Six hints for building an effective business innovation system

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1.Six Hints for Building anEffective Business Innovation System Miguel Senz de Viguera Aizpurua 2007 PMI Distinguished Contribution Award msaenzdeviguera@hotmail.com November 2010Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua2. Introduction: The Shift of the Economic ParadigmOn August 6, 1991, Tim On August 6, 1991, TimThe New EconomyBerners-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 ofWide Web project on theWide Web project on the instantaneous, global diffusion of informationalt.hypertext newsgroup. alt.hypertext newsgroup. and knowledge at practically no cost, the era ofThis date marked the debutThis date marked the debutInternet of the Web as a publicly of the Web as a publiclyThe WWW is the main responsible of theavailable service on the available service on theInternet.Internet.dramatically fast globalization of the economyand of the appearance of an increasingly wildHe wrote:He wrote: competition at any industry during the last years.The WorldWideWebThe WorldWideWeb The main responsible too of the economical (WWW) project aims to(WWW) project aims to growth of the emergent countries that ten yearsallow all links to be made to allow all links to be made toago, practically, didnt 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 wasstarted to allow high energywinnersstarted to allow high energy physicists to share data, physicists to share data, In the New Economy, for the Companies of thenews, and documentation. news, and documentation. EU and USA, from now and for the future, it isWe are very interested inWe are very interested in not possible competing by cost. Competing byspreading the web to other spreading the web to other quality becomes more and more difficult eachareas, and having gatewayareas, and having gateway day for them. Business Innovation is, the onlyservers for other data. servers for other data. Collaborators welcome!"Collaborators welcome!"way that they have to get a sustainablecompetitivenessSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 1/30 3. What are we speaking about when we mention Business Innovation? When Speaking about Business Innovation, werefer ourselves to Product Innovation, Innovationof Processes and Innovation of the Business Model, all togetherThe Innovation of the Business Model, many times the most critical Innovation, also calledBusiness Transformation, demands transformingthe Key Processes of the Organization and/or itsPrimary Infrastructure Most of these Transformations are Enabled bythe Efficient Use of the New TechnologiesSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 2/30 4. 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 ideasare generated, developed, and transformed into value.are generated, developed, and transformed into value.Since it is a process, it can be planned and managedSince it is a process, it can be planned and managedMoreover, when we add information technology to the Moreover, when we add information technology to themix of creativity and knowledge, we get a particularlymix of creativity and knowledge, we get a particularly potent combination: capabilities to represent, deploy and potent combination: capabilities to represent, deploy andtrack knowledge coupled with technologies to promote track knowledge coupled with technologies to promoteProfessor John KaoHarvard Business School collaboration across divergent disciplines and collaboration across divergent disciplines andMIT Media Lab.perspectives. When properly managed, the combinationperspectives. 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 creativeorganizations require specially tailored managerialorganizations require specially tailored managerial systems and processes, to transform creative ideas intosystems and processes, to transform creative ideas into value and discipline for its implementationvalue and discipline for its implementation Professor John Kao Professor John Kao Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua3/30 5. First Hint: Innovate your Business Strategy Strategy Innovation is aboutchallenging existing industry methodsof creating customer value, in order tomeet newly emerging customer needs, add additional value, and create newmarkets and new customer groups forthe organizationSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 4/30 6. First Hint: Innovate your Business Strategy Why Innovating the Business Strategy? All countries and industries are now suffering the NewEconomy of wild, global competition Changes of the business environment and the competition aredramatically deeper and faster each day In the New Economy, the new paradigm, the old models forbusiness strategic analysis and planning are not more valid But Business Strategy should drive the Business InnovationEffort In the new economy, business strategy should be defined,evaluated and refined frequently, through the application of thelast best proven models, tools and