Innovation moves strategy
Module 11 Innovation Moves Strategy Page  ©2008 Balanced Scorecard Collaborative, a Palladium company • thepalladiumgroup....
Discussion Questions <ul><li>Does your strategy consider innovation? </li></ul><ul><li>Or </li></ul><ul><li>Is your strate...
Innovation vs Strategy  <ul><li>Within five years if you're in the same business you are in now, you are going to be out o...
Triggers of strategy change at Marriot Vacation Club International Innovation should be a continual and  progressive proce...
AS IS SITUATION <ul><li>The key success factor is being able to create new market spaces where there is no existing compet...
<ul><li>Strategy Plan; </li></ul><ul><li>Many hypothesis (answers) to questions </li></ul><ul><li>Questions that have no a...
Innovation vs Strategy  Water, from the Greek means new life, emotion, intuition, rebirth and force VIDEO BE WATER MY FRIE...
Execution Premium Process DEFINE + EXECUTE + INNOVATE Innovation vs Strategy
Build through Co-Creation Start to ripple Create Movement Keep the wave rolling Execute Innovation Break the rules Define ...
40% of managers do not determine where to focus innovation efforts. Don't just blow with the wind Define the opportunity
COSTUMER JOURNEY ANALYSIS Get to know the customer's experience and all the processes that relate to the service VALUE CHA...
MARKET TRENDS Review market trends and the industry COMPANY CUSTOMER Define the opportunity  XXXXX XXXXX XXXXX XXXXX XXXXX...
The role of the leader Establish a sense of urgency; The first thing our leader did was to remark the importance of change...
Define the opportunity; case study. Metro de Madrid <ul><li>Strategy Map </li></ul><ul><li>Projects </li></ul><ul><li>10 s...
Define the opportunity; case study. Metro de Madrid Public Transport 1. Advertisement & Public Relations 2. Subscription A...
Define the opportunity; case study. Metro de Madrid 4 MAIN QUESTIONS What next when no tickets and no conductors are neede...
Build Through Co-Creation Three quarters of the executives consider customers, employees and affiliates as an important so...
Discussion Questions <ul><li>Does your executive committee have many innovate ideas? </li></ul><ul><li>Guess why? </li></u...
4 COMBINING and DEVELOPMENT OF IDEAS 2 GROUPS  EMPLOYEES AND  NON - EMPLOYEES GENERATION OF IDEAS  STORAGE OF IDEAS PORTFO...
Build Through Co-Creation Tools; Ideation ECC Lateral thinking Anthropology Ask about how they use the product, their prob...
Number of Red Dots >=3 Pilot Station potential Areas Attention/Information Initiative potential Areas Entertainment Initia...
Build Through Co-Creation Case Study: Metro de Madrid. Some ideas
Build Through Co-Creation;  COMBINE AND DEVELOP THE IDEAS USING IMAGINATION 1. iPod “music access and listening” experienc...
<ul><li>Key success factors for the Business Plan; </li></ul><ul><ul><li>IMAGINATION; visualize the ideas </li></ul></ul><...
Execute Innovation Only 4% of the R&D projects obtain the expected results (BusinessWeek) Break the rules
You can have an excellent idea and still be stuck in the same jam
Once the organisation has evaluated the impact of the innovation initiatives on the strategy, it's time to EXECUTE! Impact...
20% 80% Execute Innovation FOCUS Strategy Map Visual representation of the strategic objectives and their interactions ACT...
<ul><li>After 3 years “create a differential experience” become a strategic theme in the map </li></ul>Execute Innovation;...
‘ Suddenly they start running, but no matter how hard Alice runs, they stay in the same place. The queen explains that in ...
Create Movement 64% of the executives say that they have enough of the right kind of people to innovate, however almost 70...
Create Movement. New functions for the OSM <ul><li>ROLE OF THE CHIEF MARKETING OFFICER (P.Kotler) </li></ul><ul><li>Repres...
INTERESTING FOR STRATEGY MANAGEMENT? Idea Management tools facilitate continuous Co-creation; structure and process determ...
