CAPITOLUL 1 Despre managementul si procesele inovationale in general

1.1. Innovation as process. Overview.

Organizations have always been compelled to evolve in order to survive environmental
changes. In the beginning, innovation has been associated to the capacity of survival and
leadership in the context of troubled markets. This vital interest has generated, throughout
the 19th and 20th centuries, a constant influx of contributions which would bring clarity and
complexity to said subject.
Utilized under numerous acceptations, the term innovation conveys multiple
dimensions which render comprehension and definition rather problematical. From one
standpoint, the concept qualifies a result, an offer of product and/or service, and a change
in productive, administrative or any other processes. From another perspective, innovation
refers to multiple research fields relevant to the companys strategic, marketing or
managerial domains.
Innovation is defined as the development and implementation of new ideas by people
who over time engage in transactions with others within an institutional order. This
definition focuses on four basic factors (new ideas, people, transactions, and institutional
context). An understanding of how these factors are related leads to four basic problems
confronting most general managers: (1) a human problem of managing attention, (2) a
process problem in managing new ideas into good currency, (3) a structural problem of
managing part-whole relationships, and (4) a strategic problem of institutional leadership.
Through multiple debates and insightful observation have emerged three approaches to
the innovative processes management. The first school, in chronological order, focuses
on development management planed through a number of predefined steps. Dominant until
the 80s, its main focus is the reduction of the likelihood of launch failures.

The eight steps of Innovation Process Management

Published by Jeffrey Baumgartner on June 30, 2009 in Business innovation.
http://noweurope.com/2009/06/30/innovation-process/

With the growing popularity of innovation initiatives, ever more companies are launching
their own actions. However, many are going forward in a piecemeal fashion, running a
brainstorming event here, trying out an ideas campaign there and promoting innovation in
vague ways in marketing communications. Such an approach works, somewhat, but it is
not ideal.
The best approach is to have a comprehensive innovation process management (IPM)
structure that treats innovation as a series of cycles that run within a grand, enterprise
innovation process cycle.
The Innovation Process Cycle

redo
An innovation process cycle combines creative problem solving (CPS) with scientific peer
review evaluation and some typical business tools.
1) The Challenge
The cycle starts with a problem or goal which needs to be formulated into an innovation
challenge. Once this is done, the challenge is presented to the problem solving group. This
may be done in the form of a brainstorming event, ideas campaign or other activity. The
group problem solving group may be a team, all employees in the firm, the public or any
other group of people.
2) Collaboration
In order to maximise the creative potential of the problem solving group, the idea
generation activity should be collaborative in nature. This can be accomplished in many
ways. Idea management and innovation process management software often provides online collaboration tools, while facilitators of brainstorming and other ideation events should
promote collaborative idea development.
3) Combination
Because an innovation process cycle starts with a challenge, ideas tend to be interrelated
and many are complementary. Hence, before going further, it is best to combine such
complementary ideas into larger, more sophisticated ideas so that they can be handled as a
single package. This makes the next steps in the cycle more efficient.
4) Scientific Peer Review Evaluation
Here is where a lot of innovation initiatives break down: choosing the best ideas. Many
poorly thought out approaches use voting, which is a good way to identify the most

