This document discusses innovative leadership and innovation. It provides learning objectives around identifying the importance of innovative leadership, types of innovation, and approaches to leading innovation within an organization. It also discusses concepts like incremental vs radical innovation, open vs closed innovation, sources of novel initiatives, thinking skills for innovation, and characteristics of innovative leadership. Key drivers of innovation are identified as improving customer experience, reducing costs, and competitive positioning.

1. Innovative Leadership

2. Learning Objectives
Oncompletion of this course, participants shallbe
able to do thefollowing:
Identify the Importance of InnovativeLeadership
Identify various types of innovation
Identify approaches to Innovation
Leadorganisation-wide implementation of
innovation strategy
Coordinate evolution of innovationculture

3. “Whether you like it or not, your business
profession or line of work will evolve and you
have two choices. First, you canbe a
proactive force and get yourself and your
organization involved in making innovations;
or second, you canchooseto ‘react’ to the
innovations of others and miss opportunities
to grow and apply your experience inexciting,
new ways.”
Source: Center for Management & OrganisationEffectiveness

4. “Innovation keeps businesses competitive – it is
widely recognized asproviding areal impetus
for growth and is at the heart of corporate
strategy in many ofthe world’s leading firms.”
Source: CBI

5. “ Innovation isn’t anything until it becomes
part of your everydaybusiness”
- Carina Kemp, Head of Insight and Planning, HSBC.

6. The“functional” source of innovationdepends
upon the functional relationship between
innovator and innovation:
An innovation is aUSERinnovation when the
developer expects to benefit by USINGit;
An innovation is aMANUFACTURERinnovation
when the developer expects to benefit by
SELLINGit.
Source: Eric Von Hippel, Innovate or Buy

7. Drivers of Innovation
Improvement in CustomerExperience
Demand of Customers
CostReduction
Organisational Culture
Need to Changeor ReduceRawMaterials
Regulatory Requirements
Competitive Positioning
Minimization of EnvironmentalImpact
Gapin the Market
Improving Quality
Reduction of EnergyExpenditure
Differentiation
Enhancing Flexibility

8. SomeInnovative Companies and Innovation Drivers 1
Company Innovation Highlighted by Company Innovation Drivers
1.Arup Development of the Dongtan Ecocity Conceptin
China
Developed telematics insurance product for
individual customers andfleets
Foresight and long established company
culture
Need to respond torapid change in insurance
market, strategic decision to seekoutorganic
growth, inevitability of telematics provided
opportunity
In response to rapid company growthand
need to free-up key staff to focus on core
architecture work
Declining opportunity in core market and
strategic decision togrow, rather than have a
managed retreat
Toreplace existing foot measurement
equipment at the end of its useful life, to
reduce costs and determination to createa
leading retail experience
Company culture and strategy, foresight-
looking for trends and tipping points, to
reduce costs, requests for innovation from
clients, todifferentiate themselves from the
competition
Toimprove customer experience, meet
demands of new markets while reducingcosts
and environmental impacts
2.Aviva-Norwich Union
3.Benoy Internal business reorganization
4. BTWholesale New ways of bundling services andproviding
software (rather than hardware)solutions
5.Clarks Development and introduction of 3Dfoot
scanning technology
6.Fujitsu Moving from technological solutionsto
business-based outcome services
7.HSBC Sharia-compliant banking, green banking, self-
service banking in branches and borderless
banking

9. SomeInnovative Companies and Innovation Drivers 2
Company Innovation Highlighted by Company Innovation Drivers
8.KPMG Developing anew internal innovation
framework incorporating skills, behaviour and
process
Tohelp them keep ahead of arapidly
changing business environment where some
traditional services have become
commoditized and clients are more
demanding
Togain advantage over competitors with
better training, thus raising standards, brand
image and reputation while reducing costs,
offering better career progression
opportunities to retain the best staff
Company culture, identified agapand sought
to create anewmarket
9. Legal & General Starting underwriters academy in collaboration
with Cardiff University
10. LochLomondSeaplanes Bringing seaplanes asamode of transport to
west Scotland
11. MagicLantern Providing abridge between traditional and
digital media with afocus on participative
engagement
Company culture, proactively identifying
audience needs that seemunder-served, to
grow by focusing on their areas ofexpertise in
new technology, innovation and creativity
Changemarket environment becoming more
competitive, desire to differentiate
themselves on service delivery and need to
retain staff
Toimprove overall customer experience while
also maximizing revenue opportunities and
meeting changing regulatory demands on
security etc
12.Muckle Complete organisational culture change
internally
13. NewcastleInternational
Airport
Increase ‘dwell time’ in key parts of the airport

