Code Ref: 2006-Nov.

Question #1 In the selected case studies identify, define & describe the main Technology Management issues. Compare and contrast the case studies approaches

Question #2 Innovation systems are complex and need to cover many activities to be effective. What is the meaning of innovation and the ambiguity that may exist?

Question #3 Draw a system map to exploit new ideas

Question #4 Based on question #3 suggest KPIs that would assess an organisations innovation systems in relation to the type of the organisation and product Vs process. Page Count 17 Word Count 2730

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Contents
Page Executive Summary Questions #1 1.1 1.2 1.3 1.4 Questions #2 2.1 2.2 2.3 2.4 2.5 2.6 Questions #3 3.1 3.2 Questions #4 4.1 4.2 References Organizations Innovation Systems. 3 KPIs for ccessing the success of an innovation system. 14 System Map Introduction Explanation of the Systems Map to exploit New Ideas. What is the meaning of innovation? Ambiguity #1 Inventions and Innovations. Ambiguity #2 Innovation and Improvement Ambiguity #3 Which comes first innovation on the product or process ? Ambiguity #4 Do innovative ideas need to be pushed or pulled ?. Conclusion Introduction to Technology Management. Trouble in the Bank A tail of two Technologies Conclusion 4 4 6 8 3

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Executive Summary
This paper is divided into 4 sections section #1, reviews case studies to see how well technology management was applied to delivering the required technical objectives. In the case of the banking industry I look at how the technology management (TM) failed. In the case of Apple and Canon organizations I look at how TM was successful using similar method steps but with different tasks steps. In section 2 I look at what innovation is and then review certain ambiguities that can take from its effectiveness if they are not considered, In section 3 & 4, I discuss a system for exploiting innovative ideas and then suggest how one would use KPIs to monitor the effectiveness of innovation.

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Question 1
1.1 Introduction to Technology Management.

All these case studies document the methods that were used to achieve an objective via technology enablement. Fundamentally they were about managing change. The main change was the selection of technology enablement which was used along with the organizations strategy to provide a competitive advantage. The main way in which TM differs from the more traditional management is that it must operate in a dynamic environment. Resources like tools, knowledge, systems, etc. are constantly changing therefore leveraging of these resources need to change. Failure to integrates TM into an organization overall strategy can lead to failure. The Banks, Apples & Canons Objective: The Banks, Apples & Canons Approach: To respond to the new completive environment in their respective industries by the use of technology innovation. Focus on the use of technology management to drive innovation that matters.

At a high level the objectives and the selected approaches were very similar. While implementation and TM methods yielded difference results. 1.2 Trouble in the Bank

In the banking case study I have selected a fishbone diagram (diagram 1.1) to illustrate that when a project fails if can be due to:1) 2) Catastrophic failure ( Perreir and the benzene recall in the mid 80s kill the brand ) Increment failure ( Poorly managed banking IT revolutionary solution, as in this case study )

I looked at 5 main technology issues: Seeing Technology as a silver bullet solution. Technology capability has been the reason for many organization to generate a strong competitive advantage. But the injection of technology into an organization does not automatically guarantee this. The banks believed this would be the case and did not focus the how this should be achieved and how to manage it. Poor Understanding of integration complexities Banking systems and processes have evolved over a great many years. This was a collection of high integrated tacit knowledge, manual and technical processes. TM is the art of integrating technology into an organisation without disruption to its core processes, while adding value. The inability to understand what disruption and how it would be caused, while not knowing how value add was being created was one of the major failures of the banks TM. Lack Of Accountability The banks rigid structure and well defined systems meant that a strong but flexible control needed for a TM project was lacking. This in turn gave rise to poor defined objectives and uncontrolled method of delivery. Lack Of Environmental / Cultural Consideration Banks have operated for a long time on traditional business models. Dynamic environments, changing consumers trends, technology evolution were all new concepts. Their management style did not let them fully appreciate the need to change to TM perspective and understand how this new revolution in process would effect their culture.

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_______________________________________________________________________________________________ Over Reaction to Competition The banking industry has seen very little competition from substitution industries. When First Direct, Tesco ect. offered alternative methods of banking which banks believed that they were the experts in and they could drive away the new comers. What they did not take into consideration was that the threat was from technology knowledge superiority and not banking knowledge superiority.

Trouble in Banking IT Enablement

Lack Of Accountability Lack Of Environmental / Cultural Consideration Banking staff & backing customers were well comfortable with current method Over Reaction to Competition Competition business model fundamental different but banks tried to adapt rather then transform to compete.

Poor established monitoring procedures based on banking Methods & Culture

No Feed back of delivery to provide gap analysis ( actual v required) delivery performance.

Revolutionary innovation imlemation was not a common in the banking system

Competition was seen as a threat to the whole customer base.

