Attachement 4: General innovation

ESF project 4895: Meer werk maken van innovatie voor werkgelegenheid en arbeidsmarkt
ANALYSIS FICHE OF LITERATURE
TITLE OF LITERATURE: “Is your genius idea really so great?”
AUTHOR : Bizz (inventors of concept RESTOC are C. and Y. Frey)
TYPE OF AUTHOR (academic, consultants, practitioners, other): Bizz June 2006 (business magazine)
COMMISSIONER OF LITERATURE (IF APPROPRIATE):
ORIENTATION OF LITERATURE (check with X):
• innovation in general: X
• innovation by / within the public sector:
• innovation oriented towards citizens:
• innovation oriented towards social and employment issues typically dealt with by ESF:
LESSONS LEARNT REGARDING:
A. How to define innovation e.g. in types
Recognises three types defined by 8 criteria, the most relevant are described below:
a) Revolutionary innovation: requires 10-15 years. Starts from unaddressed need. Knowledge is
emerging. Applied research is starting point for search of new concept. Market is new.
Impact high.
b) Evolutionary innovation: 3-6 years. Starts from known and already served need. Knowledge is
derived from combining known elements or from evolving them. Starting point for new
concept are redefined / actualized needs. Market exists or is new. Impact medium.
c) Specialised innovation: 1-2 years. Needs are known and served. Starts from existing service
to get improved/perfected but not new concept. Market exists. Impact low.
B. How to formulate an innovation strategy (in terms of scope, types of innovation,
requirements)
C. How to organize innovation as a process in different stages?
Splits the process into 1) conceptualizing 2) development (operational prototype) 3) dissemination
(produce and sell)
D. How to define outputs of innovation e.g. in terms of idea, concept, prototype…?

E. How to make decisions regarding progress of an innovation?
F. What roles exist for different actors in the innovation process? What competences are
required for these roles?
G. How to organize interaction with external stakeholders (open innovation)?
H. Specific tools that are explained (list briefly for each tool in what stage, by which role, why,
how it is to be used).
a) Tool 1:

TITLE OF LITERATURE: Innovation, the classic traps
AUTHOR : RM Kanter
TYPE OF AUTHOR (academic, consultants, practitioners, other): academic
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review Nov 2006
requirements)
Strategy mistakes:
• Beware of screening out ideas that cannot directly demonstrate how much impact
they would have (eg based on research, experience)
• Beware of focusing too narrowly on improving an existing service rather than
redefining more fundamentally what is needed and how it can be addressed
• Linked to the above, beware of funding a range of smaller variations on the same
service
• Remedies: create an innovation pyramid with 1) a broad base of early stage ideas of
incremental innovations 2) a mid level of promising ideas pursued by dedicated
temporary teams 3) a few big bets that receive most of the funding and that set clear
directions for future by dedicated groups. The latter influence medium and small
ideas, while also small tinkering may lead to big ideas. If smaller ideas find a place,
people are liberated to come up with bigger ones too.
• Tip: wide funnels increase chances for big ideas alongside smaller ones.

Process mistakes:
• Applying the same planning, budgeting, review processes as for mature business
with expectations that managers stick to their plans (leading them again to
underpromise) and no separate innovation investment funds
• Remedies: Reserve pools of special funds. Follow the rhythm of the project, rather a
fixed quarterly or annual calendar. Same may go faster, quickly reaching milestones
that trigger a review and allocation of next funding, while others require more
patience (eg when encountering an unexpected obstacle).
Structure mistakes:
• Game changing innovation often cut across existing silos, combining existing
capacities in a different way. This may be perceived as a threat by those existing
silos. This requires that interpersonal connections across silos are strengthened.
• Remedies: productive conversations should be held between business as usual and
the inn ovation team. Senior leaders play a role here in focusing on mutual learning.
Also, rotation from innovation to front line teams can be useful as can creating
solutions oriented teams that span different silos.
Skills mistakes:
• Leaders should lead innovation development, not necessarily the best “experts,
technicians”. They focus on building trust and interplay among the innovation team.
Research is quoted that states team members relay start to perform after two years
on board. Otherwise, they cannot stay involved from start to finish given average
lead times of 24 to 26 months.

• Relationships outside the team need also to be nurtured by leaders to avoid the
project team to become closed off. This leads to failure to tap ideas from outside but
also failure to create buy-in. Technical experts may rather mystify others, losing
support along the way. Jumping out with something fully developed as a surprise will
face unexpected objections that sink the whole project.
a) Tool 1:

TITLE OF LITERATURE: the Myths of Innovation
AUTHOR : J. Birkinshaw et al.
COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT SLOAN MANAGEMENT REVIEW
requirements)
1) Financial triggers are not what motivates innovators. Recognition is much more important.
This means face to face contact to present ideas matters.
2) At the front line, continuous experimentation facilitated by local seed-money for small scale
bets is required. As some of these small scale bets start to develop further and need more
financing, the idea goes to a higher level where it can become a pilot project.
Preliminary sorting, scoring and feed-back of large numbers of ideas take a huge amount of time and
effort by stakeholders and experts. If there is a lack of capacity to act on the ideas, this is
demotivating.
Remedy: be very clear what problem you intend to solve and start idea collection only if a lack of
ideas is already certain. If you go for idea generation, be prepared for the work.

Using external sources for innovation creates issues of intellectual property and trust. Also, the
capacity to use the insights offered by outsiders may be stretched, with really radical ideas finding no
receptive ear.
a) Tool 1: web 2.0
Just building a web 2.0 interactive site does not guarantee success. Many ideas that get posted are
half-baked. Few people take the trouble to build on ideas of others.
TIP: if 1) you want to generate a wide variety of views about existing ideas, or 2) you are looking
for a specific answer to a question (e.g. choose between options, narrow technical questions with
factual answers), then an online forum can be effective. To avoid: big conceptual leaps (we want a
radical new approach in…). Here you need to provide a stimulus to encourage people to think
differently (e.g. what would our service look like if it was like your favourite restaurant). Also, if
you want people to build on ideas of others and take responsibility for their ideas, use workshops.

TITLE OF LITERATURE: The innovative climate
AUTHOR : Trends
TYPE OF AUTHOR (academic, consultants, practitioners, other): business magazine
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Trends, March 2007
requirements)
Innovation can lie in new technology but also new processes and organisation.
Never reward individuals, only the team. Focus on recognition.
Failure is when you keep going too long with an unsuccessful project. Stopping such a project is not
failure but just a moment to capture the lessons learnt and move on.