10. SomeInnovative Companies and Innovation Drivers 3
Company Innovation Highlighted by Company Innovation Drivers
14.Nike Unique brand experience from social
networking to aservice allowing customersto
design their own footware- process of mass
customization
Business process improvement for Norwich City
Council and black cab scheduling system for BAA
Company culture, which promotesinnovation
asone of four core values. Tocreate abrand
that enhances the customer experience and
grows Nike’s market-leading position
Tostay ahead in competitive sector whereIP
is difficult to protect; responding to the
changing market where managed servicesare
now seenasacommodity and customers are
more demanding
Company culture, to grow thebusiness,
reduce costs and stay ahead of fastmoving
competition
15.Steria
16.Texperts On-demand expert answers to customer
questions by text service
Source: CBI, Excellence in Service Innovation

11. Incremental Innovation Radical Innovation
1.It’s competence-enhancing
becauseit builds upon
existing knowledge and
resources
2.It brings aboutchanges
It’s competence-destroying
becauseit needs new
knowledge and resources
wherein the existing products development that pushdown
will still beviable.
It brings about verygreat
existing products into
obsolescence

12. Forward Innovation vs. BackwardInnovation
Forward Innovation involves development of
new functions in new or existing products ,
market or technology; while Backward
Innovation encompassesdevelopment of
existing functions more rapidly andcheaper.

13. OpenInnovation
Open Innovation is an intentional course of
action for identifying and exploitinginternal
and external novel initiatives in order to
develop new products andservices.
It involves multi-stage collaboration with other
entities outside afirm, in order to value
capture and optimize the standard andvalue
of the finalproduct.

14. Sourcesof External NovelInitiatives
in OpenInnovation
Competitors
Distributors
Suppliers
Freelance Commentators
Contract ResearchOrganisations
Independent ResearchOrganisations
Practicing Experts
Customers

15. ClosedInnovation
ClosedInnovation is apractice in which afirm
focuses on internal sources of novelinitiatives
asits sole innovation provider, in order to
maximize intellectual property exploitation
and market control.

16. TheDifference Between Open and Closed Innovation
Microsoft’s OS
Google
IBM LinuxCode
MySpace
YouTube
LinuxKernel
Pirated Music
Complementors Wikipedia
Source: Henry Chesbrough & Melissa Appleyard
Company
Ecosystem
Value
Capture
In-House Community-Driven
Value Creation

17. Determinants of InnovationApproach
Competition
Internal Capabilities
Scarcityof Expertise
Marketing
Strategy
Mission
Extent of Opportunities forCollaboration

18. 10 Attributes of SuccessfulServiceInnovation
1. Start with unmet user needs, notnew ideas
2.Researchmethods are basedon deep customer empathy(e.g.,
ethnography)
3. Focusis on the customer journey – not merely your own touch
points
4. Emphasison identifying and winning the moments oftruth
5. Rapid,low-fidelity serviceprototyping
6. Open innovation – including the customer in the earliest stages
7. Openinnovation – bringing together aunique valuenetwork
8. Creating evidence of the brand attributes within the touch points
9. Useof storytelling to convey the experienceintent
10.Overcoming metrics that run counter to creating compelling
experiences
Source: Customer Perspectives on Service Innovation

19. “Unsuccessful leaders often display
stereotypical fallacies in theirthinking.”
-Sternberg

20. Stereotypical Fallacies Against
Innovative Leadership
• Egocentric fallacy
• Invulnerability fallacy
• Omnipotent fallacy
• Unrealistic optimism fallacy
• Omniscience fallacy

21. “ Thebest organisations understand design
and do not seeinnovation assomething
happening in alaboratory on itsown”
- JoeHeapy, Co-founder and Director, Engine.

22. Characteristic Features of
Innovative Leadership
Guidance
Ground breaking
Control
Novel
Direction
Modern
Inventive
Headship
Pioneering

23. Thinking Skills in Innovation
i. Multi-screen Thinking vs.SpotThinking
ii. Abstract Thinking vs.SpecificThinking
iii. Breakthrough Thinking vs.Trade-offThinking
iv. Intensification Thinking vs.ShelteredThinking
v. Non-linear Thinking vs.LinearThinking
vi. Diversity Thinking vs.Uniformity Thinking
vii. Structured Thinking vs.RandomThinking
viii. Ideality Thinking vs.ConsumptionThinking
ix. Ultimate GoalThinking vs.ShallowThinking
x. Evolutionary Thinking vs.RandomThinking
xi. Long-TermThinking vs.Short-Term Thinking
xii. Wild Thinking vs.GroundedThinking
xiii. Analytical Thinking vs.Jump-to-SolutionThinking
xiv. Problem Flow Thinking vs.Single Solution Thinking
Source: Valeri Souchkov, Power Thinking Skills For Innovative Leadership

