winning_with_technology

Winning with Technology.ISBN 978-974-7560-69-5Banja Junhasavasdikul, Ph.D.Edition No. 1 Octorber 2011Published by :Innovation Group (Thailand) Co., Ltd.Address :18 Soi Ramkhamheang 30 (Ban Rao),Huamark, Bangkapi, Bangkok 10240, Thailand.Tel : 02 375 5197 Fax : 02 732 1778Printing :JST Publishing (Thailand) Co., Ltd.Address :199/88 Ladphrao-Wanghin Road, Ladphrao, Bangkok10230, Thailand.Tel : 02 931 6898 Fax: 02 931 6968

Introduction I always told my children that I am a lucky person.I always have good friends and excellent friends. ButIn 12 years working with Shell (Thailand) and Du Pont, Ihad bad bosses, good bosses and very, very good boss.Therefore, when I have hundreds persons work underme, I promise myself to be a “Good but Tough Coacher”.When you are small company, you work under dog of bigcompetitors. Thai people always say that this because wedo not have technology. 17 years ago, JSR who was our jointventure partner in rubber compounding. In the joint venturebusiness, JSR controlled the technology, manufacturingand marketing to Japanese customers. One day, JSR toldme that they decided to set their own rubber compoundingplant in Thailand. And within one year, after their plant startedup, they would take away all Japanese customers from us.But 15 years late, we are a world-class rubber compounderand we never see JSR comes close to us. Why? “Thinking of people” this is the causes of personalbehavior and his life style. Why Thai SMEs wait for help fromthe government in protecting their businesses. They are waitingfor the technology assistance to fight against imports.

“Build our own technology” and doing the “Best” inbusiness we are doing. Technology is around us. If we areseeking technology, we can master the technology in oneday. Build your business from “inside-out”, if we like to becompetitive, build your core competencies from inside theorganization. Offer your strong technology to service tocustomers, industries and academic sectors. The more youcontribute, the more challenging requests will come backto you. Then you can build new innovative products andtechnology from market insights. “Outside-in” This book was written from my 40 years of workingexperience. It was parts to my papers which were submittedto Rushmore University to qualify my Ph.D. program. I wouldlike to thank you Dr. Donald Mitchell to give me advices andMs. Laurel Barkley in editing my paper. Most of all, I thank you my dear wife, Ms Somsri, whoalways encourage me in my work and life forward. It is verychallenge for the new generation of Innovation Group Innovationto sustain the growth of Innovation Group in global market. Banja Junhasavasdikul, Ph.D.

AppreciationDear Reader, IhavebeenhonoredtoserveasDr.BanjaJunhasavasdikul’sadvisor during his Ph.D. studies at Rushmore University. Drawingon my very interesting work with him, I am delighted to havethis opportunity to write a brief foreword for this volume thatcommemorates the opening of the Innovation Group ofCompanies’ new plant in Rayong, Thailand. Over my four decades of working with successfulCEOs, I have often been struck by how little many suchleaders understand about how to lead their organizationsduring times of change. Thus, new circumstances oftenbecome stumbling blocks that lead to major problems asinappropriate strategies and tactics are applied. Such is notthe case for Dr. Junhasavasdikul. In this volume, Dr. Junhasavasdikul has includedportions of papers written for his doctoral studies thatprovide timeless descriptions of the rubber industry,challenges and opportunities concerning globalization,how to conduct industrial marketing, developing anorganization’s internal competencies, and applyingnanotechnology to createanewgenerationofproducts.Each

paper embodies and applies the best of Peter Drucker’sthinking about innovation and entrepreneurship. While many organizations simply seek to copy othersat lower cost and with lower prices, progress occursprimarily through accomplishing new tasks that bringbreakthroughs in effectiveness for customers, end users,and other beneficiaries. These five papers provide tangibleexamples of blueprints for industry leaders to accomplishsuch important new tasks, expressed in terms of theInnovation Group of Companies. I encourage you to read, to reread, to study, andto apply the principles in these papers to accelerateimprovements in what you do. You’ll be glad that you did!Sincerely,Donald W. MitchellProfessorRushmore UniversityWeston, Massachusetts, USAOctober 2011