popular idea, but an appallingly ineffective method for identifying the most potentially
innovative idea. I have also seen organisations put a great deal of effort into idea
generation, leaving the final decision to a manager who basically picks out her favourite
idea. Assuming the manager has suitable business expertise, such an approach is better
than voting as it is based on expertise rather than popularity but it is typically far from
perfect.
The scientific approach of peer review by expert, on the other hand, is ideally suited for
identifying the most promising ideas in a cycle. Instead of basing selection on popularity
(can you imagine Einstein sending his special theory of relativity to the public for a vote in
order to determine its validity?) or the whim of a manager, you apply a set of business
criteria to the idea and rank how well the idea meets each criterion. If an idea achieves a
sufficiently high ranking, either as is or through additional modification, it should be
developed further.
5) Testing and Development
Ideas identified as being potential innovations are now ready to be tested and developed.
Here is where typical business tools come in useful. A business case is a useful means of
hypothetically implementing an innovative idea and projecting the potential results. Of
course it is not perfect, but it indicates possible issues in the implementation of the idea, as
well as benefits that may not have been obvious to the original idea developers.
Prototypes are an excellent means for testing ideas. Not only do they allow you, your
colleagues, customers and others to see how an idea would actually look in
implementation, but building and playing with a prototype is a good method of further
improving upon the core idea. Prototypes are, of course, ideally suited towards material
ideas such as new products. But more abstract ideas, such as new services, process
improvements and other concepts can often be prototyped through role-play, building
structural models and making diagrams.
6) Implementation
Ideas that make it through testing and development are ready to be implemented. Unless
the idea is a radical change from your usual activities, you dont need me to tell you how to
do this!
7) Review
Once ideas have been implemented, they need to be reviewed, probably against an ongoing
series of milestones. If an implementation does not achieve a milestone, it needs to
modified or killed. Moreover, even the most spectacularly effective and profitable
breakthrough innovations need to be improved on a regular basis.
8) New Needs and Inspiration
Hence, reviewing the implementation of new ideas should indicate new needs which can
be transformed into challenges which, in turn, start a new innovation process cycle.
Likewise, implementations can inspire new corporate goals. Again, these can be turned
into new challenges and new cycles.
Integrated Innovation Process Management
An innovative company, however, should not have a single innovation process cycle in
operation. Rather it should have many of them! Large cycles are suitable for enterprisewide innovation. Meanwhile, business units can run somewhat smaller innovation process
cycles in order to manage their own ideas (although it should be noted, collaborative

groups need not be limited to employees of that business unit). Teams, departments and
any other group can also run their own innovation process cycles.
Multiple innovation process cycles create the process
However, these innovation process cycles should not be in isolation. Rather they should
inspire and feed other cycles elsewhere in the organisation. For instance, the
implementation of a new product idea should inspire innovation cycles in the marketing,
sales and customer service divisions as well as at the enterprise level.
Managers should watch their colleagues innovation process cycles and ruthlessly copy
ideas as inspirations for their own cycles.
The Result: a Highly Innovative Organisation
By applying innovation process management across your entire organisation, you can
transform it into one which is innovation driven. And that is a sure way to keep well ahead
of the competition, survive this financial crisis and make your firm a great place to work.

Continuous Change as a Norm

Companies, like any living organism, must become learning organizations that change and
adapt to suit their changing environment. If you don't practice the change management
that looks after the future, the future will not look after you, says Bill Gates. "The
tendency for successful companies to fail to innovate is just that: a tendency. If you're too
focused on your current business, it's hard to look ahead.
Two Types of Change
1. Organic, or continuous, change
2. Radical, or discontinuous, change driven by radical innovation
Innovation Management: Two Approaches

"Because much of the innovation taking place today is incremental, so is its impact on
growth. Little ventured, little gained. Other firms, after years of incremental innovation,
suddenly throw millions or even billions of dollars at ideas that are poorly conceived,
poorly timed, and poorly executed, only to have near-catastrophic consequences."
There is practical value in understanding the patterns in and the differences between
evolutionary incremental innovation projects and revolutionary radical innovation
projects. This understanding can help you apply right management practices to different
types of innovation projects and make the course of radical innovation shorter, less
sporadic, less expensive, and less uncertain.
High level of uncertainty is a hallmark a radical innovation projects, especially at early
stages. The criteria used to evaluate a radical idea and concept should differ from those
applied to evaluating incremental innovations. Viewing radical ideas - associated with high
uncertainties - from the perspective of the mainstream business and applying traditional
evaluation methods and criteria to them is inappropriate and counterproductive.
Either these methods give a false sense of security, or they lead to premature rejection of
good ideas. "It is easier to say "no" or to require more detailed information than to defend a
decision to invest resources in the absence of "hard data."
Down the road, uncertainties influence the course of radical project development that
requires flexibility and creativity in resource and competency acquisition, while
incremental projects follow more formal and predictable route.

