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Some Hints for Building an Effective Business Innovation System

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Six Key Hints to Transform a Company into an Innovating Organization

Six Key Hints to Transform a Company into an Innovating Organization

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Some Hints for Building an Effective Business Innovation System Some Hints for Building an Effective Business Innovation System Presentation Transcript

  • Some Hints for Building an Effective Business Innovation System Miguel Sáenz de Viguera Aizpurua 2007 PMI Distinguished Contribution Award msaenzdeviguera@hotmail.com November 2010 “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua
  • Introduction: The Shift of the Economic Paradigm On August 6, 1991, Tim On August 6, 1991, Tim The “New Economy” Berners-Lee (CERN) posted Berners-Lee (CERN) posted a summary of the World a summary of the World • On 1991 the humanity entered in a new era of Wide Web project on the Wide Web project on the instantaneous, global diffusion of information alt.hypertext newsgroup. alt.hypertext newsgroup. and knowledge at practically no cost, the era of This date marked the debut This date marked the debut Internet of the Web as a publicly of the Web as a publicly • The “WWW” is the main responsible of the available service on the available service on the Internet. Internet. dramatically fast globalization of the economy and of the appearance of an increasingly wild He wrote: He wrote: competition at any industry during the last years. “The WorldWideWeb “The WorldWideWeb The main responsible too of the economical (WWW) project aims to (WWW) project aims to growth of the emergent countries that ten years allow all links to be made to allow all links to be made to ago, practically, didn’t count in the economic any information anywhere. any information anywhere. arena and now are in the way of becoming the [...] The WWW project was [...] The WWW project was started to allow high energy winners started to allow high energy physicists to share data, physicists to share data, • In the New Economy, for the Companies of the news, and documentation. news, and documentation. EU and USA, from now and for the future, it is We are very interested in We are very interested in not possible competing by cost. Competing by spreading the web to other spreading the web to other quality becomes more and more difficult each areas, and having gateway areas, and having gateway day for them. Business Innovation is, the only servers for other data. servers for other data. Collaborators welcome!" Collaborators welcome!" way that they have to get a sustainable competitiveness “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 1/30
  • What are we speaking about when we mention Business Innovation? When Speaking about Business Innovation, we refer ourselves to Product Innovation, Innovation of Processes and Innovation of the Business Model, all together The Innovation of the Business Model, many times the most critical Innovation, also called Business Transformation, demands transforming the Key Processes of the Organization and/or its Primary Infrastructure Most of these Transformations are Enabled by the Efficient Use of the New Technologies “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 2/30 View slide
  • Why Companies Need Innovation Management Systems? Managing the Paradox between Creative Improvisation and Discipline “I define creativity as the entire process by which ideas “I define creativity as the entire process by which ideas are generated, developed, and transformed into value. are generated, developed, and transformed into value. Since it is a process, it can be planned and managed” Since it is a process, it can be planned and managed” “Moreover, when we add information technology to the “Moreover, when we add information technology to the mix of creativity and knowledge, we get a particularly mix of creativity and knowledge, we get a particularly potent combination: capabilities to represent, deploy and potent combination: capabilities to represent, deploy and track knowledge coupled with technologies to promote track knowledge coupled with technologies to promote Professor John Kao Harvard Business School collaboration across divergent disciplines and collaboration across divergent disciplines and MIT Media Lab. perspectives. When properly managed, the combination perspectives. When properly managed, the combination results in creative combustion” results in creative combustion” “Innovation is about implementation. Being creative and “Innovation is about implementation. Being creative and maybe even radical does not necessarily mean success” maybe even radical does not necessarily mean success” “The ambiguity, complexity and improvisation of creative “The ambiguity, complexity and improvisation of creative organizations require specially tailored managerial organizations require specially tailored managerial systems and processes, to transform creative ideas into systems and processes, to transform creative ideas into value and discipline for its implementation” value and discipline for its implementation” Professor John Kao Professor John Kao “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 3/30 View slide