INDEXWorld of Rubber 11 Rubber and economic recovery in Asia 13 Natural rubber and synthetic rubber 15 Japanese synthetic rubber in year 1940-2000 18Corporate Competency 31 Creating Internal Competencies 33 Create innovative Product 34 Develop Innovators 37 Innovation Group and Internal Competencies 40Marketing Industrial Products in 51the Global Market 53 Modern Marketing Concepts 57 Successful Industrial Product Company 78 Grow Innovation Group in the global market Developed Nanotechnology 85Globalization 105 Global economic movements 107 Free Trade Agreement (FTA) 114 The 4th wave of globalization 116 Thailand under AEC and FTA 117 Creative Economy 119 Thailand must take advantage from FTA 121

“ Their Japanese determined spirithelped them survive when they werefacing crisis. They gained experiencefrom efficiency improvement, energysaving measurements. Japanese hardworking spirit and never give up“Fukutsu no seikin” were built up in”Japanese working style.

“Human being has to balancebetween wealth and green environment”to live happily between human andnature.



01World of Rubber

World of Rubber It’s crazy world. In the fourth quarter of 2010, pricesof natural rubber jumped up from below $2 per kilo to $6per kilo. It stayed at $6 for 5 months and returned to $3 in aweek. Now, the price is staying around $5 per kilo. It is verydifficult to explain if the price fluctuation of natural rubberhappened because of real demand and supply or becauseof the speculation in price. Price fluctuations in naturalrubber created many uncontrollable factors for the finalrubber product producers. Not only because of cost, supplyof raw material is also fluctuating all the time. Thailand is the largest natural rubber producer with 3.1million metric ton in annum production. Seventy percent ofthe production is exported. Natural rubber plantations weremainly in southern and eastern parts of Thailand. And nowthe plantations spread into every part of the country. Naturalrubber is one of the main polymers using in tire. Therefore,Thailand becomes one of the largest tire producers becauseof the abundant of natural rubber. With the prices increased to$6 per kilo, owner of rubber plantation became rich overnight.12 Winning with Technology

Labors returned home to work in rubber plantation. Laborwhich was tight in other industry became very tight. In theearly of 2011, prices of natural rubber dropped down from$6 per kilo to $3 in a week time. Then price of natural rubberreturned to around $5. Most of the rubber factories found thatthey had very difficult to control their production cost. Pricesand supply of synthetic SBR which is also mainly used in tireindustry follow the prices and supply of natural rubber, swungin wide range. Why?Rubber and economic recovery in Asia Let’s look back to the past three years, after theeconomic recession in 2008-2009, most of the countriesin Asia recovered from the recession within 10-12 months,leaded by China and followed by countries in Southeast Asiaand newly industrialized countries, like Korea and Taiwan.These countries recovered from the recession within a yearbecause of economic stimulation programs of the governments.Economic stimulation programs of these countries were aimingin creating domestic demands as well as fiscal policy toBanja Junhasavasdikul, Ph.D. 13

have more liquidity of money with low interest rates. In2010, almost countries in Asia had very high GDP growthrates. Many countries took that opportunity to improvetheir infrastructures. Because of better infrastructure andhigher income of people and better infrastructure in thesecountries, especially in China and India, these countries needlarge quantity of raw material for their manufacturing. Pricesof raw material (as well as crude oil) returned to the pricesbefore the economic crisis of year 2008. Tire was one of theproducts that had very high demand because of the bigincrease in car production in China, India and countriesin South East Asia. By nature, 60 percent of natural rubberproduction is consumed in tire industry. There was no doubtthat prices of nature rubber increased from $2 to $6 perkilo in the short period follow with the prices of syntheticrubber. People in rubber industry worried about naturalrubber price would further increase up to $8 per kilo. Chinakept high inventory of natural rubber. In the mid of March,2011, most of the factories in China had very high inventoryof natural rubber. They stopped to import natural rubber.Then the prices of natural rubber dropped down to $3 in14 Winning with Technology