techniques for businessstrategic analysis and planningSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 5/30 7. First Hint: Innovate your Business Strategy Focus your innovation strategy on the new strategic options for your business 1980 2001 Michael PorterArnoldo C. Hax Dean L. Wilde IIHarvard Business SchoolMIT Sloan School of ManagementCompetitive StrategyThe Delta ProjectThe NewStrategic SystemLock-InOptions DistinctStrategicPositions Total CustomerBest SolutionsProductGeneric StrategiesThe Delta ModelTraditional EconomyThe New Economy The New EconomyTraditional EconomyThree Distinct Strategic Options Three Distinct Strategic OptionsTwo Generic Competitive StrategiesTwo Generic Competitive Strategies Best Product Best Product Cost LeadershipCost LeadershipTotal Customer Solutions Total Customer Solutions Product DifferentiationProduct DifferentiationSystem Lock-in System Lock-in Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 6/30 8. First Hint: Innovate your Business StrategyThe 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 Enabledthrough Effective Use of TechnologyTotal Customer SolutionsBest Product Based on: Customer Economics Based on: Product Economics Strategy: CooperationStrategy: Best than Competitors Objective: Achieving Customer ShareObjective: Achieving Product ShareSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 7/30 9. First Hint: Innovate your Business Strategy The Three New Distinct Strategic Positions, Main Features and Compared SustainabilitySystem Focus on the Full SystemLock-Inas the Relevant Scope to get Power (The Business, Customers, Suppliers andComplementors)Key Strategic Driving Force Gaining Complementors Shared as the main objective because they are theIncreasedBasis for the Consolidation of the Power SustainabilityTotalCustomerBestSolutionsProduct Its Aim is a Unique Value Proposition toEmphasize Product Orientation Individualized Customers by means of aCustomized Portfolio of Products and ServicesKey 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 KeySuppliers guided by the Individual CustomerThreatExpectations Commodization Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua8/30 10. First Hint: Innovate your Business Strategy Some Strategies towards the New Strategic PositionsSystemMost of theMost of theLock-Inorganizations have organizations haveDominantProprietary not a dominant not a dominantExchangeYellow PagesStandardMicrosoftexchange position,exchange position,eBayIntel cannot get the cannot get theExclusive exclusivity of theexclusivity of theChannelTelefnica channels of channels ofNespresso distribution that distribution that Increasedcustomers use to customers use toStrategy avail themselves of avail themselves of Horizontal Sustainability their products and their products andLow Cost Breadth Fidelity Easy Jet, Clickiaireither, not haveeither, not haveTotal Air Berlinthe possibility to the possibility toCustomerBest develop and getdevelop and getSolutionsProductthe ownership of the ownership ofthe standards of Redefining the CustomerDifferentiation Customer Integration Bang & Olufsen the standards of Relationship Indra, EDSSony Wega the industrythe industry MCIAccenture Not Every organization has the possibility to reach thestrategic position of System Lock-InSystem Lock-InSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 9/30 11. First Hint: Innovate your Business StrategyMCI, an Example of Strategy for Redefining the Customer RelationshipSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 10/30 12. First Hint: Innovate your Business Strategy Fidelity, an Example of Strategy for Expanding theBreadth of Products and Services provided to the CustomerSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 11/30 13. First Hint: Innovate your Business Strategy Business Strategy for the New Economy, ConclusionsThe competencies required to successfully perform in the Best ProductStrategy A Strong Product Base A Solid Supply Chain Infrastructure Strong Internal Innovation Capabilitiesvery often are not enough to create or defend sustainable competitiveadvantages in the new economyThe transformation that any company should undertake toThe move away from a Product-Centered Mentality towards a TotalProduct-Centered Mentality towards a TotalCustomer Solutions Position, and towards a System Lock-InSolutions 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 thestrategic alliance between IKUSI and ORMAZABAL are examples of Basquestrategic alliance between IKUSI and ORMAZABAL are examples of BasqueCompanies, strategically trying to move from a position of "Best Product" towardsCompanies, 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 Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 12/30 14. Second Hint: Implement an Efficient, Idea Management ProcessImplement an Efficient, Structured Process for: for:I IIIII Encouraging the Encouraging the Evaluating, Prioritizing Evaluating, PrioritizingBuilding an Efficient Building an Efficient Generation, Capture and Generation, Capture