Examination of innovation types final

Collaborative Innovation Reference Framework Choice of the Innovation Types
Nine different approaches to Innovation
Examination of the Innovation Types
This third presentation, Examination of Innovation Types , uses the innovation framework established above to examine a range of innovation “types” within the context of the innovation framework defined in the Core Innovation Framework deck.
We have broken these up into two decks for absorbing the significant detail provided within each type to ‘value’ the often subtle differences in applying the different type to your organization.
Using the framework we can establish which focus areas are critical for innovation success in the different innovation types. For example, we can see that Needs-based innovation relies on Trajectories, Discovery and Insight for success because of the importance placed on customer needs. Investigating the innovation “types” within the framework provides more detailed and careful examination of the actual work involved when innovating using that “type” or approach.

We are interested in explaining the many facets that make up a successful innovation endeavour. It can be extremely tough to capture and explain the complexity of innovation. We would like to see an emerging reference model for innovation from this starting point. The end result is to create a common innovation model or framework that accelerates acceptance, reduces mystery, constant rework and simplifies innovation efforts. Innovation is dynamic. Opening this set of models allows for it to be constantly improved for all to benefit - this is our stated aim in publishing these models.
We submit these suggested models as a starting point to deconstruct how innovation works and to encourage a “common” innovation model across all geographies, industries and markets. Developing a common innovation model and approach reduces confusion and simplifies innovation work. We believe we can remove a lot of the mystique around innovation and help accelerate its adoption and implementation by firms everywhere if we can agree on basic models and principles.
We would encourage you to feel free to send commentary, corrections, additions or changes to the models or types to Paul Hobcraft or Jeffrey Phillips . We in turn will re-publish the model as necessary under a Creative Commons License, so that anyone who cares can use it and adopt the innovation model. We want this to be open and a transparent process but we will retain copyright while allowing others to copy, distribute, and make some uses of their work as long as we are credited for the original creation.
These are collaborative work-in-progress to achieve a common position for understanding innovation
Go to the Wiki on http://cirf.pbworks.com
Our intention behind these different models of Innovation

Deeper examination of innovation types
We’ll examine the key differences between the NINE different innovation types or strategies that can be explored, recognizing that the innovation processes and many of the ‘core’ innovation capabilities DO remain the same regardless of innovation approach.
The constantly shifting boundaries of innovation matter and understanding the multiple options available becomes increasingly important to master.
Why do changing innovation boundaries matter so much? Because, at its most extreme, failure to detect, acknowledge, and respond to these changing boundaries can make the difference between organisational success and failure.
Each type of innovation described here requires some distinct attributes to be successfully deployed- these “differentiation points” define the type of innovation you want to do and how to go about it

Approach Type – Innovation Models
Innovators need to choose specific innovation strategies, models or types:
Management Innovation
Open Innovation
Design led Innovation
R&D led innovation
Service/Experience Innovation
Business Model Innovation
Technology Innovation
Needs-based Innovation
Operational innovation
What approaches to innovation should we choose? What is appropriate to our position?
Different approaches are appropriate to different innovation goals
N.B. These choices aren’t dependent or mutually exclusive – a firm can conduct “open” innovation and design-led innovation simultaneously, for example

Innovation Strategies- Decision Path
The choice of the strategy approach is determined by what your firm wants to achieve and equally what you have available to you.
Any gaps need to be recognized and you need to gain the knowledge and experience to build those into your approach and time expectations to achieve the result you would ideally like.
Choosing a specific innovation strategic approach has consequences on the people, skills, organizational structure and many other facets of the innovation model. These need to be equally addressed.

Exploring and selecting innovation types, models & philosophies Service / Experience innovation Design Led Innovation Needs Based Innovation Open Innovation Technology Led Innovation Business Model Innovation Operational Innovation R&D Innovation Identify Potential Screen & Rationalize Management Innovation Approach Type Summary – Nine Strategic ‘Types’ of Innovation Models Establish Strategy Evaluate Skills

Innovation Management Universal Need Environment Stage Key Sub Anchor Capabilities & Competences (triggers) Service / Experience innovation Design Led Innovation Needs Based Innovation Open Innovation Technology Led Innovation Business Model Innovation Operational Innovation R&D Innovation Consideration Factors Strategies/ Design Essentials of the Types of Innovation Approach IP Aware & Sharing Trust & Relationships Problem Definition Wisdom of Many Structured Discovery Process Search for Unarticulated Needs Opportunity Landscape & Uncontested Market Space Needs first approach NOT ideas VP: Customer Segments & New Channels Clear Revenue Streams & Cost Structures Identify Key Partnerships & Relationships Key Resources & Activity Clarity designer attitude & philosophy Designing in novelty, function & aesthetics Integrated design in all considerations Context, visualizing and framing Relevant & Valuable to Client Lives Co-create & Co-design Front stage & back stage needs Turning Services into Tangibles Correlation & Convergence Point Unlock the Business Value Seeing beyond incremental to evolutionary Collaborative & Cross Functional Superior or Evolutionary Champion & Advocate for Change Clarity of Purpose & Potential Need Disruptive Potential ‘ Step’ change in performance Understand ‘points of pain’ Engage hearts & minds, sense of urgency New ways to work & behaviours Management innovation Unchallenged Orthodoxies/ Beliefs Unarticulated Needs of Customers Underleveraged Competencies Underappreciated Trends

