capstone innovation session 10 - amazon s3€¦ · capstone: innovation – session 10 – © prof....

Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 1

© Prof. Dr. Holger Ernst

Chair for Technology and Innovation ManagementWissenschaftliche Hochschule für Unternehmensführung (WHU)

- Otto Beisheim School of Management -Burgplatz 2

D- 56179 Vallendar

Tel: +49-(0)261-6509-241Fax: +49-(0)261-6509-249e-mail: [email protected]://www.whu.edu/tim

Session 10: Innovation Processes, Organizational Structures, Innovation Tools and Best Practices


Agenda

• NPD Process

• Portfolio Management

• Project Management and Teams

• Corporate Venturing

• Summary: Best Practices


Gate 3

The Generic Stage-Gate NPD Process

Source: Cooper/Edgett/Kleinschmidt (2002)

Stage-GateTM:A five-stage, five-gate model along with Discovery and Post-Launch Review


Stage-Gate NPD Process Suits Different Projects



Source: Cooper (2008)

Stage-Gate NPD Process and Feedback Loops During Stages


Gate 3

The Generic Stage-Gate NPD Process


Stage-GateTM:A five-stage, five-gate model along with Discovery and Post-Launch Review

Fuzzy Front End


Key Organizational Issues during the Fuzzy Front End

Early classification of projects/ideas (newness; potential) Strong Project Management (important projects) Multifunctional Team (esp. R&D and Marketing) Core Team Members Sufficient (financial and human) resources; relatively more

corporate funds Top Management Involvement at Milestones (Steering) Involve Champions Early (high level of the organization)

Strengthening of the Fuzzy Front End and Improving T2Min the Early Stages of NPD


Workflow: Idea Management

AssignmentR&D-Senior Manager

Rejection Assessment from Tech. and Business Teams

R&D feasibili-ty study

Info Patent Department

Feedback toteams€Storage in data base

Rejection(WV)

BVW

Patent

Source: 3M ESPE AG


Source: 3M ESPE AG

Results: Ideas are taken out of the heads Ideas are discussed Knowledge does not get lost Good ideas are implemented fast

(Ø: T2M reduced by 6 months in FFE)

Strengths of the 3M ESPE approach: Intelligent IT Implementation Incentives for Ideas Top-Management Commitment Corresponding Corporate Culture Integration into Workflows / NPD Process Clear Business Focus (evaluation criteria) Clear Responsibilities (defined tasks) Inventor shares are self-determined

Best Practice: Idea Management


Idea Generation via the Internet – The Case of Starbucks


Agenda

• NPD Process






Integration of Portfolio Management and Innovation Process



The Importance of Portfolio Management

Portfolio Management has a strong impact on NPD success!

1. financial – to maximize return; to maximize R&D productivity; to achieve financial goals

2. to maintain the competitive position of the business –to increase sales and market share

3. to properly and efficiently allocate scarce resources4. to forge the link between project selection and business strategy:

the portfolio is the expression of strategy; it must support the strategy5. to achieve focus – not doing too many projects for the limited resources

available; and to resource the “great” projects6. to achieve balance – the right balance between long and short term projects,

and high risk and low risk ones, consistent with the business’s goals7. to better communicate priorities within the organization, both vertically

and horizontally. 8. to provide better objectivity in project selection – to weed out bad projects.


Portfolio Management links Strategy with Innovation Projects

Corporate Strategy e.g. XYZ 2020, growsales by x%, increase profit margins from x to y

Business Unit Portfolio Management

Product Management and Projects

Corporate Portfolio Management

TimePresent Planning

Strategic Sales Gap

Target ValueSales

EstablishedProducts ("Firm Base")

)

)

Existing

New

Products/

Technologies

Existing New

Markets


Example: Risk-Reward Project Portfolio



A study shows that senior

management even holds on

to innovation projects where the

financial and market data

clearly shows that they will

be unsuccessful.