  • First Hint: “Innovate your Business Strategy” Strategy Innovation is about challenging existing industry methods of creating customer value, in order to meet newly emerging customer needs, add additional value, and create new markets and new customer groups for the organization “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 4/30
  • First Hint: “Innovate your Business Strategy” Why Innovating the Business Strategy? • All countries and industries are now suffering the “New Economy” of wild, global competition • Changes of the business environment and the competition are dramatically deeper and faster each day • In the New Economy, the new paradigm, the old models for business strategic analysis and planning are not more valid • But… Business Strategy should drive the Business Innovation Effort In the new economy, business strategy should be defined, evaluated and refined frequently, through the application of the last best proven models, tools and techniques for business strategic analysis and planning “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 5/30
  • First Hint: “Innovate your Business Strategy” Focus your innovation strategy on the new strategic options for your business 1980 2001 Michael Porter Arnoldo C. Hax Dean L. Wilde II Harvard Business School MIT Sloan School of Management “Competitive Strategy” “The Delta Project” The New Strategic System Lock-In Options Distinct Strategic Positions Total Customer Best Solutions Product Generic Strategies The “Delta Model” Traditional Economy The “New Economy” The “New Economy” Traditional Economy Three Distinct Strategic Options Three Distinct Strategic Options Two Generic Competitive Strategies Two Generic Competitive Strategies Best Product Best Product Cost Leadership Cost Leadership Total Customer Solutions Total Customer Solutions Product Differentiation Product Differentiation System Lock-in System Lock-in “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 6/30
  • First Hint: “Innovate your Business Strategy” The Delta Model: The Three New Distinct Strategic Positions (Arnoldo C. Hax & Dean L. Wilde II, MIT Sloan School of Management) Management) System Lock-In Based on: System Economics Strategy: Market Dominance Objective: Achieving Complementors Share Mostly Enabled through Effective Use of Technology Total Customer Solutions Best Product Based on: Customer Economics Based on: Product Economics Strategy: Cooperation Strategy: Best than Competitors Objective: Achieving Customer Share Objective: Achieving Product Share “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 7/30
  • First Hint: “Innovate your Business Strategy” The Three New Distinct Strategic Positions, Main Features and Compared Sustainability System Focus on the “Full System” Lock-In as the Relevant Scope to get Power (The Business, Customers, Suppliers and Complementors) Key Strategic Driving Force Gaining Complementors Shared as the main objective because they are the Increased Basis for the Consolidation of the Power Sustainability Total Customer Best Solutions Product Its Aim is a Unique Value Proposition to Emphasize Product Orientation Individualized Customers by means of a Customized Portfolio of Products and Services Key Driving Forces • Supply Chain Efficiency (Cost & Quality) Key Driving Forces • New Product Development Capability • Careful Segmentation of the Customers’ Base • Securing of Distribution Channels • Joint Development Efforts with Customers and Key Suppliers guided by the Individual Customer Threat Expectations Commodization “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 8/30
  • First Hint: “Innovate your Business Strategy” Some Strategies towards the New Strategic Positions System Most of the Most of the Lock-In organizations have organizations have Dominant Proprietary not a dominant not a dominant Exchange Yellow Pages Standard Microsoft exchange position, exchange position, eBay Intel cannot get the cannot get the Exclusive exclusivity of the exclusivity of the Channel Telefónica channels of channels of Nespresso distribution that distribution that Increased customers use to customers use to Strategy avail themselves of avail themselves of Horizontal Sustainability their products and their products and Low Cost Breadth Fidelity Easy Jet, Clickiair either, not have either, not have Total Air Berlin the possibility to the possibility to Customer Best develop and get develop and get Solutions Product the ownership of the ownership of the standards of Redefining the Customer Differentiation Customer Integration Bang & Olufsen the standards of Relationship Indra, EDS Sony Wega the industry the industry MCI Accenture Not Every organization has the possibility to reach the strategic position of “System Lock-In” “System Lock-In” “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 9/30
  • First Hint: “Innovate your Business Strategy” “MCI”, an Example of Strategy for Redefining the Customer Relationship “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 10/30
  • First Hint: “Innovate your Business Strategy” “Fidelity”, an Example of Strategy for Expanding the Breadth of Products and Services provided to the Customer “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 11/30
