The Game Changer: Chapters 1,2,9,10
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The Game Changer: Chapters 1,2,9,10

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Reading Notes On: The Game-Changer How You Can Drive Revenue and Profit Growth With Innovation

Reading Notes On: The Game-Changer How You Can Drive Revenue and Profit Growth With Innovation

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    The Game Changer: Chapters 1,2,9,10 The Game Changer: Chapters 1,2,9,10 Presentation Transcript

    • The Game-Changer How You Can Drive Revenue and Profit Growth With Innovation by AG Lafley & Ram Charan
    • How and Why Innovation At P&G Changed Its Game Chapter One:
    • What We Had To Do
      • Put the consumer at center of everything we do
      • Opened up
      • Made sustainable organic growth the priority
      • Organized around innovation to drive sustained organic growth
      • Began thinking of innovation in new ways
    • What We Had To Do
      • Put the consumer at center of everything we do
          • “ consumer is boss” standard
          • Spend more time with consumers
              • In stores
              • In their homes
              • Consumer testing centers
          • Delight our consumers at two moments of truth
              • When they buy
              • When they use
      • Opened up
          • Seek out innovation from all sources, inside and outside the company
          • Innovation is all about connections; everyone involved
              • Connect & develop
              • More Connections, more ideas, more solutions
          • Goal set that half of new product and technology innovations come from outside P&G
    • What We Had To Do
      • Made sustainable organic growth the priority
          • Innovation enables expansion into new categories
          • Allows us to reframe mature business & transform them into platforms for profitable growth
          • Creates bridges into adjacent segments
          • Emphasis on organic growth
              • Less risky than acquired growth
              • More highly valued by investors
      • Organized around innovation to drive sustained organic growth
          • Innovation as a strategy
          • Regular business strategy that focuses on innovation
          • Regular innovation reviews for every global business unit
          • Careful selection and use of the right metrics
          • Evaluating, development and promotion of outstanding business and innovation leaders
          • Allocation of resources …to outstanding innovation
    • What We Had To Do
      • Began thinking of innovation in new ways
          • Run innovation like we run a factory
          • Broadened way we thought about innovation
            • Not just products, services but to include business models, supply chains etc.
            • Not just disruptive, but also incremental
          • Innovation is risky
            • Learned how to pinpoint the risks
            • Developed tools and the know-how to manage them
    • How We Did It…First Things First
      • Improve our execution
      • “ we were trying to do too much, too fast and nothing was being done well.”
        • Growing the core
        • Laser-sharp focus on current consumers, current retailers, wholesalers, and distributors
      • Pricing
        • Too high, find pricing “sweet spot” “…better value for consumers, gave retailers a fair profit, and would drive P&G to improved market share, net sales, and margin performance.”
      • Innovation
        • Key to winning medium and long term
        • Strategy of differentiation
        • Brands are promises of something different and better in terms of performance, quality and value.
        • Brand are guarantees of consistent quality, performance, and value.
    • Critical Questions on Innovation
      • How could we put innovation at the center of everything we do?
      • How could we turn innovation into a more consistent, more decisive, and more sustainable competitive advantage?
      • How could we manage the risks associated with our all-in and full-on commitment to innovation?
      • Could we identify and take advantage of the opportunities innovation might offer us?
    • Drivers for Customer-Centric Game Changing Innovation Courageous & Connected Culture Consistent & Reliable Systems Enabling Structures Unique Core Strengths Choiceful Strategies Stretching Goals Motivating Purpose & Values Inspiring Leadership Customer-Centric INNOVATION Game-Changing
    • Drivers for Customer-Centric Game Changing Innovation
      • Motivating Purpose & Values
        • Companies centered on innovation are inspiring places to work and the people who work there are turned on by a higher purpose
        • Purpose inspires; Values unite
      • Stretching Goals
        • A few critical goals creates clarity in focusing on strategies that win and align everyone’s energy
        • Stretching but achievable, yet cannot be reached w/o sustained innovation; driven by leaders who see it as game changer
      • Choiceful Strategies
        • Choices that result in wining with consumers and customers and against competition
        • Focus on four core businesses, ten leading brands
        • Enabled where not to play (exited most food & beverage)
      • Unique Core Strengths
        • Focus on how to win by building on, enhancing and deploying our unique core strengths
        • Effectively leverage global learning
        • Immersive research living, shopping and being part of consumers’ lives
      Drivers for Customer-Centric Game Changing Innovation
      • Enabling Structures
        • Unique core strengths require design of organizational structure that supports innovation at the center
        • Era of open corporation (end of internally focused, vertical integrated organization)
        • Need to be comfortable designing structures and processes that bring in and commercialize outside ideas
      • Consistent & Reliable Systems
        • Innovation is creative but not chaotic
        • Systematic way of moving from concept to commercialization
        • Has well-defined success criteria, milestones, and measures
      Drivers for Customer-Centric Game Changing Innovation
      • Courageous & Connected Culture
        • Culture is what people do day in and day out without being told
        • No fear of innovation = know-how to manage risk
        • Employees are more connected to:
          • Consumers whose lives committed to improving
          • Customers and suppliers who are important innovation partners
          • Each other based on open-learning culture “that applies and reapplies with pride”
      • Inspiring Leadership
        • Link all the drivers together, energize people, and inspire them to new heights
        • Leaders are instigators
        • Passionate about knowing about consumers, immersing in finding insights about consumer needs
        • In time they develop confidence, how to deal with risk and inherent risk in innovation
      Drivers for Customer-Centric Game Changing Innovation
    • Drivers for Customer-Centric Game Changing Innovation Courageous & Connected Culture Consistent & Reliable Systems Enabling Structures Unique Core Strengths Choiceful Strategies Stretching Goals Motivating Purpose & Values Inspiring Leadership Customer-Centric INNOVATION Game-Changing
    • What P&G’s Innovation Transformation Means For You Chapter Two:
    • What P&G’s Innovation Transformation Means For You
      • P&G’s managerial breakthrough was to conceive of and implement innovation as an integrated process based on the idea of customer is boss
      • Continual innovation process can change the landscape of the business
      • P&G change form technology-push innovation model to a customer-pull one
      • Other companies:
        • General Electric (under Immelt)
        • Nokia
        • HP (personal computer unit under Bradley)
    • What is real Innovation?