City's Observatory Functions Internal Provide local government with the necessary information to plan and manage their ser...
Information Systems Governance Management Evaluation In accordance with the City Model In accordance with the citizen's ne...
A co-created strategy will deliver new mutual value for a company and its customers NEW ATRIBUTE BEFORE NEW MODEL Planning...
Implementation (Operations) Management Definition SCOPE PARTICIPATION Board of Directors Senior Management All Employees C...
<ul><li>Innovation movement model video </li></ul>
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Innovation moves strategy. ideas normally come bottom up, but you need a process to link them with the strategy

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  • Developing Strategy with the Balanced Scorecard © 2008 Balanced Scorecard Collaborative, a Palladium company Developing_0108 Page
  • Innovation Moves Strategy V2. No Slide Photos

    1. 1. Innovation moves strategy
    2. 2. Module 11 Innovation Moves Strategy Page ©2008 Balanced Scorecard Collaborative, a Palladium company • thepalladiumgroup.com Innovation vs Strategy 0.1 Define the opportunity 0.2 Build through co-creation 0.3 Execute innovation 0.4 Create the movement 0.5
    3. 3. Discussion Questions <ul><li>Does your strategy consider innovation? </li></ul><ul><li>Or </li></ul><ul><li>Is your strategy innovative? </li></ul>
    4. 4. Innovation vs Strategy <ul><li>Within five years if you're in the same business you are in now, you are going to be out of business (Philip Kotler) </li></ul><ul><li>Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value. (Michael Porter) </li></ul><ul><li>A business has two-and only two-basic functions: marketing and innovation. Marketing and innovation produce results. All the rest are costs (Peter Drucker) </li></ul><ul><li>Once you have defined your strategy, you should start thinking in the next generation strategy (Norton) </li></ul>
    5. 5. Triggers of strategy change at Marriot Vacation Club International Innovation should be a continual and progressive process in every organization Transformative strategy (high innovation) Incremental strategy (execution) Degree of Change Encompassed by Strategy Ideal transformative strategy curve Transformative strategy (high innovation) Innovation vs Strategy
    6. 6. AS IS SITUATION <ul><li>The key success factor is being able to create new market spaces where there is no existing competence. Companies that find blue ocean are 2-3 times more profitable than the ones that are in red oceans </li></ul>TO BE Innovation should progressively drive companies towards Blue Oceans Innovation vs Strategy COMPETITION New Attributes
    7. 7. <ul><li>Strategy Plan; </li></ul><ul><li>Many hypothesis (answers) to questions </li></ul><ul><li>Questions that have no answer yet </li></ul>Source; Jose Luis Larrea Innovation vs Strategy Cycle of innovation Questions Answers
    8. 8. Innovation vs Strategy Water, from the Greek means new life, emotion, intuition, rebirth and force VIDEO BE WATER MY FRIEND <ul><li>STEP ONE; do you have an enough broad mission? Whose mission? Improve quality of life All information at one click We want to be your energy </li></ul>
    9. 9. Execution Premium Process DEFINE + EXECUTE + INNOVATE Innovation vs Strategy
    10. 10. Build through Co-Creation Start to ripple Create Movement Keep the wave rolling Execute Innovation Break the rules Define the Opportunity- Don't blow with the wind 40% of managers do not determine where to focus innovation efforts. Three quarters of the executives consider customers, employees and affiliates as an important source of new ideas, but in most organizations there is no central governance to manage innovation. Only 4% of the R&D projects obtain the expected results (BusinessWeek). The problem is R&D in normally constrained under a conservative strategy 64% of the executives say that they have enough of the right kind of people to innovate, however almost 70% of them considers this talent is not being used due to lack of processes or of an adequate culture Innovation vs Strategy
    11. 11. 40% of managers do not determine where to focus innovation efforts. Don't just blow with the wind Define the opportunity