  • First Hint: “Innovate your Business Strategy” Business Strategy for the New Economy, Conclusions The competencies required to successfully perform in the Best Product Strategy… • A Strong Product Base • A Solid Supply Chain Infrastructure • Strong Internal Innovation Capabilities… very often are not enough to create or defend sustainable competitive advantages in the new economy “The transformation that any company should undertake to “The move away from a Product-Centered Mentality towards a Total Product-Centered Mentality towards a Total Customer Solutions Position, and towards a System Lock-In Solutions Position, Lock-In Position, if it has possibilities, is a mandatory challenge for all executives” executives” Professor Arnold C. Hax (MIT) Professor Arnold C. Hax (MIT) CAF, DANOBAT RAILWAY SYSTEMS and the recent announcement of the CAF, DANOBAT RAILWAY SYSTEMS and the recent announcement of the strategic alliance between IKUSI and ORMAZABAL are examples of Basque strategic alliance between IKUSI and ORMAZABAL are examples of Basque Companies, strategically trying to move from a position of "Best Product" towards Companies, strategically trying to move from a position of "Best Product" towards another one of "Total Customer Solutions", an intelligent strategic movement another one of "Total Customer Solutions", an intelligent strategic movement “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 12/30
  • Second Hint: “Implement an Efficient, Idea Management Process” Implement an Efficient, Structured Process for: for: I II III Encouraging the Encouraging the Evaluating, Prioritizing Evaluating, Prioritizing Building an Efficient Building an Efficient Generation, Capture and Generation, Capture and and Selecting the ideas and Selecting the ideas Development Process that Development Process that Refinement of Ideas for Refinement of Ideas for that have the greatest that have the greatest Provides Excellence in the Provides Excellence in the Innovation from Innovation from potential to add value to potential to add value to Development and Development and Customers, Employees Customers, Employees the Business the Business Implementation of the Implementation of the and other Stakeholders of and other Stakeholders of Selected Innovations Selected Innovations your Organization your Organization Proposals Proposals “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 13/30
  • Second Hint: “Implement an Efficient Idea Management Process” Keys for Boosting the Generation of Innovation Ideas • Communicate that creativity and innovation have high priority in the organization. The High Management demonstrably should boost innovation If no one believes • Provide free education and training on creativity and creative problem solving that your firm is serious about • Give to the people free time and other resources innovation, few (mentoring, space, tools,...) to refine, test, developing the people will take it concept and presentation for creative ideas seriously • Reward rather than discourage creative thinking. Show that If no one knows failures are tolerated, indeed they are seen as valuable about your ideas learning opportunities. campaign, no one will • Set aside some additional budget for refining and testing participate the more radical ideas Small rewards for • Implement and communicate a system to gather and ideas can be a process the innovation ideas. The goal: not one idea remarkably powerful without answer from management means of promoting • Communicate your process, for assessing, filtering ideas participation and deciding which ones to invest in “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 14/30
  • Second Hint: “Implement an Efficient Idea Management Process” Example of Practices for Boosting the Generation of Innovation Ideas IN-HOUSE ENTREPRENEURSHIP PROGRAMMMES “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 15/30
  • Second Hint: “Implement an Efficient Idea Management Process” What are doing the Innovation Champions to Select which ones are the Innovation Proposals to be Developed? Rejected The Most Innovative Companies, have a Initiatives multifunctional, Innovation Steering Committee (“ISC”) Initiatives Portfolio composed by members of the top management with the mission of assessing, prioritizing and selecting the innovation ideas The ISC meets periodically (monthly in most of the All Selected cases) to select the innovation proposals Initiatives The ISC establishes and publishes, within the Initiative Ideas organization, the scoring system applied, that takes Development into account, at least the following criteria to evaluate Funnel the innovation proposals • Their Strategic Fit Once one innovation initiative has • The Estimation and Availability of Investment Once one innovation initiative has Funds, Human and other Resources required been approved by the Innovation been approved by the Innovation Steering Committee, an initial for their development and implementation Steering Committee, an initial budget for its development is budget for its development is • A Qualitative and Quantitative (IRR, NPV, Pay assigned assigned Back,...) Estimation of their Adding Value to The rejected ideas are recorded The rejected ideas are recorded the Business in an innovation ideas repository in an innovation ideas repository where they can be revisited to be where they can be revisited to be • Their Risks Evaluation combined with other ideas or combined with other ideas or • The Sustainability Analysis of the Advantage being applied for different being applied for different purposes than the original one purposes than the original one Acquired by the implementation of the idea “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 16/30
