Presentation in innovation management, given at seminar for MBA students at the International University of Monaco

1. MEASURING INNOVATION CAPABILITIES
International University of Monaco,
MBA in Luxury Management March 2012
Jörgen Eriksson
Jorgen.eriksson@bearing-consulting.com

2. ABOUT BEARING CONSULTING
Bearing Consulting is a management consultancy incorporated in United Kingdom
with local offices in London, Stockholm, Barcelona and Johannesburg
We work with clients in three
focus areas;
 Places & Regions
 Bank & Finance
 Corporate Innovation
Bearing develops methodology and publish books
2

3. MEASURING INNOVATION CAPABILITIES
What is “innovation”?
3

4. MOTOROLA - WORLD DOMINANCE
In the year 1994, Motorola was world leader in (analogue) mobiles,
seven years later Nokia was world leader in (digital) mobiles
60%
50%
Motorola
40%
30%
20%
10% Nokia
0%
Market shares 1994 Market Shares 2001
4

5. NOKIA - FROM #1 TO CRISIS IN LESS THAN 3 YEARS...
Why ?
5

6. INNOVATION
Innovation is creative destruction, where entrepreneurs
combine existing elements in new ways…
After Joseph Schumpeter (1883 – 1950)
6

7. What is Around the Corner?
7

8. Shift from “hard” to “soft” factors in packaging of products and brands
8

9. Development of batteries
9

10. HYPER COMPETITION
“Either you innovate or you’re in commodity hell. If you do what
everyone else does, you have a low-margin business.That’s not
where you want to be.”
Sam Palmisano, CEO IBM
10

11. THE AVIATION INDUSTRY
Frame of analysis
Personalised Service
High Cost
Low Cost
Basic Service
11

12. THE AVIATION INDUSTRY
The current market
PRIVATE CHARTER
Personalised Service
High Cost
Low Cost
Basic Service
LOW COST CARRIERS LEGACY CARRIERS
12

13. THE AVIATION INDUSTRY
Recovery in sight ?
SUMMARY…
Ascend Corporate Travel Survey – 2011
• Predicting a recovery of business air travel 2011/12
• Expecting less choice and higher fares from current industry consolidations
• Negatives are:
– Crowded aircraft
– Security queues
– Declining on-board service levels
– Loss of productivity due to inflexible schedules
13

14. THE AVIATION INDUSTRY
The new generation Light Jets...
...evolution or revolution ?
14

15. THE AVIATION INDUSTRY
...how do they fit the market?
PRIVATE CHARTER
Personalised Service
“THE NEW
BUSINESS CLASS”
High Cost
Low Cost
Basic Service
LOW COST CARRIERS LEGACY CARRIERS
15

16. THE AVIATION INDUSTRY
“The New Business Class”
So will it really happen? ?
IN A NUTSHELL…
1. New technology, material and manufacturing processes
have reduced the cost of new aircraft, making new
business applications viable
2. Environmental, political , regulatory and safety
considerations will change market dynamics
3. Business travellers are becoming increasingly
discerning to price, function and performance
The general aviation sector will undergo a similar
fundamental shake-up as the scheduled industry
16

17. THE AVIATION INDUSTRY
The Concept:
Is the Market clear for Take-Off? ?
ACCORDING TO…
Eurocontrol
 The first quarter of 2011 showed an increase in business
aviation of 3.9% compared to the same period in 2010
 Business aviation is the fastest growing sector after
low-cost carriers
Boeing
 Recovery has followed each period of down-turn as the
industry reliably return to along-term annual growth rate of 5%
17

18. THE AVIATION INDUSTRY
Who will do it? it ? Wrong fleet
PRIVATE CHARTER
Personalised Service
“THE NEW No money
BUSINESS CLASS”
High Cost
Low Cost
Basic Service
LOW COST CARRIERS LEGACY CARRIERS
18

