Mastering development when technology leads innovation – thriving in a world of disruptive innovation

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Presentation at the APM Project Management Conference by Simon Miller from PA Consulting

Presentation at the APM Project Management Conference by Simon Miller from PA Consulting

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  • 1. © PA Knowledge Limited 2014 1 MASTERING DEVELOPMENT WHEN TECHNOLOGY LEADS INNOVATION Thriving in a world of disruptive innovation Simon Miller April 2014 This image cannot currently be displayed. This image cannot currently be displayed.
  • 2. © PA Knowledge Limited 2014 2 Thriving in a world of disruptive innovation Technology used to be an enabler for innovation development Ensure alignment between technologies and business aims Embrace failure as the route to success Secure portfolio sustainability Agenda
  • 3. © PA Knowledge Limited 2014 3 Thriving in a world of disruptive innovation In 1993 after 5,127 prototypes and 15 years of frustration and perseverance Dyson launched the first bagless vacuum cleaner. Dyson recently set out to quadruple its UK engineering force by 2020. Apple launched the iPOD in 2001 – since then: • Classic 6 generations ~ 24m mean • Mini/Nano 9 generations ~ 13m mean • Shuflle 4 generations • Touch 5 generations Apple launched the iPhone in 2007: • 7th generation launched in 2013 ~ 12m mean The first iPad was released in 2010: • 5th generation iPad Air & 2nd generation iPad mini launched in 2013 ~ 10m mean Thriving in a world of disruptive innovation... Many organisations aspire to use disruptive innovation to gain competitive edge. Dyson and Apple have demonstrated how successful this strategy can be. Even with increasing product complexity innovation life cycles are ever shorter
  • 4. © PA Knowledge Limited 2014 4 Technology used to be an enabler for innovation development now it is often the driver Technologies emerge much faster than before This brings a set of challenges for organisations not used to being inspired and led by step changes in technology. They have to move quickly to reap new value and maintain or enhance their market position. These challenges need to be understood and addressed or they can lead to organisational tension and ultimately value destruction To get 50 million users took: Radio 38 years TV 13 years The internet 4 years IPOD 3 years Facebook 200+ million <1 year Thriving in a world of disruptive innovation... Electronic cigarettes were introduced in China in 2004 for smoking cessation & replacement Major cigarette companies ignored the technologies Since 2012 most of these majors have acquired companies to exploit these technologies Many of the necessary capabilities, materials, supply chains and regulatory environments are fundamentally different . The impact on their innovation delivery is huge So what do organisations need to do to adapt to market disruption without destroying themselves?
  • 5. © PA Knowledge Limited 2014 5 Align your technology and core business aims and take risks whilst establishing those new capabilities that will enable a sustainable and dynamic portfolio Thriving in a world of disruptive innovation...
  • 6. © PA Knowledge Limited 2014 6 ENSURE ALIGNMENT BETWEEN TECHNOLOGIES AND BUSINESS AIMS 1 Ensure alignment between technologies and business aims
  • 7. © PA Knowledge Limited 2014 7 Manage the technologies through an innovation dialogue Ensure alignment between technologies and business aims Develop road-maps with different horizons
  • 8. © PA Knowledge Limited 2014 8 Expose the business to new technologies in environments that will drive creativity Reactive Proactive Giant Leaps Small steps Car sharing dominates Evolved working patterns Dynamicallyreconfigurable networkusage Industrialfocuson adaptation Effective linkage between infrastructure investment and land value Transport investment creates wealth Financefreelyavailable Transport responsive to future challenges Demolishandrebuild Green, smart, cheap infrastructure costs Infrastructure re-invents city structure and sets framework for growth Primarilynationalfunding InnovationEcosystem ImprovementSilos Car ownership dominates Unchanged working patterns Fixednetworkusage Industrialfocuson conservatism No linkage between infrastructure investment and land value Transport investment follows demand Financerestricted Transport reflects current thinking and assumptions Heritageincorporated intonewplanning Expensive, dumb, high carbon infrastructure costs Infrastructure follows/meets demand Primarilylocal/ regionalfunding Planned Integrated Evolved Travelling “customers” Packetswitchedrouting Securitybasedon trust Safety leads agenda Overall value captured for business case Open,integrateddata andinsystems Travellerbehaviourwell understood EnforcedMasterplans Plannedandintegrated transportsystem Education and messaging promote behaviour change Travelling “users” Routingdecidedby individuals Onerous“onesizefitsall” security Safety side-lined Limited business case ignores overall value Silod,proprietarydata andinformationsystems Travellerbehaviourpoorly understood Lighttouchfreemarket planningapproach Fragmentedandcompeting transportsystem “Singlesystem”planning approachdominates FutureScape: How will transport evolve to meet the challenges of World Cities in 2025? Disparate “Journey-based”approach toplanninganddesign Transport linked to health agenda No link between transport planning and health Education and messaging maintain status quo Evolutionary driver Overallapproachtoin planninganddelivery City Landscapes Moving Targets Don’t Panic Hyperlinked Fast Follower • FutureWorlds is a collaborative approach to creating plausible future scenarios. • You can explore uncertainty by exposing and challenging assumptions, scenarios and their implications • This can inspire and catalyze innovation FutureWorlds – inspiring innovation through scenarios Ensure alignment between technologies and business aims
