Develop Innovation Globally
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1. Innova)on is more than new products
The innova)on wheel helps to visualize the innova)on direc)on
Source: Mahon Sawhney 2002
The example of Dell
The example of MAN Ferrostaal
R&D
Networking
Channels (Where)
Logis8cs/ Supply Chain
Value Chain Processes (How)
Revenue Model
Customer Experience
Customers (Who)
Solu8ons
PlaHorms
Products (What)
Source: Mahon Sawhney 2002
The example of ???
R&D
Networking
Channels (Where)
Logis8cs/ Supply Chain
Value Chain Processes (How)
Revenue Model
Customer Experience
Customers (Who)
Solu8ons
PlaHorms
Products (What)
Source: Mahon Sawhney 2002
2. Aligning strategy and innova)on is key
• Where to compete? • How to compete?
Strategy
• Do people have the necessary competencies?
• Are they mo)vated?
Human Resources • What are the norms, values,
aMtudes, and behaviors needed?
Culture
• Structure? • Controls? • Rewards? • Careers?
Formal Organiza)on
• The 3-‐5 concrete things you need to do to execute your strategy
Cri)cal Tasks
Following: Tushman, O'Reilly: Winning through Innova.on – A prac.cal Guide to Leading Organiza.onal Change and Renewal
3. Strategy AND innova)on depend on your )me horizon
Three horizon model of sustainable business development
Business volume (cumulated)
Time
Horizon 1
Horizon 2
Horizon 3
Tasks of management
Create viable op)ons for fu-‐ ture businesses
Build and grow start-‐up businesses
Protect and expand core businesses
Today
Source: Baghai/Coley/White, 1999
4. Cri)cal tasks will follow your decision
Characteris)cs and challenges of three horizons
Characte-‐ ris8cs
Management challenges
• Core business of today
• Limited growth poten)al
• High profit and cash flow
• Fast growing business
• Start-‐up phase of lifecycle
• High investment required
• Op)on for business of the future
• More than just an idea
• Limited invest-‐ ment
• Protect and expand market posi)on
• Incremental innova)on
• Commodi)za)on and restructuring
• Build and grow market presen-‐ ce
• Bring innova)on to marktes
• Seed many different op)ons
• Develop entre-‐ preneurial behavior
Horizon 1
Horizon 2
Horizon 3
5. You have to seperate horizon 3 innova)on teams
4 organiza8onal designs to develop and deliver innova8ons
General Manager
MfG Sales R&D
General Manager
MfG Sales R&D Emerging Business
Func8onal designs Unsupported teams
Cross-‐func8onal teams Ambidextrous organiza8ons
General Manager
MfG Sales R&D
Exis8ng Business
Emerging Business
MfG Sales R&D
General Manager
MfG Sales R&D
The scope of the ambidextrous organization
Alignment of: Exploitative Business Exploratory Business
Strategic intent cost, profit innovation, growth
Critical tasks operations, efficiency, incremental innovation
adaptability, new products, breakthrough innovation
Competencies operational entrepreneurial
Structure formal, mechanistic adaptive, loose
Controls, rewards margins, productivity milestones, growth
Culture efficiency, low risk, quality, customers
risk taking, speed, flexibility, experimentation
Leadership role authoritative, top down visionary, involved Source: O'Reilly III / Tushmann, HBR April 2004
Emerging Business
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)?
7. What is the purpose of your R&D site?
Home-‐base exploi)ng Home-‐base augmen)ng
Source: Kuemmerle, W. (1996)
Exploit exis)ng stock of knowledge Generally located close to manufacturing site Challenges: • Manage growth • Enable careers • Respect btw. central and
decentral R&D
Develop new knowledge Close to ins)tu)ons of scien)fic excellence Challenges: • Finding the right leader (from
outside?) • Knowledge transfer back to
headquarter
Underlying challenge is the transfer of knowledge. Some ideas: • Temporary exchange of people • Inhouse science fairs • Transperent performance systems
8. Understanding your culture is key to kick-‐start innova)on
network Informality Fun
communal Teamwork
Participation
fragmented Cognitive Conflict
mercenary Market
pressure
Solidarity
Sociability
Low
Low
High
High
Adapted from Goffee/Jones
• unplanned connections • diversity • slack • radical • slow implementation
• individuals • creative and completers • slack through autonomy • recruitment key
• complex • long term • innovation all over • visionary leadership
• planned, measured • incremental • separated • no slack • fast implementation
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
