Innovate or die


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  • “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man” George Bernard Shaw
  • Identification and targeting of key processes that have considerable impact on the organization’s ability to: Achieve its short, medium and long term Strategic Goals and ObjectivesIf improved, enable the organization to realize a high Return on the Investment (ROI) Identification of target processes for which complaints have been received from customers, trading partners or internal staff and which can result in productivity improvement Achieving initial success with BPM projects in one area of the organization, will create enthusiasm and buy-in from other groups.
  • Improving Performance: The ultimate reason for a firm to innovate is to improve its performance, for example by increasing demand or reducing costs. Market Advantage: A new product or process can be a source of market advantage for the firm. Productivity Enhancement: The firm gains a cost advantage over its competitors, allowing a higher mark-up at the prevailing market price or, depending on the elasticity of demand, the use of a combination of lower price and higher mark-up than its competitors to gain market share and increase profits. Product Innovation: the firm can gain a competitive advantage by introducing a new product, which allows it to increase demand and mark-ups.Product Differentiation: Firms can also increase demand through product differentiation, by targeting new markets and by influencing demand for existing products.Changes in Organizational Methods: Firms can improve the efficiency and quality of their operations, thereby increasing demand or reducing costs.Improving Production Processes: Innovation can also improve performance by increasing the firm’s ability to innovate. Improving the capabilities of production processes can make it possible to develop a new range of products, and new organisational practices can improve the firm’s ability to gain and create new knowledge that can be used to develop other innovations.
  • Recreated from Peter Skarzynski and Rowan Gibson,Building A Systemic Innovation Capability , Harvard Business Review, 2008. Fig 11.1
  • Ref. PaulTrott p. 97.
  • Innovate or die

    1. 1. Innovate to <br />succeed<br />Innovate to fail<br />Introduction to Foundations of Business Innovation September 8, 2011<br />It’s about balancing the risk of innovating against the risk of not innovating<br />
    2. 2. Why are we here?<br /><ul><li>Philosophical reasons: </li></ul>Take the course SCS 1724 Essential Western Philosophers<br /><ul><li>Meta-physical reasons:</li></ul>Read Stephen Hawking’s book “The Grand Design”<br /><ul><li>To identify ways we can increase the likelihood of innovation success in our organizations </li></ul> Take SCS 2539 Foundations of Business Innovation<br /><ul><li>Today we will provide an overview of the Business Innovation course by identifying:</li></ul>“The top ten causes of failure to innovate”<br />
    3. 3. Ten key causes of failure:<br />Confuse the role of innovation<br />Fail to clarify innovation goals<br />Don’t recognize innovation barriers<br />Fail to engage entire organization<br />Lack of recognition of importance of communication<br />Underestimate need for innovation resources<br />Unclear process for selecting innovation projects<br />Recognize the importance of change management<br />Failure to create an innovation culture<br />Recognize innovation is a journey not a destination<br />
    4. 4. 1. Confuse the role of innovation<br />Innovation is:<br />Introduction of a new good, or a new quality of a good<br />Introduction of a new method of production (need not need include new technologies)<br />The opening of a new market <br />The securing of a new source of supply<br />The creation of a new organization <br />Joseph Schumpeter<br />
    5. 5. Identify Innovation Drivers<br />Internal drivers<br />Unexpected event<br />Contradiction<br />Change of work process<br />Change in industry structure <br />External Drivers<br />Socio-economic changes<br />Political changes<br />Technology changes<br />Drucker‘sInnovation<br />Framework<br />
    6. 6. Innovation not just technology development<br />Innovation includes:<br /><ul><li>Product Innovation
    7. 7. Process Innovation
    8. 8. Service Innovation
    9. 9. Business model Innovation……….. </li></ul>Greatest opportunities seen in business model innovation.<br />Can be applied to both private and public organizations<br />If your organization doesn’t innovate, someone else will..<br />
    10. 10. Understanding Process Innovation<br /><ul><li>A change in the way a product or service is manufactured, created, or distributed
    11. 11. Process innovation involves implementation ofnew or improved production or delivery method.
