Manging for Innovation

MANAGING 4 I N N O V A T I O N Greg Fisher

W H A T ? W H Y ? H O W ?

W H A T ?

What is innovation?

Innovation is the process of turning opportunity into new ideas and putting those into widely used practice – Tidd, Bessant & Pravitt – Managing Innovation (2001)

Innovation is the means by which entrepreneurs exploit change as an opportunity for a different business or service – Peter Druker – Innovation and Entrepreneurship (1985)

Innovation is the successful exploitation of new ideas – UK DTI Innovation Unit

What is innovation? Opportunity Idea Exploitation = Innovation + +

Product Innovation

Improving the features of a product or creating new products

Process Innovation

Improving or changing the process by which a product or service is produced or delivered

Business Concept Innovation

Radically reconceiving products and services, not just developing new products / services

Redefining market space

Redrawing industry boundaries

W H Y ?

Encyclopaedia Britannica’s 225 year track record of success was destroyed in:

24 months

5 years

10 years

25 years

Encyclopaedia Britannica’s 225 year track record of success was destroyed in:

24 months

5 years

10 years

25 years

What has more computing power?

Dell 400 Mhz Pentium III desktop PC

Apollo 11 mission control computer

Sony Playstation

What has more computing power?

Dell 400 Mhz Pentium III desktop PC

Apollo 11 mission control computer

Sony Playstation

It took the telephone 40 years to penetrate 10 million homes. How long did it take the Netscape browser?

18 months

5 years

10 years

It took the telephone 40 years to penetrate 10 million homes. How long did it take the Netscape browser?

18 months

5 years

10 years

How many people use the internet in China?

50 million

200 million

300 million

How many people use the internet in China?

50 million

200 million

300 million

Value of Yahoo!’s offer to buy Facebook.com from the 22 year old founder, Mark Zuckerberg

$100 million

$1 billion

$500 million

Value of Yahoo!’s offer to buy Facebook.com from the 22 year old founder, Mark Zuckerberg

$100 million

$1 billion

$500 million

3 billion people live in Asia. What proportion of the population is < 25 years old?

20%

35%

50%

3 billion people live in Asia. What proportion of the population is < 25 years old?

20%

35%

50%

The cost of hiring an English speaking PhD chemist in India is:

R65,000 pa

R150,000 pa

R350,000 pa

The cost of hiring an English speaking PhD chemist in India is:

R65,000 pa

R150,000 pa

R350,000 pa

The average consumer in the developed world is hit with how many marketing messages every day?

500

2500

4500

The average consumer in the developed world is hit with how many marketing messages every day?

500

2500

4500

General Motors makes more money from?

Selling cars

Selling technology

Lending customers money to buy its cars

General Motors makes more money from?

Selling cars

Selling technology

Lending customers money to buy its cars

Number of Apple iPods sold to date?

10 million

35 million

100 million

Number of Apple iPods sold to date?

10 million

35 million

100 million

Google’s value at IPO, 6 years after the business was founded?

32 billion

20 billion

12 billion

Google’s value at IPO, 6 years after the business was founded?

32 billion

20 billion

12 billion

H O W ?

4 businesses 4 case studies 4 management philosophies 4 innovation models

Methodical Innovation Observe Brainstorm Implement Prototype

Observe IDEO’s cognitive psychologists, anthropologists, and sociologists team up with corporate clients to understand the consumer experience

Ideo

Brainstorm An intense, idea-generating session analyzing data gathered by observing people. Each lasts no more than an hour. Rules of brainstorming are strict and are stenciled on the walls.

Ideo

Prototype Mocking up working models helps everyone visualize possible solutions and speeds up decision-making and innovation .

Ideo

Implement Bring IDEO’s strong engineering, design, and social-science capabilities to bear when actually creating a product or service .

Methodical Innovation

Process to drive innovation

Fun environment

Diverse teams

Encourage failure

Application

Facts about P&G

167-year-old business

$50 billion in sales

300 brands

160 Countries

13 brands in excess of $1 billion

P&G History of Innovations How do they keep this going?

R&D Spend – $1.6 billion

7,200-strong R&D staff

Over 1000 PhD’s

P&G Response = R&D But still not getting the innovation they want?

Open Innovation R&D C&D [Connect & Develop] [Research & Development]

Source: P&G Connect and Develop Booklet: http://pg.t2h.yet2.com/t2h/page/homepage

Connection network Source: P&G Connect and Develop Booklet: http://pg.t2h.yet2.com/t2h/page/homepage

Our vision is simple. We want P&G to be known as the company that collaborates - inside and out - better than any other company in the world. I want us to be the absolute best at spotting, developing and leveraging relationships with best-in-class partners in every part of our business. In fact, I want P&G to be a magnet for the best-in-class. I have a ready-to-go product or technology to offer P&G I want to acquire a technology from P&G.

Ready-To-Go Products By acquiring the newly introduced SpinBrush, P&G was able to bring a superior oral care brand to market quickly, without undertaking the time and expense of developing an entirely new product. Ready-To-Go Packaging Consumer-preferred pump dispensers were originally developed by a European packaging products company. P&G led a collaborative improvement process to make the original pumps more effective prior to their launch in Olay’s North American markets. Open Innovation

Ready-To-Go Technologies P&G introduced Bounce, the world’s first dryer-added softener, after acquiring the product technology from the independent inventor who developed the innovative fabric-care solution. Open Innovation Commercial Partnerships P&G found the perfect complement to the Swiffer brand in a hand-held duster developed by a Japanese competitor. After purchasing the product, P&G leveraged elements of existing manufacturing processes and advertising components to launch Swiffer Duster within 18 months.

Know where to look

Leverage networks

Distribute and screen ideas

Promote openness to external ideas

Open Innovation Application

MSA Vitality Discovery Life Discovery Card Destiny Health Discovery World 1994 2006 Innovation History

Driven Innovation "We don't innovate for innovation's sake, but without a deadline that fine line between a great product and a mediocre product is seldom bridged.” Adrian Gore – CEO Discovery

Set a deadline

Short planning cycles: 18 months to 3 years

Link product and process innovation

Combine intellect & emotion

Pet Project Innovation “ We call all of these projects Googlettes. Basically, they're baby Googles, startups within the startups. We really like the concept because it helps us keep that innovative startup feel and launch projects quickly.” Marissa Mayer - Director Consumer Web products at Google

Pet Project Innovation