Highly rated for innovation
CASE STUDY SONY ERICSSON
When Sony of Japan and Ericsson of Sweden merged their struggling mobile phone units in 2001, not everyone was convinced the joint venture would work.
The year before, Ericsson had lost SKr24bn in its handset division. Sony, on the other hand, was a big player in the handset sector by global standards.
Initially, the doubters appeared to have been right. Sony Ericsson's market share continued to slide.
However, three years later, both sales and market share are on the way up.
Innovation, both in technology and design, has been the key to the transformation.
Sony Ericsson spotted early the possibilities offered by imaging and pushed hard to introduce camera phones. The company was also quick to spot the move away from mono-block or candy bar formats.
In contrast to several industry rivals, Sony Ericsson actually saw its average selling price per handset rise in the third quarter. Innovative products can command higher prices and move the company out of the tough price war now being waged in the lower end of the market.
As third-generation networks (3G) begin to establish themselves, the convergence between telephony, photography and computing will eventually accelerate.
The challenge will be to provide the hardware, software and style to join the technologies seamlessly.
Source: Financial Times, Mastering Innovation, September 24, 2004
The life cycle of an innovation network
Innovation networks typically go through three discernible stages:
Set-up stage: The priority here is establishing the momentum for bringing the network together and clearly defining its purpose.
Operating stage: Here, the network will be trying to establish a foundation of operating processes that have general support and agreement. These need to cover the following range of issues:
Sustaining (or closure) stage: Sometimes [networks] are set up to achieve a highly specific purpose, and once this has been done, the network can be disbanded. In other situations, there is a case for sustaining the networking activities for as long as members see benefits.
Why do we need innovation networks? One reason is that the innovation game has simply become too big and complex for any single player to handle. But it is also about exploiting potential. The overriding message seems to be that future growth through innovation is increasingly going to depend on following E.M. Forster's famous imperative: 'Only connect'. Learning to do so effectively is going to be one of the key innovation management challenges for some time to come.
What are the advantages of networks and network organizations?
What is 'the weakest link' in the network organizations?
Compare Sony Ericsson and Nike as most respected organizations.
Would you typify Sony Ericsson and Nike as network organizations?
Why is Sony Ericsson highly rated for innovation? How do these companies organize their innovation process(es)?