The innovation challenge


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  • The innovation challenge

    1. 1. The innovation challenge. by Patrick Willemarck
    2. 3. “ What you find says a lot about what you’re searching. I do find and don’t search anymore.” Pablo Picasso
    3. 4. 1. How to cope with what’s going wrong ? 2. Focus on creating a superior value of use 3. New economy, new rules 4. A few thoughts about how to innovate 5. A few things to keep in mind
    4. 5. <ul><li>How to cope with what’s going wrong ? </li></ul>
    5. 9. -100 -80 -60 -40 -20 0 20 40 60 80 100 Prix Promotions Publicité Choix nouveautés fra îcheur Modernité Localisation Plaisir courses Personnel disponible Accueil Suivi des marques Service clients Enseigne préférée CARREFOUR COLRUYT CORA DELHAIZE + AD ALDI SUPER GB + PARTNER LIDL
    6. 10. Théo Janssen, kinetisch beeldhouwer
    7. 14. <ul><li>Ces dix dernières années, le géant pétrolier </li></ul><ul><li>EXXON a suivi deux routes sur le chemin de l’innovation. </li></ul><ul><li>Il a créé 19 activités nouvelles en interne. </li></ul><ul><li>Il a investi, parallèlement dans 18 start-up. </li></ul><ul><li>Aucun des projets internes n’a abouti. </li></ul><ul><li>Les start-up ont rapporté un ROI cumulé de 51%. </li></ul><ul><li>Source: professeur David Molian, Cranfield University </li></ul>
    8. 17. Red Ocean Strategy Focus on existing customers Compete in existing market space Beat the competition Exploit existing demand Make the value-cost trade-off Align the whole system of a firm’s activities with the strategic choice of differentiation or low cost Blue Ocean Strategy Focus on non-customer Create uncontested market space Make the competition irrelevant Create and capture new demand Break the value-cost trade-off Align the whole system of a firm’s activities in pursuit of differentiation and low cost
    9. 18. <ul><li>Zara </li></ul><ul><li>Cirque du Soleil en Guy Laliberté </li></ul><ul><li>Enterprise rent-a-car en Jack Taylor </li></ul><ul><li>Swatch, Smart en Nicolas Hayek </li></ul><ul><li>Option International en Jan Calewaert </li></ul><ul><li>Apple en Steve Jobs </li></ul><ul><li>IKEA en Ingvar Kamprad </li></ul><ul><li>Procter & Gamble </li></ul><ul><li>Delhaize </li></ul>
    10. 19. 2. Focus on creating a superior value of use
    11. 20. Superior value of use resources Context of use References
    12. 21. The context of use The three us The failures of marketing research Demand is an ecosystem
    13. 22. References in the market
    14. 23. Brands and companies are under pressure Distribution Advertising Media Product Parity Competition Marketing Inconsistencies The Consumer The Brand Promotional Explosion
    15. 26. What is the objective of Business ?
    16. 27. “ To make and keep a customer” Peter Drucker ‘ Father of’ Management Consulting 1959
    17. 28. It’s all about relationships
    18. 29. <ul><li>What are the basic reasons for loss of clients? </li></ul><ul><li>Change of Address 4% </li></ul><ul><li>Contact at another company 5% </li></ul><ul><li>The Competition 9% </li></ul><ul><li>Disatisfaction with the product 15% </li></ul><ul><li>Lack of relevant contact/communication 67% </li></ul>Building relationships helps fighting against the passive nature of marketing
    19. 30. This leads us to a more updated definition of what we do.... <ul><li>From ‘Unique Selling Proposition’ </li></ul>To ‘Unique Brand Behaviour’
    20. 31. Resources
    21. 32. Resources Think in terms of platform like iPod and iTunes and iPhone. Follow two strategies at the same time: - the core competency school of strategy : deepen what you’re excellent at. - the leverage capabilities school of strategy : mobilize ressources outside your firm, at the edges. Be ex-centric.
    22. 33. Resources “ There are allways more smart people outside your company than within it” Bill Joy, co-founder of Sun Microsystems
    23. 35. “ The truth is that we only have one trick - but it is a very good one. We concentrate in achieving that every ‘experience’ that a customer has with us is perfect. ” Jeff Bezos, Founder
    24. 36. Creation of superior value of use , is going to be the currency of this economy.
    25. 37. Why ? It favours good profit vs bad profit. <ul><li>Bad profit are made at the expense of customer relationship </li></ul><ul><li>Accountants don’t make the difference but time reveals it. </li></ul><ul><li>Bad profits extract value from customer i/o creating value </li></ul><ul><li>True growth is hard to find </li></ul><ul><li>Good profits are earned with customer’s enthusiastic participation and growth come from WOM </li></ul>
    26. 40. Welcome in the « what can I do for you » economy.
    27. 41. 3. New economy, new rules
    28. 42. An economy imposing a paradigm shift. <ul><li>Employees are supposed to make customers delighted but </li></ul><ul><li>- their employers tell them they’re accountable for profit. </li></ul><ul><li>- Financial results are what companies measure. </li></ul><ul><li>- Financial results determine their career plans and their bonuses </li></ul><ul><li>- Accounting procedures cannot distinguish good profits from bad. </li></ul>
    29. 44. The example of Dell <ul><li>2003: 8 millions customers </li></ul><ul><li>15% detractors = 1,2 millions X 57$= 68 millions cost to Dell </li></ul><ul><li>Converting half of them would improve the bottom line with 160 millions$: 600 000X267$ improvement per conversion. </li></ul><ul><li>How a simple math helps putting the right priorities. </li></ul>Source: Fred Reichheld, The Ultimate Question, Bain&Company.