  • 9. © PA Knowledge Limited 2014 9 Innovation must align with business strategy and generate profitable revenue at acceptable levels of risk Ensure alignment between technologies and business aims The technology scenarios need to be translated into: • Market impacts • Organizational or capability impacts
  • 10. © PA Knowledge Limited 2014 10 EMBRACE FAILURE AS THE ROUTE TO SUCCESS 2 Embrace failure as the route to success...
  • 11. © PA Knowledge Limited 2014 11 Potential applications include: • Field servicing and engineering • Consumer product finding/ information and pricing • Providing hands free instructions and responses No-one really knows what works (or does not) or which devices will succeed: • Device evolution will be unpredictable driven by fashion and societal response • There is relatively low cost of entry to develop apps and services • So its time to prototype and explore Back a number of horses simultaneously Wearable electronics are proliferating… And it’s not just gadgets, it’s clothing too… Under Armour E39 Hug Shirt™ E39 Embrace failure as the route to success...
  • 12. © PA Knowledge Limited 2014 12 This involves a different mind-set – counter to many of the traditional norms: • Take a quick and dirty approach to early proof in principle • Be ruthless with your portfolio - cutting your losses early is a good thing • But don’t throw away good ideas – 3M took 15 years from concept to getting the Post-it to a successful market launch! • Full analysis of risk during initiation but recognising low levels of certainty • Selective use of expert resources Encourage rapid development as a way to unearth failures quickly
  • 13. © PA Knowledge Limited 2014 13 Know your own strengths • Many of the innovation capabilities required involve technologies, materials, supply chains and regulatory environments which are fundamentally different • It takes years to build them and few organisations have time to do this • Benchmark your innovation capabilities to assess the development challenge • Open Innovation is a powerful way to play to your own strengths and leverage the strengths of others Embrace failure as the route to success... CORE INNOVATION STRATEGY CONSUMER INSIGHTS EXPLORATION PIPELINE MANAGEMENT DELIVERY CAPABILITY IP MANAGEMENT SUPPLIER MANAGEMENT/ OPEN INNOVATION
  • 14. © PA Knowledge Limited 2014 14 SECURE PORTFOLIO SUSTAINABILITY 3 Secure sustainability...
  • 15. © PA Knowledge Limited 2014 15 Prioritise development across technologies offering innovation platforms • People have a tendency to think of “point” solutions • You can reduce risk through aiming to avoid one hit wonders or solutions for specific segments or markets • Look for ideas that have a range of outcomes • You also need to pay attention to technology life-cycles and know when to stop or rebalance investment Secure sustainability... ... Technologies have a shelf life. Microreplication has a life of perhaps 15 years. We need to get as much out of the platform in the time that we can. Then, we’ll migrate to something else. Robert Finocchiaro, Technical Director, Engineered Adhesives Division, 3M
  • 16. © PA Knowledge Limited 2014 16 Recognise that as a disruptive innovator you will be a target for second movers • A leading hotel chain used social media analysis to predict future demand • It adopted variable pricing to increase room utilisation and build its profits • Within a few months its competitors realised what it was doing and adopted “me-too” tactics • The advantage was lost and other avenues had to be explored This trend and reducing product life cycles means that business case assumptions of multi-year benefits needs to be treated with caution Secure sustainability...
  • 17. © PA Knowledge Limited 2014 17 Exploit all your Intellectual Property, even that you don’t need in your organisation • Take a dynamic approach to your technology portfolio • You need a value strategy and decision making process to exploit your IP • Many organisations have invested in IP that has just been shelved Secure sustainability... ... At 3M we’re a bunch of ideas. We never throw an idea away because you never know when someone else may need it. Art Fry, 3M Business Strategy Our cast-off is another’s treasure Develop Idea Add to IP Portfolio Competitor assessmentMarket Product Matrix Obtain Externally Obtain Internally Patent decision Value Opportunity Value Extraction Sell/licence Develop new product Store for Later New tech. need Cancel
  • 18. © PA Knowledge Limited 2014 18 Align your technology and core business aims and take risks whilst establishing those new capabilities that will enable a sustainable and dynamic portfolio Thriving in a world of disruptive innovation...
  • 19. © PA Knowledge Limited 2014 19