[En] MIB Dauphine - ICT3

2information and communicationstechnology (ICT) products andservicesthe marketing of technological innovationday threeParis, 2011 some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec

copyright notice •This presentation is made available to all the registered readers of visionarymarketing.com •This work is licensed under the Creative Commons Attribution-Noncommercial-Share Alike 3.0 License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc- sa/3.0/ or send a letter to Creative Commons, 543 Howard Street, 5th Floor, San Francisco, California, 94105, USA. •You are allowed to use one or all the slides/images contained within this presentation provided you quote the author and the source of this information (http://visionarymarketing.com) •You are also welcome to recommend this website to your friends and colleagues and to invite them to register to our free newsletter (http://visionarymarketing.com/listbot.html) some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

my personal research online… since 1995 • http://visionarymarketing.com • http://visionarymarketing.wordpress.com a French Web 2.0 website some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

agenda module timing topic one 3 hours ICT marketing and innovation, main characteristics and principles Two 3 hours innovation management: towards wikinomics Three 3 hours online marketing innovationmaterial will be made available online at http://visionarymarketing.com/mibdauphine some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

module twoinnovation managementParis, 2011 some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec

the web: a source of inspiration for economics? “While the old Web was about Web sites, clicks, and “eyeballs,” the new Web is about communities, participation and peering.” Wikinomics, Don Tapscott & Anthony D. Williams http://www.wikinomics.com/ some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

wikinomics: towards mass collaboration cbs news •Don Tapscott on Wikinomics (7:45 min.) •2007, abc news •local version click here some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

module two agenda • part one: what is innovation management? • part two: the organisational factor; a CAA survey • part three: (some) classic innovation traps and the myths of innovation • part four: towards mass collaboration? some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

module two – part onewhat is innovation management?Paris, 2011 some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec

recap •technology not sufficient •clients don‟t always/seldom have requirements •researchers cannot expect everything from marketing •product development = major effort •marketing = major effort too •innovation is a source of trouble before profit some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

What is innovation about? "A lot of people think that coming up with an idea is the key when it comes to innovation. It‟s not. The idea is important. But ideas are cheap. You have to come up with a lot of ideas and then pick the right one, the one on which you will focus" Kevin O‟Connor, The Map of Innovation € No idea exists until it has been actually implemented some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

reminder •“creativity is the generation of new ideas. innovation is the implementation of creative ideas” jeffrey baumgartner http://jpb.com LEADING EDGE VS BLEEDING EDGE •source: •http://www.strategic- innovation.dk/Engelsk/Consult.html some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

so, do we need innovation? http://bit.ly/innovatecrisis (source PIMS, profit impact of marketing strategy) some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

innovation requires more than one ingredient organisation marketing technology some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

expect similar costs on both sides technical research and intelligence Marketing investment Market development Product development Needs prototype Product prototype 100 K€ 70 to 100 K€ source: Paul Millier some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

is innovation generating value? •most innovative companies (1) grow margins faster than average >average growth worth 3.4% for top 25 innovators vs. 0.4% for S&P 1200 global stock index) •generate more value than average >growth of market capitalisation: 14.3% vs. 11.1% (1) : source Business Week, “The world‟s most innovative companies”, April 24, 2006 ** Based on fewer than 10 years of data some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

2006 – 2011 comparison ** Based on fewer than 10 years of data some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

OK, but what kind of innovation are we talking about? internet digital banking photography major major radical impact of on end-user/client innovation innovation behaviour incremental strategic innovation innovation minor lcd tv abs enhances destroys screens Source : "Fast second", Paul A. Geroski et Constantinos C. Markides, Jossey- Bass, 2005 http://media.wiley.com/product_data/excerpt/45/0787971 effect on established firms‟ competencies 5/0787971545.pdf and complementary assets some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

theoretically: the innovation machine Source: http://www.jpb.com (Jeffrey Baumgartner) some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

ideation process challenge initial ideas, correct, t ransform, repla ce, … Idea generation phase short-listing phase prioritisationinitial out-of- phasethe-box ideas 10 ideas 4-5 prioritised 2250+by Orange approx. initiatives approx. ideas(suggestions) add new ideas 3 phases before moving into project phase ideation process should be refined with client some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec

reality: internal marketing burning a lot of energy guess what happens in the middle? project product/service debates, nih, internal politics, project mismanagement … some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

common internal innovation process INITIALISATION • business intelligence • internal discussions OPTIMISME [La technologie va résoudre tous les problèmes] 1 2 PIONEERING CONFLICTING INTERESTS 3 neither good or bad OR ACKNOWLEGEMENT discovery of innovation attempts at REALISM suppressing innovation PHASE OR hostility, ‘Luddites’, rejection, scepticism innovation & users mature innovative initiative innovation killed technology becomes useful STEALING INNOVATOR’S THUNDER COMPETITION PHASE Coopetition competing initiatives some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

technology digestion phases technology digestion phases technological breakthrough HELL changes are obvious, markets are technology is bad and disrupted (e.g. online travel, digital one has to be protected photography, mai order, vs e-commerce) A1 from its consequences C1 B technology improves IRL world, and improves existing lines grey area ‘digestion’ may take up to 10 years or even C2 of business (e.g. online banking, e- commerce, e-administration (tax more collection)). HEAVEN technology is bound to be C3 A2 good - our lives will be changed for the better technological changes don’t get implemented, and new technology is abandoned, recycled, or stays in a niche (e.g. first gen tablet PCs, voice recognition). +/- digestion results some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

classical stage-gate innovation process (cooper) official website for Cooper‟s stage gate process http://www.stage-gate.com/ some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

the whirlwind model (Millier and Palmer)adapted to exploratory project exit exit exit strategy strategy strategy assumptions assumptions assumptions Possible success I II III field test field test field test criticism criticism criticism feed-back feed-back feed-back source: Millier and Palmer some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

part one - what have we learnt? • innovation management is when the rubber meets the road • but overlooking it  missed opportunities (mid-long term) • innovation management is a hard nut to crack … • classic cooper cycle: nice check list but not very practical • internal marketing a must and … • wikinomics is changing the rules (share vs hide/outside in innovation) some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

module two – part twothe organisational factor: can innovationlead to profitability? (CAA survey: )Paris, 2011 some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec

sample of surveyed companies company names vertical company names vertical air france transport janssen cilag pharmaceutics air liquide chemical industry lesieur agribusiness apple multimedia loreal cosmetics arcelor steel industry merck chemicals chemical industry arianespace aeronautics nestlé agribusiness ascometal manufacturing procter et gamble france hygiene bnp bddf bdm banking psa automotive bouygues telecom telecom renault automotive cegetel telecom Rhodia chemical industry danone agribusiness royal canin pet food Edf utility saint-gobain manufacturing essilor international manufacturing schneider electric manufacturing Automotive faurecia industry seb groupe household goods france telecom telecom sodiaal international agribusiness hutchinson manufacturing veolia environment infogrames multimedia whirlpool france household goods some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

4 main organisational models technology-centric client-centric R&D or innovation depts marketing is working on work with a disruptive the basis of a client‟s technology objective in requirement (feature or mind application) cross-functional let’s do it innovation managed by innovation is developed cross-organisational by almost anybody in a teams not so orderly fashion some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

innovation management dear innovation manager, I liked your idea about creating more and better new services but judging by the result, I suspect that there must be something wrong with the way you‟re organised. Would you mind auditing this and draw your own conclusions from this study based on the results of this survey, would you please analyse what organisation seems best fitted for generating more, better and more sustainable innovations? for what reasons? some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

(1) technology-centric model: silos and high failure ratio main characteristics of portfolio of innovative projects that innovation process • R&D initiates and manages innovation projects •marketing is not (or not enough) kept in the loop before decision to launch technical industrial marketing • operational departements in charge of feasibility feasibility feasibility industrialising the solution informed after decision to launch is made • BU/internal client can veto idea but only after launch 100 20 à 50 5 à 10 projects projects projects decision to launch is made • innovation budget always voted by R&D before 2 3 4 decision to launch is made 0 1 5 innitial technical identification testing and marketing launch screen scoping phase validation business case financials all done in parallel impact on margins: margin from - 15 % to + 5% best practice product innovation existing product worst practice benefits concerns product innovation • usefulness and marketing benefits too vague • pricing is included too far side notes • disruptive innovation down in the process • bottom up pricing applies vs. • difficult to stop on-going programmes design to cost • partnerships dictated by technical side some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