Incremental innovation projects, due to low levels of uncertainties, are usually follow
the orderly process:
A potential marketable improvement to an existing product/service/process is quickly
placed within a clearly defined, time-tested process designed to prove or disprove its value
to the company
The process has organizational sponsorship, funding, and the assignment of a development
team
Development and commercialization are directed along a formal phase-gate process
Radical innovation projects, due to high levels of uncertainties, cannot be described by
this orderly process. "Even though the radical innovation life cycle includes many of the
same sets of activities and decision points, the reality of managing the process is strikingly
different for radical versus incremental innovation."1
General characteristics of the radical innovation life cycle:
long-term, highly uncertain and unpredictable
sporadic - starts and stops, dead ends and revivals
nonlinear - detours, recycling back through activities in response to discontinuities and
setbacks
stochastic - waxing and waning of interest and funding, key players come and go, priorities
change
context dependent - corporate culture, history, personalities, informal relations, and
experience all create a mix of accelerating and retarding factors.

Emphasis

Technology
Prototyping

Trajectory
Business Case

Incremental versus Radical Innovation

Incremental
Radical
Cost or feature
Development of new
improvements in existing
businesses, products and/or
products, services, or
processes that transform the
processes
economies of a business
Exploitation of existing
Exploration of new
technology
technology
Ironing out wrinkles near
Teaching the market about
the end of the design phase
the new technology and
learning from the markets
how valuable that
technology is in that
application arena
Linear and continuous
Sporadic and discontinuous
Business model and plan
Detailed plan can be
evolves through discovery-

Idea Generation &

Opportunity Recognition

Key Players
Process

developed at the beginning

of the process
Occur at the front end;
critical events are largely
anticipated
Formal cross-functional
teams
Formal, phase-gate model

Organizational Structures

Cross-functional project
team operates within a
business unit

Resources and competencies

Standard resource
allocation; the team has all
competencies required to
complete the process
Formal involvement from
the very beginning

Operating Unit Involvement

based learning
Occur sporadically
throughout the life cycle,
often in response to
discontinuities in the project
trajectory
Cross-functional individuals,
informal networks
Informal, flexible model at
early stages due to high
uncertainties formal at
later stages after
uncertainties have been
reduced
Project starts in R&D
migrates into an incubating
organization transitions
into a goal-driven project
organization
Creative acquisition of
competencies and resources
from a variety of internal
and external sources
Informal at early stages
formal at later stages

New Systemic Approach to Innovation

Until recently innovation has been seen principally as the means to turn research results
into commercially successful products, but not all research leads to innovation and not all
innovation is research-based. Certainly research is a major contributor to innovation,
generating a flow of technical ideas and continually renewing the pool of technical skills.
It should be a vital ingredient in your enterprise strategy, particularly over long term, if you
are to maintain a stream of competitive products on the market.
Important though research is as the source of invention, innovation encompasses more than
the successful application of research results. Innovation can also stem from adopting new
technologies or processes from other fields, or from new ways of doing business, or from
new ways of marketing products and services. The evolution of the innovation concept
from the linear model having R&D as the starting point to the systemic model in which
innovation arises from complex interactions between individuals, organizations and their
operating environments demonstrates that your innovation policies and practices must
extend their focus beyond the link with research.
Hard vs. Soft Innovation
Hard Innovation is organized R&D characterized by strategic investment in innovation, be
it high-risk-high-return radical innovation or low-risk-low-return incremental innovation.

Soft Innovation is the clever, insightful, useful ideas that just anyone in the organization
can think up.

Serendipitous versus Strategic Innovation

Many organizations reply on serendipitous acts of creativity to foster innovation. Others
take an ad hoc unstructured approach, which often results in uninspired incremental
improvements or poor implementation.
Strategic innovation is a holistic systematic approach focused on generating beyond
incremental, breakthrough or discontinuous innovations. Innovation becomes "strategic"
when it is an intentional repeatable process that creates a significant difference in the value
delivered to consumers, customers, partners and the corporation. A Strategic Innovation
initiative generates a portfolio of breakthrough business growth opportunities using a
disciplined yet creative process.

A Holistic, Multidisciplinary Framework

The framework combines non-traditional, creative approaches to business innovation with
conventional strategy development models. It brings together perspectives from several
disciplines: the non-traditional approaches to innovation found in the business creativity
movement; traditional strategy consulting; the new product development perspective of
industrial design firms; qualitative consumer/customer research; futures research found in
think tanks and traditional scenario planning; and organizational development (OD)
practices that examine the effectiveness of an organization's culture, processes and
structures.

