The policy of Internal Innovation Management Order Instructions: No title page needed
Research and report on two companies. Pick one which has always adhered to a policy of internal innovation and a second which has acquired technology several times through external means as detailed in our prior units. Compare and contrast the two approaches from the context of:
Implementation
•Evaluation
•Control
•Overall Portfolio Management
Relate them all back to your company’s success or lack thereof and consider the individual contribution each of these individual components has on the result. In both companies, consider if their approach is sustainable or if they need to change any of their methods applied in these four categories. Also consider if they need to switch between internal and external innovation overall.
Present your ideas as a complete set of recommendations for the company both evaluating their past performance and providing future recommendations. Also include consideration of current events (macroeconomic, competition, etc.) when making your recommendations.
The Policy of Internal Innovation Management Sample Answer
In the marketing arena as far as companies are concerned, it have been mentioned that, the key behind the development and growth of companies that are able to withstand a continuous increase of profits is innovation. Most of the business enterprises have invested a lot in innovation and not just innovation but open innovation. The aim of investing in this innovation is that, when an organization gives their innovation a second thought, it is able to yield a significance innovation results. Organizations are trying to explore on how it can be easier for them to connect with one another and mainly come up with a way that they will be able to comprehend between high and low technology and how they should develop to further innovations. With this in mind, companies are changing the innovations plans from internal innovation to open innovation, (Drucker, pg. 87, 2014). This method is given a hand shake in the service industries, where stiff competition and advanced technological are mostly depended on for future innovative processes. It should be noted that, any kind of innovation should not interpret on how companies should govern their innovation. Every company vary differently from the other.
Facebook limited is a company that adhered to internal innovation. This has been there culture as they believe they should give their internal resources including their employees an upper hand to give there entrepreneur opinion. Facebook does encourage each and every person from the top management to the junior level to cram by creating. For it to happen, even the Chief Executive Office Mark Zuckerberg together with his vice president of the products Christopher Cox, are involved. They all become a part of concept and engineering of their products. In Facebook, the top management are viewed as great thinkers. With them been in the team, their innovation procedure get less of the approval and more of the great team of thinkers to participate. Facebook have come up with a new mobile strategy, (Berchicci, pg. 127, 2013).
The strategy has been implemented because in the recent study, it is believed that more user are trying to get contact with Facebook on their mobile phones. This has challenged the company and they have shifted to become a mobile organization. The organization has spurred on the mobile innovation. They have taken a different direction when there user are accessing Facebook through their phones. For this to happen, the company aims at giving their user something that is relevant, interesting and at the same time be in a position to come up with a new exposure where they are able to take act at an impulse. To do this internally, Facebook has come up with an internal mobile design think tank. Also, they are operating on the reengineering of the experience obtained from the “contextual sharing”. It means that they are able to offer information which can be comprehended, answered or even questioned while the user is still on the phone, (Feitelson, Frachtenberg, & Beck, pg. 17, 2013)
On the other hand, the Alliance Management Group believes that outsourcing for innovation require the employee to change on how they perceive things. They believe that what has not been invented in their company may or might be invented anywhere else. In the Alliance Management group, the top management whore are responsible for company biggest project do collaborate, share and be in charge of projects with their partners. For this to take place, the company needs to review their development process as far as the products are concerned. Also, the strategic planning, supply chain management, technology procedure, reward system and other organizational system for the benefit of incorporating innovation should be changed. Leaders in this company have created a cultural trend that hand shank external innovation. They have set a frame work that do encourage the employees to think global and be in a position to see new marketable places and idea when they use or apply the external resources, they will achieve what they want. To put this into action, the leader has created a reward system where they are able to reward those employees that use external resources. In addition, they have created a platform to maintain the activity. The company deal with three approaches of dealing with the sourcing of technology in the firm.
The first on is recognized as traditional strategic planning activities. It normally deals with the inventory inside the firm and by this they are able to develop a plan if they are given those assets. In this context, what is missing for the company is the external inventories that the organization is in a position to get them. Through the use of external assets, the company top management team are able to develop new customers from different market target. This is generated from the unimagined perspective of view that could not have been obtain from the use of only internal assets. To obtain all of this, the leaders or the top management have to restructure the strategizing process by including all the firms available resources. Also they should encourage employees to be able to identify external assets that will help them and the company at large to obtain the company vision and mission as quickly as possible and also at a minimum hurdle rate, (Cheng, & Huizingh, pg. 1215, 2014).
Facebook is the best known site in the social media. It recent innovated and invested in the mobile platform where its user can be able to access information without posing or at a go. With this innovation, it has been able to make a significance turning point. Facebook was able to get revenue that amounted to 69% of its total revenue generated only from the mobile devices. This was a great return for the Facebook since not many people could have used laptops or computers at a go an access to their services. According to their data, it is evidenced that through the fiscal year 2014 to 2015, they experienced a significant rise of 24% to 745 million. Through the use of the mobile platform, they have been able to make a significance step on advertisements. This will help them to allocate little cost to their projects and in return experience a huge return from the projects. For example in 2014, it was able to generate revenue amounting to 12,466,000 dollars and a net income of 2,925,000 dollars as compared to other years.
