Marketing & Innovation Session 03: Managing the Innovative Organization Marcos LIMA, PhD Skema Business School

What is a management system? What is management?

What is a management process? Human Resources Informational Resources Material Resources Financial Resources

What is a management system? What is a System? External Environment INPUT PROCESS OUTPUT Internal Environment FEEDBACK

What is a management system? External Environment Management System in Action Products / Services PROCESS INPUT OUTPUT Market FEEDBACK Internal Environment

What is an Organization?

What is an Organization? McKinsey’s 7S

What is an Organization? Simplified McKinsey Model: 3Ps Search ENVIRONMENT Select STRATEGY Implement PROCESS Capture-Value CULTURE PROCESS POSITION Implement Processes Search Environment Select Strategy Create Value-Capture Culture PEOPLE

Fragmented Synthesis McKinsey’s Interactive Exploration of the 7S http://www.mckinsey.com/insights/strategy/enduring_ideas_the_7-s_framework

Knowledge Management & Innovation The 7 Dimensions of Knowledge Management Senior Management VISION & STRATEGY 1 Suppliers Partners Universities 7 External Learning Clients Competitors Government 7 External Learning a. STRATEGIC Organizational CULTURE 2 HR Policies 4 Organizational STRUCTURE 3 b. TACTIC Information SYSTEMS 5 Performance Measurement SYSTEMS 6 c. OPERATIONAL

Knowledge Management & Innovation

Knowledge Management & Innovation: D1 – Strategy Video Case: Pirates of the Silicon Valley Part 1 Apple’s Core Competence (0:00:00 + 0:18:50)

Knowledge Management & Innovation: D1 - Strategy Senior Management Vision Focus on core competency Create a sense of direction and “urgency” Case in point: Lloyds Bank Goal: to double the company’s value every 3 years Under CEO Brian Pitman, goal was reached for 15 years !!! X 2X 4X 8X 16X 32X !!! Brian Pitman

Knowledge Management & Innovation: D2 - Culture Organizational Learning Institutional / Organizational Barriers / Incentives Organizational Knowledge Stock Ideas With Innovation Potential INNOVATION Learning by Doing (Exploiting) Learning by R&D / Searching (Exploring) Market Barriers / Incentives Innovative Projects Organizational Forgetting Creative Forgetting

Deep Dive at IDEO Designing a Shopping Cart

KM & Innovation: D2/D3/D4: Culture / Structure Video Case: Pirates of the Silicon Valley Part 2 Barriers at Apple (0:40:25)

Knowledge Management & Innovation: D3 - Structure Organizational Structure Flat hierarchies Open spaces Incentive to “skunk works” Case in Point: Alcoa CEO’s workstation measures 3 x 3 m, like any other in the building No desk is more than 15 m from a window

Knowledge Management & Innovation: D4 - People HR Policies Recruit (and retain) talent Incentivate knowledge sharing Case in Point: McKinsey Diversity of sources Engagement of top managers in recruitment process Global knowledge base Built-in turn-over: constant renewal

Knowledge Management & Innovation: D4 - People Video Insight : Diversity is key to learning http://vimeo.com/3475327

Knowledge Management & Innovation: D5 - Systems Information Systems Knowledge “mental evaluation” Information “message with meaning and purpose” Data “structured registries” Explicit Domain Tacit / Implicit Domain

Knowledge Management & Innovation: D6- Measures

Knowledge Management & Innovation: D6- Measures Measurement Systems Indicators that capture not only financial performance but also: Customer feedback Process efficiency Learning and renewal Case in Point: Skandia Multiple indicators, multiple perspectives

Knowledge Management & Innovation: D7 - Networking Internal / External Learning Networking with Suppliers / Partners Competitors Government / University Video Case: Pirates of the Silicon Valley Part 3: Apple x Xerox (1:01:00) Learning with the Environment

Knowledge Management & Innovation: A Synthesis

Marcos Lima limamarcos@gmail.com Conclusions Marcos Lima limamarcos@gmail.com

Knowledge Management, Innovation and New Products How are these concepts related? Do we have an innovative Organization? Do we have an innovation strategy? Market Results Innovation Business Model Positioning Process Marketing Mix Targeted Segments Knowledge Management New Products & Services Technology

A Visual Definition These two variables explain the critical role of MARKETING in the innovation process: understanding UNMET NEEDS

Source: Lannings & Michaels 1988 apud Kotler, 2009 Strategic Marketing Physical Process x Value Creation Process Source: Lannings & Michaels 1988 apud Kotler, 2009

Marketing Planning Process Technological Forces Social Forces Competitive Forces Legal/Political Forces Cultural Forces Economic Forces Market / Product Positioning Segmentation /Targeting Competitive Advantage Choosing the Value Place/ Distribution Product Promotion Promotion Price Marketing Environement Marketing Positioning Providing the Value Marketing Mix Customer Needs Communicating the Value

What is a Business Model Your Definition? Alex Osterwalder’s Definition A business model describes the rationale of how an organization creates, delivers and captures value.

Types of Innovation Tidd’s 4Ps

Disruptive Innovations

Decision Making in the Innovation Process Stage-Gate Decision Process Preliminary Investigation Business Opportunities Product/Process Development Pilot Testing Launch

BMC Overview

What is an Organization? McKinsey’s 7S

Knowledge Management & Innovation The 7 Dimensions of Knowledge Management Senior Management VISION & STRATEGY 1 Suppliers Partners Universities 7 External Learning Clients Competitors Government 7 External Learning a. STRATEGIC Organizational CULTURE 2 HR Policies 4 Organizational STRUCTURE 3 b. TACTIC Information SYSTEMS 5 Performance Measurement SYSTEMS 6 c. OPERATIONAL

Innovation Project Proposal https://docs.google.com/forms/d/1zy0KP1vVCuW3AaNV_aKO7FZWYY0fOjtpOJvI8iAECOI/viewform