GLOBAL INNOVATION
MANAGEMENT AND
VIRTUAL R&D TEAMS
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Innovatıons have acquired a key-ole in the
growth and competition strategies of firms
today.
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At the same time, innovations in today’s
“GLOBALIZED” world are hardly feasible in
isolation.
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All these developments are leading to do
“globalization” of innovation. Based on
recent emprical studies cunducted by the
authors in Germany.
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ERNST and KIM (2001) identified three forces that drive
global production Networks(GPN)
a)Instutional changes in the form of economic liberalization
and free trade agreements
b)The impact of information and communication
Technologies (ICT)
c) Competition and the changing industrial organization
(Networks)
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In summary, GLOBAL INNOVATION activities
are thought to provide firms the following
advanteges:
1-ACCESS TO GLOBAL EXPERTISE AND
KNOW-HOW :
1-ACCESS TO GLOBAL EXPERTISE AND KNOWHOW
2- REDUCE BOTTLENECKS IN THE R&D PIPELINE
AND SHORTEN TIME TO MARKET
3-MEET DEMAND FOR LOCALİZED PRODUCTS IN
EXTERNAL (FAST – GRAWING ) MARKETS
4- RELIEVING COST PRESSURE
5- PROXIMITY TO PRODUCTION CENTERS
6- LEARNING FROM “LEAD MARKETS”
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4- RELIEVING COST PRESSURE
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5- PROXIMITY TO PRODUCTION CENTERS
6- LEARNING FROM “LEAD MARKETS”
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The above mentioned advantages may be
translated in a BCF strategy, which enables a
“better,cheaper and faster” development of
products, process and services. The BCF
factors may be regarded as characterizing the
“goal model” of moderni international firm.
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The desire to engage in international
innovation activites however either did not
materialize or did not run satisfactorialy for
many. (((The primary reasons cited, and
evaluated on a scale of 1 (=very important to
6=not importatnt at all)
10 RULES FOR MANAGING GLOBAL
INNOVATION
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Companies are well aware that hidden in
their dispersed, global operations is a
treasure trove of ideas and capabilities for
innovation.
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But it’s proving harder than expected to
unearth those ideas or exploit those
capabilities in global innovation projects.
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What works for an innovation project
conducted in a single location doesn’t
necessarily work for one dispersed across
many sites around the world. When a project
spans multiple locations, many of the natural
benefits of co-location are lost. Part of the
challenge of dispersed innovation thus
becomes how to replicate the positive
aspects of co-location while harnessing the
unique benefits of a global initiative.
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To explore this challenge, we spent more than a
decade doing field research at 47 companies
around the world, including Citibank, Intel,
Novartis, Samsung and Xerox. In 2004 we
teamed up with Booz & Company to conduct a
global survey that was completed by 186
companies from 19 countries and 17 sectors. We
draw on that work to present a set of guidelines
for successfully managing global innovation
projects.
1. Start Small
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No matter how strong technical capabilities or
customer knowledge may be at a particular site,
employees will struggle to make a contribution to a
global project commensurate with their skills if they
have had experience only in co-located
development. That’s because on single-location
projects, team members benefit from collective
tacit knowledge and a shared context, both of which
support rich communication and help build trust
and confidence among coworkers.
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Projects that span multiple sites and time zones are
often hobbled by differences in workplace practices,
communication patterns and cultural norms. In the
absence of everyday interactions and encounters,
people struggle to signal trustworthiness and
demonstrate competencies. Many teams are used
to competing for resources with teams at other
sites, and this creates yet another barrier to trust
and collaboration between sites.
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To be effective, dispersed teams have to
develop a new set of collaboration
competencies and establish a collaborative
mindset. This can be done by running small,
dispersed projects involving just two or three
sites before a project launch
2. Provide a stable organisational context
 During periods of major organisational change, the
complexity of dispersed innovation escalates. Top managers
are likely to be focused elsewhere within the organisation,
leaving their global projects orphaned. In a climate of
organisational uncertainty, turf battles can flare up, and
team members may become concerned about job security
and lose focus.
 Managers need to anticipate the possible toxic side effects
of reorganisation on global innovation and shelter teams as
much as possible from disruptions. They should focus on
creating an atmosphere of stability and bolster employees’
sense of self-worth and loyalty to the firm.
3. Assign oversight and support responsibility to a senior
manager
 When a project is fragmented and scattered over multiple
locations, miscommunication, conflict and stalemates over
crucial decision-making are much more likely. Teams often
struggle to handle these problems constructively over a
distance, so senior managers have to take on a formal role as
arbiter, risk-manager, support-provider and ultimate
decision-maker. Companies that are smart about global
innovation create an explicit role for senior executives in
their projects.
4. Use rigorous project management and seasoned
project leaders
 A global innovation project also requires a strong
management team to drive the project on a day-to-day
basis and strong team leaders supported by robust tools
and processes. These are necessary to impose discipline,
structure and a shared sense of purpose across the
locations.