    12. 12. COSTUMER JOURNEY ANALYSIS Get to know the customer's experience and all the processes that relate to the service VALUE CHAIN ANALYSIS Understand the current situation and the processes in the company. LOOK BEYOND PRODUCT AND SERVICE OFFERINGS Define the opportunity XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
    13. 13. MARKET TRENDS Review market trends and the industry COMPANY CUSTOMER Define the opportunity XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
    14. 14. The role of the leader Establish a sense of urgency; The first thing our leader did was to remark the importance of change STRATEGIC COMPLEXITY 2008 2005 2000 TIME To be competitive To be effective To be efficient Integration - intermodal Geographic dispersion Extension Liberalization <ul><li>CHALLENGES </li></ul><ul><ul><li>Manage growth </li></ul></ul><ul><ul><li>Customer orientation </li></ul></ul><ul><ul><li>Win concessions </li></ul></ul><ul><ul><li>External business </li></ul></ul><ul><ul><li>Cultural evolution </li></ul></ul>Greater customer demand Environmental concerns Define the opportunity; case study. Metro de Madrid
    15. 15. Define the opportunity; case study. Metro de Madrid <ul><li>Strategy Map </li></ul><ul><li>Projects </li></ul><ul><li>10 strategic projects </li></ul><ul><li>9 with many questions,…,but also many answers </li></ul><ul><li>1 just with questions,...., ACTIVA </li></ul>Typically, roughly 80% of an Organization should be focus on executing strategy, 20% need to be focus in evolving it
    16. 16. Define the opportunity; case study. Metro de Madrid Public Transport 1. Advertisement & Public Relations 2. Subscription Administration / Consortium 4.Entrance Hall & In-Station Stores & Turn-tickets 6. Navigation & Information Support 7. Providing Information & Support 8. Navigation & Other information Support 1. Choosing a daily transport 2. Applying for a card for season ticket 3. Buying Season Ticket 4.Getting Inside Public Transport Space 5. Public Transport Train 6. Train Change 7. Problems / Breakdown 8. Getting Outside of Public Transport Space Customer of Public Transport 5. Vehicles (Conductor) 3.Selling Points
    17. 17. Define the opportunity; case study. Metro de Madrid 4 MAIN QUESTIONS What next when no tickets and no conductors are needed?, will Metro have employees? Should Metro care for better use of citizen time? Should Metro provide further information from the surface? 1. Advertisement & Public Relations 2. Subscription Administration / Consortium 4.Entrance Hall & In-Station Stores & Turn-tickets 6. Navigation & Information Support 7. Providing Information & Support 8. Navigation & Other information Support 1. Choosing a daily transport 2. Applying for a card for season ticket 3. Buying Season Ticket 4.Getting Inside Public Transport Space 5. Public Transport Train 6. Train Change 7. Problems / Breakdown 8. Getting Outside of Public Transport Space 5. Vehicles (Conductor) 3.Selling Points
    18. 18. Build Through Co-Creation Three quarters of the executives consider customers, employees and affiliates as an important source of new ideas, but in most organizations there is no central governance to manage innovation. Start to ripple
    19. 19. Discussion Questions <ul><li>Does your executive committee have many innovate ideas? </li></ul><ul><li>Guess why? </li></ul><ul><li>Norton; There is a bottom-up innovation process, which involves employees and customers participating in the collective building of the next generation strategy. </li></ul>
    20. 20. 4 COMBINING and DEVELOPMENT OF IDEAS 2 GROUPS EMPLOYEES AND NON - EMPLOYEES GENERATION OF IDEAS STORAGE OF IDEAS PORTFOLIO OF INITIATIVES 5 CUSTOMERS, AND NON-CUSTOMERS AFFILIATES, UNIVERSITIES,ETC.. 3 CO-CREATION 1 2 3 4 5 Key success factors Leadership and commitment around opportunity areas Common language and philosophy 1 6 Co-create. Interaction generates creativity Combine and develop ideas using imagination Right resources to the right initiatives Coordination and communication Build Through Co-Creation
