Strategic Innovation: Coming to an Industry Near You

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1. What ‘strategic innovation’ means
2. Why you should care about it
3. How you can do it

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Strategic Innovation: Coming to an Industry Near You

  1. 1. Strategic Innovation: Coming to an Industry Near You Brian Christian, President, The Inovo Group 2013 International Polyolefins Conference
  2. 2. Three Topics 2 1. What ‘strategic innovation’ means 2. Why you should care about it 3. How you can do it Copyright © 2013 The Inovo Group, LLC
  3. 3. WHAT ‘STRATEGIC INNOVATION’ MEANS 3 Copyright © 2013 The Inovo Group, LLC
  4. 4. Too Risky Sustaining Innovation Disruptive Incremental Core Horizon Zone Newness to the World Newness to the Company What ‘Strategic Innovation’ Means The Strategic Innovation Zone Probable success but won’t move the growth needle Wasted time, capital & resources pursuing probable failures Copyright © 2013 The Inovo Group, LLC 4 Significantly new offerings at risk levels that stretch but do not break the company
  5. 5. Disruptive Incremental Core Horizon Newness to the World Newness to the Company What ‘Strategic Innovation’ Means Strategic Innovation Examples Copyright © 2013 The Inovo Group, LLC 5 Too Risky Sustaining Innovation Strategic Innovation Zone direct publishing
  6. 6. WHY YOU SHOULD CARE ABOUT IT 6 Copyright © 2013 The Inovo Group, LLC
  7. 7. Why You Should Care About It Coming to an Industry Near You! 7 Copyright © 2013 The Inovo Group, LLC • Not just about growth…can be a matter of survival • Industries in flux are ripe for strategic innovation • Your industry is in flux
  8. 8. Why You Should Care About It Corporate Turnover is Accelerating 8 Turbulence in Fortune 500 List Year (1955–2011) #ofCompaniesRemoved Notable Victims of Strategic Innovation in Last 5 Years Alone • Blockbuster • Borders Group • Tribune Company • Ziff Davis • AbitibiBowater • Kodak • Vivitar • Silicon Graphics • Bethlehem Steel • Global Crossing Copyright © 2013 The Inovo Group, LLC 82 of Fortune 100 disappeared
  9. 9. Why You Should Care About It Industries in Flux are Ripe for Strategic Innovation 9 Copyright © 2013 The Inovo Group, LLC Industry Cause of Flux Resulting Innovation Telecom Break-up of AT&T in 1984 Rapid rise of cable and cellular voice & data as well as devices Auto Oil prices, global warming, energy independence New wave of hybrid and electric vehicle innovation starting in 1997 with the Toyota Prius HVAC (et al) Environmental restrictions on fluorinated hydrocarbons Three generations of non-ozone depleting, low global warming refrigerants and blowing agents Corporate Services Fall in cost of international communication in early 2000’s Boom in business process outsourcing (BPO) to India
  10. 10. Why You Should Care About It Your Industry Is in Flux 10 Copyright © 2013 The Inovo Group, LLC Design-Driven Flux 1. Designer Plastics: catalyst technology (metallocene, chain shuttling) driving transformation in polyolefin value chain 2. Shale Gas: upstream technology driving massive shift in cost and mix of C2-C3-C4 paraffin and olefin feedstocks Demand-Driven Flux 3. China/India: rapid growth and future potential driving transformation in polyolefin industry business models 4. Sustainability: regulatory incentives/constraints and consumer preference driving bioplastics, PVC replacement
  11. 11. 11 Copyright © 2013 The Inovo Group, LLC Design-Driven Flux 1. 3D printing 2. Metal organic frameworks (MOFs) Demand-Driven Flux 3. Smart packaging 4. Africa Why You Should Care About It Other Flux Forces on the Horizon
  12. 12. Why You Should Care About It This Flux is Driving a Lot of Strategic Innovation 12 Copyright © 2013 The Inovo Group, LLC Strategic Innovation Types Drivers of Strategic Innovation Design-Driven Demand-Driven Designer Plastics Shale Gas China & India Sustaina- bility New Products New Services New Processes New Biz Models Molecule & application design ‘On-purpose’ C3/C4 olefins JVs and Specialty M&A Biomass to chemicals (butadiene)
  13. 13. HOW YOU CAN DO IT 13 Copyright © 2013 The Inovo Group, LLC
  14. 14. 14 Copyright © 2013 The Inovo Group, LLC How You Can Do It Four Basic Requirements 1) Clearly define your starting point 2) Clearly define your end point 3) Develop a set of process design principles 4) Design a discovery process
  15. 15. 15 Copyright © 2013 The Inovo Group LLC Design Side Demand Side CORE Demand–Design Canvas ADJACENCY (design forward) ADJACENCY (demand backward) WHITE SPACE Property of The Inovo Group, LLC How You Can Do It Step 1: Clearly Define Your Starting Point Design Side Demand Side PC (iMac) Apple’s Canvas in 1999 Branded Retail (Apple Stores) Consumer Electronics (iPod) Music Business (iTunes Store) Demand–Design Canvas
  16. 16. How You Can Do It Step 2: Clearly Define Your End Point 16 Copyright © 2013 The Inovo Group LLC Strategic Opportunity Model Illustrative Example Offering: iPod Develop: Partner with music industry; exclusive rights to Toshiba drive Produce: Chinese contract manufacturers (e.g., Foxconn) Deliver: Apple branded stores plus Apple website Value: Consumers, Apple up; artists, distributors down Develop Deliver Offering Produce Value Property of The Inovo Group, LLC
  17. 17. 17 Copyright © 2013 The Inovo Group LLC How You Can Do It Step 3: Develop a Set of Process Design Principles Be hypothesis-driven and needs-based Employ concept of ‘iterative deepening’ Ensure end-to-end business model focus Reach outside for new knowledge Incorporate the ‘wisdom of crowds’ Separate ‘should do’ from ‘could do’ Inovo’s Discovery Process Design Principles 1 4 2 6 3 5
  18. 18. 18 Copyright © 2013 The Inovo Group LLC 15-20 4-6 80-100STAGE 1 STAGE 3 STAGE 2 Opportunities Property of The Inovo Group, LLC community engagement How You Can Do It Step 4: Design a Discovery Process… evaluation/selection tools Demand–Design Canvas 1 4 2 6 3 5
  19. 19. 19 Copyright © 2013 The Inovo Group LLC 15-20 4-6 80-100STAGE 1 STAGE 3 STAGE 2 Opportunities Property of The Inovo Group, LLC community engagement How You Can Do It …Which Reflects These Principles evaluation/selection tools Demand–Design Canvas 1 4 2 6 3 5 Be hypothesis-driven and needs-based Employ concept of ‘iterative deepening’ Ensure end-to-end business model focus Reach outside for new knowledge Incorporate the ‘wisdom of crowds’ Separate ‘should do’ from ‘could do’
  20. 20. Thanks for Your Attention 20 Copyright © 2013 The Inovo Group LLC President 35 Research Drive Suite 400 Ann Arbor, MI 48103 (269) 930-0574 Bchristian@TheInovoGroup.com Brian Christian

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