Post on 18-Apr-2020
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: hernst@whu.eduhttp://www.whu.edu/tim
Session 10: Innovation Processes, Organizational Structures, Innovation Tools and Best Practices
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 2
Agenda
• NPD Process
• Portfolio Management
• Project Management and Teams
• Corporate Venturing
• Summary: Best Practices
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 3
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 4
Stage-Gate NPD Process Suits Different Projects
Source: Cooper/Edgett/Kleinschmidt (2002)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 5
Source: Cooper (2008)
Stage-Gate NPD Process and Feedback Loops During Stages
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 6
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
Fuzzy Front End
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 7
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 8
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 9
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 10
Idea Generation via the Internet – The Case of Starbucks
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 11
Agenda
• NPD Process
• Portfolio Management
• Project Management and Teams
• Corporate Venturing
• Summary: Best Practices
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 12
Integration of Portfolio Management and Innovation Process
Source: Cooper/Edgett/Kleinschmidt (2002)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 13
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.
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 14
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 15
Example: Risk-Reward Project Portfolio
Source: Cooper/Edgett/Kleinschmidt (2002)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 16
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 17
Agenda
• NPD Process
• Portfolio Management
• Project Management and Teams
• Corporate Venturing
• Summary: Best Practices
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 18
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.
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 19
ENG ENG MFG MKT
L L L L
PM
Concept
Market
FM FM FM FM
Autonomous team structure (Task Force)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 20
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)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 21
Innovation Management: Important Challenges
Source: Mc Gregor (2006)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 22
ENG ENG MFG MKT
FM FM FM FM
PM
PM
PM
Area of strong PM influence
Matrix team structure
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 23
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 24
Agenda
• NPD Process
• Portfolio Management
• Project Management and Teams
• Corporate Venturing
• Summary: Best Practices
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 25
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.
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 26
Separate Organization to Manage Disruptive Change
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 27
Source: Weiblen & Chesbrough (2015), pp. 66-90
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 28
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
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 29
Some Examples of Corporate Venturing
BMW i VENTURES
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 30
Source: Weiblen & Chesbrough (2015), pp. 66-90
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 31
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.
Source: Weiblen & Chesbrough (2015), pp. 66-90
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 32
Source: Weiblen & Chesbrough (2015), pp. 66-90
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 33
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)
Source: Weiblen & Chesbrough (2015), pp. 66-90
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 34
Source: Weiblen & Chesbrough (2015), pp. 66-90
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 35
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#
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 36
Agenda
• NPD Process
• Portfolio Management
• Project Management and Teams
• Corporate Venturing
• Summary: Best Practices
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 37
Best Practices in New Product Development- Strategy -
Source: Kahn, Barczak and Moss (2006)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 38
Best Practices in New Product Development- Portfolio Management -
Source: Kahn, Barczak and Moss (2006)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 39
Best Practices in New Product Development- Process -
Source: Kahn, Barczak and Moss (2006)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 40
Best Practices in New Product Development- Market Research -
Source: Kahn, Barczak and Moss (2006)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 41
Best Practices in New Product Development- People -
Source: Kahn, Barczak and Moss (2006)
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 42
Source: Kahn, Barczak and Moss (2006)
Best Practices in New Product Development- Metrics and Performance Evaluation -
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 43
© Prof. Dr. Holger ErnstWissenschaftliche Hochschule für Unternehmensführung (WHU)
Burgplatz 2, 56179 Vallendar, E-Mail: hernst@whu.edu, Tel.: 0049-261-6509-241
I ePI sP
Innovation Success Panel (ISP®) -Identifying Best Practices in
Innovation Management
®
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 44
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.
Capstone: Innovation – Session 10 – © Prof. Dr. Holger Ernst – Slide 45
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’)