Innovation

Management in

Corporations

Velimir Srića

University of Zagreb, Croatia

How old is Google, what is its present market

value?

When did you buy your first mobile phone? How

often do you buy a new one?

When did you send your first e-mail, when did

you first surf the web?

Thirty years from now, what will be the

percentage of people under 27 living in the so

called developed world?

What is the value of software export of India?

A few questions?

Learn or Unlearn?

The Nan-in story

The problem is not just how

to get new, innovative

thoughts into your mind, but

also how to get the old ones

out!

“If you want a paradigm

shift, it is not enough for the

old professors to retire; they

must die!” (Tom Peters)

Routine vs. Creativity

• How much knowledge our students use in everyday life

• How creative are you on your job

• Are you a rational person?

Creativity - Innovation

Creativity

Ability to solve complex problems in an

original way

Ability to produce ideas

Innovation

Applied creativity

Implementation of ideas

A few Problems

1. Hunter and pray

2. if y = 25, x = ?

3. Captain of a ship with

musical instruments

4. Circus problem

AHA Effect

• Problem definition

• Confusion

• Frustration

• Incubation

• Illumination

(aha effect)

• Solution

Another Problem

Connect all the

dots with four

uninterrupted

straight lines!

• Creativity = Freedom

• Lack of creativity = Lack of freedom

• Introducing more constraints than necessary

• Perception of a problem is the problem

• Wishful thinking

• Expecting only one, the best, solution

• Affection for simetry, elegance, regularity

• Extremes are preferred (black-white, good-

bad, logical-illogical, right-wrong)

What do we do Wrong?

• We are affraid of change - 1:2:3

• The typpical attitude: “I like change, I am all

for change… Just don’t make me change!”

• Courage is not the absence of fear but rather

the judgement that something else is more

important than fear. » Ambrose Redmoon

• Let us become the change we seek in the

world. » Mahatma Ghandi

What do we do Wrong?

How to Measure the Building Height with a Barometer??

Convergent

Divergent

Intuitive - Rational

Vertical

Lateral

Left – Right side of the

brain

Human Reasoning

•Sherlock Holmes

•IQ tests

•Education and

learning

•Logic, analysis

•Rational models

Convergent Thinking

•Thomas Edison

•Imagination

•Idea production

•Intuitivne approach

•Meditation

Divergent Thinking

•How to make tea

•Structure, precision,

logic, quantities

•Algorithms (steps,

phases)

•Procedural knowledge

•Manual, Cook-book, SOP

(standard operating

procedure)

Vertical Reasoning – ISO Logic

•How to make a drink

•Why not approach

•How else approach

•Imagination-based

•Idea generation process

•Key to creativity and

innovation

Lateral Reasoning – ISO Logic

•Understanding dynamic

environment

•Removing blocks and barriers

to creativity

•Developing Serendipity

(idea-supportive)

environment

Creativity Management

•Socrates: I know to know

nothing!

•Einstein: All is relative!

•Little Prince: A man can

see clearly only with his

heart. The essence is

invisible to eyes!

Key Concepts

Rules of Creative Corporation (Peters)

• Each year make a list of 10 key ideas on which the company stands and question it

• Change regularly the product/service list

• Newcomers should make for at least 25% of department directors

• Sell 30% of company regardless of success (every decade)

• At least 20% Mgmt Board members should be independent outsiders

• Change the headquarters every 15 years

• Have well argumented discussions

“Curious Corporation” (Peters)

• Hire inquisitive people

• Offer jobs to freaks (Ted Turner, George Lucas, Steven Jobs)

• Empower the young

• Make the employees use vacations

• Support training and education

• Create informal groups

• Organize discussions with outside guests

• Measure and coach creativity

Innovative Team

Endless creativity

Full adaptability

Inspirational environment Organizations based on love

Ideas compete on equal footing

Freaks are heroes

Tasks are selected, not administered

Authority is not based on position

Team structure is natural, not imposed

Teams are self-organized

Leaders serve

Resources are attracted and not budgeted…

Successful Projects

On time

Within a budget

Meeting the goals

Accepted by the clients

Make us proud and fulfilled

Help us grow and develop

Provide happiness

Build self-confidence…

Innovative Worker

Decides when, where, with whom to work

Selects his team

Treats everybody else as a client

Does not let formal organization run his life

Wants to be taken seriously

Asks from a boss to serve and inspire

Actively participates in strategy setting

Works without control because he loves the work

Does at work what he does the best

The Old and the New

Rationality

Profit

Pragmatism

Hard Intelligence

Efficiency

Capital

Structures

Organizations

Information

Outcomes…

Emotions

Sustainable Growth

Values

Soft Intelligence

Creativity

Human Capital

Processes

Networks

Communication

Meaning…

Corporate Venturing

• Corporate venturing – an attempt to foster creativity throughout corporation, technology innovation in particular

