Andy Hall - Innovation and value creation

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  • It is about bringing the idea to market
  • Apple also has a technical evolution history
  • The difference between efficient and effective strategy.
  • Take-Make-Dispose paradigm is not sustainable
  • Normally where it goes wrong: the translation step to a practical operation
  • Zoom in on chemicals and employees. What you have built is a value delivery & recovery system, rather than a quantatative measurement tool.
  • Your own personal tagline…….4 cs Cost, confusion, commitment and collaboration. Cost is the biggest barrier to sustainability activities but value is the business driver….SVCS identifies the innovation opportunities and the value creation scenarios.Not all innovation is technical. Premium brands need to discriminate on difference not compete on price or volume.
  • Andy Hall - Innovation and value creation

    1. 1. Sustainable Value Cycle SolutionsEllen MacArthur Foundation webinar 24 April 2012 “Innovation and Value Creation”
    2. 2. Invention or Innovation ?Invention: The creation of an idea or a methodInnovation: The use of a new idea or method
    3. 3. Where does innovation take place?Technical environmentJet engine, Digital revolution, nuclear fusion, synthetic fibre (Nylon)Business ModelAmazon, MacDonalds, Zara, EasyJet, DellSystem LevelHarley Davidson, Facebook, Google, Ford
    4. 4. Where does innovation take place?Technical environmentJet engine, Digital revolution, nuclear fusion, synthetic fibre (Nylon)Business ModelAmazon, MacDonalds, Zara, EasyJet, DellSystem LevelHarley Davidson, Facebook, Google, Ford
    5. 5. Henry Ford’s real legacy Ford’s vision was a car for every home…. "I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one – and enjoy with his family the blessing of hours of pleasure in Gods great open spaces”Personal mobility
    6. 6. Innovation Business ? Revenue and Value Innovation business Creation growth"Companies cannot grow through cost reduction and re-engineeringalone... Innovation is the key element in providing aggressive top-linegrowth, and for increasing bottom-line results." Davila et al. ”Making Innovation Work” (2006)
    7. 7. Drivers for InnovationResources Social Consumer/Market Technology • Historical issue • 1950-70s • 1980-00s • 2005+ • Materials • Mass • Marketing/Brand • People/network • Labour production and driven driven • Water manufacturing • Experience • Transformation • Fuel • Consumption • Consumer • Co-creation and • Crisis/war • Push to Insights content consumer • “company is • “customer is • “Customer is my King” King” best friend”
    8. 8. ..but something else is changing“..Traditional approaches to business will collapse, and companieswill have to develop innovative solutions. That will happen only whenexecutives recognize a simple truth: Sustainability = Innovation..”Source: HBR, Sept 2009 “It is more intriguing that outperformance on revenue growth is correlated with superior creation of stakeholder value” Source: “The granularity of growth”, McKinsey Quarterly, 2007
    9. 9. The additional drivers for innovation TraditionalCostTechnologyConsumer needs Stakeholder Revenue and Drivers Innovation value business creation growthResources/wasteSocialEnvironmental Holistic …a formula for business success
    10. 10. Current economyResources
    11. 11. “We cant solve problems by using the same kind of thinking we used when we created them” – Albert Einstein –
    12. 12. Albert Einstein Gene Simmons - KISS
    13. 13. Circular Economy
    14. 14. Stakeholder Revenue and Design for Innovation value business Value creation growthThe only sustainability strategy that should be considered is one that isintegral with the business and does not compromise it; a systems approach...a cyclic process of innovation, value creation and value recovery. .. a "Value Cycle"
    15. 15. From concept to reality1. Communicate the concept simply2. Design “value”products for the system3. Use “Trustful and Recoverable” materials4. Consumer is my best friend
    16. 16. 1. Value Cycle conceptDesigninjection Createpoint Collect Source Recover
    17. 17. 2. Design “value” products for the systemGreat product Added value
    18. 18. • Deliver on brand promise• Designed for recycling & value recovery• Defined periods of use
    19. 19. 3. Use trustful and recoverable materials   Source Content Usage    Source Content Usage €
    20. 20. • Managed/renewable source• 100% known & evaluated content• Known use scenario• Technically recylable• Commercially recoverable• Second life target product• Safe end of life Select and retain materials value
    21. 21. 4. Consumer is my best friendYour design Health and happiness Do more good, not less bad
    22. 22. The result• Great products• Delighted consumers• Lower costs through better design• Return on materials investment• Eimination of toxins and waste• Materials and chemicals (risk) management• Brand image enhancement• Improved employee engagement Multi stakeholder value creation
    23. 23. Maximising Value Value Cycle designBrand • Brand promise • Social & Ethical position • Primary functionProduct • Primary proposition Product • Additional value discriminators • Supporting argument
    24. 24. Case study… Desso AirMasterBrand •Brand promise: “Creativity, Ambition, Flexibility, Cradle to Cradle” •Social & Ethical position: Cradle to Cradle company & products •Primary function: floor coveringProduct •Primary proposition: high quality, durable, trending designs Product •Additional value: improves indoor air qualityDiscriminator •Supporting argument: C2C certified, take back & recycling
    25. 25. Not just a one off More Innovation.. • Light reflecting carpets • Aviation carpeting Desso profitability (EBIT) 9%60% accousitc damping 4.5%+10dB sound reduction <1% 2006 2008 2010
    26. 26. The Value Internal value• New consumer value spaces/ideas• Innovative and critical designs• Materials risk and flow management• Reduced data set of materials• Reduced BoM• ROI from materials recovery• Employee engagement External value • Brand enhancement • Superior primary function • Additional functionality (descriminator) • Supported sustainability program • Option to certify or label • Delighted consumers • Market and business growth
    27. 27. Sustainable Value Cycle Solutions “Value creation in sustainability”Staff training Strategic advice Interim expert management • Workshops • Materials development • Specialist competences • Coaching • Supply chain development • Partner selection & engagement • Ideation for innovation
    28. 28. Corporate Sustainability office CL Board of management Andy Hall Consumer Lifestyle -C2C and resource effectiveness team Sustainability Innovation Manager Preferred Materials Program

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