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Value Innovation Tab 2
- 1. Let’s move on – the fun is just beginning.
This is easy if you just follow the logic.
- 3. Value Innovation Organizations
Value Innovators deliver exceptional value
to the most important customer in the value
chain….all the time, every time.
This:
Fuels Sustainable, Profitable Growth
Increases company value
Creates Jobs
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 4. Where does Value Innovation Fit?
Ideation Stage:
The front end of innovation
Front end of the Stage-Gate process
Assures you are going to deliver exceptional value
to the most important customer in the Value Chain
(marketing homework IS done upfront)
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 5. Where does Value Innovation Fit?
Commercialization Process (either an
external or internal MIC):
Primary communication tools
Modified as you move through the Stage-Gate
process
Key part of the portfolio management review
process
Assures you are going to deliver exceptional value
to the most important customer in the Value Chain
regardless whether the MIC is internal or external
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 6. Where does Value Innovation Fit?
Day to Day Operations
Primary tool is Contextual Interviewing with those
who are closest to the action
Still go through 3 interviews
Can be completed in a few weeks
Changes focus from cost reduction to value created
Focus on Cost Focus on Value
Total cost ($)/Employee Gross Margin/Employee
EPS in current quarter Average EPS over 5y
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 7. Value Innovation Organizations
Gary Hamel’s Thesis1, 2: Companies fall into one of
three categories:
Rule Maker [#1 in the market; Sets the
rules for all other companies]
Rule Taker [Plays by the rules set by the
Rule Maker]
Rule Breaker [Defines new rules]
1. Gary Hamel, “Strategy as Revolution”, Harvard Business
Review, July-August, 1996, 69-82
2. Gary Hamel, “Leading the Revolution – How to Thrive in
Turbulent Times by Making Innovation a Way of
Life”, Plume, 2000
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 8. Value Innovation Organizations
Rule Maker, Rule Taker, Rule Breaker
examples
Industry Rule Maker Rule Taker Rule Breaker
Procter Colgate
Consumer
And Palmolive,
Packaged Goods
Gamble Unilever
Consumer Sony, Chinese
Samsung
Electronics Matsushita Company?
British
UK Airline British Midland Virgin Group
Airways
Indian Airlines Jet Airways Indian Airlines Kingfisher
Hoover,
Vacuum Cleaner Dyson Ltd Dyson Ltd
Electrolux
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 9. Value Innovation Organizations
Reinvent Your Company - Hamel’s Ten Rules for
bubbling up Billion Dollar Ideas
Set Unreasonable Offer and Open Market for
Expectations Capital
Stretch Your Business Open up the Market for
Definition Talent
Create a Cause, not a Lower the Risks of
Business Experimentation
Listen to New Voices Make Like a cell – Divide
and Divide
Design an Open Market for Pay Your Innovators Well –
Ideas Really Well
Gary Hamel, “Reinvent Your Company, 10 Rules for making billion-
dollar business ideas bubble up from below”, Fortune, June
12, 2000, pp 98-118
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 10. Value Innovation Organizations
Gary Hamel’s Rule Breakers and selected Rule
Makers are generally Value Innovators
Rule Makers
Procter and Gamble, Samsung
Rule Breakers
RE/MAX, Southwest, Virgin Group
You can use Hamel’s classification to help identify
Value Innovation Companies
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 11. Innovaro’s “Innovation Leaders”
Considers 8 criteria to determine the Innovation Leaders:
Organizational culture and Average margin per product,
supporting structure service or customer
Strategic focus on innovation Investment in innovation
and its role in driving corporate related activities (e.g., R&D
growth and marketing)
Number of Major new product
Brand value and human capital
launches and relative success
growth
ratios
Growth in revenues, profits
Peer review from within sector
and market cap
“Innovation Leaders”, Innovaro, London: Published bi-
annually for last 10 years. Tim Jones, was the Principal
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 12. Innovaro’s “Innovation Leaders”
Sector Innovation Leader One to Watch 1 One to Watch 2
Aerospace Honeywell Rolls Royce EADS
Airlines Virgin Atlantic Singapore Airlines British Airways
Automotive Toyota Renault Honda
Banking RBS Bank of America HSBC
Chemicals DSM BASF Rohm and Haas
Consumer
Electronics Samsung LG Apple
Freight UPS FedEx TPG
Energy bp ExxonMobil Total
Fashion Retail H&M PPR George
Food and Beverage PepsiCo Danone Cadbury Schweppes
Food Retail Tesco Carrerfour Ahold
Household Products Reckitt Benckiser P&G Kimberley Clark
IT Hardware Logitech Acer 3Com
IT Software Microsoft Google Adobe
Media Time Warner Pixar BBC Worldwide
Medical Medtronic Smith and Nephew Boston Scientific
Office Equipment Canon Fuji Xerox Konica Minolta
Pharmaceuticals Novo Nordisk Genzyme Eli Lilly
Sports and Leisure Adidas Nike Speedo
Telecommunications Nokia ?? BT Juniper
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 13. Innovaro’s “Innovation Leaders”
2005 Leaders Stock Performance
On average the groups stocks increased
48.6% in two years
Company Stock Price Inc (%)
2005-2006
Apple 163
Google 139
Rolls Royce 89
Toyota 64
Canon 61
Tim Jones, Innovation Update, February, 2007
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 15. The Global Innovation 1000 – Booz and Co.
