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1. 1
E-learning course on Management Innovation in SMEs
In
Asia Productivity Organization
Mr. Hideyuki EZAKI
December-2017 ＆ January-2018

2. -“Innovation” & “management innovation”
-”Innovation creation”
-Best practices of management innovation with special
focus on SMEs
( 40 minutes presentation and 20 minutes Q&A)
2
Lecture 1
Overview of Management Innovation

3. 3
What’s an “Innovation”?
Thousands of “innovations” are around us

4. What’s an “Innovation”?
Question
What is the meaning of the word “Innovation”?
4

5. WHAT IS AN “INNOVATION”?
• “Innovation is
“Ten types of innovation” Larry Keeley, 2013
Innovation means a new thing for a certain industry or a
certain market. It does not have to be completely new to
the world.
Innovation brings value and profit to you. Innovation
should be sustainable enough to absorb its R&D cost .
Innovation occurs not only in products, but services,
combinations of products and services, interactions
between company and customers, processes, etc.

6. WHAT IS AN “INNOVATION”?
6
“NEW”
NEW market
+
Existing product / service
NEW market
+
NEW product / service
Existing market
+
Existing product / service
Existing market
+
NEW product / service
• “Innovation is
to create NEW & sustainable offering”

7. WHAT IS AN “INNOVATION”?
7
“NEW”
NEW work process
+
Existing organization
NEW work process
+
NEW organization
Existing work process
+
Existing organization
Existing good work
process
+
NEW organization
• “Innovation is
to create NEW & sustainable offering”

8. WHAT IS AN “INNOVATION”?
8
“SUSTAINABLE”
→ Innovation is not just an idea
→ Innovation requires investment (or resources)
→ Innovation has to contribute to profit/value creation
• “Innovation is
to create new & SUSTAINABLE offering”
⇒An innovation is a seed of the growth of an enterprise
⇒Continuous creation of new values

9. WHAT IS AN “INNOVATION”?
9
“OFFERING”
→ Products
Services
Work flow…etc.
What’s else?
• “Innovation is
to create new & sustainable OFFERING”

10. “MANAGEMENT INNOVATION”
10
Innovations take place everywhere an enterprise.
Then, what is the “Management
Innovation” ?

11. “MANAGEMENT INNOVATION”
11
Management innovation can be defined as;
“Innovations in Corporate Management”
=“_Embedding_ innovations in an organization”
Create an in-house _system_& innovation can take place
through a certain _process__.
Innovation is NOT originated from the sixth sense or
inspiration by chance. (=scientific)
Innovation is _manageable_ & _controllable_ .
Therefore, innovation must be _sustainable_.
“Report on Management Innovation” Association of RMC, Japan 2010,

12. 12
The Organization for Economic Co-operation and
Development (OECD) categorizes “innovation” into 4
types.
Types of Innovation
1) Product Innovation
2) Process Innovation
3) Marketing Innovation
4) Organizational Innovation

13. 13
4. Organizational innovation
A new organizational method in business practices, workplace organization or external
relations.
3. Marketing innovation
A new marketing method involving significant changes in product design or packaging,
product placement, product promotion or pricing.
2. Process innovation
A new or significantly improved _Production or delivery method _. This includes significant
changes in techniques, equipment and/or software.
Types of innovation
1. Product innovation
_A good or service___ that is new or significantly improved. This includes significant
improvements in technical specifications, components and materials, software in the product,
user friendliness or other functional characteristics.

14. ~ 1. Product Innovation ~
14
Blue LED – Novel prize in Physics 2014
Prof. Akasaki, Prof. Amano, Prof. Nakamura
Incandescent lamp ⇒ LED lamp

15. ~ 2. Marketing Innovation ~
15
A sales staff of Budweiser tried to promote the beer bottles to bars and
restaurants in various ways. But the sales result was not so good.
What he had tried were;
-Negotiate with managers and chefs;
-Put posters in restaurants;
-Offer discount for larger lot purchase;
-Direct promotion activities to customers in restaurants;
But he was in serious competition with other suppliers.
One day, he changed his promoting strategy and recovered his sales.
How did he promote the beer bottles and increase his sales?

16. ~ 2. Marketing Innovation ~
16
This enterprise now operates many bars & restaurants in Japan.
However, they found very few customers coming when they had opened their 1st
restaurant. And it lasted for some months.
The president found that customers were not satisfied with their services, but could
not get detailed feedback because unsatisfied customers never came back to the
restaurant. (un-satisfied customers often ignore a request to fill in a feed-back
questionnaire)
How did this president get feed-backs from the customers?

