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The 6P Model for Making Innovation a Core Capability

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The 6P Model for Making Innovation a Core Capability

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If innovation is so important for business growth, why do so many companies get it wrong? The 6P Model for Making Innovation a Core Capability provides an overview of they elements any organization should have in place to support always-on, sustained innovation that delivers positive business outcomes.

The original blog post for this content can be found at http://gregverdino.com/innovation-capability.

If innovation is so important for business growth, why do so many companies get it wrong? The 6P Model for Making Innovation a Core Capability provides an overview of they elements any organization should have in place to support always-on, sustained innovation that delivers positive business outcomes.

The original blog post for this content can be found at http://gregverdino.com/innovation-capability.

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The 6P Model for Making Innovation a Core Capability

  1. 1. GREG VERDINO | WWW.VERDINOLLC.COM MAKING INNOVATION A CORE CAPABILITY THE 6P MODEL
  2. 2. Start Innovation is the Key to Business Success PETER DRUCKER “The business enterprise “Innovation is the “An established company has two - and only two – specific instrument of which, in an age basic functions: marketing entrepreneurship. The act demanding innovation, and innovation. Marketing that endows resources is not able to innovate, and innovation produce with a new capacity to is doomed to decline results; all the rest are costs.” create wealth.” and extinction.” HOW WELL DOES YOUR BUSINESS INNOVATE? © VERDIINO LLC. All Rights Reserved. | 1
  3. 3. Innovation Upside It Drives Superior Business Results GROSS PROFIT ENTERPRISE VALUE Innovation isn’t all about starry Indexed mean of normalized Indexed mean of normalized 5-year CAGR eyes and unfettered creativity. 5-year CAGR Average Average Across All 56 It is a business discipline that Across All Companies provides a clear pathway to Companies 48 51 49 stronger performance in key 45 business metrics. 44 42 43 Companies that both exhibit strong alignment between innovation and business strategy, and possess a supportive innovation culture financially outperform their less innovative peers. Low Moderate High Low Moderate High LEVEL OF STRATEGIC+CULTURAL ALIGNMENT SOURCE: Booz & Company, 2011 “Global Innovation 1000” © VERDIINO LLC. All Rights Reserved. | 2
  4. 4. Innovation Roadblocks Why Do So Many Businesses Get It Wrong? WHY DO INNOVATIONS FAIL? Most senior executives rank 63% DON’T MEET CUSTOMER NEEDS innovation among their top Due to: business priorities. Inability to develop strong, market-relevant ideas But many have not taken the Insufficient connection to customers steps necessary to make Fear of failure innovation a core capability through sustainable programs 54% ARE TOO LATE TO MARKET and repeatable processes. Due to: It’s no surprise that 80% are Too many in-flight innovation projects (lack of focus) not satisfied with how their Too much innovation risk (unbalanced portfolio) organizations innovate and Too much waste (inefficient, low impact process) disappointed with the return on their innovation investments. Underdeveloped innovation capability SOURCE: Accenture Innovation Survey, 2009: Top 2 reasons cited for innovation failure © VERDIINO LLC. All Rights Reserved. | 3
  5. 5. Mindset Reset Rethink the Way You Think About Innovation IT ISN’T OPTIONAL IT’S NOT (JUST) IDEAS IT’S NOT AN EVENT “Innovation is the central job Innovation must focus on Real results require an of every leader – business unit solving clearly defined always-on approach, managers, functional leaders, challenges with applied sustainable processes and and the CEO.” A.G. Lafley, creativity, a clear path to platforms that empower your retired Chairman & CEO, P&G implementation, and an eye people to function as a well- on accountability. tuned innovation capability. IT’S NOT (ALL) iPHONES IT’S NOT (JUST) R&D IT’S NOT OUT OF REACH Success requires leaders to Differentiate your business You don’t need to be a born manage a diverse portfolio of across all core areas - from visionary, and you don’t need radical, substantial and strategy, sales and customer a massive budget to win at incremental innovations that service, to people, product innovation. You do need the balance risks with rewards. and process (and everything right attitudes, behaviors, in between.) strategy, and systems. © VERDIINO LLC. All Rights Reserved. | 4
  6. 6. The 6P Model Make Innovation a Core Capability © VERDIINO LLC. All Rights Reserved. | 5
  7. 7. Purpose Align Innovation With Your Strategy And while a quick, creative approach to some new new thing can sometimes pay-off, the “once is witty, twice is shitty” principle comes on fast, and you’re rarely left with a properly grounded, repeatable process for making magic time and time again. PURPOSE Purpose means starting with why  — why must we Innovation must be purpose-driven. innovate in the first place. It means considering what In other words, it must be fully — what do we hope to achieve through innovation. It aligned with your organization’s then uses your overarching corporate strategy as a no- overarching business strategy. This nonsense filter to turn innovation into a how — how sounds obvious, but I’ve worked will innovation in this area empower us to more with enough big brands and inside effectively deliver upon our top priorities; whether those enough agencies to know that — priorities are revenue generation, top notch service more often then not — this clear delivery, cost savings, vertical or horizontal expansion, or just about anything else that differentiates your sense of strategic purpose is the company from its competitors. exception more often than it is the rule. We have a name for innovation for innovation’s sake — we call that ARE YOU GROUNDING YOUR CALL FOR the shiny object syndrome. INNOVATION WITH A CLEAR SENSE OF PURPOSE? © VERDIINO LLC. All Rights Reserved. |6
