What is innovation?
2
Creativity
is about new
ideas
Innovation
is the profitable
implementation
of these ideas
In Fortune 500 companies…
 New products account for 50% of revenues
 And 40% of profits
3
Why it is important …
companies value innovation, are innovative
The perception gap: of companies think they had a major
innovation in the last ...
A warm up exercise
1000
40
1000
30
1000
20
1000
10
5,000
90 % of business
executives agree
Paradigms = models, patterns
the basic way of perceiving, thinking, valuing
A dominant paradigm is seldom if ever stated
e...
7
 It is about what we do behind closed doors
 Innovation just happens
 We need to reward innovation
 It is about work...
Test Layout 8
These are comfortable, logical
business ideas and what we have been
taught….
But, they are not the whole sto...
9
10
It is about opening
doors and listening
Myth:
It is about what we do
behind closed doors
Innovation = Size ^ power value
Power value
Cities Companies
1.3 0.7
Innovation output
1 100% 100%
Size 5 690% 309%
25 475...
Test Layout 13
Imagine this…
BMW has some of the best
designers in the world and sells
their designers by the day
below co...
14
Innovation is
something you make
happen
Myth:
Innovation just happens
Test Layout 15
Innovation is about
 Being committed to better satisfying unmet
unarticulated needs
 Working to build ins...
Test Layout 16
Needs first, not ideas first !
Develop a
solution
Find a need Find a market
Ideas
First
Success
Rate*
5-10%...
17
It is more than talking to
consumers
today’s
business
Mobile
phone
Computers
Internet…
It is about hard questioning…
You can't just ask consumers what they
want and then try to give that to them.
Sometimes (ac...
21
More importantly you
need to reward good
failures
Myth:
We need to reward
innovation
22
The danger of the Internet…
Is there anything someone
hasn’t done on the internet ?
A big idea
Look it up
on the
intern...
The big innovation Paradox
Whoever Makes the
Most Mistakes Wins
Richard Farson & Ralph Keyes
23
Introduction 24
Introduction 25
Introduction 26
“Reward excellent failures.
Punish mediocre successes.”
Phil Daniels, Sydney exec
28
29
No, it is about working
smarter
Myth:
It is all about working
harder
Introduction 30
“90 % of what we call ‘management’
consists of making it difficult for people
to get things done.”
– Peter...
Your new creativity office
Test Layout 32
The test, solve a difficult task while…
Reading emails or smoking marijuana…
Test 1
Test 2
A few simple ideas
 Stop the email notifications
 No internal email Fridays
 5,10,20% time like 3M,
Google
 Get people...
36
Real innovation is
about the adjacent
possible
Myth:
Innovation is about big
ideas
Introduction 37
How many people think Apple
invented the MP3 player ?
Almost 50% of US consumers
Introduction 38
More memory
More features
Better song management
Simplicity and coolness
More Examples
Managers increasingly need to take “ors” and
turn them into “ands”
Roger Martin
The design of business
41
42
Actually, what you need
is people that think
differently
Myth:
We need our brightest
and best on the case..
43
Two Groups
Best 20 agents
Group 1
Random 20 agents
Group 2
44
The IQ View
Alpha Group
121
132 155
139
135
137
Diverse Group
121 84 111
105 135 95
45
The Toolbox View
Alpha Group
ABD
ADE BCD
ABC
BCD
ACD
Diverse Group
AHK FD AEG
EZ BCD IL
46
“Bringing new members into the
organization, even if they’re less
experienced and less capable, actually
makes the grou...
47
A UCLA MFA 3 X harder to get into
than Harvard MBA
The bigger surprise…
Average starting salaries for
MFAs are now high...
What you can do…
Diversity Independence Aggregation
+ + =
What you decide not to
do is just as important
Myth:
It is all about selecting
the best ideas and doing
more
“Fail . Fail again. Fail better.”
– Samuel Beckett
“With so many things to do and so many
great ideas… what we decide not to do
is infinitely more important than what
we dec...
Research on innovation
211 companies
Worst Avg Best
Top vs.
bottom
% of revenues from new products 17% 28% 47% 2.76
% of p...