Leaders must create a motivating environment for innovators so they can follow their passion. These
innovators should be able to “own” their projects.
Teams should not be too small (eg 3 people) as there is too little diversity, but also not too large (eg
10 persons) as then it becomes inefficient to exchange knowledge.
a) Tool 1:

TITLE OF LITERATURE: Reverse engineering Google’s innovation machine
AUTHOR : B. Iyer et al.
TYPE OF AUTHOR (academic, consultants, practitioners, other): Academic
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, April 2008
requirements)
1) Be strategic ally patient, have a long term vision in mind rather than short term gains.
2) Employees have to spend 20% of their time on innovation projects. Managers also have
to spend 20% of their time on related, but different new projects and 10% on totally
unrelated projects. This allocation is not by month or week but by year with
accumulation possible.
3) Trust placed in employees to work on the right things combined with possibility to
engage rapidly in experimentation is highly motivating.
1) Prototype, pilot, test as a controlled experiment.
2) Multiple parallel offerings are presented to users whose choices lead to adoption or
rejection.
3) People should be able to bump into each other without knowing where to go to spark
creativity.

4) How to define outputs of innovation e.g. in terms of idea, concept, prototype…?
5) How to make decisions regarding progress of an innovation?
1) If you fail, you should fail fast, so that you can try again.
2) Be analytical, data focused.
6) What roles exist for different actors in the innovation process? What competences are
Leaders should assess staff on their contributions to stimulate innovation eg. how often they
organized a “tech talk” (see below). They should also make sure there are lots of opportunities to
meet and talk to people with other perspectives.
7) How to organize interaction with external stakeholders (open innovation)?
1) Testing and marketing with users blends into one. Users become essential members of
the development team.
2) Allow others to come up with complementary services and link them to you own core
service.
3) Capture the information related to all users, whatever service they access, including on
its usefulness.
4) Organise intellectually stimulating “tech talks “with global experts, researchers.
8) Specific tools that are explained (list briefly for each tool in what stage, by which role, why,
a) Tool 1: The internet is used for randomized experiments (eg multiple versions of a webpage
and then see who clicks more).
b) Tool 2: Prediction markets are used to assess user demand for new services (eg ask 300
people a specific question regarding the future)
c) Tool 3: online idea box where all staff can comment on and rate the idea.

TITLE OF LITERATURE: Mapping your innovation strategy
AUTHOR : S. Anthony et al
TYPE OF AUTHOR (academic, consultants, practitioners, other): consultants
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, May 2006
requirements)
Need to define where to innovate by asking: what jobs can our existing clients not get done.
Discover this by seeing if services are used in unintended ways or whether they are clumped
together for a suboptimal solution. Also, see who the worst clients are. Next, check if
accessing the service goes beyond the means, capacity/expertise of some clients or requires
to go to a centralised place.

1. The early focus needs to be on a checklist of criteria derived as follows: check out the
last 10 major innovations both flops (particularly those though to become a sure hit)
and successes (particularly those considered unpromising at first). Derive from this
list of criteria to meet. In this way, you can avoid going for similar solutions as before.
2. Avoid staring at innovations for well-known large user bases because they can be
calculated in terms of demand and cost. Chances are that these are very incremental
innovations only. Better is to come up with ball-park figures and then to think
through what would have to be true to make these number stick. This procedure can
handle innovations aimed at difficult to measure, seemingly small markets too.
3. Teams with too much money can affords to keep going in the wrong direction, even
when faced with unfavourable info, for too long with too much money allocated too
early. Best is to invest a little to learn a lot via focused experimentation. You must
identify the critical assumptions that you focus your knowledge gaining efforts on.
This implies weighing the costs of being wrong about an assumption with the costs
and time required for finding out more. This also means you must be willing to kill
projects early if key assumptions are not met.
4. Four kinds of status exist:
o Double down: move forward rapidly as most info gained points to success
with few tested assumptions being a big threat
o Continue exploring: what is tested is positive, but some key assumptions
remain untested so keep testing
o Adjust the game plan: the current approach seems not to be viable but
another may be so switch
o Shelve: no clear path forward, move on to something totally different
5. The right kind of failure is success. Learning what is wrong and acting on this is a
good thing.
Leaders must know that stage gate processes have led to us (project team) against them (decision-
makers mentalities. However, senior leaders should act as problem solvers, not gatekeepers who
only open or lock gates. They should get involved in the project, reviewing early prototypes,
participate in brainstorms, help solve problems, to enable them to get a better feel for the project
and its potential, rather than wait until the team presents itself in a meeting for a decision. This is not
necessary for innovations in well-known markets where a traditional gate-keeper roles is OK.

TITLE OF LITERATURE: Managing innovation strategy
AUTHOR : J. Duelli et al at Bain
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Bain
requirements)
Step 1: identify and develop innovation options. First do a strategic review, drawing on the latest
knowledge (from experts, literature, networks,…) in terms of approaches to get a basic
understanding of possibilities. Then study the potential of these possibilities in terms of servicing
clients and their needs. This entails proper segmenting according to characteristics different groups
may value differently. Next for each possible approach and segment, come up with estimates for
demand and cost. Finally, consider other service providers and whether or not they are already
offering a particular approach or have a better capability to do so in the future.
Step 2: assess internal capabilities. For each option we investigate how much is really know for sure
and what the probability could be of success. Next we look at the kind of capabilities we need
(available in house or must they be brought in). Next, for the full portfolio of possibilities we map and
cost and staff capacity requirements over time.

Step 3: value and prioritise options. Use decision trees to be able to compare various options based
on probabilities of success of various phases they would go through. Also use qualitative criteria for
elements hard to quantify.
Step 4: implement and manage. Multifunctional project teams start projects. They will need to go
through pre-established go/no go checkpoints.
How to define outputs of innovation e.g. in terms of idea, concept, prototype…?
D. How to make decisions regarding progress of an innovation?
E. What roles exist for different actors in the innovation process? What competences are
F. How to organize interaction with external stakeholders (open innovation)?
G. Specific tools that are explained (list briefly for each tool in what stage, by which role, why,
a) Tool 1:

