Total Innovation Management: A New Emerging Paradigm of

Innovation Management
YANG Zhirong ZHENG Gang XIE Zhangshu BA0 Gongmin
email [email protected] email [email protected] email [email protected] cmail [email protected]

School of Management, Zhejiang University, Hangzhou, Zhejiang Province, China

Abstract et al., may also have important influence on innovation

The innovation management is the key activiw for performance.
company, and the innovation synergy mechanism and Based on the review of literatures about evolution of
pattern between technology element and non-technology innovation management and case studies of two Chinese
elements (mainly including strategy, culture, organization top enterprises, Haier Group and Baosteel, the authors
and institution) is the core issue for innovation-based argue that, to win the competitive advantage in the ICTs
organization. The traditional innovation management has (Information Communication Technologies)-driven new
provided the innovation synergy pattern behveen different economy, innovation must be systemic and all-around, and
products, but it limits itse[f to product innovation. The correspondingly put forward the concept frame of Total
portfolio innovation management insists on the innovation Innovation Management (TIM)-A Pentagon model.
synergy among technologv, organization and culture and According to this study, it is very necessary for enterprises
oriented to building up innovation competence, has to transform from traditional paradigm of innovation
provided more extension and pertinence, but not token management to the new paradigm of total innovation
time-space dimension of innovation management into management, by which to face the challenge of violent
account. Therefore, based on cases studies of the firms market competition and individualized users demands. The
home and abroad. a novel paradigm of innovation authors believe that grasping the marrow of TIM and
management- total innovation management (TIM is put putting it into practice is the crucial way at present for
folward in this paper. This new paradigm combines the Chinese enterprises to win the sustainable competitive
insights and coherence of the traditional innovation advantage in the violent market environment.
management view with the mare relevant porfolio
innovation management, and draws on three distincf areas The author hope that the bringing forward of TIM can
of recent research, namely, the innovation theory of the greatly raise the upsurge of total innovation in enterprises,
firm, the resource-based view (REV), as well as the making the view of total innovation rooted in everyones
complexih/ theory. It introduces the theoretical framework hearts, and make innovation indispensable ability and DNA
of TIM and present the context of TIMformation. It holds, of every department and every employee.
particularly, ihe view that all people are innovators. The
paradigm of TIM provides a basis for an upgraded. more
unified, and better-attuned view on innovation management 2. REVIEW of the EVOLUTION of INNOVATION
field. MANAGEMENT
Generally speaking, the practice of innovation management
Ueywords has gone through two stages, and accordingly, there have
Total innovation management, everyone as innovator, been two basic paradigms for innovation management
organizational culture (Figure 2), as follows:
1. INTRODUCTION 2.1 The traditional technological
Since 1990% the turbulent environment, the increasing innovation-centered management (Single
intensity of market competition, and customers increasing Technological Innovation Management).
demand on individualization, time to market and Before 1980s, the dominant paradigm of innovation
uniqueness, have put forward new challenges to management is traditional technological
enterprises. More and more enterprises find that innovation innovation-centered, which mainly focus on the
is becoming the critical source and driver for enterprises technological dimensions of innovation, namely product
survival and development. Past practices also proved that innovation or process innovation. At this stage, the center
its not enough to focus on technological context of task of enterprises innovation management is to pay too
innovation, some non-technological factors, such as the much attention to product innovation or process innovation
organizational structure, cultural characteristics, market separately, regardless leverage the percentage of product
context, the strategy of innovation, and management style, and process. The well-known U/A paradigm (Utterback and
Abemathy, 1976) is just an example of this stage. The main

