Bottom-up Innovation Process

•Old ideas
•Knowledge broker
•Customers •Idea sponsors Innovation Execution
•Suppliers •Idea defenders champion Development
•Team ventures

Market
Customers
Partners

•Supervisors •Upper level

•Team ventures Executives Testing
managers
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 Generating Ideas
1. Hiring creative entrepreneurs
2. Creating an environment conducive to innovation
3. Spotting and supporting good ideas early on
4. Establishing idea management and funding mechanisms
• Innovation performance measures – creating targets for
innovation through key performance indicators, like percentage
of sales from new products
•“Free time” – giving staff the time to explore new ideas
• Networking – partnering with universities, idea providers, and
other groups
• Customer/consumer sensing – getting closer to the customer to
understand their needs 
•Reward systems – recognizing the providers of great ideas

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 Bottom-up Innovation and Company Culture
• A customer-centric (or consumer-centric) culture is a
pre-requisite for bottom-up innovation.
– Curiosity – visiting and observing customers
– Empathy – sensing the experience behind a purchasing or usage act
– Rigor – performing research into the customer experience
– Humility – really listening to what customers have to say

• A customer-centric culture requires promoting and

rewarding the attitudes listed above, and setting
strong priorities across all functions.
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Other important aspects of company culture

Entrepreneur-
ship culture

Organizatio-
nal creativity

Innovation Can-do
champions climate

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Other important aspects of company culture
1. Organizational creativity
Organizational creativity, or the creativity of a team, can be encouraged in four concrete ways:
• Ensuring team and staff diversity: gender, age, education, function, culture, and
mindset. 
• Tolerating mavericks – Mavericks are lateral thinkers who challenge "group think".
Such people are good for innovation, but need to be managed well. Companies need to
accept that by their nature, mavericks tend come and go; the important thing is to make
sure enough are coming in and that the company culture supports them. 
• External contact – Innovation leaders should have strong networks in all areas: R&D,
suppliers, customers, and partners. 
• Promoting broad-bandwidth managers – These managers have a mix of technical
depth and functional breadth. They may not be experts in a particular area, but their
diverse interests and ability to see approaching paradigm shifts will promote innovation.

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2. Innovation champions
Bottom-up innovation only occurs because of dedicated and committed people
making things happen. Three types of these innovation champions are needed:
technical champions, business champions, and, most importantly, executive
champions who back up innovation teams.
3. Entrepreneurship culture
A positive attitude towards risk is extremely well accepted in principle, but very
rarely implemented in practice. A company must actively support people who try
new things and take risks, and also accept failure, if it wishes to encourage
bottom-up innovation. Constant learning is another important aspect of an
entrepreneurial culture.

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 4. “Can-do” climate
To encourage bottom-up innovation, a company’s leaders must fire their
employees with passion. Management also needs to ensure that there are no
barriers to, or stifling of, innovation, either in their own attitude and behavior
or in the company’s processes and policies. Critical climate factors include:
• Management attitudes that are explicitly interested in innovation; tolerate
risks and failure; have a reasonably long payback horizon; and share lessons
from failures
• Management policies that reward innovators; systematically track
innovation; strongly empower teams; and make innovation resources
available
• Management processes such as a clear innovation strategy; a flexible
planning style; minimal red tape; and fast and clear decision-making.

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 Steering Innovation Top Down
Top-down innovation is initiated and fuelled by the
vision of a company’s top management. Unlike
bottom-up innovation, which capitalizes on ideas
freely generated by its staff, top-down innovation
results from a deliberate management vision and
ambition.

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 Top Down Innovation: Two General
Reasons
1. The first motive is to respond to an external threat, such as from:
• Disruptive technology – e.g., the impact of digital photography on companies
like Kodak and Fuji.
• Gradual performance erosion – e.g., the declining performance over time
experienced by GM and Ford.
• Commoditization – e.g., rapidly declining prices in flat screen displays which
make Japanese and Korean companies unable to reap the benefits of their huge
investments.
• Stock market pressures – e.g., harsh judgments made by financial analysts on
the R&D pipeline of pharmaceutical companies.

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 Top Down Innovation: Two General Reasons
2. The second reason is to drive management’s own ambitions for the company.
These may include:
• Changing the internal rules of the game – e.g., opening the company to ideas
and technologies from the outside, as P&G did with its "connect & develop"
model.
• Leveraging technology to pursue new growth applications – e.g. Dow-
Corning in the field of silicone.
• Reaching organizational excellence by improving a vital process – e.g. Tetra
Pak in liquid food packaging.
• Attracting world-class talent by offering them the opportunity to work on
innovative ground-breaking projects.

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 Implementing top-down innovation:
Vision and Strategy
Innovation vision
Creating an innovation vision requires observing the environment in which the
company is operating and identifying early signals of industry and market changes
in order to find opportunities. Examples include changes to industry structures and
regulations, the convergence of different industry segments, the emergence of new
distribution channels, and/or changes in customer needs, habits and values.