19. THE AVIATION INDUSTRY
“The New Business Class”
TANGIBLE BENEFITS BEYOND CONVENIENCE…
• Travel “Just-in-Time”
• To and from where you are and where you want to be
• Avoiding busy airports
• Reducing wasted time
• Value for money at affordable pricing
19

20. VALUE IS CREATED ON THE ”EDGE” OF YOUR BUSINESS
Business Product & Sales & Delivery &
Operation
Model Services Marketing Consumption
20

21. DOES HARLEY-DAVIDSON SELL MOTOR CYCLES?
“…what we sell is the ability
for a 43-year-old accountant to
dress in black leather, ride
through small towns and have
people be afraid of him“
– an HD executive
21

22. MARKET EQUILIBRUM
Demand Supply
•3 Billion consumers in BRIC •Global talent market
•Growing middle class in BRIC, •Low cost production of
300M Chinese live on western services and products
standard •Open communities and
crowdsourcing
•Instant communication access
•Online universities
Hyper competition - > Temporarily competitive advantages
22

23. HOW TO DO IT?
How can we measure innovation capabilities
in an organisation?
23

24. EXAMPLES FROM THE LUXURY GOODS INDUSTRY
3 and 3, 10 minutes
Identify 2 examples where new business models or delivery
/ consumption formats scoped out competitors
24

25. INNOVATE – EXECUTE™
… the world will never be the same
25

26. BEARING INNOVATION NAVIGATOR™
Stockholm – London – Barcelona – Johannesburg
“..because the execution of an idea is always more important
than the brilliance of the thought..”
(Harvard Business Publishing – Morgan, Levitt & Maleck – INVEST model)
This document is solely for the use of the receiver. No part of it may be circulated, quoted, or reproduced for
distribution outside the receivers organisation without prior written approval from Bearing Consulting Ltd.
2012 Bearing Consulting Ltd. Proprietary and Confidential. All Rights Reserved

27. BEARING INNOVATION NAVIGATOR™
...within a hypercompetitive market
How can you measure,
improve and invent new
What is your competitive advantages?
future competitive
advantage?
Where is your
value created?
27

28. YOUR SWEET SPOT DEFINES YOUR FUTURE SUCESSE
Where your firm meets What?
customers needs in a way Where?
in which your competitors Why?
Competitors’ Customers’ cannot How?
offerings needs
3
1
Sweet
Spot Sweet spot = unique spot
2 How to protect/define boundary 1,2,3
Company’s
capabilities Context (technology, industry,
regulatory, etc.)
28
Source: Collis & Rukstad (2008). Can You Say What Your Strategy Is?, HBR (April 2008)

29. THE GENERIC PROCESS
Implementation
& re-mesuring on
scoped issue
Conclutions,
Recommendations &
Innovation Game Plan
Analysis
+ quantitative (Navigator)
+ qualitative (Interviews)
Data Sampling (Survey
+ complementary
indepth interviews)
Hypothesis formulation
&
Survey Design
CEO Intervew and
Innovation Training (understand
the strategic question:
short and long term)
29

30. DATA & KEY FINDING PRESENTAION FORMAT
 Relative strength and weaknesses (HOW) presented in a 360 spider diagram
 Misalignments presented as GAP-tables (Why, What and How)
 Potential issues or general key presented in correlation tables or data tables (Why, What
and How)
Example: Relative strength and
weaknesses
Process (How)
Learning Capability 7 Value Capture
6
Organization 5 Customer Engagement
4
Supply Chain 3 Customer Experiance
2
1
Presence (Where) 0 Customers (Who)
Linkages Deliveries
Openess Service
Brand Product
Offerings (What)
30