    21. 21. Build Through Co-Creation Tools; Ideation ECC Lateral thinking Anthropology Ask about how they use the product, their problems, their dreams, encourage or challenge your customers to change or improve. (i.e; restaurant) OTHER COMPANY CUSTOMER SUPPLIER REGULATOR CONSULTANT
    22. 22. Number of Red Dots >=3 Pilot Station potential Areas Attention/Information Initiative potential Areas Entertainment Initiatives potential Areas Build Through Co-Creation Case Study: Metro de Madrid <ul><li>GROUP IDEAS; 4 NEW POSSIBLE BUSSINES </li></ul><ul><li>Media channel = 1.000.000 clients for 1 hour. </li></ul><ul><li>School / Library </li></ul><ul><li>Retail; Metro-shop </li></ul><ul><li>Social & cultural Activity, Entertainment </li></ul><ul><li>NEW ATENTION / INFORMATION MODEL </li></ul>152 4 26 25 12 19 26 32 8 Total 9 0 1 1 1 1 1 4 0 SPEED 7 0 1 2 0 0 1 3 0 SECURITY 10 0 0 2 2 2 2 2 0 COMFORT 27 0 5 5 3 4 5 5 0 ENVIRONMENT/CONSERVATION 41 1 7 6 3 6 6 9 3 INFORMATION 30 2 5 4 2 2 6 5 4 ATTENTION 12 0 4 2 0 1 2 3 0 ENTERTAINMENT 16 1 3 3 1 3 3 1 1 OTHER SERVICES Total EXIT to DESTINY PLATFORM to EXIT TRANSFER TRAIN PLATFORM TURNSTILE to PLATFORM ACCESS To TURNSTILE ORIGIN to ACCESS
    23. 23. Build Through Co-Creation Case Study: Metro de Madrid. Some ideas
    24. 24. Build Through Co-Creation; COMBINE AND DEVELOP THE IDEAS USING IMAGINATION 1. iPod “music access and listening” experience 2. iTunes “music management and download” experience 3. iTunes “music browsing” experience 4. iMix sharing playlists experience Go beyond product and services, Create new experiences What is it with the i-pod?
    25. 25. <ul><li>Key success factors for the Business Plan; </li></ul><ul><ul><li>IMAGINATION; visualize the ideas </li></ul></ul><ul><ul><li>HOMOGENIZATION; The Strategy Map defines the KPI´s that will be estimated in every business plan. </li></ul></ul>STRATEX; Expenditure for strategic and innovative initiatives Build Through Co-Creation; RIGHT RESOURCES FOR THE RIGHT INITIATIVES Strategic impact on FUTURE STRATEGY!!!...TO BE value proposition - Time to results + - Strategic Impact + QUICK WINS NEEDS TEST AND VALIDATION STOP THESE INITIATIVES OR TRANSFER TO THE CORRESPONDING AREA Effort ( Investment level, human capital, change management, etc.) + START NOW
    26. 26. Execute Innovation Only 4% of the R&D projects obtain the expected results (BusinessWeek) Break the rules
    27. 27. You can have an excellent idea and still be stuck in the same jam
    28. 28. Once the organisation has evaluated the impact of the innovation initiatives on the strategy, it's time to EXECUTE! Impact on the strategy Execute Innovation Initiatives generating a differential costumer experience Initiatives improving processes radically STRATEGY INTEGRATION
    29. 29. 20% 80% Execute Innovation FOCUS Strategy Map Visual representation of the strategic objectives and their interactions ACTION Initiatives (Incorporate Innovative Initiatives) Key action programs to reach objectives Economic value added Asset productivity Be the lowest cost producer Pick the winners globally Create new market demand Price performance Partnering Integrate and align resources Sales and customer development Focused technology development Perfect manufacturing People and change management Strategic competencies and skills Individual and team performance Customer sensitive culture Perspectiva Financial Customer Internal Learning & Growth Objetivos Procurement redesign Emerging markets strategy Partner with the winners Res sec and W&L and hurricane Quality needs identification Quality proc for root cause elim Reformulation SV commercialization/facilities Cust complaint tracking process Side lam VP/partnerships IT enhancement in value chain SCOP implementation ABM Develop/cascade BSC Communicate vision Asia reformation facilities IT strategy alignment Scrap rework proc improvement Yield improvement program Facilities upgrade ISO 9002 NA resin mfg cert Expert systems Rewards dev/implementation Global communications Training strategic skills Iniciativas FOLLOW UP Balanced Scorecards / Indicators / Goals Key strategy success factors and definition of the anticipated performance results