a week, followed with the prices of synthetic rubber.After that it moved up to $5 per kilo and stays there. Out of 30 million tons of rubber consumed in worldwide,natural rubber shares one third of this quantity. Becauseof good mechanical properties and good tack properties,natural rubber is widely used in tire and glove. Natural rubberhad its origin from countries in Latin America. In 1493,Christopher Columbus brought this product to Europe.Natural rubber found its commercial value after Mr. CharlesGoodyear discovered the method to cured natural rubberfrom thermoplastic to thermosetted rubber by using sulfurin 1839. In 1976, Henry Wickman brought natural rubber toplant in Cylon (Sri Lanka), Malaysia, Singapore and Indonesia.Now-a-day, Thailand, Indonesia and Malaysia are threelargest natural rubber producers with two third of naturalrubber production.Natural rubber and synthetic rubber Since World War I, rubber had become a strategicmaterial indispensable to war operations. US and JapaneseBanja Junhasavasdikul, Ph.D. 15

armies tried to seize control major production areas of naturalrubber in Southeast Asia. Meanwhile, Germany and USgovernments accelerated their research and production ofsynthetic rubber in order to encounter the serious supply ofnatural rubber from forecast. In year of 1930s, from the research of laboratory ofDu Pont, Dr. Walter H Carothers and his researched teamdiscovered chloroprene rubber (Neoprene). Meanwhile,Dr. Boch and Dr.Tschuku from IG Farben industries in Germanydiscovered butadiene – styrene copolymer (Buna S) andbutadiene – acrylonitrile (Buna N). Before the World War2, Nazi German took the lead to build synthetic rubberplants. Four synthetic rubber plants were built based ontechnology of Buna S and Buna N with capacity of 120,000ton. Meanwhile, in the United Stated of America, PresidentFranklin D Roosvelt had designated rubber as nationalstrategic material. The US government allocated $700 millionto build 15 synthetic rubber plants in USA with total capacityof 700,000 tons.16 Winning with Technology

After The World War II, the US government transferredsynthetic rubber facilities to private sector. The transferstimulated rapid technological advancement and increasedproduction capacity of synthetic rubber in USA. During 1950-1952, because of Korean War, naturalrubber prices soared up, European countries and USrekindled campaigns to increase production of syntheticrubber. After San Francisco Peace Treat in April 1952, USgovernment released it’s tighten policy to countries that lostthe war. Bayer in Germany started to build synthetic rubberbased on technology of Buna S and Buna N. At that year,Japanese government sent 12 technicians to visit USA toinitiate synthetic rubber transferred to Japan. Now-a day, over 30 kinds of synthetic rubber areproduced at the quantity of 23 million metric tons per yearto serve many industries. Automotive and tire industriesconsume more than half of the rubber consumption,follow with construction, oil and gas, electric applicants andelectronic industries.Banja Junhasavasdikul, Ph.D. 17

Japanese synthetic rubber in year 1940-2000 When we talk about rubber, It is quite interested to studyhow Japanese synthetic rubber being developed in the past40 years. Before the World War 2, same as the United Statedand Germany, who considered rubber, was a strategic materialfor war operation, Japanese government mapped out plansto produce synthetic rubber. Japanese army seized controlnatural rubber production areas in South East Asia. In 1942,Imperial Japanese Army advanced into Indonesia, andtook over Goodyear Tire and Rubber Company in Java andrenameditasNipponTireCo. Encouragedbythegovernment,Mr. Shojiro Ishibashi launched a project to study and developsynthetic rubber of his own. In the same time Furukawa ElectricCo., Nippon Kasei Chemical and few Japanese companiesstarted to do research in synthetic rubber. In 1941, Ishibashi’slaboratory succeeded at the pilot plant to produce smallquantity of chloroprene rubber. In 1943, Ishibashi planned toproduce more chloroprene rubber in Manchuria, north partof China. Unfortunately, the plant was not complete beforeJapan lost the Second World War.18 Winning with Technology

After the war, Japan was called to down size itsindustrial capacity to the level that allowed it to satisfy onlyits own domestic demand. In April 1952, USA lift the pastwar treaty to Japanese industries. Japanese rubber industry,leaded by Shojiro Ishibashi, dispatched 12-member tothe United States and Europe to study synthetic rubbertechnology and production In 1952, it was Japanese government plans, leadedby the Ministry of Internal Trade and Industry (MITI) toenvisage an annual production of synthetic rubber at least45,000 tons. In 1953, Goodyear reached an agreementShojiro Ishibashi to transfer technology of syntheticproduction to Bridgestone, while BF Goodrich hadtechnology tie-up with Yokohama Rubber. This was thebeginning of Japanese synthetic rubber industry. Japanese synthetic rubber started production in 1960to replace 60,000 tons of imported synthetic rubber. To thefavor of this industry, demand from tire manufacturers wasrising steeply, reflecting the rise of the domestic automobileindustry. Thanks to the ambitions high-growth fiscal policiesBanja Junhasavasdikul, Ph.D. 19