31. DATA & KEY FINDING PRESENTAION FORMAT
 Relative strength and weaknesses (HOW) presented in a 360 spider diagram
 Misalignments presented as GAP-tables (Why, What and How)
 Potential issues or general key presented in correlation tables or data tables (Why, What
and How)
Example: Perception of strategy
1-7
We keep our competitors out by our (7=Strongly We keep our competitors out by 1-7 (7=Strongly
innovation work (Management) Agree) our innovation work (Emplyees) Agree)
Mean 5,02 Mean 3
Median 5 Median 2,8
Standard Deviation 1,45 Standard Deviation 1,3
1-7
We keep our competitors out by our (7=Strongly We keep our competitors out by 1-7 (7=Strongly
innovation work (Suppliers) Agree) our innovation work (Customers) Agree)
Mean 3,1 Mean 3,4
Median 3 Median 3,3
Standard Deviation 2,3 Standard Deviation 2,1
31

32. DATA & KEY FINDING PRESENTAION FORMAT
 Relative strength and weaknesses (HOW) presented in a 360 spider diagram
 Misalignments presented as GAP-tables (Why, What and How)
 Potential issues or general key presented in correlation tables or data tables (Why, What
and How)
Example: Innovation style distributed
on competition aspects
7
6
5
Entrepreneurial where
the business model is
4
frequently challenged
3
You clime upwards
2 without losing the over-all
goal, always innovate to
1 do things better
0 Tries to use existing
Our We are We keep We believe capabilities and resources
competitors imitating our we do get in a new way
are our competitors better
imitating competitors out by our profit from
our innovations innovation driving
innovations work innovation
work
32

33. DATA & KEY FINDING PRESENTAION FORMAT
 Relative strength and weaknesses (HOW) presented in a 360 spider diagram
 Misalignments presented as GAP-tables (Why, What and How)
 Potential issues or general key presented in correlation tables or data tables (Why, What
and How)
Example: Correlation between innovation capabilities and
respondents stating they getting better profit by their
innovation work
Rigorous decision making around portfolio trade-offs
Supplier–partner engagement in product development
Ongoing assessment of market potential
Project resource requirement forecasting and planning
Regulatory/government relationship management
Product platform management
Pilot-user selection/controlled rollouts
Product life-cycle management
Reverse engineering
Diverse user group management
Design for specific goals
Engagement with customers to prove real-world…
Production ramp-up
Supplier and distributor engagement in the idea…
Independent competitive insights from the marketplace
Deep consumer and customer insights and analytics
Technical risk assessment/management
Global, enterprise-wide product launch
Open innovation/capturing ideas at any point in the…
Detailed understanding of emerging technologies and…
Strategic disruption decision making and transition plan
-0,2 -0,1 0 0,1 0,2 0,3 0,4 0,5 0,6 33

34. DATA & KEY FINDING PRESENTAION FORMAT
 Relative strength and weaknesses (HOW) presented in a 360 spider diagram
 Misalignments presented as GAP-tables (Why, What and How)
 Potential issues or general key presented in correlation tables or data tables (Why, What
and How)
Example: Correlation between learning personas and
capabilities within the Ideation Process
Deep
Supplier and Detailed consumer
distributor Independent Open understandi and
engagement competitive innovation/ ng of customer
in the idea insights from capturing ideas emerging insights
creation the at any point in technologies and
process marketplace the process and trends analytics
Anthropologists ( 0,10 ) ( 0,10 ) 0,03 0,13 ( 0,05 )
Experimenters 0,16 0,18 0,11 0,26 0,13
Cross-
pollinators 0,25 0,28 0,21 0,04 0,12
34

35. IN THE ANALYSIS PROCESS LOOK FOR
 Is the respondents stating that the company is innovating for change? Otherwise
the survey will be meaningless
 Look for correlations between different groups stating different things
(internally)
 Look for generic correlations giving general insights
 Look for misalignments between stakeholders as well as internal departments
 Use the analysis excel template
35

