Process Innovation

Capability/Talent/Ability = Knowledge & Skills Innovate new / improved process flows Innovate new / improved process flows Recall Existing Knowledge Recall Existing Knowledge Materialise ideas: Explicit Knowledge + ICT Technology Materialise ideas: Explicit Knowledge + ICT Technology Virtualised Process Innovation: Digital Services Business Models Sources: Individuals & communities of Practice

Process Innovation Forms eServices  Digital Workflows + ICT Technology + People Interactions + Physical Products Business Architectures of Firms business models / operations Different business models / operations across locations; connecting people & resource networks; trading/selling digitally worldwide……..

Process Innovation Value Adds eServices are hard to duplicate  Creates sustainable competitive product or service advantage New business models create new types of business organisations eg e-Bay or virtual shopping e-Newspapers or magazines Telemedicine models Internet Banks eg ING

Reading: Sony Vaio Laptop Inquiry Q: Why geographic concentration of R&D is critical? Method:Case study analysis Findings: Institutional Views Social networkers’ Views Knowledge Managers’ Views Innovation is most likely when people can be in close proximity with each other

Institutional Views Collaborating for creating/sustaining Location Based Competition Country specific Regional Mix of the above Reason 1 Reason 2 Enabling time to market learning & harnessing talents to produce innovative outcomes

Social Networkers’ Views Social Network Theory Granovetter (1985) Communications is embedded in knowledge exchange Knowledge Communities Trusted Relationships Varying cultural contexts drive preference for nature & style of comunications & K-exchange

Knowledge Managers’ Views Tacit Knowledge Theory (Polanyi (1966); Nonakka & Takeuchi (1995) and others Tacit KnowledgeCodified (explicit) Knowledge Digitalised Knowledge Influenced by interpersonal contacts, rapport, trust, interactions …….

Case Analysis Findings Japanese Culture  Stable business relationships & networks Japanese Culture  Stable business relationships & networks  Close interaction between Sony’s production & R&D units  Keiretsu group - companies with interlocking business relationships and shareholdings

Case Analysis Findings Sony’s Innovation Capacity Strength Sharing tacit knowledge Dynamic interaction between tacit & explicit knowledge workers

Case Analysis Findings Sony & its Supply Chain Stakeholders Strategic R&D Partnership in Locations that reflect Sony’s multi-site value chain configuration strategy

Specificity of Innovation R&D Processes Mass Production 1.Strategic procurement 2.Agile product development Gives additional customer value add – watching movies, powerful graphic design for games, music access, etc Difficult to imitate – process innovation Differentiate from competitors’ products/services 3.Involvement of customers in design & prototyping 1.Value chain strategies development to bridge design and mass production Knowledge & workflow coordination between designers & producers All related divisions involved in knowledge and workflow coordination eg marketing, executive management, etc 2.High TQM in production

Key Success Factors 1 – Managing Complexity Availability, integration & management of multi- disciplinary technical work to design the product 1 – Managing Complexity Availability, integration & management of multi- disciplinary technical work to design the product 2 – Interdisciplinary Engagement The development project engaged people across business units – from executives, to marketing & production, etc 2 – Interdisciplinary Engagement The development project engaged people across business units – from executives, to marketing & production, etc 3 – Product Proof of Concept Prototyping & testing involves many stakeholders aiming for not just functional features, but also emotional contexts through aesthetic concept & style 3 – Product Proof of Concept Prototyping & testing involves many stakeholders aiming for not just functional features, but also emotional contexts through aesthetic concept & style

Lecture & Reading Relationship Sony case study Communications underpin R&D knowledge exchange  requiring people to be in close proximity Multi-disciplinary, cross stakeholders engagement and often multi-site process engineering / innovation activities are crucial to create unique, reliably functional and aesthetically meaningful products