The Decisions to Terminate Unpromising Innovation Projectsis important for Performance, but difficult to Execute

Termination Culture

Average

Source: WHU 2012


Agenda

• NPD Process






C

D

A

B

Poor Fit(Disruptive)

Strong Fit(Sustaining)

Fit with Organization’s Values

New

Customary

HeavyweightTeams

Lightweight Teams

Functional Organization

AutonomousOrg. Required

Mainstream Org. Adequate

Position of Responsible Commercial Structure

Fit w

ith O

rgan

izat

ion’

s Pr

oces

ses

Stru

ctur

e of

Dev

elop

men

t Tea

m

Microsoft’s Internet BrowserMELF and MFC Beyschlag

BMW X5 and X3Porsche Cayenne, Panamera

Compaq Computer Direct SalesWal Mart online retailing

NespressoDacia Logan

Sam’s Club

Christensen provides a map to fit innovation requirements with an organization‘s capabilities.


ENG ENG MFG MKT

L L L L

PM

Concept

Market

FM FM FM FM

Autonomous team structure (Task Force)


Main characteristics:1. Project team is completely independent from both divisional and functional units2. Project manager has the right to issue directives both in the professional

and disciplinary sphere3. Project manager has project and bottom-line responsibility 4. Multifunctional composition (compensation for lower degree of

specialization by clear separation form the line hierarchy)5. Often used projects with a high degree of newness, important and/or urgent projects

(importance of lead times, e.g. telecommunications (Barczak, 1995))

Main advantages and disadvantages:+ Clear focus on the goals of the project+ Efficient project management+ Minimization of interfaces (composition of the team, incentives )+ Separation from the other parts of the firm (separation from daily business)+ positive effect on the motivation of the team members- Process of independence (deviation from the goals of the company)- Emergence of independent product areas

(low synergies, lower degree of information sharing)- Re-integration of project team members after completion

(problem of project-focused career paths)

Autonomous team structure (Task Force)


Innovation Management: Important Challenges

Source: Mc Gregor (2006)


ENG ENG MFG MKT

FM FM FM FM

PM

PM

PM

Area of strong PM influence

Matrix team structure


Main characteristics:

1. Project team not independent from functional or divisional structures2. Responsibility shared between line and project managers3. Project manager‘s authority to issue directives limited to

professional sphere (no disciplinary authority)4. Division of decision making process: PM (What? When?), FM (Who? How?)

Main advantages and disadvantages:

+ Improved inter-functional communication and co-ordination+ More influential project manager+ Stronger focus on the project+ Access to specialized know-how in the functional units- Decision making process slower - Potential for conflicts increased- Fuzzy hierarchical positions

Matrix team structure


Agenda

• NPD Process






C

D

A

B

Poor Fit(Disruptive)

Strong Fit(Sustaining)

Fit with Organization’s Values

New

Customary

HeavyweightTeams

Lightweight Teams

Functional Organization

AutonomousOrg. Required

Mainstream Org. Adequate

Position of Responsible Commercial Structure

Fit w

ith O

rgan

izat

ion’

s Pr

oces

ses

Stru

ctur

e of

Dev

elop

men

t Tea

m

Microsoft’s Internet BrowserMELF and MFC Beyschlag

BMW X5 and X3Porsche Cayenne, Panamera

Compaq Computer Direct SalesWal Mart online retailing

NespressoDacia Logan

Sam’s Club

Christensen provides a map to fit innovation requirements with an organization‘s capabilities.


Separate Organization to Manage Disruptive Change


Source: Weiblen & Chesbrough (2015), pp. 66-90


Investment Type Example

Experimenting with new capabilities

In ventures developing interesting new business processes unrelated or possibly in conflict with your current ones

Emergent Cisco‘s investmentin communications technologies that it later acquires and deploys internally

Developing a backup technology

In companies developing alternative technologies, as hedges against your current technology direction

Emergent Intel‘s investment in a company developing a networking technology that could supplant one that Intelparticipates in

Exploring strategicwhitespace

In companies serving customers in a new markets, thereby providing an indicator of those markets‘ potential

Emergent Panasonic‘s investment in start-ups pursuing the convergence of home computing and entertainment

Strategic Motives: Growing Your Future Business by Means of Corporate Venturing

Source: Chesbrough, H.W. (2003) „Making Sense of Corporate Venture Capital“, Harvard Business Review, Vol. 80 (3), p. 99.