36. INNOVATION FRAMEWORK
Strategic question Type of innovation Style
Why
How
What
Product Innovation • Cauldron
Company Strategy Process Innovation • Spirale
• Incremental/ Organisational Innovation • Fertile
Disruptive • PacMan
Management Innovation
• Need seekers • Explorer
Production Innovation
• Market readers
• Technology drivers Commercial/Marketing People
Innovation
• 10 Faces of Innovation
Service Innovation
Capability & Process
• Ideation
• Project selection
• Product development
• Commercialisation
Where
When
Source: Penker (2011) 36

37. WHY – STRATEGIC QUESTION
?
Strategic
To keep competitors Question
out keeping/gaining To increase the profit ?
market shares?
Building the capabilities to increase the
Increase barriers to enter or copy
internal efficiency
Differentiation and neutralization of
Cost savings
competitors
Focus on competitive advantages Disruptive opportunities
37

38. WHY – STRATEGY
Need seekers Market readers Technology
• look for potential • capitalise on drivers
opportunities by existing trends and • drive for
applying superior understanding of breakthrough
understanding of markets innovations based
the market and on new technology
rapid go-to-markets
38

39. WHAT – TYPE OF INNOVATION
Product Innovation • The development of a new or improved product.
Process Innovation • The development of a new manufacturing process.
Organisational • A new venture division; a new internal communication
Innovation system; introduction of a new accounting procedure
Management • TQM (total quality management) systems; BPR
Innovation (business processes re-engineering).
• Quality circles; just-in-time (JIT) manufacturing
Production Innovation systems; new production planning software.
Commercial/Marketing • New financing arrangements; new sales, Delivery
innovations in sales, market approaches, e.g. direct
Innovation marketing.
Service Innovation • Internet-based financial services.
Source: Trott (2008) 39

40. HOW - STYLE & PEPOLE
“The Devil´s Advocate may never go away, but on a good day, the ten personas
can keep him in place” (Kelly & Littman, 2005)
Learning Organisational Building
personas personas personas
Experience
Anthropologist Hurdler Architect
Set Designer
Experimenter Collaborator
Storyteller
Cross-Pollinator Director Caregiver
Source: Kelly & Littman (2005) 40

41. HOW - STYLE & PEPOLE
Leadership and style
The Spiral The Fertile
The Cauldron The PacMan The Explorer
Staircase Field
• An • A style where • A style where • A style where • A style where
entrepreneurial you climb the organisation you invent, you explore
style where the upwards tries to use outsource and possibilities and
business model without losing existing finance start- invest time and
is frequently the over-all capabilities and ups. money in them
challenged. goal. resources in a without
new way. demanding
short-term
profit.
Source: Loewe,Williamson, & Wood (2001) 41

42. HOW - CAPABILITIES & PROCESS
Project Product Commercializa
Ideation
Selection Development tion
Supplier and distributor Strategic disruption Diverse user group
engagement in ideation decision making and Reverse engineering management
process transition plan
Independent Technical risk Supplier–partner Production ramp-up
competitive insights assessment/managemen engagement in product
from the marketplace t development
Regulatory/government
relationship
Open
Rigorous decision management
innovation/capturing
making around Design for specific goals
ideas at any point in the
portfolio trade-offs
process Global, enterprise-wide
product launch
Detailed understanding Project resource
Product platform
of emerging requirement forecasting
management Product life-cycle
technologies and trends and planning
management
Deep consumer and Engagement with Pilot-user
Ongoing assessment of
customer insights and customers to prove selection/controlled
market potential
analytics real-world feasibility rollouts
Source: Jaruzelski & Dehoff (2010) 42

43. WHEN - SERVICE VALUE WEB
The key to competitive advantage is to understand the service value web where the company and the
market interact creating value’ (Chesbrough, 2011).
Customer
Surrounding Engagement
Environment
Includes
customers;
Service Service Co-
may also include Offering creation
partners,
competitors or
other third
parties
Design
Elicit Tacit
Experience
Knowledge
Point
Boundary of the Company
Source: Adopted from Chesbrough (2011) 43