17. ~ 3. Process Innovation ~
17
?
They are producing a toy truck, under a
project sponsored by JICA (Japan
International Cooperation Agency)
In South African universities.
Let’s watch a video clip
Employability Improvement Project
(JICA South Africa, 2011-2018)

18. 18
~ 4. Organizational Innovation ~

19. WRAP-UP
19
“Innovation means
to create new & sustainable offering”
NEW: new market, new product, new to employee, new to customer,…
→ How can we find something new in our business?
SUSTAINABLE: need investment but profitable
→ We do have very limited resources…
OFFERING: new product, new concept, new service, new market, new system…
→ How can we make it happen in SMEs?
I understand. BUT…

20. WRAP-UP
20
“Management Innovation” means
to embed a system or process to make
innovation happen
→ Do we need big investment to organize system?
→ Do we need to install some process from outside?
→ We are small organization, so we can not afford…
→ We do not have in-house resources or know-how…
No! Everyone can create a new value !!!
I understand. BUT…

21. • Innovation creation process
• Innovation and management system
• Strategical innovation for sustaining competitiveness
• Case studies in SMEs
( 40 minutes presentation and 20 minutes Q&A)
21Lecture 3
Strategies for Management Innovation for
SMEs

22. CHALLENGES IN SMES
INNOVATION can take place everywhere in or around our
business field.
22
• BUT, HOW can we create something new?
• Do we need special skills or excellence?
• Only selected smart people can create new value?

23. CHALLENGES IN SMES
<Obstacles>
• We are busy in our existing business…
• We do not have R&D budget…
• We do not have in-house human resources …
• We do not have specialty or know-how…
23
_________________ is the biggest risk to SMEs!!!
Because the world is always changing & updating.
Economy, Policy, Customers, Technologies…
Your competitors are even changing.

24. HOW TO MAKE INNOVATION
HAPPEN
1) How can we make something from nothing ?
2) How can we proceed it systematically?
24
Innovation should be created in a system
& Innovation is manageable
Not by financial expense but by wisdom in yourselves

25. HOW TO MAKE INNOVATION
HAPPEN
✔1) How can we make something from nothing ?
2) How can we proceed it systematically?
25

26. INNOVATION FOR SMES/SMALL
ORGANIZATIONS
0
100
10000
26
0
1
2

27. 27In general, a conceptualized idea is developed by tested, tried as
a prototype or by feasible study.
A general process in enterprises
Concept
or Idea
Pilot or
Trial
GO!
Value
=1
Value=
10
Value=
100
Innovation creation process
Test sales,
Test run,
Demonstration,
Pilot project, etc.
Mass production,
Mass sales,
Advertisement,
Press release, etc.

28. 28
1) How can we create “1” from “0”?
⇒How can we CONCEPTULIZE knowledge/experience ?
Innovation creation process
Concept
or Idea0 1

29. 29
There must be a __________which generates an innovation!
This means, everyone can create new offerings following the process.
Knowledge
&
Experience
Concept
or Idea0 1
Innovation creation process
!!
PROCESS/FUNCTIONS

30. 30
QUESTION
Please sell a can of coke by 10 dollars
I’m 1$.
Sell me by 10$!

31. 31“Osborn Checklist” is a complete checklist containing many possibilities to
change an existing idea into new ideas, whether close or far from the initial idea.
<Ex: a camera>
What do you CONBINE?
How do you MODIFY?
If we MAGNIFY it?
If we MINIIZE it?
SUBSTITUTE?
REARRANGE?
http://manualthinking.com/ja/tag/osborn-checklist/

32. 32
http://manualthinking.com/ja/tag/osborn-checklist/
PROCESS/FUNCTIONS

33. 33
QUESTION
Please increase the value of a canned coke by 10
dollars by using the Osborn checklist.
I’m 1$.
Sell me by 10$!

34. 34
Knowledge
Experience
Concept
Idea0 1
WILD IDEA BRAIN-STORM
THINK OUT OF THE BOX
Concept of Innovation creation
COMBINE
MAGNIFY
MINIMIZE
SUBSTITUTE
REARRANGE
MODIFY
Framework

35. HOW TO MAKE INNOVATION
HAPPEN
1) How can we make something from nothing ?
✔2) How can we proceed it systematically?
35

36. INNOVATION & MANAGEMENT
SYSTEM
36
CONCEPT
IDEA
HYPOTHESIS
PLANNING
DO TRIAL ……… CHECK
ACTION
Target clients
Expected outcome
Etc.…
Identify gaps
between the plan and
the trial result
What should be
improved?
WILD IDEA
When? Where?
To whom? What?

