Aim for Breakthrough Growth using our CoGrow's Krisalis System.

1. Aim for … Breakthrough Growth Audio Book 211 Module A5A 1 Krishnan S. Rajan Create a Culture of Innovation Innovation Excellence Audio Book 211

2. CoGrow Systems, Inc. offers distinctive solutions for growing small businesses into smart businesses. Its MAESTRO Business Academy educates and counsels business owners to orchestrate their business like a MAESTRO. Its Innovation Division guides the business owners in their industry and technology research, innovation and growth. Krishnan S. Rajan is President of CoGrow Systems, Inc. With advanced education in Management and Computer Science, he has wide experience working with large and small businesses in their business transformation and growth. © 2003-7 Unauthorized copying or distribution is not permitted www.cogrow.com e-mail: rajan@cogrow.com ®

4. Innovation Excellence Module A.5.A Part 1 Create a Culture of Innovation Krishnan S. Rajan Krisalis ™ ®

5. Choices before the Business Owner … Working “in” the business Research & Development Continue to solve day-to-day problems … Innovation Excellence Working “on” the business Where do you spent your time? 2 Sales Operations Admin. Energize your Business

6. Why take the time to work on the business? The Benefits of Innovation Retain Customers Attract new Customers Add new Product Line Add new Services Become more distinctive Competitive Advantage ---- More Revenue More Profits More Wealth (e.g., Patents & Copyrights) More Excitement! 3

7. Innovation Excellence Create a Culture of Innovation One of the main objectives of a smart business is to enjoy growing the business profitably in order to create wealth potential. Your Potential consists of your Property (both tangible and intangible resources) as well as Competencies of your People. One of the core competencies you need to develop is … culture of innovation. This will propel your business to accelerated growth and distinctiveness . Innovation involves not only continuous improvement of your business operations but also finding new products and services, and new processes to produce the existing or new products and services. Going one step further, radical innovation involves developing new Business Models to bring new and different value propositions to Prospects in the existing and new marketplaces. Instead of getting drowned in the daily operations of the business, smart business owners understand the need to challenge their thinking … and devote sufficient time and resources to create a culture of innovation. The primary impetus for creativity is your Purpose and passion in starting and operating your business, coupled with that of your Potential in carrying out the innovative ideas into reality … to be of value to your prospects in the marketplace which in turn results in building wealth. 4

8. Innovation Excellence Create a Culture of Innovation Creating a culture of innovation is a long-term commitment requiring a paradoxical blend of free-spirit and discipline … creativity and organized efforts to make the creative work meaningful in taking conscious risks. That requires a commitment to the concepts of the Innovation Process which will manifest as the Research and Development (R & D) Process in your organization. Innovation is a strategy. And if you build your business on the basis of becoming innovative and distinctive in the marketplace, then you have control in shaping your business culture and in seeking opportunities for growth … leading to Innovation Excellence. 4 Contd.

9. Understanding Value Innovation … Customer Owner Other Stakeholders Value for all Stakeholders Value Innovation Positioning Operations Potential (Capabilities) Products & Services Value Proposition Value Fulfillment 1 2 3 4 5C 5A Business Model Value Innovation is the key driver of Business Excellence. To the extent your Business Vision includes all Stakeholders and their interests, you lead and pave your way to success (win/win). Business Vision 5B 5

10. Aiming for Excellence … Organizing the Business Processes & Roles L-SOAR Model S ales & Marketing O perations & Fulfillment A dministration & Other Support R esearch & Development L eadership MAESTRO (Leader/Manager) Leadership Excellence Management Excellence (Empowering) (Governing) Vision/Mission Opportunities Strategies Insight/Values Planning Organizing Execution Maturing Marketing Excellence Capabilities Excellence Innovation Excellence Operational Excellence Criteria: Strategic Focus: Stretch Growth Breakthrough Growth (Distinctive /Dominant) (Effective) (Cohesive) (Innovative) (Target New Markets) (Reach out to Customers) (Advance your Capabilities: Development) (Advance your Capabilities: Innovation) Projects 6

11. Innovation Process (Creativity & Research) Business Process & Systems Research (Skills) Research & Development Process Business Process & Systems Design Research (Design Guidelines) Research & Design (Ideation to Innovation) Product Research & Design (Innovation Lab) Capabilities & Technology Research & Design (PROFITS & Wealth) Business Model Research & Design 2 A B C D Development & Support (Incubation to Implementation) Product Development (Pilot Projects) Business Model Development (Pilot Projects) 3 C D Common Infrastructure Development (Info. & Comm.) B Orchestrating the Culture of Innovation Business Process & Systems Development (New Systems) A Capabilities & Technology Research (Skills) Competency Development 1 A B C Products & Market Research (Skills) Business Model Research & Design D Critical Issues Resolution (Ongoing) O 7

