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Rishikesha T. Krishnan & Vinay Dabholkar
rishi@iimb.ernet.in; vinay@catalign.com
8 Steps to Innovation:
Building a Systematic Innovation Capability
April 26, 2013
1
Build a
pipeline
3 Improve
Batting Avg
2 Improve idea velocity
From Jugaad to Systematic Innovation:
Innovation by
Firms
Inputs
People
Funding
Knowledge
Infrastructure
Capacity to Innovate
Incentive to
Innovate
Benefits
Competition
Appropriability
Rewards
Social
Environment
Political
Environment
Economic
Environment
Technology
Environment
Government Policy
International
Environment
3
Innovation by
Firms
Inputs
People
Funding
Knowledge
Infrastructure
Capacity to Innovate
Incentive to
Innovate
Benefits
Competition
Appropriability
Rewards
Social
Environment
Political
Environment
Economic
Environment
Technology
Environment
Government Policy
International
Environment
Improved since
1991
Remain areas
of concern
4
INNOVATION STRATEGIES
DEPEND ON YOUR SOURCE OF
COMPETITIVE ADVANTAGE….
Look at the
disciplines of market leaders….
6
1. Operational Excellence
Provision of consistent quality at the best price
through a standardized business system
that minimizes the cost & difficulty faced
by the customer in acquiring the product
• Wal-Mart
• Southwest Airlines
Low-cost transaction
processing systems
Optimization of
business processes
7
2. Customer Responsiveness
Emphasis on careful tailoring and adaptation
of products & services to increasingly
specific requirements
• Merrill-Lynch
• Nordstrom’s
Microsegments
Long-term relationships
Empowerment
8
3. Performance Superiority
Continuous, fast-paced innovation that yields
a steady flow of leading-edge products that
consistently push the state-of-art
•3M
•Sony
•Gillette
Openness to new ideas
Sensitive to latent needs
Mobilize NPD teams
9
8 Steps to Innovation:
Building a Systematic Innovation Capability
1
Build a
pipeline
3 Improve
Batting Avg
2 Improve idea velocity
Build a Pipeline
1. Lay the Foundation
2. Create a Challenge Book
3. Build Participation
11
Improve the Idea Velocity
4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model
12
Increase the Batting Average
7. Build an Innovation Sandbox
8. Create a Margin of Safety
13
LAY THE FOUNDATION
STEP 114
8 Steps to Innovation Excellence
Build a Pipeline
1. Lay the Foundation
 Create Innovation Program
 E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
 3 Key Processes
 Idea Management
 Buzz Creation
 Training & Development
15
3 Key Processes
in an Innovation Program
Idea
Management
Buzz
Creation
Training &
Development
(who submits?
who selects?
who funds?)
(campaigns,
communication,
rewards,
innovation day)
(prototyping,
TRIZ,
design thinking,
idea communication,
leadership development)
Idea Box
source scope stages
technology selection funding
Idea Management
Year No of Suggestions Participation Adoption
suggestions per person Rate(%) Rate(%)
1951 789 0.1 8 23
1971 88,607 2.2 67 72
1986 2.6million 48 95 96
40 years, 20 million ideas
The Power of Small Ideas
“There is no genius in our company. We
just do whatever we believe is right, trying
every day to improve every little bit and
piece. But when 70 years of very small
improvements accumulate, they become a
revolution”
From Interview with Katsuaki Watanabe
in HBR, July-Aug 2007
19
Build a Pipeline
 Lay the Foundation
 Create Innovation Program
 E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
 3 Key Processes
 Idea Management
 Buzz Creation
 Training & Development
20
Buzz Creation (creative campaigns)
21
Garib Rath
(Heavier & longer)
Axle load
Heavier, faster and longer
Some Titan Innovation Campaigns
 2004: “What is new?”