BMW i VENTURES


Some Examples of Corporate Venturing

BMW i VENTURES


Corporate Incubation (Inside-Out)

- Incubator is designed to take up those ideas from corporate research or other parts of the organizationthat would drop out of the standard innovation process due to lack of relevance for Bosch‘s establishedbusiness

- Startups are not obliged to follow Bosch‘s several hundred corporate procedural directives, but arebound to only about a dozen basic guidelines governing values and compliance

Goal: to integrate the startup back into an existing business unit or create a new unit inside the company tocommercialize it. Spinning it off or selling are secondary options.



Siemens Technology to Business (TTB)(Outside-In Startup Program)

- TTB globally screens about 1,200 potential project pipeline ideas per year- 80 of them go into detailed evaluation and 16 of them reach project status- 72 projects started since 1999 – resulting in 12 new products or entire product lines- Non-equity partnership with startups as most dominant type of incubation in the past five years- Central element of the partnership is the joint-development-agreement (which includes among

others all IP-related issues)- Most interesting technologies (for Siemens) today come out of universities in the form of a startup No more need for Siemens to engage in early-stage incubation (“There are a lot of people or

organizations who know how to build a new company really, really well – we don‘t need toreproduce that“)

Source; Siemens (2015)



While SAP is worldwide renowned for its ERP software (R/2, R/3), it is opening up towards start-ups that develop new applications to enter new markets (start-ups, smaller firms)

Hasso Plattner – one of the founders himself – is driving this strategic change (“This is the future of SAP”)

With a new product/database called Hana (in-memory technology,) SAP get‘s into new markets where huge amounts of data needs to be processed (e.g. PARKYA)

SAP builds an eco system based on Hana and other products encompassing more than one million developers

SAP invests money into these start-ups (405 Mio. US$) More than 1,500 startups by mid-2014 as early adopters of the Hana platform E.g., a startup CEO who was targeting the oil & gas industry, said SAP was „extremely helpful and

responsive“ in providing him with contacts and a demo opportunity for that particular industry.

Taking the firm into new business areas byInside-Out Platform Programs: The case of SAP

Quelle: http://www.welt.de/wirtschaft/webwelt/article117154668/SAP-verjuengt-sich-mit-hippen-Start-ups.html?config=print#


Agenda

• NPD Process






Best Practices in New Product Development- Strategy -

Source: Kahn, Barczak and Moss (2006)


Best Practices in New Product Development- Portfolio Management -



Best Practices in New Product Development- Process -



Best Practices in New Product Development- Market Research -



Best Practices in New Product Development- People -




Best Practices in New Product Development- Metrics and Performance Evaluation -


© Prof. Dr. Holger ErnstWissenschaftliche Hochschule für Unternehmensführung (WHU)

Burgplatz 2, 56179 Vallendar, E-Mail: [email protected], Tel.: 0049-261-6509-241

I ePI sP

Innovation Success Panel (ISP®) -Identifying Best Practices in

Innovation Management

®


Top-Performer Profiles Against Worst-Performers Indicate Best Practices

Growth with Innovations

Profitabilityof Innovations

Top-Performer

Worst-Performer

Top-PerformerWorst-Performer

Growth with innovations:• Success rate• Percentage sales of the innovation program• Influence of innovation program on sales

Profitability of innovations:• Profitability of the innovation program (ROI)• Contributions to profits by the NPD program.

• Relative profitability of the innovation program compared to competitors.


The Top 10 Success Factors of Innovations

1. Risk-taking and innovation rewarding corporate culture

2. Existence and support of innovation champions

3. Innovation related strategic goals and metrics

4. Adequate human and financial resources

5. Strong customer/market orientation

6. Effective cross-functional collaboration (especially Marketing, Sales and R&D)

7. Strong project management (especially heavy-weight/venture teams)

8. High innovation process management proficiency (from idea to launch)

9. Good innovation portfolio management (monitoring, assessment, decision)

10. Alliances and partnerships (‘Open Innovation’)

capstone innovation session 10 - amazon s3€¦ · capstone: innovation – session 10 – © prof....

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