Banking business technology revolutionary buinsee model needed to capture, structure, systems, culture. Mismatch in what customers wanted and what staff could deliver using the new technology

Many of the banks systems are legacy syetms with deep roots Aggressive timeline prevented a uniform deployment of systems

Poor Productivities results from an over zealous Technology Investment

IT & Operation conflict was not dealt with correctly Seeing Technology as a silver bullet solution rather then as a component of a integrated strategy

Problem creep set in and was allowed to grow Poor Understanding of integration complexities

Ishikawa-Type Fishbone Diagram

Diagram 1.1

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_______________________________________________________________________________________________ 1.3 A tail of two Technologies

In the case of Canon and Apple the hi levels step they took were very similar except for the cultural differences that existed and the style of management of the team. I used a case/effect diagram to illustrate how their similar innovation process flowed (diagram 1.2) I looked at 5 main technology issues:(These issues can be seen in the diagram 1.2) A well founded belief and the ability to take risk in technology Both Apple and Canon had grown from innovative technologies therefore a leap of faith in to new technology was under pinned by a strong understanding of what was needed in technology management. This may not have pointed the correct route but helped to identify the wrong ones. Both product and process innovation was needed To Solve todays problems we will need the thinking of tomorrow, A. Einstein 1933. Both S. Jobs & H. Tanaka setup new teams, with new people using new processes and an appropriate style of management. Only the original objectives were kept intact. Thinking sessions and communications were redesigned to try to funnel the creativity down to the objectives, i.e. a new mini copier (MC)and a revolutionary PC. Technically challenging objectives needed to be over come via creative thinking In Canons case the objectives were light weight, hi quality and small mini copier with a price tag of$1000. Canon used Canon Revolution as the phase to fuse R&D engineering, production, marking and product design thinking. This used contradiction (or argument) thinking to create solutions for the technical challenges. Apple also used a idea generation process that allowed others join in, even secretaries often joined the impromptu discussions. This like Canon was given a name group mania. This allows the exchange of ideas and concepts that may not have surfaced in a formal meeting environment.

The system of technology management needed to harness the new culture Culturally the Japanese are reserved and follow a very hierarchical organizational structure. Canon saw that a new dynamic culture was needed therefore started to hire new personal to generate a counter culture. Canon also selected a very young team who were not overly influenced by traditionally Japanese organizational culture. This was used very successfully to unlock the subdued culture and evolved brainstorming camps for idea generation. Canon also allowed the team be self organizing. While the California culture was a lot easier-going with individuals used to a flat organizational structure S. Jobs did take the role of product champion and became a pivoting figure in the group. In many cases his ideas were dictated to the team but acted as a catalyst. This may have helped to focus the free spirited culture generate clearer ideas. Apple also allowed the team to be self organizing.

Sustainability and Continual benefits must arise from an innovative experience This is where both Canon and Apple differed. Canon saw that the knowledge generated in the MC development was captured and deployed throughout the canon organization. This was then used as a catalyst to promote innovation in other areas. Canon had ensured they completed the last step in technical project management i.e. project closure. This was used for retain learning. The transformation at Apple was not on the same levels as Canons. Many leaders left Apple to seek other opportunities which was in line with the Silicon Valley culture. Others also complained of burnout and tension from disagreements. Apples focus was on this project and did not seem to have a long term technical learning strategy.

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Cause & Effect Diagram for Canons PPC & Apples Macintosh Computer Development Methodology
Competitive Environment went against Canon & Apple Apple Specific Canon Specific

Both Company acknowledged the urgency to act Hire in New Blood Setup New Teams Both had a vision and objectives

Canon & Apple needed to respond by new process & product

Canon & Apple reviewed their current processes & product

Both teams were small focused and well managed

Apple used a pacesetting style of management Cannon used a democratic style of management

Both team environments suited the culture Social interaction

Solution were novel

Communication and Interaction was deliberate

innovation existed in revolutionary and evolution forms

Closure was Unique

Product Launch was a success

Cano process was adopted after launch

Apples process was not adopted after launch

Diagram 1.2

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_______________________________________________________________________________________________ 1.4 Conclusion

Compare the approaches All case studies had the following similarities: They had an initial objective ( as stated above ) They knew that technology enablement was the approached they wanted to take They knew that process innovation along with product innovation was the key to developing a highly successful competitive advantage. They knew their initial objectives had risk and were prepared to isolate themselves from the organisations core to delivery the project.

Contrast the approaches Both Canon and Apple knew their objectives and focused hard in trying to achieve them. This was achieved by constant monitoring and adjusting the project (feed back control) The banks just set the objectives and hoped they would be reached (open loop control). Technology management was well understood by Canon and Apple. The banks did not have such expertise. Revolutionary innovation was a new concept to the banks and was managed poorly. Both Apple and Canon were born from such a concept and understood that both product and processes need to happen for such a transformation to take place..