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Firms can adopt rigorous quality programs to
provide formal management for global
projects, or they can build a corporate
project-management capability. However, it’s
important to note that global innovation
projects are so complex that standard tools
and processes don’t always work well.
5. Appoint a lead site
 Each site involved in global innovation will see the
project through the prism of its own contribution
and context. That’s why all sites can’t carry equal
weight, even if their experience and expertise are
equivalent; one has to be designated the lead. That
site takes responsibility for delivering the project on
time and on budget.
6. Invest time defining the innovation
 One of the great benefits of co-location innovation is that the
product or service isn’t always what was anticipated at the outset.
Because everyone involved is in frequent communication,
continuous learning and adaptation can take place, allowing the
design of the product or service to improve over the course of the
project.
 When a project is split, there is very little latitude for iterative
learning. Instead, everything must be defined upfront. In addition,
process flows, timelines and knowledge requirements need to be
thoroughly understood so that everyone working on the project
has the same understanding of the goals and their individual
contributions to them.

Although there is a natural temptation to dive into
development as soon as possible, studies show a
positive correlation between investment in defining
goals and technical specifications and the successful
outcome of projects. We believe that a global
project can’t be effectively defined without some
degree of co-location between the different
functions and sites involved. Co-location builds
relationships and trust upfront and supports the
sharing of complex ideas and concepts.
7. Allocate resources on the basis of capability, not
availability
 The question of how best to staff a project rarely
arises when only one location is involved. The
effective staffing of a global project, however,
requires a great deal of attention to select and
integrate the best possible knowledge and
capabilities.
8. Build enough knowledge overlap for collaboration
 Although sites should be selected on the basis of the
unique capabilities and knowledge they can bring, there
also has to be a small degree of knowledge overlap
between sites. Without this, critical interdependencies
between modules may not be apparent until the
integration phase, when problems are costly to rectify.
This doesn’t mean replicating the other sites’
knowledge, but understanding enough of what they do
to anticipate potential interdependencies and interfaces
in the development process.
9. Limit the number of subcontractors and partners
 In most innovation projects today, part of the work
is outsourced or undertaken by development
partners to access specific competencies, reduce
development time or cut costs. Managing
relationships with external parties takes time and
energy, so global projects must limit the additional
complexity and management burden by keeping
the number of subcontractors or partners to a
minimum.
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Choosing partners or subcontractors located
close to one of the internal project sites will
reduce the potential for cross-cultural
misunderstandings and support face-to-face
communication.
10. Don’t rely solely on technology for
communication
 The successful execution of a global project remains
dependent upon communication channels that go
as far as possible to replicate the richness of colocated communication. Information and
communications technologies certainly have a role
to play, but those tools shouldn’t be over-relied on,
because they tend to mask differences between
locations, leading to misunderstandings and
tension. Successful globally integrated firms
understand the importance of an extensive
communications approach.
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Information and communications
technologies certainly have a role to play, but
those tools shouldn’t be over-relied on,
because they tend to mask differences
between locations, leading to
misunderstandings and tension. Successful
globally integrated firms understand the
importance of an extensive communications
approach.
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TOGETHER , 10 STEPS we have outlined represent the
foundation for successful global innovation
projects.Adopting only one or two may result in fleeting
success in some projects but will not produce a stream of
positive outcomes.These best practices all need to be put in
place and honed over time.It’s not easy to build a global
innovation capability , but for companies that don’t have the
skills and processes in place to manage global innovation
projects,the future offers a stark choice :

Continue with only colocated projects , in the
hope that they will fill the innovation pipeline
for a few more years until global competition
intensifies and makes local innovation a niche
activity.Or begin building capability in global
innovation now to take advantage of lower
development costs , faster time to market ,
and , most important , the ability to leverage
dispersed knowledge to gain competitive
advantage.
Innovation is becoming the most important key issue for
company’s success in the 21 st century. In the competitive
environment is necessary for the enterprises to put together
different capabilities and services with the goal. It’s a widely
accepted that innovation is better achieved by working in
team.
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Virtual teams base on information technology are
formed to facilitate transnational innovation
processes and it should be noted that innovation has a
positive impact on corporate performance.
Information and communication technology has
brought about significant changes in organizations
and produced important benefits, including in the
areas of innovation which is recognized as a prime
source of national competitive advantage. This
contribution proposes a conceptual model for
understanding and analyzing the process of virtual
R&D team as an innovation and technology
assimilation facilitator.
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Research and development and as a result,
technology have tremendously improved the
quality of human life over the last five decades.
Timely information can be crucial to the success
of businesses.
In adequate knowledge about or access to new
technologies and know-how is a central concern
for many enterprises. One of the best ways of
promoting innovation is to ensure that
individuals and firms benefit from the results of
their research efforts.
