Achieving a successful paradigm shift
with the HPO Innovation Engine
Changing market requirements, increasing competition, and technological
change are forcing companies to radically question conventional
approaches and to introduce dramatic change. This includes changing
from an orientation focused mainly on individual clients, to one focused on
the needs of entire market segments.
A systematic development of new products and
services is often neglected in those industries that
depend heavily on project business. Development
most often takes place within the framework of a
specific client project. In this manner two very
important aspects are overlooked:
� Developments procured within the framework
of a client project are naturally based on the
needs of an individual client, but they are not
based on the needs of a market segment.
� Due to time and cost constraints, solutions are
developed that are optimal for specific clients,
but when these are used as mass producible
solutions they tend to be very difficult to adapt.
Innovation Governance Client
(HPO Innovation Engine)
(HPO Delivery Engine)
Market potential remains unknown with this type of
approach and efficiency improvement potential
(economies of scale, reduction of complexity)
cannot be materialized. The HPO Innovation
Engine makes it possible for firms to systematically
access these potentials. The HPO Innovation
Engine is based on the following principles:
� Process oriented separation of product
definition and product delivery.
� Delineating necessary innovation processes
from the product- and performancearchitectures
of a firm.
� Governing these innovation activities in tight
alignment with corporate strategy.
The implementation of a HPO Innovation Engine is
based on a systematic model. The proven „Top
Down – Bottom up“ approach assures the
commitment of the management and the inclusion
of key employees.
The accompanying graphic shows a general
business process model with dedicated processes
for product definition and product delivery.
With T-Systems und Bachmann electronics we
present to you two corresponding case examples .
2 / 2006
Dr. Oliver Kohler
Managing Partner HPO AG
Project Manager HPO AG
«Successful firms know how
to proactively identify future
market needs and to offer
corresponding solutions at
competitive prices. They are
in control of dedicated
processes and structures
that on the one hand,
ensure an efficient handling
of the day‘s business and
on the other hand, secure
an optimization of their
product- market portfolios.»
Chief Development Officer
Member of the Business
«With the introduction of the
Innovation Engine, T-
Systems Switzerland has
experienced a fundamental
shift away from a business
focused only on the needs
of individual customers, to a
business positioning based
on market segments. Such
a significant change was
only made possible by a
unified and methodical
approach, a great deal of
effort, and the HPO change
Achieving market success through
strength of innovation
T-Systems Switzerland wants to have a clear lead in innovation to confront
an increasingly aggressive and price focused competition. This strategic
orientation demands a switch from a business model that is concentrated
on single clients, to one that is focused on market demands.
As a provider of ICT-services, T-Systems finds
itself among hard competition in Switzerland.
And the intensity of competition continues to
increase. This has led to erosion of margin and
less profitability. As a price battle does not
promise any prospects for success, market
success should be achieved through efficient
processes and clear interfaces, but most
importantly, through a focus on innovation.
Through a well-directed increase in innovation
capability, T-Systems aims to achieve
profitable growth even amongst increasingly
aggressive competition. An innovation machine
with the following objectives was realized
together with HPO:
� Innovation capabilities should be increased
and sustained through a systematization
and simplification of innovation decisionmaking
� A traditional business behavior that is
focused on the individual clients should be
broadened to include entire market
� Flexible, need based solutions should be
offered to the target markets through a
modular product- and service-architecture
that is directed to the needs of the target
Within the framework of a performance checkup,
the innovation activities of T-Systems
Switzerland were analyzed and their
weaknesses were identified. Necessary
processes and interfaces were defined for a
market conforming definition and for further
development of the performance portfolio
based on the market performance architecture.
The corresponding reorganization was derived
from these innovation processes. This takes
into consideration the continual (process)
responsibility and the uniformity of tasks as well
as the optimal design of necessary interfaces.
The new Innovation Engine is a businessprocess-model,
which allows T-Systems
Switzerland to proactively define the
performance portfolio, thereby developing it
further while conforming it to the Swiss market.
