Management of

InnovatiInnovationon

What is

Management of

InnovationInnovation..?..?

Innovation Thinking

Innovation Activities

New Product New Tech

New Biz

New Market

New. New.. New…

What Is Management Innovation ?

Based on Webster online dictionary :

Management :

"Management" is characterizes the process of leading and directing all or part of an organization, often a business one, through the deployment and manipulation of resources (human, financial, material, intellectual or intangible).

Innovation :1. A creation (a new device or process) resulting from study and experimentation.

2. The creation of something in the mind.

3. Specific programmed for the dissemination and optimization of the results of

activities in the field of research and technological development, including

demonstration

What Is Management Innovation ?

Management Innovation : about activity to manage all kind innovation activity follow the vision, use strategic and optimize tools the get the best result based on target set before

Basic Concept Sharing share info related to

innovation about planning, role, authority, etcChallenge give new paradigm of successful like project or target that must be achieve by person or Team Monitoring take control to manage all kind of activity run well in advancePDCA : is about Cycle role of activity come from Plan - Do - Check –Action

Concept

SharingSharing

ChallengeChallenge MonitoringMonitoring

P-D-C-AP-D-C-AP-D-C-AP-D-C-A

Management Management InnovationInnovation

What Is Management Innovation ?

Sharing

• Guidance and sharing to all group/employee always supported among program to make good condition of new thinking method about all kind of innovation thinking• All improvement condition will be implemented by each team as innovation Project that will be evaluated by Mgt. Inn. Team

MonitoringMonitoring

At the end of period Mgt. Inn. Team will held review and assessment and will evaluate by Manager and Director. Its about rewarding process after program, and also progress monitoring continued.

Challenging

Each group/employee collect & organize the problem occurred in the working area, and continue to analyze, and next is making solution, and finally is implementation, based on target setting in Innovation Plan

What Is Management Innovation ?

Business System

ManufacturingManufacturing

FinanceFinance

AdvertisementAdvertisement

R&D Supply Produc-tion

Logistics Market-ing

Sales SVC

ProductPlanning

DesignPricing

Accept-ance

Syndica-tion

Place-ment

TradingMarket-ing

MediaPurchase

ProductPlanning

Sales MakeAd.

AirAd.

MonitorExploitCustomer

CustomerCustomer

Management Innovation

What Is Management Innovation ?

3 Core Strategy

New MarketMarket – Expand

No-Competition

Non-Customer

Blue Ocean Strategy is about Create New Market Space with no Competition & make

Competition Irrelevant

LGE Company innovation Logo

2 = Triple double (double profit, revenue, share holder value); BY =

By Year; 10 = 2100 through Blue Ocean Strategy

Strategy of Innovation

Blue Ocean Strategy concept is based on

Value Innovation.

How to make product that have best value for

customer, and optimum cost in production

Costs

ValueInnovation

Buyer Value

Strategy of Innovation

Compare point of view between Red Ocean vs. Blue Ocean; in New Market Concept

Competition

Michael Porter Renee A. MauborgneW.Chan Kim

Cost Leaders DifferentiatorsStuck

in the middle

Old Market

Cost Leaders

Capture the core of Expanded Market

Value Innovators

New Market

Red Ocean Blue Ocean

Divergence

V Innovation

Strategy of Innovation

Focus

CoreTools

Strategy competition

Value Chain

5 Force model

Buyer Utility Map

Define Industry Key Success Factor

Create New Market

A tool to help identify value drivers

Check New Value from Cuctomer side

Strategy Value innovation

6 Paths’ Framework / Value Curve

Red Ocean

Blue Ocean

Compare point of view between Red Ocean vs. Blue Ocean; in Non Competitor Concept

Strategy of Innovation

Value Chain

5 Force model

Buyer Utility Map

6 Paths’ Framework / Value Curve

Compare point of view between Red Ocean vs. Blue Ocean; in Non Competitor Concept

Strategy of Innovation

Mass customer

• Focus to current state customer

• by segmentation • service variation

•Focus to non-customer•Concentrate in similarity before differentiation

•First is documentation

Level 1Level 2

Level 3

Market

Level 1: Non customer soon to be customer

Level 2 :Non customer that refusing market

Level 3 :Non customer that unexplored in the market

Red Ocean Blue Ocean

Target Customer

Compare point of view between Red Ocean vs. Blue Ocean; in Non Customer Concept

Strategy of Innovation

Oops !I heard that the averagedepth is 4 meters !!!