 Identification and implementation of 5 new ideas by
every supervisor on the shopfloor
 2006: HOD Fund
 Every head of department authorised to spend upto Rs. 1
lakh on an idea without any approvals
 2008: “Simplify & Automate”
 Most successful theme at Titan
 2009: “Innovation School of Management”
 Making every employee an innovator
24
Titan: The 3M of India?
25
Karatmeter resulted in transformation of jewellery
business
“Anyone can be an Innovator”
Innovation School of Management
Process innovations result in 100s of crores savings
Build a Pipeline
 Lay the Foundation
 Create Innovation Program
 E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
 3 Key Processes
 Idea Management
 Buzz Creation
 Training & Development
26
Training & Development
 Titan Innovation School of Management
 “Everybody an innovator by 2015”
27
Focus area Techniques
Design thinking Immersive research, rapid
prototyping, brainstorming
Systems thinking TRIZ
Systems archetypes
Theory of constraints (TOC)
Lateral thinking Edward de Bono’s six thinking
hats
CREATE A CHALLENGE BOOK
STEP 228
8 Steps to Innovation Excellence
Build a Pipeline
2. Create a Challenge Book
 U & I Portal at HCL
 Petition Box at Tihar Jail
 Feel the Pain
 Sense the Wave
 See the Waste
29
The Bajaj Pulsar exploited a discontinuity..
30
7 Themes
 Digital consumers
 Emerging economies
 Sustainable tomorrow
 Smarter organizations
 New commerce
 Pervasive computing
 Healthcare economy
31
http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
Disguster Delighter
Annoyance Frills
Negative Positive
Low
High
Emotions
Importance
to
customer
A Relentless Focus
on User Experience is Critical
Source: H. Rao, Stanford GSB, 2007
32
Disguster
Delays
Missing Bags
Delighter
Upgrades
Annoyance
Pepsi instead
of Coke
Frills
Inflight
Magazine
Negative Positive
Low
High
Emotions
Importance
to
customer
A Relentless Focus
on User Experience is Critical
Examples from the Airline Industry
Source: H. Rao, Stanford GSB, 2007
33
BUILD PARTICIPATION
STEP 334
8 Steps to Innovation Excellence
Examples
 Role model
 Community of practice
 Innovation catalyst
 Rewards & recognition
35
Improve the Idea Velocity
4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model
36
EXPERIMENT WITH LOW COST
AT HIGH SPEED
STEP 437
8 Steps to Innovation Excellence
Improve the Idea Velocity
4. Experiment with Low Cost at High Speed
38
itch
idea
demo
impact
Feasibility Loop Viability Loop
2 months
Sep
2003
Nov
2003
Feb 2004
3 months 2 months
Apr 2004
Creating a Climate for Experimentation
 Failure plays a critical role in innovation
 Post-It Notes & failed adhesives
 Nylon: a lab experiment that went wrong
 TVS Spectra failed, but Victor succeeded
 Time-to-market is important…but don’t forget the role
of earlier innovations
 Separate intelligent failure from unnecessary failure -
in language and managerial response
 Create infrastructure, give resources for expts
 Have a high trial rate: fail fast, learn fast
 Can you do the “last” experiment first?
40
Avoid the “Failure Fallacy”
41
GO FAST FROM PROTOTYPE
TO INCUBATION
STEP 542
8 Steps to Innovation Excellence
Improve the Idea Velocity
5. Go Fast from Prototyping to Incubation
43
ITERATE ON THE
BUSINESS MODEL
STEP 644
8 Steps to Innovation Excellence
Improve the Idea Velocity
6. Iterate on the Business Model
45
Difficult to
make money
Holder of
complementary
resources makes
Money
(EMI, Coke)
Inventor
makes
money
Party with
Innov .+ Compl.
resources makes
Money
(Pixar vs Disney)
Freely available
or unimportant
Tightly held
and important
Low
High
Complementary Assets
Ease of Imitation
Inimitability/Complementary Assets Framework
Source: Afuah, 2004
BUILD AN
INNOVATION SANDBOX
STEP 747
8 Steps to Innovation Excellence
Increase the Batting Average
7. Build an Innovation Sandbox
48
The Power of Platforms
7 Themes
 Digital consumers
 Emerging economies
 Sustainable tomorrow
 Smarter organizations
 New commerce
 Pervasive computing
 Healthcare economy
49
WalletEdge
Platform Offering
http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
Open Innovation
50
As one of the biggest players
in the water purification market,
Eureka Forbes is a natural
partner for new technologies.
