GLOBAL INNOVATION

MANAGEMENT

RECAP - THE INNOVATION MANAGEMENT PROCESS

Evolving models of the innovation process 6th generation based on knowledge – intangible

assetsManaging innovation thru Organizational

Routines or CapabilitiesSpecify the different phases of the

innovation process Search -> Select -> Implement Scan -> Focus -> Resource -> Implement Learning underpins both processes

AGENDA

STRUCTURING THE NEW PRODUCT DEVELOPMENT PROCESSES

EVALUATION OF THE NEW PRODUCT DEVELOPMENT AND R&D PROJECTS

HOW TO SELECT THE PORTFOLIO OF NEW PRODUCT DEVELOPMENT PROJECTS

BUILDING THE INNOVATIVE ORGANIZATION Learning organizations

STRUCTURING THE NEW PRODUCT DEVELOPMENT PROCESSES

STAGE-GATE PROCESS R. Cooper, 1960´s phases with inputs and outputs specified

beforehand gates, in which the gatekeepers decide about

the continuation of the process Activities standardized and the indicators of

the process performance significantly improved.

6© 2009 John Wiley & Sons Ltd.www.wileyeurope.com/college/tidd

2-ND GENERATION SG PROCESS

EVALUATION CRITERIA Operational, realistic, differentiating Must meet: to kill ‘not well proceeding’

projects as soon as possible

Should meet: prioritization, support of portfolio management

Strategic buckets: resources allocated to various strategic goals

INTERDISCIPLINARY VIEW

FUZZY FRONT END (FFE, FEI) quality of pre-development phases

significantly influence the product success

early phases to a large extent influence, which projects will be realized, why, what will be final costs, time, and – in the end – the final success in the market

highly dynamic, not strictly documented, creativity competes with systemization.

NEW CONCEPT DEVELOPMENT MODEL

in the early phases it is not suitable to use the same approaches as in the later, more structured process phases

DIFFERENCE BETWEEN FFE AND NPD

Fuzzy Front End (FFE) New Product Development (NPD)

Nature of Work Experimental, often chaotic.“Eureka” moments. Can schedule

work—but not invention.

Disciplined and goal-oriented with a project plan.

Commercialization Date Unpredictable or uncertain. High degree of certainty.

Funding Variable Budgeted.

Revenue Expectations

Often uncertain, with a great deal of speculation.

Predictable, with increasing certainty, analysis, and documentation as the product release date gets closer.

Activity minimize risk and optimize potential Multifunction product and/or process development team

Measures of Progress Strengthened concepts. Milestone achievement.

TRADITIONAL AND TECHNOLOGY STAGE-GATE PROCESSES

HOW TO SELECT THE PORTFOLIO OF NEW PRODUCT DEVELOPMENT

PROJECTS

Portfolio management Goal 1: Maximizing the portfolio

value Goal 2: Balance Goal 3: Strategic alignment

PORTFOLIO MANAGEMENT Resources are always limited, it is neither possible nor effective to invest in every idea without due consideration.

It is important to select from many possibilities those with the highest potential; today’s innovation projects decide about the future profile of the company, its customers and market share.

Goal: to create such portfolio of products that is rooted in the company strategy and optimizes the company performance.

Portfolio management: dynamic decision-making process of evaluation, selection and prioritization of new projects; active project can be fostered, put on hold or even killed; their priorities and allocation of resources can change.

The process is characterised by uncertainty, changing information, dynamics of opportunities and threats, links between projects. The whole process must be based on the long-term company strategy and must support it

GLOBAL R&D NETWORKS: NOVARTIS