Total Innovation Management A New Paradigm in Innovation Management

1. Total Innovation ManagementANew Paradigm in Innovation Management

2. Zaipul Anwar Bin Zainudin Lecturer in Institute of Product Design & Manufacturing, (IPROM) Universiti Kuala Lumpur Tel: 03-27154715, 019-3262427 Email: zaipul@gmail.com Website: http://www.zaipul.com Blog: http://zaipul.com/category/blogs Facebook: http://www.facebook.com/zaipul You may download softcopies of all my materials in this session from this link: http://www.zaipul.com/download/tech-innovation-mgt/ - To verify the URL, go to ‘Download’ link at my website Zaipul.com About the speaker

3. OBJECTIVES • To introduce a new management paradigm: Total Innovation Management (TIM). • To increase the awareness about the importance of creativity and innovation in organisation.

4. What is TIM? “The term Total Innovation Management (TIM) is define as the innovation synergy among technology, organization and culture and oriented to building up innovation competence for an organisation.” Chen., Gang., Zhangshu., Zheng., Jin., Jingjiang., Liu., Qingrui., Wang., Xie., Xu., & Yong. (2007). Total Innovation Management: a novel paradigm of innovation management in the 21st century. The Journal of Technology Transfer, 32(1-2), 9-25.

5. What are the other “Total…” available? TQM – Total Quality Management TPM – Total Productive Maintenance TCS – Total ? ? TNAW – Total ? ? TIM – Total Innovation Management

6. What is Creativity & Innovation? Creativity is the generation of new ideas Innovation is the process of transformation of creative ideas into desired outputs.

7. Who started to develop TIM? This paradigm was developed and popularized by Institute of Management Science & Strategy of Zhejiang University and a group of scholars in American advisory company of Stanford University (SDG).

8. From Where did the ideas to develop TIM came from? The ideas to develop TIM was inspired by the thoughts of system and biology, the complex and changeable internet environment, and the observations of some leading Chinese firms and famous transnational companies’ innovation practices, like Haier, Legend, Baosteel, 3M and HP. 1 - 7

9. Before we begin let’s look at some of the videos from these innovative companies These videos showcase some of the products from these companies.

10. Why we need TIM? More and more enterprises find that innovation is becoming the critical source and driver for enterprise’s survival and development. The paradigm of TIM provides a basis for an upgraded, a more unified and better view of innovation management. It’s not enough to focus on technological context of innovation, some non-technological factors, such as the organizational structure, cultural characteristics, market, innovation strategy, and management style may also have an important influence on innovation performance.

11. EVOLUTION of INNOVATIONMANAGEMENT Practice of innovation management has gone through two stages: 1. Technology & Innovation Centered Management: • At this stage, the center task of enterprises’ innovation management is to pay too much attention to product innovation or process innovation separately • It concentrates on products innovation first, then pays more attention to process innovation, and finally reaches the steady balance between product innovation and process innovation • What's more, the innovation activities only depend on the R&D function and R&D people, other sources of innovation are generally ignored

12. EVOLUTION of INNOVATIONMANAGEMENT Practice of innovation management has gone through two stages: 2. Portfolio innovation management. • At present, it is the dominant paradigm for innovation management both home and abroad. • It concentrates on products innovation first, then pays more attention to process innovation, and finally reaches the steady balance between product innovation and process innovation

13. Different types of innovation Major Innovation Radical Innovation Major Effect of innovations on consumer habits and behaviors Incremental Innovation Strategic Innovation Minor Destroys Enhances Effect of innovations on established firms’ competences and complimentary assets Costas Markides, Paul A. Geroski, Racing to be 2nd: Conquering the Industries of the future, Business Strategy Review, Vol 15, Issue 4, Winter 2004, p25-31, Blackwell Publishing Ltd Crafting & Executing Strategy, Thompson, Strickland & Gamble, McGraw Hill 1 - 12

14. Forces of Innovation:Market Pull - R&DPush Market pull looking for the best way of satisfying a newly emerging customer demand improvement of the existing products, extension of the existing offer or decrease of price impulses for continuous, incremental innovations or for process innovations Research and development push looking for commercial use of new impulses resulting from the R&D results generating of new markets for conceptually different products

15. TIM FRAMEWORK & CHARATERISTICS There are three layers on total innovation: 1) Involves innovation in all functional area, including organizational, cultural, institutional, process, etc. 2) It covers the whole space-time dimension and continuous innovation in every department by, everybody (all as innovators), at anytime to innovate, including the whole value chain innovation. 3) The innovation synergy among innovative elements.

16. TIM FRAMEWORK & CHARATERISTICS The remarkable difference between the traditional management of innovation and total innovation is that it breaks through the past framework of innovation confinedonly in R&D department.

17. TIM FRAMEWORK & CHARATERISTICS TIM promotes tag lines such as: “NOW EVERYONE CAN INNOVATE” “EVERYONE IS INNOVATOR” “INNOVATE BY EVERYONE AT EVERYWHERE, ON EVERYTHING AND AT ANYTIME”

18. TIM FRAMEWORK & CHARATERISTICS TIM ELEMENTS: 1) Strategy:Organizational strategy should be develop timely and kept in dynamic balance. 2) Technology:Technology innovation is the key source for enterprises to accumulate core competence and accordingly to obtain the competitive sustainable advantage. 3) Management:This refers to the innovation of managerial theory, thought, paradigm, mechanism, and tools, et al. For example 6 Sigma management mode of GE is one of typical management innovation.

