small i to BIG I Innovation

HYPER-SOCIAL INNOVATION STARTING AND SUSTAINING SMALL I TO BIG I INNOVATION EFFORTS

"Because the purpose ofbusiness is to create acustomer, the businessenterprise has two--and onlytwo--basic functions:marketing and innovation.Marketing and innovationproduce results; all the restare costs.” - Peter Drucker

Why Innovation… Now?1. Drucker’s Quote is from 1954 – globalization = need for smarter marketing + innovation2. Knowledge era, not the industrial era = adapt or DIE3. Innovation isn’t the job of R&D or Marketing anymore. Innovation is everyone’s job – but most aren’t trained/experienced in innovation

ARE YOU READY?

10 Year Market Rollercoaster – Nobody Anticipated the 2008 Shock

How do Billionaires fair? Not so good at company level… MSFT Underperforming the Market for 10 years

Lean-powered Innovation via Toyota Motors? Even during the “runaway car” fiasco, Toyota outperformed MSFT and the Market

Compared to Apple?MSFT and Toyota and Market Index are still onthis chart – but look like flatlines at this scale

Even Google Looks like they’re standing still, but they are well abovethe pack… See green arrow for Google

Removed Apple to Highlight Google vs. Toyota and MSFT

GOOGLE AND TOYOTA= SMALL I INNOVATION AND THE RESULTS PAY-OFF SIGNIFICANTLY VS. “INNOVATION IS ONLY IN R&D”

MICROSOFT ISINNOVATION BY RETAINING MARKETSHARE AND THE GROWTH HASN’T APPEARED BY “DOING THINGS AS USUAL” (TYPICAL PRODUCT LIFECYCLE IS 3 YEARS PER VERSION)

How About Just Poor Innovation Performance... Period?• “In the mid 1980s, with failure rates approaching 90 percent, R&D expenditures under scrutiny and lead times for success averaging nearly eight years, it was clear that a new approach was needed [...] 50 percent or greater failure rates are still the norm.” • What Customers Want, Anthony Ulwick, 2005

APPLE = BIG I INNOVATIONMARKETING AND INNOVATION, CONSTANTLYAND IT WASN’T PURELY ABOUT STEVE JOBS

The Economic Shocks Keep Coming and are More Sudden Sept 2002 Sept 2008

HAVE YOU CHANGED THEWAY YOU INNOVATE SINCE 2008?

All Hands on Deck to Handle the Next “Economic Titanic”• 100 years later, we still don’t know what really happened to sink the unsinkable ship• You can’t afford to wait 100 days (a financial quarter) to understand where things have gone wrong• It’s time to radically speed up innovation capability, across the board

Kaizen, Lean, and 1,000,000

For every individual P&G researcher • Estimated that there are 200 scientists/engineers elsewhere in the world who are just as good • P&G determined they needed to change from "not invented here” to enthusiasm for “proudly found elsewhere" Source: P&G’s New Innovation Model (Harvard Business Review. 2006)

Actionable and Repeatable Innovation = Price of Entry to be inBusiness Today • Drucker marketing + innovation from “The Practice of Management” (1954) • Innovation as a management issue and business toolkit, has been around for over 60 years • Innovation is everyone’s job comes from the quality movement, and birth of what we now know as Lean – Lean has spread from manufacturing to IT Operations, User Experience Design, Funding and Creation of Startups or Skunkworks operations, and much more. • America, Japan, Germany, Korea, Singapore, Thailand, are all embracing Lean across industries – Lean is not only for the automotive industry it’s a mindset of continuous improvement and problem solving – Innovation toolkits for engineering have spread from the Soviet Union 60 years ago, alongside the quality movement – bringing “hard science” and predictability to innovation – The Art and Science of Large-scale Change Management for Innovation (Hyper-social innovation) has become a widely felt need since the beginning of the economic slide in 2007.