  • Second Hint: “Implement an Efficient Idea Management Process” A Model for Analyzing the Sustainability of Innovation Initiatives Co er s m The sustainability of the advantage m is An pe to s al tit achieved by an innovation depends on us aly C n As ys or is s A y The Replication Time of Ba m m rs ce rie n rri etr • Its assessment requires an analysis of the ar fere er i c innovation project itself and the changes B e s Pr required in the infrastructure of the business. Some WEB-based innovations can be replicated in Sustainability weeks but the changes in the primary infrastructure of the Advantage achieved of the business required for its implementation can by an Innovation take years. Example Compaq against Dell The Asymmetric Barriers • Their identification requires analyzing if our advantage will be cancelled, when a competitor Replication replicates our innovation. Time The cost of suppliers substitution is an example of asymmetric barrier Project The Barriers of Preference Analysis • Their identification requires assessing if our customers will remain loyal to our organization A Model for Sustainability unless a competitor offers to them a better Assessment of Innovation alternative. Investments Example: Amazon has built up high barriers of preference “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 17/30
  • Second Hint: “Implement an Efficient Idea Management Process” How is the Development Process of the Innovation Leaders? The “Development Funnel” Innovation Innovation Development Development The “Development Funnel” is the graphical Steering Steering Steering Steering representation of the Development Process Committee Committee Program and Program and Committee Committee Project Project A Development Steering Committee, (“DSC”) that Managers Managers can be the same or another committee, than the “ISC”, is responsible for: Multifunctional Multifunctional • Providing Guidance during the whole Project Teams Project Teams Development Process • Assigning Program Managers, Project Managers, Project Teams, budgets and other Phase I Phase II Phase III Phase IV resources • Approving Cycles Life for each Development Project, the Results to be Achieved at the End of Each one of their Phases, and the Project Plans Frequent Prototyping • Establishing and Leading the Phase Verification and Validation Meetings (Gates) Management of the Development Funnel Management of the Development Funnel • Supervising the Management and Administration of the Resources and Project Management Professionalism and Project Management Professionalism and Program's Budgets Frequent Prototyping are Key Success Frequent Prototyping are Key Success • Making Recommendations to the Top Drivers for the Process of Development Drivers for the Process of Development Management, Including Proposals for Program and Project Changes or its Termination “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 18/30
  • Second Hint: “Implement an Efficient Idea Management Process” Example: The Model of WINNING BOOST In the Model of “Winning Program and Innovation Boost”, Business Strategy is Project Programs/Projects driving: • The Management of the Management I II III IV Multifunctional Project Teams Portfolio of Innovation Innovation Proposals Steering Committee • The Management of the Development Process Innovation • The Internal R&D Implemented Proposals Innovations • The HHRR Development Programs Development New Competencies Funnel • The Acquisition of External Technology and Know How Business Strategy Technology and Know There is a unique, Innovation How Steering Committee, New Technologies Acquisition responsible for Managing the In-Company R&D In- Portfolio of Innovation Ideas and HHRR and its Development Process Development Strategy WB Innovation Development Model © 2007 Winning Boost “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 19/30
  • Second Hint: “Implement an Efficient Idea Management Process” Apply Frequent Prototyping for Faster and Reliable Development When Frequent Prototyping of Products and Processes, is applied, the feedback from the end users results in an iterative refinement of the model until it finally meets the user's needs and expectations. Phase I Phase II Phase III Phase IV Advantages of Frequent Prototyping of Products and Processes • User requirements easier to determine • The development’s result, more closely meets the needs and expectations of the end users Frequent Prototyping • Changes identified earlier in the development process • Development costs are reduced • Faster development • Stopping development on an unworkable product or process Advantages of Frequent Prototyping of Processes and Business Models • Involvement of the personnel working for the process • Easier for the personnel to learn how to operate in the process before its implementation • Employees know what to expect at the implementation of the new process Fast Prototyping applyingPrototyping Applying CAD/CAM for Fast CAD/CAM • Fewer changes needed after implementation • Employees’ resistance to change reduced. The application of IT enable prototyping products, processes and The application of IT enable prototyping products, processes and business models, fast and cost efficiently business models, fast and cost efficiently “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 20/30
