Schneider Electric « The global specialist in

energy management »
Introduction

I decided to talk about Schneider Electric, a French company founded in 1836

specialized in electrical equipment. Today it is the world leader in its field and a
model in term of innovation both in products and organization management.

The first part of this essay is focus on the chief innovation manager and the
organizational innovation inside the company because it is the first part of
innovation and the reason why the company innovate largely today. The second
part is based on the innovation value chain, a process to understand how
innovation is built at Scheinder Electric.

Innovation management is nowadays becoming essential for large company and

is supplanting R&D which was before the only key point of the innovation. This is
necessary to let employees understand the importance of innovation and allow
them to take part of it in order to create a group synergy.

I- Chief innovation manager & organizational innovation

Sir Xavier Bonnaud, knowledge & innovation manager at Schneider electric uses
to talk about 3 convictions he has. The first one is that innovation is necessary for
the company. According to him a company which to not innovate always die. The
second conviction is the collective intelligence meaning that a group is well more
performing if there are various profiles, and complementary people rather than
same people working together. And finally Mr Bonnaud talks about the
managerial involvement which is essential for companies has managers are now
understanding that motivate employees to give their ideas and can have
recognition from the top managers is extremely useful and also smarter when
you want an healthy company.

Mr Bonnaud tried and actually succeed by introducing into the company the
collaborative innovation or “Innovation by sales forces” (Innovation & open
innovation at Schneider Electric, www.open-your-innovation.com , 30 June 2010,
[acceded the 22 December 2010]) Sale forces collect directly from their
customers new ideas, new expectations and in order to motivate sale forces to do
it well, top managers give them financial reward and also recognition for their
work.

When we talk about innovation management the word “collaboration” is one of

the most important as it enable companies to obtain more like sales, market
share… but also to have new ideas and less risky project. Actually, Schneider
Electric always try to be innovative and this is the reason why the company
created a social network targeting their customers in order to create and develop
better relationships between the company and its customers: “the Schneider
Innovation Lab”.

We can definitely say that SE is an innovative organization as the all company

atmosphere is based on creativity of employees, customers but also thanks to
team working. The purpose of the company is to implement a creative climate &
positive approach to listen ideas and they do that thanks to motivation system.

Finally, The R& D is not limited to researches only, actually the company is
more preoccupied about how to dispose of necessary competences to do the
project. Indeed competences which are in the company are that they developed
through projects create innovation as the company would “puiser” on them to
find a new product for example. Why SE invest a lot in R&D? because they have
to improve all the time this competencies they already have through the
improving of their learning capacities, formations, or through past projects
experiences.

II- The innovation value chain (IVC)

“Competitive pressures and opportunities provide the motivation for firms to

engage risky, uncertain and costly activity” (The innovation value chain, Stephen
Roper/Jun Du/James H Love, Aston University)

The IVC could be define as a process of 3 different steps which starts with the
knowledge sourcing, then the transformation of the product or the organization
thanks to this knowledge and finally the exploitation and this value chain leads to
the innovation. But there are also other studies which describe the IVC in 7
steps:
 7 steps
Idea Selection Launch
method
Integration
Support Learning
Information

3 steps

method The knowledge steps begins with a new idea, it may come from customers
as we have seen earlier with the collaborative innovation and then it involves
obviously R&D researches for company such as Schneider Electric. For example
their R&D budget is 5% of global sales, with 7500 engineers all over the world
Knowledge
because at Schneider Electric they understood that to invest Exploitation
Transformation in R&D is the key of
the innovation (Innovation and R&D, www. Schneider-electric.com, [accessed 23
December 2010]). But there are also other types of information like external
knowledge thanks to consultant for example and the competition can also give
ideas because you can sometimes follow other company in terms of innovation
but the idea did not come from your company.
The second step can be called the transformation and is about the idea selection
and also to try to match it with production processes, try to catch the real
potential of the idea. This is clearly the setting up to the idea into a real
innovative product or organization.
The exploitation or diffusion is the last step, once the product has been
developed and is ready to be launched. This is the step that involves the changes
in term of organization.

In order to understand this concept I choose to talk about one recent product that
Schneider Electric decided to launch in February 2010: In-Diya a “highly energy-
efficient LED based Lighting System’ (Schneider Electrics, Press release, 10
February 2010, [acceded in the 22 of December 2010]) and this new product
aimed to light Indian people who do not have access to electricity. Indeed it is a
good way to understand IVC because at the beginning the company had to make
a lot of researches in order to create value for the company but also for the
consumers. And then Schneider Electric had to find the right market for the
product and also the right target which is completely based on the first step of
the IVC. In fact they choose to focus on Indian population and especially for rural
India by creating a led “which provides backup ranging from 8 to 15 hours for
indoor applications”. When all information, data have been evaluated the
company had to create the product and see how it could be an innovation with
new materials, new way of using….The aim of the product came easily, they
wanted to launch a new product, more efficient but with an affordable price. End
the final step became a reality on February the 10th 2010 when Schneider Electric
launched In-Diya, but they would have to wait a few times more in order to learn
from results.

Conclusion
“No risk equals no innovation” (Mathias Lamien, boots patents initiative Project
leader, Schneider Electric). More than innovation the company innovates in its
way of innovating, actually the all company, all departments are turned through
innovation direction in order to face the market.