1. Göran Roos

2. European definition is SME up to 250 employees; Mid-sized firms are more than 250 employees and up to 1bn in turn-over. The average German mid-sized firm has 600 employees, turns over 100 million and export 62% of their turnover; 70% are family owned, 70% are based in local/rural communities and they are on average 70 years old as firms; they have on average 5% of turnover in R&D. The mid-sized firms contribute 50 % of Germanys gross domestic product (GDP, $3.3 trillion). They have a synergistic relationship with the institutional structure that supports high value added manufacturing in Germany 80 % of the worlds SME & Midsized leaders are based in Germany and Scandinavia © Copyright Göran Roos 2012

4. Dominate global segments Global market footprint + specialisation = market leadership Stay away from large, price-driven volume markets Compete through superior value not cost Technology Leadership Masters of incremental innovation Very good at innovation Obsessed with leading edge technology Very strong, mostly domestic, research network [internal plus external] Operational effectiveness Sophisticated production networks Careful choice of outsourcing and offshoring [less then you think] Close connection between R&D and Manufacturing Highly flexible work arrangements worldwide Learning organisations and Kaizen masters Top class management capability © Copyright Göran Roos 2012

5. Stewardship/Custodian: Long-term survival and intergenerational transfer as key objective Profit is an inevitable consequence of serving customers better than anyone else Focus on long-term sustainability with key stakeholders: customers; employees; suppliers and community at large Companies as communities: high degree of mutual trust and loyalty leading to an implicit life-long contract contributing to a high performance work place culture Leadership through example: Domain knowledge Passion for the business Flat hierarchies and informal channels of communication Bottom-up management style High degree of cross compartmental cooperation © Copyright Göran Roos 2012

6. ExperiencedEntrepreneurial Leadership with Ambitious Goals ExperiencedEntrepreneurial Leadership with Ambitious Goals DepthDepth DecentralisationDecentralisation Knowledgeable, Loyal Low turn-over Employees Knowledgeable, Loyal Low turn-over Employees FocusFocus IntegratedInnovationIntegratedInnovation GlobalisationGlobalisation Specific Closeness to the customer Specific Closeness to the customer High Performance High Quality Product-Service-SystemOffering High Performance High Quality Product-Service-SystemOffering Risk reducing and Innovation driving partnerships with research and expertise centres Risk reducing and Innovation driving partnerships with research and expertise centres Roos, G. and Burton, K., Integrated Innovation driven by emerging technologies, Adelaide Thinker in Residence 2011 Innovation Process: Underpinning Subject Matter Report, February 1 st 2012, Department of the Premier and Cabinet, Adelaide, Australia © Copyright Göran Roos 2012

7. Edquist, H., 2011, Intangible investment and the Swedish manufacturing and service sector paradox – what can Europe learn?, Research Institute of Industrial Economics, Stockholm, Sweden © Copyright Göran Roos 2012

8. Extracted from slide No. 17 in Green, R., 2011, Future of manufacturing – management, innovation and productivity, Presentation, Australian Chambers Business Congress Gold Coast Convention Centre, June 1-3 2011 © Copyright Göran Roos 2012

9. My responsibility as an employer is to make you the employee more employable during your tenure with me My responsibility as an employee is to make you the employer more successful during my tenure with you We both want more firms that are more successful We differ on how to distribute the economic profit and social good that results from a successful firm © Copyright Göran Roos 2012

10. Innovation& Effectiveness Focus Imitation& Efficiency Focus Innovation& Effectiveness Focus Imitation& Efficiency Focus © Copyright Göran Roos 2012

11. Innovation Management Innovation Strategy & Innovation Management System Innovation Management Innovation Strategy & Innovation Management System Innovation to Create Value Through Efficiency Improving Innovations, Technology Based Innovations, Design Based Innovations, Art Based Innovations and Hermeneutic Based Innovations Innovation to Create Value Through Efficiency Improving Innovations, Technology Based Innovations, Design Based Innovations, Art Based Innovations and Hermeneutic Based Innovations Innovation to Appropriate Value Through Effectiveness Improving Innovations and Business Model Based Innovations Innovation to Appropriate Value Through Effectiveness Improving Innovations and Business Model Based Innovations Innovation Enablers Monetary, Physical, Relational, Organisational and Competence Resources deployed in an effective and efficient system Innovation Enablers Monetary, Physical, Relational, Organisational and Competence Resources deployed in an effective and efficient system Roos, G., Integrated Innovation – The necessary route to profitability, in B+I Strategy (ed.), Estrategia, Bilbao, Spain, December, 2011, pp. 51-58 © Copyright Göran Roos 2012

12. Resources Resource Deployment System © Copyright Göran Roos 2012

13. Owned or Controlled By the Firm Owned or Controlled By the Firm Owned or Controlled By the Firm Additive Additive Owned or Controlled by the Other Party Owned or Controlled By the Employee © Copyright Göran Roos 2012