  • Second Hint: “Implement an Efficient Idea Management Process” Improve the Competency for Project Management of your Organization Development, the final Stage for Successful Implementation of Innovative Ideas is mainly a task of performing projects Project Management Professionalism is Key for: • Ensuring that the deliverables will meet the needs and expectations of the project’s stakeholders and the Company’s quality standards • Identifying early the project's risks and defining and implementing properly the adequate risk response • Managing properly the unavoidable project changes while ensuring the achievement of the goals of the organization and stakeholders satisfaction • Tracking and Controlling adequately the project's progress • Taking advantage of the opportunities to speed up the schedule, reduce cost and improve the deliverables features • Completing the projects within the optimal period of time and the most efficient use of the budget and resources available Provide to your Employees Education and Training for Project Management Provide to your Employees Education and Training for Project Management Assign to the Most Competent, Project Managers the Responsibility for Managing Assign to the Most Competent, Project Managers the Responsibility for Managing your Key Innovation Projects your Key Innovation Projects “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 21/30
  • Third Hint: “Make an Intelligent Use of the Information Technologies” • The use of new Information technology enables most innovations of the business Order Do you need it? processes. ("I-Innovations") Order Do you need it? Specification Specification How is it? How is it? • Analysis of opportunities of "I-Operations" "and" I-Marketing " , enable identifying Distribution Distribution Who distributes it? Who distributes it? pragmatic paths to increase sales and competitiveness of the organization Availability Availability Who has it? Who has it? • New business models and most radical Price Price How much does ititcost? How much does cost? innovations are most often identified, looking for opportunities of "I-Service“ Payment Payment Credit? Credit? When do you want it? Delivery Delivery When do you want it? At the selection of the technological At the selection of the technological Acceptance Acceptance Fully received, satisfied? Fully received, satisfied? platform to support the innovation of platform to support the innovation of Installation Ready to work? your processes or business model your processes or business model • Don’t rely totally on advice from Installation Ready to work? Performance How does ititwork? How does work? Don’t rely totally on advice from Performance System Suppliers. Many times their System Suppliers. Many times their Improvement Improvement Anything else needed? Anything else needed? advice is not free of conflicts of advice is not free of conflicts of Maintenance Maintenance, repair required? Maintenance, repair required? interest interest • Ask for references of success, Maintenance Return Return Sale Finished? Sale Finished? Ask for references of success, check and analyze them personally check and analyze them personally • Apply, proven decision models, to Assessment Assessment Provided Value ?? Provided Value Apply, proven decision models, to facilitate your decision facilitate your decision I-Service – Opportunities Model I-Service – Opportunities Model “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 22/30
  • Third Hint: “Make an Intelligent Use of the Information Technologies” A Model of Web-Based Transformations of Business Processes David Feeny (Oxford University) ... Process Transformations Enabled by WEB-Based Technologies High Reengineering of Reengineering of the Primary Banking, Insurance, the Primary “E-Operations – Opportunity Model” Infrastructure and Infrastructure and Pharmaceutical, David Feeny, Oxford University Publishing Companies... Information Content Key Business Key Business Processes in the Product Processes To improve • Product Availability and Functionality • Development Time • Cost Structure Intensity of Information along the Extended High Supply Chain (ESC) Low In fo Dis Companies with rm pe Va atio rsio geographically Virtual Integration Virtual Integration Companies with lue n a n dispersed of the ESC Ch lon of homogeneous activities. of the ESC products including ain g t hundreds or he Example: McDonald's To improve thousands of • Product Availability components Reinforcing the Reinforcing the and Functionality (Automotive, “Parenting Value” “Parenting Value” • Development Time Aerospace, • Cost Structure Appliances, To improve Hardware ...) and • Sharing Learning companies of "Build High and Best Practices. to Order " • Economies of Scale • Cultural Consistency “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 23/30
  • Fourth Hint: “Adopt the Open Innovation” Open versus Closed Innovation Boundary The Closed Innovation Model of the Firm • The Company generates, develop and commercializes its own ideas. The • This philosophy of self-reliance dominated Market the innovation processes and R&D operations of many leading industrial corporations for most of the 20th century Innovation Development Proposals Closed Innovation Model Boundary The Open Innovation Model of the Firm New • The Company commercializes both its own Market ideas as innovations from other firms Current • The Organization seeks ways, to bring its Market in-house ideas to the market, by deploying pathways outside its current business • The boundary between the Company and its surrounding environment is porous, enabling innovations to move between the Innovation Development two Proposals Open Innovation Model Henry W. Chesbrough (HBS) “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 24/30