of Prime Minister Hayato Ikeda in 1960-1964, domesticautomotive industry was in the period of robust growth whichhelped to all its supplies chain. During 1961 to 1973 (beforethe first oil crisis) synthetic rubber consumption grew on theaverage of 14 percent per year. Japan Synthetic Rubber(subsidiary company of Bridgestone) Nippon Zeon andAsahi Kasei were three major synthetic rubber producersin SBR and BR supplying to tire industry. During the late 1960s, US synthetic rubber which wasthe major export of 300,000 tons a year to European markets.It was encounter with the shortage of butadiene which is theraw material to produce SBR and BR. Manufacturers werediscouraged to supply synthetic rubber to oversea markets.Major tire producers, such as Goodyear Tire & Rubber,Firestone Tire and Rubber, BF Goodrich who had their plantsin Europe, had to turned their raw material supplies from nearby countries in Europe. But the synthetic rubber producersin Europe had not been keen in increasing their syntheticrubber production capacity. That gave good opportunitiesfor Japanese synthetic rubber producers to export to Europe.20 Winning with Technology

In the 1970s, Japanese petrochemical industry grew veryfast and able to catch up with petrochemical industry in US.Synthetic rubber from Japan exported to many countries inAsia, Europe and USA. In August 15,1971, because of suffering from doubledeficits, President Richard Nixon announced in broken awayfrom Bretton Woods system which tighten the convertiblerate of US$ to gold. which referred as Fixed Rate System.Countries like, Japan, UK, France, Germany, had to shiftedto floating exchange rates. Meanwhile, President Nixonimposed an import duty surcharge of 10 percent todiscourage the imports to US. President Nixon had targetedon Japan. Japanese yen were under pressured to appreciateits value versus US dollar, in order to reduce trade deficitsbetween US and Japan. Japanese yen which was kept at360 yens per one $US since 1944 till 1971, had to increasedto $280 yens per one $US and to 200 yens per one $USin 1978. All these were under US government policies tocounter Japanese competition to US trades.Banja Junhasavasdikul, Ph.D. 21

In October 6, 1973, ten days after the Yom Kipper Warin Middle East, the organization of the Petroleum ExportingCountries (OPEC) decided to decrease crude oil productionby 10 percent. Price of crude oil increased from $3 perbarrel to $12. Petrochemical industry of Japan who imported99.7 percent of crude oil was much panicked because ofincreasing in prices of crude oil as well as short of supply.Japanese government imposed restrictions on the use ofelectricity and fuel. From the dollar shock in 1971 through the oil crisisin 1973, Japanese economy was in turmoil. Japanesegovernment had to improve their efficiency of Japaneseindustry and energy saving measurement to survive fromthe crisis. Their Japanese determined spirit helped themsurvive when they were facing crisis. They gainedexperience from efficiency improvement, energy savingmeasurements. Japanese hard working spirit and nevergive up “Fukutsu no seikin” were built up in Japaneseworking style. Therefore the second crude oil shock in 1978,when OPEC decided to carry out a four-stage price hike,22 Winning with Technology

petrochemical industry in Japan was less vulnerable to thenew crude oil shock. In 1980, after the Iranian Revolution, Saudi Arabiadecided to sharply increase crude oil production Crude oilprice continued to decrease from $40 per barrel to below$20. Japanese petrochemicals came to the forefront of petroindustry in the world. The years of 1980s, Japanese trade surplus with theworld amount $44 billion. In 1985, Trade deficit with theUnited States kept increased year after year from $7 billionin 1985 to $56 billion in 1986. Trade imbalances with Japanaccounted for 30-40 percent of overall US trade deficit.Therefore, on September 22, 1985, Finance Ministers andcentral bank governors of Five Industrialized Countries (USA,Japan, British, France, and Germany) reached so-call PlazaAccord to allowed US$ to depreciate against Japaneseyen and the German mark by 10-12 percent. One day afterthe Accord, US currency plummeted from one US$ to 320yens to 234 yens. It weakened to 200 yens in 4 months andreached 150 yens in a year after the Plaza Accord.Banja Junhasavasdikul, Ph.D. 23