If Innovation is one of the top two items business should focus on,why haven’t we? • Decades have been spent DISABLING employees from thinking about how to innovate. • Specialization of roles, departmental boundaries, purpose-built applications that serve mini-populations rather than entire organizations, enterprise-wide systems, that are too generic and unfocused to deliver significant value = expectation that “innovation is someone else’s job” • We can’t afford to operate as departmental boxes, throwing work over to a nameless “next guy, next department” – and assume problems will be solved by someone else. The speed of change, and our reaction time, won’t allow it anymore.

LET’S TALKINNOVATION SPEED

IMPROVE “IDEA-TO-CONCEPT” TIME FROM TWO MONTHS (60 DAYS) TO TWO HOURS (.08 DAYS)

WHAT COULD YOUR BUSINESS DO IF YOUIF YOU INCREASED INNOVATION SPEED BY 720%?

WHAT ABOUTCUSTOMER-SERVING PROCESSES?

USE LEAN MANUFACTURING TO BUILD & DELIVER AN ENTIRE CAR IN LESS THAN 7 DAYS FROM CUSTOMER PURCHASE, WITH THE EXACT DESIGN THE CUSTOMER WANTS

RATHER THAN GUESSING WHAT CUSTOMERSWILL WANT, WITH 6 MONTHS OF INVENTORY SITTING ON THE LOT THIS IS THE DIFFERENCE BETWEEN REACTING TO PULL FROM THE MARKET, AND TRYING TO PUSH A “NEED.” LEAD TIMES IN FAULTY DECISIONS (GUESSES) WILL KILL YOU…

Time to Grow & Flex Problem- Solving Muscles Without TakingShortcutsThat Will Deflate Quickly

ARE YOUR PEOPLE TRAINEDFOR INNOVATION? SKILLS AND EXPERIENCE

If you don’t have the tools tocreate & vet ideas at scale... How can you hope to compete with MASTERS of innovation?“That’s not a knife...THIS is a knife”Crocodile Dundee

DO YOU PROVIDE ALICENSE TO INNOVATE? YOU CAN’T RELY ON MASS MOVEMENTS STARTING AND SUSTAINING SPONTANEOUSLY

LICENSE2INNOVATE

IS YOUR CULTURE READYFOR INNOVATION? SOCIAL READINESSLEADERS, FIRST-FOLLOWERS, AMBASSADORS, EVANGELISTS, CHAMPIONS, OWNERS, REVIEWERS, LEARNERS, PLAYERS THE TRIBE

There are more smart people OUTSIDE of your organization, than INSIDE. Guaranteed. But there are also more people within yourcompany who are not CURRENTLY being tapped for “innovations” than you’re using today. Feel like doubling your odds?

Planning vs Implementing In Your Organization, What Community or Communities did you target or will you target with Crowdsourcing? 2008 (2 years ago) 2010 2015 (5 years ou Source: www.InformationArchitect ed.com

Who to Target?Target Crowds By Where the Most Value Is Most Significant Sources of Innovative Ideas Source: IBM

START A MOVEMENTLESSONS FROM A SHIRTLESS GUY – IN UNDER 3 MINUTES

Source: http://www.ted.com/talks/derek_sivers_how_to_start_a_movement.html

IF YOU AREN’TLEVERAGING YOUR EMPLOYEES FOR INNOVATION… YOU ARE MISSING ORDERS OF MAGNITUDE OFINNOVATION CAPABILITY BEYOND WHAT YOU HAVE NOW

Innovation can be Learned more Quickly than you think… Source:24/7 Innovation by Steve Shapiro

BY SPEEDING UP INNOVATIONAND INCLUDING MORE WELL-EQUIPPED AND “LICENSED” BRAINS INTO THE PROCESS, THE PAYBACK IS INTENSE…

Time to Market (TTM) and Impact on Revenue vs. Spend

Time to Market (TTM) and Impact on Revenue vs. Spend SOURCE: PRESENTATION BY VISION CONSULTING (VISION.COM) REGARDING PAYBACK AND AGILE DEVELOPMENT