      • Differences between invention & innovation:
        • Invention is new idea that is often turned into a tangible outcome.
        • Innovation is the conversion of a new idea into revenues and profits.
          • “ Innovation without a customer is nonsense; it’s not even innovation.” --Jeff Immelt
      • Innovation is not complete until it shows up in the financial results
      • Real innovation can change the context (market space, customer space, competitive space, societal space)
      • Innovation enables you to be on the offensive
      • Commoditization drive down prices; differentiation from innovation carries an economic premium
      • Key to shaping corporate life, helping leaders conceive previously unimagined strategic options
      • Enables you to potential acquisitions through a different lens
      • Provides an edge in being able to enter new markets faster & deeper
      • Puts companies on the offensive
      Why Innovation Matters
    • Innovation Leader Skill Set
      • Effective at evoking the skills of others to build an innovation culture
      • Collaboration is essential
      • Failure is a regular visitor
      • Comfortable with uncertainty and have an open mind
      • Receptive to ideas from very different disciplines
      • Have organized innovation into disciplined process that is replicable
      • Have tools and skills to pinpoint and manage the risks inherent in innovation
    • Myths of Innovation
      • It’s all about new products
        • Functions, logistics business models and processes can also benefit greatly through innovation
          • Toyota’s Global Production Systems
          • Wal-Mart’s Inventory Management
      • Innovation is for geniuses
        • Waiting for the “eureka” moment will be fatal
        • True innovation matters for the present, not for centuries hence
        • “ Anything that won’t sell, I don’t want to invent. Its sale is proof of utility and utility is success.” --Thomas Edison
      • Size matters
        • Innovation can happen in companies as large as P&G, GE, DuPont or as small as Ram Charan’s fathers’ shoe store in India
    • Innovation is a social process
      • When people do that simple, profound thing – connect to share problems, opportunities, and learning
      • Anyone can innovate, but practically no one can innovate alone
      • Develop leaders of the future
      • Improve productivity
      • Execute strategy
      • Create innovation
      To prosper, companies need to do four things:
      • A strategy
      • Ideas
      • A process that moves these ideas to market
      • An organizational structure that supports innovation (and protects and rewards innovators) up and down the line.
      To create an innovation culture, you need,
    • Innovation Is A Team Sport Chapter Nine:
    • Total Immersion
      • Co-location
      • Released from usual duties
      • Discouraged from emailing colleagues
      • Constantly accessible to each other
      • Deeply concentrated
      • Multiple disciplines, demographics
      • Outsiders
      • Full-time staff for immersion (brand strategy, description of product and category, introductions, etc)
    • Breakthroughs
      • Knowing the consumer
      • Teamwork
    • Building an Innovation Team
      • Idea Generator – Push beyond plausible to create provocative ideas
      • Project Manager – Ensure all pieces come together
      • Executor – make things happen
      • Team Leader – pragmatic dreamer
      • The Key is intellectual diversity!
    • Building an Innovation Team
      • Risk Diversity
      • No “like” thinkers
      • Deadlines – can spur creativity and it is a business after all…
      • 5-12 people on the team
      • Communication
      • Say No to bad ideas
      • Team connectedness
      • Interdisciplinary – “T” Shape
    • Changing Culture requires Changing Behavior
      • Clearly defined business and personal development expectations
      • Change the consequences that follow success and failures – reward entrepreneurial behavior
      • Start small and focus on four important elements: Courageous, Connected, Collaborative, Curious, and Open.
