Introduction To The Killer Innovation Approach Ver 5

Slide 1: Killer Innovations Introduction to a better way to innovate Philip McKinney podcast@killerinnovations.com www.killerinnovations.com Killer Innovations Workshop www.killerinnovations.com

Slide 2: Agenda • Why Innovation? • Other Approaches • A Better Approach • Benefits • Lessons Learned Killer Innovations Workshop www.killerinnovations.com

Slide 3: Innovation Acceleration -Innovations are having a larger impact -The lifecycle of innovations is getting shorter Impact Time Killer Innovations Workshop www.killerinnovations.com

Slide 4: Technology Adoption is Accelerating How long does it take to get to 50 million users? Phone 74 years Radio 38 years PC 16 years TV 13 years 2 years Internet Blogs 1 year Killer Innovations Workshop www.killerinnovations.com

Slide 5: The Innovation Reality Innovation Gap The shortfall between a organizations rapidly rising need for ideas/innovations and their inadequate supply Innovation Delay The delay between the time when decisions to adopt strategic innovations are made and their eventual impact to the organization. Killer Innovations Workshop www.killerinnovations.com

Slide 6: Innovation Impact Innovation has increased in 92% importance over the last 10 years Innovation plays an important role 73% in assessment of company value Confident in ability to manage and 35% measure innovation impact 0% 20% 40% 60% 80% 100% Source: Arthur D. Little Research Killer Innovations Workshop www.killerinnovations.com

Slide 7: Executive View of Innovation • 87% rank innovation as one of their top 5 priorities • Executives boast that their companies excel at innovation • Executives, however couldn’t differentiate between incremental improvements and breakthroughs • Very few executives said their firms have any kind of structured approach to innovation Source: DiamondCluster International, Techtrend Group Killer Innovations Workshop www.killerinnovations.com

Slide 8: The Challenge of Innovation • Maintain efficiency while fostering innovation • Stressing bottom-line results without restricting innovation • Adapting to changing markets and environments while maintaining stability Killer Innovations Workshop www.killerinnovations.com

Slide 9: Value From Innovation Creating new 14% 61% 38% offerings/markets/ industries Incremental Innovations to 62% 39% 86% existing offerings R&D Revenue Margin Source: Harvard Business Review, October 2004 Killer Innovations Workshop www.killerinnovations.com

Slide 10: What’s wrong with the current approaches to find ideas?

Slide 11: What’s wrong with current brainstorming approaches? • Innovations are either incremental or totally unrealistic • Rarely any real follow-up • No confidence that there aren't better ideas to be had • Lack of executive/organizational support Killer Innovations Workshop www.killerinnovations.com

Slide 12: Incremental versus Breakthrough Incremental improvements Evolutionary change tools • Reduce expenses • BPR/TQM/Six Sigma • Extend brand/product line • Feature enhancement Breakthrough improvements Revolutionary change tools • Find new markets • Killer Innovation • Create new strategic assets • Lateral Thinking • Launch new businesses • TRIZ/TIPS Killer Innovations Workshop www.killerinnovations.com

Slide 13: Killer Innovations

Slide 14: What is a killer innovation? A Killer Innovation is defined as significant and highly profitable departures from current offerings or practices that is difficult to imitate Killer Innovations Workshop www.killerinnovations.com

Slide 15: Killer Innovation Approach • Tools – The tools to find/create, rank and execute against killer ideas • Skills – Tricks to help change your perspective and improve your ability to apply empathic design through observation Killer Innovations Workshop www.killerinnovations.com

Slide 16: Killer Innovation Tools Using FIRE • Focus The Innovation Search – Focus the problem – Depth is better than breadth for idea quality • Ideation – Structured questions that drive discovery/insight • Rank The Ideas – Will this idea change the customer expectation? – Will this idea change the competitive landscape? – Will this idea change the economics of the industry? • Execution – Define clear milestones – Kill projects early Killer Innovations Workshop www.killerinnovations.com

