good idea, as suggested by the slogan "1+1=3". It is believed to stimulate the building of ideas by a process of association.


6-3-5 Brainwriting

  6-3-5 Brainwriting (also known as the 6-3-5 Method, or Method 635) is a group creativity technique used in marketing, advertising, design, writing and product development originally developed by Professor Bernd Rohrbach in 1968.

  Based on the concept of Brainstorming, the aim of 6-3-5 Brainwriting is to generate 108 new ideas in half an hour. In a similar way to brainstorming, it is not the quality of ideas that matters but the quantity.

  The technique involves 6 participants who sit in a group and are supervised by a moderator. Each participant thinks up 3 ideas every 5 minutes. Participants are encouraged to draw on others' ideas for inspiration, thus stimulating the creative process. After 6 rounds in 30 minutes the group has thought up a total of 108 ideas.


Sugges&on Schemes

Suggestion schemes in Japanese firms:   Participation rate is 70% of workers;   Adoption rate of suggestions is 87%;   Toyota > 2 million suggestions/ year, = 35 per worker;   Toshiba 4 million suggestions/year = 77 per worker;   Kawasaki Heavy Engineering 7 million



Sugges&on Schemes





Chapter 5

Building the innovation case



Forecas&ng

Forecas&ng technology & markets, given uncertainty:

 explore implica-on of a range of possible trends  ensure broad par-cipa-on & informal channels of communica-on

 encourage mul0ple sources, debate & (construc-ve) scep-cism

 be prepared to change strategy in light of new (& unexpected) evidence



Failures of Forecas&ng

  “I think there is a world market for about five computers” (T.Watson, CEO IBM, 1948)

  “I cannot conceive of any vital disaster happening to this vessel” (Captain of the Titanic, 1912)

  “The war in Vietnam is going well and will succeed”, (R.MacNamara, 1963)



Failures of Forecas&ng

Probe of the Future, TRW Inc., 1969:   nuclear-‐powered underwater recrea-on centres   3-‐D colour TV   robot soldiers   plas-c germ-‐proof houses   but not: PCs, Internet, Biotechnology etc



An&cipa&ng Trends

A forecast should include the following:

  quan-ta-ve factors, e.g.specific measures   qualita-ve factors, e.g scope of forecast   -me frame   probability   assump-ons made



An&cipa&ng Trends

Choice of forecas&ng method depends on:   organisa-on’s planning horizon   rate of environmental change   availability of informa-on   accuracy of informa-on   availability of resources -‐ -me & money   competence & willingness of managers




Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 64 Innovation Management Prof. Dr. Werner Fees, GSO MI Nürnberg – Page Innovation Management

Chapter 6

Creating new products and services



New Product Development

Factors affec-ng new product success:

  Significant product advantage   Clear defini-on of target market   Proficiency of pre-‐development




Dimensions of product advantage:

  Unique benefit for customers   Rela-ve perceived quality   Rela-ve perceived superiority   Reduced life-‐cycle cost to customer   Solu-on to customers problem




Clear target market:   Basis of segmenta-on   Customer needs -‐ essen-al features vs. preferences   Product aEributes -‐ basic vs. augmented   Product concept -‐ benefits, posi-oning & compe-ng

products  Market poten-al & aErac-veness




Cri-cal predevelopment ac-vi-es:   Ini-al screening -‐ product fit & project scope   Preliminary technical assessment-‐ will it work?   Preliminary market assessment -‐ will it sell?   Financial analysis -‐ sensi-vity & DCF



Development Process

9

Benefits of having a formal process (n=203)

% of projects



The Stage-Gate Process

  Split-up of the Process in smaller activities, starting with idea finding and finishing with the practical usage of the new problem solution => Control of Risks

  Innovation Processes are creative work processes, therefore support is needed through creativity methods in order to increase process effectivity

  Innovation Processes are embedded into specific internal and external contexts

Prof. Dr. Werner Fees, GSO MI Nürnberg – Page 71 Innovation Management Prof. Dr. Werner Fees, GSO MI Nürnberg – Page Innovation Management 11 © 2009 John Wiley & Sons Ltd.



