Invited talk at Korea National Information Society Agency

1. GeunHo Lee
geunhole@bu.edu
Reengineering in
Innovation & Strategy
Reengineering in
Innovation & Strategy
Brown Bag Meeting
Korea National Information Society Agency
Jan. 30, 2007

2. 1.1. New Trends in InnovationNew Trends in Innovation
2.2. New Trends in StrategyNew Trends in Strategy
3.3. Strategy InnovationStrategy Innovation
CONTENTSCONTENTS

3. New Trends in Innovation
Value Creation Chain
Disruptive Innovation
Open Innovation

4. Invention Innovation Diffusion
Value Creation ChainValue Creation Chain

5. Disruptive InnovationDisruptive Innovation
The term disruptive innovation first appeared in the
1997 Harvard Business School professor Clayton
Christensen’s best-seller The Innovator’s Dilemma.
The book investigated innovations that were radical
in nature compare to the conventional sustaining
(incremental) innovation.

6. Disruptive InnovationDisruptive Innovation
Value
Time
Conventional
Innovation
Market’s Demand
Disruptive
Innovation
continued

7. Contents of Disruptive InnovationContents of Disruptive Innovation
Disruptive Technologies: technologies that have
displaced other technologies to offer a whole new
sphere of possibilities at lower prices.
Disruptive Products: products or services that
replace similar existing products or services based
on their superior attributes or lower price.

8. Contents of Disruptive InnovationContents of Disruptive Innovation
Disruptive Processes: processes that are of
disruptive nature often outperform the traditional
ways of working.
Disruptive Business Models: Business Models that
are disruptive do business in new and innovative
ways in established or new areas.
continued

9. Open InnovationOpen Innovation
Popularized by UC Berkeley Business
School’s Professor Henry Chesbrough's
book "Open Innovation," this term refers to
the broad concepts of leveraging external
sources of innovation to drive internal
growth.
continued

10. Open Innovation ModelsOpen Innovation Models
In open innovation models, companies look
inside-out and outside-in, across all aspects
of the innovation delivery chain.

11. Open Innovation ModelsOpen Innovation Models
continued

12. Open Innovation ModelsOpen Innovation Models
Companies looking externally for sources of
available technologies that can be used as a
basis for internal development.
continued

13. Open Innovation ModelsOpen Innovation Models
Established companies may acquire external
innovations that offer the opportunity to develop
new technology for scale-up.
Companies may also spinout technologies that
were internally developed but are determined to be
better developed and commercialized by others.
continued

14. Open Innovation ModelsOpen Innovation Models
Companies may spin out already
commercialized technologies where more
value can be realized, or acquire already
commercialized innovation that can provide
sources of new growth.
continued

15. Best Practices: NokiaBest Practices: Nokia’’s Venturings Venturing
Nokia moved beyond "not invented here" and are embracing
the best ideas whereever they are.
Nokia's Venturing Organization is focused on corporate
venturing activities that include identifying and developing
new businesses.
Nokia have a group called Innovent that directly supports
innovators with the hope of growing future opportunities for
Nokia.

16. Strategies Hierachy
Blue Ocean Strategy
New Trends in Strategy

17. Strategies HierarchyStrategies Hierarchy

18. Blue Ocean StrategyBlue Ocean Strategy
Blue Ocean strategies, as described in the book
“Blue Ocean Strategy” by W. Chan Kim and Renee
Mauborgne at INSIED, found that most enterprises'
business strategy relied primarily on competition
which only results in a “Red Ocean,” where the
costs of competition are very high and the rewards
are relatively low.

19. Blue Ocean StrategyBlue Ocean Strategy
To maintain sustainable growth, the companies
need to go beyond competition and create a new
market- Blue Ocean.
The Blue Ocean Strategy provides a framework and
tool set for discovering new markets in traditionally
filled spaces by changing the nature of competition
away from the normal direction of the industry.
continued

20. Blue Ocean StrategyBlue Ocean Strategy
The main idea of Blue
Ocean Strategy is
how to change the
rules and lift the
constraints through
the value innovation.
continued

21. A Good Blue Ocean StrategyA Good Blue Ocean Strategy
Focus: a good strategy has a focus, and a
company's strategic profile should clearly show it.
Divergence: the value curve of blue ocean strategy
always stand apart from the competitors.
Compelling Tagline: a good strategy has a clear-cut
and compelling tagline.

22. A Good Blue Ocean StrategyA Good Blue Ocean Strategy
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Price
Amenities
Equipment
Instruction
Environment
Convenience
Fun
B.O. R.O.
Tagline
Focus
Divergence
continued

23. Best Practices:Best Practices: SaviSavi for RFID Businessfor RFID Business
The RFID market is highly fragmented, and many
players are competing on small niches. Up to now
there was only small numbers of cases open a RFID
blue ocean market.
One example that open a RFID blue ocean market is
the Savi technology which had a $425 million
contract with the US Department of Defense in 2006.

24. Analysis ofAnalysis of SaviSavi’’ss StrategyStrategy
How do the company and its technologies provide end-user
values across diverse needs?
Right Offerings
Does the nature of the company's technology support
innovative use and further development?
Innovation Potential
To what extent is the technology offered can be integrated
with legacy systems?
Consistency
Measures a company's price competitiveness.Price Model
This value measures the technological stability of the current
firm, compared with its competitors.
Technological Stability
To what extent can the company's technology be complying
with different industry standards?
Standard Compliances
How the company and its products/services support specific
applications/industry?
Vertical Integration
DescriptionBlue Ocean Attribute

25. Analysis ofAnalysis of SaviSavi’’ss StrategyStrategy
continued
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Vertical Integration (MU=M)
Standard Compliances (MU = L)
Price Model (MU=L)
Technological Stability (MU=H)
Consistency (MU = H)
Innovation Potential (MU=H)
Right Offerings (MU = H)
Savi R.O

26. Analysis ofAnalysis of SaviSavi’’ss StrategyStrategy
Savi’s strategy canvas shows three characteristics of a good
strategy usually found in Blue Ocean cases studies:
1. Focus on factors such as consistency with the legacy system
and innovation potential by developing various platforms
(multi-band, active and passive, sensor tags, wireless
networks).
2. Divergence from conventional competition factors such as
Gen2 standard compliances and low price devices
development sacrificing the technological stability in
operation.
3. Compelling Tagline in right offerings for end-user values
across diverse needs.
continued

27. Strategy Innovation
Reengineering
Strategy Innovation
Issues

28. ReengineeringReengineering
Reengineering is the redesign of an organization's
development & implementation processes for
Innovation & Strategy.
Reengineering in innovation & strategy is need to
capture the paradigm shift such as disruptive
innovation, open innovation, and blue ocean
strategy.

29. Strategy InnovationStrategy Innovation
Strategy innovation is an example of reengineering
in innovation and strategy.
Strategy innovation is a shifting in organization's
business strategy in order to create new value for
both the customer and the organization.
Strategy innovation is a process of applying
innovative thinking to the entire business model of a
organization.

30. Strategy InnovationStrategy Innovation
Strategy innovation is a change form the “Play the
game better” to “Making my rule of the game”.
Strategy innovation is Creative, Insights-driven, and
Market-centric.
continued

31. IssuesIssues
What is the strategy innovation for the digital
convergence?
Is the uIT-839 a strategy innovation for the u-Korea
vision?
continued

32. Thank You!