THE PRACTICE OF

INNOVATION PART 2
 When You Can’t Innovate, Copy
Imitating others may not offer the best path to becoming an industry leader. And it’s not without
risk. For instance, pioneers can command strong market loyalty that could be difficult for copycats
to overcome. Still, startups need to understand that even big companies copy. Would Apple have
created the iPhone if there was no BlackBerry? Entrepreneurs need to think about whether they
need to innovate when there are business models that can be copied lawfully. The Samwer
brothers have certainly shown that in the absence of innovation, copying and funding already-
tested business models can work.

https://hbr.org/2012/
05/when-you-cant-
innovate-copy

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KOMPAS.com - Sebagian perusahaan Korea Selatan berkembang
dengan menjiplak produk perusahaan-perusahaan Jepang dan
Amerika Serikat. Namun, dalam waktu singkat, ”sang penjiplak”
berhasil mengalahkan kekuatan yang ditiru. Samsung, adalah salah
satunya.

”Kami (para insinyur Korsel) didorong untuk menyerap ilmu dan

pengalaman sebanyak-banyaknya dari para insinyur Jepang,” kenang
Park Sang-il, mantan Kepala Perencanaan Strategis dan Chief
Technology Officer Samsung Electronics. Kini, Sang-il menjadi guru
besar di Seoul National University for Sciences and Technology.

Di ruang kerja yang sedikit berantakan oleh kertas kerja dan peranti
elektronik, awal September lalu, ia menceritakan kisah bagaimana
para insinyur Korsel ”mencuri” ilmu dari insinyur Jepang.

AMATI, TIRU, MODIFIKASI……COPY, TRANSFORM, COMBINE: REMIXING

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How Chinese Innovation is Going Global
“Made in China” is a thing of the past. The next big shift
moves from “Made for China” to “Designed in China”.

Chinese Tech Firms Are Increasingly Being Copied by

U.S., Not Just Copying

China has a rap as the world's biggest copycat, but U.S.

companies are now borrowing more tech ideas from China.

China vs US: who is copying whom?

New generation of China tech groups blazes

trail in services and business models
https://medium.com/ming-labs/how-chinese-
innovation-is-going-global-99fd08f1c436
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 The ultimate creation
1. Mengapa meniru (new-to-the-firm) dapat lebih sukses dibandingkan
dengan melakukan inovasi baru untuk pasar (new-to-the-market)?
Bagaimana kesuksesan tersebut dapat dipertahankan dalam jangka
waktu yang panjang (sustainable)?
2. Organisasi sebagai sebuah sistem: apakah inovasi merupakan buah
kerja sama? Mengapa dan bagaimana mengelolanya?
3. Bagaimana iklim inovasi dikembangkan?

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1. Melompati tangga dalam kurva pembelajaran.
2. Memperoleh gambaran atas kemajuan yang dicapai.
3. Alokasi sumberdaya lebih efisien dan terkontrol.
4. Dapat menghindari kesalahan sama yang dilakukan oleh
inisiator.
5. Mampu tetap sederhana, fleksibel, berubah dengan cepat.
6. Dapat melakukan penelitian dan pemahaman pasar dengan
lebih baik.
7. Menawarkan sesuatu yang lebih baik.
8. Mendapatkan gambaran atas strategi dan taktik yang efektif.
9. Bisa mendapatkan dana lebih murah.

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The argument that imitation is smarter than innovation is borne
out by numbers. He says innovators as a group get only a small
fraction of the value of an innovation. Typically, the better
returns go to businesspeople often derided as copycats.

Backing that up, Shenkar (2010) provides examples of companies

that innovated new products but lost out in the marketplace to
others afterward. Among them, Diners Card created credit cards
but lost the market to MasterCard and Visa , EMI created CAT
scans but the market today is dominated by General Electric.