Investigating “Types” using this framework Execution Strategic Alignment to Vision & MOST (Mission, Objectives, Strategies & Tactics) . 4.Go-to-market execution 5. Enabling and Scalable Infrastructure Common Environment, Networking & Collaboration-Building Tools 3. Systematic Innovation Process 2. Trajectories, Discovery, Insight Identify Potential Establish Strategy Screen & Rationalize Evaluate Skills 1. Strategic Context Desire & Motivation to Innovation Existing Capabilities & Skills Strategies, Strategic Intent Resources and funding Trend Spotting Scenario Planning Product Development Launch Software Infrastructure Scouting Voice of Customer Align Market & Customer Environment Existing Product/Service Portfolio and Capabilities Organizational Readiness

Strategic Types of Innovation Short Explanations

Management Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Management Innovation Underleveraged Competencies Unchallenged Orthodoxies Underappreciated Trends Unarticulated Needs

Management Innovation Description
Management innovation is the invention and implementation of a new management practice , process or structure that represents a significant and novel departure from generally accepted or standard management practices, and intended to further organisational goals. (Birkinshaw, Hamel & Mol, 2005)
Gary Hamel, in his book The Future of Management , focuses on the historic lack of management innovation, demonstrating that hierarchical organization structures haven’t changed in over 100 years.
In its broadest sense then, management innovation can be defined as a difference in the form, quality or state over time of the management activities in an organization, where the change is a novel or unprecedented departure from the past
Management Innovation’s goal is in generating positive outcomes for the innovating firm as a whole to further the organization’s goals, which include both traditional aspects of performance (e.g. financial goals) as well as softer aspects (e.g. employee satisfaction).
Management innovation is often not easy to copy as it goes to the heart of how firms operate. Even where firms do not invent new-to-the-world management innovations but instead adopt and implement existing ones, there is adaptation involved to fit these innovations to the particular firm .
Management innovation, in other words, is hard to reverse engineer and can therefore be a sustainable source of competitive advantage.

Management Innovation
Obviously, you can’t teach someone to be an innovator unless you know where game-changing ideas come from. In other words, you need a theory of innovation – like Ben Hogan’s theory of the golf swing.
There is still a big gap between the rhetoric of innovation and the reality- addressing this fully requires a strong, clear conviction of what innovation can provide as the end result .
How can we game-change? By paying close attention to four things that usually go unnoticed:
1. Unchallenged orthodoxies – the widely held industry beliefs that blind incumbents to new opportunities.
2. Underleveraged competencies – the “invisible” assets and competencies, locked up in moribund businesses, that can be repurposed as new growth platforms
3. Underappreciated trends – the nascent discontinuities that can be harnessed to reinvigorate old business models and create new ones.
4. Unarticulated needs – the frustrations and inconveniences that customers take for granted, and industry stalwarts have thus far failed to address.
The first and most important step for any company intent on building a capacity for continuous, game-changing, innovation is to teach its people how see what’s around them with fresh eyes. Until your company steps up to this challenge, it will be filled with innovation hackers whose ideas rarely find the fairway.”- Source: Gary Hamel

Initial management changes and experiments are validated and expanded Changing roles and responsibilities Explore, Trial and Adapt Development Program Innovation education and training made mandatory for all managers and executives Strategic Considerations : we’re really serious about innovation . In terms of the future of management, we’re at the beginning of what will be a fairly long journey where innovation lies at the very core, we are treating this as a radical departure from the existing ‘norms’ Resource Considerations: We need people who can manage in very different organization structures and teams Capability & Competency issues : Change what managers do by changing the processes that govern their work that will allow organisations to reach new performance thresholds Culture & Climate: We need to change the orthodoxies that bound our thinking —the habits, dogmas, and conceits we have never taken the trouble to challenge Insights: org structure is a present barrier to innovation
Critical Insight: New management thinking process, skills and capabilities are require:
Peer based decisions
Ideas compete on equal footing
Power is a function of competence rather than position
Agenda setting, idea linking approach
Opening up and exploring with fresh eyes
Achieving a more ‘sharper relief’ for opportunities
Testing and deploying new management structures and practices that innovate the practice of management Principles and processes that ultimately changes the practice of what managers do, and how they do it novel or unprecedented departure from the past to further the organization’s future innovation goals Roles, compensation and evaluation changes are deployed throughout the organization to reinforce new management innovation practices Problem Driven Search/ Contextualizing/ Refining/ Reflective New Training, new hiring Trends: Must make decisions and take action closer to the customer, and more quickly Discovery: The value that “management” adds is more dynamic and changing Management Innovation Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process Revolutionizing the management hierarchy Experimentation with new team structures Constructing a safe harbor to explore with C-Level commitment to experiment A more reflective practitioner

Management Innovation Pros/Cons
Management Innovation is evolutionary
Positives:
It retrains managerial minds
It unleashes further human imagination
Dramatically reduces the pull of the past
Retools management for a more open world
Reduces fear and increases trust
It redefines the work of leadership for innovation
Positions the firm for future growth and success
Cons:
Requires new insights, perspectives and skills from the management team
Requires the development of holistic performance measures
Stretches executives time frames and perspectives
Requires significant change

