Innovation to the Core

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Peter Skarzynski, the CEO of Strategos (an innovation strategy co

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Innovation to the Core

  1. 1. INNOVATION TO THE CORE Peter Skarzynski, CEO Strategos Copies: PCS@Strategos.com
  2. 2. AN INNOVATION IMPERATIVE?Gary Hamel “Innovation is the only way to stay ahead of the curve” www.strategos.com
  3. 3. OROVER-HYPED? www.strategos.com
  4. 4. A BIG problem… OF INNOVATION USUALLY FAILS www.strategos.com
  5. 5. WHY THEFAILURE? www.strategos.com
  6. 6. www.strategos.com
  7. 7. MAYBE BECAUSE IT IS DIFFICULT?Dilbert: © Scott Adams/Dist. By United Feature Syndicate, Inc. www.strategos.com
  8. 8. EFFORTLESSLY www.strategos.com
  9. 9. REFLEXIVELY www.strategos.com
  10. 10. INSTINCTIVELYwww.strategos.com
  11. 11. SEVEN INNOVATION MYTHS:1. Innovation is risky.
  12. 12. FOR ONCE, IT’S NOT ABOUT THE MONEY! “THERE IS NO RELATIONSHIP BETWEEN R&D SPENDING AND THE PRIMARY MEASURES OF ECONOMIC OR CORPORATE SUCCESS, SUCH AS GROWTH, ENTERPRISE PROFITABILITY, AND SHAREHOLDER RETURN.”
  13. 13. DARE TO BE RADICAL 1. Does it have the power to change customer expectations? 2. Does it have the power to change the basis for competitive advantage? 3. Does it have the power to change industry economics?Source: Professor Gay Hamel
  14. 14. Low High Risk RiskSource: Professor Gay Hamel
  15. 15. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.
  16. 16. Cost?
  17. 17. RADICAL: LOW COST AND STYLE Redefining Expectations A Wine Cellar With Refined Taste Your finest wines will be preserved and safe in this wine cellar. Settings for red and white wine make it easy to select the optimum temperature to maintain quality and taste. The grey-blue tinted glass door provides a full view of your collection while protecting it from harmful UV rays. With 7 slide-out wood racks and room for 54 bottles of wine, you can keep all of your favorites on hand in this modern, stylish wine cellar. This wine cellar also has a dual electronic FlexZone™, with two separately controlled temperature zones so you can store combinations of white wine, red wine, and champagne in the same cellar.
  18. 18. Experience?
  19. 19. Management Innovations?
  20. 20. BUSINESS MODEL INNOVATION
  21. 21. Simply Said “…the key to sustained success is business model innovation.” - Clay Christensen, Harvard Business School Who do we serve? How do we What do wemake money? provide? How do we differentiate & How do wesustain advantage? provide it?
  22. 22. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.
  23. 23. INNOVATION MATH Ideas Innovation’s 1,000 Arithmetic ExperimentsNumber of options 100 Projects 10 Winners 1 Increments of risk
  24. 24. Easier than you think
  25. 25. …but, please link to operating processes
  26. 26. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught.
  27. 27. “It‟s always „Sit,‟ „Stay,‟ „Heel‟--never „Think,‟ „Innovate,‟ „Be yourself.‟ ”
  28. 28. ENCOURAGE, TEACH, & SUPPORTOut of context to Risk of bizarre business flow overreaction Not grounded in Irrelevant to us any observed(our competences) customer need
  29. 29. FRAME BREAKING NEW PERSPECTIVE 1 2 Challenge Harness industry emerging orthodoxies trends 3 4 Address Leverage unarticulated Know How needs Assets
  30. 30. SELL BY THE TANK?
  31. 31. SERVING CARE GIVERS 2001 Winner An all-in-one portable medical oxygen system • Eliminating the need for a separate regulator, flow meter, cylinder wrench, and special valve seal • Allowing medical personnel to easily adjust oxygen flow with the turn of a dial and verify contents at a glance
  32. 32. WORK FROM THE FUTURE BACK Future Stretch We Create Future-based migration path Future Fit We Accept Present Traditional extrapolation Past 37
  33. 33. 38