37. 37
Embed a new idea into __MANAGEMENT cycle (P/D/C/A)_
Innovation & management system
P：Budget
Team-building and roles
Period / term
A goal with tangible elements etc.
D：Implementation what is planned
(It’s just a piece of paper if not implemented)
C：Monitor the result with tangible elements
Feedback from staffs and clients
A：Take countermeasure to improve
Proceed to mass provision

38. STRATEGICAL INNOVATION
FOR SUSTAINING
COMPETITIVENESS
38
Justification of innovation in an organization
→Identify “WHY” for innovation and share with corporative staffs
There must be remarks in embedding innovation
Establish a culture of welcoming wild idea
→Do not deny ideas (positive communication only)
→Establish a system to have ideas from colleagues

39. STRATEGICAL INNOVATION
FOR SUSTAINING
COMPETITIVENESS
39
Leadership and commitment to roll-out
→Let staffs do as they plan and the management secures time & budget
→Check and feedback as a leader
Tangible measurement at planning and evaluation
→Time and budget should be clearly set at the plan phase and
checked the result tangibly
Exit strategy
→Risk hedge against failure (Innovation creation is not a gamble)
→Set a limitation, range, and break-even

40. 40
Problem!
Trouble!
Complaint!
Delay!
Accident!
Challenge!
Needs!
Strategical innovation for sustaining
competitiveness
“Necessity is a mother of innovation”
×Ignore it…
×Hide it…
×Fire the manager!
👍It’s time to change!
👍We have got a good hint!
👍Why did it happen?
👍And _HOW can I change_?

41. INNOVATION CREATION IN
AFRICAN CONTINENT
41
Case: AFRICA is suffering from lots of constraints of resources.
However, there are many innovations taking place.
Let’s watch a video-clip!
① What is the innovation like?
-Q-Drum = Product Innovation
- Combination of water tank + wheel rotation
② What was the origin of the innovation creation?
(Was it problem-oriented? opportunity-oriented? needs-oriented? )
- Problem oriented = Difficult in transporting water for local people
③ What are tangible and intangible impacts generated by the
innovation?
(Contribution to company, or staffs, or clients, or society, or economy)
- Get water easier in their lift by reducing burden and time
④ What might be challenges of this product?
1) Cost = USD 65, which is difficult to afford by local people
2) Durability = Strong enough in daily use in rocky regions

42. WRAP-UP
42
Concept
Idea
Pilot
Trial
GO!
Value
=1
Value=
10
Value=
100
Knowledge
Experience0
WILD
IDEAs
PROCESS
A management process (_P/D/C/A_)
✔Innovation takes place in a certain flow of process.
✔Anything that happens in this flow can be called as innovation
✔Innovation can be _0-1__ or _1+1_

43. IN THE NEXT LECTURE...
• How can we apply this in our organization?
• Any good example and lessons-learnt?
⇒Examples & a case-study
43

44. • Value co-creation process in SMEs
-Organ system to standardize innovation
-Enhancing capacity and capability of SMEs in value co-
creation
-Entrepreneurial leadership in value creation in SMEs
-Case studies in SMEs
( 40 minutes presentation and 20 minutes Q&A)
44
Lecture 5
Continuous Creation of New Values for SMEs

45. AT THE PREVIOUS LECTURE… 45
Concept
Idea
Pilot
Trial
GO!
Value
=1
Value=
10
Value=
100
Knowledge
Experience0
WILD
IDEAs
PROCESS
A management process (PDCA)
✔Innovation takes place in a certain flow of process.
✔Anything that happens in this flow can be innovation
✔Innovation is 0⇒1 or 1+1

46. ORGAN SYSTEM TO STANDARDIZE
INNOVATION
46
Justification of innovation in an organization
→Identify “WHY” & share with corporative staffs
Establish a culture of welcoming wild idea
→Have ideas from staffs & do not deny ideas
Leadership and commitment to roll-out
→Rely on staffs’ creativity & check and feedback by a leader
Tangible measurement at planning and evaluation
→Planning of resources & check and measurement
Exit strategy
→Risk hedge
Embedding innovation should accompany with some remarks

47. ORGAN SYSTEM TO STANDARDIZE
INNOVATION
47
An Innovation process is able to be standardized as shown in the last
lecture. However, the process is for one-time creation.
Innovation should be “sustainable”, which means, new innovations are
expected to come out one after another.
Innovation creation must be repeatedly appeared in an organization.
✔Staffs’ involvement and motivation
✔Efficient use of limited resources
HOW ? Lecture 5

48. ENHANCING CAPACITY &
CAPABILITY OF SMES IN VALUE CO-
CREATION
① QC circle
What are QC circle activities?
QC (Quality Control) circle activities are Small group activities .
whereby people working on the front line carry out improvements to
products, service and work, etc., continuously. While they conduct
autonomous operations, they display creativity and promote activities
aiming for self-development and mutual edification.
48
http://tds-group.co.jp/en/company/qc5s.html