What if your competitors are even smarter and faster? SOURCE: PRESENTATION BY VISION CONSULTING (VISION.COM) REGARDING PAYBACK AND AGILE DEVELOPMENT

ENGAGE YOUR TRIBES SOME WILL LEAD, MOST WILL FOLLOW IF YOU SET THE ENGAGEMENT ENVIRONMENT UP CORRECTLY

Find “the crazy ones” • Were a herding species - and depending on whos numbers you believe, the "innovators" who will willingly jump in and lead the way with any new change, are somewhere around 2.5% of the population. • The potential "first followers" are another 13.5% after that, and the rest make up the majority who are waiting for consensus/social proof to show that its safe to join a movement. • (These #s come from Everett M. Rogers, Diffusion of Innovations, Fifth Edition 2003 - which was the pre-cursor of Geoffrey Moores Crossing the Chasm model) • Hint: Unlike our earlier tribal days, with big companies, spread out over multiple companies, it’s not nearly as obvious where your “sub- tribes” hang out – and the anti-social enterprise systems in place are likely to keep you from easily finding them, as opposed to the customer-tribes that form outside of organizations.

Multi-stage Engagement Effort • Lessons learned from the innovators – why they’ve found value, what they can see as benefits to others not in their areas (by nature, they’re more visionary) • For first followers – pairing up mentoring/coaching who are in the next level of interest, and support them beyond excitement and into getting their own benefits • Large-scale – barn-raising, kick-off events with specific targeted areas, led by experienced innovators, first-followers who are already trained, and targeted at areas that “uncovery” work has shown are areas of pain, passion, or interest to large groups.

WITHOUTENGAGEMENT…

Reference Articles • Using Lean to Create Innovation Culture – http://www.managementexchange.com/hack/groundwork-create-innovation-culture • Know Your Tribe, Be Your Tribe – http://www.informationweek.com/thebrainyard/news/232601678/know-your-tribe-be-your-tribe • Social Business: Dont Let Transparency Be A Barrier – http://www.informationweek.com/thebrainyard/news/230500036/social-business-dont-let-transparency-be-a-barrier • Enterprise 2.0 Innovators Must Bridge to the Laggards – http://www.informationweek.com/thebrainyard/news/231001117/enterprise-20-innovators-must-bridge-to-the- laggards • Are Cubicles Killing Us? – http://www.informationweek.com/thebrainyard/news/231002493/are-cubicles-killing-us • Are Collaboration Killers Roaming Your Halls? – http://www.informationweek.com/thebrainyard/news/231600087/are-collaboration-killers-roaming-your-halls • Collaboration Simulations: Think Big – http://www.informationweek.com/thebrainyard/news/232200533/collaboration-simulations-think-big • It’s the Little Things That Count: – http://www.informationarchitected.com/blog/innovation-management-its-the-little-things-that-count/ • Assessing and Building Innovation Strengths: – http://www.business-strategy-innovation.com/2010/04/innovation-perspectives-assessing-and.html • Making Innovation Work in a Downturn (Interview with Carlos Dominguez, SVP at Cisco) – http://www.business-strategy-innovation.com/2009/08/making-innovation-work-in-downturn.html • Strategy from Above? – http://www.business-strategy-innovation.com/2009/08/innovation-perspectives-strategy-from.html • Get Ahead of the Curve – http://www.aiim.org/Resources/Archive/Magazine/2008-Jul-Aug/34899

READY FOR INNOVATION?LET’S TALK INNOVATION ENGAGEMENT STRATEGY AND START MAKING A DIFFERENCE TO YOUR BUSINESS, SMALL I OR BIG I

Dan Keldsen – Partner at Human 1.0Enterprise Client Services Focused on Innovation & Insights(twitter) @dankeldsenDan[at]human1.com617-520-4326linkedin.com/in/dankeldsen

small i to BIG I Innovation

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