Open Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Open Innovation Wisdom of Many Intellectual Property Problem Definition Building Trusted Relationships

Open Innovation
Open Innovation seeks and leverages ideas from partners, customers and individuals external to the organization. This assumes that many great ideas exist outside of the corporate boundaries. Open Innovation was first defined by Henry Chesbrough in his book Open Innovation .
Open Innovation is perhaps the innovation “type” attracting the most attention in the media.
OI supplements but does not substitute conventional practices
There are four components that are uniquely different and applicable to open innovation:
Intellectual Property Thinking
Crowdsourcing/Wisdom of Crowds
Problem definition
Building trusted broader open relationships

Resource Considerations : Finding the best partners, engaging the partners and customers, vetting ideas and intellectual property, abilities to make clear connections, networking emphasis. Culture & Climate : Establishing the value of an open collaborative model and its more different social practices Business Development/Partnering External Network & Collaborative Management & Protocols IP Transfer Social Media Application Strategic Development : Developing a partnering strategy and identifying the best possible innovation partners, concern for constant fit and relevance of propositions Software / Information Networks Outward facing collaboration & contribution positions Interactive Value Creation : Degree of Connectivity x Degree of Interactivity x Degree of Sharing Absorptive Capacity. Relationship Capacity & Multiplication Capacity Fast concept work Rigorous Business Case : factors for projected value captured, risks highlighted, licensing costs outlined, opportunity costs of use of key resources, likely impacts, need for ‘hard’ evidence Communications : Establishing the need for open innovation, creating channels and messages to third parties, clearly identifying innovation needs, conceptual thinking, clarifying value and need Legal : Establishing a rapid vetting process for the provenance of new ideas, reflecting on the sharing of IP, shared meaning & solutions. Shared market analysis and trend spotting/ evaluation Scouting Networking Crowd sourcing Market & Customer Related Research Open Innovation Contests Co-branding/Co-marketing Trajectories, Discovery and Insight How ideas are GENERATED changes: Crowdsourcing, etc but how ideas are managed remains the same Incorporate partner goals in evaluation and selection of ideas Distributed ‘Co-creation ‘in a web of networks to explore outside the boundaries of the Org. Incorporate legal and IP into the innovation team The growing role of the customer within the open collaboration process OI Readiness Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process The consistent flow of knowledge to explore breaking opportunities Managing more on platforms and through ecosystems A clarity within the value proposition but flexible to explore alternatives The management of internal and collaborative tensions “ We use people to find content, we find content to find people”

Open Innovation Model Maturity
Managing open, distributed, modular innovation means managing conflicting criteria and rationales, including conflicts between innovation and dependability, flexibility and efficiency, and flexibility and reliability
As the use of Open Innovation progresses within a firm, the model will mature through these three phases:
Partner Firm Partner Firm Partner Firm Customers & Clients Supplier Externally aware – receiving ideas from third parties Integrated – exchanging ideas with customers and partners Orchestrated Marketplace – All participants in a value chain involved in innovation Institute or University Competing Firm

Open Innovation Pros/Cons
Open Innovation presents powerful incentives and some significant challenges
Positives:
Many ideas from a wide variety of sources provide enhanced perspective
The “voice of the customer” has more weight
More minds applied to the problem
Cons:
Intellectual Property concerns based on idea origin
Expose strategic direction to outside parties
Identifying the “right” people to address a problem

R&D Led Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . R& D Led Innovation Deep Technical Capabilities Collaborative and Cross-Functional Research and Methodologies Unlock Business Value

R&D Led Innovation
The most “typical” product driven innovation strategy, led by internal research and development teams
Mostly focused on discovering new products for new and existing needs across multiple time frames
Unique factors include
Highly collaborative & cross functional coordination, a converging point of knowledge.
Deep technical capabilities for ‘seeing beyond’ balancing incremental with evolutionary research
Strong research focus and methodologies- the convergence point and highly structured.
Different product life cycles to ‘unlock’ the business value

Business Case: justify, validate, emerging metrics & measurement of returns Lifecycle Recognition Management- central and distributed timeline differences Common Environment, Networking & Collaboration-Building Environment Scouting Networking Trend Spotting Regular Innovation Development Program is Established Synthesize, theorize, explore, hypotheses, clarify, investigate, design, develop, test, implement and improve Scalable, repeatable, end-to-end need, relationship focused Strategic intent : Leadership in creating “new to the world “technology that create defensible intellectual property, and unlock value Communications: clear internal communications about targeted market opportunities. More restricted and limited external communication. Resource Considerations: Increase the stock of knowledge, broad & narrow ‘in-house’ expertise, responsiveness, commercially aware, experimental learning, profit-sharing view Capability & Competency : Creative thoughts, experimentation, selection, testing, market appraisal, resolution of scientific and technical uncertainty, to ‘see beyond’ for potential discovery Culture & Climate : Focus on investigation and research into critical problems. Careful to avoid “blockbuster” mentality. Reward mentality for orientation, project delivery emphasis and resolving roadblocks Metrics & ROI must be well articulated constantly for investments made Road mapping High Knowledge Acquisition Partnering with universities, independent research institutes, government labs, open market Seeing beyond Science & Technology shift “ Blue sky” & “White spaces” Carefully planned market launch Tight linkages with product Development and commercialization Granting ‘degrees’ of freedom to researchers Intellectual Property Mining Well-documented research methodologies Innovation internally driven by R&D Research &Development Innovation Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process “ Recognition return “of positive results from enhanced R&D work Linkage to Growth strategy and business platforms Established levels of internal collaboration ‘ Controlled ‘risk taking End result orientation to market

R&D Innovation Model Maturity
As the model matures, R & D innovation becomes increasingly more difficult
As a result the R&D led innovation effort must identify new technology or breakthrough developments to solve and grow the business (extend capabilities, explore adjacent markets for expertise)
Alternatively the R&D led innovation effort can apply its methodologies to research service, experience and business model innovations (apply existing capabilities to new problems)
Seek collaboration or extend internal knowledge through institutions, universities or its existing partners (Open Innovation)
Reflect on how to move beyond traditional boundaries.

