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Transforming Innovation Into Profit
 

Transforming Innovation Into Profit

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As companies begin to look beyond the latest global economic crisis, many are refocusing on growth and innovation has once again become a priority. The approach companies use to generate ideas and ...

As companies begin to look beyond the latest global economic crisis, many are refocusing on growth and innovation has once again become a priority. The approach companies use to generate ideas and turn them into products and services has changed little since before the global economic crisis. In the past few years the core barriers to successful innovation haven’t changed, yet companies have made little progress in surmounting them. Many of the challenges such as finding the right talent, encouraging collaboration and risk taking, and organizing the innovation process from beginning to end are consistent across companies and industries. Many executives understand that innovation is very important, but their companies’ approach to it is often informal, and leaders lack confidence in their decisions.
What strategies are the most successful companies employing to tap into new opportunities and overcome business barriers? When and how does a leader’s input have the most impact? When should management give employees the freedom to experiment?

About The AIPMM
The Association of International Product Marketing and Management (AIPMM), founded in 1998, promotes worldwide excellence in product management education and provides training, education, certification and professional networking opportunities. With members in 65 countries, the AIPMM is the Worldwide Certifying Body of product team professionals and offers globalized trainings and credentials localized for specific markets designed to meet the challenges of a constantly changing business landscape. As the only professional organization that addresses the entire product lifecycle from inception to obsolescence in any industry, the AIPMM supports strategic partners with offerings in Europe, the Middle East, Australia, and SouthEast Asia, as well as North America.

AIPMM Membership benefits include the national Product Management Educational Conference, regional conferences, the Career Center, peer Forums, tools, templates, publications and eligibility to enroll in the Certification Programs. The Agile Certified Product Manager® (ACPM), Certified Product Manager® (CPM), Certified Product Marketing Manager® (CPMM), Certified Brand Manager® (CBM), and Certified Innovation Leader (CIL) programs allow individual members to demonstrate their level of expertise and provide corporate members an assurance that their product professionals are operating at peak performance.
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    Transforming Innovation Into Profit Transforming Innovation Into Profit Presentation Transcript