Let’s have some fun
and exercise your innovative
muscles…
And let’s be honest ….
Many of you have products / ideas only a
mother could love !
The biggest 3 mistakes of
Entrepreneurs/ Innovators
1. Investing in the wrong business
2. Staying too long in the wrong bu...
I will see it when I believe it
VS.
I will believe it when I see it
An example: global warming
Hot summers
Warm winters
Evidence of
global warming
Cold summers
Cold winters
Evidence of
globa...
SUGGING
You’re not alone !
‘‘More than nine out of ten consumable products
launched in the last ten years offered absolutely
nothi...
A checklist for ideas…
 Is there a benefit (real or perceived)
 People willing to pay (enough)
 Cost of cut-through acc...
A simple evaluation system…
Pets.com
Kosmo
Despair.com
Etoys.com
Petrock
Flooz
Webvan
Is there a benefit (real or
percieve...
63
Pets.com
Pet supplies via the
internet
Save big, save time
Stay at home
64
65
Kosmo.com
Instant delivery of products
purchased via the internet in
big cities Order a wide variety
of products, from ...
Despair.com
We hate all the senseless, wasted time on employee
motivation and un-founded optimism
We imagine you do to, bu...
67
Continuous effort is the key to unlocking your potential
Winston Churchill
68
Etoys.com
The new place to buy toys. Find you want on
the internet
69
70
71
Petrock.com
Pets take a lot of
time and energy.
Your kids can have
almost as much fun
with a pet rock.
We even include ...
Flooz
72
Webvan.com
Buying groceries should be easier. With webvan you
can get all your groceries, so you have time for other
thing...
74
Now the most important question
Why would this business fail …
Pets.com
Kosmo
Despair.com
Etoys.com
Petrock.com
Flooz
Webv...
76
 Arguing the other
direction…
Why is this a bad
idea…
If it fails, why will it
fail…
 And then deciding
what can be done...
Moving forwards…
What you need is a bit of
innovation magic…
Magic
Make
innovation
Central
Thinking
Different
Good ideas in
Bad ideas out
A summary…
 Getting people out of the building asking the right questions
 Structuring your innovation process around cu...
What is the real danger ?
Flavor of the month…
Suggestions:
 No announcement of a big new innovation program/focus
 Buil...
The solution…
go slow to go fast…
build on what you have…
you don’t need to change everything to
be innovative
7 myths of business innovation
7 myths of business innovation
7 myths of business innovation
7 myths of business innovation
7 myths of business innovation
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7 myths of business innovation

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A fun talk about the myths of innovation.

You'll learn.. why you do not want just your best employees working on your most important projects. How rules can make you more innovative. Most importantly, we’ll talk about how you can be more innovative without changing your company.

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7 myths of business innovation

  1. 1. What is innovation? 2 Creativity is about new ideas Innovation is the profitable implementation of these ideas
  2. 2. In Fortune 500 companies…  New products account for 50% of revenues  And 40% of profits 3 Why it is important …
  3. 3. companies value innovation, are innovative The perception gap: of companies think they had a major innovation in the last 6 months. of consumers agree The hard road from ideas to impact of valuable ideas do not reach their full implementation
  4. 4. A warm up exercise 1000 40 1000 30 1000 20 1000 10 5,000 90 % of business executives agree
  5. 5. Paradigms = models, patterns the basic way of perceiving, thinking, valuing A dominant paradigm is seldom if ever stated explicitly; it exists unquestioned… transferred through culture and unspoken business practices William Harmon- An incomplete guide to the future
  6. 6. 7  It is about what we do behind closed doors  Innovation just happens  We need to reward innovation  It is about working harder  Innovation is about big ideas  We need our brightest and best on the case  It is all about selecting the best ideas and doing more The Innovation Paradigm
