1. Integrating Process
Improvement and
Transformational Innovation
Douglas Brockway
April, 2012

2. “The source of (corporate) wealth is something specifically
human: knowledge. If we apply knowledge to tasks we
already know how to do, we call it „productivity‟; If we apply
knowledge to tasks that are new and different, we call it
‟innovation‟”
The Discipline of Innovation
Peter Drucker
1

3. Common challenges regarding innovation
 Interest in innovation remains quite high
 But, fiscal budgets are tight
 Many companies are “out of shape” regarding Innovation
̶ Forward looking investments have been closely managed
̶ Individuals and teams introduce new concepts when they can, but
̶ Project timelines and budgets are tight as is the overall budget
 Innovation research shows that when flexibility on “when” and “how” a solution
is derived is removed organizations forfeit creativity
 They are forced to use what is known, what has be tried and used before, to
NOT innovate
2

4. Innovations can be very local or very transformational in impact
Processes/Capabilities
 Organizations innovate in three main “scopes”
̶ Internal Processes/Capabilities
 Constant innovation
 Relatively low value, cost and risk
 Addressed through Six Sigma and similar approaches
 Drucker calls this “productivity” Products/Services
̶ Products and Services
 Frequent innovation
 Moderate value, cost and risk
 Product marketing and engineering
 A middle form
̶ Business Models and Markets Models/Markets
 Least frequent innovation
 Largest value, cost and risk
 Strategic and transformational planning and analysis
 Most commonly desired form of innovation
3

5. Any given innovation follows a predictable path from concept to broad
use
 There are four main elements
that influence the spread of a
new idea: The Diffusion of Innovations¹
̶ the innovation,
̶ communication channels,
̶ time, and
̶ a social system.
 Diffusion is the process by
which an innovation is
communicated through
certain channels over time
among the members of a
social system
 In the context of business and
IT, the innovations can be for
external markets or internal
consumption
Source: Everett Rogers’, Diffusion of innovations, appendix
4

6. Innovative companies must transform themselves to be accepted
by the broader market as reliable vendors or suppliers
 Geoffrey Moore‟s adaption that describes the most challenging hurdle for technology-
based innovations:
 The majority has a different set of key values in making investments and a different
sense of risk in a vendor and provider
 Innovators must appear to be the kind of company a main stream market wishes to
depend on
5

7. Organizations desiring transformations must learn internal/process
innovation first, “cross” to products, then on to markets
 You must be able to innovate at the Process level in order to see, understand, and
take advantage of Product and Services opportunities that may arise
n
=
Integrals -
1 The integral of Process
Processes and Capabilities = Products and Services innovation is new Products &
Services. The integral of
n Products & Services
innovations is new Business
= Models & Markets
1
Products and Services = Business Models and Markets
 Similarly, you must be able to Innovate at the Product and Service level in order to
take advantage of Game Changing business models and markets
6

8. What can be done on a tight budget?
 Continue to focus on efforts to improve the Internal Process efficiency and
capabilities
̶ It is required to generate the resource/organizational capacity to do more
interesting work
̶ This will burnish the skills needed to engage in Products and Services
innovation
 Find Product and Services opportunities, OR, uncover skunk works successes
running under the radar
̶ Protect and support them
 Use low-key, often university or vendor-based, frequently local and no cost
external speakers to inject new ideas to internal discussions
 Avoid getting sucked into “business transformational” or “business game-
changing” innovations unless they:
̶ Are clearly required
̶ Have overt c-level involvement
̶ Are properly, but not overly, resourced
7

9. How to contact the author
 Doug Brockway is a partner with AKA Group, LLC he can be reached at:
̶ (617) 834-0067
̶ doug.brockway@akaplex.com
̶ Twitter = @workingonstep2
̶ Find out more about AKA Group at www.akaplex.com
8