09
INTERNAL LENS: ORGANIZATIONAL MAPPING
To outline a strategy for the future, understanding the internal
status quo is also vital. The process of mapping the overall
organizational picture reveals pain points, inefficiencies as
well as missing or overlapping roles and responsibilities.
Organizations can identify their current competence profile
by conducting site visits as well as structured interviews with
key stakeholders:
Identify and map relevant as-is processes, responsibilities
and governance structures; be sure to uncover
the actual status and not just the favored one.
Identify official as well as hidden cross-border
interfaces and interdependencies between the
Chinese entity and the international headquarters.
Uncover ongoing initiatives both in the Chinese
division as well as in the headquarters to identify
overlaps, synergy potentials and alignment needs.
Identify key employees and knowledge pools
across organizational units.
Learn from the past – leverage use cases of historic
market entry efforts of product and service innovations
to evaluate success factors.
PUTTING THE PARTS TOGETHER: THE LONG
LIST OF INNOVATION OPPORTUNITIES
Matching the internal picture against the identified external
market requirements helps to disclose competency gaps and
to develop a long list of innovation opportunities. These opportunities
may range from new product lines over customized
integrated solutions, to the capability of delivering predictive
after-sales services.
4.2 ELABORATE THE INNOVATION ROAD MAP
required investments on the other. From here on, “ease-ofimplementation”
should receive particular attention. It is
determined by the degree to which an opportunity requires
the redesign or adaptation of existing products and services
to fit local market needs. Depending on the required extent
of modifications, MNCs can pursue either a top-down or a
bottom-up approach.
TOP-DOWN refers to the adaption of an existing design to
local requirements and is particularly suitable for customers
with a moderate to low price sensitivity who value high-end
products from international markets. While this approach can
usually be readily implemented, it doesn’t allow for product
cost reductions of more than 20%.
BOTTOM-UP approaches gain in importance since they allow
for substantial cost advantages even when local competitors
are increasingly offering adequate quality at low price levels.
By rebuilding product solutions from scratch, significantly
higher cost advantages are realizable and thus allow for noteworthy
price decreases. As a result, MNCs can keep up with
local competition and at the same time cater more accurately
to local market demands. While the bottom-up approach
offers considerable leverage for improvement, it must be
diligently orchestrated to avoid potential pitfalls. Its success
depends mostly on the smooth cooperation of cross-border
R&D teams, making the seamless and secure transfer of
know-how a key challenge.
The short list of innovation opportunities is captured in a
detailed innovation road map. This roadmap forms the bridge
between strategic and operative innovation management,
and outlines the timing and frequency of the introduction of
product extensions, upgrades and new generations. Furthermore,
it includes the assignment of staff with specific responsibilities
as well as critical project milestones.
STRATEGIC
INNOVATION
MANAGEMENT
Identifying and investing in the right innovation projects is a
challenging task, particularly in times of unpredictable market
dynamics. Therefore, successful innovators in China have
a systematic product and service portfolio management process
in place and rigorously validate the identified opportunities
according to expected value, timing and associated risks.
Subsequently, a prioritization, or short list, of opportunities is
derived by trading off the potential financial and operational
impacts on the one hand and the ease-of-implementation and
OPERATIVE
INNOVATION
MANAGEMENT