andand Selecting the ideas and Selecting the ideasDevelopment Process thatDevelopment Process that Refinement of Ideas forRefinement of Ideas forthat have the greatestthat have the greatestProvides Excellence in theProvides Excellence in the Innovation fromInnovation from potential to add value topotential to add value to Development and Development and Customers, EmployeesCustomers, Employeesthe Business the Business Implementation of theImplementation of theand other Stakeholders ofand other Stakeholders ofSelected Innovations Selected Innovationsyour Organizationyour Organization ProposalsProposalsSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 13/30 15. Second Hint: Implement an Efficient Idea Management Process Keys for Boosting the Generation of Innovation IdeasCommunicate that creativity and innovation have high priority in the organization. The High Management demonstrably should boost innovation If no one believesProvide free education and training on creativity and creative problem solvingthat your firm isserious 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 ideasseriously Reward rather than discourage creative thinking. Show thatIf no one knowsfailures are tolerated, indeed they are seen as valuableabout your ideas learning opportunities.campaign, no one will Set aside some additional budget for refining and testingparticipatethe more radical ideas Small rewards forImplement and communicate a system to gather and ideas can be aprocess the innovation ideas. The goal: not one idearemarkably powerfulwithout answer from management means of promoting Communicate your process, for assessing, filtering ideasparticipationand deciding which ones to invest inSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 14/30 16. Second Hint: Implement an Efficient Idea Management Process Example of Practices for Boosting the Generation of Innovation Ideas IN-HOUSE ENTREPRENEURSHIP PROGRAMMMESSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 15/30 17. Second Hint: Implement an Efficient Idea Management ProcessWhat 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) InitiativesPortfoliocomposed 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 theAllSelected cases) to select the innovation proposalsInitiativesThe ISC establishes and publishes, within theInitiativeIdeasorganization, the scoring system applied, that takesDevelopmentinto account, at least the following criteria to evaluateFunnel the innovation proposals Their Strategic FitOnce one innovation initiative has The Estimation and Availability of InvestmentOnce one innovation initiative hasFunds, Human and other Resources requiredbeen 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 isbudget for its development is A Qualitative and Quantitative (IRR, NPV, PayassignedassignedBack,...) Estimation of their Adding Value toThe rejected ideas are recorded The rejected ideas are recordedthe Business in an innovation ideas repositoryin an innovation ideas repositorywhere they can be revisited to bewhere they can be revisited to be Their Risks Evaluation combined with other ideas orcombined 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 oneAcquired by the implementation of the idea Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 16/30 18. Second Hint: Implement an Efficient Idea Management Process A Model for Analyzing the Sustainability of Innovation InitiativesCoer s mThe sustainability of the advantage m is An pe to sal tit achieved by an innovation depends on us alyC n As ys or is sA yThe Replication TimeofBa m mrs ce rie nrri etr Its assessment requires an analysis of the ar fere er i cinnovation project itself and the changesB es Prrequired in the infrastructure of the business. Some WEB-based innovations can be replicated inSustainability weeks but the changes in the primary infrastructure of the Advantage achieved of the business required for its implementation canby an Innovation take years. Example Compaq against DellThe 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 ProjectThe Barriers of PreferenceAnalysis Their identification requires assessing if our customers will remain loyal to our organization A Model for Sustainabilityunless a competitor offers to them a better Assessment of Innovationalternative. Investments Example: Amazon has built up high barriers of preferenceSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 17/30 19. Second Hint: Implement an Efficient Idea Management Process How is the Development Process of the Innovation Leaders?The Development Funnel InnovationInnovationDevelopmentDevelopment The Development Funnel is the graphical Steering Steering SteeringSteering representation of the Development Process Committee CommitteeProgram andProgram and Committee Committee Project ProjectA Development Steering Committee, (DSC) that Managers Managers can be the same or another committee, than theISC, is responsible for:MultifunctionalMultifunctional Providing Guidance during the wholeProject TeamsProject TeamsDevelopment 