What is Innovation and how to set it up

1. Frank Dethier

2. Frank Dethier
Session 1:
Why Innovate?
Business Model

3. Frank Dethier –
INTRO & EXPECTATIONS
 Can you please each explain in 3 min
 Who are you?
 Which company are you working for and what’s your
role?
 Which expectations do you have about this academy?
 Which concrete outcomes do you want to have
applicable to you/your company?
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4. Frank Dethier –
MY EXPECTATIONS
 What I would like to have
 Lean forward attitude (discussions, challenges, …)
 You create a draft framework for your company already
 That I learn from you
 What’s possible
 Program is changed during the course based on your needs
 …
 What I would not like to have
 Lean back (I do the talking, you only listen)
 You follow this academy and go back to work as if nothing
happened  should be more than purely inspiration
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5. Frank Dethier –
OVERVIEW
 Innovation
 Creativity?
 Innovation?
 Why Innovate?
 Types & Levels of Innovation
 Business Model
 Business Model of your company using BMC
 Inspiring Examples
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6. Frank Dethier –
CREATIVITY?
What’s creativity?
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7. Frank Dethier –
CREATIVITY?
 Creativity is a phenomenon whereby something
new and in some way valuable is created (such as
an idea, a joke, a literary work, painting or
musical composition, a solution, an invention
etc).
 Creativity can also be defined "as the process of
producing something that is both original and
worthwhile"
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8. Frank Dethier –
CREATIVITY?
Who’s Creative?
Who wishes to be more Creative?
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9. Frank Dethier –
CREATIVITY?
LIFE OF IDEA GENERATED IN YOUR BRAIN
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Preparation
Incubation
Inspiration
Verification
Knowledge
Experience

10. Frank Dethier –
CREATIVITY?
IMPROVE CREATIVITY?
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Marvin Reznikoff test of identical twins
80% IQ based on genetics
30% creativity based on genetics
By giving people the right environment, training and context, they can dramatically
improve their creativity over time, no matter what level they are at now

11. Frank Dethier –
CREATIVITY?
IMPROVE CREATIVITY?
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Marvin Reznikoff test of identical twins
80% IQ based on genetics
30% creativity based on genetics
By giving people the right environment, training and context, they can dramatically
improve their creativity over time, no matter what level they are at now

12. Frank Dethier –
CREATIVITY?
HOW TO IMPROVE CREATIVITY?
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When importance of giving correct answer
is emphasized
New ideas are typically rough which makes
them more susceptible to criticism
How will creativity drop?
Brain is ‘offline’  new connections are formed
in your brain that sometimes creates ‘eureka’
Brain is focused  idea is refined

13. Frank Dethier –
CREATIVITY?
HOW TO IMPROVE CREATIVITY?
 Put your brain offline: Take a walk, exercise,
daydream, shower, …
 Give your brain new triggers: change physical
surroundings, change your routine
 Create company culture of trust and failure is allowed
 Do daily creativity training exercises
 Gain knowledge and context in wide variety of fields
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14. Frank Dethier –
CREATIVITY?
HOW TO IMPROVE CREATIVITY?
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15. Frank Dethier –
INNOVATION?
How do you define Innovation?
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16. Frank Dethier –
INNOVATION?
 Innovate = Create Value by using Creativity
 Value: Ensure that concept provides
advantage for market, customers &
company
 Create: What needs to happen to initiate the
work and to hold on
 Creativity: find fresh ideas and combinations of
ideas
 Innovation ≠ Creativity
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17. Frank Dethier –
INNOVATION?
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Janet Echelman – Taking Imagination Seriously

18. Frank Dethier –
WHY INNOVATE?
Why does your company need to Innovate?
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19. Frank Dethier –
WHY INNOVATE?
 2014 Innovation Assessment by PWC, McKinsey
and BCG: “Innovation remains top 3 priority”
 OECD: “Innovation will become an ever more
important driver of growth of many developed
Western economies”
 Intuitively: World around us (customers,
markets, technologies, competition, …) is
continuously changing, so
 either my company is making a change
 or my company is changed (by world around us)
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20. Frank Dethier –
WHY INNOVATE?
True or False?
Increase your R&D budget and your company
becomes more innovative
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21. Frank Dethier –
WHY INNOVATE?
True or False?
Larger companies can innovate much better than
SMEs
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22. Frank Dethier –
WHY INNOVATE?
INNOVATION BARRIERS
 Time pressure
 Not enough budget
 How can we innovate?
 Mindset of our people
 Too bureaucratic
 No support from management
 Cooperation between different people/functions
 How to prove value of innovation?
 Company culture
 Fear for the unknown
 No reward system
 …
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23. Frank Dethier –
 Why does your company need to Innovate?
 Which are the biggest Innovation Barriers in
your company?
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24. Frank Dethier –
EXERCISE
 Teams of 2 people
 Fill in & Discuss within your team
 Time foreseen: 15 min
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25. Frank Dethier –
OVERVIEW
 Innovation
 Creativity?
 Innovation?
 Why Innovate?
 Types & Levels of Innovation
 Business Model
 Business Model of your company using BMC
 Inspiring Examples
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26. Frank Dethier –
TYPES OF INNOVATION
Product Innovation
Business model Innovation
Service Innovation
Any company can realize different types of Innovation
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Process Innovation

27. Frank Dethier –
TYPES OF INNOVATION
Product Innovation
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Philips Ambisound: same sound experience as
5.1 sound system without clutter
Any company can realize different types of Innovation

