The Other Side of Innovation

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In The Other Side of Innovation, Vijay Govindarajan and Chris Trimble reveal how to execute an innovation initiative. This is Peter Modigliani's summary of this book by the two business school professors.

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The Other Side of Innovation

  1. the other side of innovationSOLVING THE EXECUTION CHALLENGE<br />Summary By<br />Peter Modigliani<br />Vijay Govindarajan<br />Chris Trimble<br />
  2. Genius is 1% inspiration and 99% perspiration<br />2<br />Thomas Edison<br />
  3. idea<br />leader<br />team<br />+ plan<br />innovation<br />3<br />Innovation Model<br />
  4. Ongoing Operations<br />Repeatable and Predictable<br />Innovation<br />Nonroutine and Uncertain<br />4<br />Address Fundamental Incompatibilities<br />Innovation Leaders Must Think Differently About Organizing and Planning<br />
  5. Beyond the idea<br />5<br />Real Innovation Challenge<br />Long journey fromimagination to impact<br />
  6. Powerful<br />Capable<br />Productive<br />Efficient<br />Growth Potential<br />Impossible to innovateon its own<br />6<br />Performance Engine<br />Ongoing Operations<br />
  7. Rebels Fighting the Bureaucracy<br />7<br />Innovation Leaders<br />
  8. 8<br />Each Innovation Initiative Requires <br />A team with a custom organizational model<br />A plan revised by a rigorous learning process<br />
  9. Company<br />Performance Engine<br />9<br />The Innovation Team<br />Partnership<br />Dedicated Team<br />Shared Staff<br />
  10. 10<br />Performance Engine Limitations<br />Skills of the Individuals<br />Work Relationship Between Them<br />
  11. Identify skills needed<br />Hire the best people<br />Match the organizational model to the team<br />11<br />Principles for Dedicated Team<br />
  12. Having a bias for insiders<br />Adopting existing formal roles & responsibilities<br />Reinforcing performance engine power centers<br />Assessing performance from established metrics<br />Failing to create a distinct culture<br />Using existing processes<br />Succumbing to the tyranny of conformance<br />12<br />7 Common Mistakes<br />1.<br />2.<br />3.<br />4.<br />5.<br />6.<br />7.<br />
  13. Pride<br />Familiarity<br />Comfort<br />Expedience<br />Compensation norms<br />A desire to give attractive opportunities to your own employees<br />13<br />Trap 1: Having a Bias for Insiders<br />
  14. Skills Deficit Risk – Investors flock to start ups<br />Organizational Memory Risk – Little Performance Engine<br />Outsiders – Add New Perspectives, Challenge Org Memory<br />14<br />Trap 1: Having a Bias for Insiders<br />
  15. Use new and unfamiliar titles<br />Write new job descriptions<br />Create a separate physical space for the Team<br />15<br />Trap 2: Adopting Existing Roles and Responsibilities<br />
  16. Avoid replicating power centers for new team<br />Achieve a power shift through:<br />Team hierarchy<br />Clear decision rights<br />Leadership choices<br />16<br />Trap 3: Reinforcing Performance Engine Power Centers<br />
  17. Performance Engine metrics are rarely equally meaningful to Dedicated Team<br />Identify performance metrics that matter most for your specific innovation initiative<br />17<br />Trap 4: Assessing Performance From Established Metrics <br />
  18. Common assumptions and company stories<br />Examine the company’s culture<br />Consciously adopt some elements of the culture<br />Avoid claiming a uniquely innovative culture which may offend the Performance Engine<br />18<br />Trap 5: Failing to Create a Distinct Culture <br />
  19. If identical processes truly worked, the initiative would be part of Performance Engine<br />19<br />Trap 6: Using Existing Processes<br />
  20. HR, Finance, and IT drive standardization<br />Insist on being an exception to these standards<br />20<br />Trap 7: Succumbing to the Tyranny of Conformance<br />
  21. Create a team distinct from the Performance Engine<br />Treat the Performance Engine like a strategic partner<br />21<br />Take a Positive Approach<br />
  22. 22<br />You Will Face 3 Challenges<br />Competition for Scare Resources<br />Divided Attention of Shared Staff<br />Disharmony in the Partnership<br />
  23. Allocate resources through one plan<br />Fund Shared Staff resources<br />Discuss contingency plans in advance<br />23<br />1. Competition for Scare Resources<br />