14. MONETARY PHYSICAL RELATIONAL ORGANISATIONAL HUMAN MONETARYPHYSICALREL.ORG.HUMAN Knowledge codification, new IP Building & developing relationships Developing prototypes Sales of man-hours Sale of IP, processes & knowledge Produce By numbers CRM Developing competence through use Relationship arbitrage Use of other companys assets Access to process Co-learning Sales of products Design & Chemical effect New Processes New Knowledge Investment in assets Investment in building links Investment in brands, image and systems Recruitment training, conditions Training Chemical synthesis Word of mouth Systems generate IP Investment In financial instruments © Copyright Göran Roos 2012

15. Efficiency Improving Innovations Technology Based Innovation Design Based Innovation Art Based Innovation Counselling Based Innovations © Copyright Göran Roos 2012

16. All the classical techniques e.g. Business Process Reengineering, Lean Manufacturing etc. All with the objective of reducing transaction costs © Copyright Göran Roos 2012

17. EmotionalExperiencePractice

18. Trajectories of Existing Core Technologies Trajectories for potential substitute technologies Technology Convergence © Copyright Göran Roos 2012

19. Tomorrows Manufacturing Base GenomeGenome AtomsAtoms BitsBits NeuronesNeurones © Copyright Göran Roos 2012

20. Changes the economics of making customised components. Big threat to logistics firms: why would a company airfreight an urgently needed spare part from abroad when it could print one where it is required? It lowers the cost of entry into manufacturing by reducing the amount of conventional industrial infrastructure – machine tools, testing equipment and related factory hardware – that companies require to be considered serious industrial players Requires re-thinking existing design methodology and is a perfect complement to a Living Lab The quality of ideas becomes more important than the scale of production but brilliance alone will not suffice. Good products can be copied even more rapidly with 3D printing, so battles over intellectual property will probably become even more intense. It will be easier for imitators as well as innovators to get goods to market fast. Competitive advantages may thus be shorter-lived than ever before and although the competitive advantages of large and well organised global manufacturers will remain, the artisan production worker will return to prominence. Mass personalisation becomes a practical reality Enables some manufacturing to return from China and elsewhere. © Copyright Göran Roos 2012

21. The objective of Design is to achieve behavioural change in the user which is Desirable from the users point of view [i.e. they are better of in their own opinion after the change] Beneficial to the supplier Positively impacting other stakeholders © Copyright Göran Roos 2012 Source: Nyberg, M. and Lindström, M. (2005), Muotoilun Taloudelliset Vaikutukset, ETLA, Discussion papers No. 982, p. 20.

22. Art has numerous opportunities to add value to business. In consumer goods art can add to the perceived authenticity of the good and thereby increase its value in the eye of the consumer. This is critical in the luxury goods end of the spectrum. © Copyright Göran Roos 2012

23. Svejenova, S.,Mazza, C. and Planellas,M., 2007, Cooking up change in haute cuisine: Ferran Adrià as an institutional entrepreneur, Journal of Organizational Behavior 28 (5), 539 © Copyright Göran Roos 2012

24. Innovating in this space becomes a process, the aim of which is to generate, as a creator of an object, in the mind of the interpreter (consumer/customer) a specific set of emotions, intentions and thoughts as well as physical change. © Copyright Göran Roos 2012

25. EmotionalExperiencePractice

26. Effectiveness Improving Innovations Business Model Based Innovations ©Göran Roos 2012

27. Maximising the value delivered from the stakeholders point of view © Copyright Göran Roos 2012 deployment Value derived from the deployment of the offering possession Value derived from the possession of the offering appreciation Value derived from the appreciation of the offering Instrumentalvalue Intrinsicvalue Extrinsicvalue

28. Description of the Product-Service-System/Solutions offering Value Proposition for each of the target customer segments, target consumer segments and other definitive stakeholders Description how the target customer segments, target consumer segments and other definitive stakeholders capture value from the offering What competitive advantage does the offering enable or contribute to within the target customer segments, target consumer segments and other definitive stakeholders Value attribute, attribute preference and attribute performance for each of the target customer segments, target consumer segments and other definitive stakeholders What requirements must be fulfilled by the target customer segments, target consumer segments and other definitive stakeholders in order to be able to benefit from the offering Description of how the Product-Service-System/Solutions offering should be implemented at the target customer segments, target consumer segments and other definitive stakeholders to ensure the targeted benefits (value) Place, role and strategy of THIS business in the business ecosystem of which it is part Outgoing logistics and Distribution Channel choice for each of the target customer segments, target consumer segments and other definitive stakeholders Incoming logistics and supply chain choice Relationship width, depth and frequency for each of the target customer segments and other definitive stakeholders Value Configuration (Value Chain, Value Shop, Value Network) Cost structure Revenue Models © Copyright Göran Roos 2012

29. To have a higher profit than the revenue from the main Product- Service-System Offering Through accessing multiple profit pools in different value chains and ecosystems © Copyright Göran Roos 2012

30. Innovation Strategy Innovation Management System © Copyright Göran Roos 2012