The Innovation Engine distinguishes itself by:
� Increasing innovation capabilities through a
process oriented separation in delivery
(realization of a concrete customer order)
and innovation (realization of future market
� Entangling of strategic marketing, product
management, product- and processdevelopment
as well as development and
maintenance of architectures, standards,
� Structuring these activities on the basis of a
market performance architecture in various
innovation areas, which are connected to
one another through innovation
In addition to increasing innovation capacity,
and with that the possibility of achieving
innovation leadership, the Innovation Engine is
also a prerequisite for substantial cost
reduction and an increase in productivity, as
well as an increase in the quality of products
and services .
More growth through a proactive
reaction to market demands
General stagnation in the market environment, increasing
competitiveness, and the traditional focus on individual clientele have
prompted Bachmann electronic to question what were once recipes for
success, and to introduce a paradigm shift together with HPO.
Due to increasing competition and the resulting
erosion of margin, Gerhard Bachmann, as
owner and manager of Bachmann electronic,
needed to address three very important
� How can future market demands be
proactively met with innovative solutions?
� How can customer needs be satisfied in a
timely and cost effective manner?
� How can the complexity of market offering be
reasonably limited, thereby creating business
processes that are more controllable?
In order to meet these challenges, Gerdhard
Bachmann found in HPO a partner that
possesses a high level of experience in the
high-tech arena, but a partner that also
understands the needs of a medium-sized
Together an approach suited to the conditions
of a medium-sized firm was chosen with HPO
as a methodology coach and sparring partner
with the goals:
� The creation of clear responsibilities and
competences with an optimization of internal
� The creation of a foundation for further
profitable growth through the establishment
of a product management.
� The Implementation of business processes
based resolutely on market needs.
The chosen, pragmatic approach utilizes the
HPO-Methodology 5M © :
� The determination of future market
performance and market performance
� The derivation of business processes and
interfaces under the premise of necessary
� The derivation of process oriented
responsibilities and competences, which
are clearly defined and suited to the
conditions of a medium-sized firm.
Thanks to an approach with a well functioning
role definition between the business leadership
and the consultants, Bachmann electronics
transformed from a traditional business,
oriented towards individual customers, into an
organization focused on markets segments.
The newly created business process model
clearly separates all activities having to do with
a concrete customer (product delivery), and the
defining and producing of new products and
solutions developed independently of individual
clients (product definition).
Working as a crux between market needs and
development, the newly established product
management takes on a decisive roll in the
Last year Bachmann electronic was able to
surpass growth targets and to win further
market share within the target segments .
«The integrated HPO
approach, the commitment
of the experienced HPO
team, and finally the
successful empowerment of
our key employees has led
to an actual change in the
way we do business.»
CH - 8807 Freienbach
Tel +41 (44) 787 6000
Fax +41 (44) 787 6060
Laying the foundations for profitable growth by
creating innovation strength with HPO
«It is the explicit goal of T-Systems Switzerland
to create profitable growth in an aggressive,
price conscious ICT-services market through
the persistent strengthening of its innovation
The HPO concept of clear separation of value
defining and value creating activities and the
distinct assignment of duties, responsibilities,
and competences within the framework of the
‚Innovation Engine‘ allowed for a fundamental
change in the way we do business.
As coach and methodology provider, HPO
understood the importance of highlighting
where the substantial optimization levers.
Our Name is Program:
We are Management Consultants for
High Performance Organizations
Through the inclusion of key employees at all
levels, HPO succeeded in initiating a change
process. At the same time the foundations
were created on which mutually achieved
results and corresponding concepts could be
The implementation of the ‚Innovation Engine‘
is almost complete and the first successes in
the market have already been achieved.»
Creating a basis for further successful business
development with HPO
«The firm Bachmann electronic has undergone
a great deal of change within the last 3 years.
Together with HPO we have introduced a
paradigm shift, which takes us away from a
traditional focus on individual clients, to a
stronger market orientation.
Today we are proactively working on single
market segments, and we can identify future
market needs early and translate this
information into new products.
The partnership with our clients is still the focus
of our attention, but our goal today is to utilize
our standard products and solutions while
keeping the „Customizing“ to a minimum.
We found in HPO a partner that possesses a
high level of expertise in the international hightech
arena, but we also found one that
understands the needs of a medium-sized
We promote lasting improvements in your results by multiple EBIT points. We accept performance
based fees. And we have good reason to, because we will improve your performance with our
own proven methodology. Step by step. To success.