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 FunnelManagement of the Development Funnel Supervising the Management and Administration of the Resources andProject Management Professionalism andProject Management Professionalism and Programs Budgets Frequent Prototyping are Key SuccessFrequent Prototyping are Key Success Making Recommendations to the TopDrivers for the Process of Development Drivers for the Process of DevelopmentManagement, Including Proposals for Program and Project Changes or its TerminationSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 18/30 20. Second Hint: Implement an Efficient Idea Management Process Example: The Model of WINNING BOOSTIn the Model of WinningProgram andInnovation Boost, Business Strategy is ProjectPrograms/Projects driving: The Management of theManagementI II III IVMultifunctionalProject Teams Portfolio of InnovationInnovationProposals SteeringCommittee The Management of theDevelopment ProcessInnovation The Internal R&D ImplementedProposals Innovations The HHRR DevelopmentPrograms Development New Competencies Funnel The Acquisition of ExternalTechnology and Know How Business StrategyTechnology and Know There is a unique, Innovation HowSteering Committee, New TechnologiesAcquisition responsible for Managing theIn-Company R&DIn- Portfolio of Innovation Ideasand HHRRand its Development ProcessDevelopment StrategyWB Innovation Development Model 2007 Winning Boost Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua19/30 21. Second Hint: Implement an Efficient Idea Management Process Apply Frequent Prototyping for Faster and Reliable DevelopmentWhen Frequent Prototyping of Products and Processes, isapplied, the feedback from the end users results in an iterativerefinement of the model until it finally meets the users needsand expectations. Phase I Phase II Phase III Phase IVAdvantages of Frequent Prototyping of Products andProcesses User requirements easier to determine The developments 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 processAdvantages of Frequent Prototyping of Processes andBusiness 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 processFast 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 andbusiness models, fast and cost efficiently business models, fast and cost efficientlySix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 20/30 22. Second Hint: Implement an Efficient Idea Management Process Improve the Competency for Project Management of your OrganizationDevelopment, the final Stage for SuccessfulImplementation of Innovative Ideas is mainly a task ofperforming projectsProject Management Professionalism is Key for: Ensuring that the deliverables will meet the needs and expectations of the projects stakeholders and the Companys quality standards Identifying early the projects 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 projects 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 ManagementAssign to the Most Competent, Project Managers the Responsibility for ManagingAssign to the Most Competent, Project Managers the Responsibility for Managingyour Key Innovation Projectsyour Key Innovation Projects Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 21/30 23. 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?SpecificationSpecificationHow is it? How is it? Analysis of opportunities of "I-Operations" "and" I-Marketing " , enable identifyingDistributionDistribution Who distributes it? Who distributes it? pragmatic paths to increase sales and competitiveness of the organizationAvailabilityAvailability 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-ServicePaymentPaymentCredit? Credit? When do you want it?DeliveryDelivery When do you want it?At the selection of the technological At the selection of the technologicalAcceptanceAcceptance Fully received, satisfied?Fully received, satisfied? platform to support the innovation of platform to support the innovation ofInstallation Ready to work? your processes or business model your processes or business model Dont rely totally on advice from InstallationReady to work?PerformanceHow does ititwork? How does work? Dont rely totally on advice fromPerformance System Suppliers. Many times their System Suppliers. Many times theirImprovement Improvement Anything else needed? Anything else needed? advice is not free of conflicts of advice is not free of conflicts ofMaintenanceMaintenance, repair required? Maintenance, repair required? interest interest Ask for references of success,MaintenanceReturnReturn Sale Finished? Sale Finished?Ask for references of success, check and analyze them personally check and analyze them personally Apply, proven decision models, toAssessmentAssessment Provided Value ?? Provided Value Apply, proven decision models, to facilitate your decision facilitate your decisionI-Service Opportunities Model I-Service Opportunities ModelSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 22/30 24. Third Hint: Make an Intelligent Use of the Information TechnologiesA Model of Web-Based Transformations of