IMT Lecture: Innovation Pattern MM Biztel 29 Jun09.

Design and Implementation of Technology Strategy: Pattern of Industrial Innovation Lecture by: by: Djadja.Sardjana@gmail.com 28-Jun-09 28-Jun- IMT MM-Biztel MM- 1

Design and Implementation of Technology Strategy: Pattern of Industrial Innovation BMW 1m05 Definition, Scope and Perspective 28-Jun-09 28-Jun- IMT MM-Biztel MM- 2

Management Innovation is… A marked departure from traditional management principles, processes, and practices or a departure from the customary organizational forms that significantly alters the way the work of management if performed Gary Hamel , Harvard Business Review, February 2006 6/28/2009 3

Operational vs Management Innovation Operations innovation focuses on business processes while management innovation targets the company’s management processes Gary Hamel , Harvard Business Review, February 2006 6/28/2009 4

General Manager’s Perspective Integrating of managing innovation and the impacts of innovation upon organizations into a coherent whole still remains a significant challenge. They arise across the boundaries of functional organizations, in many ways. Example, finding ideas for Example, new products, and the challenge of uncovering new markets, isn’t just a marketing problem. An organization’s structure, the systems, and the formal and informal mechanisms powerfully influences the types of ideas that get surfaced, pushed forward, and surfaced, adopted. Burgleman, Robert, Christensen, Clayton, and Wheelwright, Steven. Strategic Management of Technology and Innovation, Irwin McGraw-Hill, 2008 28-Jun-09 28-Jun- IMT MM-Biztel MM- 5

Is not simply of engineering management Many projects lack an adequate strategy for selecting and evaluating potential projects Failure to stay abreast of important technologies has little to do with : the intrinsic difficulty or newness of the technologies The failure frequently can be traced to biases in decision tools such as return-on-investment calculations employed in the return-on- resource allocation process Burgleman, Robert, Christensen, Clayton, and Wheelwright, Steven. Strategic Management of Technology and Innovation, Irwin McGraw-Hill, 2008 28-Jun-09 28-Jun- IMT MM-Biztel MM- 6

Management of Technology / Innovation re.Christensen Only from the viewpoint of the leader can the complex challenges of integrating the work of people in multiple functions be understood and the apparent performance problems in new product development be traced to their underlying causes. And only the leader can mold the resources, processes and values that affect innovation into a coherent capability to develop and launch superior new products and services repeatedly (Christensen, 1999) 1999) 28-Jun-09 28-Jun- IMT MM-Biztel MM- 7

Management of Technology / Innovation evolutionary perspective 1. Firm’s technology strategy emerges from its technological competencies and capabilities; 2. Technology strategy is shaped by external (environmental) and internal (organizational forces); and 3. The enactment of technology strategy the experience that it generates develop the firm’s technological competencies and capabilities. Burgleman, Robert, Christensen, Clayton, and Wheelwright, Steven. Strategic Management of Technology and Innovation, Irwin McGraw-Hill, 2008 28-Jun-09 28-Jun- IMT MM-Biztel MM- 8

Design and Implementation of Technology Strategy: Pattern of Industrial Innovation The Pattern 28-Jun-09 28-Jun- IMT MM-Biztel MM- 9

Why Its Matter? General Electric brought management discipline to the chaos of scientific discovery DuPont developed standards of comparing performance of its product departments Procter & Gamble creates value out of intangible assets Visa formed a consortium in the US in the early 1970’s that created one of the world’s best known brands Linux open source development is highly effective in coordinating the efforts of geographically dispersed individuals 28-Jun-09 28-Jun- IMT MM-Biztel MM- 10

Why Its Matter? General Electric, DuPont, IBM, Procter & Gamble, Visa, Linux & Toyota What makes them stand out? Great Products? Great people? Great leaders? IBM 30s 28-Jun-09 28-Jun- IMT MM-Biztel MM- 11

Why Its Matter? Management Innovation creates lasting advantage when it is: a novel principle that challenges management orthodoxy systemic part of on-going invention on- 28-Jun-09 28-Jun- IMT MM-Biztel MM- 12

Toyota Case Study Harnessing employee intellect at Toyota Employees are more than cogs They are problem solvers, innovators and change agents Gave every employee the skills, tools and the permission to solve problems Real advantage was ability to harness intellect of “ordinary” employees More unconventional the principle, the longer it takes for competitors to respond 28-Jun-09 28-Jun- IMT MM-Biztel MM- 13

GE Case Study Growing great leaders at GE Persistent Dedicated training facility in Crotonville, Crotonville, NY 360- 360-degree feedback Power law: Innovation numbers game the more you do, greater payback 28-Jun-09 28-Jun- IMT MM-Biztel MM- 14