Slide 17: History of the KI Approach • Question based methodology – Based on Socratic method of asking questions to eliminate ideas … the best ideas are the ones left standing • Build around a core of +70 killer questions – Based on “reverse” innovation analysis – Designed to unlock unique insights • Structure is based on a “gated” model • Tested – HP, Agilent, CSC and many start-ups Killer Innovations Workshop www.killerinnovations.com

Slide 18: Tool: Focus

Slide 19: Focus the search New or existing customers Moving into new competitive arenas Innovation in products or Expansion into services new geographies Innovation in value delivery system Improvement in industry structure Killer Innovations Workshop www.killerinnovations.com

Slide 20: Search Areas for Innovation Six degrees of freedom Such as … Developing a new business in an industry within which a Moving into new competitive company has not previously competed or when there is no arenas overlap in customer value proposition Expanding into a new geographic area with high value-added Expansion into new geographies transfer from existing geography or when the activity is new Changing the value proposition, value delivery system, or Improvement in industry structure competitive relationships that improve/change the industry structure or redefine the industry Innovation in value delivery Creating an innovation that redesigns the business system sufficiently system to alter the value proposition Innovation in products or Creating a new product or service, normally in a cocooned services manner Creating a new business by selling existing products/services to New/Existing customers existing or new, unfamiliar customer segment Source: Techtrend Group Killer Innovations Workshop www.killerinnovations.com

Slide 21: Focus on the customer Which are the right segments? YUPPIES Young Urban Professionals YUFFIES Young Urban Failures MOBY/DOBY Mom/Dad Older – Baby Younger WOOFS Well Off Older Folks School Kids with Income + SKIPPIES Purchasing Power “Sandwichers” Adults caught between caring for their children and their older parents Killer Innovations Workshop www.killerinnovations.com

Slide 22: Tool: Ideation

Slide 23: The Current Method …. The typical brainstorming session begins with a simple question …. “Create some new product ideas” “Develop some differentiators for x” …. you get simple answers. Killer Innovations Workshop www.killerinnovations.com

Slide 24: Better Questions = Killer Ideas New or Existing Customers • What emotional, psychological, or status benefit do (could) people derive from using the product? • How can you create a social or group experience with the product? Industry Structure • What are some of the basic assumptions under which the industry operates? • What external jolts have the potential to significantly impact the operational rules of the industry? Product & Services Innovation • Who uses the product because of some benefit we did not foresee? • What regularly used makeshifts can we capture in a product design? Killer Innovations Workshop www.killerinnovations.com

Slide 25: Exploring Beyond the Obvious • Everything that is new is an addition or modification of something that already exists • Based on the answers to the questions, use SCAMPER to generate a wide variety of ideas S Substitute? C Combine? A Adapt? M Modify – Magnify? P Put to other uses? E Eliminate or minify? R Reverse – Rearrange? Killer Innovations Workshop www.killerinnovations.com

Slide 26: Idea Quota Idea quotas force you to actively generate ideas and alternatives • The first 1/3 of the quota will be the easiest • The second 1/3 will typically extensions from first 1/3 • The final 1/3 will be the hardest yet typically contain the kernel of a killer innovation Always fill the quota even if the ideas seem far fetched or outlandish. The best ideas come to those that work at it …. Killer Innovations Workshop www.killerinnovations.com

Slide 27: Characteristics of the Best Killer Ideas • Purpose - the yield of high quality ideas is significantly higher with a clear business purpose and a supportive business sponsor. • Timeliness - the difference between a great idea and a so-so idea is market/technology timing. • Diversity - the pool of contributors needs to be broad, broader than you intuitively think. • Perspective Change - the very best ideas come through individuals looking at things in a different way. • Collaborative Development - environment, where people can comment and build on ideas thereby significantly increasing the overall yield of high impact ideas. Killer Innovations Workshop www.killerinnovations.com

