Innovation Management Notes

7/25/2019 Innovation Management Notes

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Innovation Management



Bosch’s CEO Interview at Tough

Times

Franz Fehrenbach,the four decade veteran in Bosch heading the Compan duringthe tough financia! crisis time "##$ gave an interview with Financia! Times,

%t the Mid of Crisis, In order to maintain their Financia! Independence and

&ustainab!e growth,

a' (igidit in &upp!ier Cost Contro!

b' (eduction in )!ant )roduction , in turn *+,### emp!oees !ost their ob either

temporari! or permanent!

c' &a!e of -oss ma.ing B!aupun.t

*/ Inspite of &!ash in sa!es b "/01 BFT the compan’s !ong term &trateg focuses

on

a' Business 2iversification

b' Investment in (esearch 3 2eve!opment

c' a Targeted Internationa!ization

"/ 4e &tressed C!ear! 5 Cost Contro! have to be done in a!! the areas, e6cept

(esearch 3 2eve!opment for important Future )roects72



Bosch’s CEO Interview at Tough

Times 8 "

9/ The Compan cu!ture, cutting Edge Techno!og ,so!idfinance position and compan’s habit of re8i vesti g

a!! of its profits i the busi ess instead of funne!ing

them to anonmous investors made them to breathe

amid the crisis/

:/ %c;uisition of Erson < % =erman &o!ar )ane! ma.er for *

Bi!!ion Euro showed his wi!!ingness to diversif into new

areas which !oo.s prudent e6ecution among other riva!s

0/ 4e sas 5 The car industr is at the beginning of (adica!

&tructura! Transition7 brininging c!oser to his strategic

goa!s a reduced dependenc on the car industr but b

the growth in other industria! and other consumer goods

sectors/3



?hat is it that differentiates

@anguard from 4omestar >

(ange of home app!iancesA)roduct E6tensions' Afridge, 2ish ?asher' with in8depth design detai!ing

!i.e,

a' (ounded -ines, Chrome 2etai!ing, attractive

co!ors retro from c!assic automobi!es )roducts are made based on customermar.et

needs rather than on! techno!og, !eads to

emotiona! attachment with the product

The captured the mar.et trendpatternspu!se and introduce products in a rapid manner

The &) of new 5 C!ean 3 Eat 5 fridges featuring a

separate compartment for trip!e washing and

draining fruits and vegetab!es f!ew of the

showrooms5



?hat are ?ea.nesses 3 &trengths

of 4omestar >

Weakness Strength

They are Technology Centeredrather than customer centric

Break-through or Cutting EdgeTechnology

No immediate & healthyproduct developments inpipeline

Long terms Products are underdevelopment

Conventional ethods o!

innovation and dependent on"&#

Strong "&# Team

Started Losing the arketShare to $anguard

%n the past they are the leaderso! the market posses customerloyalty and they add values to

the product7



4ow Cou!d 4omestar &peedup its

Innovation )rocess>

Brininging a 9

rd

part consu!tant to deve!opprototpes for the upcoming trade show/

Ma.ing )rototpe of networ.ed machines

and after the (eceiva! of customer feedbac.

before committing fu!! resources and time toma.e the actua! product

Mar.et assessment 3 needs, prototpe

ma.ing ,e6periment to the customer 3

getting feedbac. ;uic.! wi!! reduce the timeand investments/

(adica! change in Compan’s innovation

process Aco!!aborative' with time frames and

manage the innovation portfo!io 8



4a!!’s Thoughts 3 Ideas

*/ Deed to fi6 disconnection between what theMar.etcustomer wants and what our (32 is

actua!! producing/

"/ (epac.age 3 (eposition of umbo %pp!iances forthe Institutiona! se/

9/ Introducing Detwor.ing 4ome app!iances into the

mar.et which is under deve!opment and grabbing a

new mar.et/

:/ (estructuring the Board b either remova! of

Char!ieA The (32 4ead ' or e!evating him to si!ent

ro!e or Off!oading the (32 services to outside firm/9



E6pert @iew on &puttering (32

Machine < Tom e!! < =/M 8 I2EO• The )roduct )rob!em < 4& is more Techno!og Centered

rather than Customer Centered and it cou!d be so!ved bdeeper understanding of customer needs and new

insights into usage patterns/

•

The )eop!e )rob!em < 4a! cou!d change Char!ie’sattitude b convincing he himse!f is barrier for innovation

or outsource the (32 wor.s to a consu!tanc and

change in Char!ie’s ro!e is not advisab!e/

• %t the Trade fair the team shou!d come up with)rototpe of networ.ed machines as we!! as with

machine which is in need b the mar.et and get

customer feedbac. , before entering into fu!!

deve!opment/

10



E6pert @iew 8 )hi!ips )eovich < @) 8

?hir!poo!

• *st )rincip!e < To focus on Consumer

a' %ssess consumer needs

b' Engaging consumers to e6periment with

possib!e so!utions

c' Testing mar.eting concept to assestheir appea!

=enera!! Innovation fai! for 9 reasons,

*' It is not re!evant to the customer "' It is difficu!t to distribute

9' Its va!ue message is not C!ear

11




?hir!poo!

