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Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
Systematic Innovation
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Systematic Innovation

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Tools and techniques for enabling innovation in your organization – this presentation describes a systematic approach that involves your entire ecosystem (e.g. employees, customers and suppliers). …

Tools and techniques for enabling innovation in your organization – this presentation describes a systematic approach that involves your entire ecosystem (e.g. employees, customers and suppliers). How to enable the generation of innovative ideas consistent with strategic direction, leverage social software to improve and evolve these ideas, effectively involve customer through a “go broad and then focus” approach to prototyping; manage product development resources to enable growth, free up the resources needed to invest in innovative ideas.

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  • 1. Systematic Innovation
    Miles Lewitt
    VP Advanced Technology
    Intuit
  • 2. Outline
    Why is innovation important?
    What is innovation?
    Exercise 1 - Disruptive Innovation
    Systematic innovation
    Exercise 2 - Incongruity
    Horizon Planning (A systematic approach to structuring your investments for innovation)
    Core and Context (A systematic approach to freeing up resources for innovation)
    Exercise 3 - Core and Context
    Involve everyone (In a systematic way)
    Prototypes (A systematic approach to customer understanding)
    Exercise 4 - Putting it to work
  • 3. Why is Innovation Important?
    Trees don’t grow to the sky forever
  • 4. Rapid Change
    Technology
    Cloud Computing
    Social Networking
    Massively Scalable
    Immersive Experiences
    Business
    • New Business Models
    • 5. Attract New Realms of Customers
    • 6. Radically Increase Loyalty
    Environment
    • Green
    • 7. Power Reduction
    • 8. New Outsourcing Models
  • Importance of Innovation
    Declining
    Revenue
    Rapid
    Revenue Growth
    High
    Rate of
    Change
    Average
    Revenue Growth
    Above Average
    Revenue Growth
    Low
    High
    Low
    Success With
    Innovation
  • 9. What is innovation?
    "The creative mind is a sacred gift, and the logical mind
    a faithful servant. We’ve created a society that honors the
    servant ... and forgotten the gift."
    - Albert Einstein
  • 10. What is Innovation?
    Flash of genius
    Cannot be taught, replicated or learned
    Most of the time, these ideas are not realizable with the current state of technology
    Doing something different that represents a new opportunity for satisfying wants and needs
    Can This Be Done Systematically?
  • 11. One Perspective on theTypes of Innovation
    Operational
    innovation
    Disruptive
    innovation
    Visionary
    innovation
    Sustaining
    innovation
    Offering
    innovation
    Disruptive innovation
    Simple, convenient and less capable offerings that fill a role that the current offerings do not fill
    Performance and capability improvements enable moving up-market until the market incumbents are displaced
    Offering innovation - making existing products and services better in order to stay ahead of entrenched competition, entrepreneurial challengers, and demanding customers
    Operational innovation - improvements to processes, methodologies, and other business fundamentals
  • 12. Disruptive Innovation
    Disruptors create growth by
    Bringing a simple cheap solution to the low end of an established market
    Helping non-consumers solve a problem
    Types of non-consumers
    Skill Related (e.g. computers, defibrillators)
    Wealth Related (e.g. automobiles prior to assembly line)
    Access Related (e.g. telephone – limited locations)
    Time Related (e.g. buying and selling of collectibles)
  • 13. Exercise 1 - Disruptive Innovation
    Which of the following innovations are disruptive?
    For those that are disruptive what was disrupted?
    Brownie Camera
    WalMart
    A380 (Airbus)
    Microsoft Office 2007
    eBay
    Internet Banking
    Share your results with someone next to you
  • 14. Systematic Innovation
  • 15. Innovation Opportunity Indicators
    Internal
    The unexpected: the unexpected success, the unexpected failure, the unexpected outside event
    The incongruity: between reality as it actually is and reality as it is assumed to be or as it “ought to be”
    Process need
    Changes in industry structure or market structure
    External
    Changes in demographics
    Changes in perception, mood or meaning
    New knowledge
  • 16. exercise 2 (part 1) - incongruity
    You are the CEO of a cargo shipping company in the mid 20th century
    Costs of ocean freight are rapidly rising
    Time for delivery is increasing
    Pilferage is increasing
    What do you do?