Companies, rather than just imitate,

should combine creativity and imitation,
However and come up with their own competitive
advantage. This group of businesses is
what Shenkar calls “imovators.”
Flannery, 2010 (Forbes)
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How the practice of innovation starts

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 How to boost an innovation
capacity?
• Importing another firm’s best practice
• Inviting ideas from outside parties (knowledge
brokers)
• Acquiring firms with innovative ideas/products
• Developing internally (organic growth) by
creating an innovation culture
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 Phase Methods
Idea generation Collaboration within unit

Collaboration across unit

Collaboration with outside parties

Idea conversion Screening and funding of new ideas

Developing ideas into new viable products,

services, or businesses
Idea diffusion Spreading developed ideas within and outside
the company

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 Phase Methods
Idea generation Build external networks

Build cross-unit network

Idea conversion Provide cross-unit funding

Create safe haven

Idea diffusion Designate “idea evalengists”

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 The Innovation Value Chain: A Systematic Way
of Improving the Innovation Process
IDEA GENERATION CONVERSION DIFFUSION

IN-HOUSE CROSS- EXTERNAL SELECTION DEVELOPMENT SPREAD

POLLINATION
Collaboration Screening and Movement Dissemination
Creation within Collaboration with parties initial funding from across the
a unit across units outside the idea to first organization
firm result
KEY Do people Do we create Do we source Are we good Are we good at Are we good
QUESTIONS in our unit good ideas by enough good at screening turning ideas at diffusing
create good working across ideas from and funding into viable developed
ideas on their the company? outside the new ideas? products, ideas across
own? firm? businesses, the company?
and best
practices?
KEY Number of Number of Number of Percentage Percentage of Percentage
PERFORMANCE high-quality high-quality high-quality of all ideas funded ideas of penetration
INDICATORS ideas ideas ideas generated that that lead to in desired
generated generated generated end up being revenues; markets,
within a unit. across units. from outside selected and number channels,
the funded. of months to customer
firm. first sale. groups;
number
of months to
full diffusion.

Source: The Innovation Value Chain. By Morten Hansen and Julian Birkinshaw. Harvard Business Review, July 2007.
 Survey of 121 companies show that all parts of
the chain are difficult
Average across the chain (2.6 on a 5-point scale) is very low. All 6 items in
the chain are also low. Diffusion is a bigger problem than idea generation.
IDEA GENERATION CONVERSION DIFFUSION

IN-HOUSE CROSS- EXTERNAL SELECTION DEVELOPMENT SPREAD

Creation within POLLINATION Collaboration Screening and Movement from Dissemination
a unit Collaboration with parties initial funding idea to first across the
across units outside the result organization
firm

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ideasinside crosspoll ideaoutside selection development diffusion

Source: Benchmark survey of 121 companies, August 2007. By Hansen and Birkinshaw.
Companies recognize it is important to foster innovation in their
organizations. Watson Wyatt’s 2004/5 study found companies
that created innovative environments had higher returns to
shareholders than those that did not (Asia-Pacific).
I am encouraged to give suggestions to improve 59%
business practices, processes and systems
Management implements my suggestions where 46%
feasible and explains why they are not implemented
My company provides employees with resources to try 43%
new ideas that will help the organization boost
revenue/reduce expenditures
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Employee Rating and Ranking of Workplace Innovation
(Indonesia vs. Asia-Pacific)
Favorable Indonesia Rank Asia-Pacific Rank
Percentage
Innovation 49% 6/10 6/10
Employee Rating of the Innovation Gap – Indonesia and Asia-
Pacific (percentage of favorable responses)
I am encouraged to give suggestions to improve Indonesia Asia-Pacific
business practices, processes and systems 62% 59%
Management implements my suggestions where 51% 46%
feasible and explains why they are not implemented

My company provides employees with resources 44% 43%

(time and money) to try out new ideas that will
help the organization boost revenue/reduce
expenditures
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 Team Learning
• The fundamental learning unit
• Alignment - necessary condition before
empowering the individual will empower the
whole team
• Trust is the key
• Different perspectives do matter
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• It is team learning, not individual learning,
that adds to organizational learning.
• People need each other to achieve their
objectives.
• Teams are the key learning group of
organizations.
• Talented teams are made up of talented
individuals.
• Team Learning is the building block for
organizational learning.

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 Climate of innovation
1. Clarity of purpose: the sense people have that innovation is a
business priority.
2. Outside-in perspective: the sense that the organization is open
to ideas from external sources, especially from customers.
3. Innovation discipline: the sense that innovation is managed
through a disciplined process.
4. Idea generation: the sense that employees are expected and
encouraged to take initiative and try new ways of doing things.
5. Idea support: the sense that the environment in the
organization is supportive of the development and
implementation of innovative ideas.
6. Recognition: the sense of being rewarded for identifying and
implementing innovative ideas.

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INNOVATION CAPABILITIES:
LESSON FROM RESEARCH
FINDINGS

Source: Determinants of innovation capability

In small UK firms: An empirical analysis
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 Thank you very much

globally
respected

Locally
rooted