According to Facebook, threat is not or no longer a threat to them. They take a reputable advertising as the main threat for them. Failing to advance in advertisements they might be in a position to make a significance loss and that might be a boom to the company.
According to the alliance management group, it is based on the basis of controlling and overseeing the portfolio of innovation. The company has been able to create a very stable foundation that has help it to manage the portfolio of companies. It does mainly back it up with overseen and taking into consideration what might be of a big challenge or threat to them. To implement this, it involve the group collaborating with the members of the group and coming up with a good corporate governance procedure that goes beyond the company long term goal but at the time be a key knot toward the firm short term and long-term strategic plan, (Woo, Bae, Kang, & Chu, pg. 14125,2014).
The implementation of internal and external innovation depends or is influenced by the external and internal factors that are within the business environment. For Facebook, it becomes difficult for them to use open innovation opt to source technology to boost up their services. This is because, they are facing a challenge of coming up with an informed decision procedure that they should undertake when implementing innovation that has been sourced from anywhere else. As we saw earlier, the company is at an easier position to make a good decision on what entrepreneur approach they should take since the top management are part of the internal innovation. Also, Facebook cannot be able to use or to source technology because, the business external factors are very cautious on the firm’s management as far as innovation is concerned. It is because, the external factor are used to decide what time the organization is in a position to refigure or rethink about managing their innovations. Also, Facebook key external sources and also the internal factors that govern the business operation are able to control on how the firm will be able to apply outsourcing approach to the company. This approach of outsourcing is at stake since it can easily affect the culture, communications and the architecture of the firm’s innovation control.
On the other hand, the Alliance Management Group, is better off with the sourcing of external resources. This is because it is able to bring together the innovative ideas into the firm which are congruent to the firm’s internal procedures, incentives and also the metrics. This are of a great significance to the implementation of the company long term strategies that are been generated from the use of external resources of technology. The use of this will help the company to bring together both the external and internal approaches into the big picture and the company system that will enhance the business approaches that will eventually require redesigning and the use of the organization innovative system. The use of open innovation or external innovation requires a great overlook on the basis of creativity and the process of innovation. It is because it maximizes the difficulty that is aligned with the control process of innovation. This technique of outsourcing requires that the top management is in a position to manage between internal and external factors that may be affecting the organization, (West, & Bogers, pg.814, 2014).
From the above, it can be concluded that both companies work best from their point of innovation. Whether they follow insourcing of technology or the outsourcing of technology to further their company long term goal, what matter most is how they are able to implement and control innovation keeping both internal and external factors that affects businesses. Also, it can be mentioned that, the top management team in both companies has the overall mandate to control their innovation procedures. This is because, it become very important for them to give and upper hand and encourage their stakeholder both internal and external to embrace innovation since it will be able to maintain a significance performance in the field of innovative management. With no support from the top management, the company innovative processes will have little or no impact on the company projects.
In addition, the top management are the primary contributors to the internal performances of the organization. When a new innovation has been launched, they should foster on a variety of internal ways on how they should adhere to the changes, (Zhang, Chen, & Li, pg. 669, 2013). This will take effect when the employees are able to bring together and take in to action the new methods induced in the process of innovation. Encouraging innovative culture as Facebook does will create an environment where the entrepreneur ideas and risks are encouraged and the holder of them is rewarded as a way of motivation. This will be able to create a case where the development of new products are based on a good and thorough research that will be measured as part of a credible innovation and that will help the company to sustain very high profits in a given fiscal years. This will create a positive feedback on the basis of innovation culture that is expected to yield positive and curtained results. With this, it can me summarized that the implantation of any kind of innovation, whether insourced or outsourced do vary from one company to another. This is determined by the internal or external factors that affect a business environment.
The Policy of Internal Innovation Management References
Berchicci, L. (2013). Towards an open R&D system: Internal R&D investment, external knowledge acquisition and innovative performance. Research Policy, 42(1), 117-127.
Feitelson, D. G., Frachtenberg, E., & Beck, K. L. (2013). Development and deployment at Facebook. IEEE Internet Computing, (4), 8-17.
Woo, H., Bae, J., Kang, R. R., & Chu, Y. (2014, January). Effects of a Portfolio Company’s Alliance Formation on the Market Returns of Its CVC Firm. In Academy of Management Proceedings (Vol. 2014, No. 1, p. 14790). Academy of Management.
Cheng, C. C., & Huizingh, E. K. (2014). When is open innovation beneficial? The role of strategic orientation. Journal of product innovation management, 31(6), 1235-1253.
West, J., & Bogers, M. (2014). Leveraging external sources of innovation: a review of research on open innovation. Journal of Product Innovation Management, 31(4), 814-831.
Zhang, J., Chen, Y., & Li, T. (2013, July). Opportunities of innovation under challenges of big data. In Fuzzy Systems and Knowledge Discovery (FSKD), 2013 10th International Conference on (pp. 669-673). IEEE.
Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