TITLE OF LITERATURE: The eight esssentials of innovation performance
AUTHOR : M. De Jong et al. (McKinsey)
COMMISSIONER OF LITERATURE (IF APPROPRIATE): McKinsey
requirements)
1. ASPIRE: A compelling vision is needed. But also, the innovation gap should be clear: how
much of this vision will we be able to realise with current activity (existing, expanding)? Put it
in numbers. The gap implies the need for innovation. Where there is no gap, there is no need
for innovation or there is too little ambition. Try to break down the gap towards all those
actors who are meant to contribute to it.
2. CHOOSE: a) Define innovation themes/spaces within which we will conduct searches for
insights to create new value. This is helped by recognizing signals of change and
understanding various possible scenario’s for the future. B) Create transparency in the
portfolio of initiatives in terms of expected impact (scale of 1-10 depicted as a bubble),
timing (1-2, 2-3, more than 3 years on X axis) and risk (high, medium, low on Y axis). Consider
the distribution of initiatives (e.g. high risk, low value makes little sense; fewer high risk high
value projects and more low risk lower value ones may make sense). Make sure all are linked
to the themes. c) Ensure adequate funding to maturity for all initiatives. d) Keep the
innovation gap in mind!
3. DISCOVER: this revolves around identifying the problems, issues that need an innovative
response by an interdisciplinary team who draw up a list of possible actions and outcomes
citizen want to realise. This is based on a) an analysis of the current value chains (who does

what when for/with whom until we reach the citizen). Consider if this can be reconfigured
with the end customer in mind, given interests/positions of current actors and the regulatory
context b) understanding citizen preferences through observation of behavior (ethnography,
surveys, to find out about motivation for use of current services and how they are used). This
may challenge existing segmentation based on demographics and current services. c)
Understanding of (emerging or existing) technologies, approaches.
4. EVOLVE: act on the current value chain, reconfiguring it. Do this first with experiments.
5. ACCELERATE: get the innovations up and running fast by
a) knocking down barriers (access to resources, channels, partners, people) that stand
between an idea and the user who needs it.
b) testing ideas early on, before they get diluted in stage/gate committees while keeping
focus on the value proposition / concept
c) have strong project managers who can say “yes” (rather than focus on “no”)
d) have a cross-functional qualified team of project members dedicate 50% min of their time
to the project to ensure the project focus and culture are in place to be successful.
e) co-locate the team
f) have frequent reviews with relevant managers/decision-makers driving towards decisions
for next steps towards success rather than ticking boxes on “gate“ checklists.
g) changes to the concept need to be deliberate and based on new info. They should be
approved by a cross-functional review board to avoid accidental bias towards one viewpoint.
Of course, enhancing the concept based on better understanding of the users’ needs or how
to meet them is very much desired.
6. SCALE :
a) consider the right scale to deploy the innovation. Sometimes something can only work a
smaller scales, sometimes only at a larger one.
b) use user test markets or reference customer installations to test before doing a large scale
roll-out
c) create anticipation and excitement
d) think about and use all the different ways to get the service to the user
e) ensure staff are trained, the facilities are adequate, partners are fully aligned, etc. and that
everyone has the capacity to deal with the anticipated volume of users
5 strategies are described:
Visionary:
driven by
strong
leader who
sees
paradigm
shift early
Strategic: be
in right
position
Discoverer:
focus on
meeting
hidden needs
Fast
follower:
outdeliver
innovation to
market
Experimenter:
explore high
number of
avenues
within broad
areas
Aspire X

Choose X X
Discover X
Evolve X
Accelerate X
Scale X X X
Mobilise X X
8. MOBILISE: a) committed leadership is the greatest predictor of innovation success. b)
innovation competitions are a good way to motivate but simply asking for good ideas is
rarely effective. c) establish a dedicated team at business unit or corporate level responsible
for driving innovation. d) support exchange of information (virtual/co-location; documenting
lessons learnt from market, ideas, tests, …). e) visibly recognise innovators.
7. EXTEND: Use networks, co-create with partners and users. Foster a culture that welcomes
ideas from outside and does not dismiss what does not seem useful initially too fast. This
requires tightly managing the interface with the external community and being able to
translate what is out there to something useful. Don’t just ask for ideas in general, ask them
to source specific existing issues.
a) Tool 1:

TITLE OF LITERATURE: How the top innovators keep winning
AUTHOR : B. Jaruzelski et al
TYPE OF AUTHOR (academic, consultants, practitioners, other): consultant (Booz)
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy and Business issue 61
requirements)
1) Need seekers: superior end user understanding, active and direct interaction, first to
market.
2) Market readers: focus on incremental change and proven market trends
3) Technology drivers: driven by technical expertise, both in incremental and breakthrough
innovation, often focusing on unarticulated needs.

Common:
1) At ideation: ability to gain insights into customer needs and understand potential of
emerging approaches
2) Engage actively with users to prove validity of concepts during development
3) Work with pilot users to roll out service carefully
Depending on strategy:
a) Need seekers: connect directly and constantly even before selecting ideas for
development. Go back with prototypes to same sites were research was done originally
and testy with users. Leave users to think about it, play with it and then come back to
collect info.
b) Market readers: disciplined stage/gate processes to make sure right service hits users at
right time. Engage with users throughout development to make sure it is feasible to
deliver the service.
c) Technology drivers: pursue open innovation and give time to own staff (eg google % rule)
to capture as many ideas as possible. Anticipate issues for users. Make long range
scenario’s/road maps of future trends in terms of technology/techniques. Rigorous
decision making in R&D portfolios to funnel the wide ranging ideas. Life cycle
management.
a) Tool 1:

TITLE OF LITERATURE: Match your innovation strategy to your innovation ecosystem
AUTHOR : Ron Adner
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review April 2006
requirements)
Initiative risk: feasibility of the service itself, likely benefit to users, relevant competition (if relevant),
appropriateness of the supply chain (if relevant), quality of the project team.
NOTE: Venture capitalists expect 9 out 10 investments to be losses.

The article focuses on the risks associated with external parties.
1. Interdependence risks: will different partners be able to satisfy their commitments
within a given timeframe towards a component of a larger solution that has to b co-
delivered? Consult managers, double check with partners, check track records. Partners
may be late due to internal development challenges, regulatory delays, incentive
problems, financial problems, leadership crises or their own interdependence with
others. Mathematically, if 5 partners have to co-deliver, the probability they will deliver
on time is based on multiplying each individual probability. This means one weak link has
a large impact on overall probability of delivering on time. The longest time it takes one
of them to deliver determines the overall time (parallel timing).
2. Integration risks: as the number of intermediaries rises, so does the risk. In this case
probabilities of delays are added. If benefits do not exceed costs at every intermediate
step, intermediaries will not move the offering down the line. These intermediaries also
need time to adjust to offering / cooperating in a new service (sequential timing).
a) Tool 1: ecosystem map
1) Identify all intermediaries and all complementors
2) Estimate delays related to all of them
3) Arrive at time to market
Maps vary according to the target market, even if the core innovation is the same.