0-7803-8150-5/03/$17.0002003 IEEE 261

characteristics of it are that, it concentrates on products 3. FRAMEWORK of TIM and ITS
innovation first, then pays more attention to process CHARACTERISTCS
innovation, and finally reaches the steady balance between d

product innovation and process innovation. What's more,

the innovation activities only depend on the R&D function
and R&D people, other sources of innovation are generally
<" t iTOotai
innovation '
I

ignored. It is more suitable for developed countries that are

powerful in R&D (Cooper, 1998).
2.2 Portfolio innovation management.
Portfolio innovation is the important base and approach of
realizing overall benefit of technological innovation, which
is key to win sustainable competitive advantage. This
paradigm was developed and popularized by a group of
scholars in American advisory company of Stanford
LOW
University (SDG) and institute of management science & High
strategy of Zhejiang University. At present, it is the Figure 2. Evolution of Innovation Management
dominant paradigm for innovation management both home There are three layers on total Innovation: 1) it involves
and abroad. The researches and practices of portfolio innovation in all functional area, as innovative key element.
innovation have passed through four stages (see Figure I): Including organizational, cultural, institutional, process,
etc., 2) it covers the whole space-time dimension and
continuous innovation in every department by, everybody
(all as innovators), at anytime to innovate, including the

/-
whole value chain innovation; 3) the innovation synergy
among innovative elements. The remarkable difference
between the traditional management of innovation and total
innovation is that it breaks through the past framework of
innovation confined only in R&D department.
19805 Technological In~noytio".Pop& What it the essence and objective of TIM?
. - Total Innovation Management (see Figure 3)
0 Aim at winning the sustainable competitive advantage
1970s Product innovation portfolio
(value added);
Focus on accumulating and improving the core
Figure 1. Evolution 01portfolio innovation management competency (as core competency not limited to
technological ones).
In recent years, based on the theory of portfolio innovation With the proper mechanism and tools, TIM makes
management, the innovation ,theories are developing innovation pervasive and perpetual throughout the
towards a higher level, and many scholars are conducting organization, which means that innovate by everyone, at
innovation theory research based on ecosystem theory, the everywhere, on everything, and at any time.
TIM such as innovation by everyone, at any time, in all the
processes, among different functions and around the world 3.1 Dimensions of TIM inherent elements
is the next phase research's focus. In recent years, the ideas Strategy innovation is the blueprint.
of inspiring each employee's creativity and actualizing the Due to the increasing turbulent and uncertainty
idea that everyone is the innovator are considered by lots of environment that enterprises faced, the strategy should keep
theoretic researchers (Tucker, 2002;Peters, 2002; Shapiro relatively stable with flexibility. According to the changes
, 2001; Wheatley, 2001; et al). Roger Bean (2002) of internal and external environments, enterprise's strategy
pointed out that innovation should be considered as a should be shifted timelv and keot in dvnamic balance.
_ _ the ~
husiness and ~~~~ innnvatinn
~ should
~ ~.~~ ~ . take d a c e- --at everv
...~~.
. r~~~~ -~,
Technology innovation is the key.
~

aspects. Shapiro (2002) indicated that enterprises should try

to realize innovation at 2417 in order to timely Technology innovation is the key source for enterprises to
responsiveness to the needs of customers due to the fierce accumulate core competence and accordingly to obtain the
competition and the more rigorous requirement of competitive sustainable advantage. So total innovation
customers. Some scholars think that the emergence of new management must regard technology innovation as the key
oreanization form such as outsourcine and strategic
L L

alliance have advanced the globalization of R&D,

- and . foundation
. .
(Obviously,
. . . .
Service lnnovat'on Is the key).
as to sewice enterprises,

manufacture and marketing etc. (Chowdhury , 2003) .

