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The Other Side of Innovation
 

The Other Side of Innovation

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In The Other Side of Innovation, Vijay Govindarajan and Chris Trimble reveal how to execute an innovation initiative. This is Peter Modigliani's summary of this book by the two business school ...

In The Other Side of Innovation, Vijay Govindarajan and Chris Trimble reveal how to execute an innovation initiative. This is Peter Modigliani's summary of this book by the two business school professors.

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    The Other Side of Innovation The Other Side of Innovation Presentation Transcript

    • the other side of innovationSOLVING THE EXECUTION CHALLENGE
      Summary By
      Peter Modigliani
      Vijay Govindarajan
      Chris Trimble
    • Genius is 1% inspiration and 99% perspiration
      2
      Thomas Edison
    • idea
      leader
      team
      + plan
      innovation
      3
      Innovation Model
    • Ongoing Operations
      Repeatable and Predictable
      Innovation
      Nonroutine and Uncertain
      4
      Address Fundamental Incompatibilities
      Innovation Leaders Must Think Differently About Organizing and Planning
    • Beyond the idea
      5
      Real Innovation Challenge
      Long journey fromimagination to impact
    • Powerful
      Capable
      Productive
      Efficient
      Growth Potential
      Impossible to innovateon its own
      6
      Performance Engine
      Ongoing Operations
    • Rebels Fighting the Bureaucracy
      7
      Innovation Leaders
    • 8
      Each Innovation Initiative Requires
      A team with a custom organizational model
      A plan revised by a rigorous learning process
    • Company
      Performance Engine
      9
      The Innovation Team
      Partnership
      Dedicated Team
      Shared Staff
    • 10
      Performance Engine Limitations
      Skills of the Individuals
      Work Relationship Between Them
    • Identify skills needed
      Hire the best people
      Match the organizational model to the team
      11
      Principles for Dedicated Team
    • Having a bias for insiders
      Adopting existing formal roles & responsibilities
      Reinforcing performance engine power centers
      Assessing performance from established metrics
      Failing to create a distinct culture
      Using existing processes
      Succumbing to the tyranny of conformance
      12
      7 Common Mistakes
      1.
      2.
      3.
      4.
      5.
      6.
      7.
    • Pride
      Familiarity
      Comfort
      Expedience
      Compensation norms
      A desire to give attractive opportunities to your own employees
      13
      Trap 1: Having a Bias for Insiders
    • Skills Deficit Risk – Investors flock to start ups
      Organizational Memory Risk – Little Performance Engine
      Outsiders – Add New Perspectives, Challenge Org Memory
      14
      Trap 1: Having a Bias for Insiders
    • Use new and unfamiliar titles
      Write new job descriptions
      Create a separate physical space for the Team
      15
      Trap 2: Adopting Existing Roles and Responsibilities
    • Avoid replicating power centers for new team
      Achieve a power shift through:
      Team hierarchy
      Clear decision rights
      Leadership choices
      16
      Trap 3: Reinforcing Performance Engine Power Centers
    • Performance Engine metrics are rarely equally meaningful to Dedicated Team
      Identify performance metrics that matter most for your specific innovation initiative
      17
      Trap 4: Assessing Performance From Established Metrics
    • Common assumptions and company stories
      Examine the company’s culture
      Consciously adopt some elements of the culture
      Avoid claiming a uniquely innovative culture which may offend the Performance Engine
      18
      Trap 5: Failing to Create a Distinct Culture
    • If identical processes truly worked, the initiative would be part of Performance Engine
      19
      Trap 6: Using Existing Processes
    • HR, Finance, and IT drive standardization
      Insist on being an exception to these standards
      20
      Trap 7: Succumbing to the Tyranny of Conformance
    • Create a team distinct from the Performance Engine
      Treat the Performance Engine like a strategic partner
      21
      Take a Positive Approach
    • 22
      You Will Face 3 Challenges
      Competition for Scare Resources
      Divided Attention of Shared Staff