12. Innovation Excellence involves: Culture of Innovation; and Seeking Opportunities for Growth. Innovation Excellence Culture of Innovation Seeking Opportunities for Growth 8

13. Innovation Competencies __________________ Passion for Innovation and distinctiveness Innovation _______________________ Application of Creativity for strategic solutions (Value) Ideation (Generating Ideas) Enables Innovation Process Culture of Innovation Culture of Innovation involves: Innovation Competencies and Innovation Process. 9

14. Your Visioning Process (Passion) Your Business (Strengths & Weaknesses) ____________________ Products & Services Business Processes Business Model Creativity (Competency) _________________ Creative Thinking Tools & Techniques Tradition & Culture Research (Competency) ______________________ Technologies & Capabilities Market & Products Business Processes Energizes Energizes Innovation Excellence Strategic Engines Catalog Innovation Competencies __________________ Passion for Innovation and distinctiveness Innovation _______________________ Application of Creativity for strategic solutions (Value) Ideation (Generating Ideas) Enables Seeking Opportunities for Growth Innovation Process Culture of Innovation 10 New Possibilities _____________________ Capabilities & Technology Cooperation & Alliances Market Trends ____________________ People’s Needs (Frustrations, Aspirations, Circumstances, Expectations, Troubles) Research (Opportunities & Threats) Competition & other forces

15. The MAESTRO Competency Model (Innovation Competencies: Creativity & Research) Inventing/Designing/Coaching Research Skills Creative Thinking Exploring (Researching) Whole-hearted Passion for the Purpose; Pursuit, Creativity, & Unwillingness to accept status-quo. Tradition & Culture Tools and Techniques Industry/ Market FACET’s 11 Efficacy (Mindset) Education (Knowledge) Endowments (Talents) Expertise (Skills) Endeavor (Field/ Industry)

16. Innovation Process Innovation Process The Innovation Process consists of four Stages (4-I’s): 1. Ideation (Creative Thinking); 2. Innovation; 3. Incubation; and 4. Implementation. Creative Thinking is the seed for Innovation. The Innovation Process should be a continuous cycle, in order to gain and sustain competitive advantages. Creativity is a Talent (endowment) that everyone has; But only a few people are aware of it; And, very few develop it actively. A culture of innovation fosters creativity … and it is one of the Unique Capabilities of a Smart Business. 12 3 4 2 1 Ideation (Creative Thinking) 1 Innovation 2 Incubation 3 Implementation 4

17. Innovation Process (4-I’s) Ideation It is the first stage … it is the source of creativity … forming, conceiving and imagining ideas … looking at the world in a different way, asking questions: why and why not. It is right brain thinking. It is fun and expansive. It is naïve child-like; it is wondering at the possibilities and seeing freshness. Generally it is a solo flight into the clouds. It is the seed for innovation; it is the out-of-the box thinking, genesis of opportunities around us. It is the originality in its purest form … intuition … accessing our spiritual potential, unencumbered by current technologies or practicalities. Innovation It is the second stage … it is seeing opportunities for the application of creativity … analyzing and assimilating and looking at the world with a view of solving its challenges, expanding the questions of why and why not. It is a holistic thinking … both right and left-brain. It is the exhilaration of seeing possibilities meeting practicalities and technologies. It is still an act of our inner child growing up wonder-struck. It is the out-of-the box thinking applied to specific situations. It is where the leaders bring people together and make the idea into a worthwhile change from the known. It is a strategy. 13

18. Innovation Process (4-I’s) – contd. Incubation It is the third stage … an innovation needs to be nurtured. It needs to be tested in the real world. It needs to be proved; just faith in the idea is not enough for most people; they need touch-and-feel proof to believe in the solution. It is an experimentation to get the bugs out. It is a low cost and quick model of the real world situations. It is the “beta-test” of a system … Proof Of Concept. It is where the managers involve more people, making a simple idea into a project of many heads and hearts. It is reality challenging the creativity – to let the best win. It is the fine tuning of a logistic solution toward the strategy. Implementation It is the final stage … an innovation project meeting real-world customers. It is the proof of the pudding … it is doing the logistics in line with the strategy. It results from the orchestrated efforts of thinkers, designers, developers, managers, technicians, legal experts and marketers. As much as it is the culmination of their efforts, it is also a start up of a plethora of relationship and technology issues … it is a nudge for a new ideation cycle. 13 Contd.