NASSCOM GIC Conclave 2014 - Evolving Creative Confidence: A four-pronged approach to enable GICs as centres of innovation excellence - McKinsey & Company

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  • 1. Evolving Creative Confidence A four-pronged approach to enabling GICs as Centers of Innovation Excellence CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited
  • 2. McKinsey & Company | 1SOURCE: McKinsey R&D360 practice, Nasscom-McKinsey GIC study 2013, 2014 Role played by GIC Type of products that GICs are working on Percent of FTE Percent of FTE SAMPLE DATAExpectation of GICs to innovate rapidly increasing 30 10Product ownership Engineering ownership Resource ownership Past (3-5y) 60 40 Current 40 20 Past (3-5y) 65 Current Future Legacy 30 5 50 Current 40 10
  • 3. McKinsey & Company | 2 GICs evolving on Innovation Maturity; successful GICs breaking away on two dimensions SOURCE: McKinsey R&D360 practice, Nasscom-McKinsey GIC study 2013, 2014 Bigger and better ideas B Mobilized organization D Clear vision and strategy A Fast and effective scale-up C 1. Service Center 2. Center of Competence 3. Center of Excellence 4. Center of Innovation 4 3 2 1 Average Top quartile
  • 4. McKinsey & Company | 3 How GICs define their innovation aspirations Percent of GICs polled Make innovation targets real SOURCE: McKinsey R&D360 practice, Nasscom-McKinsey GIC study 2013, 2014 A Successful innovators define and cascade aspirations at a very granular level Vehicle weight Component strength +15% AspirationCurrent AspirationCurrent -13% Aspiration +12% Current Corporate average fuel efficiency Module team aspiration Corporate aspiration Product aspiration 10 70 20 Targets being evolved Innovation targets (e.g. Disclosures, Patents, Ideas Gene) Measurable business outcomes (e.g. Revenue, product perfor- mance, etc.) Output targets Targets being evolved Outcome targets
  • 5. McKinsey & Company | 4 Customer insights are everywhere SOURCE: McKinsey R&D360 practice, Nasscom-McKinsey GIC study 2013, 2014 GICs have used multiple creative means to gain customer insights – of which close customer contact is only one Design Thinking Periodic customer interaction Patent and IP search Cross- functional collision workshops Systematic idea flow back from product support teams Competitor product benchmarking Customer insights B
  • 6. McKinsey & Company | 5 Evolution in product ownership at GICs Products Customersegments Global large enterprise Global SMEs Local large enterprise Local SMEs A B C D E All big things started small SOURCE: McKinsey R&D360 practice, Nasscom-McKinsey GIC study 2013, 2014 C SAMPLE DATA
  • 7. McKinsey & Company | 6 Invest ahead of demand SOURCE: McKinsey R&D360 practice, Nasscom-McKinsey GIC study 2013, 2014 Successful GICs have taken a 2-4-year view to nurturing architects GICs that have invested in architects have seen significant payback Technical training Participation in external conferences Opportunity as lead customer- facing architect Internship with product team/ manufacturing Staffing on global R&D team Evaluations by global expert panels 4 3x Current~3 years ago Number of architects 5x Current~3 years ago Number of patents
  • 8. McKinsey & Company | 7 Summary of Learnings SOURCE: McKinsey R&D360 practice, Nasscom-McKinsey GIC study 2013, 2014 Bigger and better ideas B Mobilized organization D Clear vision and strategy A Fast and effective scale-up C 4 3 2 1 Make innovation targets real Customer insights are everywhere All big things started small Invest ahead of demand