R&D Innovation Pros/Cons
Relying on R&D alone for innovation presents a number of opportunities and challenges
Positives:
Clear provenance for intellectual property
Focused innovation efforts
Cons:
Innovation centered in only one portion of the business
Typically tied to product innovation ignoring opportunities in services, business models
Limited inputs and discussions with outside entities
Too focused on protection of ideas

Service/Experience Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Service/ Experience Innovation Turning services into tangibles Based on Customer Needs/Experiences New, different Research and insights req’d Co-create and Co-design

Service/Experience Innovation
Increasingly many firms are focusing on service and customer experience innovation to provide a more comprehensive set of solutions to its clients. These innovations create differentiated services or experiences for customers. The work of firms like Doblin and IDEO is instructive here.
These innovations are more difficult to create, often more intangible but more sustainable when appropriate.
Based on customer experiences that they regard as valuable and relevant
Not product oriented but
Requires differentiated experiences
New research and insights are needed

Business Case: justify, validate, emerging metrics & measurement of returns People Trained in new interaction skills Time scale recognition & scalable considerations Common Environment, Networking & Collaboration-Building Environment Customer focus groups Changes the “outcome” of innovation from product to experience but doesn’t change how to create or manage ideas Scalable, repeatable, end-to-end need, relationship focused Strategic Understanding of Service Systems- language, taxonomy, value propositions, transition points to service value, the differences between product & service needs. Communication s: education on policies, knowledge, resolution, compliance, expectations of consumer. Resource Considerations : service and/or experience innovation demands an increased focus on internal, capable resources who delight customers . Rapid assembly of diverse views in teams Capability & Competency : High levels of ‘contact’ intensity and interactivity, empathic, discovering latent needs, invest in wider sources of knowledge for skilled, creative, open minded people Culture & Climate is consistently on people issues: behaviors, service culture, deep insight methods, skill retention, thinking and service mindsets Interactions & Engagement by Customers provide the experience and feedback of value Understanding customer needs and expectations Customer Experience Journey Dramatic changes to service levels and customer experiences Voice of Customer / Ethnography Roadmap of enquiry Touchpoint mapping expertise of interaction points Systems that manage customer interaction in all channels equally Empathy Aware of Customer Interface Focal Points The promises you make need to be delivered Experience Design capabilities Analytical & Interpretation skills Service/Experience Innovation Accountability and decision making as close to the customer as possible Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process Delivering experiences not products Diversity of expertise for inputs High use of data mining High knowledge intensive process The ‘art’ of bundling to find the value points Entire Lifecycle management- ruthless Exnovation Issue path: nature of problem, function to resolve & structure to deliver solution

Service/Experience Model Maturity
Service models rapidly alter, expectations rise and service gives way to ‘experience’ innovation that builds value to all involved
Firm progresses from meeting customer expectations to exceeding expectations, going beyond the norm.
From satisfying customers in all touch points to delighting customers in all touch points with rapid and anticipatory responses that ‘delight’ and are appreciated.
Moving from reacting to existing needs to anticipating new needs and surfacing unarticulated needs

Service/ Experience Innovation Pros/Cons
Service and experience innovation is valuable but difficult to achieve
Positives:
Most distinctive form of innovation
Most difficult to copy or reproduce
Cons:
Often requires a change in corporate culture
Hard to sustain without significant investment in people and training
Difficult for firms with a product mentality to make the switch to services or experiences

Needs-Based Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Needs-Based Innovation Needs-first approach, not ideas-first Search for Unarticulated Needs Structured Discovery Process Opportunity Landscape

Needs Based Innovation
Needs based innovation is an approach that involves understanding the “jobs to be done,” that a consumer is seeking to complete that a product or service can resolve. Developed from Christensen’s work and documented in Anthony Ulwick’s book What Customers Want .
These insights are derived from a close attention to the consumers needs
Needs first- they lead, not ideas or technology first
Jobs (wanting)to be done, unarticulated needs
Structured and disciplined search process for unarticulated needs
Search for uncontested market space through opportunity landscaping