Because of Plaza Accord, Japanese governmentworried the appreciation of yen would result in a recession andwould adversely affect to Japanese industries. Japanesegovernment resorted to easy monetary policy andexpansionary fiscal policy. Bank of Japan lowered itsdiscount rate to only 2.5%. Meanwhile, the governmentimplemented an emergency economy-boosting program,including public works spending and income tax cut.Consequently, Japanese money supply grew by 11-12percent year-by year in 1987-1988. Financial capabilityimproved drastically. Financial resources which rose bybusiness corporations were injected into stock and realestate markets. This caused a chain reaction of upward pricespiral on both markets. During 1987-1990, Japan had veryhigh economic growth versus the strengthening of Japanesecurrency. This bubble economy of Japan lasted until theBank of Japan moved to tighten their gap on nationaleconomy in spring of 1990. Even with the strong pressure from the United States,petrochemical industry and synthetic rubber in Japan were24 Winning with Technology

growing strongly because of rapid growth of Japaneseautomakers. In the 1980s, Japanese automakers increasedtheir production at home town as well as constructed theirplants in the United States. Major brands of Japaneseautomobiles set up their production in United Statesbecause they were afraid of trade protectionism on importpassenger cars to the US. Follow the Japanese automotive,Bridgestone who was the largest tire producer in Japanexpanded their productions in Japan and other countrieswhere the Japanese automotive went. Japanese automakersand tire makers used mainly synthetic rubber from Japanesemakers. During 1980-1997, it was golden years of Japaneseautomakers and tire makers. This was also the best years formost of the Japanese petrochemicals and synthetic rubber. From the history, Japanese petrochemicals andsynthetic rubber started from 1964 by receiving technologytransfer from US. “Copy and Develop” was a concept using bythese industries in Japan. They invested in R&D to gainedforefront technologies. Their determined spirit and hardworking helped them survived from crisis and becameBanja Junhasavasdikul, Ph.D. 25

very strong. Japanese industries grew very fast during1975-1990 With the government economic stimulationprograms and their effort in research and technologydevelopment. Japanese Automotives, electronic and electricindustries grew very strongly and exported to worldwide.Most of the manufacturing of Japanese automotive hasbeen moving to overseas because of logistic and costreasons. But the situation was different in petrochemical andsynthetic rubber. Years after 1990, Petrochemical andsynthetic rubber plants which were difficult to relocateand could not follow other Japanese industries to move toother countries became not competitive. Their raw materials(crude oil) still needed to import from middle east at highcost. Meanwhile, demand in the country decrease yearby year. Many of them slowed down their research anddevelopment. Their old technologies became not competitive,New technologies come to replace technology thatJapanese has. Currently, number of automobile produces inJapan is decreasing. They move their production to other26 Winning with Technology

countries. Chinese automotive industry is becoming thelargest automotive production. Petrochemical and syntheticrubber follow are following the automotive industry to China.Now a day, China becomes the largest consumer andproducer in petrochemical and synthetic rubber. In Thailand, price of natural rubber remains high.People invade into the forestry land to plant more naturalrubber trees. When monsoon comes, it causes land slidethat kill a lot of people. Humanbeinghastobalancebetweenwealthandgreenenvironment to live happily between human and nature.Banja Junhasavasdikul, Ph.D. 27



“ The successful innovative companymust have a long-term vision andresearch on the megatrends of theindustry that it serves. The company bringin the future requirements of industry intothe organization’s development cycle.To commercialize product discoveredfrom the research, the businessdevelopment team must be able to sell”the value-innovation to meet customers’demands.