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The use of teams has increased significantly as organizations
(both public and private) have turned more and more jobs
over to team-based structures. Teams are now being used in
innovative ways in strategic planning , flexible-jobbing
initiatives , global networks , the horizontal organization,
and the virtual organization.
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Now,due to communication technology
improvements and continued globalization, virtual
teams have increased rapidly worldwide. With rare
exceptions all organizational teams are virtual to
some extent. Virtual teams are assumed to be part
of normal business life. It is commonly agreed that
virtual teams produce a greater quantity of ideas
and information than individuals acting alone. So
delaying with virtual team can bring new
opportunity to facilitate technology creation and
innovation in enterprises.
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DEFINITION OF VIRTUAL TEAM : A
summary of the definition of virtual team
may be taken as : “small temporary groups
of geographically, organizationally and/or
time dispersed knowledge workers who
coordinate their work predominantly with
electronic information and communication
technologies in order to accomplish one or
more organization tasks”.
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Common Criteria Of Virtual Team
Characteristics of virtual team :
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Geographically dispersed (over different time zones)
Driven by common purpose
Enabled by communication technologies
Involved in cross-boundary collaboration
It is not a permanent team
Small team size
Team member are knowledge workers
Team members may belong to different companies
Some Of The Main Advantages Associated With Virtual Teaming
Reducing relocation time and costs, reduced travel costs
Reducing time-to-market
More effective R&D continuation decisions
Able to tap selectively into center of excellence, using the best
talent regardless of location
 Greater productivity, shorter development times
 Greater degree of freedom to individuals involved with the
development project
 Higher degree of cohesion
 Producing better outcomes and attract better employees
 Provide organizations with unprecedented level of
flexibility and responsiveness
 Can manage the development and commercialization tasks
quite well
 Organizations seeking to leverage scarce resources across
geographic and other boundaries…
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Respond quickly to changing business environments
Sharing knowledge, experiences
Enable organizations to respond faster to increased
competition
Better team outcomes (quality, productivity, and
satisfaction)
Most effective in making decisions
Higher team effectiveness and efficiency
Self-assessed performance and high performance
Cultivating and managing creativity
Improve the detail and precision of design activities
Provide a vehicle for global collaboration and
coordination of R&D-related activities
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This virtual team strategy has many
advantages, but it presents its own set of
managerial challenges; working online is less
formalized, and companies frequently lack
clear policies on how to manage virtually .
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Here are 10 tips for managers to get the most out of
their virtual teams:
1- Be available
2-Organize regular meetings with both individuals and
the whole team
3-Encourage informal conversations
4-Rotate
5-Be creative with team bonding
6-Treat time zones fairly
7- Prioritize cultural sensitivity
8-Invest in socializing pre-existing teams
9-Look for shared understanding when
recruiting
10-Manage expectations
Some Of The Main Disadvantages Associated With Virtual Teaming
 Lack of physical interaction
 Challenges of project management are more related to the distance
between team members than to their cultural or language differences
 Challenges of determining the appropriate task technology fit
 Cultural and functional diversity in virtual teams lead to differences in the
members’ thought processes. Develop trust among the members are
challenging
 Will create challenges and obstacles like technophobia (employees who
are uncomfortable with computer and other telecommunications
technologies)
 Variety of practices (cultural and work process diversity) and employee
mobility negatively impacted performance in virtual teams.
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RESEARCH AND DEVELOPMENT
Nowadays, unpredictable economic and
business environment suggests that many
firms seek new ways of conducting their
business through some innovation to make a
profit and stay ahead of the competition
R&D is a strategy for developing technologies
that can be commercialized under
independent intellectual property rights.
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R&D enable firms to create new technologies
and/or to build on existing technologies
gained through technology transfer.
R&D efforts are necessary to realize various
goals.
R&D is an endless process for any forward
thinking technology based companies.
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Virtual R&D team is a form of a virtual team, which includes
the features of virtual teams and concentrates on R&D
activities.
The members of a virtual R&D team utilize different degrees
of communication technology to complete the research
without space, time and organizational boundaries.
There is a general movement towards virtual R&D teams, as
virtual R&D teams facilitate the spreading of risks and
sharing or costs among a network of companies.
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For most R&D teams, being virtual is a matter
of degree in their case study of virtual team
working in the European automotive industry
have shown that enhanced communication
and collaboration between geographically
distributed engineers at automotive
manufacturers and suppliers sites make them
acquiring benefits in terms of quality, reduced
costs and a reduction in the time-to market
for a new product.
Five Trends in Organizing Virtual R&D Teams
1. Continued internationalization of R&D will further increase the
importance of and reliance on virtual R&D teams.
2. Virtual R&D teams will better integrate talent in newly industrialized
countries.
3. Advances in information and communication technologies will further
enhance the functionality of virtual teams.
4. Relative costs of running virtual R&D projects will decrease due to
learning curve effects.
5. Highly decentralized virtual R&D teams will gain importance in open
system architectures such as internet-based applications