262
 environment, in order to meet the request of total
innovation.
Market innovation is orientation.
Market innovation means the innovation of marketing
channel, the operational ways et al., by which to create new
market, new channel and new ways.
Innovation synergy is approach.
Due to the inherent limitation of isolated innovation, its
necessaly to integrate all the innovative elements
systemically. Synergy of all the innovation agents has
becoming the dominant paradigm of innovation
management both native and abroad since 198Os, and its
the basic approach to realize TIM.
3.2 Space-time dimension of total innovation
management (see figure 4)
Figure 3. The pentagon model of TIM Innovating at anytime.
Fierceness of competition and instant response required by
(Source:Qingrui Xu.Gang Zheng,et al. Towards
users make innovation must to be available all time and
Capability-based Total Innovation Management (TiM): The never cease. Enterprises must make every effort to realize
Emerging New Trend of Innovation Management-A Case 2417 innovation (namely innovates throughout 7 days of
Study of Haier Group, ISMOTBICMIT02 Proceedings. Zhejiang every week, 24 hours of every day) (Stephen M. Shapiro,
Univ. Press ,2002.)
2002). Innovative enterprises should encourage immediate
innovation (like writers or musicians improvisation).

Management innovation is operational base. Innovating throughout all processes, all departments,
It refers to the innovation of managerial theory, thoughf all over the world (everywhere innovation).
Traditional organizational processes are based on function
paradigm, mechanism, and tools, et al. For example 6
Sigma management mode of GE is one of typical and specialization, which often lead to processes separate
management innovation. OEC and SST are successful from each other. As a result, no one is responsible for the
management innovation in Haier. whole processes, and no one is really responsible for
customers. It has become difficult to tit for the
Organizationinnovation is structural pledge. customer-centered new economy. With the increasing
With expansion in scale, the traditional pyramid strnctnre diversified and individualized demands of customers,
will cause overstaffed in organizations, low efficiency, and innovation should no longer regard as only the function of
slow responsive speed. It will ultimately influence the the R&D department, but all the processes. Only by
innovation performances and market competitiveness. embodying innovation in each process, could enterprises
Organizational structure must be adjusted correspondingly meet the real demand of customer better.
according to the demand of innovation.
With the rapid development of economic globalization,
Thoughts and culture innovation is precondition.
E-commerce, networked economy, the border of enterprises
The innovation in thought is the prerequisites to cany ont
is becoming hazier and hazier. The rising of new
the all innovations. If the idea cant change prior to the
organizational fonns, such as outsourcing, the strategic
changed .situations, there will be no innovative spirit
alliance, and virtnal organization, make the border of
existed. Strong innovative cultnre is the key factor which
enterprises crossing over the restrictions of the region,
influences the effective and continuous innovation in
industry and even countq, and has promoted the
enterprises. For many famous innovative enterprises in the
globalization of R&D, manufacture, and marketing etc. A
world at present, for instance, 3M, there is a strong
lot of transnational enterprises have set up R&D centers or
innovative culture of encouraging innovations and
the base throughout the world and cany on innovation in
tolerating failures.
order to combine global scientific and technological
Institution innovation is stimulator. resources, such as Microsoft, Nokia, etc. Nokia Company
Institution innovation means innovation of rules and has 55 R&D centers located in 14 countries, including over
regulations about enterprises routine, performance 19,000 R&D personnel.
evaluating, staff rewards and punishments, salary system,
training and promotion and so on. They should innovate With the evolution of innovation management theory and
timely according to internal and external change of practice, and the change of market environment, people
realize that, no matter how the information network in