Business Case : value of ideas can be quantified when all needs are known Lifecycle Management of Need: purpose, structure, content & syntax Time scale recognition & scalable considerations Ethnography Voice of Customer Scalable, repeatable, need based on the structure of the Desired Outcome Statement as the contextual clarifier and direction of improvement intent Traditional commercialization and launch issues Strategic Need : A rigorous controlled approach to collecting needs, formulating growth strategies and generating and validating breakthrough ideas. Communications : Consistency in focus to find out the jobs customers are trying to get done Resource Considerations : resources for turning job outcomes into insight, insight into products that resolve needs Ca pability & Competency to manage projects from discovery to delivery based on rules-based disciplines, turning job outcomes into fresh insight, emphasis on market research Culture & Climate requires intense focus on customer needs and jobs to be done. Immersive research emphasis Opportunity landscape modeling Opportunity-based segmentation Universal Job Map Features & platforms, core jobs or related jobs, over served/ under served Co-design with people’s needs Needs first not ideas first Underserved/ Overserved Identifying Jobs-to-be-done Needs Based Innovation Ranking, evaluation, selection processes unchanged Ideas generated based on “jobs to be done” methodology Opportunity identification, data collection, pattern recognition, conceptualization, prototyping, testing, implementing Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process Successful outcome measure: when it gets the job done to the satisfaction of the customer When outcomes meets needs! Idea Quadrant ranking-different paths Setting desired outcome options Exploring for uncontested market space

Needs Based Model Maturity
As the model matures, needs based innovation becomes a fully integrated part of the innovation culture regardless of method or type of innovation practice.
Perspectives shift from internal Brand Premise to understanding more of the customer expectations
New solutions combine internal skills and external capabilities built around consistent customer experiences and how best can the jobs to be done that give value and more uncontested market space opportunities
Culture shifts from “what we do best” to delivering Brand Reality that meets customers needs to do the jobs they want too achieve.

Needs Based Innovation Pros/Cons
Needs based innovation improves outcomes by reducing innovation “misses”
Positives:
Ensures ideas are in line with customer needs and expectations
Cons:
Requires very clear understanding of customer requirements
Insights may run counter to company strengths or investments
Insights may be difficult to acquire in firms with a technology-led or R&D innovation focus

Design-led Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Design-Led Innovation Context, visualizing and framing Designer attitude and Philosophy Designing function and aesthetics Integrating Design

Design Led Innovation
Design led innovation examines the concept of new product, process, service or experiences that connect with customers on a broader appeal of function and novelty through intentional design.
Design provides the visual appeal, greater connection and identification for more value extraction.
Design considerations become integral to development
Implementing a design philosophy and in-built designer attitude.
Translating context, visualizing and framing concepts delivers new dimensions of insight and discovery for ‘greater’ innovation potential
The aesthetic and symbolic to add novelty to any functional value

Business Case: justify, validate, and contribution of design into the process Lifecycle Management: foresight, insight and alignment Time scale recognition & scalable considerations Integrating into the Common Innovation Environment, Networking & Collaboration-Building Environment Shaping Human Behavior Usability Engineers Visual Interface techniques Information Architects Customer insights, concept designs, prototyping & testing, design implementation Scalable, repeatable, end-to-end need, relationship focused Design thinking drives Strategy : visualize the future, create new markets, new offerings, different business models with new applications, new ways to connect with customers and in different collaborations Resource Considerations : design treats innovation as holistic, synthesis, integrative, generative and optimistic in nature, it is visual and interactive Capability & Competency : understanding contexts, framing problems, exploring alternatives, envisioning solutions, listening, interpretation and addressing problems or concepts Culture & Climate- Design considerations are paramount Use of deep workable core customer insights Interactive design stimulus, cutting edge exploration Designers role in a team- getting design ‘attitude’ into the long term mix Context mapping Creative sessions/ workshops Design principle definitions Design of Customer Journey Maps Co-design and Co-create sessions with end users Touch Points to explore High levels of customer input Reframing problems Aesthetic, stylistic emphasis rather than functional change Design Led Innovation Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process Design considerations become the key criteria for idea generation and evaluation Impacts on commercialization and marketing for firms with little prior design focus or experience Assessing quality of interactions Result:“design is where problems are defined in new ways with design solutions generated. Outcome: New dimensions of innovation come through design involvement

Design Led Model Maturity
Many of the products and services we offer aren’t the result of an intentional, design led process
“ Design-led” innovation often starts with the design of physical products or spaces
Design thinking then enters into customer service, process and customer experience
As the firm matures, all new innovations are considered from a design perspective and with design tools and thinking paramount

Design Led Innovation Pros/Cons
Design thinking adds a unique approach but can lead to significant changes and costs
Positives:
Design thinking creates holistic products and services
Products and services are innately attuned to customer needs and expectations
Cons:
Requires a very different perspective and approach than exists in many companies
More beneficial for services or experiences than products
Requires far more research and investigation into needs and design than many firms will invest

Business Model Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Business Model Innovation Changing revenue streams and cost structures New Value Proposition, Constant Reiteration Key resources and Activity Clarity Key Partnerships and Relationships

Business Model Innovation
Business model innovation reinvents the “model” of the business – changing the revenue streams or cost structures of the business. Drawn from Business Model Generation by Alex Osterwalder.
The value has to be well articulated so its ‘disruptive’ aspects are seen and evaluated against existing models
The level of resources and the activities need to be well stated
The key understanding of different partnerships and relationships needs identifying to provide difference.
Identifying revenue streams and likely cost structures provide the ROI and impact evaluation.
Articulating the VP through different customer segments and channel identification targets.