  7. 7. Test Layout 8 These are comfortable, logical business ideas and what we have been taught…. But, they are not the whole story
  8. 8. 9
  9. 9. 10 It is about opening doors and listening Myth: It is about what we do behind closed doors
  10. 10. Innovation = Size ^ power value Power value Cities Companies 1.3 0.7 Innovation output 1 100% 100% Size 5 690% 309% 25 4759% 952% Innovation per person 1 100% 100% Size 5 138% 62% 25 190% 38% Source: Geoffrey West: The surprising math of cities and corporations Test Layout 12 The Power Laws of Innovation As cities grow and contact increases… innovation increases (25 X bigger = 2X more innovative) Why: contact increases … As companies get bigger and have more resources… innovation falls (25 X bigger = 60% less innovative ) Why: contact decreases
  11. 11. Test Layout 13 Imagine this… BMW has some of the best designers in the world and sells their designers by the day below cost Why: to build creativity…
  12. 12. 14 Innovation is something you make happen Myth: Innovation just happens
  13. 13. Test Layout 15 Innovation is about  Being committed to better satisfying unmet unarticulated needs  Working to build insights  Staying focused on consumer (customer) value  Habits
  14. 14. Test Layout 16 Needs first, not ideas first ! Develop a solution Find a need Find a market Ideas First Success Rate* 5-10% Find a need Develop a solution Find a market Needs First 70 % * According to Strategyn research on outcome driven innovation…
  15. 15. 17 It is more than talking to consumers today’s business Mobile phone Computers Internet…
  16. 16. It is about hard questioning… You can't just ask consumers what they want and then try to give that to them. Sometimes (actually often) they don’t know what they want It is often about “golden questions” 18
  17. 17. 21 More importantly you need to reward good failures Myth: We need to reward innovation
  18. 18. 22 The danger of the Internet… Is there anything someone hasn’t done on the internet ? A big idea Look it up on the internet Someone has done it already
  19. 19. The big innovation Paradox Whoever Makes the Most Mistakes Wins Richard Farson & Ralph Keyes 23
  20. 20. Introduction 24
  21. 21. Introduction 25
  22. 22. Introduction 26
  23. 23. “Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec
  24. 24. 28
  25. 25. 29 No, it is about working smarter Myth: It is all about working harder
  26. 26. Introduction 30 “90 % of what we call ‘management’ consists of making it difficult for people to get things done.” – Peter Drucker
  27. 27. Your new creativity office Test Layout 32
  28. 28. The test, solve a difficult task while… Reading emails or smoking marijuana… Test 1 Test 2
  29. 29. A few simple ideas  Stop the email notifications  No internal email Fridays  5,10,20% time like 3M, Google  Get people to block (and keep) time for creativity in their agendas Test Layout 35
  30. 30. 36 Real innovation is about the adjacent possible Myth: Innovation is about big ideas
  31. 31. Introduction 37 How many people think Apple invented the MP3 player ? Almost 50% of US consumers
  32. 32. Introduction 38 More memory More features Better song management Simplicity and coolness
  33. 33. More Examples
  34. 34. Managers increasingly need to take “ors” and turn them into “ands” Roger Martin The design of business
  35. 35. 41
  36. 36. 42 Actually, what you need is people that think differently Myth: We need our brightest and best on the case..
  37. 37. 43 Two Groups Best 20 agents Group 1 Random 20 agents Group 2
  38. 38. 44 The IQ View Alpha Group 121 132 155 139 135 137 Diverse Group 121 84 111 105 135 95
  39. 39. 45 The Toolbox View Alpha Group ABD ADE BCD ABC BCD ACD Diverse Group AHK FD AEG EZ BCD IL
  40. 40. 46 “Bringing new members into the organization, even if they’re less experienced and less capable, actually makes the group smarter simply because what little the new members do know is not redundant with what everyone else knows.” James Surowiecki author Wisdom of crowds..