Business ProcessesDavid Feeny (Oxford University) ...Process TransformationsEnabled by WEB-Based Technologies HighReengineering of Reengineering of the Primary Banking, Insurance,the PrimaryE-Operations Opportunity Model Infrastructure andInfrastructure and Pharmaceutical,David Feeny, Oxford University Publishing Companies... Information ContentKey BusinessKey BusinessProcessesin the Product ProcessesTo improve Product Availability and Functionality Development Time Cost Structure Intensity of Information along the ExtendedHigh Supply Chain (ESC) Low Info Dis Companies withrm pe Va atio rsiogeographicallyVirtual IntegrationVirtual Integration Companies with lue n a n dispersedof the ESC Ch lon of homogeneous activities.of the ESCproducts includingain g thundreds or he Example: McDonalds To improve thousands of Product Availability componentsReinforcing theReinforcing theand Functionality (Automotive,Parenting Value Parenting Value Development Time Aerospace, Cost Structure Appliances, To improveHardware ...) and Sharing Learningcompanies of "Build High and Best Practices.to Order " Economies of Scale Cultural Consistency Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 23/30 25. Fourth Hint: Adopt the Open InnovationOpen versus Closed InnovationBoundary The Closed Innovation Model of the Firm The Company generates, develop andcommercializes its own ideas. The This philosophy of self-reliance dominatedMarketthe innovation processes and R&Doperations of many leading industrialcorporations for most of the 20th centuryInnovation DevelopmentProposals Closed Innovation Model BoundaryThe Open Innovation Modelof the FirmNew The Company commercializes both its own Market ideas as innovations from other firms Current The Organization seeks ways, to bring its Marketin-house ideas to the market, by deployingpathways outside its current business The boundary between the Company and itssurrounding environment is porous,enabling innovations to move between theInnovationDevelopment twoProposals Open Innovation ModelHenry W. Chesbrough (HBS) Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 24/30 26. Fourth Hint: Adopt the Open InnovationWhy Adopting Open Innovation?False Beliefs for Closed InnovationRealities to adopt Open Innovation The talented people in our industry Not all of the smart people work for us, sowork for our organization we must find and tap into the knowledgeand expertise of bright individuals outsideour company To profit from R&D, we must discover, External R&D can create significantdevelop and commercialize itvalue. Internal R&D is needed to claimourselves some portion of that value If we discover it ourselves, we will get We dont have to originate the research into the market first order to profit from it If we are the first to commercialize an Building a better business model is betterinnovation, 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 andour industry, we will win external ideas, we will win We should control our intellectual We should profit from others use of ourproperty (IP) so that our competitors IP, and we should buy others IP if itdont profit from our ideas advances our own business modelOpen innovation represents, in part, a reinvention of the organizational models that weOpen 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 moreIn the next few years, as connectivity becomes ubiquitous, the shift to more distributed, more networked and more open organizational models will becomedistributed, 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 Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 25/30 27. 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 togreatest 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 freshstill youngbusiness models. Companies likeOrange, Philips andA 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 suppliersHewlett Packard aremaking of it aStart small, with no more than two or three organizations. Some of your suppliersstrategic priority or clients can be good candidates to start with or clients can be good candidates to start with Virgin Atlantic, andProcter & 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 theirOpen Innovation The aim of these committees is to extract investable propositions for theThe aim of these committees is to extract investable propositions for thePrograms 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 arenot enough Emphasize more on valuable delivery partnerships than on passive ownership of IPEmphasize more on valuable delivery partnerships than on passive ownership of IP Periodically use the lessons learnt to refine the process and extend it to otherexperiences toextract commonPeriodically use the lessons learnt to refine the process and extend it to othergood practices for collaborating organizations collaborating organizations The process, matures when both organizations find several opportunities to makeits implementation The experiences ofThe process, matures when both organizations find several opportunities to makesuccess are notinvestments or partnership decisions in collaborative business models like jointinvestments or partnership decisions in collaborative business models like jointconsistent, becauseventures or delivery partnershipsventures or delivery partnershipseach company hasstarted Open A welcome by-product of these programmes is that the communities stay activeA welcome by-product of these programmes is that the communities stay activeInnovation in itslong after the programme has ended, keeping the conversations going, and valuelong after the programme has ended, keeping the conversations going, and valueown wayflowingflowing Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 26/30 28. 