The InnoVision Statement should signal a new and crystal-clear approach to

innovation. It should energize and inspire employees, and gives them a sense of
purpose. It needs to be authentic and should become the centerpiece for the
innovation efforts.
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 Example of InnoVision
Examples from pharmaceutical company Novartis:

• Focus on the customer. Collaborate with patients closely throughout the

drug-development process.
• Be extremely efficient. Streamline the way drugs are developed and
focus resources in the best way possible.
• Get the best minds on board. Get access to the most cutting-edge
scientific thinking and research—from both inside and outside the
organization.

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 Implementing top-down innovation: Vision and Strategy

Innovation strategy
While essential, identifying opportunities is not enough by itself. Management also needs to clarify its
innovation strategy and priorities, i.e. define where the company will focus its innovation efforts.

Creating a strategy can be achieved by answering four simple questions:

1. Why do you want to innovate? Is it to create a totally new business? Or to reinforce one of your
current businesses?
2. Where do you want to innovate? In "black-box" new products or services? Or in your business
system or model?
3. By how much do you want to innovate? Do you want a radical change? Or an incremental
improvement?
4. With whom do you want to innovate? Will you innovate mostly within your company? Or do you
want to partner with others to innovate?

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 Seamless process
Top-down innovation drives generally include the building—or re-vamping—of the company's
process from idea to market. The process to be developed must be seamless to avoid traditional
functional handovers. It should not be bureaucratic – it needs to remain lean, flexible and fast.

The innovation process consists of a number of integrated and dynamic sub-processes, namely:
1. business and technology intelligence (gathering and analysis of information and insight);
2. idea management (generation, screening and validation of new concepts);
3. technology and supply base development and deployment;
4. product and technology strategy and planning (including product and project portfolios);
5. program management, that combines product development and commercial launch;
6. product lifecycle management.

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 Requirements
Three fundamental requirements are needed to ensure the
innovation process works seamlessly:
1. process owners and coaches for each of these sub-processes;
2. strongly empowered program managers who can take cross-
functional teams from the beginning to end of innovation
projects;
3. a close partnership between marketing and R&D to ensure
both functions move in the same direction.

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 Networking
Innovation requires intense networking – not just internally between different
departments and functionalities, but also externally with suppliers and
partners. Management may worry that involving outside partners deeply in
their innovation process will threaten the company's intellectual property. This
is definitely a concern that needs to be managed. However, truly innovative
companies consider that speed is the best weapon against copycats. They
recognize that early supplier involvement and innovation partnerships lead to
faster and more effective innovation.

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 Resources
Innovation will not happen without resources. This includes an adequate
supply of people with the right competencies; risk-money for
experimentation; project funding, of course; access to relevant information
sources; adapted tools; and time… because innovation takes time!

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The leadership behind innovation
Top-down and bottom-up innovation are driven by different factors.
The task of management is indeed quite different when focusing on
creating a company culture that encourages bottom-up innovation or
driving innovation proactively top-down. But both types of
innovation ultimately require a strong and persistent commitment on
the part of the management team. Leadership is the key condition
for sustaining innovation.

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 Innovation: Push versus Pull?

Internal Design & Manu-

Marketing Sales
Effort/Ideas Engineering facturing

Market need Development Manufacturing Sales

Source: Rothwell, 1994

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 Keberlangsungan bisnis
1. Tidak tergantung pada satu manusia
2. Model bisnis yang memenuhi kebutuhan
3. Model bisnis yang menciptakan kebutuhan
4. Model bisnis yang menarik minat
5. Keberlangsungan pasokan
6. Sistem yang kuat dan berkembang
7. Kapabilitas yang kuat dan berkembang
8. Eksekusi keputusan dan aktivitas operasional
 Stimulants to Work Creativity
1) FREEDOM in deciding work to do or how to do it
2) CHALLENGE to work hard on important projects
3) RESOURCES needed to do the work
4) ENCOURAGEMENT from a supervisor who is a good work model, sets
appropriate goals, supports and has confidence in the work group
5) WORK GROUP SUPPORTS such as diverse skills, people who communicate
well, are open to new ideas, constructively challenge one another’s work,
trust and help each other, and feel committed to their work
6) ORGANIZATIONAL ENCOURAGEMENT in a culture that supports creativity
and communicates a shared vision of organization

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 Obstacles to Work Creativity
1) ORGANIZATIONAL IMPEDIMENTS such as internal political problems,
harsh criticism of new ideas, destructive internal competition,
avoidance of risk and overemphasis on the status quo.
2) WORKLOAD PRESSURES such as extreme time pressure, unrealistic
expectations, or distractions.

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 Steps to Personal Creativity
1. Accept that you can be creative
2. Question traditional assumptions
3. Expand your problem-solving styles
4. Employ creativity techniques
5. Practice thinking in new ways
6. Learn when your creative thinking is best

• Adapted in part from Higgins, James M. 1997. Escape From The Maze. New York: New Management Publishing.

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MATUR NUWUN