  24. Internal transfer payments<br />Special targets<br />Added bonuses<br />24<br />2. Divided Attentions of Shared Staff<br />
  25. 25<br />3. Disharmony in the Partnership<br />Clear responsibilities<br />Common values<br />Insider collaboration<br />Co-locate members<br />External collaboration<br />
  26. Formalize the experiment<br />Break down the hypothesis<br />Seek the truth<br />26<br />Run a Disciplined Experiment<br />
  27. Wild<br />Guesses<br />27<br />Predictions Improve With Learning<br />Informed<br />Estimates<br />Reliable<br />Forecasts<br />Prediction<br />Time<br />Learning<br />Executives Demanding Results Over Learning Drive Failure<br />
  28. 28<br />Formalizing an Experiment<br />Plan the experiment(or revise the plan)<br />Compare predictions and outcomes, assess lessons learned<br />Predict outcomes,document supportinglogic and assumptions<br />Execute experiment,record measurements,<br />document observations<br />Learning Must Be a Rigorous Scientific Method – Not Intuition<br />
  29. Invest heavily in planning<br />Create the plan and scorecard from scratch<br />Discuss data and assumptions<br />Document a clear hypothesis of record<br />Find ways to spend a little, learn a lot<br />Create a separate forum for discussing results<br />Frequently reassess the plan<br />Analyze trends<br />Allow formal revisions to predictions<br />Evaluate innovation leaders subjectively<br />29<br />10 Planning Principles for Innovation<br />I<br />II<br />III<br />IV<br />V<br />VI<br />VII<br />VIII<br />IX<br />X<br />
  30. Spreadsheets<br />Cause and Effect<br />30<br />Conversational Models<br />Subsequent outcome<br />C<br />Additional<br />dependency<br />Outcome<br />Sales<br />B<br />D<br />Action<br />Trial Use<br />Product<br />quality<br />A<br />Advertising<br />spending<br />Focus On Conversations, Not Spreadsheets with Complexity<br />
  31. 31<br />Hypothesis Creation Technique<br /> Divide the budget for innovation into 5 or fewer categories.<br /> Sketch a sequence of outcomes and subsequent outcomes.<br /> Choose specific, unambiguous, measurable outcomes.<br /> Identify additional factors that each outcome depends on.<br />1<br />2<br />3<br />4<br /> Look for overlaps in category cause-and-effect chains.<br /> Show how critical <br />non-spending decisions can impact outcomes<br /> Keep it simple – One page diagrams.<br />5<br />6<br />7<br />
  32. 32<br />Resolve Critical Unknowns First<br />Most critical unknowns<br />Severe<br />What are the consequences if we are wrong?<br />Moderate<br />Least<br />critical<br />unknowns<br />Minor<br />Certain<br />Educated Guess<br />Wild Guess<br />How certain are we?<br />
  33. Get off to a good start<br />Monitor interactions with Performance Engine<br />Stay engaged in a rigorous learning process<br />Shape the Endgame<br />33<br />Supervise an Innovation Initiative<br />
  34. Powerful<br />Broadly Experienced<br />Able to Serve Long-Term Company Interests<br />34<br />Choose the Right Supervising Executive<br />
  35. Strategic objective<br />Form – New product/service launches<br />Core functions of Dedicated Teams required<br />Length of time<br />Scope of expense<br />Areas of uncertainty<br />35<br />Oversee a Family of Related Initiatives<br />
  36. Innovation is all about ideas<br />The great leader never fails<br />Leaders are only fighting the system<br />Everyone can be an innovator<br />Innovation happens organically<br />Can be inside an establish organization<br />Requires wholesale organizational change<br />Innovation can only happen in Skunk Works<br />Innovation is unmanageable chaos<br />Only start-ups can innovate<br />36<br />10 Common Innovation Myths<br />
  37. Ideas are only the beginning<br />Nothing simple about execution<br />Primary leader virtue is humility<br />Ideation is everyone’s job<br />Initiatives require formal resource commitment<br />Innovation is incompatible with ongoing operations<br />Innovation requires only targeted change<br />Innovation must be engaged with ongoing operations<br />Innovation must be closely and carefully managed<br />Many of the world’s biggest problems can be solved only by large, established corporations<br />37<br />10 Innovation Truths<br />
  38. 38<br />Shape a More Innovative Company<br />
  39. 39<br />

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