02CoCmopreptoernactey

Corporate Competency How can we sustain our growth in this competitivemarket? We must create technology and innovation to sustainour competitive advantage, but how?Innovation has become a popular word in business, industry,academic institutes and even government organizations.Innovation is the way to create innovative product to keep usbeing competitive. Some people understood that innovationcould be generated by thinking differently. Therefore theystarted their innovation process by running workshops andasked their members to give as many ideas as possible.They believed that thinking outside the box could createinnovation, but after hundred of ideas had been generated,few of them had been implemented or had created anythinginnovative. To create innovation, we need to start in developingcorporate competencies from inside the organization. Buildingcorporate competency is a never-ending task becauseopportunities and competition are changing, and buildingcorporate competencies initially means increasing capability32 Winning with Technology

of staff numbers. Capable employees bring better valuableknowledge and creativity that can help the organization tomake faster progress.Creating Internal Competencies To create internal competencies requires a clearcorporate vision and long-term strategies from corporate topmanagement. Good corporate strategies come from the rightbalance between the resources and business. There is noone right strategy for all companies because every companystarts at a different point, operates in a different context andhas a different kind of environment. The organization mustfigure out how to leverage those resources into the businessstrategies and create synergy between business units tocapture the value of individual units’ achievements. Internallyconsistent corporate strategies must be tailored to fit the firm’sresources and opportunities. When a company’s technicalresources are critical to the success of its business, buildingtechnology competence and product innovation arecompetitive advantages that enable the company to makefaster progress.Banja Junhasavasdikul, Ph.D. 33

In the highly global competition, an organization mustcreate innovative, high-quality products at a competitiveprice, a strong market position in attractive industries, andan effective administrative organization before them rushingout to the market.Create innovative Product Innovation never comes by luck. Just generatingdifferent ideas can not create an innovative product. Goodproductive ideas have to come from industrial demands.An innovative organization brings customers’ need andindustrial future requirements into the development cycle,which requires strong knowledge and technology in thatarea. Research facilities are needed to develop the industrialrequirement into an innovative product to offer to the market.Sometimes, new material was also found in the research lab.They have to find out the value-in-use of the new material tooffer to customers an innovative product. Consistently pursuing its vision of technologicalcreativity will push a technology the company to the forefront34 Winning with Technology

of its industry. For example, Sharp specializes in optoelectronictechnology that contributes to its competitive advantage. Itsmost successful technology had been in liquid crystal display(LCD), which brought Sharp success in video recorders. Sharpcontinually invested in technology that was at the corecompetitive edge, thereby maintaining its position as the leaderin video recorders for a decade. However, demand changes,technology changes, a hi-tech company has to pursue newtechnology to sustain its position in the industry. Create Innovative Product from “Outside-In and Inside-Out” TKencohawnnloedldoggey ReInqduuirsetmriaelnt DReFevsaeecloailiprtcimehse&ntOutside-in InCcuebnatetirveCInudsutMosmtarrieakrlestm’ irenegsqiaguhitrrteesmndesnt Innovative products InDsfreiodvmee-looinupst:indeew-dibsucsoivneersys Business Success 35 Banja Junhasavasdikul, Ph.D.

The successful innovative company must have along-term vision and research on the megatrends of theindustry that it serves. The company bring in the futurerequirements of industry into the organization’s developmentcycle. The organization’s staff members must have strongknowledge and technology in that industry they serve. Theorganization needs to build research and development (R&D)facilities to do research in new technology and products. DuPont is a good example of this life cycle of innovation. Afterhundred years as the leader in the chemical industry, DuPont realized that it could not sustain its growth for the nextdecades by relying on raw materials from crude oil. Du Pontbrought the megatrends of future demands in food, the greenindustry, and renewable energy into its strategic planningand decided to go for biotechnology and renewal energy. Itbuilt research and development facilities with ten thousandof chemists and engineers involved in the research anddevelopment of those new fields. In order to shorten time inresearch, Du Pont acquired many biotechnology companies.But still, many new bio-products have been discovered inDu Pont R&D Center. Du Pont also realizes that prototype36 Winning with Technology

products from R&D; still needs a strong business and productdevelopment team to commercialize those innovativeproducts. To commercialize product discovered from theresearch, the business development team must be able tomarket the value-innovation products by meeting customers’demands. Usually the period of business development will belonger than the research cycle in R&D. It needs strong effortand commitment from the management and developmentteam to accelerate the programme and make it an innovativeproduct and business success.Develop Innovators Innovators are not born to be, but they can bedeveloped. Innovators have unique sense in generatingbreakthrough business ideas. Innovators have creativeintelligence, which differs from other types of intelligenceand enables them to make discoveries. The more diverseour experience and knowledge, the more connectionswe develop in creativity thinking, Innovators are able toconnect unrelated questions, problems and ideas fromBanja Junhasavasdikul, Ph.D. 37