  8. 8. People Build an Innovation Program of Substance and the authority to make it happen, or might be disengaged or disenfranchised. All of that said, these people may be very good at what they do and incredibly valuable to the company. But they’re not the right people to drive an innovation effort. PURPOSE This doesn’t mean you need to restock your company You’ve already got people, right? But with Steve Jobsian innovation super-humans. So who have you got the right people? If do you need? People with the right mindset, for you’re like many companies I’ve starters — individuals committed to the challenge of worked with over the years, you change; who are well aware of the world outside your probably have senior leaders on the walls; who can view your business challenges through wrong side of the digital divide, too a series of new lenses, apply solutions from beyond vested in the status quo, too resistant your team, department, company, industry or even the to change (or scared of the business world itself. repercussion), or too beholden to this And then you need to guide them, support them, and quarter’s P&L. You probably have give them permission to fail. staffers too tapped with their current workload, who mean well but lack the charter to drive change from within DO YOUR PEOPLE BRING UNCOMMON, OUTSIDE PERSPECTIVES & APPROACHES TO WORK DAILY? © VERDIINO LLC. All Rights Reserved. |7
  9. 9. Process Build an Innovation Program of Substance ideas die on the vine? We all have. A true, sustained innovation capability is governed by clearly defined processes that govern how ideas get surfaced, how they get evaluated, what criteria they PROCESS must meet to advance to the next stage, and what happens when the company commits to testing the OK, so now you’ve got your free idea in the market. spirits and free thinkers — set them loose, right? Well, not exactly. Process may not be sexy, but it’s necessary if you Sustainable innovation, done right, want your innovation efforts to succeed. means you’ll capture new ideas from all corners of your company. All. The. Time. You know how you’ve gone into all those standalone brainstorms, spent an inspiring hour batting about cool new concepts, then went back to your workaday world as your new HAVE YOU DEFINED & COMMUNICATED CLEAR PROCESSES TO GUIDE YOUR INNOVATION PLAN? © VERDIINO LLC. All Rights Reserved. | 8
  10. 10. Platforms Build an Innovation Program of Substance PLATFORMS Systems and software go hand-in- hand with old fashioned process, making it easier - and at scale, possible - to move ideas to execution efficiently, cost effectively, and with the right number of checks and balances. My purpose here isn’t to promote specific platforms; there are lots to choose from. They make your life as an innovator easier and the output of your process more viable. Without them, even the best innovation intentions will give way to DO YOU HAVE INNOVATION PLATFORMS IN PLACE chaos over time. IN YOUR ORGANIZATION TODAY? © VERDIINO LLC. All Rights Reserved. | 9
  11. 11. Partners Build an Innovation Program of Substance consider ways to bring nimble upstarts into the fold in order to up the fresh ideas quotient, while leading edge start-ups might consider how well resourced multinationals could fund edgy new ideas. Public sector and private sector can work together. PARTNERS The possibilities for partnership are limited only by You didn’t think you could do it all your willingness to collaborate with others. yourself now, did you? If you truly intend to innovate (to create new value for customers in order to realize new value for the company) you might want to think of your customers themselves as your partners in innovation. You may know this as crowdsourcing… But as much as the lines are blurring between company and customer, the lines are also DO YOU INVOLVE YOUR CUSTOMERS, blurring between company and COMPETITORS, COLLABORATORS & OTHER company (even company and COMPANIES IN YOUR INNOVATION APPROACH competitor). Large corporations might TODAY? © VERDIINO LLC. All Rights Reserved. | 10
  12. 12. Performance Define, Measure & Reward Innovation Success core capability (much less a cornerstone of a company’s culture) when the only measures of performance relate to near term profits, successful completion of day-to-day tasks, and other measures of the here-and-now. Of course those things are PERFORMANCE important - there’s no sense in prepping your business for tomorrow while you run the risk of going Way back at the First P, I wrote that out of business today. everything starts with purpose. But, truth be told, performance is as good But a truly innovative organization knows that the a place to begin and one of the most right incentives, rewards, and recognition systems are critical components for innovation necessary conditions for innovation excellence. Think success. Let’s be frank — it feels intrinsic rewards (status, recognition) as well as good to talk about innovation, but it’s extrinsic rewards (prizes, money). Think beyond the a different matter to rework the way check box on the performance appraisal… we incentivize our people to make it worth their while to bring new ideas, process improvements and more to the table on a routine basis. Simply HOW DO YOU MEASURE THE IMPACT OF put, innovation will never become a INNOVATION AND REWARD THE PEOPLE WHO MAKE IT HAPPEN? © VERDIINO LLC. All Rights Reserved. | 11
  13. 13. Work LEARN MORE ABOUT HOW GREG CAN HELP YOU GREG VERDINO MARKETING STRATEGY & INNOVATION GREG@VERDINOLLC.COM 631.747.1451 WWW.VERDINOLLC.COM CONSULTING ADVISORY SPEAKING

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