Presentation on theme: "What have we learned so far?"— Presentation transcript:
1What have we learned so far? Innovation is important for competitive advantage.Innovation is a complex process leading to innovative outcomes that benefit the company and the consumer.Innovations can be categorized in many ways, internally and externally.Innovation involves solving problems and creating value.
2Innovation can be radical (blue ocean) or incremental (red ocean). A company needs to define it’s innovation strategy.We have looked at examples of creating a culture of innovation (Best Buy), of business model innovation (experience-wine), and considered the importance of learning.
3Tonight… Discussion of processes for innovating, and an example. Stamypor: applying a formal stage gate process to both radical and incremental innovations.
8Research Laboratories (Labs) Informal Innovation Processes Experiment with solutions > find a problemExample: Think TanksCommunity of experts, intellectuals, scientists, or other appropriate individuals brought together for the purpose of “thinking” about prescribed topics. A think tank's purpose is to raise awareness about certain topics and "gather" communal thoughts toward that topic.Research Laboratories (Labs)
10Collaboration:… is a purposeful, strategic way of working that leverages the resources of each party for the benefit of all by coordinating activities and communicating information within an environment of trust and transparency.… opens up the possibility of accessing the resources, knowledge, and relationships the other party has and using both parties’ resources for mutual benefit. It also raises the specter of counting on someone who has no stake in your success.Collaborative Network Management: An emerging role for alliance management. Volume 6 in White Paper Series, Collaborative Business by Jeffrey Shuman and Janice Twombly, The Rhythm of Business, April 2008.
11Collaboration Innovation Is prevalent.Requires:TrustCommunicationConnections
12Innovation suffers from Opportunism Risk Collaborative Innovation: Implications of Partner Choice on Risk & RewardInnovation suffers from Opportunism RiskFirms forming R&D alliances with prior partners benefit from the smoothness of technology transfer, which comes from both reduced information asymmetry and increased trust. But reduced information asymmetry can also lead to increased risk of partner opportunism.Innovation benefits from Greater Trust and Reduced Information Asymmetry.Monetary risk & returnStrangerAcquaintanceFriendNumber of PriorPartnerships“Friends, Acquaintances, or Strangers? Partner Selection in R&D Alliances” by Li, Eden, Hitt & Ireland. Academy of Management Journal, 2008, Vol. 51:2,As the number of prior relationships increases, synergies from complementarities in information symmetry decrease and eventually are exhausted. Eventually, the prior partners share full knowledge about each other, the alliance is successfully complete, and the needs gap no long exist, in that the two partners no longer have any relevant information that may be applicable for future alliances.The reduction in information symmetry also increases a firm’s vulnerability to opportunistic behavior by a prior partner, raising opportunism risk for the local firm.
13Innovation Communities Connecting your company with people outside the organization “whose passions match your problems” (Gary Hamel).
14Larry Huston, former vice president for innovation and knowledge at P&G “You can’t possess all the science and brilliant minds … In our R&D organization we have 7,500 people in 150 science areas, but there are 1.5 million high-quality people outside P&G. It doesn’t take a genius to figure out that if you can engage the brains of your 7,500, plus the key ones from that 1.5 million, you can build better products.”
15Examples of Innovation Communities P&G’s InnovationNetScientific networks such as InnoCentive, NineSigma, UTEK’s U2BGoogle Labs where services like Google Maps, Google Desktop, Google News Alerts and Google Video first startedIBM’s AlphaWorks
16Contribute to progress in mobility What company is this?Contribute to progress in mobility "We have one profession and one mission: contribute to long-term progress in the field of mobility."
17MAKING IT HAPPEN: MICHELIN CORPORATION Sells over 200 million tires per year in 170 countries17.2% of World Tire Market2007 Net Sales = 16,867 million euro2007 Net Income = 774 million euro2007 Operating Income = 1,645 million euro2007 Operating Margin = 9.8%
18MISSIONTo make a sustainable contribution to progress in the mobility of goods and people by constantly enhancing freedom of movement, safety, efficiency and pleasure when on the move.
19STRATEGYTo achieve its objectives in an ever demanding environment, Michelin focuses on three levers:Keep delivering ever higher-performing products and services to optimize professional customers’ value and bottom line through customization and innovation;Accelerate expansion in the higher-growth markets;Improve competitive position.
20INNOVATION STRATEGY INNOVATE in order to… LEADERSHIP THROUGH INNOVATIONEver since Michelin was first set up, the dynamics of innovation and the search for new technologies for the customer's benefit have been at the core of Michelin's strategy and success.INNOVATE in order to…Leverage differentiation, Accelerate growth, Strengthen competitiveness
21INNOVATIONHow do innovations like this come about in a large, structured organization?Formal Processes (Ladoux Technology Center)Informal Processes (Think Tank)Partnerships
22Example The Michelin X One tire Showcased at the Beijing International Bus Trade Show, the MICHELIN X One tire was elected as the original equipment of the new bus fleet serving Beijing International Airport. The key benefits built into the urban version of the tire are comfort, grip and a noiseless ride.
23Black donuts? How are tires made? What comes after the radial tire? Tires for …?
25STAMYPOR What type of innovation is Stamypor? Why have a separate NBD unit?What should Rein Nieland report to the NBD board?
26Stamypor Progress Against Criteria Stamypor could not be framed within the charter of one of the BGs.Technology fits the company culture, strategy and competencies.Synergy in raw materials, technology and market.Fits within the NBD portfolio.No high upfront costs.