different fields. New discovery will lead to creative newideas. Innovators have the ability to generate ideas afterideas that can be recombined in new ways. The morepeople studied and learned, they can store more knowledgeand their brains, with a rich reservoir for them to combineassociations and create breakthrough thinking. In the book “Opposable Mind”, Dr. Roger Martinwrote that “Innovative thinkers have the capacity to hold twodiametrically opposing ideas in their heads. Without panickingor simply settling for one alternative or the other, they are able toproduce a synthesis that is superior to either opposing idea.” - Dr.Roger Martin in “Opposable mind” - To build an innovative organization, the managementof Innovation Group has a long-term vision and commitmentto build the knowledge and technology base, which isthe fundamental factor in developing innovators in theorganization. We are providing research facilities to tryout new ideas, creating prototypes and launching pilotproducts.38 Winning with Technology

Many people said that “The world is our library andlaboratory.” Some of the powerful experiments that innovatorscan engage in are working in new surroundings, physicallytinkering, and intellectual exploration. Working and living indifferent environment and culture, the executive to becomean innovative leader. Innovators build connection andnet-working. They meet people to extend their own knowledgedomains. They engage with customers, industrial experts, tradeassociations and others to identify future opportunities. Innovators are great observers. Discovery-drivenleaders produce uncommon business ideas. Innovatorscarefully, intentionally and consistently look out for smallbehavioural details in the activities of customers, suppliersand other companies in order to gain insights about newways of doing business. Sir Isaac Newton observed that apples in the gardendropped down from the tree to the ground. He created the“Law of Gravitational Force”. Raton Tata got the inspirationthat led to building the world’s cheapest car by observingan Indian family of four packed onto a single motorizedBanja Junhasavasdikul, Ph.D. 39

scooter. In 2009 the Tata group launched the $2,500 “Nano”to displace the automobile in India. To build the capability for breakthrough, the innovatorsmust engage in three distinct career paths. Exploration - Innovators must be able to explore marketinsight to reflecting whether the organization’s technologicalcapabilities and the market’s needs are a good fit, andrepresent a worthwhile opportunity. Evaluation - Innovators must be able to evaluatemarketinsight opportunities to fit corporate core-competency andengage in experimenting in design a viable model for anew business. Implementation - Innovators must be able to implementaccording to plans until project can stand on its own.Innovation Group and Internal Competencies “Knowledge does not automatically lead to technology.We have to change knowledge into technology that issuitable to the industrial needs. This will enable us to create.40 Winning with Technology

“Innovation” accordingly holds our technology competencein the long term.” Banja Junhasavasdikul, Ph.D. 20-Year Anniversary of Innovation Group We have journeyed along the road of polymertechnology since 1983. It took many years to buildInnovation Group’s technology centre to serve customers’demands and create its own technology capability, butwe have learned that in this competitive global market weneed not only technological competence but also long-termvision and strategies that balance resources and businessopportunities. Innovation Group must build competitivecompetencies that can sustain the group’s competency inthe long term. It can create the value-creation zones fromthree competitive advantages that have to be continuouslyrebuilt.Banja Junhasavasdikul, Ph.D. 41

Three completive advantages that we create Value Creation MPaorskietitoinng Zones 1 3 4 TCeachpanobilolitgyy 2 Organization’s culture & System 1) Technology capability Technology will not come by chance. Sustainable tech-nology must be built from inside the organization. To buildits technology competence, Innovation Group has to builda strong “Knowledge Based Organization”. Only from goodknowledge in serving the industry can Innovation Group build astrong technical organization with a technologicall competitive42 Winning with Technology

edge. This requires strong commitment from the managementof Innovation Group in Focusing on long-term business. A Research Centre is necessary to build technologicalcompetence for the organization. Therefore, we built a smallrubber research lab with three chemists to do applicationresearch to confirm formulations to serve customers infootwear. It was quite a financial burden for a small tradingfirm to set up a research lab, but we have believed in“Inspiration of Technology” from its inception. This smallresearch lab became a technical training centre for newtechnical employees. We employed new technical graduatesand train them in the research lab before putting theminto marketing as Technical Sales Representatives. In themarket, we train these technical sales representativesto be excellent investigators, innovators and integrators.They bring in market and competitive information into theorganization. They translate industrial demands into researchand development programmes, and they bring researchedproducts to market and develop them as innovations.Banja Junhasavasdikul, Ph.D. 43

