TELECOM’S INNOVATION MANAGEMENT : An Analysis of the R&D’s Key Success Factors to Thrive in a Tough Industry

Abstract: In the telecom manufacturing industry, the business environment is characterized by high competition and challenging tasks. To be able to thrive in this environment, companies have to work hard in order to develop innovations in the form of products, services and solutions to the marketplace. R&D departments, in collaboration with other functional departments and external agents, become the main engine for innovation development. R&D managers face the difficult challenge of effectively managing innovation projects, which are surrounded by high complexity, uncertainty and risk. To help address this issue, this thesis explores four successful innovation projects within four distinct international telecom technology suppliers, namely Nortel, Alvarion, ZTE and ST-Ericsson, to identify the factors that directly influenced the success behind each innovation. To do so, a comprehensive study of the telecom innovation system was conducted; this study enabled the researchers to devise a framework that describes the innovation process in the industry and that highlights the value of the marketing department, the importance of early customer involvement and that clearly demonstrates the self-sufficiency of today’s telecom manufacturing department. Additionally, the study highlights the importance of the human factor and the substantial value of nurturing staff and fostering different roles within the innovation team, such as that of the gatekeeper, entrepreneur, technology specialist and senior manager. R&D management literature lists over 250 different success factors; the framework included in this thesis presents only the 60 factors that are relevant to the industry. These factors are categorized in two ways: (1) As either order winners or order qualifiers and (2) as either being affected or unaffected by the innovation type. The first categorization serves to identify 25 factors that can become a source of competitive advantage if managed accordingly and 35 factors that are considered to be the status quo of the industry, and while very important are not a source of competitive advantage. The second categorization brings awareness to the R&D manager by identifying nine factors, namely: the source of the idea, access to information, the probability of commercial success, the comprehensiveness of the requirements, newness to firm, market strength, innovation receptiveness, degree of innovation and supportive environment. The research showed that these nine factors are directly affected by the innovation type (incremental, architectural or radical).