  • 17. exercise 2 (part 2) - incongruity
    Your investments are delivering results:
    Faster ships
    More fuel efficient ships
    Ships that need a smaller crew
    In spite of these investments the situation continues to deteriorate (more cost, more time, more pilfering)
    This incongruity points you to what opportunity for innovation?
    What do you do to capitalize on this opportunity?
  • 18.
  • 19. Malcolm McLean
  • 20. Systematic Approachto the Scope of Innovation
    Technology
    Operational
    User
    Experience
    Product
    Concept
  • 21. Horizon Planning
    Systematic Approach to Structuring Your Investment Portfolio for Innovation
  • 22. Horizon Planning Overview
    H3
    Create Viable
    Options
    H2
    Build Emerging
    Businesses
    Profitable
    Revenue
    Growth
    H1
    Extend & Defend
    Core Businesses
    Time (years)
  • 23. Horizon Planning Characteristics
    H1
    Established:
    Extend & defend the core businesses
    H2
    Emerging:
    Businesses that have a promising future
    H3
    Viable Options:
    Potential for high growth businesses
    Materiality
    Outcomes
  • 24. Core and Context
    Systematic Approach
    to Freeing up Resources for Innovation
  • 25. Definition: Core and Context
    Core
    Activities or investments that increase competitive advantage by making its offerings more differentiated
    Context
    All other activities or investments
    Typically, A Business Has 90% of it’s Resources Allocated to Context
    Doubling the small fraction of resources invested in core has a dramatic impact on company performance
  • 26. Framework: Core And Context
    Core
    Creates differentiation that wins customers
    Context
    Mission Critical
    Process shortfall creates
    serious and immediate risk
    Material to Financials
    Non-Mission-Critical
    All other processes
    Competitive Differentiation
    23
  • 27. Flow: Core and Context
    Core
    Context
    Mission
    Critical
    Enabling
  • 28. Reducing The Cost of Context
    Centralize: Bring operations under a single authority
    Standardize: Reduce the variety and variability of processes delivering similar outputs
    Modularize:Deconstruct the system into its component subsystems and standardize interfaces for future cost reductions
    Optimize:Cost and resource reduce
    Instrument: Characterize processes in terms of the variability of key parameters and develop monitor and control systems
    Outsource
  • 29. Invention
    Zone
    Optimization Zone
    Resourcing Core and Context
    Use conventional methods to ramp and manage mission-critical processes at scale
    Deployment
    Zone
    Use unconventional methods to create and incubate new core
    Use the Six Levers to extract resources from context to repurpose for core
  • 30. Exercise 3 - core and context
    • What offering attributes are the key reasons that customers buy your product?
    • 31. What work tasks are directly tied to the key reasons that customers buy your product? (Core)
    • 32. What work tasks are not directly tied to the key reasons that customers buy your product? (Context)
    • 33. List three ideas specific to your organization that would reduce you investment in context, thus enabling you to create more core
    Share your results with someone next to you
  • 34. Involve everyone
    In a Systematic Way
  • 35. Drive Grassroots Innovation
    Invest in Social Computing tools to enable bottom-up innovation. Social Computing tools like wikis and prediction markets to harness the creativity of employees, validate major decisions, and collaboratively shape new strategies
    Foster “intrapreneurship” by decentralizing decision-making. Best Buy, for instance, empowers its individual store managers to make their own design, supply chain, and merchandising decisions to address regional customers’ needs
  • 36. Aspects of aSuccessful Innovation Program
    Control
    Creativity
  • 37. Brainstorm: A Tool Developed by Intuit That Focuses on the Innovators
    Grow ideasEvolve your idea by capturing notes, to dos, documents, and links to relevant information
    Build TeamsRecruit from across the company or let them find you
    Get HelpLocate those with needed skills and reach out to leaders to remove obstacles
    CollaborateTake advantage of the collective wisdom of the company through comments and discussion
  • 38. Prototypes
    A Systematic Approach to Customer Understanding
  • 39. go broad
    lots of prototypes
    evaluate
    experiment & iterate
    go broad, then focus narrowly
    With rapid prototyping and deep customer feedback
  • 40. 7 Ideas for 1
  • 41. “If your prototype is half-baked, consumers give you better feedback.”