  34. 34. Crash in the Garage! Discontinuities Core Competences An Example Low costFrom: Bedroom suburbs high-quality,To: McMansions stationary electro- mechanicalMen are Appliancesrelegated to are sold tothe garage womenCustomer Insight Orthodoxies
  35. 35. Gladiator Solution
  36. 36. START HERE…Discontinuities Core Competences An Example Better lifeFrom: Mom approved through “colorTo: Kid preferred chemistry”Surprisingexperiences which Perfection is theare “mine” are only acceptableexciting and more standardattractiveConsumer Insight Orthodoxies
  37. 37. End Here “No Mess” but still fun (i.e., messy) for kids! Aspiration XXXX New Oppty 5 Color Explosion Outdoor Oppty 7Capabilities Oppty 6 Color Wonder Erasable Existing Washables Existing New Markets
  38. 38. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught.5. Innovation is a diversion.
  39. 39. Beyond the Suggestion Box
  40. 40. AN INNOVATION PROCESS Building a Generating Managing foundation of a portfolio of a pipeline of truly novel game-changing strategic insights ideas experiments Discovery Opportunity Innovation to the coreHow widely & deeply How radical and How efficient in termsunderstood? coherent? of risk-reward?
  41. 41. Perspectives from DifferentSources…Inside Your Organization“We are sixty thousand employees around the world in 170 countries,with efficiency and productivity unparalleled in any industry. We havethirteen high-tech manufacturing facilities and eighteen world-classtechnology centers with engineers designing in virtual teams fromaround the world…Hundreds of innovators from all levels and types ofjobs, sometimes from where you might least expect them, are workingto invent on behalf of the customer, enjoying and maximizing theircontributions to the company.” Nancy Snyder – Strategic Innovation
  42. 42. …FINDING GOLD The Goldcorp Inc. Challenge • First global brainstormingChallenge: Where to find the gold Half a million hits in four months 1400 people from 50 countries Accelerated the exploration program
  43. 43. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught.5. Innovation is a diversion.6. Innovation is expensive.
  44. 44. INNOVATION EFFICIENCY No. of innovators K 1 No. of employees E No. of radical ideas Y 2 Total no. of ideas R Ideas from outside 3 A Ideas from inside T Learning I 4 Investment O S Commitment 5 PrioritiesSource: Adapted from Professor Gary Hamel 50
  45. 45. Learn, Fail, Scale Experiment # 1 2 3 4 5 2. Can we do it? Competencies? Operating Model? 3. Can we make money? Revenues? Costs? Profit? 1. Do they want it? Customer Value Proposition --who, what, how differentiated?Time 51
  46. 46. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught.5. Innovation is a diversion.6. Innovation is expensive.7. Innovation is an exception.
  47. 47. HOW FRIENDLY? Leadership & OrganizationProcesses & Innovation Culture & Tools Effectiveness Values People & Skills
  48. 48. Take you back – an analogy
  49. 49. SUSTAINING AT CEMEX
  50. 50. W.L. GORE:1. No VPs, no directors, no managers, no titles.2. Every employee can spend 10% of his or her time "dabbling."3. Theres a "market for talent."4. No division can grow to more than 200 people.
  51. 51. $3.3 Billion in Innovation ValueSource: Business Week; Creativity Overflowing, May 8, 2006
  52. 52. MAKE IT INESCAPABLE "Tomorrow, if I went to the organization and said, „Well, weve had enough of this [innovation], lets go back to cutting costs and running the business like everyone else is running the business in the appliance area I think Id have a revolt on my hands." David Whitwam, Former CEO, Whirlpool
  53. 53. ASK YOURSELF…1. Are you creating the time and space?2. What new conversations and connections?3. What % portfolio should meet the test of radical?4. What am I doing to make growth inescapable?
  54. 54. Thank you for your timeCopies? pcs@strategos.com www.strategos.com

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