The framework consists of a cohesive set of practices that inspire imaginative teams to
look beyond the obvious, explore a broad range of possibilities, identify significant
opportunities, make informed decisions about the most promising paths to pursue, create a
shared vision for growth, define pragmatic action plans that bridge from the future back to
the present and align the organization around the requirements for success.
Strategic Innovation takes the road less traveled it challenges an organization to look
beyond its established business boundaries and mental models and to participate in an
open-minded, creative exploration of the realm of possibilities.
Some organizations may feel that seeking breakthroughs is too grandiose a goal, and that
they would be content with simply growing the business. Experience shows, however,
that focusing on the short-term typically yields only short-term results while teams
aspiring to seek significant breakthroughs will both identify big ideas and also generate
closer-in, incremental ideas.

Strategic Innovation is not characterized by mundane, incremental product extensions, the

me-too business models of close followers, or band-aids for inefficient processes. It does
not consist of simple facilitated creativity sessions and brainstorming new ideas. It is not
based on the linear principles of traditional strategic planning which extrapolate the past in
an attempt to predict the future.
It does not result in pure blue sky. Instead, it spans a journey of inquiry and activity
from creative inspiration at the ambiguous fuzzy front end through the detailed
requirements of successful execution that lead to business impact.
Strategic Innovation calls for a holistic approach that operates on multiple levels. First, it
blends non-traditional and traditional approaches to business strategy, deploying the
practices of Industry Foresight, Consumer/Customer Insight and Strategic
Alignment as a foundation, and supplementing them with conventional consulting
models. Second, it combines two seemingly paradoxical mindsets: expansive, visionary
thinking that imaginatively explores long-term possibilities; and pragmatic, down-to-earth
implementation activities that lead to short-term, measurable business impact.
Traditional Strategy versus Strategic Innovation
Traditional approaches
Strategic Innovation approach
Adopt a "present to future" orientation
"Starts with the end in mind" identifies
takes today as a starting point
long-term opportunities and then "bridges
back to the present"
Assumes a rule-maker/taker
Assumes a rule-breaker (revolutionary)
(defensive/follower) posture
posture
Accepts established business boundaries /
Seeks to create new competitive space /
product categories
playing fields
Focus on incremental innovation
Seeks breakthrough, disruptive innovation
while continuing to build the core
Follow traditional, linear business planning Marries process discipline with creative
models
inspiration

Seek input from obvious, traditional sources

Seek articulated customer needs
Are technology-driven (seek consumer
satisfaction)
May have a "one-size-fits-all"
organizational model

Seeks inspiration from unconventional

sources
Seeks unarticulated customer needs
Is consumer-inspired (seeks consumer
delight)
May experiment with entrepreneurial "new
venture" or other organizational structures

Capitolul 2. Japan and China. Case studies.

2.1. Present
The rise and rise of China
China is the biggest gainer among all economies, developed and emerging. Its innovation
performance will improve by 11% and it will rise from 54th to 46th place between 2004-08
and 2009-13. India will move up four places, whereas the rankings for the two other BRIC
countries, Brazil and Russia, remain unchanged.
Innovation efciency
Not all countries use their innovation inputs with equal efciency. A comparison of a
countrys rank on its innovation performance with its ranking on direct innovation inputs
can provide an insight into its level of innovation efciency. A large discrepancy in the two
rankings suggests either a high level of efciency (high innovation output relative to
inputs) or a high degree of inefciency if the direct inputs rank exceeds signicantly a
countrys ranking on innovation performance.
Japan is highly efcient: it is top-ranked in innovation performance in 2004-08, but only
11th in the index that measures the environmental factors that are conducive to innovation.
Japanese innovators are therefore swimming upstream. Japan is a resource-poor economy
with a greying population that has long taken an innovate or die approach. The country
invests heavily in R&D, and more of this R&D is carried out by industry than in the US or
EU. The country has more scientic researchers per head than the US and scores well in
terms of the standard of higher education. It has a large share of high-tech activities and
scores high in Internet penetration. The economy has a high concentration of high-tech
companies, which tend to be more innovation-intensive. Another feature is the symbiotic
relationship between these companies and webs of associated small and medium-sized
enterprises, which are under strong pressure to innovate.