    • Innovation Culture Elements and Interventions
      • Courageous
      • Connective & collaborative
      • Curious
      • Open
    • Innovation Culture Elements and Interventions: Courageous
      • What it looks like
        • No fear
        • Learn from failure
        • Knows how to manage risk based on measures
      • Expectation Interventions
        • Use innovation portfolio to manage risks
        • Qualify few, meaningful broadly applied measures
        • Establish there’s no bad idea
        • Test prototype, and iterate
      • Consequence Interventions
        • Limited human and financial resources are sufficient to support in well-managed portfolio
        • Capture learning from failed innovations and share with other teams
        • Broadly reward and recognize teams who fail
        • Assign talent from a failed innovation to a new high-profile innovation project
    • Innovation Culture Elements and Interventions: Connected and Collaborative
      • What it looks like
        • Works effectively and productively with others—inside and outside the company
        • Works seamlessly across business, functions et al
        • Uses personal and professional networks to seek out information ideas
      • Expectation Interventions
        • Creates in-house communities to foster knowledge exchange
        • Select team leaders who facilitate connections and expect collaboration
        • Establish ways to employees to leverage their external networks
      • Consequence Interventions
        • Include in performance evaluations
        • Be prepared to change the leader and/or team members
        • Continuity of team members builds trust
    • Innovation Culture Elements and Interventions: Curious
      • What it looks like
        • Remains childlike, naïve
        • Looks for obvious patterns
        • Explores and likes to discover
        • Looks for analogies and metaphors
        • Asks “Why? and Why not?” “What’s Possible?” “How does that work?”
        • Uses “Columbo” approach to solve; focuses on solutions
      • Expectation Interventions
        • set an expectation of ongoing learning
        • Brainstorming
        • Consumer, shopper and customer immersion
        • External connections and diverse experiences
      • Consequence Interventions
        • Challenges the team’s thinking
        • Keep asking “Why? and Why not?” again
    • Innovation Culture Elements and Interventions: Open
      • What it looks like
        • Open-minded to new ideas
        • Open to learn to assumption that others’ ideas will make the product or service better
        • Open to empathy to consumer/customer
        • Open to suspend judgment
      • Expectation Interventions
        • Institute an open architecture
        • Establish and communicate clear goals
        • Eliminate “not invented here”; encourage “apply and reapply with pride”
      • Consequence Interventions
        • Reward and recognize those who seek out/commercialize innovation opportunities from outside
        • Reward and recognize those who reapply others’ success to their business
        • Include open-mindedness in performance evaluations
    • Emphasize Out of the Box IDEAS
      • Inclusive: Reaping benefits of diverse thinking and ideas needed to foster innovation
      • Decisive: Eliminating organizational swirl, debate, and over analysis - faster innovation, development, qualification, and commercialization
      • External: Externally focused to stay in touch with clusters, consumers, suppliers – honest and objective
      • Agile: Quickly reacting to changing conditions, forward thinking – taking calculated risks
      • Simple: Ongoing streamlining and simplification of structures and processes
    • Rules of brainstorming
      • Get a facilitator
      • Be prepared
      • Relax
      • Ladders should follow
      • Get everyone to contribute
      • Keep track of ideas
      • Think ahead
      • Use props
      • Outside the lines
      • Follow the rules.
    • Questions for Leaders
      • What are you doing to encourage and eliminate fear of failure?
      • How are you fostering a culture of curiosity and openness?
      • How are you eliminating unnecessary bureaucracy?
      • How are the team leaders and members chosen?
      • What are you doing to encourage open communications within the innovation team?
      • How well do you manager the development of an individual’s innovation skills?
      • How do you enable individuals to reenter more traditional assignments in the most productive way?
      • Do you use special approaches to enable teams to immerse themselves in customers?
      • Do you use co-location to help business units build innovation?
    • New Job of the Leader Chapter Ten:
    • Developing Leaders of Innovation
      • Performance Evaluations
      • Early Identification
      • Job experiences
      • Reward and recognition
      • Clear sense of purpose / inspiring them
    • Leaders need to be good at…
      • Drawing people out
      • Synthesize ideas
      • Facilitating debates
      • getting the group to be decisive and action-oriented
    • How innovation Leaders Dream
      • See the world as it can be not as it is
      • View the external landscape in a new way
      • Imagine possibilities that elude others
    • Responsibilities of an Innovation Leader Hone Critical Skills Provide Unique Value-added Roles Role Model Behavior of innovation Culture Model the 4 C’s and O Integrate member tasks Courage Balance IQ and EQ Inspire Set the Vision Deal with the killer issues Integrative Thinking
    • Building the Pipeline
      • Performance Evaluation
        • Power of Minds, People, Agility
      • Start them from day one
      • Personal Coaching
      • Support systems and training
      • Intentional assignments
      • Reward and recognition
    • How Jeff Immelt Made Innovation A Way Of Life At GE Conclusion:
    • GE Case Study How Jeff Immelt Made Innovation A Way Of Life At GE
      • Put innovation and productivity on Your personal leadership agenda
      • Give innovation a seat at the table
      • Find and follow up on the best ideas
      • Shift the focus to customers and the longer term
      • Rethink Leadership
      • Build capabilities you are lacking
      • Architect the social process of innovation
      • Create the resources you need to fund growth
      • Open up to learn from others
      • Reorganize or restructure to get close to customers
      • Reinforce the culture you want
      • Let Innovation spread