19. TIM FRAMEWORK & CHARATERISTICS TIM ELEMENTS: 4) Organization:Organizational structure must be adjusted correspondingly according to the demand of innovation. 5) Culture:Changes in mind set and culture is the prerequisites to carry out all innovation. In 3M for instance there is a strong innovative culture to encourage innovation and tolerating failures. 6) System:System innovationmeans the innovation of rules and regulations about enterprise’s routine, performance evaluating, staff rewards and punishments, salary system, training and promotion and so on.

20. TIM FRAMEWORK & CHARATERISTICS TIM ELEMENTS: 7)Market: Market innovation means the innovation of marketing channel, the operational ways et al., by which to create new market, new channel and new ways, such as using Blue Ocean Strategy. (Show video of BOS)

21. TIM FRAMEWORK & CHARATERISTICS It is necessary to synergize all of this elementssystemically. Synergy of all the innovation agents has becoming the dominant paradigmof innovation management both native and abroad since 1980s, and it’s the basic approach to realize TIM.

22. TIM FRAMEWORK & CHARATERISTICS TIM SCOPE/DIMENSION: 1) Time: Enterprises must make every effort to realize 24/7 innovation (namely innovates throughout 7 days of every week, 24 hours of every day) (Stephen M. Shapiro, 2002). Innovative enterprises should encourage immediate innovation (like writers or musicians’ improvisation). 2) Places: Traditional organizational processes are based on function and specialization, which often lead to processes separate from each other. As aresult, no one is responsible for the whole processes, and no one is really responsible for customers. 3) People: For implementing innovation at anytime and everywhere, it is necessary to have all the people inside and outside firms to participate the innovation. Life taught usthat everyone possesses the capability to deal ,with complexity and interconnection. Their creativity and commitment are the greatest resources for innovation.

23. TIM FRAMEWORK & CHARATERISTICS Let’s try to sketch the previous TIM model What’s the different between TQM & TIM model?

24. Internal sources for TIM Own R&D Technical divisions – design, technology Production divisions (production, provision of services) Marketing and sales Logistics (purchase and supplies) Guarantee and post-guarantee service Owners QCC and QIT

25. External sources for TIM Customers Suppliers Competitors Consultants, R&D institutions Schools, universities Professional publications, Internet Exhibitions, fairs, specialized seminars and conferences Advertising agencies Investors Media Authorized testing laboratories, certification agencies State institutions, public sector Legislation Globalization

26. CHARACTERISTICS OF SUCCESSFUL TIM COMPANIES: Systematic collection of all impulses that could lead to innovation Creativity of employees Ability to evaluate the possibility of the innovation idea Good team work Project-based approach and ability to manage projects Cooperation with external experts (universities, research laboratories…) Proper rate of risk-taking Employees’ motivation (the employees are willing to improve the product and the operation of the whole company) Continued education of employees Ability to finance the innovation activities TIM FRAMEWORK & CHARATERISTICS

27. DISCUSSION: Can you give other examples of successful innovative companies? How do they do it? TIM FRAMEWORK & CHARATERISTICS

28. The context of TIM formation 1) Environmental impetus- The requirement of the complex and changeable Internet environments. 2) The practice needs- The requirement of total innovation practice in firm. 3) Cultural foundation- agree with innovative culture.

29. Some of TIM formation tools

30. Different types of innovation Major Innovation Radical Innovation Major Effect of innovations on consumer habits and behaviors Incremental Innovation Strategic Innovation Minor Destroys Enhances Effect of innovations on established firms’ competences and complimentary assets Can you suggest the type of innovation for TIM now? 1 - 29

31. TIM Policy Implications & Future Research Directions 1)TIM is a journey to heighten competence of company, not a destination of company. It isn’t an annual, quick fix, slogan-based strategy, but a long-term, competence-based strategy for achieving the sustainable competitive advantage involving all people at every level of organization. 2) TIM is about corporate survival and growth, therefore, involvement from the top management is important for the success of TIM implementation. 3)TIM is a long-term process of organizational learning. In conclusion, TIM is a very significant path to reinvent and revitalize the company competing at the 21st century.

32. Summary of TIM in Mind Map

33. Reference Garud, R, and K Munir. "From transaction to transformation costs: The case of Polaroid's SX-70 camera." Research Policy 37, no. 4 (2008): 690-705. Carr, Kathleen. Polaroid Manipulations: A Complete Visual Guide to Creating SX-70, Transfer, and Digital Prints (Photography for All Levels: Intermediate). london: Amphoto Books, 2002. Coupland, Douglas. Polaroids from the Dead. New York: Harper Perennial, 1997. Iizuka, Naomi. Polaroid Stories. Woodstock: Dramatic Pub Co, 1999. Nicholson, Brian. "Transaction Costs and Control of Outsourced Accounting: Case Evidence from Britain and India." Social Science Research Network Working Paper Series 37 (2006): 16. Other online references used: http://www.wikipedia.com, http://www.jbs.cam.ac.uk/interactive/expert_comment/, http://www.polaroid.com 1 - 32