Slide 28: Suspend Disbelief Let’s shelve that for the time being Someone must have already tried it. Who is going to do it? I thought of that a long time ago. I have something better. We can’t afford that. We tried that before. You’ll never get approval. It won’t fit our operation. You’re on the wrong track. It’s against all our combined logic. Don’t rock the boat. Not enough return on investment. The market it not ready yet. It’s great, but . . . . . . It’s not a new concept. Killer Innovations Workshop www.killerinnovations.com

Slide 29: Tool: Rank The Ideas

Slide 30: Idea Criteria: Key Questions Must have a YES to at least one of the following: – Will this idea change the customer experience/expectation? – Will this idea change the competitive landscape/position? – Will this idea change the economic structure of the industry? Must have a YES to the following: – Do we have a contribution to make in this space? – Will this idea generate sufficient margin to the business? For each key question, give a score from 0 to 5. Killer Innovations Workshop www.killerinnovations.com

Slide 31: Idea Criteria: Ability To Execute For the top 10 ideas based on the Key Questions, score each idea from 0 to 5 for the following questions: • Can we get our groups/teams excited? • Will senior management support it? • Do we have the skill/expertise to pull this off? • Can we access the customers preferred channel? You now have a ranked list of your best ideas. Killer Innovations Workshop www.killerinnovations.com

Slide 32: Tool: Execution

Slide 33: Execution = Stage Gate Management M ile s to n e s T im e lin e P ro d u c t P ro p o s a l P h a s e D e fin itio n P h a s e D e v e lo p m e n t P h a s e R e le a s e P h a s e D e p lo y C u s to m e r A g re e m e n t A g re e m e n t o n o n w a n ts D e liv e ra b le s P ro d u c t M a rk e tin g P ro d u c t C oncept M k t. R e q . B u s in e s s C o m m itt P IT P r o je c t W o rk P ro je c t P o te n tia l Im p le m e n - S e le c t 1 s t P r e lim in a ry S a le s F o rc e P ro d u c t P ro je c t Id e a P re s e n ta tio n D e f. & case to C re a tio n D e fin itio n B re a k d o w n P la n P ro b le m ta tio n K ic k o ff b e ta s ite P ro d u c t P re p e r a tio n R e le a s e R e v ie w P ln g C u s to m e r Is s u e X A n a ly s is A nnouncem ent A p p ro v a l S o ftw a re D e v e lo p m e n t S W R e q . D e f. & S W R e q . D e f. & D e ta ile d D e s ig n Code S o ftw a re B e ta B e ta Is s u e s P ro d u c t P ln g - P re lim X P l n g Is s u e X F u n c tio n a l R e v ie w / R e v ie w R e le a s e F ix e d R e le a s e D e fin itio n A p p ro v a l Q A /T e s t Q A /T e s t Q A /T e s t Q A /T e s t P ro d u c t P ro d u c t B e ta R e v is e d P ro d u c t P ro d P la n - R e v ie w o f P la n - T e s t P la n Test T e s tin g T e s t P la n Test T e s tin g P re lim X Req. Is s u e X C o m p le te C o m p le te T ra in in g T ra in in g T ra in in g D e ta ile d P re lim T r a in in g C u s to m e r P la n - P la n - D e fin itio n o f P ackage R eady T r a in in g “The Best” use some P re lim X Is s u e X C o n te n ts R eady D o c u m e n ta tio n D o c . P la n D o c . P la n D e ta ile d 1 s t R e v. P re lim D o c P a rt R e le a s e d from of a Milestone/Stage - P r e lim X - Is s u e X D e fin itio n o f D o c u m e n ts D ocum ent N um ber D o c u m e n ts C o n te n ts R eady P ackage R eady R e le a s e d R eady C u s to m e r S e rv ic e Gate process to S u p p o rt Id e n tify R e v ie w S u p p o rt C u s to m e r S e rv ic e P ro d u c t S u p p o rt C S /P S R e p s Im p l. P la n A p p lic a b le SW Req. Im p l. P la n V e rific a tio n B e g in s P ackage R eady T ra in e d - P r e lim X S td s . - Is s u e X M a rk e tin g C o m m u n ic a tio n s introduce new products M ARCOM M ARCOM P re lim S a le s / S a le s /S u p p o rt P la n - P la n - S u p p o rt M a te ria ls R e a d y P re lim X Is s u e X M a te r ia ls and services R e le a s e C o n tro l R e le a s e R e le a s e B e ta B u ild B e ta R e le a s e P ro d B u ild P ro d u c tio n P la n - P la n - A p p ro ve d R e le a s e P re lim X Is s u e X S a le s S a le s S a le s T a rg e t C o m p e titiv e R e a d y to S e ll C u s to m e r P la n - P la n - C u s to m e r S e llin g S tra te g y A c c e p ta n c e / P re lim X Is s u e X S e llin g P la n - Is s u e X S ta n d a rd iz a tio n O p e ra tio n s O p e r a tio n s O p e ra tio n s O p s - B e ta O ps - Ops - Ops - O ps - 1st O p s - B e ta Ops - O p s - B e ta O p s - P ro d . P la n - P re lim P la n - Is s u e P la n n in g P ro c e d u re T ra in in g T e s tin g C u s to m e r P ro d u c tio n B e ta B ills B ill/R e v R eady X X Doc P la n n in g M tg V e rific a to n B e t a C o o r d in a t o r 's R o le B e ta P r e lim B e ta F ie ld F ie ld F ie ld 1 s t C u s to m e r 1st 1st B e ta C o o r d in a to r 's P la n V e r ific a tio n V e rific a tio n V e rific a tio n B e ta C u s to m e r C u s to m e r R e v ie w P la n - Is s u e X B e ta B e ta B e g in s R e v ie w P la n n in g B e ta B e ta P la n n in g M e e tin g B e g in s Ends M e e tin g G o /N o G o D e c is io n G o /N o G o D e c is io n G o /N o G o D e c is io n G o /N o G o D e c is io n Source: Techtrend Group Killer Innovations Workshop www.killerinnovations.com