Characteristics of Stage-Gate-Models

  Very much cross – functional   Appropriate project structure & team work   Marketing and Manufacturing are now integral parts   Decision points or gates are also cross - functional   Capturing the entire process from idea through to launch   Much more emphasis on up-front homework or pre-development

work   Strong market orientation   Parallel or concurrent processing

  Sharper decision points with clear Go / Kill criteria


Overview: The Gates

  Gates are predefined and specify a set of "deliverables"

  Deliverables include a list of criteria:

 "Must meet" => Mandatory

 "Should meet" => Desired

 Output, e.g. a decision

  Gate meetings are usually manned by Top Managers from different functions (resource owner)


Chapter 7

Capturing the benefits of innovation



Knowledge Management

Central challenges in knowledge management:   to iden-fy, order & process explicit informa-on &

knowledge;   to encourage the exchange of tacit knowledge between

communi-es of prac-ce;   to translate tacit knowledge into explicit knowledge.



Inven&on versus Innova&on

  Goodyear invented vulcanized rubber, but did not create Goodyear Tires;

  Howe invented the sewing machine, but Singer later infringed the patent;

  Spangler invented the vacuum cleaner , but Hoover was first to commercialise it;

  Paterson developed DOS, but Gates bought the rights ($25,000!) & licensed it to IBM.



Patents

Patents provide a legal monopoly on IPR for a limited period (usually 20 years):

  novelty -‐ no part of ‘prior art’   inven-ve step -‐ non ‘obvious’   industrial applica-on -‐ inu-lity test   patentable subject -‐ discovery vs. inven-on   clear & complete disclosure



Designs

Design registra&on is a cross between patent & copyright protec&on:

  provides protec-on for up to 25 years:   protects only visual appearance   covers four features -‐ shape, configura-on, paEern & ornament   cheaper & easier than patent protec-on, but more limited scope



Designs

Design rights are similar to copyright protec&on, but mainly apply to three-‐dimensional ar&cles:

  any aspect of the ‘shape’ or ‘configura-on’   internal or external, whole or part   excludes integral & func-onal features



Copyright

Limited legal protec&on of certain material for a specific term:   type of material -‐ ‘original’ literary (inc. s/w), drama-c, musical,

& ar-s-c works   protec-on -‐ reproduc-on in ‘material form’ within 50 years   infringement -‐ ‘substan-al taking’ vs. ‘fair dealing’



Trade Marks

Trade marks (& names) can be registered for a specific period (usually 10 years) & then renewed (usually for further periods of 10 years):

  dis-nc-veness -‐ so as not to prevent others from trading   decep-veness -‐ not similar to other marks, or to infer product

quali-es



Limits of IPR

Intellectual property rights also incur costs & risks:

  cost of search, registra-on & renewal   need to register in various na-onal markets   full & public disclosure of your idea   need to be able to enforce



Patent Costs

0 5000 10000 15000 20000 25000 30000 35000 40000

1996 US $

Singapore

Malaysia

Korea

UK

France

Netherlands

US

Germany

Japan

Years 1-5 Years 6-10 Years 11-15 Years 16-20

Germany

Netherlands

UK

Malaysia


83


Licensing

Considera&ons in a licensing agreement:   degree of exclusivity -‐ exclusive, sole or non-‐exclusive   scope -‐ territory & type of end use   period -‐ no longer than licensor’s IPR   payment -‐ royalty, lump sum or cross-‐license



Licensing

Typical licensing agreement includes:

  grant of rights -‐ exclusivity, territory, term   transfer of know-‐how -‐ support & training   produc-on & marke-ng -‐ materials   fees & royal-es -‐ levels & condi-ons   protec-on of IPR -‐ all par-es rights & resp.   termina-on of agreement -‐ when & how



Licensing

Benefits of licensing to licensor:   reduce development costs & risks;   reach a larger market;   exploit in other applica-ons;   establish standards;   gain access to complementary technology;   block compe-ng developments;   convert compe-tor into defender.



Licensing

Benefits of licensing to licensee:   access to know-‐how   speed of market entry   overcome internal resource constraints   reduce technical & market uncertain-es   low cost acquisi-on of know-‐how


Documents

Kavala Innovation Management Fees 2012.Ppt