    • Hector Del Castillo AIPMM hmdelcastillo@aipmm.com © AIPMM 2010
    • AIPMM Core Team • Therese Padilla - President, Co-Founder AIPMM • Paula Gray - VP, Co-Founder, Anthropologist-in-Residence • Steve Wells - Senior Product Manager • Hector Del Castillo - Senior Product Marketing Manager – BS EE, MS EE – CPM, CPMM & PMP certifications – IEEE Standards experience – 10+ years in product management – 20+ technologies (HW/SW/Apps) – 10+ industries (12+ mobile/wireless) – Launched over 15 hardware and software products – Passion for transforming products into profit 2 © AIPMM 2010
    • AIPMM Founded 1998 in the heart of the Silicon Valley. © AIPMM 2010
    • © AIPMM 2010
    • Poll Question: What are the biggest barriers to fostering innovation within your company? • Poor management • Insufficient investment in product • Lack of innovative people • Inadequate product planning process • Cannot afford the risk • Little or no adoption of leading edge technologies 5 © AIPMM 2010
    • What We Will Discuss • Why your company needs innovation • An approach to transform innovation into profit • Options to foster innovation within your company • Ways to reduce risk for your company © AIPMM 2010
    • IBM 2010 Global CEO Study Fostering innovation to manage increasing complexity is the most critical success factor for company executives • Most CEOs believe that the business environment is increasingly volatile, uncertain and complex. • Eight in ten CEOs expect their environment to grow significantly more complex. • Only 49 percent believe their companies are equipped to manage complexity effectively. © AIPMM 2010
    • McKinsey 2010 Global Survey • Innovation has once again become a priority for company executives. • 84% - innovation is extremely or very important to their companies’ growth strategy. • 50% - need a more robust pipeline of big ideas • Only 55% - innovate better than their peers © AIPMM 2010
    • 2010 Fortune Most Innovative Companies Rank Company Industry Industry Rank 1 Apple 1 Computers 2 Google 1 Internet Services & Retailing 3 Nike 1 Apparel 4 Amazon.com 2 Internet Services & Retailing 5 Goldman Sachs Group 1 Megabanks 6 Procter & Gamble 1 Soaps & Cosmetics 7 McDonald's 1 Food Services 8 Intel 1 Semiconductors 9 UPS 1 Delivery 10 FPL Group 1 Electric & Gas Utilities © AIPMM 2010
    • What is Innovation? “I’ll be happy to give you innovative thinking. What are the guidelines?” © AIPMM 2010
    • Defining Innovation All these Innovation is “the commercial or industrial application of something new—a new product, process or method of production; a new market or sources of supply; a new form of commercial business or financial organization.” Schumpeter, Theory of Economic Development Competitiveness, Innovate America, National Innovation Initiative Report, 2004 experts say: Innovation is the intersection of invention and insight, leading to the creation of social and economic value. Council on Innovation covers a wide range of activities to improve firm performance, including the implementation of a new or • Innovation is significantly improved product, service, distribution process, manufacturing process, marketing method or organizational method. European Commission, Innobarometer 2004 hard to do .. Innovation—the blend of invention, insight and entrepreneurship that launches growth industries, generates new value and creates high value jobs. The Business Council of New York State, Inc., Ahead of the Curve, 2006 • Innovation The design, invention, development and/or implementation of new or altered products, services, processes, systems, organizational models for the purpose of creating new value for customers and financial returns for the firm. Committee, Department of Commerce, Federal Register Notice, Measuring Innovation in the 21st Century Economy Advisory, April 13, 2007 involves huge An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations. risks.. Innovation activities are all scientific, technological, organizational, financial and commercial steps which actually, or are intended to, lead to the implementation of innovations. OECD, Oslo Manual, 3rd Edition, 2005 Innovation success is the degree to which value is created for customers through enterprises that transform new knowledge and technologies into profitable products and services for national and global markets. A high rate of innovation in turn contributes to more market creation, economic growth, job creation, wealth and a higher standard of living. 21st CenturyWorking Group, National Innovation Initiative, 2004 Source: “Defining ‘Innovation’: A New Framework to Aid Policymakers,” 3 Dec 2008. © AIPMM 2010
    • Myth: Innovation requires high risks that most companies cannot afford. Fact: In this economy, companies need innovation to survive. Company executives believe it is a bigger risk not to innovate. © AIPMM 2010
    • Innovation is… • A change in the thought process for doing something, or the useful application of new inventions or discoveries. • An incremental emergent or radical and revolutionary changes in thinking, products, It requires a formal process processes, or to capture ideas and find organizations. ways to implement them. © AIPMM 2010
    • Integrating Innovation Ideas are not enough; you must find a way to integrate them into your company’s culture, strategy, processes, and products. 14 © AIPMM 2010
    • Product Management Life Cycle Innovation must be an integral part of the Product Management process within your company. Source: AIPMM, © 1998-2010, All Rights Reserved. © AIPMM 2010
    • Innovation Funnel 7 Steps: • Gather • Conceive • Analyze • Build • Test • Adopt • Deliver © AIPMM 2010
    • Gather Capture Screen • Unarticulated Customer Needs • Customer Needs • Technology • Competition • Market Needs • Business Strategy • Competition © AIPMM 2010
    • Conceive Concept Screen: • Needs • Priorities • Market Size • Customer Benefit • Available Proof of Concept Funds © AIPMM 2010
    • Plan Analyze Screen: • Needs • Priorities • Market Size • Customer Benefit • Proof of Concept Funds © AIPMM 2010
    • Develop Build Screen: • Intellectual Property • Exploitation • Investment Risk/Reward • Probability of Success • Availability of Finances • Availability of Resources © AIPMM 2010
    • Qualify Test Screen: • Marketing Readiness © AIPMM 2010
    • Launch Adopt Screen: • Marketing • USP • Pricing © AIPMM 2010
    • Marketing Mix Innovation • Product • Price • Promotion • Place [Distribution] • People • Process • Physical Proof © AIPMM 2010
    • Online DVD Rental Market © AIPMM 2010
    • Benefits of Innovation • Improved business efficiency through optimized practices • Shortened time-to-market through improved tools • Enhanced market penetration through adoption of disruptive technologies • Enhanced product delivery and pricing Increased product value for customers Improved profitability for your company © AIPMM 2010
    • What can you do to reduce the risk of innovation? 1. Adopt a formalized process to gather, capture and organize ideas. 2. Create alignment within your product team and company. 3. Communicate the importance of innovation. 4. Encourage innovation throughout the product life cycle. 5. Gather and capture ideas internally and externally. 6. Promote open communication and problem solving. 7. Empower leaders to drive the vision for your products. 8. Create a relaxed, fun, and open environment. 9. Recruit and reward innovative people. 10. Benchmark your products and processes with your competitors. © AIPMM 2010
    • Conclusion • Fostering innovation is essential for your company’s survival. • Innovation can result in incremental emergent or radical changes in business model, strategy, processes, technologies, tools, or products. • There are several options to foster innovation while reducing risk. • Innovation can significantly increase your company’s value and profitability by focusing on enhancing your products’ value. © AIPMM 2010
    • What other tips would you add? How have you successfully fostered innovation to improve your products? What else can you do to transform innovation into profit? © AIPMM 2010
    • Join AIPMM! • Participate in networking opportunities. • Expand your knowledge and soft skills. • Learn best practices and methodologies. • Opportunities to lead activities. • Get certified; validate your expertise! • Execute your personal career plan. © AIPMM 2010
    • Useful Links Association of International Product Marketing & Management • Website: http://www.aipmm.com • Articles: http://www.aipmm.com/html/newsletter/article.php • Blogs: http://aipmm.com/anthropology/ • Webinars: http://aipmm.com/aipmm_webinars/ • Certification: http://aipmm.com/html/certification/ • Product Management Framework Brochure: http://www.aipmm.com/brochures/AIPMM_PMF.pdf © AIPMM 2010
    • Hector Del Castillo AIPMM hmdelcastillo@aipmm.com © AIPMM 2010