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Question 2
2.1 What is the meaning of innovation?

Innovation is the process by which meaningful ideas are generated that improves a situation by 1) Being an original idea that helps rather then hinders 2) Improveing on an existing idea. For innovation to be effective the following attributes should exist There is a need for a new idea ( either Internally generated push, externally required pull ) The innovative ideas must matter to the situation and make a positive difference. When ideas are created they are called inventions regardless if they make a difference to a situation or not. If they make a positive difference then they are called innovative inventions.

For innovation to have a clearer meaning it maybe better to talk in terms of what it is and what it is not. 2.2 Ambiguity #1 Inventions and Innovations.

An Invention becomes an innovation invention when a need for that inventions arises. This maybe pre or post invention. The following examples can illustrate how this may happen. Invention:When 3M tried to invent new super glue they came up with a low adhesion non residue glue that had no useful application as super glue Innovative inventions:When the inventor used this glue to hold notes to mark passages in his Bible the post-it was born. One should innovate for a purpose and not for the sake of invention. Additional ambiguity can arise when the invention generates its own need and then is considered innovative. 2.3 Ambiguity #2 Innovation and Improvement

Innovation can also be used to enhance some existing idea. So when is this enhancement considered an improvement or a new innovation?. One method is to look at the degree of enhancement and the added benefit to the original idea. There are various degrees of innovation enhancement. Land breaking Radical Major Improvement.

Is a new flavor of ice cream an improvement or innovation? Was the jet engine a land breaking innovation against the turbo-prop? Maybe it is not important to achieve an exact label for added benefit. The most import label is added benefit. 2.4 Ambiguity #3 which comes first innovation on the product or process.

Traditionally product innovation has preceded process innovation. Getting the product right and then improving the methods of production. In the information age new innovative technological process has lead to various innovative product. E.g.. supermarkets process technology has allowed control of supply chains and now have been utilized to sell financial products. To look at the product / process as a sequential method maybe incorrect, maybe it can be considered cyclical.

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2.5

Ambiguity #4 Does innovative ideas need to be pushed or pulled.

Push:- development of an idea that will generate a requirement i.e. SMS texting Pull:- development of an idea that will satisfy a requirement i.e. ball point pen All innovative ideas will have started with an objective in mind, i.e. they want to make a positive difference. The degree of pull or push depends on ones perspective. If the innovation is to make a difference then a need must exist but may not be obvious, push. Consequently to satisfy this need a pull exist. Maybe it would be more appropriate to talk in terms of how big a difference the idea will make or made the how it came about. The ipod was a fusion of existing technologies push but people were looking for new ways to carry more music since the establishment of the cassette tape, CD, Mini disk, digital audio tape, ect.

2.6

Conclusion

Ambiguity may surround the exact meaning of innovation but what is very clear is that for technical organizations to comperte a competitive advantage is needed. This will mainly comes from innovation, Innovation that matters!.

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Question 3
3.1 System Map Introduction

Systems Maps allow one to group components that have some sense of group existence. An innovative idea can said to be successfully exploited if it gives a tangible benefit to an organization

System Map for new Idea Exploitation

Test & Deploy & Monitor Innovation Reviewers

Modification Input

Modification Input

Innovation Reviewers

Think Place Website & DB

Idea Generation

Annual Idea Jam

Prototype Test Cost Benefit Analysis

Communications Internal External Commercialization Team

Awards

Test Market

External Market

Shareholder Value

Diagram 3.1 In the above system map the value of the idea is seen in terms of adding value to the organisation for the benefit of the shareholders. This is based on gathering of ideas and having a system that will guide them through the innovation system to allow them reach their full potential. This could be seen as a innovative ideas funnelling system as only the ideas will impact the financial bottom line will be realized. See Diagram 3.2

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Innovative Ideas Funneling

Ideas

Idea Collector

Feasibility Filter

Testing Filter

Test Market Filter

Commercial Success
Diagram 3.2

3.2

Explanation of the Systems Map to exploit New Ideas. Ideas Generated These can be captured in 2 systems, i) a DB that is constantly open or a ii) yearly idea Jam session. Modification Input Captured ideas will be left for others to review, modify or use as catalyst to generate more ideas, i.e. Crossover ideas, Hybrid ideas, ideas Fusion. Innovation Reviews* The ideas that are most popular via others additional inputs will be further reviewed for feasibility of use in the organization. Test, Deploy and Monitor* If an idea is feasible and suitable for the organization, resources will be applied to test, deploy and monitor. This maybe a relatively easy idea to implement or may need more intensive testing. Prototype Testing* Ideas that need intensive testing will be implemented in a structured prototype environment. This will involve scenario testing, pressure testing, quality testing, ect. Cost benefit Analysis* ** Innovation must always matter i.e. be of benefit to the organization. In the case of a commercial organization this is a ROI. For an innovative idea to be accepted it must have the potential to generate revenue or reduce costs. Rewards Any innovative idea that has or could yield a positive cost benefit analysis, needs to be rewarded. This ensure motivation exist for others to generate more ideas. Communications Communication is needed to motivate the population of the need and reward for innovation. It is also a signal to the market place the innovation capability in the company.