TITLE OF LITERATURE: Creating value through business model innovation
AUTHOR : R. Amit et al
COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT Sloan Management Review spring 2012
Business model innovation: “bundle of interconnected/dependent activities to satisfy a perceived
need along with the specification of which parties conduct which activities and how they are linked
to each other”.
An new business model can either a) create a new market b) allow to tap new opportunities in
existing markets by:
a) Adding new activities to deal with shifts in needs (content)
b) Linking activities in novel ways (structure)
c) Changing the parties (incl customers themselves) that perform the activities (governance)
These elements can themselves be highly interdependent.
requirements)

Success depends on whether value is generated via 1) innovativeness of the activities 2) incentives
for partners / users to stay engaged (switching costs, network effects) 3) value enhancing
complementarities 4) costs savings through the inter-connections
It is necessary to consider the interdependence between the business model and the revenue model
(how the business model gets financed) for all parties involved.
a) Tool 1:

TITLE OF LITERATURE: Meeting the challenge of disruptive change
AUTHOR : C. Christensen et a;
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review March 2000
1) Sustaining innovations: make a service perform better in ways that users already value.
Usually introduced by well-established organisations via fixed processes and consistent with
values of more mature organisations.
2) Disruptive innovations: a new kind of service, initially worse if judged by mainstream
customers. Usually bred by start-ups who can embrace small markets and revenues.
requirements)
Change (to embrace an innovative idea) is very difficult for organisations where capability resides
in its processes and values (priorities that enable to make judgments), as in mature
organisations. It is less problematic when it resides mostly in people (as in start-ups).
To embrace change that requires new processes and values a new organisational space is
required. Two ways are:
a) Create a “heavy-weight team” with its own resources and authority, allowing new processes
to emerge, if the old processes are not compatible with the innovation.
b) Create a spin-out only when new processes are necessary AND the cost structure must be
radically different for the new service to be viable or the size of the opportunity is too
insignificant to be considered by the mainstream organization (no fit in values). Top
management must take charge of this and adequately resource such a spin-out.

One can also purchase capability via acquisitions. If the capability is embedded in processes
and values, it should not be integrated. Better is to infuse it with the new owner’s resources.
However, if it is the people, technology or customers one wanted, these can be integrated.
a) Tool 1:

TITLE OF LITERATURE: Innovations uncertain terrain
AUTHOR : N. Rosenberg
TYPE OF AUTHOR (academic, consultants, practitioners, other): consultant
COMMISSIONER OF LITERATURE (IF APPROPRIATE): McKinsey Quarterly nr 3 1995
Truly major innovations have a knock-on effect: they induce further innovations across a
wide front.
requirements)
We have a remarkable inability to foresee the uses to which new technologies, techniques,
approaches can be put. This is because they may at first be in a primitive state as well as
have characteristics that cannot be immediately appreciated. This is due to the fact that we
look at a new approach only from the point of view of the current and what it can do to
improve the current.
Sometimes, complementary evolutions are required before something becomes useful. This
can have very long timeframes. Sometimes, old approaches become useful again in
combination with the new.
It also can take a long time before an innovation becomes embedded because people have
to learn by doing and organizational change may also be required.
Uncertainty is so large, that it is not a good idea to bet on only one thing but better to have a
diversified portfolio .

a) Tool 1:

TITLE OF LITERATURE: Half your R&D is wasted, but which half and on what?
AUTHOR : JP Deschamps
TYPE OF AUTHOR (academic, consultants, practitioners, other): academic/consultant
COMMISSIONER OF LITERATURE (IF APPROPRIATE): AD Little
requirements)
Deciding which customer needs or wants to address and on which ideas that address these to focus
innovation resources remains a huge challenge. The tools for handling innovation AFTER these
choices are made, in terms of developing and launching the best solutions, are much better
established.
What is needed?
1) A set of clear strategic guidelines regarding where and how to play in the future together
with unambiguous mandates for innovators on which problems or opportunities it should
focus. This helps avoid the “cure all” problem work on everything at the same time).
2) Consistent commitment over time to these from decision-makers
3) Opportunities for innovator to get their own feel for how these priorities evolve in the world
of users (getting market exposure), to become better partners and challenges for their
mainstream colleagues and
a. to avoid wrong focus by market immersion: talk to customers

b. to avoid tunnel vision by talking also to non-customers and other organisations
customers as well as the customers of customers or end-users down the chain to
avoid missing opportunities missed by direct customers
c. to avoid searching for irrelevant perfection when a need has been met but one
continues to look for a better solution anyway, one should have regular reviews of
customer’s perceptions of what constitutes value
4) Tools for enhancing dialogue with others in the organisation (especially marketeers to avoid
technology/solutions push and / or unaffordable solutions by
a. Having regular workshops with the rest of the organization to discuss potentials of
new approaches and insights from market immersions
b. Providing funding only for short exploration at first. To move on, the innovators must
find a sponsor in the organization. If they cannot sell it to themselves, then how will
they ever sell it to anyone else.
c. Design to cost approaches.
d. Constructive review processes enriched with outsiders (e.g. experts) to help find
cost)-effective solutions
a) Tool 1:

TITLE OF LITERATURE: Bringing open innovation to services
AUTHOR : H. Chesbrough
COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT Sloan Management review
Service innovation refers to something different than product innovation. While for the first, there is
a linear process of material inputs being processed into outputs and then shipped to a customer,
with services there is an iterative process between customer and service provider but also partners,
complementors and others that results as a whole in a customer experience.
It may run like this: a customer comes with a problem. The customer is then invited to co-create the
service, which may lead to provider eliciting tacit knowledge (usually with open ended questions)
from customer (and vice versa), this is put to use to design/refine “experience points” (direct outputs
for the customer based on the providers expertise and their understanding of the customer’s issue
and context). Finally this is then offered. Not everything needs to be done by one provider. In fact,
the provider may just be coordinating others. Then it is checked by the customer if this is addressing
all needs or if some needs have not yet been addressed well enough. If OK, service provision starts, if
not, then co-creation continues. All of this creates a customer experience.
A classification of innovation is offered:
-improve a service that is already offered
-extend this service
-come up with entirely new service offerings

requirements)
Open innovation: this entails
1) Bring outside in: make use of ideas and resources of others (incl. users e.g. where they do
part of the service provision themselves)
2) Bring inside out: bring ideas and resources to others
Fostering open innovation can be done by:
1) Team up with a particular customer (group) to solve a problem in a pilot, then offer more
widely.
2) Focus on utility rather than instruments. People don’t want the instrument, they want their
needs addressed.
3) Embed yourself into the customer organization (if relevant).
a) Tool 1:

TITLE OF LITERATURE: Reinventing R&D through open innovation
AUTHOR : H. Chesbrough
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy and Business, 2003 (Booz)
requirements)
Open innovation =
• Rethinking the R&D function from research all the way up to development into a unit
that looks for opportunities to exchange Intellectual property with others
• This requires switching from a focus on depth to one on breadth and integration

a) Tool 1:

TITLE OF LITERATURE: The era of open innovation
AUTHOR : HW Chesbrough
COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT SLOAN Management review, Spring 2003
Open innovation means ideas can become real not by deploying them internally where they started,
but somewhere else (eg in a new perhaps even joint venture, via licensing). It also means ideas from
elsewhere can be brought in an deployed. This means that IP (intellectual property) is not about
“locking it up”, keeping it secret from others anymore but finding ways to benefit from sharing.
requirements)
Open innovation idea screening not only tries to get rid of false positives (look good but are bad) but
also retain false negatives (look bad, but are actually good). This is possible because what looks bad

from one point of view, due to a constraint given by the current business focus, may look good to
someone else.
1. Funding:
a. Innovation funders: have money to move ideas into the market (g via start up) and
offer advice in this.
b. Innovation benefactors: money for early stages of research discovery.
2. Generating:
a. Explorers: specialise in discovery research for innovation’s sake
b. Merchants: also explore but focus more narrowly to create IP that can be sold to
others
c. Architects: organize others to develop a complex offering where they need to make
sure all parties benefit sufficiently
d. Missionaries: selflessly , because they want to see a higher cause achieved, develop
and share an innovation (eg open source movements)
3. Deploying:
a. Marketers: keep finger on pulse of user needs and focus on bringing in ideas from
others that could meet these needs
b. One-stop centres: do the same but for a more comprehensive offering, to be
deployed together with others.
A new function will be “brokers” who form markets for Intellectual Property.
If an idea generated somewhere is not acted on by an organization within, say 3 years, then it should
be offered to others.
a) Tool 1:

TITLE OF LITERATURE: A better way to innovate
AUTHOR : HW Chesborough
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, July 2003
requirements)
Mobile knowledge workers more widely dispersed than ever + the internet (cheap and fast flows
of info) = demise of old model of ‘closed’ innovation (based on shielding Intellectual Property
from others).
Examples of open innovation:
1) Export:
a. Delivering services for others under their name.
b. Sell ideas to others
c. Sell competences/capabilities to others
2) Import:
a. Academics, researchers are “rotated” into an organization for time (eg 2 years) and
then return to the university
b. Use external idea scouts (like Big Idea Group) to find ideas “out there”
c. Use online knowledge brokers

a) Tool 1: online knowledge broker tools like
a. http://www.innocentive.com/

TITLE OF LITERATURE: The new business logic of open innovation
AUTHOR : H. Chesborough
TYPE OF AUTHOR (academic, consultants, practitioners, other): acedmic
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business School, 2003
requirements)
One principle is : It is not necessarily having the very best individual service that matters, but
how it is integrated with other offerings by others.
There are other principles:
Closed Innovation Principles Open Innovation Principles
The smart people in the field work
for us.
If we create the most and the best ideas in the
industry, we will win.
To profit from R&D, we must
discover it, develop it, and ship it
ourselves.
External R&D can create significant value: internal
R&D is needed to claim some portion of that value.
If we discover it ourselves, we will
get it to the market first.
We don’t have to originate the research to profit from
it.
The company that gets an innovation
to the market first will win.
Building a better business model is better than getting
to the market first.

If we create the most and the best
ideas in the industry, we will win.
If we make the best use of internal and external ideas,
we will win.
If we create the most and the best
ideas in the industry, we will win.
We should profit from others’ use of our IP, and we
should buy others’ IP whenever it advances our
business model.
a) Tool 1:

TITLE OF LITERATURE: Design thinking
AUTHOR : Tim Brown
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review June 2008
• innovation oriented towards citizens: X
requirements)
Initiate revolutionary innovation from the top, while expecting incremental from below.
Edison’s approach was not to set out to validate pre-conceived hypothesis but to help experimenters
learn something new from each iteration / try (99% perspiration).
The innovation design process is best seen as a system of three spaces, that must all be (re)visited at
some point, rather than a predefined series of orderly steps: 1) inspiration for the circumstances 2)
Ideation for the process of generating, developing, testing ideas that may lead to solutions 3)
Implementation for charting a path to roll out for the solutions that were withheld. Projects will loop
back more than once (especially in the first two spaces).

Innovation should focus on human needs e.g. by using direct observation to detect these.
Teams should come up with a first prototype in the first week of a project. They should expose rapid
prototypes to many users throughout the project.
Co-create with users, exploit web 2.0
Get designers involved.
Ensure people can stay involved the full length of the project from start to finish.

Teams should be interdisciplinary.
Design thinkers have the following profile:
• Empathy: see the world through different perspectives incl. users and focus on needs of
people. Observe in minute detail, noticing things others do not.
• Integrative thinking: can see beyond the obvious
• Optimism: believe at least one potential solution will be better
• Experimentalism: pose questions, explore constraints in creative ways
• Collaborative: most have a diverse background, master more than one discipline. This goes
beyond just working with other disciplines.
a) Tool 1:

TITLE OF LITERATURE: IDEO service design
AUTHOR : INSEAD case
COMMISSIONER OF LITERATURE (IF APPROPRIATE): INSEAD
requirements)
1) Observe: observe and empathise with users instead of sending surveys
2) Synthesise: step back and distill info into guiding principles for the solutions that are to be
designed
3) Generate ideas: cast a wide net using brainstorming. Go for quantity, build on other’s ideas,
no judgment, stimulate wild, stay on topic, be visual (write ideas on cards and put on walls)
4) Rapid prototyping: quick and dirty (no frills) prototypes (using mock-ups of spaces, services
etc, videos, role plays with different kinds of user roles ) are used to refine ideas and flesh
them out early. Each iteration brings the idea closer to the final solution.
5) Refine: narrow down to a few possibilities now, focusing prototyping now on a few key ideas
to arrive at an optimal solution. Get agreement from stakeholders.
6) Implement: bring all resources to bear when making the service happen.

Knowledge sharing is done via stories (Monday morning meetings, leadership meetings, lunchtime
show and tell, …)
a) Tool 1: customer journey map: account for all the different service “touch points” where the
users interacts with the provider.
b) Tool 2: fly on the wall: watch what people actually do
c) Tool 3: “Be a” . Choose an inanimate object (not people but eg a file) and observe the path it
takes and the interactions that occur within a system.
d) Tool 4: Customer segmentation based on insights from observation
e) Tool 5: Experience architecture: visualization of the “new” customer journey
f) Tool 6: user evolution pathway: shows how user experience evolves over longer term with
multiple interactions
g) Tool 7: Extreme user research: extremely familiar or unfamiliar with service
h) Tool 8: Design principles and style guide: principles and more detailed rules for design
derived from observation /interviews
i) Tool 9: brainstorming
j) Tool 10: rapid prototyping: use mock-ups, movies to depict user experience, storyboards,
role playing (all stakeholders)
k) Tool 11: shadowing: tag along with people to observe their daily routine
l) Tool 12: visualize user experience with drawings and diagrams
m) Tool 13: character profiles (archetypes) based on observation: the typical customers come to
life (may attach different value to different concepts)
n) Tool 14: Camera journal: visual diary of user experience
o) Tool 15: narration: ask to describe aloud what users are thinking as they engage