Business Case: high level justification for risk assessment, validate, cost sided & value sided considerations, articulating the exact proposition, recognition this can undergo a number of iterations Lifecycle Management Launch & Measure Impact- is it disruptive, designed to do as intended, can it be copied easily Primary Focus Time scale recognition & scalable considerations Scouting Trend Spotting Scenario Planning Discovery, Clarification Execution of ideas may mean dramatic changes to existing models and processes or designing new ‘stand alone’ ones Synchronize Build Manage Test Monitor Measure Scalability issue as business model innovation is infrequent/rare Providing consistent, early warning, fast feedback to fine-tune and adapt to knowledge learnt Strategic Considerations : Business model innovation impacts the strategic framework of the business, changing how the firm delivers value and how it gains revenue. initiatives. Clear philosophy in intent and concept Resource Considerations: Knowledge of business resources available/ needed, supporting processes that can be different, the target groups and channels to focus upon. Strategic development , communications and broad negotiation experience. Capability & Competency issues : process tensions, content issues and context paradoxes, system design understandings Cu lture & Climate: Alignment to existing practices or degree of separation and the impact Context, design drivers & constraints Defining new value proposition White Space Exploration Opportunity recognition & positioning skills Synthesizing skills Work flow and job design Business Model Innovation Difficult idea generation as new business models challenge the status quo Evaluation and selection difficult as criteria for business model innovation challenges existing concepts Fresh insights on potential market and customer needs not being delivered today High initial levels of adaptability & flexibility Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process Exploring the full linkage of any BM in evaluation The ability to ‘pivot’ through testing Clarity of Competitive positions

Business Model Innovation Maturity
As the model matures, Business Model innovation focuses on increasingly exploring :
Unarticulated market needs
White space opportunities
Entirely new business models, that explore different channels, products or services not seen before.
Improve, disrupt or transform existing BM into new better models that meet changing market needs
Disrupting existing practices, networks or relationships
Breaking the existing BM into different parts to extract more value
Bringing new technologies that require different approaches.

Business Model Innovation Pros/Cons
Business model innovation is dramatic but can change market dynamics
Positives:
Create entirely revenue streams or cost models
Change the structure of the market or industry
Force competitors to react
Cons:
Requires a change to an embedded business model

Operational Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Operational Innovation Knowing Your Pain Points Step Change in Performance as Goal Current Sources of Inertia New Ways of Working& New Behaviours

Operational Innovation
Operational innovation is when breakthroughs in existing performance have to be made, a ‘step’ change not an incremental one to extract cost or improve just efficiency .
At this operational level, we can identify management practices, management processes, management techniques and organizational structures as those potentially requiring significant change to the rules and routines by which work gets done inside organizations
A high competence of change-ready needs to be present
Unique factors include:
This requires a ‘step change’ on performance caused by changing events and shifts that need responding too
Having a clear understanding of the different (multiple) pain points that need reflecting upon and changing
The need is to engage the hearts and minds of all involved in the evaluation promoting a strong sense of urgency, overcoming inertia
Ending up with new ways of working and different behaviors.

Business Case : justify, validate, emerging metrics & measurement of returns Lifecycle Management approach Primary Focus Time scale recognition & scalable considerations Areas of Operational Innovation opportunity : -Customer Loyalty -Cycle time reduction -Development process -Time to service initiation -Outsourcing -Shared Services -Integrated Global Delivery - Cost Drivers - Pain points for customers Clear Investigation & Validation methods Regular Innovation Development Program is Established and Separate from these more breakthrough initiatives Scalable, repeatable, well integrated end-to-end need. Strategic Intent : redesign of operational processes to achieve internal breakthroughs in innovation performance Communications need to articulate the problems and be disciplined Resource Considerations : This is not TQM/ Six Sigma, Incremental, it is thinking through a ‘step-change ‘and needs a high competency of change readiness, industry awareness, shared accountability, objectivity,, risk management Capability & Competency Build Elements : taking a more holistic approach to redesigning for breakthrough results as markets mature and change, products and processes shift and the result in performance diminishes . Strong positioning skills & business development process Culture & Climate ‘ must’ alter the ‘status quo, realign and commit fresh resources, HR reinforces new behaviors, watch for systemic inertia as trigger for change For operational innovation to succeed, the process must be persistent, constantly considering new ideas with clearly defined evaluation criteria Quick, accurate measurement of benefits and ROI impact ‘ The invention and deployment of new ways of doing work’ Ongoing targets: Achieve scale, breakthrough in efficiency , flexibility, effectiveness and agility Process expertise Engineering & Design Skills Operational innovation Rapid testing and deployment of new operational processes Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process Degree of change and strategic need Change measurement criteria 1) cost drivers of the business, 2) competitive differentiation points, 3) problem areas for satisfaction points for customers. Exploring upstream and downstream potential & implication assessments Early warning systems awareness

Operational Innovation Maturity
As the model matures the key to operational innovation needs to centered around certain criteria:
Processes that influence (perception of) value
Processes that influence strength of (changing) relationships
Processes that influence (perception of) adding greater service
Processes that when combined with other parties accelerates and reduces costs.
Consistently looking at
The cost drivers of the business
The competitive differentiation points
Problem areas for satisfaction points for customers
For example: when the design, production and maintenance of products, processes and services, are distributed across extended organisational networks, are they at the same time, innovative and dependable?

