Phil McKinney - On Killer Innovation

On Killer Innovation Philip McKinney podcast@killerinnovations.com

The content, information and opinions shared in this presentation are mine and mine along and do not necessarily reflect those of my past, current or future employers. The content is my personal content and is licensed under Creative Commons – Non-Commercial/Attribution. Philip McKinney podcast@killerinnovations.com 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 2

What’s wrong with current approach’s? • 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 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 3

Killer Innovation approach • Focus The Innovation Search Depth is better than breadth for idea quality • Ask the right set of questions Structured questions that drive discovery/insight • Prioritize 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? • Quick Execution Quick idea validation via “fast” prototype (days versus weeks/months) 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 4

Areas of innovation focus Moving into New or new existing competitive customers arenas Innovation in products Expansion into or services new geographies Innovation in value delivery Improvement system in industry structure 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 5

Better Questions=Killer Ideas New or Existing Customers 4What emotional, psychological, or status benefit do (could) people derive from using the product? 4How can you create a social or group experience with the product? Industry Structure 4What are some of the basic assumptions under which the industry operates? 4What external jolts have the potential to significantly impact the operational rules of the industry? Product & Services Innovation 4Who uses the product because of some benefit we did not foresee? 4What regularly used makeshifts can we capture in a product design? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 6

How to Generate 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. 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 7

Execution = Stage Gate Management Milestones Timeline Product Proposal Phase Definition Phase Development Phase Release Phase Deploy Customer Agreement Agreement on on wants Deliverables Product Marketing Product Concept Mkt. Req. Business Committ PIT Project W ork Project Potential Implemen- Select 1st Preliminary Sales Force Product Project Idea Presentation Def. & case to Creation Definition Breakdown Plan Problem tation Kickoff beta site Product Preperation Release Review Plng Customer Issue X Analysis Announcement Approval Software Development SW Req. Def. & SW Req. Def. & Detailed Design Code Software Beta Beta Issues Product Plng - Prelim X Plng Issue X Functional Review/ Review Release Fixed Release Definition Approval QA/Test QA/Test QA/Test QA/Test Product Product Beta Revised Product Prod Plan - Review of Plan - Test Plan Test Testing Test Plan Test Testing Prelim X Req. Issue X Complete Complete Training Training Training Detailed Prelim Training Customer Plan - Plan - Definition of Package Ready Training Prelim X Issue X Contents Ready Documentation Doc. Plan Doc. Plan Detailed 1st Rev. Prelim Doc Part Released - Prelim X - Issue X Definition of Documents Document Number Documents “The Best” use some from Contents Ready Package Ready Released Ready “The Best” use some from Customer Service of aaMilestone/Stage Gate Support Identify Review Support Customer Service Product Support CS/PS Reps of Milestone/Stage Gate Impl. Plan Applicable SW Req. Impl. Plan Verification Begins Package Ready Trained - Prelim X Stds. - Issue X process to introduce new Marketing Communications process to introduce new MARCOM MARCOM Prelim Sales/ Sales/Support products and services Plan - Plan - Support Materials Ready products and services Prelim X Issue X Materials Release Control Release Release Beta Build Beta Release Prod Build Production Plan - Plan - Approved Release Prelim X Issue X Sales Sales Sales Target Competitive Ready to Sell Customer Plan - Plan - Customer Selling Strategy Acceptance/ Prelim X Issue X Selling Plan - Issue X Standardization Operations Operations Operations Ops - Beta Ops - Ops - Ops - Ops - 1st Ops - Beta Ops - Ops - Beta Ops - Prod. Plan - Prelim Plan - Issue Planning Procedure Training Testing Customer Production Beta Bills Bill/Rev Ready X X Doc Planning Mtg Verificaton Beta Coordinator's Role Beta Prelim Beta Field Field Field 1st Customer 1st 1st Beta Coordinator's Plan Verification Verification Verification Beta Customer Customer Review Plan - Issue X Beta Beta Begins Review Planning Beta Beta Planning Meeting Begins Ends Meeting Go/No Go Decision Go/No Go Decision Go/No Go Decision Go/No Go Decision Source: Techtrend Group 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 8

Let’s Warm Up 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 9

What do you see? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 10

What is half of thirteen? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 11

Killer Innovation Workshop 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 12

Areas of innovation focus 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 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 13

WOW!! This is so COOL!! Experience Economy 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 14

The Experience Model ion Experience t iza om st Cu Services on ti Goods iza t di mo m Co Commodities 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 15

What do people not like about the process of purchasing my product? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 16

What service levels could I offer if I controlled the entire experience chain? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 17

I’m not going to pay for that! Value Based Pricing 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 18

Value By The Pound Intel Processor $42,893.00 Hermes Scarf $1,964.29 “Shrek”/DVD $874.75 Mercedes-Benz $18.98 Hot Rolled Steel $0.19 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 19

What would it take to make my product at half the cost? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 20

Could I offer my product at 5 times the cost if it had greater feature/function? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 21

We are just like them - just better! BestPractices ≠ BestStrategy 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 22

“Me To” Companies Late 1970’s Late 1990’s Bottled water brands 16 50 Milk types 4 19 Magazine titles 339 790 Radio stations 7,038 12,458 New book titles 40,530 77,446 Replication of market concepts lead to a lack of differentiation and confused customers. The result is an industry where commodity strategies (e.g. win market share with lower prices) take over. 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 23

Brand Extension Late 1970’s Late 1990’s McDonalds items 13 43 Levi’s jean styles 41 70 Frito-Lay chip varieties 10 78 Pop-Tarts 3 29 KFC menu items 7 14 Brand extension is not to be confused with true innovation. In many cases, customers only care about the one or two items within a brand they purchase. Brand extension normally doesn’t increase the size of the market, but instead simply provides choices to existing customers. 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 24

Types of Differentiation - Preference - Owning an Attribute - Getting the herd to follow - Must be unique - Look at opposite attributes (e.g. - Production small against a larger competitor) - Ingredients - Products/system innovations - Owning a Category (Leadership) - Sales leadership - Be the Latest - Technology leadership - New - Performance leadership - Make yourself obsolete - Heritage - Hotness - A substitute for leadership - Sales - Search the history - Industry ratings - Industry Ratings - Market Specialty - NOT all things to all people - Must stay specialized 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 25

Who uses my product because of some benefit I did not foresee? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 26

How can I capitalize on pop culture in my product offering? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 27

So ... How many ideas did you come up with? 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 28

Contact: Podcast: www.killerinnovations.com Blog: www.philmckinney.com Email: podcast@killerinnovations.com 11/23/2006 Creative Commons - Non-Commercial/Attribution by Phil McKinney 29

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Phil McKinney - On Killer Innovation

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