    12. 12. Process innovations can be intended to decrease unit costs of production or delivery, to increase quality, or to produce or deliver new or significantly improved products. </li></li></ul><li>Understanding Service Innovation<br /><ul><li>Majority of individuals in Canada (and US) work in service industry
    13. 13. Even where people work in manufacturing, many of these individuals providesupport services
    14. 14. Service innovation isbiggest opportunity to increase competitiveness
    15. 15. Improvements in service innovation can be measured in terms of increases productivity and value added </li></li></ul><li>Opportunities for Service Innovation<br /><ul><li>Contributes to competitive advantage
    16. 16. Requires specific social and technical skills
    17. 17. Involves development and new technology application
    18. 18. Costly to develop needed specialist and generalist skills
    19. 19. Requires integrated thinking and agile environment
    20. 20. Can be implemented in all service areas
    21. 21. Most significant possibilities in financial and medical services</li></li></ul><li>Understanding Business Model Innovation <br /><ul><li>New ways of doing business can also increase competitiveness and productivity by:
    22. 22. Creating enhanced utility for the customer
    23. 23. Enabling a different pricing strategy
    24. 24. Providing alternate purchasing options
    25. 25. To truly disrupt a market a technology innovationrequires a business model innovation</li></li></ul><li>2. Fail to clarify innovation goals<br /><ul><li>Improve top line(revenues/market share)
    26. 26. Improve bottom line (profit/cost effectiveness)
    27. 27. Strengthen brand/reputation
    28. 28. Improve shareholder/stakeholder perceived value </li></ul>"Would you tell me, please, which way I ought to go from here?""That depends a good deal on where you want to get to," said the Cat."I don’t much care where--" said Alice."Then it doesn’t matter which way you go," said the Cat."--so long as I get SOMEWHERE," Alice added as an explanation."Oh, you’re sure to do that," said the Cat, "if you only walk long enough." Lewis Carroll<br />
    29. 29. Organic<br />Renewal<br />Acquisition<br />Renewal<br />Renewal Innovation<br />Recognize different types of innovation <br />Enhancement<br />Innovation<br />Experiential<br />Innovation<br />Marketing<br />Innovation<br />Line Extension<br />Innovation<br />Platform<br />Innovation<br />Product<br />Innovation<br />Harvest<br />& Exit<br />Disruptive<br />Innovation<br />Application<br />Innovation<br />Integration<br />Innovation<br />Process<br />Innovation<br />Value Migration<br />Innovation<br />Value Engineering<br />Innovation<br />Geoffrey Moore Dealing with Darwin<br />
    30. 30. 3. Fail to recognize innovation barriers<br />Over time successful organizations develop<br /><ul><li>Processes and procedures
    31. 31. Management and leadership styles
    32. 32. Organizational structures and charts
    33. 33. Customer relationships and partners
    34. 34. Compensation and recruitment policies</li></ul>“Organizations, by their very nature are designed to promote order and routine. They are inhospitable environments for innovation” Ted Levitt <br />
    35. 35. Is your organization innovative?<br /><ul><li>Focuses on financials & timelines
    36. 36. Has strict guidelines & control
    37. 37. Has a hierarchical structure
    38. 38. Has multiple bosses & “dotted lines”
    39. 39. Fosters attitude of “Everyone is for himself”
    40. 40. Embraces and learns from failure
    41. 41. Fosters high energy activities
    42. 42. Create a “Can do” environment
    43. 43. Develop support & trust
    44. 44. Is a fun place to work</li></li></ul><li>Your organization’s innovation readiness?<br />Resources<br />Financial<br />Technology<br />People<br />External<br />Strategy<br />Product Leadership<br />Customer Intimacy<br />Operational Excellence<br />Disruptive Offerings<br />Business Information<br />Quality Management<br />Project Management<br />Decision Support<br />Processes<br />Leadership<br />Incentives<br />Communications<br />Risk Tolerance<br />Culture<br />
    45. 45. Architecting an Innovative Environment <br />
    46. 46. 4. Fail to engage entire organization<br />Customers<br /><ul><li>Current
    47. 47. Potential
    48. 48. Unknown</li></ul>Employees<br /><ul><li>Sales
    49. 49. Operations
    50. 50. Support</li></ul>Internal Technology<br /><ul><li>Product innovations
    51. 51. Process innovations
    52. 52. Platforminnovations</li></ul>Competitors<br /><ul><li>Direct
    53. 53. Indirect
    54. 54. Alliance</li></ul>External Technology<br /><ul><li>Embeddable technologies
    55. 55. Process technologies
    56. 56. Value added technologies</li></ul>Supply Chain<br /><ul><li>Suppliers
    57. 57. Distributors
    58. 58. Integrators</li></li></ul><li>5. Recognise the importance of communication<br /><ul><li>Communicate vision and innovation imperative
    59. 59. Stimulate creativity and idea generation
    60. 60. Develop decision-making process that communicates how:
    61. 61. Decisions are made
