Managing Global Innovation

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Managing Global Innovation

• Attila Kurucz
• University of West-Hungary
• Department of Business Sciences

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Distinguishing RD Processes
Highly differentiated phase concepts are commonly
accepted and applied in RD practice, but they
suffer from the strictly sequential execution of
project phases and are therefore often
impractical. On the other hand, if projects are
carried out without reviews or milestones, there
is the danger of achieving little effectiveness
(doing the wrong things) and low efficiency
(doing things wrong). Today we know, at least
in principle, how projects work. But we still do
not know how to get from the useful many ideas to
the vital few projects which the RD lab is
capable to execute. Even more difficulties arise
when the new product is to be introduced to the
market.
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There are three phases in the RD process -
Pre-project phase How to create a good product
concept and a manageable project -
Development phase How to manage a project -
Market-introduction How to transfer RD results
efficiently to operations and the
customer Between the pre-project and the
development phase we must translate from the
language of the customers or scientists to the
language of the company (market or technology
driven). Between the project and the
market-introduction phases, we need to translate
from the companys technical language to the
emotional language of the sales force and the
customer.
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Main problems in transnational RD processes
Informal Links Networks - Create a manageable
project - Build trust among project
members - Ensure downstream Project
Processes - Management of dispersed RD
teams - Match functions and processes -
Creating integral designs Hierarchical
Functional - Structured versus unstructured
processes - Translate between language of the
company and language of the customer -
Innovation factors cant be measured and
controlled Regional Legal - Transfer of RD
results to sales units and customers -
Integrating local expertise without moving people
too much - Market maturity
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Stage-Gate-Process to Support Project Management
A combination of classical phase segmentation and
process orientation is found in the concept of
the state-gate-process. Every step or stage
necessary to complete a particular project task
is linked to the next by a gate at which
decisions for the continuation of the project are
made. Contrary to milestones, gates are more
flexible in terms of time, date and content.
Gates allow a deliberate parallelization of
phases as well as their recombination or
adaptation to new requirements. You can get
around a milestone, but you must go through a
gate.
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Stage-Gate-Process to Support Project Management

• The number of stages and gates is project and
  industry dependent. Ex ante agreements serve as
  guidelines for the collaboration of project
  participants.
• Stage-gate process are not contradictory to the
  parallel execution of product and process
  development.
• The differentiation between pre-project phase and
  main development phase is of utmost significance
  for the quick and efficient execution of RD
  projects.
• The stage-gate exhibits a further advantage
  should customer specifications change or
  competitors introduce rivalling products, so if
  high complexity and dynamics alter the
  competitive environment.

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Transnational RD Processes

• Pre-project Phase
• Fostering Creativity

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Characters of Pre-project phase

• Budget often none / low
• Goals vague
• Costs low
• Processes not structured
• Results unclear
• Financial risk small

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Tasks during Pre-project Phase

• It requires strong management support,
• it relies on experience, knowledge and know-how
  (soft management factors)
• The identification of the market segments (who is
  the customer?)
• The work statement (what does the customer want?)
• The product requirement specification (how can we
  fulfill the customers needs?)

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The Product Concept Team

• Team has a cross-functional role.
• Team should be formed of member different
  functional departments (development, marketing,
  production, support)
• Its activity concludes with the specification
  list.( translation of the customers requirements
  into technical specifications)

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Specification List

• Technical specification
• Project plans and schedules
• Time-critical path
• Technical alternatives
• Technical and market risks
• (procurement, production, sales, market
  introduction)

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Idea Generation

• Needs exploration
• Traditional marketing research tools panel
  research, focus group interviews, sales and
  distribution questionnaires, scenario techniques,
  lead market analysis
• Recently developed tools cooperative forms of
  RD, anthropological expeditions
• Technology-potential screening leading edge
  innovation centres, conferences, technology
  forecasts, expert interview, patent database
  research,

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Intensive Idea Flow and Workflow Systems

• Idea generation take place on a global scale.
• Function transmits and distributes ideas,
  problems, commentaries and solutions by means of
  modern information and communication technologies.

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Good Idea Require Good Promotion

• The problem identification usually occurs by a
  single person or a group.
• Looking for support they try to convince
  influential people about their idea.
• The influence is based on their
• Hierarchical position (power promoters)
• Knowledge (functional promoters)
• Communication abilities (process promoters)
• Experience show that personal relations are the
  most important for winning decision-makers.
• Project opponents are who bring in technological
  and economical arguments against new idea.

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Product Profitability Calculation

• Product profitability calculation is based on
  forecasted market returns discounted to present
  net value.
• It is widely used, but it isnt always an
  appropriate tool for project evaluation.
• Project proposals should be complemented with
  qualitative data and evaluated in light of the
  firms strategy and technological vision.

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Project Approval Rational Criteria and Politics

• Proposal is presented to a steering committee.
• Project selection always takes place mostly at
  the location of the decision-maker.
• Decisions about projects are made on a rather
  informal basis. (political agreement finding
  process)
• Approval includes decision about project members
  and participating locations

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Transnational RD processes

• Development (Project phase)
• Market Introduction

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Development Phase

• In transnational projects this process is
  characterized by high complexity
• Goal conflicts may occur between RD, production,
  marketing, and logistics
• The conception of the system architecture is a
  critical success factor for the whole project
• To share the knowledge and information is a
  principal factor

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Development Phase

• The activities in the development phase is more
  detailed, structured than in the pre-project
  phase
• This phase requires a resource- and
  time-conscious project management
• Prototyping
• The complexity in innovation projects can be
  reduced by introducing tangible support tools and
  media

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Development Phase

• Prototypes serve a wider role
• To reduce risk
• To learn from experiments
• To determine customers preferences
• To communicate across functional interfaces
• Nowadays companies can employ rapid prototyping
  due to the CAD planning, Internet, and digital
  photography

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Market Introduction

• There are three important challenges to the
  company
• Market introduction is a global project,
• Not all the participants work for the same
  company,
• The costs often exceed the total costs of the two
  previous phases
• The key to success rests in professional project
  management. The different tasks of RD,
  marketing, production, sales and maintenance must
  be coordinated and integrated

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Market Introduction

• There are two types of introducing a product
• Big-bang market introduction when the company is
  presenting the product to all target markets at
  the same time,
• And in the lead concept, the product is tested
  with lead customers or in lead markets, before
  the world wide introduction
• Besides the product, complementary services must
  reach the market as well