24. 7 Dimensions of StrategicInnovation
1. AManaged Innovation Process:Combining non-
traditional and traditional approaches to business
strategy.
2. StrategicAlignment: Buildingsupport.
3. Industry Foresight: Understanding articulated emerging
trends.
4. Consumer/ Customer Insight: Understandingarticulated
and unarticulated needs.
5. CoreTechnologies and Competencies: Leveraging and
extending corporate assets.
6. Organisational Readiness:Theability to takeaction.
7. Disciplined Implementation: Managing the pathfrom
inspiration to busiS
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25. SystemicApproach to Innovation
Marketing
Innovation
Organisational
Innovation
Product
Innovation
Strategy
Innovation
Technology
Innovation
Process
Innovation
Business
Innovation
Source: Vadim Kotelnikov

26. BusinessInnovation
Shifting the dimensions of BusinessModel
Examples
1.General Electric: Evolving one of themost
competitive firms
2.Coscharis: Resolvingmultiple value streams
into total valueproposition

27. Organisational Innovation
Shifting from Industrial to Knowledge-Driven
Organisation (Learning, Teachingand Coaching)
Examples
1.Microsoft Corporation: Raisingaverage
intelligence quotient ofemployees
2.First Bank: Eliminating internal bureaucracyand
building internal capacity for upwardchange

28. Strategy Innovation
Shifting from Strategic Rigidity toFlexibility in
Approaching Opportunities
Examples
1.Charles Schwab:Development of corporate
guiding principles for leveragingopportunities
2.Zenith Bank: Realignment of strategic intentto
expansion opportunities

29. Technology Innovation
Developing Radical Innovation Capability and S
trategic
Alignment of TechnologyPortfolio.
Examples
1. Zensys:Wireless technology for controlling home
lighting, entertainment and securitysystems
2. MTN: Collaboration with Innovation Hub’sCoachlab
for advancement of InnovativeTechnology

30. ProcessInnovation
Shifting from Functional to Cross-Functional
ProcessMethodology and Integration of Novel
ProcessSystemsSuchasLeanand EBPM.
Examples
1.Fidelity Investments: Processimprovement
for boosting financialsolution
2.RusselSmith:Processoptimization for safety
and quality enhancement

31. Product Innovation
Developing new products for providingcustomer
satisfaction and veritable solution
Examples
1. Multispectral Solutions: Development of Ultra
Wideband product technology for RFID,wireless
communications, radar andgeo-positioning
2. Starcomms: Introduction of iZap super fast broad
band internet connection into theNigerian Market

32. Marketing Innovation
Exploring Value, Customer-Centricity andCompetitive
Advantage for NovelPositioning
Examples
1. Dell Computers: Development of customer
partnership for tracking and exploitingvalue
engineering
2. Friesland Foods(WAMCO): Built competitive
advantage based on value-driven branding

33. Empowering Cross-Functional Teams
for LeadingInnovation
Define what work isrequired
Identify the keyinterdependencies
Parsethe innovation subtask to small,interlocking
teams with definedleaders
Agree on goals, schedule, and accountability
Provide resources but stay out of each team’stask
unless itis not meeting its major commitments
Craft the firm’s overall shape, keep all thesubtasks
together, and link non-adjacent subtasks as
necessary
Source: Christopher Meyer, Relentless Growth

34. Customer-Inspired Innovation
• Customer-Inspired Innovation is the imaginative discovery ofnew
business concepts (products, services, business models,
strategies, etc.) by matching deep insight into customer needs
with an organization’s capabilities in unprecedentedways
• New insight into customers’ needs are discovered, new growth
opportunities are identified, new organizational competencies
are mobilized, new solutions arecreated
• “Articulated Customer Needs” – Needs that are recognized and
communicated (stated) bycustomers
• “Unarticulated Customer Needs” – Needs unrecognized by
customers that – when recognized and satisfied – lead to
products and services that delightthem
• While exploring customer behavior the challenge is to “read
between the lines” and “make non-obviousconnections”
Source: InnovationPoint

35. Asuccessful Innovative Leader must
provide guidance for implementationof
innovation culture in every stratum of
organisational hierarchy.