TITLE OF LITERATURE: Design thinking for social innovation
AUTHOR : Tim Brown et al
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Stanford Social Innovation review Winter 2010
requirements)
You need to think systemically. Consider not only form and function but also channels .
System of overlapping spaces (see also article 20, Design thinking by Tim Brown) as they are
visited more than once as the team refines ideas and explores new directions.
1. Inspiration:
a. identify problem/opportunity. Brief also gives constraints: price/costs, available
techniques/technology (how), market segment (who). The brief should not be
too abstract as the team will wander, nor too constrained as only incremental
solutions will develop.
b. Discover needs: although people cannot tell what their needs are, their behavior
reveals it. Need to work with local partners: serve as cultural guides and
interpreters, make introductions, help build credibility.
2. Ideation: generating, developing, testing ideas.
a. Synthesis of finding

b. Brainstorm of ideas: multidisciplinary people required for divergent thinking.
100s from absurd to obvious. Use visuals. No devil’s advocates allowed. At the
end, grouping and sorting. The best ideas naturally rise to the top. These should
be competing ones to increase chances for bolder outcomes.
3. Implementation: get it into people’s lives.
a. Prototype, test, iterate. Uncovers unforeseen implementation challenges and
consequences. Can concern a detail in an interaction in a service or b almost like
the full real life thing as time goes on.
b. Communication plan: storytelling via multimedia helps to communicate the
solution across a wide range of stakeholders, across language and cultural
barriers.
Openness, curiosity, learn by doing, empathy
a) Tool 1: positive deviance: find people who are already doing well, unexpectedly (as most
others are not). These are a form of ‘extreme’ people who think and act differently than the
regular people.

TITLE OF LITERATURE: The innovation value chain
AUTHOR : MT Hansen et al
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review
requirements)
An innovation process is only as strong as its weakest link. All links must function.
Three sub-processes:
A) Idea generation: look first 1) inside, but bigger sparks come when fragments of ideas come
together, 2) across units or from 3) external sources, even outside the sector.
a. Needs a solution network where “briefs” (the challenges that need to be tackled and
constraints) can be launched or specific problems/technical issues put forward for
answers (where the best can get a financial reward)
b. Other way is a discovery network. This can be a scouting unit where staff only spend
time unearthing new ideas in broad domains / themes. These staff cultivate personal
relations with researchers, academia and others who generate ideas. Diversity of
contacts, NOT number is key here.

c. Support internal networks: it is not enough to just bring people together for a
brainstorm one in a while. Ongoing dialogue and knowledge exchange and the
trusting relationship that goes with it is key.
B) Idea conversion: Need to balance the tendency to kill innovation by too strict criteria, tight
budgets and conventional thinking with the one to let everything pass through weak screens
where the organization overflows with new ideas of varying quality (often underfunded and
understaffed) and no sense of how these fit into an overarching strategy.
a. Specific seed funds allow to fund ideas from anywhere until they reach “proof of
concept” stage and go into further development elsewhere. These are like venture
capitalists.
b. A specific unit can be set up for new ventures, with a project champion leading them.
This helps shield new ideas from the business as usual. On the other hand, it is
necessary to keep line managers on board eg via a board; to enable access to line
resources.
C) Idea diffusion: it is necessary to get the right stakeholders, incl. users, to support and spreads
the innovation. Hence, someone must make sure innovations do not just languish
somewhere as everyone is too busy doing other things. You need to create a “buzz” for new
concepts. “Idea evangelists” use their deep, personal networks to do this.
Proof of concept is mentioned but not explained.
See above in process: scouts, idea evangelists, internal venture capitalists, project champions. These
need not be full-time roles.
a) Tool 1: www.innocentive.com used to resolve specific technical issues (where the best can
get a financial reward)
b) Tool 2: Shell Gamechanger (start with submission into website)

Ideas are submitted by anyone from anywhere at any time (1) via a web portal, and are also
developed in focused-topical workshops. Submissions are kept very simple – a single free-
form paragraph giving a rough description of the idea. Every idea’s submitting ‘Proponent’ is
assigned a ‘Sponsor’ within the GameChanger team in weekly meetings. The Sponsor
arranges for a ‘Screening Panel’ (2) wherein any two members of the Gamechanger team
hear a brief summary of the idea from the ‘Proponent,’ and decide on the spot whether it
was worth developing into a formal proposal. If needed, modest funds (<$25,000) can
already be allocated by that two-person panel to do the work necessary to Mature a more
robust investment proposal (3).
When ready, the investment proposal is pitched to an ‘Extended Panel’ (4), consisting of any
three Gamechanger team members, plus at least three experts with deep relevant
knowledge in the technology and business the idea was addressing. Experts are hand-picked
by the Sponsor and are generally energized to have an opportunity to see and comment on
ideas in their field of expertise at an early stage. The GameChanger ‘Sponsor’ orchestrates a
simple process that creates room for questions to be asked before opinions or judgments can
be made. In a key design attribute, the expert panelists are asked to render their
recommendation, but the decision is left to the Gamechanger team members present, who
after brief private deliberation, immediately take the decision whether to invest in the
proposal or not using a consensus decision process. Proposals are frequently modified based
on input from experts. The decision and the reasoning for it was recorded in summary
minutes and delivered to the proponent promptly – usually within 24-48 hrs.

If approved, the project is allocated a tranched schedule of funding to Execute the approved
proof-of-concept experimental program (5). The Extended Panel is reconvened at ‘Tollgates’
to take decision and modify plans for continued funding (6). An average project plan invests
~$500k over ~24 months in about 3 phases of work. Sponsors proactively work with
Proponent teams to drive their projects through this plan, and adapt to changes and new
opportunities along the way. The best projects ‘attract’ other people to help develop the
opportunity by filling critical skill gaps along the road. The project is considered complete
only if and when another team or department in Shell accepts a proposal to continue
development of the proven concept (7).

TITLE OF LITERATURE: The stage-gate idea to launch process update
AUTHOR : R G Cooper
COMMISSIONER OF LITERATURE (IF APPROPRIATE): J. Product Innovation Management, Volume 25,
Number 3, May 2008
requirements)
There are 5 stages, AFTER “discovery”:
1) Scoping
2) Build business case
3) Development
4) Testing and validation
5) Launch
Stages 1 and 2 involve very little funding.
Each stage is designed to gather info to reduce key uncertainties. Each costs more than the preceding
one. Within 1 stage activities are undertaken in parallel by different functional areas: there is no R&D
or marketing or engineering or production stage. They are all involved in each stage. This team must

be engaged from start to end, under leadership of a project captain. There are NO hand-overs
between functions.
Open innovation can happen at all stages.
As of stage 2, spirals to users are foreseen (build/test/feedback/revise loops)
• In stage 2, this is done a first time to understand unmet needs, benefits sought, problems
with the new service. Not much is showed to users, it is more about listening and watching.
The second time it is done with a representation of the proposed service. This should be
enough to give users a feel for the service. Think about a dummy brochure, a storyboard to
simulate a TV ad, … The aim is to gauge interest, liking, preference and intent to engage.
Dislikes and necessary changes are input to the next phase.
• Successively more detailed, integrated prototypes are fed to users and adapted based on
their feed-back.
This also means that although stage 4 is a testing phase, tests are conducted also in 2 and 3 but then
on parts / mock-ups.
Certain projects (smaller, less risky such as improvements, modifications, extensions) should go
faster. They make takes stage 1+2 together as wells as 3,4,5. Others may do 1+2, 3+4 and 5.