• "nd )rincip!e < Innovation from Everwhere

a' Innovation need not necessari! has to

come from (32 a!one, it ma come from

4(, &upp! Chain and an department

b' Innovation need not necessari! from

product a!one it ma be e6tended toprocesses, &a!es, Communication and

services as we!!/

12




?hir!poo!

• 9rd )rincip!e < )ortfo!io of )roduct Innovation

4a! Be!ieves that,

a' Incrementa! )roduct Improvement that simp! respond tomar.et pu!! are better

b' 4omestar Gs e6cessive focus on techno!og made them

5Bui!d It and the wi!! come7

@iew

5 Both the views eopardizes 4omestar’s -eadership

)osition, hence the shou!d come up with best portfo!io of

product innovations7 13




?hir!poo!:th )rincip!e < Maor Cu!tura! &hift from Traditiona! Method

of )roduct 2eve!opment

4omestar Conventiona! %pproach,

*/ &cope 3 &ize "/%pprove 3 Fund 9/ E6ecute

@iew

"/ Deed to conduct a series of customer tria! e6perimentsbefore investing fu!! resources into )roduct 2eve!opment/

9/ These e6periments he!p ma.ing decisions ;uic.! and

cheap!, so that 4& can come up with product faster into

the mar.et , before ma.ing an maor investments/14




?hir!poo!

0th )rincip!e < Inte!!ectua! )ropert &trateg

4omestar a!read deve!oped Detwor.ed

4ome %pp!iances and the probab! in aposition to deve!op a broad arra of patents

that cou!d provide additiona! va!ues to the

customer and offers resistance to

competitorsH entr/

15



E6pert @iew < -ewis 2uncan, 2ean

at 2artmouth Co!!ege in 4anover

The compan must separate from )rocess of

Continuous )roduct Improvement from distinct

(32 distinct process of Intermittent )roduct

Innovation to respond to the Immediate mar.et

need and !ong term mar.et change respective!/

The compan must move )roduct 2esign 2ept

c!oser to Mar.eting, &a!es 3 Manufacturing to

anticipate, identif and respond to emerging

mar.et trends

It shou!d address some aw.ward persona!

issues 16



E6pert @iew < ohn ao Chairman

of Ea!ing &tudios in -ondon4a! has range of prob!ems,

a' -ac. of &trateg < Do )roducts in )ipe!ine, no information to pub!icize in

a !eading magazine artic!e/

b' -ac. of connection to customers < -ate to =reen and C!ean trend,

umped into umbo app!iances, now preparing to networ.ed app!iances

where there is no mar.et need/

&o!utions

*/ Finding a wa to connect diverse viewpoints and processes to

co!!aborate with networ. of departments

"/ Find a wa to manage portfo!io of customers and innovations

9/ Finding a best strateg fit

:/ &o!ving )ersonne! issues 17



Open Innovation

5Open innovation is a paradigm that

assumes that firms can and shou!d use

e6terna! ideas as we!! as interna!ideas, and interna! and e6terna! paths

to mar.et, as the firms !oo. to advance

their techno!og7/ %!ternative!, it is

Jinnovating with partners b sharingris. and sharing reward/5

18



(evea!ing 8 Don )ecuniar < Outbound

• This tpe of openness refers to how interna!

resources are revea!ed to the e6terna!environment/

E6 Iron )roduction Industr in Eng!and during *Kth

centuries shared their design and drawings

without an rewards in bac./Benefit

(esu!ted in a stead stream of incrementa!

innovation across the communit of firms/

Cha!!enge

Do income wi!! be generated out of e6changing

I)

Competitor can be better positioned out of

other’s techno!og and capture the mar.et19



&e!!ing < Outbound Innovation 8

)ecuniar This tpe of openness refers to how firms commercia!ize

their inventions and techno!ogies through se!!ing or!icensing out resources deve!oped in other organizations/

E6-3T Bought -icense of &iemens Medica! E;uipments

Business for India

Benefits

*/ &ome companies inc!ude in their strateg to increase

their income/

"/ Companies wi!! be benefitted in mutua! wa/

Cha!!enges

*/ &ometimes mar.et fai!ure ma occur due to disc!osure of

fu!! I)20



&ourcing8 Inbound innovation8

non8pecuniarThis tpe of openness refers to how firms can use

e6terna! sources of innovation/ Firms scan thee6terna! environment prior to initiating interna! (32

wor./ If e6isting ideas and techno!ogies are avai!ab!e,

the firms use them/

E6 )3= A)rocter and =amb!e',have been ab!e to rea!izeva!ue from new products that the deve!oped and