EFL keeps itself open to new
ideas from all over the world
E.g. : Nanoceram technology
developed by Argonide Corp.
USA – takes care of viruses
without chemicals
CREATE A
MARGIN OF SAFETY
STEP 851
8 Steps to Innovation Excellence
Increase the Batting Average
8. Create a Margin of Safety
52
THANK YOU
53
rishi@iimb.ernet.in
http://jugaadtoinnovation.blogspot.in

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8 steps to innovation: An introduction

  • 1. Rishikesha T. Krishnan & Vinay Dabholkar rishi@iimb.ernet.in; vinay@catalign.com 8 Steps to Innovation: Building a Systematic Innovation Capability April 26, 2013 1 Build a pipeline 3 Improve Batting Avg 2 Improve idea velocity
  • 2. From Jugaad to Systematic Innovation:
  • 3. Innovation by Firms Inputs People Funding Knowledge Infrastructure Capacity to Innovate Incentive to Innovate Benefits Competition Appropriability Rewards Social Environment Political Environment Economic Environment Technology Environment Government Policy International Environment 3
  • 4. Innovation by Firms Inputs People Funding Knowledge Infrastructure Capacity to Innovate Incentive to Innovate Benefits Competition Appropriability Rewards Social Environment Political Environment Economic Environment Technology Environment Government Policy International Environment Improved since 1991 Remain areas of concern 4
  • 5.
  • 6. INNOVATION STRATEGIES DEPEND ON YOUR SOURCE OF COMPETITIVE ADVANTAGE…. Look at the disciplines of market leaders…. 6
  • 7. 1. Operational Excellence Provision of consistent quality at the best price through a standardized business system that minimizes the cost & difficulty faced by the customer in acquiring the product • Wal-Mart • Southwest Airlines Low-cost transaction processing systems Optimization of business processes 7
  • 8. 2. Customer Responsiveness Emphasis on careful tailoring and adaptation of products & services to increasingly specific requirements • Merrill-Lynch • Nordstrom’s Microsegments Long-term relationships Empowerment 8
  • 9. 3. Performance Superiority Continuous, fast-paced innovation that yields a steady flow of leading-edge products that consistently push the state-of-art •3M •Sony •Gillette Openness to new ideas Sensitive to latent needs Mobilize NPD teams 9
  • 10. 8 Steps to Innovation: Building a Systematic Innovation Capability 1 Build a pipeline 3 Improve Batting Avg 2 Improve idea velocity
  • 11. Build a Pipeline 1. Lay the Foundation 2. Create a Challenge Book 3. Build Participation 11
  • 12. Improve the Idea Velocity 4. Experiment with Low Cost at High Speed 5. Go Fast from Prototyping to Incubation 6. Iterate on the Business Model 12
  • 13. Increase the Batting Average 7. Build an Innovation Sandbox 8. Create a Margin of Safety 13
  • 14. LAY THE FOUNDATION STEP 114 8 Steps to Innovation Excellence
  • 15. Build a Pipeline 1. Lay the Foundation  Create Innovation Program  E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential  3 Key Processes  Idea Management  Buzz Creation  Training & Development 15
  • 16. 3 Key Processes in an Innovation Program Idea Management Buzz Creation Training & Development (who submits? who selects? who funds?) (campaigns, communication, rewards, innovation day) (prototyping, TRIZ, design thinking, idea communication, leadership development)
  • 17. Idea Box source scope stages technology selection funding Idea Management
  • 18. Year No of Suggestions Participation Adoption suggestions per person Rate(%) Rate(%) 1951 789 0.1 8 23 1971 88,607 2.2 67 72 1986 2.6million 48 95 96 40 years, 20 million ideas
  • 19. The Power of Small Ideas “There is no genius in our company. We just do whatever we believe is right, trying every day to improve every little bit and piece. But when 70 years of very small improvements accumulate, they become a revolution” From Interview with Katsuaki Watanabe in HBR, July-Aug 2007 19
  • 20. Build a Pipeline  Lay the Foundation  Create Innovation Program  E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential  3 Key Processes  Idea Management  Buzz Creation  Training & Development 20
  • 21. Buzz Creation (creative campaigns) 21
  • 22.