44. BEARING INNOVATION NAVIGATOR™
Bearing Innovation Navigator
THE STORY
• The Model was originally invented by an
occasion when trying to understand why
some firms did success with profitable
business development while other did not -
the insights were found in the linkages
between capabilities, market structure and
customer behaviour.
• It is based on year of research and
practitioners work
• The approach is very hands-on and provide
you with practical steps to execute
• The Navigator is from year 2012 codified
and implemented as a web-enabled multi-
lingual system
• All projects are executed based on an
extensive and real-world-experience-
oriented process, system and templates
• All consultants are accredited with +15
years experience of driving innovation as
consultants and executives
44

45. BEARING INNOVATION NAVIGATOR™
Bearing Innovation Navigator™
• Situation:
Need of capturing and highlighting
your imperative capabilities for success
• Complication:
Possible lack of capability
insights/foresights and unique sweet spot
• Resolution:
1. Collect, analyse and benchmark
your innovation capabilities, strategy,
leadership, culture in a 360 degree analysis
2. Define possible opportunities, weaknesses
3. Discover possible misalignments in the
strategy work
4. Analyse whether needed capabilities,
culture and leadership style is in place, or
not, in order to carry out the innovation
strategy of the firm
3. Align innovation strategy, capabilities,
leadership style and culture with corporate
and functional goals and over all strategies
4. Outline a game plan
45

46. BEARING INNOVATION NAVIGATOR™
...the process of innovation X-raying
Client Involvement Analysis process
•CEO Interview, in-depth interviews interviews with key •Hypothesis
stakeholders •Internal and external data collection (survey)
•Survey: Capturing imperatives of the business, scoping the case •Generating relevant benchmark data and innovation patterns
•Survey: Capture strategies, weaknesses, market structures, key •Analysis
drivers •Strategic options generation
•Internal and external communication / enrolment •Evaluation and conclusions
•Analysis walk through •Recommendations
•Presentation with recommendations
46

47. BEARING INNOVATION NAVIGATOR™
...the navigator
Initiated by the work of Sawhney, M., Wolcott, R. C., & Arroniz, I. (2006). The 12 Differetnt Ways for Companies to
Innovate. MIT Sloan Management Review , 75-81.
47

48. THE SYSTEM
• Internet based, works on all standard devices
• Highly user friendly
• Client tracking possible
• Multilingual
• Customizable, robust scalable database design
and system architecture
• High Security, fast access
• Work trough firewalls, spam filters
• All data is anonymous
48

49. BEARING INNOVATION NAVIGATOR™
...the project time line
Presentation &
Recommendation
CEO Meeting (1/2 day)
Innovation Implement
Audit (4 weeks) Innovation
Game Plan
(30-60 weeks)
6-8 weeks
49

50. BEARING INNOVATION NAVIGATOR™
Deliveries
• Analysis: Levels, GAPs/Misalignments,
Correlations/ Conjunctions within the
organisation/Industry
• Strategic question
• Strategies
• Leadership
• Personas
• Capabilities
• Report with recommendations
• Potential Innovation Game Plan
• Innovation objectives
• Innovation strategy
• Cost/benefit analysis
• Innovation process
• Innovation plan
• Innovation team
• KPIs (for Navigator Tracking)
50

51. THE REPORT – 420 DIFFERENT BASIC INNOVATION
ORGANISATIONAL PROFILES
51

52. CASE STUDY
Situation Perceived Solution
• Fast growing awarded Complication • Nine generated
e-commerce fashion • Growth pain recommendations
company • New competitors
• Entrepreneur of the entering the scene
year, A Great Place To • Lost the battle in
Work, AAA rated, Super Denmark
Gazell
• Perceived quality issues
in deliveries
• Lack of capitalization of
innovation initiatives
52

