Innovation among Japanese telecoms in the Internet era : a comparison based on analysis of successful U.S. companies

Abstract

The worldwide telephone industry is in transition-from traditional telecom service provider to broadband service provider. NTT, Japan's leading telecom company, must establish a new source of revenue that will compensate for declining income from fixed-phone service. The company needs to implement innovation in the organization in order to create a competitive breakthrough service while it struggles to be more efficient in the existing telecom service. In the U.S., several companies have successfully implemented innovations. I analyzed IBM, GE, 3M, and Procter & Gamble (P&G), mainly from an organizational perspective. IBM, a multinational computer technology and consulting company, is a good example of a company that successfully changed its business model from a traditional mainframe computer maker to an IT solutions provider. GE, 3M, and P&G also have produced satisfactory financial results by implementing an innovative culture into their large organizations. The key success factors of those three companies should provide some important suggestions for NTT. I also surveyed successful innovative companies from a process perspective. IDEO is a good example. Taking advantage of the strong leadership of its founder, IDEO produces many innovative designs for products and services. The company has a strong platform and culture that encourages innovation. After surveying these successful U.S. companies, I discuss how NTT could implement some of the innovative elements of those successful companies. Finally, I discuss several issues that are unique to the telecom industry: among them, regulation, bureaucracy, and restructuring. It is my hope that this thesis will help those who are in large organizations and struggling to bring innovation to the company.