263
individualized demand. For this reason, innovation must some leading Chinese firms and famous transnational
break the border of enterprises, integrating users in the companies' innovation practices, like Haier, Legend,
innovation system of enterprises, and make them become Baosteel, 3M and HP. TIM studies the systemic model
the important innovative source, by which can really meet which focuses on the innovation synergy of technology and
users' demands (Eric Von Hippel, 1988, 1993; Stephen M. non-technological innovation, and set up the biological
Shapiro, 2002). Equally, as for all the related resources mode which describes the innovation by everyone at any
throughout the value chain, such as suppliers, dealers and time, and at every field. The context of TIM formation
other stakeholders, should also be integrated in idea mainly includes the follows:
creating, forward R&D and design of products, as
important part of innovation system. Practices both native 4.1 Environmental impetus - The requirement
and abroad have proved that, by integrating the S&T of the complex and changeable Internet
resources throughout the whole value chain as innovators, environments
innovation performance can be improved greatly, and the Under the networking environment based on the computer
innovation cost can be reduced because of sharing to the and Internet technologies, information exchange among
whole value chain at the same time. different firms and different parts in a firm have
transformed from face-to-face communication to virtual
Innovating by everyone. communication via Internethtranet. Especially, under the
For implementing innovation at anytime and everywhere, it networking environment, the ability of interact by
is necessary to have all the people inside and outside firms information has been enhanced greatly, information can be
to participate the innovation. Life taught us that everyone shared conveniently and fast among the customers,
possesses the capability to deal ,with complexity and suppliers and competitors. All of these changes will bring
interconnection. Their creativity and commitment are the about both challenges and opportunities for firm's total
greatest resources for innovation. Paradigm of TIM innovation management.
requires the universal commitment and participation in
innovation. Innovation is no longer the function for R&D 4.2 The practice needs - The requirement of
personnel alone, but the all employees' behavior. Personnel total innovation practice in firm
from sales, manufacture, R&D, to customer service, Haier and Baosteel, as the leading companies in China have
administration, and financial department, etc., all are the taken total innovation into practice, and keep a sustainable
innovation source (Margaret J. Wheatley, 2001). growth in spit of facing many multinational companies'
competition. It is imperative that theorization of the
,.."._ , practice of total innovation in leading Chinese enterprises
which are unconscious to implement the TIM during the
practice in innovation management. Because an effective
theory from the firm's practice can be used to direct others
better to carry out TIM. But traditional innovation
management from the practice ago cannot provide a
scientific and effective means for firm's innovation
management in 21'' century's new environment for its
absence in the realization of the more and more turbulent
environment, and complication of innovation management.
U
So TIM are born naturally to satisfy the needs and wants of
the practice and direct more Chinese firms to succeed in the
future.
4.3 Cultural foundation - agree with innovative
culture
Corporation culture in the paper pointed to shared beliefs
and action rules posed gradually in the process of
Figure 4. Summarized the Three-All model of TIM organizational development (Robbins, 1994;Aoki,2001).
(all of the time, all the people, all places).
Concretely, it encompasses value, philosophy of business,
organizational target, action criterion, staffs thoughts, all of
these to reflect. an organizational spirit and regular
4. THE CONTEXT of TIM FORMATION everyone action directly or indirectly.
As a novel paradigm of innovation management, TIM is a Total innovation in a firm not only pointed to the
product of the combination of the theoretical development innovation of product or process, but also to the redesign of
and the required of the innovation practices. Inspired by the all staff action ideas and rules. To conduct TIM, the action
thoughts of system and biology, the complex and of innovation management and thought mode must be
changeable Internet environment, and the observations of adjusted. And a full culture for pursuing innovation is

264
of innovation management and thought mode must be Prompted by the limitations of this paper, future research
adjusted. And a full culture for pursuing innovation is directions mainly include four aspects: (1) the strategy of
necessary. At the same time, in the process of total TIM, and its formulation and implementation; (2) the
innovation, synergic innovation of different elements, critical successful factors of TIM; ( 3 ) dynamics of
co-operational innovation of every one in different organizational learning and TIM, ( 4 ) the measurement and
functions will be sure to bring about new ideas and create performance of TIM.
new atmospheres for innovation contribute to the birth of
6. ACKNOWLEDGMENTS
innovative culture. So, TIM is seeded from innovative
Many thanks to all the help from Professor XU Qingnii,
culture and its implementations give birth to the rich
director of Research Center for Innovation and
contents of culture for innovation.
Development in Zhejiang University, when the authors do
5. MAIN CONTRIBUTIONS and EXTENSIONS this study. He provided many good ideas to better the
contents of the paper
5.1 Main contributions of the new paradigm of TIM
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