M A N A G I N G I N N O V A T I O N & T E C H N O L O G Y (C) 1995,1988,1987,1983 Vasos-Peter John Panagiotopoulos II Reproduce freely if in entirety - Telex: (23) 650 353 6867 1. Get top management behind it, thinking about it, cut red tape! Clarity of purpose. "Regular guys" don't inspire. Meditate on be nonjudgemental. Coach, consult, cheerlead, coord; candid, contextual, constrctv, consistent 2. Reward$ it (equity not options), don't penalise explrtory (teachng!) mistakes. Many ideate to be noticed in awkward meeting silence. Iteratv quizzng,trying, reflecting & fixing. Keep testing your assumptions. Strategic opportunism: directed dilligent flexibility. Brainstorm (4-8 people): record all (divergent extremes force thinking) ideas, freely mix disciplines & stakeholders. Ideas are mistakes, copies or mergers. Play, non-conformity, ambiguity, non-curricularity are essential. Creatives need autonomy to incubate ideas. Stuck? pass to someone or incubate subconsc. Ready, FIRE, aim! Easier apologise than get permissn! But COMMERCIALSN not just ideation; Perception (markets) not just conception! Converg after diverg - cluster not shotgun - then obliterate misalignments. 3. Internal venture for moderate familiarity, VC for unfamiliar, JV if either tek or mkt is basic competence but oth is unfamil. JV only to learn, both structurally &by osmosis, &by very diplom mgrs w/o oth agendas. IPOs for marketing driven, VC for technology driven, JV for process driven. Intraprneurs are singleminded but paranoid. Small firms look good:no one sees them fail. Obsessives great starters but remove them when grow. 4. Cut hierarchy levels (4-7 max) else filter out ideas. Opt workgroup=7,max div empl = 500, opt team life (vs groupthink) = 2yrs. Share info w/ cust&suppliers. Tight cross-stake externalised integration costs decision time but significantly improves lead time and quality robustness. Fixing or preventing a bug earlier prevents unstable layering of fixes. Val vs accur of info is tradeoff. Variety of interests sharpens mind. Ideas depend on communic - no single innovator! 65% tek time communicating but bad (2.3x) delegators & time/cost estim! Star tek already has networks in place,also initv,tmwk,org, ld&flw,sho&tell. Supervisor never rejects ideas: req 1 lev higher. R&D & sales must talk often! Allow return to old job if try risky rotation. 5. Don't refine cost/perf/backintegrtn so finely in short-term that you kill elbowroom & delay react. Knowledge work has no dimin returns. USE, don't buy! Contract out if unspec but need spec assets & cash flow risk unless weak patent defence. Megamanagement was for more static markets! Financial measures are the language not message. Budget for risk/opnty seeking. 2 exec summaries: Probs & Opnty; changes in percepn, market, indus, knowledge. Cycl:free to expand, struct to apply. Brutally shock out of complacency - demand qual, partial optim but multipass, aim very high for long term. Not just ROI, but sales, inventory, space, leadtime, learning (software for people), qual & flex effects;apply rules flexibly, don't make red tape. Do own cost acctg regressns - chose cost drivers very carefully. Use options pricing binom trees in cap budgeting. Nonlin linkage betw functions&stakes: cognitive, nonsavant. Very high betas mean much higher i, P:E. Expect unconventnl paradigm shifts everywhere. Are sales, inventories and cash synchronised? Sched strategic gaps to reassess; stay flex:JustInTime/Tune w/markets. Contin imprvmt obstructs discontin imprvmt; Prod/tek/speclst focus early in S-curve, proc/cost/generlst later. 6. Graft innovations to corp culture,strateg,obj,budgets - not against [Corp.Cult.:High Risk/Feedback "Macho" in constrctn, media, consulting; LoRisk/HiFdbk "Work/Play Hard" in sales;HiRisk/LoFdbk"Bet Company" in capital goods, investment banks;Low Risk&Fdbk "Process" bureaucracy] Can't mix. Guides cohesively w/o rulebooks. Shape as hire/seat/clique/email. Accu mean worth more than low deviation. Common vocab/tools. Shape internal & ext strateg dependencies: coord sales vs actl recpts,sales vs support avail,productn backlog,actl roylty collxns 7. Dare to be (product) different(-iated)! Watch cust needs! Don't research world: focus! Get research by hire distrib pre-design! Users, not makers, are better innovators! Market pull, not tek push! Market driven dominant designs (PC) are ok, govt stardards (UNIX) are not - all swallow bitter as easy as can. IBM-360, 123 perfected, marketed, supported existing/ inferior tek for confused user, not tekie! Market intuitively: find unusual market, creative applicn. Tek change drivers: expand, diversify, change compet/val/cost. Order winners: cost, qual, deliv, flex. Tek buying might be standardised and formalised in ways that produce unpredictable, illogical, arbitraged results. Develop concepts, processes, platforms, prod fams THEN products. It's ok if a strategic project falls behind but not an incremental improvement. Learning the applications environment as important as learning your technology. 8. Fearlessly destroy existing success by intro a better product! 30% sales from 3yr-or-younger prods. Tek discov lags mkt by 8-15yrs but idea only buys you 7 mos lead. Tek doesn't guaranty qual prodctn/implemtn/diffusn. Try mult,parallel approaches;worst you just sell off. Plot product attribs vs existing products - more contiguous successful products, more likely market success. Plot both mkt&tek levrg&posn, then tek vs mkt posns. Freeze design as late as possible, but choose attribs & price predesign; Design qual not inspection; Design for svcblty, mfgblty. Most useful R&D isn't yours,so outsource/profitcenter/spinoff/license esp basic. Unify R&D, libraries for crit mass, but let other depts contract for indiv proj,easy for orgsn to search&use. Gurus advise not decide. Burden on patent owner to sue infringer - if internal use, better trd secrt. Licensing should be accomp w/crossshareholdg, Make them show your mark too. Beware customer & homework claims on patents & suggestions. Get all sign pre-patent-approval confidentiality. Reward solution not invention and appoint R&D staff to serve specific lead users & user groups, but avoid supporting laggard user demands - fight NIH. Help licensees circumvent legal redundancies (eg 2bl roylt for same mfg). Encourage wealthier partnrs to furth dev your tek in exch for furth roylt. New prod/old mkt or old prod/new mkt, never new/new. Int propt valn:rylty relief,cost sav,usful lif,resid from tangib,dvpt cost. 9. People are your greatest asset. Overequip,overfund,overtrain,undercontrol, understaff so no layoff so hi loyalty! Trust them, they see what doing, you only talk! Expect excellence. Solve probs at lowest level. Hire best, get out of way; Accomplish much if ignore own credit. Capitalise, don't expense, intellectual capital. Genius hates empty praise, dumb colleagues, conflict avoidance, challengeless jobs;jargon/complexity hide insecurity; want current skills. Req irrevokably integrate lives into firm mission 10.Diffusion of innovations thru market can be sped by relative advantage, compatibility (to existing envir), divisibility (ltd stepwise user risk) and communicability (can really understand how to use it). If user not comf early on - never will be. Stepwise additive (TANH) PLC diffusion. --unprocessed notes-- Achievers: nonawkward, order, honest, persistent, nondefensive, nonevasive, independent, cognitive flexibility, selfesteem, first born or only child (middle kids have most probs), less peer oriented, moreintroverted. Tenacity & reflexion => entrepreneur