    62. 62. Resources are allocated
    63. 63. Create a feedback loop that updates status of innovation projects and encourages accountability</li></ul>“The greatest barrier to communication is believing that it has occurred” Oscar Wilde<br />
    64. 64. 6. Lack of commitment to innovation resources<br /><ul><li>Greatest single barrier to stimulating innovation ideas, is the lack of action around previous innovation suggestions
    65. 65. Many ideas are not implemented without clarity or feedback as to why not
    66. 66. Implemented ideas are not successful because of:
    67. 67. Insufficient clarity of outcomes and expectations
    68. 68. Lack of required resource commitment (money, people, time)
    69. 69. Assumption that resources appropriate for one activity can be used in another</li></li></ul><li>7. Unclear innovation process<br /><ul><li>Innovation is a management process the requires specific tools, techniques and discipline
    70. 70. Innovation involves thedevelopment of organizational processes and procedures for generating, considering and acting on innovative ideas
    71. 71. Without an innovation process, the likelihood of innovative projects being pursued is minimal</li></li></ul><li><ul><li>Identify innovation imperative and establish objectives
    72. 72. Create innovation framework
    73. 73. Assess current resources (Business Analysis)
    74. 74. Analyze current environment and external trends
    75. 75. Source and capture innovative ideas
    76. 76. Create an innovation decision system
    77. 77. Compare each opportunity to agreed criteria
    78. 78. Implement pilot project
    79. 79. Measure performance
    80. 80. Scale up or cancel</li></ul>Implementing The Innovation Process<br />
    81. 81. The Inno-Gate Innovation Process <br />
    82. 82. Ideation<br />Evaluation<br />Realization<br />Implement process in organization’s context<br />Innovation Outputs<br />Resources<br />Strategy<br />Innovation<br />Inputs<br />Product Innovation<br />Service Innovation<br />Process Innovation<br />Business Model Innovation<br />Employees<br />Suppliers & Partners<br />Customers<br />Competitors<br />Processes<br />Culture<br />Creating the environment and processes to support innovation<br />
    83. 83. 8. Recognize the importance of change management<br />Change through Leadership<br />Create a Shared Need<br />Shape a Vision<br />Mobilize Commitment<br />Make Change Last<br />Monitor Progress<br />Change Systems and Structures<br />Change Culture from Control to Trust<br />Communicate<br />Incentivize <br />”If you always do what you always did, you will always get what you always got” Albert Einstein<br />
    84. 84. 9. Create an innovation culture<br /><ul><li>Use mentoring / coaching approach to management
    85. 85. Lead by example
    86. 86. Learn from failure
    87. 87. Make resources for innovation available
    88. 88. Encourage / incent team rather than individual performance
    89. 89. Build trust rather than controls, and accountability rather than monitoring</li></li></ul><li>Innovative organizations:<br /><ul><li>Embraces a culture of risk, reward success and learn from failure
    90. 90. Develop a project and portfolio managementapproach to innovation
    91. 91. Create opendecision-making processes and focus on timely implementation
    92. 92. Develop cross functional teams to embrace innovation across organization
    93. 93. Focus on communications and engagement</li></li></ul><li>Creating an Innovation Capability<br />
    94. 94. Common Causes of Innovation Failure <br />Organizational Causes <br />Process Causes <br />Poor leadership<br />Poor organization<br />Poor communication <br />Lack of empowerment of stakeholders <br />Poor knowledge management<br />Resource limitations<br />Poor goal definition<br />Poor alignments of goals and actions<br />Poor team effort<br />Poor monitoring of results<br />Poor communication and access to information<br />Inappropriate decision making<br />
    95. 95. 10. Innovation is a journey not a destination<br /><ul><li>Re-evaluate corporate strategy to examine innovation opportunities
    96. 96. Monitor innovation projects and review perfromance
    97. 97. Review innovation process and identify opportunities for improvement
    98. 98. Use projects and process to build awareness
    99. 99. Review and reduce innovation constraints
    100. 100. Learn from failures</li></li></ul><li>Innovation for success<br />Three choices:<br />Innovate your organization,<br />Partner with an innovative organization or<br />Wait for innovation to happen………..<br />“In this road to the future, there are drivers, passengers or road kill”<br />Competing for the future: Hamel & Prahalad, 1994<br />
    101. 101. Innovate or die<br />
    102. 102. See You in SCS 2539 Foundations of Business Innovation <br />Starts Monday 19th in Mississauga and Tuesday 20th in Toronto<br /><br />“Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else — if you run very fast for a long time, as we've been doing.” “A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” Lewis Carroll<br />