Tibor Dőry

Innovation and excellence

Management methods for innovation transformation


Ambidextrous organisations

Based on our surveys of companies engaged in traditional industrial production and supply activities, and discussions with business leaders and owners in our partner network, it can be said that there is no lack of will, at least nominally. During the interviews, several business owners proudly stated that one of their most important desires for the coming years is to manufacture a product bearing their company logo or the name of the founder-owner. However, this requires or would require extraordinary effort and a fundamental rethinking of the business model. Furthermore, it is difficult to imagine that, in the same production hall or facility where various components or sub-assemblies are manufactured for a large multinational company or its supplier, the company's own products could be manufactured from one day – or one year – to the next. This transition to an ambidextrous organisation requires managerial will, vision, guidance, a great deal of patience and even more capital (Füzesi et al., 2018).
In the case of ambidextrous organisations, the key issue is the combined application of efficiency, exploitation, effectiveness and exploration. The first capability refers to the high-level implementation and continuous improvement of existing activities and operational processes, while the second capability refers to the successful development and introduction of new products, services, processes and business models. It is common for companies to behave as explorers in the early stages of their life cycle and then, once they have become comfortable with their market position, to become exploiters. This is accompanied by a tendency to avoid riskier developments and to minimise investment in them (O'Reilly–Tushman, 2013).
In addition to managerial ambitions, vision and organisational capabilities, another key question is what resources are used to implement innovative ideas. In Hungary, most entrepreneurs automatically assume that their company should not be the only one to cover the costs of various innovation developments, which should instead be financed by the state through some kind of grant scheme. However, the past decades have shown that thousands of innovative corporate projects have been successfully implemented, at least from a grant perspective, but at the same time, no large number of world-renowned Hungarian products have appeared on the global market. Presumably, the problem is not with the grant system and the various schemes, but rather with the lack of long-term thinking or the persistent experimentation and testing developments over many years, as well as the financing of market launches, which domestic organisations struggle with. Developing and launching new products and services requires enormous resources and several years of perseverance and faith on the part of both developers and business leaders and owners. Innovation is expensive!
Each subsequent phase of an innovation project costs exponentially more than the previous one. While the cost of an idea is practically zero, the development of a prototype costs an average of USD 10,000. The construction and testing of further prototypes can cost several hundred thousand dollars, and then the launch of the product, together with its market introduction, can cost at least USD 10 million. The example presented is a rough estimate, which may vary significantly depending on the industry, the characteristics of the business, and even the type of innovation project (Schilling, 2020).
 
Table 1. Estimated duration and cost of different stages of product development
Phase
Duration
Cost
0. "Here is an idea!"
 
 
1. Definition, description and draft plan
1 week
100 USD
2. Preliminary analysis
2 weeks
1,000 USD
3. Planning and specifications
1 month
10,000 USD
4A. Prototype development and testing
2 months
100,000 USD
4B. Market research
4C. Strategic alignment and risk analysis
5A. Scaling up and experiential tests
8 months
1 million USD
5B. Market tests
6A. Building a factory
16 months
10 million USD
6B. Promotion and market introduction
Source: based on Schilling (2020).
 
The development times and cost estimates in Table 1 are particularly informative for those who do not have many years of practice and experience in the entire product development process. An important message for those planning and implementing research and development projects is that they must pay attention to return on investment from the outset. Sooner or later, the development must be brought to market and production, and market launch must be resolved.
In addition to financial resources, we cannot ignore the human resources and human capital required for innovation. It simply does not work to have an engineer work part-time on an groundbreaking development that will put the company on a new track. It is difficult to achieve innovation through research and development carried out during lunch breaks! It cannot be done alone – a team is needed. A large number of creative engineers and, if possible, developers with a multidisciplinary background are needed who are capable of experimenting with new directions for the business, new products and/or services that represent new markets, organising production and preparing for market launch. In fact, it is all this that must be financed; if the company cannot do it alone, some kind of financial arrangement must be made to bridge the gap to market.
According to our research experience, the wider small and medium-sized enterprise sector – with the exception of companies based on development – lacks both the capital and the human resources to launch serious development activities. It is just as true for this group of companies as it is for the much-talked-about startups of today that an idea is not just an idea, and that even many ideas do not necessarily lead to a successful market launch. Translated into financial terms, this means that numerous development paths that later turn out to be dead ends must be financed and viewed as learning experiences before we can talk about market success. James Dyson, the famous English manufacturer and innovator, developed and tested an incredible 5,127 prototypes in the 1980s over a period of about five years before achieving success with his Japanese partner with the perfected bagless vacuum cleaner (Dyson, 2021). He gained his fame and fortune through the cyclone technology developed for the vacuum cleaner and its application to other everyday products, such as the hair dryer (Dyson Supersonic) and the room cooling and heating fan (Dyson Cool), with a tenacious spirit of trial and error. Excellent design expertise, a commitment to perfection, and uncompromising development based on extremely thorough observation of consumer needs have resulted in Dyson products that quickly won the satisfaction of millions of consumers, who were willing to pay 8-10 times the price of a traditional vacuum cleaner, hair dryer or even room fan for these iconic design products.
 

Innovation and excellence

Tartalomjegyzék


Kiadó: Akadémiai Kiadó

Online megjelenés éve: 2026

ISBN: 978 963 664 182 5

The aim of the book "Innovation and Excellence" is to inspire and encourage company leaders, managers, and experts to initiate and implement innovation transformations with the help of professional literature and corporate case studies. Another important goal is to help develop the innovation capabilities of small and medium-sized enterprises in particular by sharing simple, proven management methods that can be tested in practice.

The first part of the volume reviews the factors of corporate excellence and success, then highlights the possible sources of innovation, with a focus on the role of users and employees. The empirical section presents a detailed description of the supportive role of the workplace environment and creative working conditions based on corporate case studies (AUDI, BOSCH, MELECS). The volume concludes with a description of selected tested practical methods and management techniques that readers can try out in their own businesses.

Hivatkozás: https://mersz.hu/dory-innovation-and-excellence//

BibTeXEndNoteMendeleyZotero

Kivonat
fullscreenclose
printsave