    -- Claudia Kotchka, P&G
  • 42. Exercise 4 - putting it to work
    How will you apply what you have learned from this presentation when you get back to work?
    Share your results with someone next to you
  • 43. Appendix
  • 44. A Second Perspective on theTypes of Innovation
    New
    (needs that
    people don’t
    yet know)
    Customer Problem
    Existing
    (better
    mousetrap)
    New
    Existing
    Technology
  • 45. 39
    Third Perspective on theTypes of innovation
    Customer-Driven Innovation
    Find an important customer problem that we can solve well, and build durable advantage
    Technology-Driven Innovation
    Create new or enhanced products, services or experiences based on a deep understanding and use of technology
    Commercial Innovation
    Get lots of people to buy and/or use lots of our products and services in a manner that creates trust
    Business Model Innovation
    Create and capture financial return by innovating beyond end-user benefits to other areas of the business model such as new me’s or disruptive cost structure
  • 46. The Unexpected
    Requires admitting that “We were wrong”
    Discovering what changed is critical, it is much less important to understand why
    Unexpected success:
    Follow-up questions:
    What would it mean to us if we took advantage of it?
    Where could it lead us?
    What would we have to do to convert it into an opportunity?
    How do we go about it?
    To take advantage of it, the unexpected success will make demands
    Unexpected failure:
    Should always be considered as a symptom of an innovation opportunity
    Go out, look around and listen
  • 47. Process Need
    Criteria:
    A self-contained process
    A clear definition of the objective
    That the specification for the solution can be defined clearly
    Widespread realization that “there ought to be a better way”
    Constraints:
    Do we understand what is needed?
    Is the knowledge available or can it be procured within the “state of the art”?
    Does the solution fit or does it violate the values of the intended users?
  • 48. Industry and Market Structures
    Industry and market structures appear so solid that people in an industry are likely to consider them certain to endure forever
    Rapid growth of an industry is a reliable indicator of change. It also motivates complacency by the large incumbents
    The innovator has a good chance of being left alone
  • 49. Demographics
    Population, age distribution, educational attainment, occupational segmentation, employment, income, etc.
    Impacts what will be purchased and in what quantities
    Incorrectly perceived to be slowly changing over long periods of time
    Baby boom in USA started in 1949, baby bust in 1960
    1973 participation of women in the labor force continues a multi year pattern of declines, by 1983 the labor force participation by women was at the highest level ever (64%)
  • 50. Changes in Perception
    In mathematics there is no difference between “the glass is half full” and “the glass is half empty”
    The meaning of these statements is totally different and so are their consequences
    In spite of statistically significant improvement in life expectancy, Americans are gripped with high levels of collective hypochondria
    Everything seems to cause cancer, degenerative heart disease or premature loss of memory
    Created numerous opportunities for innovation (e.g. health information, organic foods, exercise equipment, etc.)
    It is important to recognize the difference between a fad and a change in perception
  • 51. New Knowledge
    Longest lead time & highest risk
    Almost always based on the convergence of several kinds of knowledge
    Requires careful analysis of all the necessary factors (e.g. knowledge, social, economic or perceptual). Can the not yet available factors be produced?
    It is critical to focus on value to the user rather than technical sophistication
  • 52. Convergence Example: Computing
    17th Century – Binary
    1850 – Babbage’s calculating machine
    1890 – Hollerith’s punchcard
    1906 – Lee de Forest’s audion tube
    1913 – Russell & Whitehead’s symbolic logic
    1918 – Programmable anti-aircraft guns
    1946 – First computer (ENIAC)
  • 53. Example: Federal Express
    Operational
    Technology
    Own Route
    Network
    Central Hub
    User
    Experience
    Product Concept
    Ubiquitous
    and Easy
    Overnight
    Delivery
    FedEx is the largest air freight carrier in the world. It began its life as a senior thesis written by Fred Smith in 1965, while attending Yale University. Smith wrote that air freight companies should have their own route networks, rather than merely flying over passenger routes. His professor gave him a C for the paper, saying that the idea would never work in real life.
  • 54. References
    The Innovator's Solution: Creating and Sustaining Successful Growth (Clayton M. Christensen, Michael E. Raynor)
    The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise (MehrdadBaghai, David White, Stephen Coley)
    Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution (Geoffrey A. Moore)

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