An effective research and development centre needsnot only knowledgeable chemists and suitable researchequipment but also attention and commitment from topmanagement. The research lab must be run as a separatestrategic business unit of the organization. It is costly to setup a good technical research centre and it needs managerialattention and an autonomous system to run it as a separateprofit-centre. The effective technical centre contributes to theorganization by generating new businesses. It gives strongtechnologicalcompetencyandsustainsthelong-termgrowth ofthe organization. Many companies look for technology andinnovation but they do not dare to invest in a research lab.Many don’t know how to start. Some do not know where tofind the researchers. Some set up a very expensive researchlab turns into nothing but a show-room for the company. Nowadays, we have two research centres which linkwith the universities to co-research on some projects. Theseresearchers are encouraged to share technical knowledgeand information in the discussions every morning. They shareproblems and technical information in group discussions.44 Winning with Technology

Monthly technical presentations and seminars are arrangedamong R&D staff members and marketing members. Theseresearchers work closely with the marketing members to gainmarketing experience and to gain knowledge of industrialrequirements. Team members have opportunities to traveloverseas to visit customers and attend technical seminarsor to be trained at suppliers’ sites. These ventures havemade these researchers able to transfer to marketing orproduction if they are requested to do so. We train up theseresearchers to have good technical capability to serve thenew wave of expansion in the business. 2) Organization’s culture and system To be success, a company must have strong businesscultures emphasizing on good corporate governance andbuilding employees’ competence. Management developseffective systems to control and measure the achievements.This has to start with development in employees’ knowledge,technology, and attitude? By nature, Thai people areself-satisfied and narrow-minded. They spend very little timein reading. It is necessary to change their behaviour andBanja Junhasavasdikul, Ph.D. 45

attitude to become self-determined and spend more timein learning and experiencing things around them. With capable employees, empowerment is easierto build in the organization. Empowerment creates selfmotivation. But we must have a good controlling system tomeasure the performance and achievements. Combiningempowerment and measurable performance, we create aneffective organization. 3) Marketing Position We must set our market position based on vision andbusiness objectives that we like to be portrayed and servein the market. In Innovation Group, we position ourselvesas a technology leader in the polymer industry. We shallserve the industries with a wide range of products, technologyand service. Innovation Group was built on what we dobest: We tried to build world-class polymer processingfactories and research centres. We shall serve the globalpolymer market with wide range of products, technology, andservice. Innovation Group will serve industries not onlyhi-tech industrial products but also commodity polymers to46 Winning with Technology

cover the whole range of rubber products into the industries. In serving the whole range of rubber, the marketingteam has to be more dynamic in mass retailers as well asmaintaining its core-competence in the niche market, whichrequires intensive technical service. The good marketershave to be good negotiators, good investigators, goodinnovators, and good implementers. They also have to beable to have strong net-working. Ifwecontinuetobuildingthethreecorporateadvantagesin figure 2, we will create four high-value creation zones. Value-creation zone 1: building the strong technologycapability will reinforce the marketing position in the technicalmarket. The company can make faster progress with creatinginnovative products and technology to serve customers. Value-creation zone 2: with the right corporatecultures and system supported by people development anda controlling system, we will provide products of consistentquality and competitive price to the industry.Banja Junhasavasdikul, Ph.D. 47

Value-creation 3: with strong people development, acontrolling system and by building a technology andworld-class polymer manufacturing and research centre,Innovation Group will further build its good reputation as areliable technical product supplier. Value-creation 4: this is the highest value-creation zone,resulting from creating three cooperate advantages. This willsustain the growth of Innovation Group in the global market. These Value-Creation Zones can sustain the growthof Innovation Group in the global competitive market.Innovation Group’s business plans for 2012 onward willcontinue to emphasize people development, enhancingtechnology competency, expanding its world-class polymermanufacturing and strong positioning in the market.48 Winning with Technology