Towards a new theory of innovation
management: A case study comparing
Canon, Inc. and Apple Computer, Inc.
Ikujiro Nonaka, and Martin Kenney,
Journal of Engineering and Technology Management, 8 ( 1991 ) 67-83
Agenda
1 • Innovation Theory
2 • Mini Copier Case – Canon
3 • Mac Case – Apple
4 • Case Comparison
5 • Summary
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Innovation Theory
What is Innovation?
What is Information?
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What is innovation?
• Innovation is not solely represented by an object
• Innovation is the creation of new information
• Afterwards, this information can be embodied into a product
• An innovative firm will be required to constantly change to
generate new information
• Innovation is not the problem-solving but the problem-creation
moment
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What is information?
Syntactical Information Semantical Information
Information that can be Qualitative information
reduced to a digital form
Holistic, evolving and transforming
Can be manipulated through
logical operations Creating new models
Tools:
Examples: • Metaphors
• Analogies
• Return of Investment
• Profit
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Case Studies:
Product Innovations
How did Canon create the knowledge to develop the world‘s first Mini Copier?
How did Apple advance the MAC to the key of PCs nowadays?
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Canon the Mini Copier Case
How did Canon disrupt the office machine market?
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CANON – History
1993
• Canon was founded
• Main business: 35 mm camera Canon AE-1
• Most successful model: AE-1
1950 • Invention of the single reflex camera
1960s • After stagnation in sales the company had to diversify
1970 • The first Canon Plain Paper Copier was invented
• Canon struggled not to infringe XEROX patents
1970s
• Canon‘s situation got more critical
• Camera sales struggled
• Plain paper copiers market saturated quickly
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Canon - Initial position
Highly Hiring strategy:
diversified Counter-
workforce cultures
Missing:
Creative Only large plain A copier for
tension in the paper copiers homes and
company on the market small
businesses
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Canon – Mini Copier requirements
üClear copies
üLightweight
üCompact (less than 50 pounds)
üLow maintenance cost
üMaximum initial price $1,000
Ø These requirements caused major challenges for the design team
Ø Resolving the Cost-Reliability Improvement
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Canon – The weakspot “drum“
• “Drum” caused the high costs
• Usual solution, enhance the lifecycle of the drum
• However, not feasible due to cost-reliability improvement
Ø Solution: Elaborated during a “camp” session
Ø Drum should be disposable instead of long-term usable
Ø Final idea evolved from a disposable beer can
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CANON - Taskforce
Autonomous • Extremely high commitment of personnel
• Market taskforce to research the demand
taskforce • Soft taskforce to research feasibility and featureability
Metaphors • The development of the AE-1 of copiers
Setting standards • Charging, exposure, development, cleaning
and fusing
• Regular communication within the taskforce
Communication • Weekly management commitee board meeting
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Canon – The MC Innovation
“In any company good products are created when production
engineering and design become fused for their development“
Kei Saito (1984)
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Canon – Effects of MCs on Canon
Revenues by 1974 Revenues by 1989
After 15
years
Camera Business Machine Others
Camera Business Machine Others
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Apple – The Macintosh case
How was the Macintosh project organized?
What were major challenges Apple ran into?
How could Apple overcome these challenges?
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Apple – History
1976 • Apple was founded
• Main business: Personal Computer Apple II
1982 • Sales revenue $750 million
1979 • Kick-off Macintosh project
Apple Lisa
1980 • Apple Lisa
• Most successful model: Apple II
1980s • Development of Macintosh,
a cheap computer for the public
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Apple – Macintosh Team
Team diversity, self-
Recruitement from
Consisted of 25 taught “hackers”
XEROX parc and
team members and well-trained
Apple Lisa
engineers
Intense interaction
Hard- and software
and
personnel in one
communication
team
inside the team
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Apple – Mac Challenges
Organization
Physical seperation of the rest of the
company
Lack of knowledge transfer within the
company
Management
Ambivalent management commitment
towards the Macintosh team
Steve Jobs as the team leader had high
demands from his team
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APPLE – Group Mania
Marketing staff, The team created
Constant interaction Each group in the
finance specialists new problems and
between the project presented the Increased team spirit
and even secretaries stimulated other
members led to the work accomplished and motivated the
often joined these team members to
emergence of new and outlined their engineers
impromptu create solutions to
features and ideas goals
discussions create information
APPLE - Taskforce
• Manufacturing managers and engineers played an important
role
• Apple wanted to build a highly automated factory to produce
the Mac inexpensively
• Two main metaphors were used during the development time:
“It’s better to be a pirate than to
“The journey is the reward”
join the Navy. Let’s be pirates”
APPLE – Steve Jobs Innovation
Leadership
• Positive: He was a product visionary
Jobs always made
• Negative: He made decisions on the basis of
the final decision personal bias
Good ideas were
• Jobs decided against providing expansion slots on
ignored because of the original Mac
Job’s preconceptions.
Jobs set difficult • He demanded a complete rethinking of the
design challenges for personal computers features
the team • Telephone book like Compact Design of Mac
Apple – Innovation evolves from chaos
“False starts, diversions, mistakes, experiments, rebellion, and
competition formed the stuff of the machine“
Michael Moritz
(1984)
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APPLE – Outcome
It became the basis
Major leap forward Created new
for building Apple
in personal information for
Computer into a $4
computers Apple
bn company
Comparison of the Cases
What were similarities of the Mac and the Mini Copier?
What were the differences?
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Case studies - Differences
Canon Apple
Internal Knowledge External knowledge
Stable workforce Short-term employees
Management commited Ambivalent management
Company project Isolated project among othters
Participative leadership Individual leadership
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Case studies - Commonalities
Canon Apple
High social interaction
Diverse Teams
Autonomy of development teams
Intense Leadership
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Summary
What conclusions can we draw from the new theory of innovation?
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Implications for innovation
management
• To create information the organizational structure must be
under constant change
• Creating chaos is not enough but creating an environment
with creative tension and daily social interaction will raise the
likelihood of innovations
• A company should amplify the created information
• Useful tools are metaphors and analogies to provide symbollism
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Thanks for your attention!
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