Operational Model Innovation Pros/Cons
Operational Model innovation differs from Lean/Six Sigma
Positives:
Focuses on “step change” operation or process needs
Dramatically improves or eliminates process steps or operations
Radically reduces costs or improves process or service
Cons:
Very easily confused with Six Sigma or Lean processes
Often focused on very incremental issues

Technology-led Innovation We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully . Technology-Led Innovation Clarity of Purpose & Potential Disruptive Potential Evolutionary or Superior to Existing Advocate of Change Leads

Technology-led Innovation
Technology-led innovation looks to exploit advances.
The choice is does technology lead or support concepts, market ‘pull’ or technology ‘push’ and depends on its potential to disrupt or enhance to contribute to innovation change.
Technologies ‘disruptive’ potential has to be seen and evaluated against existing offerings for assessing its value
Is it evolutionary or superior to what is available
The clarity of its purpose and potential needs defining, correct arenas, targets and actions.
A clear champion & advocate of the change needs to lead.

Business Case : justify, validate, disruptive nature or supporting technology clarity/ role Lifecycle Management: links of technology to R&D Launch & Measure Impact & Effects Game changing or Incremental Time scale recognition & scalable considerations Common Environment Needs: Platforms, Networking & Collaboration-Building Environment Scouting Networking Trend Spotting Execution Management dependant on solution sought Synchronize Build Manage Monitor Measure Scalable, repeatable, end-to-end need, relationship focused Providing Consistent Feedback for updates, modification Strategic Position : Addresses the effective identification, selection, acquisition, development, exploitation and protection of technologies and their contribution to innovation. Resource Considerations : Does technology lead or support the application of concepts? Has it the potential for disruption or promoting/ supporting through technology change ? Is the technology superiority or evolutionary.? Does it advance a market position & extend business performance based on the innovation strategy to be taken? Capability & Competency Build : Curiosity, building of distinctive competencies, clarity of purpose., having a strong stable plan of advocacy if technology can ‘disrupt’ Piloting Prototype & Testing Environment Metrics & ROI: acceptable, feasible and enduring in value to customers Growth platform validation External supporting networks for application of concept Market ‘pull’ or technology ‘push’ Orientation- needs based diffusion strategies Synchronization & Visibility New or Unexpected markets to watch for Strong linkage to design innovation in synthesis potential, style and humanity considerations and science and technology ‘’ Crossing the technology chasm’’ for adoption success Pattern recognition Focus on cross development and integration skills Clear Links between engineering, research and design Value chain opportunities Adoption/ Diffusion understanding Culture & Climate: Highly skilled and focused competencies, open environment to explore and experiment, looking to extend beyond the existing Technology-led Innovation Strategic Context Trajectories, Discovery and Insight Go To Market Enabling and Scalable Infrastructure Systematic Innovation Process Utility or Mechanism decision for Competitive Advantage

Technology-Led Innovation Maturity path
Recognize the stages to go through with technology-led innovation
Innovation Decision Process theory . Adopters of a technology progress over time go through five stages in the diffusion process. First, they must learn about the innovation (knowledge); second, they must be persuaded of the value of the innovation (persuasion); they then must decide to adopt it (decision); the innovation must then be implemented (implementation); and finally, the decision must be reaffirmed or rejected (confirmation). The focus is on the user or adopter.
Rate of Adoption theory. Diffusion takes place over time with innovations going through a slow, gradual growth period, followed by dramatic and rapid growth, and then a gradual stabilization and finally into a decline.
Perceived Attributes theory. There are five attributes upon which an innovation is judged: that it can be 1) tried out (trialability), that results can be 2) observed (observability), that it has an advantage over other innovations or the 3) present circumstance (relative advantage), that it is not 4)overly complex to learn or use (complexity), that it fits in or is 5) compatible with the circumstances into which it will be adopted (compatibility).
Need-based Diffusion Strategies
- Need for recognition and process involvement. The chances of successfully "selling"
- Need for vertical support structure to overcome technophobia. Support provided by staff for discipline/content credibility
- Need for well-defined purpose or reason. If the innovation can be demonstrated as an effective, efficient and easily applied solution to those focused needs, it is more likely to be adopted and integrated.
- Need for ease of use and low risk of failure. Need for ease of use and early success
- Need for institutional/administrative advocacy and commitment. Promote the conditions and activities that can enable adoption to prevail.