  • Fourth Hint: “Adopt the Open Innovation” Why Adopting Open Innovation? False Beliefs for Closed Innovation Realities to adopt Open Innovation • The talented people in our industry • Not all of the smart people work for us, so work for our organization we must find and tap into the knowledge and expertise of bright individuals outside our company • To profit from R&D, we must discover, • External R&D can create significant develop and commercialize it value. Internal R&D is needed to claim ourselves some portion of that value • If we discover it ourselves, we will get • We don’t have to originate the research in to the market first order to profit from it • If we are the first to commercialize an • Building a better business model is better innovation, we will win than getting to market first • If we create the most and best ideas in • If we make the best use of internal and our industry, we will win external ideas, we will win • We should control our intellectual • We should profit from others’ use of our property (IP) so that our competitors IP, and we should buy others’ IP if it don’t profit from our ideas advances our own business model Open innovation represents, in part, a reinvention of the organizational models that we Open innovation represents, in part, a reinvention of the organizational models that we have come to take for granted. have come to take for granted. In the next few years, as connectivity becomes ubiquitous, the shift to more In the next few years, as connectivity becomes ubiquitous, the shift to more distributed, more networked and more open organizational models will become distributed, more networked and more open organizational models will become commonplace and those not willing or unable to make the change will be left behind commonplace and those not willing or unable to make the change will be left behind “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 25/30
  • Fourth Hint: “Adopt the Open Innovation” How to Start Open Innovation? Some Key Issues Two key questions to start the Implementation of Open Innovation • What are the kind of ideas we need? • Who are the potential collaborators that we can work with to greatest effect? An early, clear answer to these questions could inhibit the creative freedom • Open Innovation is needed to create the desired new markets, radical innovations and fresh still young business models. • Companies like Orange, Philips and A recommendable path to start Open Innovation A recommendable path to start Open Innovation • Start small, with no more than two or three organizations. Some of your suppliers Hewlett Packard are making of it a Start small, with no more than two or three organizations. Some of your suppliers strategic priority or clients can be good candidates to start with or clients can be good candidates to start with • Virgin Atlantic, and Procter & Gamble • Create a conjoint multifunctional committee with each one of these organizations, Create a conjoint multifunctional committee with each one of these organizations, reported great reporting to the top management of both organizations. reporting to the top management of both organizations. benefits from their Open Innovation • The aim of these committees is to extract investable propositions for the The aim of these committees is to extract investable propositions for the Programs participant organisations that will share the value chain and benefits of the participant organisations that will share the value chain and benefits of the developed proposal developed proposal • But still there are not enough • Emphasize more on valuable delivery partnerships than on passive ownership of IP Emphasize more on valuable delivery partnerships than on passive ownership of IP • Periodically use the lessons learnt to refine the process and extend it to other experiences to extract common Periodically use the lessons learnt to refine the process and extend it to other good practices for collaborating organizations collaborating organizations • The process, matures when both organizations find several opportunities to make its implementation • The experiences of The process, matures when both organizations find several opportunities to make success are not investments or partnership decisions in collaborative business models like joint investments or partnership decisions in collaborative business models like joint consistent, because ventures or delivery partnerships ventures or delivery partnerships each company has started Open • A welcome by-product of these programmes is that the communities stay active A welcome by-product of these programmes is that the communities stay active Innovation in its long after the programme has ended, keeping the conversations going, and value long after the programme has ended, keeping the conversations going, and value own way flowing flowing “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 26/30