mar.eted oint! with their re8se!!er networ./

Benefit

-esser Investment in Creating Techno!ogies forproducing the product/

Cha!!enge

Impact of Individua! )erception p!as a maor ro!e in

scanning the e6terna! environment/ &ometimes !ead

to error/ 21



%c;uiring8 Inbound innovation 8 pecuniar

This tpe of openness refers to ac;uiring

input to the innovation process through the

mar.et p!ace/ Fo!!owing this reasoning,

openness can be understood as how firms

!icense8in and ac;uire e6pertise fromoutside/

E6 )urchase in Lero6’s =I b %pp!e Inc and

ac;uiring e6pertise ti!! the product !aunch

Cha!!enges

The simi!arit of .now!edge bases and how

the faci!itate the integration of ideas from

distant rea!ms 22



Open innovation &iemens&iemens Bac.ground

(32 at &iemens

Open Innovation

Innovation ams

Technoweb "/#

E6terna! now!edge Bro.ers

Idea =eneration Contests

a' O&(%M -E2 Emotiona!ize Nour -ight Contest

b' &mart =rid Contest

c' Interna! &ustainabi!it Contest

d' rban India Idea Contest

The Future of Open Innovation at &iemens23



Open Innovation &iemens

• &uccessfu! )erformance in terms of the number of

participants engaged , geographica! scope, high ;ua!it of

submissions and feedbac. from participants

• Do/of/)rob!ems &o!ved b e6terna! users "# )i!ot proects

• Do/of/)rob!ems so!ved b interna! emp!oees K )i!ot

)roects

• In the ear "#*" the registered "# )atentsda across the

g!obe without open innovation

• &iemens a!so !everaged Cross8&ector Co!!aboration through

corporate !abs and e6terna! co8operation with universities,

research institutes, and supp!iers and customers/

24



Open Innovation &iemens

• B going for open innovation we cou!d reach

e6perts a!! over the wor!d that cou!d provide ;uic.

access to techno!ogies for specific cha!!enges

• O&(%M -E2 -ight Contest

• &mart =rid Contest < first time went open with "##

universities in 9P countries

• &ustainabi!it contest within siemens

• rban India Contest within siemens india

25



?ou!d &iemens be a better p!ace

without the usage of open innovation>

The advantages 3 Benefits of Open Innovation

mentioned in the research paper were as fo!!ows,

*/ Engagement of Emp!oees

"/ 4igh ;ua!it of Innovative Ideas9/ Co!!aborative Feedbac. on ideas

:/ Cross8sector co!!aboration through corporate !abs

and univeristies, research institutes ,supp!iers 3

customers !everaged their Innovation process/0/ Innovation ams reduced the gap between each

decentra!ized sectors and their business units

P/ (adica! Innovation possibi!ities//

+/ Faster Communication 26



?ou!d &iemens be a better p!ace

without the usage of open innovation>

The cha!!enges of Open Innovation mentioned b

the &iemens emp!oees were as fo!!ows,

*/ 4uge Initia! Investment for now!edge sharing

and open innovation p!atforms

"/ ?or.er’s counci! concerned about pena!ization on them if the participate in such forums

9/ Their business units were too comp!e6 to

imp!ement open innovation and difficu!t to train

peop!e:/ &ocia! co!!aboration on the p!atform wou!d be

a waste of time

0/ I) rights and other interna! on8going proects

detai!s might be shared with competitors27



Open Innovation is Efficient

Enough>

• %fter framewor. assessment and (OI

we can come to conc!usion whether its

efficient enough > But its for sure

high! effective in terms ofimp!ementation and achieving goa!s/

28



Innovation ams

• To co!!oborate interna!! within emp!oees

on a pi!ot run basis and observing the

cha!!enges to overcome/

• Topic was on Information &ecurit within

&iemens &stems

•

E6perts were together in the meetingrooms formu!ating contributions on word

documents and then posting the documents

29



Technoweb "/#

• Technoweb "/# cou!d be the .e to identifing e6perts and faci!itating communication across &iemens/

• )eop!e who wor. on simi!ar proects cou!d share information, avoid re8inventing the whee! and engage in rea!

time communication e6changes in a protected environment/

• The sstem integrated e6isting .now!edge p!atforms !i.e ?i.is, b!ogs, co!!aboration repositories and users

can tag others on .now!edge concepts

• B "#*9 more than *9## networ.s ranging from 0# to P## participants had been estab!ished

• Technoweb "/# < its interna! prob!em so!ving networ. abounded and emp!oees praised its power to connect

e6perts in diverse fie!ds and different businesses/

• Technoweb "/# < &o!ved rea! prob!ems in a fast and effective manner created sustainab!e and dnamic

.now!edge networ.s and through its socia! media features represented a competitive advantage in the war of

g!oba! ta!ent/

• %b!e to communicate within emp!oees Inspite of their difference in their geographica! !ocations and their

business wor.ing units• E6 & team engaged with %ustrian Team

• rgent re;uest function made so!utions avai!ab!e immediate! as possib!e/

• sers feedbac. saving das , even month of wor. for finding answers, hidden .now!edge , cost saving ideas,

and access to supp!iers

30



Fina! Observation

• Based on (OI on these proects

• Convincing the (32 team to

snchronize open innovation as one of

the main approaches• Ma.e OI as a !ong term strateg

• % framewor. which inc!udes &trategic

and operationa! costs and benefits of

open innovation for &iemens wi!!

determine the possibi!it for going

ahead with their proects/

Innovation Management Notes

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