Commercialization

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_______________________________________________________________________________________________ In the case of an innovative idea having a commercial element, a skilled team will try to develop a marketing strategy. Test Market* Test marketing can confirm if a commercial element exist from the innovative idea. External Market & Shareholder Value In a commercial organization the owners require a return of investment and growth. Innovation should be the engine that support this.

* At any other these stages the innovation maybe canned. ** The innovative idea may be a process improvement and not be launched externally.

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Question 4
4.1 Organizations Innovation Systems.

For a system to be successful it needs to have a feedback route. This will allow the output effect and regulate the input. In the case of the above systems (diagram 3.1) ideas are collected (i/p), processed (Tx Fn) and the successful ones are realized. By communicating the successes and rewarding innovation, a feedback loop can be used to motive an organizations population to continue to be innovative. This is illustrated in the f/b control loop below (diagram 4.1). To ensure a systems is actually performing, KPIs ( Key process indicators ) are used. Traditionally these are based at the i/p , Tx Fn & o/p parts of a system.

Innovation System KPI #1 Input (i/p) Innovative Ideas Collection KPI #2 KPI #3 Output (o/p) Realization of Innovative Idea

Transformation Function (Tx Fn) ( Reviewing, Accepting, Testing & Deploying )

Feedback Motivation for continual innovation ( awards, communications , etc. )

Diagram 4.1 4.2 3 KPIs for the assessing of the success of an innovation system. Total Ideas Collected (i/p KPI) Calculator:Objective: How many new ideas are been collected over a certain period Is the organization proactive in submitting innovative ideas

Total Ideas past V rejected (Tx Fn KPI). Calculator:Objective:How many ideas are giving the GO in relation to NO-GO Illustrated the quality of ideas, if a high percentage get a GO, then innovative ideas are of good quality.

Business Impact and/or commercial viability ROI Calculator:Objective:What is the of revenue generation or cost reduction based against idea realization cost. Having a positive KPI means values is being added to the business. This can also be used to communicate a positive messages, that the organization is an innovate one.

If trended these 3 KPIs can point to effectiveness of an innovation system. Internally generated treads may be the only way of benching marking as benchmark data for other organization innovation systems may not be appropriate. The following is how innovation system KPIs may differ in organizations. Consider the above 3 KPIs applied to 2 different types of organization and areas:-

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_______________________________________________________________________________________________ Organization type Bureaucratic Type:Technology Type: Innovation Area Product Process
Organizational Type KPI #1 Risk Takers This market has a short product life cycle and requires a hi level of innovative ideas to find the next winning feature, This KPI needs to be high As technology prototype is costly it would be hoped that KPI would be high Bureaucratic Culture in bureaucracy likes to keep a status-quo and a low KPI for ideas generation maybe normal Innovation Area Process New process innovation ideas KPI are generally higher then product, due to the amount of stakeholders in a process This KPI should also be high to show that continuous improvement is taking place Process improvement should save more then it cost. This is KPI should also be high

Government Office Mobile phone manufacturer

#2

Product New product ideas are generally confined to Engineering design groups therefore this KPI may no be uniform through the organization Once ideas are As product received political development is costly positioning may kill this KPI should be them so keeping this high to ensure the KPI low industry is developing This KPI may be low as government projects rarely are based on ROI Unsuccessful product launches are costly. Innovative ideas need have a positive ROI KPI

#3

Unsuccessful product launches are costly. Innovative ideas need have a positive ROI KPI

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References
Nonaka,I.,Kenney.M.,(1191)Towards a new theory of innovation management: A case study comparing Canon, Inc. and Apple Computer, Inc. , Butler & Tanner Harris,l., (2001), The IT productivity paradox- evidence from the UK retail banking industry, Butler & Tanner The Open University, (2005) Patterns of Innovation and Improvement, Block 1, Butler & Tanner The Open University, (2005)Technology Management: the operational issues, Block 1, Butler & Tanner The Open University, (2005) Analytical Methods, Block 6, Butler & Tanner Porter, M.E. (1985) Competitive Advantage, Free Press, New York . Cameron, Sheila. (2001) The MBA Handbook , The Open University , Prentice Hall.

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