    30. 45. The challenge is about creating and delivering Superior Value of Use in the daily life of users and even stakeholders.
    31. 46. Another example
    32. 47. The big gap of the “what can I do for you economy” <ul><li>From a recent survey amongst 362 companies we discovered that </li></ul><ul><li>- 96% of their senior executives said they were focused on the customer. </li></ul><ul><li>- 80% believed they delivered a superior customer experience </li></ul><ul><li>Customers, in another survey were asked to rate the providers of good and services that they bought from: only 8% of the companies got a superior rating. </li></ul><ul><li>BRING THE CONSUMER INTO THE BOARD ROOM. </li></ul>
    33. 48. Conclusion: What is really new in this economy ? <ul><li>Consumers are taking over the marketing conversation. </li></ul><ul><li>They’re developping their own messaging about the brand, creative content and media preferences. </li></ul><ul><li>With increased frequency they launch their own commentaries online. </li></ul><ul><li>In 2005, 78% of all users of internet were researching a product or service before buying it. </li></ul><ul><li>Advertising is no longer the great influencer </li></ul><ul><li>The passive target of the past is becoming a smarter than you are moving target that talks back and thinks for itself. ME-COMMERCE is not far away. </li></ul>The you niverse
    34. 49. Conclusion: What is really new in this economy ? The me -commerce
    35. 50. Conclusion: What is really new in this economy ? The entry into « reverse markets » <ul><li>Markets where companies will have to focus on being more accessible rather than reaching out for people and targets </li></ul><ul><li>Markets where companies will maximize the value customers receive from the purchase and use of their products and services by providing tailor made help in purchasing and using these products and services. </li></ul>Source: John Hagel III
    36. 51. Conclusion: What is really new in this economy ? The entry into « reverse markets » <ul><li>Markets where companies will mobilize third parties and focus on assembling and packaging the resources to meet the needs of each individual. </li></ul><ul><li>Markets where the key measure will be RETURN ON ATTENTION. In a world where choices and information are unlimited, the only scarce resource is customer attention. They’re stuck with 24h/day. </li></ul>Source: John Hagel III
    37. 52. 4. A few thoughts about how to innovate
    38. 53. 4.1. The edisonteam
    39. 54. 4.2. Ex-centricity We’ve seen one aspect of it : consumercentricity. Let’s look at another one inspired by surfers and John Hagel.
    40. 56. First , if you want to push your performance levels, find the relevant edge. Second , attract motivated groups of people to these edges to work together around challenging performance issues. Third , recognize that the people who are likely to be attracted to the edge are big risk-takers. Fourth , recognize that the edge fosters not just risk-taking, but very different cultures that are also &quot;edgy. Fifth , find ways to appropriate insights from adjacent disciplines and even more remote areas of activity.  » Sixth , bring users and developers of technology close together.  John Hagel in Business Week, 2008.
    41. 57. 4.3. Business Ideal ©   <ul><li>Ideal communication leadership </li></ul><ul><li>Ideal human ressources leadership </li></ul><ul><li>Ideal value chain leadership </li></ul><ul><li>Ideal marketing leadership </li></ul><ul><li>Ideal R&D leadership </li></ul><ul><li>Ideal leadership: unleash talent and ideas </li></ul>
    42. 58. <ul><li>Be proactive </li></ul><ul><li>Start with the end in mind </li></ul><ul><li>1 st things 1 st </li></ul><ul><li>Think win win </li></ul><ul><li>Understanding > being understood </li></ul><ul><li>Synergize </li></ul><ul><li>Sharpen the saw </li></ul><ul><li>Find your voice </li></ul><ul><li>Aim at being surpetitive </li></ul><ul><li>Start with the stakeholders in mind </li></ul><ul><li>1 st things 1 st </li></ul><ul><li>Think SVU </li></ul><ul><li>Explore the world </li></ul><ul><li>Release stakeholders energy and unleash talent </li></ul><ul><li>Sharpen the saw </li></ul><ul><li>Find your idea </li></ul>An organization The ideal business laws An individual The 8 habits of Covey
    43. 59. 4.4. Structure and culture 
    44. 61. 4.4. Attitude 
    45. 62. Rules to live by : - Resist the usual - Ideas come from everywhere - Everybody can contribute - Open source and trust are critical - Having ideas is more important than owning it - There is no territory for an idea except the Cy - Playing with best players makes you play better - Sustain intrapreneurship (3M, Google) - Innovation never lead to instant perfection: you need a commitment to improve or rejuvenate ideas - Numbers are essential: you need data, it frees people from worries about politics. - Creativity loves constraints - Money follow customers - The interest of the future is about inventing it rather than knowing how it will look. - The future belongs to heretics, not prophets. Inspired by a conference from Marissa Mayer @ Stanford.
    46. 63. Conclusions
    47. 64. « The more I practice, the luckier I get. » Gary Player.
    48. 65. What should you remember ?  <ul><li>Without innovation, you’ll die. </li></ul><ul><li>Innovation becomes a fashion there where it should be a culture, an attitude. It takes art to innovate and to become sustainably competitive. </li></ul><ul><li>Be ex-centric, work on the edges. </li></ul><ul><li>Bring the consumer into the boardroom. </li></ul><ul><li>Deepen your core competencies and look for differentiating resources outside, at the edges of your business. </li></ul><ul><li>Find an idea that federates the troops along your value chain. </li></ul><ul><li>Avoid politics by measuring everything, starting by the problem that an innovation should resolve. </li></ul><ul><li>Practice, practice, practice, practice, practice, practice, practice, practice... </li></ul>
    49. 66. 21, rue Joseph Bensstraat 1180 Brussels Belgium [email_address]