36. Obstacles to Innovation
1. Lackof ashared vision, purposeand/or
strategy
2. Innovation not articulated asacompany-wide
commitment
3. Lackof ownership by SeniorLeaders
4. Constantly shifting priorities
5. Short-termthinking
6. Internal process focus rather thanexternal
customer focus
7. Focuson successesof the past rather thanthe
challenges of thefuture
8. Unwillingness to change in the absenceofa
burning platform
9. Politics —efforts tosustain the status quo to
support entrenchedinterests
10. Rewarding crisis management rather than
crisis prevention
11. Hierarchy —over-management and reviewof
new ideas
12. Under-funding of new ideas in thename of
sustaining current efforts
13. Reluctanceto kill initiatives that are not
succeeding,but have been funded andstaffed
Source: Mitchell Ditkoff
14. Fearthat criticizing current practicesand
commitments is ahigh-risk activity
15. Workforce workloads (i.e. too much todo, not
enough time)
16. Riskaversion (i.e. punishment for "failure")
17. Micromanagement
18. Inelegant systems and processes
19. Addiction toleft-brained, analytical thinking ("data is
God")
20. Absenceof user-friendly ideamanagement
processes
21. Unwillingness to acknowledge and learn frompast
"failures"
22. Inadequate understanding of customers
23. Innovation not part of the performance review
process
24. Lackof skillful brainstormfacilitation
25. Lackof "spec time" todevelop new ideas and
opportunities
26. Inadequate "innovation coaching"
27. No creative thinking training
28. No reward and recognitionprograms
29. "Innovation" relegated to R&D

37. 11 Practice Tipsfor Innovation
1. Provide strategic alignment
2. Define the innovation processpublicly
3. Build cross-functional expertise
4. Establish acreative chaos environment
5. Challenge assumptions
6. CrossPollinate
7. Reward idea generation
8. Experiment to pursueopportunities
9. Allow freedom to fail
10. Measure the progress
11. Make business fun
Source: Vadim Kotelnikov

38. TheCase
Of
Innovation in Unilever

39. Background
Until 1990
• Highly decentralized
• Federation of Companies
• 5 Central Laboratories
• Common Codeof BusinessPrinciples
• Innovation and Marketing all at Companylevel
(circa 200)

40. Start of Modern InnovationJourney
1990-1995
• Conference to establish need forInnovation
Process
• Dedicated Innovation Resources
• Development of Concept ofInnovation
Centers
• Randomsoftware developments
• 14,000 odd databases were created
• Someinnovations at InnovationCenters

41. Unilever’s Mission
Unilever's mission is to add vitality to life.
We meet everyday needs for nutrition,
hygiene, and personal care with brandsthat
help people feel good, look good and get
more out oflife.

42. In TheEvolving Journey
2005 onwards
• Additional features
– Group Executive announced
– R&Daligned within the businesses
– Focusis on Consumers, Brands& Customers

43. KeyFeatures of Unilever
Innovation ProcessManagement
Objectives
Big, bold consumer relevant innovations-
rolled out fast; and we always remind
ourselves that:
- Theprocess is only there to help enable
innovation: the ITsoftware is just tosupport
the process.

44. KeyFeatures of Unilever Innovation1
• Innovation is Consumerfocused
– Unilever reach in 150countries
– Respectfor individual tastes, preferences and wayof
living
• All the 16,000 people who are involved in Innovation are
connected via acommon software in all the countries
around the world
– Global Community on line with commonpurpose
• Senior people manage, allocate and guideresources
– Senior management commitment

45. KeyFeatures of Unilever Innovation2
•Regular meeting mechanism to review andmove
the Innovation agendaahead
•Formal process to seizeopportunities and to make
business daring
–Tomanage risks and to assessopportunities
• TheInnovation output is measured by three Key
Performance Indicators; viz Underlying VolumeGrowth,
Innovation Rate and Expenditure on R&D
– What you measure is what people focuson

46. KeyFeatures of Unilever Innovation3
• There is formal process of capturinglearning
to build acontinuous learningorganisation
•There is aSteering Group and network of
Innovation to keep the capability building
programmes, processesand systemsleading
edge

47. KeyFeatures of Unilever Innovation4
Capability building programmes
• Leadership Courses
• Marketing AcademyCourses
• Project Management andCreativity
Modules/Facilitations

48. KeyLearning 1
Picklist codings highlighted the enormous
complexity of managing 1800 odd brands,hence
Brand FocusInitiative:
–Tofocus on 40 Power Brands
• Like many other companies, Consumer Disconnect
became apparent when the modern journeybegan,
hence this initiative on ConsumerRe-connect
• Brand fragmentation had created aweak and
inefficient supply chain system, hence the World
ClassSupply Chain Initiative

49. KeyLearning 2
Tomake Innovation top of the mind agendahas
resulted in Enterprise Culture Initiative inwhich
leadership is being focused ongrowth
• Common process and systemshave brought
simplicity and focus towardsgrowth
• Advent of E-Economycoupled with other
developments in Market Environment like
growing Service Sectorsgaveimpetus to
innovate new-Channels hence the initiative on
Pioneering New Channels