6 Sigma is one of Tool for

Innovation

6 Sigma is about concept how to reduce

“variation”

6Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfec

t products and services

It’s a way of thinking, a way of decision making.

Average is not enough, so we must find the data of variation, don’t be stupid Man in graph

Tool of Innovation

μ

USLUSL

T

μ

USLUSL

T

Precision but no accurationShifting to Target

& Reduce Variation

Shift to Target

ReduceVariation

USLUSL

T

μ

Accuration but no precision

The Object of6 Sigma is

Shift to target

ReduceVariation

Tool of Innovation

FSE : 9

Process Variation Data Improvement

Statistical Thinking Statistical Tools

Characterization Analysis Action

Supplier CustomerProcess

Input Output

S I P O C

Role of Manufacturing/Production is

come from SIPOC

Variation will be occur in all area of SIPOC, but 6 Sigma focused to

reduce variation before “our Product” come to CUSTOMER

We need improvement in process to reduce

variation

Cause 99% is not enough and 1 % is big in term of

CUSTOMER SATISFACTION

So 6 Sigma make standard that our

product must be near perfect (99,9999 % or

3.4 PPM defect)

Tool of Innovation

FSE : 9

No Excuse for customer satisfaction , there’s comparison between 99 % (4σ)

and 99.9999 % (6σ )

99% Correct(4σLevel) 6σLevel

For every 300,000Letters delivered

3,000 misdeliveries 1 misdeliveries

Our of every 500,000Computer restarts

4,100 crashes < 2 crashes

For every 500 years ofmonth-end closings

50 months would notbalance

.018 months wouldnot balance

For every week of TVBroadcasting(per channel)

1.68 hours of deadair

1.8 seconds ofdead air

(The Six Sigma Way - Mc Graw Hill, 2000)

Tool of Innovation

FSE : 9

18CIQC

1940’sSQC

1970’sTQC

1980’s

TQM

6σ

Tool of Innovation

Goal

• Identify Problem• Define Requirements• Set Goal

• Validate Problem/Process

• Measure key problem

• Identify Vital Few rootcauses.

• Validate hypothesis

• Develop ideas to cutoff root causes

• Measure solution

• Standardize solution• Establish standardmeasure to maintainperformance

• Survey / Interview• QFD• Process Mapping

• Fishbone, Logic Tree• Interrelation • Graph • Statistical Inference

• Melt-In • DOE

• Stratification• Gage R&R• 4 Block Diagram

• Graph• Control Chart

Define

Measure

Analysis

Improve

Control

Useful ToolsStep

Tool of Innovation

Z

6

5

4

3

2

PPM

3.4

233

6,210

66,807

308,537

Process Defects capability opportunity

Bulk of FruitProcess characterization and OptimizationLower Fruit7 Basic Tools of QC (commonly happen in all Factory)

Ground Fruit Consist of “No Good” result

6σ Concept (Metric)

Sweet FruitsDesign for productivity

PPM = Part Per Million3.4 PPM = If Production quantity 1000.000 pieces, only 3.4 pieces in “No Good” condition (that’s mean almost perfect)

Tool of Innovation

StrategyStrategy

ToolsTools PeoplePeople

Blue Ocean

6 Sigma Intrapreneurship

Successful Manage Innovation is come from good synergy of 3 factors:

Intrapreneurship :Is about mental and action from someone that work in the company/corporate, that take high responsibility to change their idea to become service or product that have any profit, through encourage action and measurable risk and do Innovation

(The American Heritage Dictionary)

In The Book of Management Intrapreneurship “The Farmer & Hunter” (Anthony Dio Martin) :

Intrapreneurship =

Working Situation like Farmer

+ With Mentality like

Hunter

All of us MUST

LEARNING by DOING

Success is ONLY MIND Game

It is Not HOW MUCH you know that count,

It’s about WHAT YOU DO with what You Know

For further reading :

Blue Ocean Innovation Strategy , W Chan Kim – Renee Mauborgne; Penerbit Serambi 2006

Management Intrapreneurship. Petani dan Pemburu; Anthony Dio Martin, Penerbit Gramedia Pustaka Utam, 2005

Tool books of Six Sigma, The Art of Innovation etc

Innovation

or

Die..?Die..?

Thank YouThank You