The document discusses creating an "innovation assembly line" within an organization to drive continuous cycles of innovative ideas for long-term survival. It describes the key constituents of an innovation assembly line as resources, processes, values, and managing these constituents. It provides models for institutionalizing the innovation process, such as learning from lead users and knowledge brokering, and discusses idea filtering and creating new market spaces.

1. First the Revolutionaries (Innovators) will take your markets and your customers.

2. Next they will take your best employees.

3. Finally, they will take your assets!!!

4. First the Revolutionaries (Innovators) will take your markets and your customers. Next they will take your best employees. Finally, they will take your assets!!!

5. Dream, create, explore, invent, pioneer, imagine! Do these words describe what you do?

6. Innovation Assembly Line Why? What? How?

7. Presentation Structure CEO’s Tasks Value Opportunity Innovation Assembly line Constituents of the assembly lines Institutionalising the innovation process Idea Filtering Hurdles to innovation The innovation Agenda

8. CEO’s Tasks Create Shareholders wealth Manage Operations (efficiency) Deliver Experience (doing new things) Companies spent the 20th century managing efficiencies. They must spend the 21st century managing experiences. C K Prahlad Venkatram Ramaswamy Uncertain Environment

9. Manage Operations Ceased to be a differentiator Create Efficient operations Just to survive; table stakes Squeeze value in each element of the value chain Managing cost structures Unfixing the fixed cost “ In the final analysis, you can’t continue to reduce costs and grow” – Paul Cook, founder, Raychem “ No business can (cost) cut its way to success” – Bill Gates

10. Hence, business success is now derived out of…

11. Delivering Experience De-commoditizing the product Creating and delivering experiences in the entire lifecycle of the consumer The Art of Co-Creation Pre-sales to Post-sales experiences Capturing Mindshare The good old way Continuously Redefining the ‘Wow factor’ Managing Experiences in an environment where the customer is intensely value-seeking & transactional is a critical challenges for all businesses

12. Therefore, today’s greatest challenge is…

13. Uncertain Environment… Managing at Inflection points Template changes not as rapid as environmental changes Mindsets of suppliers Mindsets of internal customers Disruptive technological changes Grabbing Opportunities Managing Regulations - Jerky changes Drunken man’s walk Strategy today has to align itself to the fluid nature of this environment. It must be flexible enough to change constantly and to adapt to outside and internal conditions even as the aspiration to deliver favorable outcomes for shareholders remains constant.

14. This translates to … Capacity to drive purposeful change – the fine art of innovation Making growth happen as against participating in the growth process. In other words transforming the word “growth” from a noun to a verb. Define a new value curve/chain How do you increase the probability that radical new wealth-creating strategies emerge in your organisation?

15. Because… In an overcrowded and demand-starved economy profitable growth is not sustainable without creating and re-creating markets and market spaces Economies rejuvenate themselves through cycles of innovation only In a non linear world only non linear ideas will create new wealth

16. Value Opportunity YOU Competition Catch-up Don’t Know Competitive advantage Commodity Know Don’t Know Know

17. Value Opportunity Innovation leading to opportunity YOU Competition Catch-up Don’t Know Competitive advantage Commodity Know Don’t Know Know

18. Value Opportunity Innovation leading to opportunity YOU Competition Catch-up Don’t Know Competitive advantage Commodity Know Don’t Know Know

19. That’s all fine…but how do we do it? By creating an organisation that’s an innovation assembly line!

20. I know that I don’t know. But I will.

21. Definitions

22. innovation renew; alter; make new

23. Systematic Innovation Purposeful and organised search for change

24. What does innovation mean? Thought leadership, Thinking differently, - insights Renewal Challenging orthodoxy Breaking the mould Value Creation Innovation is mixture of serendipity, genius and sheer bloody mindedness

25. Types of innovation Linear innovation Serves existing customers better Disruptive/non-linear innovation Creates new market spaces Only non-linear innovation will drive long-term wealth creation

26. Sources of innovative opportunity Those lying within the enterprise of industry Unexpected success/failure Innovations based on process needs Changes in market/industry structure that catch everyone unawares Those lying beyond industry Demographic changes Changes in perception/mood New Knowledge

27. What is an assembly line? a series of workers and machines in a factory by which a succession of items is progressively assembled from raw materials to finished goods/services that the customers will buy

28. Why an innovation assembly line? The life span of an average business idea is longer than a butterfly’s but shorter than a dog’s. Therefore continuous cycles of innovative ideas are the only tools of long-term survival available to any organisation

29. Constituents

30. Constituents of any assembly line Resources Value Created Processes Organisational Values

31. Managing the constituents

32. Resources Access to abundant, high quality resources increases an organisation’s chances of coping with change. Given a limited access to key resources the fundamental question is where to deploy (in “releasing” wealth or in creating wealth )and in what measure.