49. ENHANCING CAPACITY &
CAPABILITY OF SMES IN VALUE CO-
CREATION
① QC circle
<Outcome>
• Recognize a problem as problem (See video clip)
• Improve capability of staffs in a frontline
<Process>
• Identify WHY we need this activity.
⇒To improve Quality, cost, time, Morale, and safety.
• Team building
• Identify a challenge to tackle &set a goal by teams
• Proceed in PDCA
49
In a department

50. ⇒New value might be identified based on discussion from
different perspective
⇒No conclusion might be made
if there is a big gap among
each expectation
ENHANCING CAPACITY &
CAPABILITY OF SMES IN VALUE CO-
CREATION
② Cross-cutting task team
• Task team-building from different departments
• Give a certain theme to the team
(Develop a new product, decrease quality defect, etc.)
50
Sales
Production
Design
Account

51. ENHANCING CAPACITY &
CAPABILITY OF SMES IN VALUE CO-
CREATION
③ Intern students’ involvement
Intern students tend to be assigned in simple tasks like copying documents or
answering phone, etc.
That means intern students are not creating value very much, and
enterprises are reluctant to join the internship.
51
Intern students can contribute more to enterprises.
At the beginning of internship, give them a certain subject in their workplace,
and request to make a presentation to the management at the end of
internship.
ex1. “Identify 5 problems and countermeasures in this workplace
ex2. “Develop a new product with new design”
ex3. “Analyze social needs and find a potential solution”

52. ENHANCING CAPACITY &
CAPABILITY OF SMES IN VALUE CO-
CREATION
③ Intern students’ involvement
52
Outcomes
✔Motivating students
✔Students’ contribution to value creation
✔Appearance of new idea from outside
Remarks
✔Students have fresh minds, and not tied with existing.
✔It does not cost much.
✔Management should take the presentations into consideration seriously.
✔Excellent students may be recruited.
Preconditions
✔Pre-setting with institutes and alignment with educational structure
✔Pre-advice to students about such innovation process

53. ENHANCING CAPACITY &
CAPABILITY OF SMES IN VALUE CO-
CREATION
Remarks for capacity building
• Activities are to be regarded as their work
（Within working time, with paid）
• Guidance & facilitation
• Commitments of top-management and his/her boss
• Take proposals into consideration seriously
(Evaluate and judge from the viewpoint of feasibility)
• Try & error, and risk hedge
• Budgeting for the activities or contest style (awarded)
53

54. 54
A JAPANESE COMPANY IS FACING A SERIOUS SITUATION.
HOW DO YOU LEAD THIS COMPANY TO SURVIVE AS A DIRECTOR?
Entrepreneurial leadership in value
creation in SMEs
~Case study~

55. 55
Set a new business strategy to survive
Mission
This company faces a very severe situation because it is losing his biggest
customer and losing his business itself.
Based on what we learned in these sessions, clarify ways to survive by
innovating its business.
【Resources in this company】
● Vehicle careers ● Drivers
● Technical staffs in logistics dept.
● Several offices in Japan regions
● Know-how and system of logistics etc.
【Business domain】
Transportation of new vehicle
⇒ Before separation, this company
transported newly vehicles in the
factories to sales spots in the all regions
of Japan.
WILD IDEAs
Knowledge
experience
What can be new
business
domain?
What kind of
new services
can offer?

56. 56
Don’t you think you can
innovate your organization?
Don’t you think you can be an
innovator?
Seeds of innovation are
around you.
Why don’t we start tomorrow?
Think
out of box
Wrap-up for whole session

57. WRAP-UP FOR WHOLE SESSION
Lecture
1
Lecture
3
Lecture
5
57
✔Innovation means to create ___________________________________
✔Management Innovation means ___________________ innovation in an
organization
✔4 types of innovation
→Innovations can take place everywhere
✔A __________ to create something from nothing (Osborn-checklist)
✔A management process of innovation creation (Plan, Do, Check, Action)
→Innovation is manageable
✔Remarks in embedding innovation creation system in an organization
✔A system to make innovation creation sustainable
→YOU are the innovator

58. Further questions and queries
Mr. Hideyuki EZAKI
Management Assistance Co., Ltd.
@Tokyo
✉ezakiayh@yahoo.co.jp
http://ezakiayh.wixsite.com/management
📶+81 90 8387 0452
58
Taylor-made seminars & workshops for more practical side of innovation
✔Seminar & Workshop for SME-jointed sectorial innovation creation
✔Facilitation & Operational supports for internal innovation creation