Manufacturing Executive - September 2008 - (Page 14)

STRATEGIC CONSIDERATIONS – PART 1 “We also have a Top Plus group of innovators with a proven record in ideas and developments. They meet together in a virtual network to exchange ideas. And there’s a group of Siemens ‘scouts’ that go out and look at what is happening all over the world. So when we make decisions, we have a reality framework to build on.” GE also has its own corporate-wide approach to innovation. Like Siemens, it is aiming for $25 billion from new green products, but by the slightly earlier date of 2010. GE’s “Imagination at Work” and “Ecomagination” programmes — which is how GE now likes to characterise the innovative efforts of its global businesses — include a requirement for business leaders across the company to submit three Imagination Breakthrough ideas each year, projects that may generate $100 million in five years. “Our focus is on making sure that GE is on top of new technologies that we believe could directly impact our business portfolio down the line,” says Michael Idelchik, vice president of advanced technologies for GE Global Research. “One big advantage is the organization and balance we bring to how we approach innovation. On the one hand, we have identified six advanced, long-term technology programs. On the other hand, 60% of our funding comes directly from the businesses. For these projects, our technology roadmap is tied closely to a given business’ strategy and helps drive nearer-term priorities.” GE thinkers have plenty of backup. The company’s global research centre houses 3,000 top brains from a range of scientific disciplines networked across labs in Niskayuna, NY; Bangalore, India; Shanghai, China; and Munich, Germany. TURNING IDEAS INTO CASH But ideas, as the saying goes, are a dime a dozen. It’s making them happen that costs the millions. “Value creation is about turning innovation into success in the marketplace,” says Georges Haour, professor of technology and innovation management at the International Institute for Management Development (IMD) in Lausanne, Switzerland. “You have to be successful in mobilising your people to turn ideas into cash. We are still not very entrepreneurial about that in Europe.” The $1.5 billion a year Lucite International depends on innovation for both internal efficiency and the development of a revolutionary new production process. ing board at Siemens. “We want people to be entrepreneurial with their ideas, to turn them into profitable businesses. But we have to watch out for the complexity trap. Mastering technological complexity is the key to increasing R&D efficiency.” Siemens should know because it has lots at stake. It invested €3.4 billion in R&D in 2007 and has 32,500 R&D employees at 150 centres in 30 countries around the world. They churned out 7,900 inventions last year. One way Siemens tries to manage the volume and complexity of innovation is through what Requardt calls a technology parliament. “Every quarter, department heads meet in a steering committee for innovation. We decide which projects merit the most attention, which we want to continue, and when it’s time to stop. the taking pulse 1 A MINORITY OF EUROPEAN COMPANIES PRACTICE INNOVATION GOVERNANCE Do you have an innovative governance model in place that assigns overall ownership to a designated resource? Strongly Agree 24.5% Strongly Disagree 29.8% Neither Agree/ Disagree 45.7% 2 MOST SEE COMPATIBILITY BETWEEN EFFICIENCY, INNOVATION How would you characterise the relationship between operational efficiency and innovation in your company? The two goals are somewhat compatible; there are differences that can be managed. 37.8% The two goals are substantially compatible. 31.7% Don’t know 12.2% The two goals are in substantial conflict; management of both is difficult. 18.2% Source: ME Reader Survey Percentages may have been rounded and may not equal 100%. 14 September 2008

Table of Contents Feed for the Digital Edition of Manufacturing Executive - September 2008

Manufacturing Executive - September 2008 Contents Editor's Letter Opinion By David Humphrey Starters Road Trip Part 1: Innovation or Efficiency? Part 2: The Innovation Gap Opinion By Lisa Bodell Special Report: Great Aspirations Supply Chain: The New Money Machine Product Design: Fruehauf Gets into High Gear with 3D CAD Business Intelligence: Food Distributor Turns Up the Heat on Manufacturers Software: Manufacturers Face SaaS Hurdles Dialogue Opinion By Pierfrancesco Manenti

Manufacturing Executive - September 2008

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