Some key mistakes to avoid:
a) It is NOT a linear process:
• Not all project go through all stages or gates
• Activities can be moved from one stage to another
• Activities and deliverables can be by-passed
• Activities and Stages may overlap. This increases risks so the benefit of this (e.g. speed)
versus the risk has to be weighed.
• Inside stages there is much iteration but also between stages there can be iteration.
b) It is not a substitute for project management. Project management (team building, timelines,
critical paths, milestone reviews) must be applied within each stage (as appropriate).
c) Have long lists of required activities / deliverables per stage everyone must do. There is NO
universal list. It is the project team that proposes a “go-forward” plan from which next gate
gate deliverables are derived in advance.
A final stage is the post-launch review: how well did a new service actually do in the end, relative to
what the project team foresaw? Typically about three months after launch. After that a monitoring
of 2 years is done. If projections were very wrong, try to ascertain why and try to trace it back to the
innovation process to avoid this happening again.
Gates consist of 1) deliverables (decided at the previous gate) , 2) criteria with “must meet” knock
out criteria and “should meet” (with points) for prioritization, 3) outputs namely a decision and
action plan for the next stage (timeline, resources, deliverables).

Gatekeepers should be only the senior people who OWN the resources, required for the project
team to move forward. Seniority increases with funding: at gate 1 and 2 mid-level managers, ramping
up to senior for 3,4,5 for major projects (for smaller ones, mid-level again suffices).
Mistakes to avoid:
a) If all resources are approved for a project at the first gate, it will not be possible to kill it
anymore.
b) If the gatekeepers are also the same people as the project leaders this usually means
gatekeepers want to use gates as control systems to micromanage the project.
c) Deliverables over-kill: detailed explanations or research, overly detailed descriptions, etc.
add no value for decision –making. Gatekeepers should know the project and whether the
deliverables were properly done before the meeting (the meeting is not an education
session). The quality of the data is NOT the focus of the gate meeting. The focus is now on
risks and commitments required, based on the data. Try to go for one-two pages (with four
pages as attachments) and three slides. It is NOT about showing the work that was done but
to highlight the results from work that help decision-making.
A 60-90 minute meeting should go as follows: 1) project team present 2) vigorous Q&A session
where gatekeepers challenge the project team 3) each gatekeeper scores individually 4) results
displayed. Areas of disagreement highlighted and discussed. It is also possible here to see how a
team scored themselves.
An example of a list of criteria:
Extra ‘process’ criteria could relate to the project team’s capability: eg how well they deliver on their
own plans (costs and timing), how good their work is, how well they are able to keep users on board.
While stage/gate is focused on individual projects, portfolio management is required as well to
manage the whole set of projects. Portfolio management requires good stage/gate processes: how
else will it be possible to compare projects if the data required to make comparisons is not agreed at

a gate. But it happens twice to four times a year and looks at the mix of projects (eg short term vs
long term, high vs low impact, high risk vs low risk) within a strategic theme/area.
a) Tool 1: rules of engagement for gatekeepers

TITLE OF LITERATURE: Developing products on internet time
AUTHOR : M. Iansiti
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review Sept/ Oct. 1997
requirements)
The article describes a flexible development process (eg as used for IT but also at Toyota).
Flexible innovation development delays until as late as possible any commitment to a final design
configuration. Several options are kept until finally only one is kept for final implementation. Concept
development and implementation therefore overlap.
The key is to come early to users with not fully developed (parts of) prototypes. Then go into
numerous (parallel for parts) design/build/test iterations, gradually adding functionalities and
integrating them. This allows to continuously integrate (changing) user input.
Three guiding principles are:
1. Sensing the market: creating intensive links with the user base (via experimentation with
many users to selective experiences with a few lead users, if otherwise less adept users

might be frustrated). Users need not be external. Ask questions like: what do you hate most
in…
2. Testing solutions: experiment with various options first eg starting with simple prototypes,
making them increasingly complex to see dis/advantages for the user. Then based on the
data, make choices for an option.
3. Integrating user needs with solutions: if different team members are working on different
parts (all iteratively with users), it is crucial to anticipate and guard interactions between
parts. Otherwise, it will be hard to integrate to a whole, with significant delays. Therefore,
someone needs to have the overview, allow sub-teams to check-out a part of the whole,
work on it, check for interaction with the whole and then check it back in. IT can support this
(eg wiki showing versions and what changed when).
a) Tool 1:

TITLE OF LITERATURE: Stage gates can kill innovation
AUTHOR : W. Koetzier, et al
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Accenture
requirements)
In stage gate processes decision-making bodies often weed out big ideas in favor of small
safe ones, sending proposals back for more research, creating time consuming, motivation /
creativity numbing rework loops.
Traditional risk aversion skews decisions to improving / extending existing services. Missing
new opportunities and discontinuities.

A failed experiment is seen as a real failure, rather than a cost-effective way to avoid
dangerously wrong future steps. Venture capitalists understand that only one out of ten
experiments will really yield results. The other 9 are part of the investment for the 1.
Rewards should be given for such failures.
An approach is required with cross-functional teams working iteratively through the market
with frequent tests. A dialogue has to be held to determine which risks (financial,
operational, reputational,…) are acceptable and which not. Within this risk tolerance, failure
is acceptable.
a) Tool 1:

TITLE OF LITERATURE: Next generation product development
AUTHOR : B. Jaruzelski et al
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy and Business (Booz), May 2011
requirements)
First generation stage-gates were rigid and linear, locking in user preferences and risks in at the
beginning. Second generation (lean) became better by adding continuous touch points with users
(for concepts, prototypes, features) alongside development and launch. But they also lock in service
attributes/requirements too early, rather than iterating, optimizing and trading off various
requirements to get to the final design.
Third generation is based on frequent iterations of multiple design options early in the process,
based on multiple testing and user driven design change.
This third generation (as used by Toyota) attempts to deal with the issue that up-front, user needs
cannot really be properly understood. When design issues are then decided at the start, risk
increases that much will have to be reworked later on (with cost overruns and delays).
There is a front and a back end.