33. Managing Resources Open market for capital - separate resources for innovation activities Earmark for innovations that are not contributing to the here and the now Open market for talent - brightest managers to head quantum growth challenges Of all the constituents resources are actually the easiest to gather and re-allocate

34. Processes Two kinds: Formal – explicitly defined and documented Informal – routines or ways of working that evolve over time They create the capability to execute one task and concurrently define disabilities in executing other tasks (non-planned). Most management process are controlled by the defenders of the past. Most process are implicitly risk-averse and are focused on existing customers and markets As a company grows, what it can and cannot do becomes more sharply defined in certain predictable ways

35. Values The single most important determinant of the innovative capability of any organisation. The founder of the organisation is the driver of values in the system. Values are the most important constituent of the innovation process and, if entrenched, most difficult to change

36. Managing Processes and Values A CULTURE of Innovation MUST be driven from the TOP It is Top Management’s responsibility to create an organizational culture that encourages innovation & calculated risk-taking, out of the box thinking and occasional mistakes Innovative behavior must be encouraged by aligning performance appraisal systems, recognition, visibility and rewards

37. Institutionalising the innovation process HOW

38. Model - 1 Learning from Lead users – the 3M way Phase-1 : Laying the foundation Phase-2 : Determining the Trends Phase-3 : Identifying Lead Users Phase-4 : Developing the breakthrough

39. Model - 2 The Knowledge Brokering Mantra Capturing good ideas “ To invent, you need good imagination and a pile of junk” – Thomas Edison Keeping the ideas alive Imagining new uses for old ideas Putting promising concepts to the test “ The real measure of success is the number of experiments that can be crowded into 24 hours” – Thomas Edison

40. Model - 3 A system for innovation Organize for rapid experimentation Fail early and often, but avoid mistakes Anticipate and exploit early information Combine new and traditional technologies

41. Idea Filtering The process of selecting, combining, refining the best creative idea(s) to turn into reality The goal is to make sure you have a winner, not to make sure there are no losers

42. Knowing a winning business idea when you see one The buyer utility map – creating exceptional utility The price corridor of the mass The business model guide

43. The Buyer Utility Map Six Stages of the Buyer Experience Cycle Six Utility Levers By locating a new product on one of the 36 spaces one can clearly see how new ideas create a different utility proposition from existing products Maintenance Environmental friendliness Fun & Image Risk Convenience Simplicity Customer Productivity Disposal Supplements Use Delivery Purchase

44. Creating New Market Space Looking across substitute industries Looking across strategic groups within industries Looking across chain of buyers: Looking across complementary Product and service offerings Looking across functional and emotional appeal to buyers Looking across Time

45. Creating New Market Space What factors should be reduced well below the industry standards Reduce Raise What factors should be created that the industry has never offered Eliminate What factors should be raised well beyond the industry standards What factors should be eliminated that the industry has taken for granted Create NEW VALUE CURVE

46. The price corridor of the mass Different form and function, same objective Different form same function Same form Low High Three Product Types Upper level pricing Mid level pricing Upper level pricing Low degree of legal & resource protection Easy to imitate Same degree of legal & resource protection Relatively easy to imitate High degree of legal & resource protection Difficult to imitate PRICE

47. The business model guide What is the cost target? What is the cost target set by the strategic price? Can the product’s raw materials be replaced by unconventional, less expensive ones? Did you significantly eliminate, reduce and outsource high-cost, low value added activities in the value chain? Can you reduce costs be digitising assets or activities? Who can we partner with? What capabilities do you need to achieve the value proposition and which ones do you lack? Which companies have those missing capabilities Based on cost quality and speed, should you acquire those companies or partner with them? Which price model should we use? Is your industry’s pricing model a barrier to your business idea’s success What pricing model would create a greater profit pool

48. Hurdles to innovation adoption

49. Biggest hurdles to innovation Resources Brightest managers not heading quantum growth challenges but simply maintaining existing business Delegating insights

50. Biggest hurdles to innovation Processes Strategic planning reduced to number crunching Projecting own aspirations onto the customer Discussing only tangibles such as budgets and targets rather than abstract underlying concepts Gap between idea and implementation

51. Biggest hurdles to innovation Values Settlers at the top – top management reluctant to push themselves and committing publicly to quantum growth targets. Reluctance to “jump in” the ideating process The Top Sitting in judgment: Writing off ideas as “too risky” or “too impractical” without going through the idea generation process itself – the conformism trap Shooting the people who take risks All new ideas seen in relation to the existing norms of market shares, volume and profitability.

52. Finally…The new Innovation agenda Continuous improvement & Non-linear innovation Product and process innovation & business concept innovation “Releasing” wealth & Creating wealth Serendipity & Capability Visionaries & Activists

53. I am no longer a captive to history. Whatever I can imagine, I can accomplish. I am no longer a vassal in a faceless bureaucracy. I am an activist, not a drone. I am no longer a foot soldier in the march of progress I am a Revolutionary (Innovator).

54. The gap between what can be imagined and what can be accomplished has never been smaller!!! Thank You