Elements of Management Innovation Commit to a big problem Search for new approaches Deconstruct your management orthodoxies Exploit the power of analogy 28-Jun-09 28-Jun- IMT MM-Biztel MM- 15

Commit to a big problem What are the tough tradeoffs that your company never seems to get right What are big companies bad at? What are the emerging challenges the future has in store for your company? 28-Jun-09 28-Jun- IMT MM-Biztel MM- 16

Search for new approaches Hunt down unlikely analogies that suggest new ways of tackling problems Study the unconventional Push autonomy and self- self- direction 28-Jun-09 28-Jun- IMT MM-Biztel MM- 17

Deconstruct your management orthodoxies Able to distinguish between what is apparently true and what is eternally true Is belief toxic to ultimate goal? Can you imagine an alternative to the reality the belief reflects? 28-Jun-09 28-Jun- IMT MM-Biztel MM- 18

Exploit the power of analogy Hunt down unlikely analogies that suggest new ways of tackling problems Study the unconventional Push autonomy and self- self-direction 28-Jun-09 28-Jun- IMT MM-Biztel MM- 19

Innovation Tools: Design Thinking 28-Jun-09 28-Jun- IMT MM-Biztel MM- 20

Design and Implementation of Technology Strategy: Pattern of Industrial Innovation Walk The Talk 28-Jun-09 28-Jun- IMT MM-Biztel MM- 21

The Strategic Management Process Hitt, Ireland & Hoskisson 28-Jun-09 28-Jun- IMT MM-Biztel MM- 22

The Challenge - Developing Strategies in an Uncertain World How do we cope with risk and uncertainty? How do we select the right indicators to track? How do we identify key trends and developments? How do we spot new opportunities, ‘white spaces’ and the potential for major discontinuities? How do we plan, operate and survive in a turbulent and fast-changing world? fast- How do we handle those not playing by ‘our rules'? rohit@fastfuture.com 28-Jun-09 28-Jun- IMT MM-Biztel MM- 23

Shaping Strategy in the Face of Uncertainty The Economy Climate Commercial Global Developments Developments Infrastructure Media S&SR Lifestyles Education People Knowledge Values Resources & Crime Natural Management Culture Core Skills World Operational Processes & Structures Providers Technology of Finance Financial and Social Performance Government Suppliers Policy Environment Interest Alternative Workers Public Providers Groups Regulation Expectation Substitutes & Values 28-Jun-09 28-Jun- IMT MM-Biztel MM- rohit@fastfuture.com 24

Strategic Leadership to Strategic Competitiveness Effective Strategic Leadership Shape the formation of Strategic Intent Strategic Mission Influence Successful Strategic Actions Formulation Implementation of Strategies of Strategies Strategic Competitiveness Hitt, Ireland & Hoskisson 28-Jun-09 28-Jun- IMT MM-Biztel MM- 25

The Environment Sociopolitical Demographic Competitors Customers Technologies Economic Scientific Opportunity Threat 28-Jun-09 28-Jun- IMT MM-Biztel MM- 26

The Landscape Customers Competition Present Direct Identified potential Indirect Unidentified potential Structural Technology Embedded Supportive Enabling 28-Jun-09 28-Jun- IMT MM-Biztel MM- 27

The Foresight 28-Jun-09 28-Jun- IMT MM-Biztel MM- 28

From Vision To Action Vision Mission Goals Strategy Plan 28-Jun-09 28-Jun- IMT MM-Biztel MM- 29

The Innovation Road Map Market Enterprise Stakeholders Road Map Capability Enterprise Capacity 28-Jun-09 28-Jun- IMT MM-Biztel MM- 30

Diffusion Social or Determination economic of opportunity impact 7 or need 6 1 Demonstration 5 Innovation 2 of feasibility Life Cycle Widespread adoption 4 3 Prototype Commercial or field trial introduction or operational use 28-Jun-09 28-Jun- IMT MM-Biztel MM- 31

Establishing Determining Balance Strategic Controls 6 Direction 1 Maintaining Innovation Core Competencies 5 2 Strategic Emphasizing Ethical 4 Leadership 3 Practices Developing Sustaining an Human organizational Capital culture Hitt, Ireland & Hoskisson 28-Jun-09 28-Jun- IMT MM-Biztel MM- 32

Innovation Culture Output Behavior Values Beliefs Philosophy 28-Jun-09 28-Jun- IMT MM-Biztel MM- 33

Design and Implementation of Technology Strategy: Pattern of Industrial Innovation Back to Orbit 6m06 Conclusion & Final Words 28-Jun-09 28-Jun- IMT MM-Biztel MM- 34

IMT Lecture: Innovation Pattern MM Biztel 29 Jun09.

by Djadja Sardjana

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