  41. 41. 47 A UCLA MFA 3 X harder to get into than Harvard MBA The bigger surprise… Average starting salaries for MFAs are now higher than MBAs * MFA = Masters of fine arts
  42. 42. What you can do… Diversity Independence Aggregation + + =
  43. 43. What you decide not to do is just as important Myth: It is all about selecting the best ideas and doing more
  44. 44. “Fail . Fail again. Fail better.” – Samuel Beckett
  45. 45. “With so many things to do and so many great ideas… what we decide not to do is infinitely more important than what we decide to do” – Steve Jobs
  46. 46. Research on innovation 211 companies Worst Avg Best Top vs. bottom % of revenues from new products 17% 28% 47% 2.76 % of profits from new products 11% 25% 44% 4.17 % of products that meet profit targets 43% 48% 66% 1.53 Go / Kill criteria set up front 26% 57% 85% 3.28 Decisions are objective / fast based 15% 42% 57% 3.85 Decisions are made in review meetings 26% 51% 60% 2.32 Cooper, Robert G. "Perspective: The Stage‐Gate® Idea‐to‐Launch Process Update, What's New, and NexGen Systems*." Journal of Product Innovation Management 25.3 (2008): 213-232.
  47. 47. Let’s have some fun and exercise your innovative muscles…
  48. 48. And let’s be honest …. Many of you have products / ideas only a mother could love !
  49. 49. The biggest 3 mistakes of Entrepreneurs/ Innovators 1. Investing in the wrong business 2. Staying too long in the wrong business.. (after you should know it is time to change…) 3. People don’t buy your product or service ‘cause they understand why they should…
  50. 50. I will see it when I believe it VS. I will believe it when I see it
  51. 51. An example: global warming Hot summers Warm winters Evidence of global warming Cold summers Cold winters Evidence of global warming
  52. 52. SUGGING
  53. 53. You’re not alone ! ‘‘More than nine out of ten consumable products launched in the last ten years offered absolutely nothing new to the consumer. More than eight out of ten new products fail. You don’t need to be a statistician to realize there’s a correlation between the two numbers.’’ – Robert McMath
  54. 54. A checklist for ideas…  Is there a benefit (real or perceived)  People willing to pay (enough)  Cost of cut-through acceptable  People will see the benefit buy again / recommend to others  Will someone hate it
  55. 55. A simple evaluation system… Pets.com Kosmo Despair.com Etoys.com Petrock Flooz Webvan Is there a benefit (real or percieved) People willing to pay (enough) Cost of cut-through acceptable People will see the benefit buy again / recommend to others Will someone hate it Kill Puppy (0 = kill, 1 = love)
  56. 56. 63 Pets.com Pet supplies via the internet Save big, save time Stay at home
  57. 57. 64
  58. 58. 65 Kosmo.com Instant delivery of products purchased via the internet in big cities Order a wide variety of products, from movies to snack food, and get them delivered to your door for free within an hour.
  59. 59. Despair.com We hate all the senseless, wasted time on employee motivation and un-founded optimism We imagine you do to, buy our products and show your true colors 66
  60. 60. 67 Continuous effort is the key to unlocking your potential Winston Churchill
  61. 61. 68
  62. 62. Etoys.com The new place to buy toys. Find you want on the internet 69
  63. 63. 70
  64. 64. 71 Petrock.com Pets take a lot of time and energy. Your kids can have almost as much fun with a pet rock. We even include a care guide
  65. 65. Flooz 72
  66. 66. Webvan.com Buying groceries should be easier. With webvan you can get all your groceries, so you have time for other things 73
  67. 67. 74
  68. 68. Now the most important question Why would this business fail … Pets.com Kosmo Despair.com Etoys.com Petrock.com Flooz Webvan Why will this business fail…
  69. 69. 76
  70. 70.  Arguing the other direction… Why is this a bad idea… If it fails, why will it fail…  And then deciding what can be done about it…
  71. 71. Moving forwards…
  72. 72. What you need is a bit of innovation magic… Magic Make innovation Central Thinking Different Good ideas in Bad ideas out
  73. 73. A summary…  Getting people out of the building asking the right questions  Structuring your innovation process around customer needs  Changing the reward systems to encourage good failures  Changing the organization so people have time to be innovative  Helping your team leverage opportunities in the “adjacent possible”  Building team diversity/ better ways to work in teams  Creating systems to kill bad ideas so you have more time for good ones
  74. 74. What is the real danger ? Flavor of the month… Suggestions:  No announcement of a big new innovation program/focus  Building enthusiasm for innovation from the bottom up
  75. 75. The solution… go slow to go fast… build on what you have… you don’t need to change everything to be innovative

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