1. Innovation involves more than new products and includes business model innovation across areas like customers, channels, revenue models and processes. The innovation wheel is a framework that visualizes these different dimensions of innovation. 2. Aligning strategy and innovation is key, with strategy determining where and how to compete while innovation ensures the critical tasks, culture, human resources, and formal organization support the strategic goals. 3. Both strategy and innovation depend on the time horizon, with a three horizon model separating short, medium and long term innovation needs and tasks.

1. Develop Innovation Globally
Professor Martin Kupp
mkupp@escpeurope.eu
@martinkupp

2. 1.
Innova)on
is
more
than
new
products

3. The
innova)on
wheel
helps
to
visualize
the
innova)on
direc)on
Source:
Mahon
Sawhney
2002

4. The
example
of
Dell

5. The
example
of
MAN
Ferrostaal
Products
(What)
R&D
PlaHorms
Networking
Solu8ons
Customers
Channels
(Who)
(Where)
Logis8cs/
Customer
Experience
Supply
Chain
Value
Chain
Revenue
Model
Processes
Source:
Mahon
Sawhney
2002
(How)

6. The
example
of
???
Products
(What)
R&D
PlaHorms
Networking
Solu8ons
Customers
Channels
(Who)
(Where)
Logis8cs/
Customer
Experience
Supply
Chain
Value
Chain
Revenue
Model
Processes
Source:
Mahon
Sawhney
2002
(How)

7. 2.
Aligning
strategy
and
innova)on
is
key
Strategy
• Where
to
compete?
• How
to
compete?
Cri)cal
Tasks
• The
3-­‐5
concrete
things
you
need
to
do
to
execute
your
Human
Resources
strategy
Culture
• Do
people
have
the
necessary
• What
are
the
norms,
values,
competencies?
aMtudes,
and
behaviors
• Are
they
mo)vated?
needed?
Formal
Organiza)on
• Structure?
• Controls?
• Rewards?
• Careers?
Following:
Tushman,
O'Reilly:
Winning
through
Innova.on
–
A
prac.cal
Guide
to
Leading
Organiza.onal
Change
and
Renewal

8. 3.
Strategy
AND
innova)on
depend
on
your
)me
horizon
Three
horizon
model
of
sustainable
business
development
Tasks
of
Business
management
volume
(cumulated)
Create
viable
Horizon
3
op)ons
for
fu-­‐
ture
businesses
Build
and
Horizon
2
grow
start-­‐up
businesses
Protect
and
Horizon
1
expand
core
businesses
Today
Time
Source:
Baghai/Coley/White,
1999

9. 4.
Cri)cal
tasks
will
follow
your
decision
Characteris)cs
and
challenges
of
three
horizons
Horizon
3
Horizon
2
Horizon
1
Characte-­‐
• Core
business
• Fast
growing
• Op)on
for
business
ris8cs
of
today
business
of
the
future
• Limited
growth
• Start-­‐up
phase
• More
than
just
an
poten)al
of
lifecycle
idea
• High
profit
and
• High
investment
• Limited
invest-­‐
cash
flow
required
ment
Management
• Protect
and
expand
• Build
and
grow
• Seed
many
challenges
market
posi)on
market
presen-­‐
different
op)ons
• Incremental
ce
• Develop
entre-­‐
innova)on
• Bring
innova)on
preneurial
• Commodi)za)on
to
marktes
behavior
and
restructuring

10. 5.
You
have
to
seperate
horizon
3
innova)on
teams
4
organiza8onal
designs
to
develop
and
deliver
innova8ons
The scope of the ambidextrous organization
Alignment of: Exploitative Business Exploratory Business
Func8onal
designs
Unsupported
teams
General
General
Strategic intent cost, profit innovation, growth
Manager
Manager
operations, efficiency, adaptability, new products,
Emerging
Critical tasks incremental innovation breakthrough innovation
MfG
Sales
R&D
MfG
Sales
R&D
Business
Competencies operational entrepreneurial
Cross-­‐func8onal
teams
Ambidextrous
organiza8ons
Structure formal, mechanistic adaptive, loose
General
General
Manager
Manager
Controls, rewards margins, productivity milestones, growth
Exis8ng
Emerging
MfG
Sales
R&D
Business
Business
efficiency, low risk, risk taking, speed, flexibility,
Culture quality, customers experimentation
Emerging
Business
MfG
Sales
R&D
MfG
Sales
R&D
Leadership role authoritative, top down visionary, involved
Source:
O'Reilly
III
/
Tushmann,
HBR
April
2004

11. 6.
You
will
have
a
hub-­‐
and
an
integrated
R&D
network
simultaneously
Source:
Gassmann,
Zedtwitz
1999
Important
ques8ons
to
ask:
• Do
we
have
the
competencies
centrally?
• Does
regional
demand
require
adapted
or
new
solu)ons?
• Is
the
demand
purely
regional
or
are
there
other
regions
with
similar
demand
(size
of
the
market
for
poten)al
new
solu)on)?

12. 7.
What
is
the
purpose
of
your
R&D
site?
Home-­‐base
exploi)ng
Home-­‐base
augmen)ng
Exploit
exis)ng
stock
of
knowledge
Develop
new
knowledge
Generally
located
close
to
Close
to
ins)tu)ons
of
scien)fic
manufacturing
site
excellence
Challenges:
Challenges:
• Manage
growth
• Finding
the
right
leader
(from
• Enable
careers
outside?)
• Respect
btw.
central
and
• Knowledge
transfer
back
to
decentral
R&D
headquarter
Underlying
challenge
is
the
transfer
of
knowledge.
Some
ideas:
• Temporary
exchange
of
people
• Inhouse
science
fairs
• Transperent
performance
systems
Source:
Kuemmerle,
W.
(1996)

13. 8.
Understanding
your
culture
is
key
to
kick-­‐start
innova)on
• unplanned connections High
• complex
• diversity network communal • long term
• slack • innovation all over
• radical Sociability
Informality Fun Teamwork • visionary leadership
• slow implementation Participation
• planned, measured
• individuals fragmented mercenary • incremental
• creative and completers • separated
• slack through autonomy Cognitive Market • no slack
• recruitment key Low
Conflict pressure • fast implementation
Low
Solidarity
High
Adapted
from
Goffee/Jones

14. 9.
Leadership
is
key
for
innova)on
• Encourage
new
ideas,
especially
from
below
and
from
unexpected
sources.
• Look
ahead,
not
behind.
The
past
is
prologue
but
not
necessarily
precedent.
• Leave
some
slack
for
experimenta8on,
whether
spare
)me
or
seed
money.
• Look
for
improvements,
not
cri)ques.
Encourage
collabora8on
toward
common
goals.
• Be
flexible.
Stress
substance
over
form,
ac)on
over
calendar.
Allow
for
unplanned
opportuni)es.
• Open
strategic
discussions
to
new
voices.
• Accept
that
stretch
goals
mean
some
things
won't
work.
Avoid
public
humilia)on;
promote
public
recogni8on
for
innova)ve
accomplishments.
• Foster
respect
for
people
and
their
talents.
• And
know
learning
is
an
impera)ve.
Everyone,
even
the
most
experienced,
must
be
open
to
learning.
Source:
Kanter,
R.
HBR
Blog,
2013