• How to produce and implement as many innovation based on “internal resources”

• Creating and using the corporate entrepreneurial spirit

• Identifiy and put in full use business opportunities within a company

• Entrepreneurship models inside a company Intrepreneurship, Corporate Venturing (CV)

Why Corporate Venturing, Interpreneurship?

• Big companies are unable to succesfully manage

innovation within traditional hierarchical

organization

• Many firms, especially hi-tech, create their own

infrastructure intended to allow for creation of

startups and support business initiatives (i.e.

Nokia’s Open Innovation Laboratory, Xerox

Technology Ventures, AT&T's Lucent Technologies,

Hewlett Packard's Agilent Technologies, 3Com's

Palm Pilot) .

• Thus big systems help survive and grow ideas and

initiatives that would most likely die out otherwise

Innovation Management Dilemmas

• New seed or “weed”

• Adequate initiative support

• Internal and external manpower

• Develop alone or cooperate

• Grow slowly or make a big leap

New seed or “weed”

• It is hard to pick the best ideas among many

• Bad strategic judgement examples: IBM and PC – operating systems development

AT&T – reluctance to engage in Internet development

Barnes and Noble – inability to recognize Internet potential and fight Amazon.com.

• All these companies have studied trends and market potential but have failed in applying their own innovative ideas

• Their innovation seed has been treted as “weed”

Initiative without Support

• New ideas are usually created by middle managers who are often unwilling to become entrepreneurs

• Lacking top management support, their initiatives will most likely die out

• In order to succeed, such initiatives need proper “infrastructure” (book keeping, HRM, legal support, marketing…).

• Only if they get support can they devote attention to a new product or service under development

Internal or external manpower

• Creators of new ideas or projects must fight tough corporate bureaucracy in order to get needed resources, particularly people, mostly because such new initiatives don’t fit into existing formal organization, and human resource development schemes

• New company does not need to use the existing manpower, they can get needed talent and management from outside the firm

• New company can create environment to attract talent which would not fit into existing budgets and compensation management arrangements

Develop alone or cooperate

• Internal development often meets barriers that don’t exist in case of external partners

• New enterprise can be based on strategic partnerships that do not depend on internal resources and limitations (budget, people, knowledge, material resources, technology, bureaucracy…)

• New ideas usually call for new partnerships, new technologies and new networking. All these will make them more conpetitive. Within the old system such ideas cannot grow properly supported

Continuous growth or big leap

• New ideas in big systems rarely get adequate

support, more often they are initiated as

small-scale projects in order to minimize risk

• It helps competition get information, causes

delays and unables capitalization of good

ideas

• CV model provides each idea with

appropriate budget, depending on its

genuine market potential .

Xerox Technology Ventures

Based on “ameba organization” (Kyocera)

Xerox Technology Ventures has a ten year experience in establishing companies based on internal ideas that would otherwise be lost

XTV had initial capital of only $30 million (venture fund). In ten years market capitalization of newly generated companies amounted to $750 million.

The parent company establishes a firm which simulates innovation incubator

The number of such newly generated businesses trippled in the last five years

They are called Intrapreneurs and combine the power of a big system and flexibility of small scale businesses based on innovative ideas

Nokia "Open Innovation" Laboratory

“Let's find the best ideas where ever they are".

• Nokia Venturing Organization creates and supports new businesses related to the core business ("the renewal of Nokia“).

• Not just one b ut two companies: NVP & Innovent

• NVP (Nokia Venture Partners) is investing in “mobile and I/P related start-up businesses”.

• Innovent is directly supporting innovation and initiatives unrelated to the core business

Thanks!

Any comments,

questions,

suggestions?

www.velimirsrica.com

velimir@velimirsrica.com