    30. 30. <ul><li>After 3 years “create a differential experience” become a strategic theme in the map </li></ul>Execute Innovation; case study; Metro de Madrid From 1 objective and 1 project, to 1 strategic theme with many projects Customer's service + - Basic Service Extended Service IMAGE CUSTOMER´S ACQUISITION AND LOYALTY SERVICES Journey phases from origin to destiny TECHNOLOGY Metro vuela algo Muy tuyo PERSONAS Customer Care Culture Global Attention Culture Commercial Culture
    31. 31. ‘ Suddenly they start running, but no matter how hard Alice runs, they stay in the same place. The queen explains that in this country you have to run at least twice as fast to get somewhere else…’ Alice in Wonderland Execute Innovation; case study; Metro de Madrid Execution Premium BUSINESS RESULTS: Sustained customer satisfaction > 70%. Growth of the public transportation share within Madrid: from 32% to 40%. Employees productivity from 43 agents per million Kms x Car in 2001 to 37 in 2004. Improved safety ratings (even after 11-M terrorist attacks). OTHER BENEFITS: Developed a culture of “measure” Begin to understand customer’s experience Improved cross-unit’s communication
    32. 32. Create Movement 64% of the executives say that they have enough of the right kind of people to innovate, however almost 70% of them considers this talent is not being used due to lack of processes or of an adequate culture Keep the wave rolling
    33. 33. Create Movement. New functions for the OSM <ul><li>ROLE OF THE CHIEF MARKETING OFFICER (P.Kotler) </li></ul><ul><li>Represent the voice of the customer </li></ul><ul><li>Gather market insights to help develop new products and services </li></ul><ul><li>Be the steward of the corporate brand </li></ul><ul><li>Upgrade marketing technology and skills </li></ul><ul><li>Bring insight into the corporate portfolio and synergies </li></ul><ul><li>Measure and account for marketing financial performance </li></ul><ul><li>ROLE OF OSM REGARDING INNOVATION OR DIFERENCIATION </li></ul><ul><li>Identify strategic challenges…do the right questions </li></ul><ul><li>Innovation Process coordination and training in the methodologies of generating and developing ideas (could be) </li></ul><ul><li>Enable strategy driven decision making using the most informative and relevant information </li></ul><ul><li>Ensure effective implementation of initiatives through efficient allocation of resources </li></ul>
    34. 34. INTERESTING FOR STRATEGY MANAGEMENT? Idea Management tools facilitate continuous Co-creation; structure and process determine success
    35. 35. City's Observatory Functions Internal Provide local government with the necessary information to plan and manage their services accordingly External Keep citizens informed of the activities of the local government and the perceived level of satisfaction for the services offered by the administration Create Movement. Case study Ayuntamiento de Madrid
    36. 36. Information Systems Governance Management Evaluation In accordance with the City Model In accordance with the citizen's needs INTERNAL PERSPECTIVE EXTERNAL PERSPECTIVE Operation Management System Budget Management System Complaint and Suggestion System Service Form System Citizen's Perception Evaluation System Strategy Management System Budget Management System Create Movement. Case study Ayuntamiento de Madrid
    37. 37. A co-created strategy will deliver new mutual value for a company and its customers NEW ATRIBUTE BEFORE NEW MODEL Planning Number of reports Consistency Reliability Innovation Learning Motivation Execution Participation Customer Orient. Co-creation the strategy is part of the experience for employees and customers, and it improves the EXECUTION PREMIUM NEW MODEL Strategy management value Proposition Create Movement. New model for strategic development
    38. 38. Implementation (Operations) Management Definition SCOPE PARTICIPATION Board of Directors Senior Management All Employees Customers / Affiliates STRATEGY MANAGEMENT 2.0 Management is about having a continuous conversation with the people around you (Gary Hamel) Create Movement. New model for strategic development Strategy Management Evolution
    39. 39. <ul><li>Innovation movement model video </li></ul>
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