MI OI RDI SEI NBI DI BMI OpI TI Strategic Considerations : we’re really serious about innovation. In terms of the future of management, we’re at the beginning of what will be a fairly long journey where innovation lies at the very core Capability & Competency issues : In a company you often can't change what managers do in any direct way. You can only change it by changing the processes that govern their work that will allow organisations to reach new performance thresholds Strategic Development : Developing a partnering strategy and identifying the best possible innovation partners, concern for constant fit and relevance of propositions Capability & Competencies based upon ‘ Distributed’ Co-creation in a web of networks of suppliers and independent specialists Strategic Partner and Preferred Choice Clarity Strategic intent : Leadership in creating new to the world ideas that create defensible intellectual property, and unlock value Capability & Competency : Creative thoughts, experimentation, selection, testing, market appraisal, resolution of scientific and technical uncertainty, to ‘see beyond’ for potential discovery Strategic Understanding of Service Systems- language, taxonomy, value propositions, transition points to service value, the differences between product & service needs. Capability & Competency : High levels of ‘contact’ intensity and interactivity, empathic, discovering latent needs, invest in wider sources of knowledge for skilled, creative, open minded people Strategic Need : A rigorous controlled approach to collecting needs, to then formulating growth strategies and generating and validating breakthrough ideas. Ca pability & Competency to manage projects from discovery to delivery based on rules-based disciplines, turning job outcomes into fresh insight, emphasis on market research Design thinking can drive Strategy : visualize the future, create new markets, new offerings, different business models with new applications, new ways to connect with customers and in different collaborations Capability & Competency : understanding contexts, framing problems, exploring alternatives, envisioning solutions, listening, interpretation and addressing problems or concepts Strategic Considerations : BM are bound inextricably to the type of philosophy you want to pursue, it is a design process within its self, the heart of it is the value to the consumer and how it links to other strategic innovation initiatives. It is the point of departure where all else flows Capability & Competency issues : process tensions, content issues and context paradoxes, system design understandings Strategic Intent : redesign of operational processes to achieve internal breakthroughs in innovation performance Capability & Competency Build Elements : taking a more holistic approach to redesigning for breakthrough results as markets mature and change, products and processes shift and the result in performance diminishes. Urgency need Strategic Position : Addresses the effective identification, selection, acquisition, development, exploitation and protection of technologies and their contribution to innovation. Capability & Competency Build : Curiosity, building of distinctive competencies, clarity of purpose., having a strong stable plan of advocacy if technology can ‘disrupt’ Strategic statements Capability & Competency statements Summary

Cu lture & Climate: We need to change our orthodoxies that bound our thinking —the habits, dogmas, and conceits we have never taken the trouble to challenge Resource Considerations: We need to quickly discover that there is still a big gap between our rhetoric of innovation and the reality . Culture & Climate : Establishing the value of an open collaborative model and its more different social practices Resource Considerations : Finding the best partners, engaging the partners and customers, vetting ideas and intellectual property, abilities to make clear connections, networking emphasis. Culture & Climate : Focus on investigation and research into critical problems. Careful to avoid “blockbuster” mentality. Reward mentality for orientation, project delivery emphasis and resolving roadblocks Resource Considerations: Increase the stock of knowledge, broad & narrow ‘in-house’ expertise, responsiveness, commercially aware, experimental learning, profit-sharing view Culture & Climate is consistently on people issues: behaviors, service culture, deep insight methods, skill retention, thinking and service mindsets Resource Considerations : dynamic configurations that rapidly change and need to respond, that focus on solutions that people see compliment their lives, quick team assembly, diversity of views Resource Considerations : the structure for turning job outcomes into insight, insight into products that meet customer needs correctly through a very collaborative internal process Culture & Climate needs to provide a sequenced and focused idea generation environment based on customer expertise. Culture & Climate- people first, business second- the human side of innovation Resource Considerations : design treats innovation as holistic, synthesis, integrative, generative and optimistic in nature, it is visual and interactive Cu lture & Climate: Alignment to existing practices or degree of separation and the impact Resource Considerations: Knowledge of business resources available/ needed, supporting processes that can be different, the target groups and channels to focus upon. Strategic development , communications and broad negotiation experience. Resource Considerations : This is not TQM/ Six Sigma, Incremental, it is thinking through a ‘step-change ‘and needs a high competency of change readiness, industry awareness, shared accountability, objectivity,, risk management, shared reporting, engaging hearts and minds in the need for change Culture & Climate ‘ must’ alter the ‘status quo, realign and commit fresh resources, HR reinforces new behaviors, watch for systemic inertia as trigger for change Resource Considerations : Does technology lead or support the application of concepts? Has it the potential for disruption or promoting/ supporting through technology change ? Is the technology superiority or evolutionary.? Does it advance a market position & extend business performance based on the innovation strategy to be taken? MI OI RDI SEI NBI DI BMI OpI TI Culture & Climate: Highly skilled and focused competencies, open environment to explore and experiment, looking to extend beyond the existing Climate & Culture statements Resource Considerations statements

Why does structuring innovation really matter?
Many companies fail to extract the most from their investments in innovation, this can be attributed to many pitfalls, to name a few:
Not having a complete understanding of innovation, all the different options to achieve a sustaining innovative organization
Insufficient insight into what customers really want
Failure to make innovation connected and explicit in vision, objectives and part of the strategy and fabric of the organization
Lack of balance between the ‘dynamic’ parts required to be successful
Weak links between business strategy and product portfolio
Insufficient engagement of the whole organization to pursuit innovation
A lack of resources or not placed in the appropriate part that brings value in your high priority areas.
A weak innovation process that places its focus on one part, not appreciating the whole process needs equal emphasis
A missing set of enabling structures within the organization
Knowing that different types of innovation require ‘distinctive’ recognition
Nurturing and managing innovation is an intricate process that is demanding.

Paul Hobcraft
Email : [email_address]
Phone Number
+65 91 751 4350
Jeffrey Philips
Email: [email_address]
Phone Number
+01 919-844-5644
Contact Details Collaborative Innovation Reference Framework For Europe, Africa, Middle East & Asia For North & South America
Go to the Wiki on http://cirf.pbworks.com

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Examination of innovation types final

by Jeffrey Phillips on Apr 13, 2011

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Examination of innovation types final — Presentation Transcript