Group Members :

Ahmad Mashudi (091714253022)

Yulia R. Kurniawati (091714253009)
Tiara Nurul H. (091724253004)
Bayu Aditya C. (091724253017)
Deanty C. Pertiwi (091724253023)
Few companies understand how such innovation
and how to encourage it. To foster new
management ideas and techniques, companies
first need to understand the four typical stages in
the management innovation proses
The Management Innovation
Process
 The research began with simple hypothesis: The
management innovation occurs in way similar to the
well understood proses for techological innovation.
 The four stages are :
1. Dissatisfaction With Status Quo
2. Inspiration Form Other Sources
3. Invention
4. Internal and External Validation
Dissatisfaction With Status Quo
• Case: Litton Interconnection Products
Impending
•  Business cell structure for
Crisis manufacturing and selling products

• Case: GlaxoSmithKline
Strategic
•  “Centers of Excellence for Drug
Threat Discovery”

Nagging • Case: Motorola

Operational •  “Six Sigma” quality control
Problem methodology
 Inspiration Form Other Sources
Case Studies:
 Wellington Insurance Co. in 1987  radical decentralization of activities.
Murray Wallace (the CEO) translated Tom Peters’s book entitled “Thriving on
Chaos”, inspiring him into making an operating model known as “Wellington
Revolution”.

 Oticon (hearing-aid company) in 1991  removal of formal hierarchy and

job. Lars Kolind (the CEO) was inspired after his deep involvement in the
Boy Scouts of America movement.

 Analog Devices in 1987  Balanced Scorecard for monitoring financial and

nonfinancial performance measures. Art Schneiderman (the manager) was
influenced by Jay Forrester’s system dynamic concepts during his MBA
training at MIT’s Sloan School of Management. He also spent 6 years as a
strategy consultant with Bain & Co. This background inspired him to develop
a set of metrics that included both financial and nonfinancial components.
Invention
Case Studies:
 Skandia Insurance Co. Ltd. In 1991-2  Skandia Navigator and
measurement of intellectual capital. Key Innovator: Leif Edvinsson
(the primary architect of the management innovation) pioneered an
approach to reporting the value of intangible assets to external
stakeholders.

 Hewlett-Packard Co. in 1991  Global account management

structure for sales organization. Key Innovator: Alan Nonnemberg.
He was asked to lead the global account management initiative.

 Sun Mycrosystems in 1995  Development of “ecosystem” of

software vendors. Key Innovator: George Paolini (the chief architect
of the Java initiative) created one of the first independent software
developer networks.
Internal and External Validation
 Internal Validation  approval from management/organization.
Example: Lars Kolind experiences challenges when tried to
persuade the owner of the company and to all employees. Some
of them chose to leave because they weren’t comfortable with
Kolind’s change. But most were quick to see the benefit and
involved in implementing “spaghetti organization”

 External Validation  approval from independent observer

There are four common sources:
1. Business school academic.
2. Consulting organization.
3. Media Organization.
4. Industry association.
 Accelerating The Process of
Management Innovation
 Become a conscious management innovator
 Create questioning, problem-solving culture
 Seek analogies and exemplars from different
environments
 Build a capacity for low-risk experimentation
 Make use of external change agents to explore your
new ideas
 Become a serial management innovator