      Disharmony in the Partnership
    • Allocate resources through one plan
      Fund Shared Staff resources
      Discuss contingency plans in advance
      23
      1. Competition for Scare Resources
    • Internal transfer payments
      Special targets
      Added bonuses
      24
      2. Divided Attentions of Shared Staff
    • 25
      3. Disharmony in the Partnership
      Clear responsibilities
      Common values
      Insider collaboration
      Co-locate members
      External collaboration
    • Formalize the experiment
      Break down the hypothesis
      Seek the truth
      26
      Run a Disciplined Experiment
    • Wild
      Guesses
      27
      Predictions Improve With Learning
      Informed
      Estimates
      Reliable
      Forecasts
      Prediction
      Time
      Learning
      Executives Demanding Results Over Learning Drive Failure
    • 28
      Formalizing an Experiment
      Plan the experiment(or revise the plan)
      Compare predictions and outcomes, assess lessons learned
      Predict outcomes,document supportinglogic and assumptions
      Execute experiment,record measurements,
      document observations
      Learning Must Be a Rigorous Scientific Method – Not Intuition
    • Invest heavily in planning
      Create the plan and scorecard from scratch
      Discuss data and assumptions
      Document a clear hypothesis of record
      Find ways to spend a little, learn a lot
      Create a separate forum for discussing results
      Frequently reassess the plan
      Analyze trends
      Allow formal revisions to predictions
      Evaluate innovation leaders subjectively
      29
      10 Planning Principles for Innovation
      I
      II
      III
      IV
      V
      VI
      VII
      VIII
      IX
      X
    • Spreadsheets
      Cause and Effect
      30
      Conversational Models
      Subsequent outcome
      C
      Additional
      dependency
      Outcome
      Sales
      B
      D
      Action
      Trial Use
      Product
      quality
      A
      Advertising
      spending
      Focus On Conversations, Not Spreadsheets with Complexity
    • 31
      Hypothesis Creation Technique
      Divide the budget for innovation into 5 or fewer categories.
      Sketch a sequence of outcomes and subsequent outcomes.
      Choose specific, unambiguous, measurable outcomes.
      Identify additional factors that each outcome depends on.
      1
      2
      3
      4
      Look for overlaps in category cause-and-effect chains.
      Show how critical
      non-spending decisions can impact outcomes
      Keep it simple – One page diagrams.
      5
      6
      7
    • 32
      Resolve Critical Unknowns First
      Most critical unknowns
      Severe
      What are the consequences if we are wrong?
      Moderate
      Least
      critical
      unknowns
      Minor
      Certain
      Educated Guess
      Wild Guess
      How certain are we?
    • Get off to a good start
      Monitor interactions with Performance Engine
      Stay engaged in a rigorous learning process
      Shape the Endgame
      33
      Supervise an Innovation Initiative
    • Powerful
      Broadly Experienced
      Able to Serve Long-Term Company Interests
      34
      Choose the Right Supervising Executive
    • Strategic objective
      Form – New product/service launches
      Core functions of Dedicated Teams required
      Length of time
      Scope of expense
      Areas of uncertainty
      35
      Oversee a Family of Related Initiatives
    • Innovation is all about ideas
      The great leader never fails
      Leaders are only fighting the system
      Everyone can be an innovator
      Innovation happens organically
      Can be inside an establish organization
      Requires wholesale organizational change
      Innovation can only happen in Skunk Works
      Innovation is unmanageable chaos
      Only start-ups can innovate
      36
      10 Common Innovation Myths
    • Ideas are only the beginning
      Nothing simple about execution
      Primary leader virtue is humility
      Ideation is everyone’s job
      Initiatives require formal resource commitment
      Innovation is incompatible with ongoing operations
      Innovation requires only targeted change
      Innovation must be engaged with ongoing operations
      Innovation must be closely and carefully managed
      Many of the world’s biggest problems can be solved only by large, established corporations
      37
      10 Innovation Truths
    • 38
      Shape a More Innovative Company
    • 39