28. Frank Dethier –
TYPES OF INNOVATION
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Service Innovation
Any company can realize different types of Innovation

29. Frank Dethier –
TYPES OF INNOVATION
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Process Innovation
Assembly time Ford chassis decreased
from 12.5h till 93 min in 1 year
Any company can realize different types of Innovation

30. Frank Dethier –
TYPES OF INNOVATION
Business model Innovation
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HighVolumes
Low variable and
fixed costs
Any company can realize different types of Innovation

31. Frank Dethier –
INNOVATION LEVELS
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32. Frank Dethier –
Radical
Innovation
• Technology leap
• Transformation
pretty cool
Incremental
Innovation
• Existing technology
• Competition driven
Not surprisingly ‘new’
INNOVATION LEVELS
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Continuous
Improvement
• Focus on process
• Efficiency driven
Not really ‘new’

33. Frank Dethier –
INNOVATION LEVELS
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Continuous
Improvement
• Focus on process
• Efficiency driven
Not really ‘new’
Disruptive
Innovation
• Small get big
• Turbulence
Blue Ocean
Sustaining
Innovation
• Focus on market
• Value driven
Business as usual

34. Frank Dethier –
OVERVIEW
 Innovation
 Creativity?
 Innovation?
 Why Innovate?
 Types & Levels of Innovation
 Business Model
 Business Model of your company using BMC
 Inspiring Examples
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35. Frank Dethier –
BUSINESS MODEL?
 A business model describes the rationale of how
an organization creates, delivers, and captures
value, in economic, social, cultural or other
contexts.
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36. Frank Dethier –
BUSINESS MODEL CANVAS
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Key Partners Key Activities
Key Resources
Value Propositions Customer Relationships
Channels
Customer Segments
Revenue StreamsCost Structure
• Who are our key
Partners/suppliers?
• Which key activities
do partners perform?
• Which key resources
are we acquiring from
partners?
What key activities do
our
• Value proposition
• Distribution channels
• Customer relation-
ships
• Revenue streams
require?
• What value do we
deliver to customer?
• Which one of our
customer’s problems
are we helping to solve?
• What bundles of
products & services are
we offering to each
customer segment?
• Which customer
needs are we satisfying?
• What type of relation-
ship does each of our
customer segments
expect us to establish &
maintain with them?
• For whom are we
creating value?
• Who are our most
important customers?
• Through which
channels do our custo-
mer segments want to
be reached?
• Which ones work
best/are cost-efficient?
What key resources do
our
• Value proposition
• Distribution channels
• Customer relation-
ships
• Revenue streams
require?
• What are most important costs inherent in our business
model?
• Which key Resources/Activities are most expensive?
• For what value are our customers really willing to pay?
• How would they prefer to pay?
• How much does each revenue stream contribute to overall
revenue?

37. Frank Dethier –
BUSINESS MODEL
BOOK ALEXANDER OSTERWALDER
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38. Frank Dethier –
APPLE IPOD/ITUNES CANVAS
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39. Frank Dethier –
BUSINESS MODEL CANVAS
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Key Partners Key Activities
Key Resources
Value Propositions Customer Relationships
Channels
Customer Segments
Revenue StreamsCost Structure

40. Frank Dethier –
BUSINESS MODEL EXERCISE
 Teams of 2 people
 Fill in Canvas of your company, and especially
 Value Proposition
 Customer Segments
 Activities
 Discuss within your team
 Time foreseen: 30 min
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41. Frank Dethier –
BUSINESS MODEL
INSPIRING EXAMPLES
 No Frills Business Model
 Essence: non-essential items of service are
discarded and savings are passed on to the
customer
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42. Frank Dethier –
BUSINESS MODEL
INSPIRING EXAMPLES
 Pay-per-Use
 Media companies increase revenues per customer
 Web companies convince customer to try their service
and set-up long term relationship
 Essence: lowers adoption barriers but big
transaction volumes needed
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43. Frank Dethier –
BUSINESS MODEL
INSPIRING EXAMPLES
 Subscription
 Essence
 Customer pays subscription fee to get access to
product/service
 Allows recurring revenues and build brand loyalty
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Healthy Office Snacks
Fruit4Thought

44. Frank Dethier –
BUSINESS MODEL
INSPIRING EXAMPLES
 Freemium = Free + Premium
 Limit Product/Service in free version
 Feature limited
 Capacity limited
 Seat limited
 Customer class limited
 Effort limited
 Support limited
 Time limited
 Bandwidth limited
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45. Frank Dethier –
BUSINESS MODEL
INSPIRING EXAMPLES
 Razor & Blade
 Essence: sell durables (lower margin) that will
work only in combination with complementary
consumables (higher margin)
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46. Frank Dethier –
MILESTONES IN HISTORY OF INNOVATION
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Every organization needs one core competence: innovation

47. Frank Dethier –
MILESTONES IN HISTORY OF INNOVATION
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James March's 1991
‘Exploration and Exploitation in Organizational Learning’

48. Frank Dethier –
MILESTONES IN HISTORY OF INNOVATION
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Clay Christensen – The Innovator’s Dilemma

49. Frank Dethier –
OVERVIEW
 Innovation
 Creativity?
 Innovation?
 Why Innovate?
 Types & Levels of Innovation
 Business Model
 Business Model of your company using BMC
 Inspiring Examples
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