53. CASE STUDY
Recommendation; Strategy Alignment
• The IT department adjust its leadership style toward that of the company, i.e. fertility
field—meaning a style where the organisation tries to use existing capabilities and
resources in a new way, focusing on sales and profit.
• Make clear—within the organisation—where the company is going for growth or
profit as main objective, enrol all stakeholders.
Recommendation; Recruiting
• Employ Hurdlers, Cross Pollinators, Anthropologists and Experience Architects
Recommendation; Leadership
• Today, the customer service department, according to itself, has a non-goal-oriented
leadership. This must be addressed, as the customer service function is vital to
adjusting the lacking capabilities pointed out in the analysis. It is imperative that this
be addressed appropriately.
Recommendation; Product Development
• Launch more new products to keep up the pace in the market, especially considering
that the other kind of innovation is low.
53

54. CASE STUDY
Recommendation; Involvement
• Engage the company’s customers, suppliers and partners in the development
• Establish a reward system internally and eventually externally, using both extrinsic
(monetary) as well as intrinsic (acknowledgment, involvement, competence
development, etc.).
Recommendation; Organisation & Systems
• Test pilots and learn from them
• Undertake frequent independent market research
• Make systematic risk assessments
• Put an effective product management system in place
Recommendation; Enlarged scope
• The type of innovation that the company is engaged in is product innovation, typically
for retail-oriented companies.
• However, service innovations, delivery innovations and business model innovations
are getting more and more important and the company scores very low here.
• Keeping in mind that the company is technology-driven and fertile field, there are
many more opportunities to use existing customers, consumers, capabilities, systems,
products and technology to innovate for more profit and market shares by applying
business model innovation, service innovation and delivery innovation.
54

55. The Good news!
• We will offer you the opportunity to do
an actual Innovation Navigator
assessment with a real client…
• After a short break you will learn more
about the Navigator and the possible
assignment
55

56. BEARING INNOVATION NAVIGATOR
PROJECTS
International University of Monaco,
MBA in Luxury Management 2012
Jorgen Eriksson
Jorgen.eriksson@bearing-consulting.com

57. Innovation Navigator Projects
Student project objective:
To run an Innovation Navigator project on a real company
What you gain:
1. Understanding of corporate innovation methodology
2. Understanding through analysing a company and survey results
3. Experience of writing a consultant report
4. Experience of running a “real” consulting project
Be prepared:
Studying documentation, getting to know the pilot company, performing
analysis and writing a quality report will take time. Best approach is to
share work tasks in project teams.
57

58. Innovation Navigator Projects
Project steps
1. Agree project teams Company criteria: At
least 50 respondents for
2. Select a real company to work with automatic survey and in
depth interviews with at
3. Prepare project plan least 3 key people
4. Perform interview(s) and gather info on web / annual
report etc to get to know the company
5. Agree respondent groups for web based survey
6. Perform survey using Bearing Innovation NavigatorTM
7. Perform analysis of results
8. Prepare client report
58

59. Innovation Navigator Projects
Support
Documentation:
Bearing will provide
documentation with
methodology and
templates for project
Coaching:
Bearing will provide
project coaching at
IUM for two hours on
Mondays, and by e-
mail
59

60. END.
INNOVATE - EXECUTE™
60

61. THE LEGO STORY
Y2000 "Toy of the Y2004-03, the
Century" by owner & CEO
Fortune magazine Kjeld Kirk
and the British Kristiansen decide
Association of Toy to go back to
Retailers basic!
Y2003 – 2004 Y2004-10, Jørgen
Huge losses, close Vig Knudstorp
to bankruptcy appointed as new
CEO
61

62. THE LEGO STORY
 The situation 2004
Demand decreasing, competition from
games, movies, merchandising
Poor quality
Poor logistics
Slow in adoption
Simplistic leadership and laid-back culture
Sources: HBR, DN, Guardian, BBC, Handouts European Offshoring Summit, (2009, Copenhagen) 62