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 toKey Features on Change Management overcome the employees overcome the employeesEnrolling 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 CoachingCoaching Challenging peoples self-limiting beliefs Recognition to effort Providing education and training, for the requiredRecognition to effortknowledge, skills and behaviorsand celebration ofand celebration of Building self-esteem and trustsuccessessuccesses Energizing, to sustain the change Communication,Communication, Building and sustaining peoples energyCommunication,Communication, Celebrating successesCommunication!Communication! Giving recognition1/30Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 27/30 29. Fifth Hint: "Apply Change Management to get an Innovative Organization Example of a Communication Tool: Map of the Innovation System of SIEMENSThe Innovation System at SIEMENS: Taking inputs from technology, competitors, and market intelligence and driving these into the planning for new product and new processes development1/30 Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 28/30 30. Sixth Hint: Continuously Update your Professional CompetenceA plan with six activities to sustain yourA plan with six activities to sustain yourprofessional competence throughout lifeprofessional competence throughout life Read, quarterly, a book recently published about Read, quarterly, a book recently published aboutInnovation ManagementInnovation Management Subscribe and read, at least three prestigious Subscribe and read, at least three prestigiousmanagement magazines ("Harvard Business Review",management magazines ("Harvard Business Review","MIT Sloan Management Review" and the online"MIT Sloan Management Review" and the onlineThe current changes of themagazine "www.innovationmanagement.se" aremagazine "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 continuingday, are making challenging education programs of prestigious academic institutionseducation 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 academicsharing programs of the alumni of the academiccompetence, if they dont institutions where you studied and the professionalinstitutions where you studied and the professional work every day to update associations where you are memberassociations 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 audienceand/or write, and get published in a professionaland/or write, and get published in a professionaltheir professionmagazine, an article about Innovation Management atmagazine, an article about Innovation Management atleast once a yearleast once a year Build and sustain a network of prestigious management Build and sustain a network of prestigious managementprofessionals and experts on innovation managementprofessionals and experts on innovation managementfrom different industries, for sharing knowledge andfrom different industries, for sharing knowledge andexperiencesexperiencesSix Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 29/30 31. What says about these issues a Global Innovation Champion?Successfully Managing Innovation requires: Implementing collaborative and social networks forcapturing requirements and ideas, from colleagues,customers and partners, into products and processes Establishing consistent, repeatable processes for translatingconcepts into products.The final stage of Making role-based data available to all stakeholders duringany 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, isthe successful Managing intellectual property including patent assets andimplementation of the protection of specialized proprietary knowledge.innovative Managing the project portfolio, tracking execution and ideasalignment with corporate mission and competitive goals, andmaking time-to-market decisions via flexible scheduling. Maintaining effective communications across multiple sitesand organizations. Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua 30/30 32. Six Hints for Building anEffective Business Innovation SystemThe author authorizes the integral reproduction of this presentation Miguel Senz de Viguera Aizpurua2007 PMI Distinguished Contribution Award msaenzdeviguera@hotmail.comNovember 2010 Six Hints for Building an Effective Business Innovation System - Miguel Senz de Viguera Aizpurua

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