Slide 34: Skills: Observation

Slide 35: What do you see? Killer Innovations Workshop www.killerinnovations.com

Slide 36: What do you see? Minimum space which can represent the full alphabet! Look beyond the obvious …. Killer Innovations Workshop www.killerinnovations.com

Slide 37: Observation Skills • Empathic Design (observational design) – In-house visits/recording – In-the-world observations – Trend Safari • Ethnographic Studies/Analysis – Deep study of a “customer” social group • Objective – Discover unspoken needs and wants of the target customer segment Killer Innovations Workshop www.killerinnovations.com

Slide 38: Skills: Changing Perspective

Slide 39: What is half of thirteen? Killer Innovations Workshop www.killerinnovations.com

Slide 40: Half of thirteen 6.5 6 or 7 (rounded) “thir” and “teen” 1 and 3 XII = VII and IIV(split horizontal) . . . How many more can you come up with? Be careful .. Don’t assume the definition of words (e.g. “half”) Killer Innovations Workshop www.killerinnovations.com

Slide 41: Benefits of KI

Slide 42: The benefits of the KI Approach • 360° search for innovations ensures you avoid a blind spot – Six degrees of innovation • Generate higher quality ideas – Killer Questions based on reverse innovation approach – Forces participants to dig deeper for answers • Work on the right ideas – Process to rank the best ideas • Execution management – Gated/Milestone to ensure alignment of funding and execution Killer Innovations Workshop www.killerinnovations.com

Slide 43: Lessons Learned

Slide 44: Lessons Learned • Changing the culture • Metrics • Finding Innovation Champions • Reward failures & successes • Adapt to your organization Killer Innovations Workshop www.killerinnovations.com

Slide 45: Thank you Q&A Killer Innovations Workshop www.killerinnovations.com