What 'strategic innovation' means. Why you should care about it. How you can do it.

1. Strategic Innovation: Coming to an Industry Near You
Brian Christian, President, The Inovo Group
2013 International Polyolefins Conference

2. Three Topics
1. What ‘strategic innovation’ means
2. Why you should care about it
3. How you can do it
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3. WHAT ‘STRATEGIC INNOVATION’
MEANS
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4. What ‘Strategic Innovation’ Means
The Strategic Innovation Zone
Disruptive
Wasted time, capital
Too & resources pursuing
Risky probable failures
Newness to
Significantly new offerings
the World at risk levels that stretch but
Zone do not break the company
Probable success
but won’t move the Sustaining
growth needle Innovation
Incremental
Core Newness to Horizon
the Company
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5. What ‘Strategic Innovation’ Means
Strategic Innovation Examples
direct
publishing
Disruptive Too
Risky
Newness to
the World Strategic
Innovation
Zone
Sustaining
Incremental Innovation
Core Newness to Horizon
the Company
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6. WHY YOU SHOULD CARE ABOUT IT
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7. Why You Should Care About It
Coming to an Industry Near You!
• Not just about growth…can be a matter of survival
• Industries in flux are ripe for strategic innovation
• Your industry is in flux
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8. Why You Should Care About It
Corporate Turnover is Accelerating
Notable Victims of
Turbulence in Fortune 500 List Strategic Innovation
in Last 5 Years Alone
# of Companies Removed
• Blockbuster
• Borders Group
• Tribune Company
• Ziff Davis
• AbitibiBowater
82 of Fortune 100 • Kodak
disappeared • Vivitar
• Silicon Graphics
• Bethlehem Steel
Year (1955–2011) • Global Crossing
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9. Why You Should Care About It
Industries in Flux are Ripe for Strategic Innovation
Industry Cause of Flux Resulting Innovation
Rapid rise of cable and cellular
Telecom Break-up of AT&T in 1984
voice & data as well as devices
New wave of hybrid and electric
Oil prices, global warming,
Auto vehicle innovation starting in 1997
energy independence
with the Toyota Prius
Three generations of non-ozone
HVAC Environmental restrictions on
depleting, low global warming
(et al) fluorinated hydrocarbons
refrigerants and blowing agents
Corporate Fall in cost of international Boom in business process
Services communication in early 2000’s outsourcing (BPO) to India
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10. Why You Should Care About It
Your Industry Is in Flux
Design-Driven Flux
1. Designer Plastics: catalyst technology (metallocene, chain
shuttling) driving transformation in polyolefin value chain
2. Shale Gas: upstream technology driving massive shift in
cost and mix of C2-C3-C4 paraffin and olefin feedstocks
Demand-Driven Flux
3. China/India: rapid growth and future potential driving
transformation in polyolefin industry business models
4. Sustainability: regulatory incentives/constraints and
consumer preference driving bioplastics, PVC replacement
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11. Why You Should Care About It
Other Flux Forces on the Horizon
Design-Driven Flux
1. 3D printing
2. Metal organic frameworks (MOFs)
Demand-Driven Flux
3. Smart packaging
4. Africa
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12. Why You Should Care About It
This Flux is Driving a Lot of Strategic Innovation
Drivers of Strategic Innovation
Strategic
Innovation Design-Driven Demand-Driven
Types Designer Shale China & Sustaina-
Plastics Gas India bility
New Products
Molecule &
New Services application
design
‘On-purpose’ Biomass to
New Processes C3/C4 olefins chemicals
(butadiene)
JVs and
New Biz Models Specialty
M&A
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13. HOW YOU CAN DO IT
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14. How You Can Do It
Four Basic Requirements
1) Clearly define your starting point
2) Clearly define your end point
3) Develop a set of process design principles
4) Design a discovery process
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15. How You Can Do It
Step 1: Clearly Define Your Starting Point
Demand–Design Canvas
Demand–Design Canvas Apple’s Canvas in 1999
ADJACENCY Branded Music
WHITE Retail Business
(design SPACE
forward) (Apple Stores) (iTunes Store)
Demand Demand
Side Side
ADJACENCY PC Consumer
CORE (demand Electronics
backward) (iMac) (iPod)
Design Design
Side Side
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16. How You Can Do It
Step 2: Clearly Define Your End Point
Strategic Opportunity Model Illustrative Example
Offering: iPod
Develop: Partner with music
industry; exclusive rights to
Toshiba drive
Develop Produce: Chinese contract
manufacturers (e.g., Foxconn)
Offering
Deliver: Apple branded
stores plus Apple website
Produce Deliver
Value: Consumers, Apple up;
Value artists, distributors down
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17. How You Can Do It
Step 3: Develop a Set of Process Design Principles
Inovo’s Discovery Process Design Principles
1 Be hypothesis-driven and needs-based
2 Employ concept of ‘iterative deepening’
3 Ensure end-to-end business model focus
4 Reach outside for new knowledge
5 Incorporate the ‘wisdom of crowds’
6 Separate ‘should do’ from ‘could do’
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18. How You Can Do It
Step 4: Design a Discovery Process…
Demand–Design
Canvas 4 community engagement
1 STAGE 1 80-100 Opportunities
2 STAGE 2 15-20
3 STAGE 3 4-6
5 evaluation/selection tools
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19. How You Can Do It
…Which Reflects These Principles
Demand–Design
Canvas 4 community engagement
Reach outside for new knowledge
1 STAGE 1 80-100 Opportunities
Be hypothesis-driven and needs-based
2 STAGE 2 15-20
Employ concept of ‘iterative deepening’
3 4-6
Ensure end-to-end business model focus
STAGE 3
5 evaluation/selection tools crowds’
Incorporate the ‘wisdom of
6 Separate ‘should do’ from ‘could do’
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20. Thanks for Your Attention
Brian Christian
President
35 Research Drive
Suite 400
Ann Arbor, MI 48103
(269) 930-0574
Bchristian@TheInovoGroup.com
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