63. THE LEGO STORY
Innovate Execute
Stabilize Deliver what
operations we promise
Improve the Value Creating
business Partnership
Define Rigid Execution
Raison d'être Platform
Organic
growth Differentiated
Value Chain
Offshoring
Consumer Driven
Restore the Value Chain
balance sheet
2200
Operational Profit
1200
MDK
200
-800 2003 2004 2005 2006 2007 2008
-1800 63
Year

64. KEY ACHIEVEMENTS
Clear Raison d'être: “we help children learn systematic and creative
problem solving—a crucial twenty-first-century skill”
Gained consumer insights through “direct sales to consumers” through
BuiltByMe without competing with existing distribution channel
Co-Branding with strong and selected partners such as Star wars and
Harry Potter
64

65. KEY ACHIEVEMENTS
Reduced lead time, 45 to 3 days to store
Cost saving through offshoring non-core
competencies
A new supplier interface
QA system in place
Open Innovation, 120,000 people
involved in external innovation work –
DesignByMe, DreamtByMe, BuildByMe
Community driven approach; the open
platform Mindstorm encouraging
customers to design and develop their
own LEGO-robots systems
65

66. LEGO TOTAL INNOVATION MAKEOVER
Customer External Innovation
Engagement
Internal Innovation
Brand Services
Supply Chain
Business Model
Partner Model Product
Marketing
...and LEGO continue to deliver exceptional profitable growth on
an oligopolistic/niched and international toy market...
66

67. THE LEGO STORY
Y2000 "Toy of the Y2004-03, the
Century" by owner & CEO
Fortune magazine Kjeld Kirk
and the British Kristiansen decide
Association of Toy to go back to
Retailers basic!
Y2003 – 2004 Y2004-10, Jørgen
Huge losses, close Vig Knudstorp
to bankruptcy appointed as new
CEO
67

68. THE LEGO STORY
 The situation 2004
Demand decreasing, competition from
games, movies, merchandising
Poor quality
Poor logistics
Slow in adoption
Simplistic leadership and laid-back culture
Sources: HBR, DN, Guardian, BBC, Handouts European Offshoring Summit, (2009, Copenhagen) 68

69. THE LEGO STORY
Innovate Execute
Stabilize Deliver what
operations we promise
Improve the Value Creating
business Partnership
Define Rigid Execution
Raison d'être Platform
Organic
growth Differentiated
Value Chain
Offshoring
Consumer Driven
Restore the Value Chain
balance sheet
2200
Operational Profit
1200
MDK
200
-800 2003 2004 2005 2006 2007 2008
-1800 69
Year

70. KEY ACHIEVEMENTS
Clear Raison d'être: “we help children learn systematic and creative
problem solving—a crucial twenty-first-century skill”
Gained consumer insights through “direct sales to consumers” through
BuiltByMe without competing with existing distribution channel
Co-Branding with strong and selected partners such as Star wars and
Harry Potter
70

71. KEY ACHIEVEMENTS
Reduced lead time, 45 to 3 days to store
Cost saving through offshoring non-core
competencies
A new supplier interface
QA system in place
Open Innovation, 120,000 people
involved in external innovation work –
DesignByMe, DreamtByMe, BuildByMe
Community driven approach; the open
platform Mindstorm encouraging
customers to design and develop their
own LEGO-robots systems
71

72. LEGO TOTAL INNOVATION MAKEOVER
Customer External Innovation
Engagement
Internal Innovation
Brand Services
Supply Chain
Business Model
Partner Model Product
Marketing
...and LEGO continue to deliver exceptional profitable growth on
an oligopolistic/niched and international toy market...
72

73. THE S-CURVE
The real challenge, LEGO managed, lies in achieving a strategically
balanced portfolio that between exploitative and the exploratory
Emergent Growth Mature
Performance / Value offering
Ongoing business Business of the future
(EXPLOITATIVE) (EXPLORATORY)
Source: Tovstiga (2007) Effort / Time
73

74. A new basis for Place Strategies
74