  • Fifth Hint: "Apply Change Management to get an Innovative Organization” To succeed on business innovation, especially for effectively implementing new To succeed on business innovation, especially for effectively implementing new business models, processes and systems, organizations must quickly get the entire business models, processes and systems, organizations must quickly get the entire organization' support to change. organization' support to change. Many change initiatives fail victim to employees' resistance mainly because their Many change initiatives fail victim to employees' resistance mainly because their fears for their personal future fears for their personal future Five basic tools to Five basic tools to Key Features on Change Management overcome the employees' overcome the employees' Enrolling resistance to change resistance to change • • The commitment and Making the people conscious of the the need for change The commitment and • Helping the people to see a future they want to be a part example of the leaders example of the leaders • Requesting commitment • Education and training Education and training Enabling • Coaching Coaching • • Challenging people’s self-limiting beliefs • Recognition to effort Providing education and training, for the required Recognition to effort knowledge, skills and behaviors and celebration of and celebration of • Building self-esteem and trust successes successes Energizing, to sustain the change • Communication, Communication, • Building and sustaining people’s energy Communication, Communication, • Celebrating successes Communication…! Communication…! • Giving recognition 1/30 “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 27/30
  • Fifth Hint: "Apply Change Management to get an Innovative Organization” Example of a Communication Tool: Map of the Innovation System of SIEMENS “The Innovation System at SIEMENS: Taking inputs from technology, competitors, and market intelligence and driving these into the planning for new product and new processes development” 1/30 “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 28/30
  • Sixth Hint: “Continuously Update your Professional Competence” A plan with six activities to sustain your A plan with six activities to sustain your professional competence throughout life professional competence throughout life • Read, quarterly, a book recently published about Read, quarterly, a book recently published about Innovation Management Innovation Management • Subscribe and read, at least three prestigious Subscribe and read, at least three prestigious management magazines ("Harvard Business Review", management magazines ("Harvard Business Review", "MIT Sloan Management Review" and the online "MIT Sloan Management Review" and the online The current changes of the magazine "www.innovationmanagement.se" are magazine "www.innovationmanagement.se" are business environment, recommendable) recommendable) deeper and faster each • Participate, at least a week per year, in continuing Participate, at least a week per year, in continuing day, are making challenging education programs of prestigious academic institutions education programs of prestigious academic institutions for managers, sustaining • Actively participate in the professional experience Actively participate in the professional experience their professional sharing programs of the alumni of the academic sharing programs of the alumni of the academic competence, if they don't institutions where you studied and the professional institutions where you studied and the professional work every day to update associations where you are member associations where you are member the knowledge and skills required for performing • Make a public presentation to a professional audience Make a public presentation to a professional audience and/or write, and get published in a professional and/or write, and get published in a professional their profession magazine, an article about Innovation Management at magazine, an article about Innovation Management at least once a year least once a year • Build and sustain a network of prestigious management Build and sustain a network of prestigious management professionals and experts on innovation management professionals and experts on innovation management from different industries, for sharing knowledge and from different industries, for sharing knowledge and experiences experiences “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 29/30
  • What says about these issues a Global Innovation Champion? Successfully Managing Innovation requires: • Implementing collaborative and social networks for capturing requirements and ideas, from colleagues, customers and partners, into products and processes • Establishing consistent, repeatable processes for translating concepts into products. The final stage of • Making role-based data available to all stakeholders during any each stage of the product development process. effective idea • Standardizing the data captured about each project, such as management strategic alignment, financials, and risk levels. approach, is the successful • Managing intellectual property including patent assets and implementation of the protection of specialized proprietary knowledge. innovative • Managing the project portfolio, tracking execution and ideas alignment with corporate mission and competitive goals, and making time-to-market decisions via flexible scheduling. • Maintaining effective communications across multiple sites and organizations. “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua 30/30
  • “Some Hints for Building an Effective Business Innovation System” The author authorizes the integral reproduction of this presentation Miguel Sáenz de Viguera Aizpurua 2007 PMI Distinguished Contribution Award msaenzdeviguera@hotmail.com November 2010 “Some Hints for Building an Effective Business Innovation System” - Miguel Sáenz de Viguera Aizpurua