1000 Companies – 3 Classifications
Need Seeker Company focuses on identifying unmet,
unarticulated needs
Market Reader Focuses on the market. Looks for trends
(price, growth), competitors’ moves,
buys Frost and Sullivan reports
Technology Follows direction suggested by their
Driver technological capabilities, leverage their
R&D investment to drive breakthroughs
and improvements
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 17. The Global Innovation 1000 – Top 20 R&D Spenders
Booz Allen Hamilton, Strategy+Buainess. Global Innovation 1000, Winter, 2011
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 18. The Global Innovation 1000 – Booz and Co.
Booz Allen Hamilton, Strategy+Buainess. Global Innovation 1000, Winter, 2011
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 19. The Global Innovation 1000 – Booz and Co.
Booz Allen Hamilton, Strategy+Buainess. Global Innovation 1000, Winter, 2011
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 20. Innovation Killers
Innovation Failure comes from
companies that confuse
R&D and Technology with Innovation
Design with Design Strategy
Consumer Marketing with Consumer
Understanding
“Out-of-the-box” Thinking with Innovation
Business Week; April 1, 2005; A Creative Corporation Toolbox
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 21. Value Innovation Organizations
Key Questions for You and Your Company
What is Your Company today?
Rule Maker? Need Seeker?
Rule Taker? Market Reader?
Rule Breaker? Technology Driver?
What do You want to be tomorrow?
What do Value Innovation Organizations do?
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 22. Value Innovation Organizations
Value Innovators (Need Seekers) deliver
exceptional value to the most important
customer in the value chain….all the time,
every time.
This:
Fuels Sustainable, Profitable
Growth
Increases company value
Creates Jobs
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 23. 27 Value Innovation Organizations
Amazon (US) Enterprise Car RE/MAX
Rental (US) International (US)
Apple(US) FedEx (US) Reliance (India)
Carbon Motors FoldedPak (US) RyanAir (UK)
(US)
CNN (US) Google (US) Samsung (Korea)
Cirque de Soleil Nissan (Japan) Southwest (US)
(Canada)
DSM (Holland) NetJets (US) Tesla (US)
Dyson Ltd (UK) Nokero (US) UPS (US)
EasyJet (UK) Pixar (US) Virgin Group (UK)
eBay (US) P&G (US) Whirlpool (US)
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 24. Tesla Motors
The Tesla Roadster
Build the brand
Show electric vehicles are exciting
Production stopped Dec. 31, 2011
2,100 produced (in 30 countries)
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 25. The Tesla Model S
1st 5 production cars off line, June 22, 2012
NUMMI Plant, Fremont, CA
5.5MM sq ft
Purchased for $42MM (<5% of book value)
Purchase Price
Range Price ($K)
160 miles 49,995
320 miles 69,995
Forecast Production
Year Units
2012 6,000
2013 20,000
Tesla S
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 26. NoKero
4 LEDs powered by a
photovoltaic:
Replaces candles and
kerosene lamps
http://www.nokero.com/videos.php?
id=3
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 28. Godrej Chotukool
Battery operated
refridgerated case
Chotukool Portable Refrigerator
Draft 1 Low
Value to Consumer
High
Purchase Price
1 2,320
INR/unit
Utility/Usefulness
2
Meets requirements - Yes/No
Operating Cost
3
INR/week
Reliability
4
Downtime - min/week
Payment Terms
5
Customer survey (1 to 10 scale)
Portability
6
Customer survey (1 to 10 scale)
Availability
7
Yes/No
Quality
8
Customer Perception (1 to 10 scale)
Design
9
Customer survey (1 to 10 scale)
1.0 3.0 5.0 7.0 9.0
Competition Chotukool
© Value Innovations, Inc., 2004-2012. All rights reserved.
- 30. ET3
Evacuated Tube Transport Technologies
"Space Travel on Earth”
Silent, low cost, safe, faster than jets
Electric.
© Value Innovations, Inc., 2004-2012. All rights reserved.