(2) client-centric model: disruptive innovations don‟t stand a chance main characteristics of portfolio of innovative projects that innovation process • business side at the source of innovation • chinese wall between up-stream R&D (15% of budget on average) and applied innovations • useless innovations can be vetoed • research budgets can be arbitrated, and also technical industrial marketing resource allocation launch feasibility feasibility feasibility • vetoes can be actioned by various centres of competence (R&D, marketing, business), • industrialisation comes too late in that process 100 50 40 30 15 25 25 projects projects projects projects projects projects projects 2 3 1 4 5 financials 0 innitial technical identification testing and marketing launch screen scoping phase validation business case impact on margins: from - 5 % to + 15% all done in parallel margin best practice product innovation existing product worst practice benefits concerns product innovation • incremental-only innovation • potential synergy between • sequential approach product lines • Industrialisation not side notes • understanding of clients‟s incorporated enough requirements and expected • marketing statement of • user benefit rather straightforward (in principle) benefits requirements subject to • top execs usually committed • pragmatic approach change some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

(3) let‟s do it model -centric model: opportunistic and hinges on topexec arbitrage main characteristics of portfolio of innovative projects that innovation process • innovation chaotic and plentiful • „problem-solving‟ emphasis 10 100 • no overall innovation management (too chaotic) projects projects • top exec arbitrage of new initiatives between R&D and marketing technical industrial marketing • no objective go/no go decision criteria launch feasibility feasibility feasibility 100 10 projects projects 2 financials 3 1 4 0 5 impact on margins: from - 10 % to + innitial technical identification testing and marketing launch margin 10% best practice screen scoping phase validation business case product innovation existing product all done in parallel worst practice product innovation benefits concerns • poor cooperation between side notes players • opportunistic approach • benefits of innovation hard • top exec involvement to isolate and measure • pricing often not taken into account due to focus • cannibalisation issues on internal fighting and difficulties • resourcing not optimal some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

(4) cross-functional model: working for the general interest main characteristics of portfolio of innovative projects that innovation process •top management is clear exec sponsor •all payers working jointly from projects inception and development: “3p model” = technical industrial marketing r&d, marketing and development working feasibility feasibility feasibility as partners •business plan debated from day one with all 100 50 50 50 partners involved launch projects projects projects projects •exec committee makes decision and arbitrage 2 3 4 1 0 5 financials innitial screen technical scoping identification phase testing and validation marketing business case launch impact on margins: from +5 % to + 20% margin best practice all done in parallel product innovation existing product benefits concerns worst practice product innovation • good balance between disruptive and incremental innovation side notes • cross-functional project • lower flexibility management with a good • comprehensive coverage of all aspects of the mixture of skills statement of requirements (technical and • better anticipation of issues marketing) some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

recurring issues for all innovation models model cross-functional client-centric NO ISSUE DEPENDS ON ORGANISATION NOT MODEL tech-centric let’s do it ISSUE •beyond silos >innovation scope definition …………………………………………………………………… >clear roles and responsibilities……. ………………………………………………………… >facilitate cross-functional work between marketing and technical depts……… •a professional approach towards cooperation >empower a multi-disciplinary project team from cradle to grave ……………… >establish common overall project management >follow up projects on all criteria >motivate teams through remuneration •business benefit at the heart of the innovation process >freeze the marketing statement of requirement……………………………………… >establish cost control at all stages ……………………………………………………… >incorporate pricing from stage zero ……………………………………………………… >enhance user-benefit……………………………………………………………………… •outsource part of the R&D >establish alliance strategy…………………………………………………………………… >manage partnerships ………………………………………………………………………… >enter contractual relationship with partners from day one……………………… >enforce top exec involvement ……………………………………………………………… some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

a cooperation hell paved with good intentions not du tout Pasat all rather Peu rather Plutôt very Très 0,0 satisfactory satisfaisant 1,0 unsatisfactory satisfaisant 2,0 satisfactory satisfaisant 3,0 satisfactory satisfaisant 1.please rate the quality of identification of research programmes in your organisation? 2.please rate the quality of cooperation across teams (marketing-development- commercial-legal) in your organisation? 3.please rate the marketing statement of requirements of new products in your organisation? not du tout Pasat all rather Peu rather Plutôt very Très 0,0 satisfactory satisfaisant 1,0 unsatisfactory satisfaisant 2,0 satisfactory satisfaisant 3,0 satisfactory satisfaisant 4.please rate the information system and project management in the R&D of your organisation? 5.please rate cooperation across teams in your organisation? 6.please rate the control of cost before for new products in inception phase some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

