Innovation in the Downturn
Afrivate
26 March 2009

Looking at the Landscape

How do you expect the economyto look at end of
1st quarter 2009?
*Compared to September 2008
McKinsey Global Survey : Economic Condition Snapshot (February 2009)

How active shouldgovernment’srole be in the
economy, since the startof the downturn.
McKinsey Global Survey : Economic Condition Snapshot (February 2009)

Where shouldgovernmentfocus their efforts ?
McKinsey Global Survey : Economic Condition Snapshot (February 2009)

What stepshas your company taken to face the
downturn?
McKinsey Global Survey : Economic Condition Snapshot (February 2009)

What is Innovation?

Idea to Tangible Exploit to Commercial Success
New Idea Invention Innovation
Invention Process
Innovation Process
Innovation is therefore much morethan invention
Need to successfullycommercialize the invention
Trott2005

Why is Innovation important?

productInnovation Funnel
William B. Rouse, “Improvement & Innovation Improvement & Innovation” 2007

processInnovation Funnel
Simulation
Modeling phase
Debriefing
session
workshop Next
simulations
Idea Focussed
s process
development
projects
Duration ca 3 months

Innovation funnel across extended enterprise

The Competitiveness Challenge
Competitive Enterprise
Continuous Improvement
Green Fields Innovation
Product
Incremental Innovation
Innovation
Radical Innovation
Operate
Optimise
Process
Innovation
Technology
Innovation
Blending Innovation and Operation
Innovate
Operate
Innovate

The Innovation Capability Dilemma
Innovation Capability Construct
Innovation
Process
Knowledge &
Competency
Organisation
al Support
Organisation
Strategy & Function & Data & Customer &
&
Objectives Processes Information Suppliers
Management
Organisational Construct
Innovate
Operate ICMA 1 2 Innovate 4
3 5
A More Competitive Enterprise

Innovation has finallyArrived

Currently,
66%
of 3000 global executives considerInnovation top 3 priority
Less than
50% of executives feel ROIis sufficient
Source: BCG Senior management innovation survey 2008

Currently,
• Understand the customer
Strengths | • Executive LevelSupport
• Speed of delivery
• Discipline of Delivery
| Weakness
• Managing Risk
• Partnering with Others
• Earmarking sufficient funds
Source: BCG Senior management innovation survey 2008

Types of Innovation
• 3 Life Cycles
– ProductLife Cycle
– TechnologyLife Cycle
– EnterpriseLife Cycle
• Dealing with Darwin – 15 Types of Innovation

Geoffrey Moore’s 15 Innovation Categories

The Economic Good Times Scenario
Improvement Programmes
Infrastructure Analysis
Innovation Process
Re-assessment
Assessment
Knowledge & Competency
Improving Innovation Capability
Organisational Support
Identify opportunities,
Deploy, refine,
generate ideas and Portfolio
Executing Innovation Initiatives formalise and exploit
concepts, and Management
opportunities
determine feasibility
Continuous monitoring and improvement of operations
Operations
Generating revenues and funding innovation

The Economic Bad Times Scenario
Improvement Programmes
Infrastructure Analysis
Innovation Process
Re-assessment
Assessment
Knowledge & Competency
Improving Innovation Capability
Organisational Support
Identify opportunities,
Deploy, refine,
generate ideas and Portfolio
Executing Innovation Initiatives formalise and exploit
concepts, and Management
opportunities
determine feasibility
Continuous monitoring and improvement of operations
Operations
Generating revenues and funding innovation

How innovation fit are you?

Innovation Maturity Fitness?
• 5 Levels of Innovation Maturity Fitness
Synchronisation of activities and resources
Outputs provide sustained competitive advantage
Synergised
5
Innovation
Aligned
4
Innovation
Integrated and aligned activities and resources
Outputs are a source of consistent differentiation
Supported
3
Innovation
Practices, procedures and tools formalised
Consistent outputs maintain market share
Defined
2
Innovation
Need to innovate identified and defined
Outputs are inconsistent, but traceable
Ad-Hoc
1
Innovation
Consumed with day-to-day operations
Outputs are inconsistent and unpredictable

What to do in the Downturn?

Ad-Hoc
If you are at 1 maturity
Innovation
• No way of rapidrecovery
– Get expertise’s help in

Supported
If you are at 3 maturity
Innovation
• Obtain partialhelp from experts

Synergised
If you are at 5 maturity
Innovation
• Adjust your ideafilter
• Harvest ideas to solve problemsrelatedto the downturn
– How to cut costs
– Hire better people for less
• Adjustyour feasibility filters
• Go to portfolio and re-align
– Reposition for when market turns

If you are at ? maturity
unknown
• Keep expertise
• Cut costs
• Negotiate with suppliers
• Find shortest route to new ways to do business
– Different products
– Cheaper processes
– New markets

Innovation Capability Assessment
•Assess to determine maturity level,
• Identifies best innovation improvement activities

Indutech’s innovation improvement lifecycle
Business Unit C
Business Unit B
Business Unit A
Improving Innovation Capabilities
Initial Infrastructure Improvement Activities Measure,
Assessment Analysis Optimise, Assess
(Wednesday Fitness)
Innovation Innovation
PD, ED, IM, etc
Innovation Process Improvement Roadmap(s)
Processes
Process Process
Knowledge & Knowledge &
IKN, BI, etc Knowledge & Competency Improvement Roadmap(s)
Competency Competency
Organisational Organisational Support Organisational
Strat, Culture,
Org struct, etc.
Support Improvement Roadmap(s) Support
Specific Innovation
(Saturday Game)
Implementations
Identifying
Immediate Pains
Identifying Identifying Portfo
Analysis/ Measure
Current Prototype Concept Concept Develop &
lio Exploit
Idea &Optimis
Innovation Innovation Definition Feasibility Implement
Mngm
Generation e
Projects Project(s) ent
Identifying
Immediate
Opportunities

Thank you