2.2. Tendencies. Forecast.

The main ndings of Innovation: Transforming the way business creates include:

 innovation is benecial to both national economies and corporate performance, but its
impact is more
visible at the microeconomic than the macroeconomic level;
innovative companies tend to outperform their peers;
rms connected to high-tech clusters tend to outperform their peers;
technical skills of the workforce and IT/telecommunications infrastructure are critical to
innovation;
small countries have an advantage; and
return on investment (ROI) is higher in middle-income countries than in rich countries.
The current economic crisis will have a strong impact on innovation performance in the
next ve years. The Economist Intelligence Unit now expects only a 2% increase in
innovation performance on average between 2004-08 and 2009-13 for the 82 economies in
the ranking. This is less than the previous forecast of a 6% average increase between 2007
and 2011. We now forecast a more modest increase in both direct and indirect inputs for
innovation over the medium term compared with two years ago. The recession will
constrain both public and private R&D spending. It will also limit governments spending
on education and training as well as support for innovation activities.
The most important expected changes in the environment include poor conditions for
nancing investment; a deterioration in macroeconomic and political stability and in scal
conditions in many countries; and unfavorable developments in institutional and regulatory
environments. The forecast is not based on a worst-case scenario, and a more gloomy
outcome that hampers innovation still further remains a possibility.

Trends will vary among countries. Because so many emerging markets start from a low
base, their overall innovation performance is still likely to improve, but at a slower pace
than previously expected.

By contrast, a few developed countries are expected to record a decline in innovation

inputs and performance. The UK has been hit exceptionally hard by the global crisis,
which has hampered the countrys innovation environment.

Current and Forecast Innovation Index

The rise and rise of China

China is the biggest gainer among all economies, developed and emerging. Its innovation
performance will improve by 11% and it will rise from 54th to 46th place between 2004-08
and 2009-13. India will move up four places, whereas the rankings for the two other BRIC
countries, Brazil and Russia, remain unchanged.

In fact, Chinas ascent up the rankings is picking up pace. Two years ago, we forecast that
it would rise to 54th place in the 2007-11 ranking. Instead, it has already climbed to this
position and is expected to jump a further eight places over the next ve years.
One reason for the jump is that China is making a concerted effort to build a more
innovative economy. The country is investing heavily in R&D and education, and its
innovation environment is improving. According to the OECD, Chinas R&D spending
(public and private) reached US$87bn in 2006. This is below the level of Japan
(US$139bn) and around one-third of that of the EU (US$243bn), but it is growing rapidly.
In real terms, Chinas R&D spending grew by 19% per year in 2001-06, and R&D as a
share of GDP
reached 1.4% in 2006. The governments target is to reach 2% by 2010. Based on its recent
progress,
China will reach this targetif not in 2010, then soon after.
China now leads the world in the number of people engaged in science and technology.
The country
accounted for 6% of the number of scienti c articles published worldwide in 2005, up
from 1.6% in 1995,
and it is ranked fth globally. University graduates with degrees in science and
engineering represent
40% of the total, almost twice the OECD average and far above the 15% recorded in the
US. Much of
Chinas FDI will continue to target innovation-intensive sectors, and foreign companies
have been
opening research centres in the country.
The prospects for China are not entirely positive; it also faces barriers to innovation. Weak
protection of
intellectual property (despite improvements in recent years) stands out.
In February 2009, the Economist Intelligence Unit updated the innovation index. The new
rankings largely conrm the forecasts of the original research, although some countries,
including China, rose more quickly than expected. The forecast for 2009-13 has been
affected by the severe business downturn and the global economic crisis, which will have a

negative impact on countries long-term ability to innovate. While developed countries will
continue to top the list of innovators in the medium term, poor business conditions will sap
their innovation capacity. But China and India are among the countries that will continue to
gain ground. Innovation at a global level is now expected to advance at a signicantly
slower pace over the next ve years than was previously forecast. The current nancial
turmoil will affect a variety of the innovation inputs that directly drive innovation. It is
likely to result in a reduction of investment in research and development (R&D), spending
on training and education, and the quality of information and communications technology
(ICT) infrastructure. The economic crisis will also have a negative impact on certain
aspects of the environment that enable innovationaccess to nance for rms, conditions
for entrepreneurship, and economic and political stability.
A signicant slowdown in the pace of innovation would harm the long-term prospects for
economic growth around the world.