a cooperation hell paved with good intentions not du tout Pasat all rather Peu rather Plutôt very Très 0,0 satisfactory satisfaisant 1,0 unsatisfactory satisfaisant 2,0 satisfactory satisfaisant 3,0 satisfactory satisfaisant 7.rate price positioning in your organisation? 8.rate the preparation of the product launch and the launch itself in your organisation? 9.rate top exec involvement in your organisatoin? 0,0at all not Pas du tout 0,0 satisfactory satisfaisant 1,0rather Peu 1,0 unsatisfactory satisfaisant rather Plutôt 2,0 2,0 satisfactory satisfaisant very Très 3,0 3,0 satisfactory satisfaisant 10. rate team involvement and motivation on innovation projects 11. rate how user-benefit is evaluated by your organisation? 12. rate how user-benefit is sold by your organisation? some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

beyond organisational models: innovation works when… scope of innovation is well top execs are involved defined cross-functional multi faceted alliance management is used teams are brought together as extensively and R&D is early as possible (marketing, partially outsourced R&D, development..) team members get paid in similar ways innovation management and decision regardless of the organisation in which processes are clear they originate financials and cost control are at the arbitration is easy and natural heart of the innovation process and when the tracking is relentless pricing issues and end user-benefit are established at the inception of the project some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

keep an eye on these items too… •statement of requirement to be jointly established and managed by marketing, technical and development departments •pay as much attention to incremental as to disruptive innovation •don‟t let any party work on its own (marketing, R&D…) •stop new programmes if cash-drains •industrialise alliance management >improve alliance programme management >make different parties agree to common objectives >despite bad habits, collaboration is not an option some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

maybe the best model is the cross-functional one but beware ofspecific cultural issues • company culture is not something to be trifled with > company culture stronger than regional culture? > cannot be a diktat: requires buy-in and staged approach • Your methodology must include: > working across silos > unify and harmonise objectives across the board > teach employees to work across silos > promote multi-disciplinary approach > includes smart objectives ultimate goal: industrialising collaboration some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

recommendation by CAA •continuous improvement AND disruptive innovation •start with a few target projects •industrialise collaboration on each target project •build on success stories •learn from examples •generalise method progressively some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

part two - what have we learnt? • 4 main types of innovation management • cross-organisational is best • … but no guarantee • cultural issue high on agenda • side note: project management is about humans not machinery • innovation management is project management some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

assignment no.3: classic traps in innovation management what are the classic traps in innovation management? classic traps assignment … some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

about Yann Gourvennec •since 02/2008, director, Web, Digital & Social Media, Orange •01/2008-02/2011 head of Internet & digital media, Orange Business Services •06/2005-01/2008, innovation principal, Orange Business Services •2003-06/2005, alliance partner manager, france telecom •1999 – 2002 - director e-business: france telecom teleconferencing services •1997 - 1999 – consultant, Internet, marketing & information systems, cap gemini •1995-1997 – internet marketing consultant, unisys europe •1992-1995 – business systems manager, unisys europe •1988-1992 – business systems manager, unisys france •1985-1988 – account executive, philips france my research is available online at: http://visionarymarketing.com/ http://www.linkedin.com/in/ygourven some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

copyright notice •This presentation is made available to all the registered readers of visionarymarketing.com •This work is licensed under the Creative Commons Attribution-Noncommercial-Share Alike 3.0 License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc- sa/3.0/ or send a letter to Creative Commons, 543 Howard Street, 5th Floor, San Francisco, California, 94105, USA. •You are allowed to use one or all the slides/images contained within this presentation provided you quote the author and the source of this information (http://visionarymarketing.com) •You are also welcome to recommend this website to your friends and colleagues and to invite them to register to our free newsletter (http://visionarymarketing.com/listbot.html) some rights reserved - CC 2011 - visionarymarketing.com - Yann A. Gourvennec Paris, 2011

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[En] MIB Dauphine - ICT3

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