1) Front end:
a) Rapid, iterative development: generate multiple concepts and in period of weeks, rather
than months, test prototypes. As results come in, cross-functional teams work together in
problem-solving sessions to produce a blueprint, based on user responses and then new
ideas that this generates.
b) Modularity: a concept can be broken in parts that can be worked on in parallel. Design
teams have to reunite the models before the next iteration takes place. This is done in
“architecture sessions” where integration issues must be addressed.
c) Early risk identification: by iterating and synthesizing, risk become clear. These must be
addressed by scheduling more tests.
d) Intensive stakeholder involvement: someone on the project team needs to have the
dedicated role to do this and bring stakeholders at crucial points into the process. For
suppliers/channels helps to define critical to quality elements so these stakeholders are
ready for it by the time of roll-out.
2) Back end: work to launch
a) Reusable platforms and modules: features that are necessary but on their own not highly
valued by users are separated into common modules to which what users DO value can be
connected.
b) Just in time info and resources: pull expertise on demand for some specialised work. Helps
save resources.
c) Lean supplier integration: derives from the stakeholder involvement of the front end.
d) Responsive change-control system: constantly think how to reduce time to market by
removing bottlenecks.
Requirements are a highly collaborative culture, including with outsiders. Continuously scout,
filter, and channel info from outside.
Deep well of sophisticated user knowledge, derived from spending substantial time in the field,
observing users.

a) Tool 1:

TITLE OF LITERATURE: Building an innovation factory
AUTHOR : A. Hargadon et al
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, May-June 2000
requirements)
Knowledge brokers:
1) Capture good ideas: as they span multiple locations, sectors, disciplines, they find “old“,
existing ideas in operation elsewhere and play with it in their minds (how and why it works

there, what is good and bad, how it could be used in a different context). They may also do
more focused work on specific issues (collecting research, doing some research of their own,
eg observation studies of users).
2) Keeping ideas alive: rather than filing ppts and docs in online systems, it is more important to
have good “yellow pages” , listing who knows what on what. A rapid response team can link
anyone with useful knowledge to anyone with a problem within 24 hours. Those willing to
share knowledge should be recognized for their efforts.
3) Imagining new uses for old ideas: organize meetings, brainstorms, informal conversations
where people share problems AND solutions.
4) Putting promising concepts to the test: early enough, drop it when evidence is against it.
Keep the lessons for use later on (learning why an idea failed is key knowledge when looking
for solutions in the future.
They are relentlessly curious, don’t care where ideas come from as long as they work –they reach out
for help and ideas often-, they are not arrogant but humble while still confident.
a) Tool 1:

TITLE OF LITERATURE: Is your company choosing the best innovation ideas?
AUTHOR : M Reitzig
COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT Sloan Management Review Summer 2011
requirements)
Idea generation: best is to begin with as many people as possible and the encourage to contribute
their ideas, before discussing them in groups.
Innovation is characterized by uncertainty: long term benefits are not visible and hard to predict at
the moment a first selection is made.
If the project selection process is delegated to lower level managers, the risks are:
a) Promoting ideas seniors would not find OK
b) Skipping those seniors would have wanted

But seniors can never review all proposals. They need funnels where a) lower managers do a first
selection and follow up afterwards b) ideas are flagged for attention of top management
There are several biases that should be accounted for and can be used to control the flow of
decision-making
Rejecting/approving:
a) Proximity bias: belonging to a same reference group and knowing each other will help get
selected. To reduce/increase selections: have dis/similar evaluators paired with proposers
b) Theme bias: a theme that is more familiar to the decision-maker will also be favoured. To
reduce/increase selections: have evaluators less/more familiar in terms of the theme paired
with proposers
c) Length of the proposal: in an example the optimal was about 250 words (1/2 to 1 page). Too
long = lack of focus. Too short = insufficiently thought through. Standards for length have to
be communicated.
d) Tone of the proposal: highlighting impact based on opportunities instead of the
problem/threat that will be addressed helps selection. If you want more / less proposals
approved ask for stress on positive versus negative.
Passing on the senior managers
e) Size of the organization: if there are more colleagues, proposals will be passed on more
rather than rejected.
f) Degree of hierarchy: the more hierarchical, the more they will pass on to superiors.
a) Tool 1:

TITLE OF LITERATURE: How to let 999 flowers die
AUTHOR : F. Vermeule,
TYPE OF AUTHOR (academic, consultants, practitioners, other): consultant (Booz)
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy+Business Autumn 2013
requirements)
Many lower end managers do not choose bold, risky ideas as they think their superiors might reject
these and this would be bad for reputation.
Senior managers tended to choose proposals they liked, usually those that fit their preconceived
notions.
In both cases this leads to lack of variation in selection.

1) A key recommendation is therefore that top managers should accept they should not make
selections themselves. Rather, they should enable selection to happen elsewhere eg organizing
markets where creators of a proposal can explain their proposal and answer probing questions
from colleagues. Then, ideas can be funded if someone wants to sponsor them. Lack of interest
means being selected out.
2) As it is hard to make predictions, use the wisdom of crowds: ask a lot of internal / external
people and average.
3) Objectivize the process: rather than keep committing to something that does not work
(anymore), make decision on the basis of hard facts only eg by using numbers into a formula.
4) The information revealed at one decision point should guide the next investment, and so on.
5) Maintain bottom up driven internal experimentation and selection while at the same time
maintaining top down strategic intent: this creates boundaries within which meaningful
variation/selection can happen. People need a ‘box’ to channel creativity. But do not make them
too narrow as this will inhibit new ideas.
a) Tool 1:

TITLE OF LITERATURE: Enlightened experimentation
AUTHOR : S. Thomke
COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review February 2001
requirements)
1. Organise for rapid experimentation:
a. Use small development groups with key people with all knowledge required
b. Parallel experiments only when time matters, cost is not an issue, developers do not
expect to need to build on the current round for another one. Otherwise, use
sequential experiments.
c. Beware of rapid prototyping if you lack capacity to process all the info from each
round.
d. Also beware of thinking only of the cost of experimenting eg when people from the
frontline are necessary to engage in the process. The cost of taking them away from
their work is small compared to the benefit for the innovation process.
2. Fail early and often

a. OK when this advances knowledge. Mistakes (eg a poorly planned and executed
experiment) on the other hand do not produce an knowledge. A mistake is also to
repeat a prior failure.
b. Requires learning objectives and hypothesis (what do you expect)
c. Requires cheap, rough prototypes, rather than expensive fully developed ones. Straw
men are easier to throw away.
3. Low fidelity experiments (cheaper) are best at the early stages, high fidelity later to verify the
final service. Low fidelity can still force problem solving and communication with down-
stream groups at an early stage. Keep them rough, rapid and right (=incomplete but still
getting specific aspect right).Forces people to think about which aspect need to be right and
which can be rough. Helps keep up with evolving user preferences.
4. Do not expect new approach to just replace the old. Usually combinations work best.
a) Tool 1:

Attachement 4: General innovation

Attachement 4: General innovation

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Attachement 4: General innovation