  • 23. Garib Rath (Heavier & longer) Axle load Heavier, faster and longer
  • 24. Some Titan Innovation Campaigns  2004: “What is new?”  Identification and implementation of 5 new ideas by every supervisor on the shopfloor  2006: HOD Fund  Every head of department authorised to spend upto Rs. 1 lakh on an idea without any approvals  2008: “Simplify & Automate”  Most successful theme at Titan  2009: “Innovation School of Management”  Making every employee an innovator 24
  • 25. Titan: The 3M of India? 25 Karatmeter resulted in transformation of jewellery business “Anyone can be an Innovator” Innovation School of Management Process innovations result in 100s of crores savings
  • 26. Build a Pipeline  Lay the Foundation  Create Innovation Program  E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential  3 Key Processes  Idea Management  Buzz Creation  Training & Development 26
  • 27. Training & Development  Titan Innovation School of Management  “Everybody an innovator by 2015” 27 Focus area Techniques Design thinking Immersive research, rapid prototyping, brainstorming Systems thinking TRIZ Systems archetypes Theory of constraints (TOC) Lateral thinking Edward de Bono’s six thinking hats
  • 28. CREATE A CHALLENGE BOOK STEP 228 8 Steps to Innovation Excellence
  • 29. Build a Pipeline 2. Create a Challenge Book  U & I Portal at HCL  Petition Box at Tihar Jail  Feel the Pain  Sense the Wave  See the Waste 29
  • 30. The Bajaj Pulsar exploited a discontinuity.. 30
  • 31. 7 Themes  Digital consumers  Emerging economies  Sustainable tomorrow  Smarter organizations  New commerce  Pervasive computing  Healthcare economy 31 http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
  • 32. Disguster Delighter Annoyance Frills Negative Positive Low High Emotions Importance to customer A Relentless Focus on User Experience is Critical Source: H. Rao, Stanford GSB, 2007 32
  • 33. Disguster Delays Missing Bags Delighter Upgrades Annoyance Pepsi instead of Coke Frills Inflight Magazine Negative Positive Low High Emotions Importance to customer A Relentless Focus on User Experience is Critical Examples from the Airline Industry Source: H. Rao, Stanford GSB, 2007 33
  • 34. BUILD PARTICIPATION STEP 334 8 Steps to Innovation Excellence
  • 35. Examples  Role model  Community of practice  Innovation catalyst  Rewards & recognition 35
  • 36. Improve the Idea Velocity 4. Experiment with Low Cost at High Speed 5. Go Fast from Prototyping to Incubation 6. Iterate on the Business Model 36
  • 37. EXPERIMENT WITH LOW COST AT HIGH SPEED STEP 437 8 Steps to Innovation Excellence
  • 38. Improve the Idea Velocity 4. Experiment with Low Cost at High Speed 38
  • 39. itch idea demo impact Feasibility Loop Viability Loop 2 months Sep 2003 Nov 2003 Feb 2004 3 months 2 months Apr 2004
  • 40. Creating a Climate for Experimentation  Failure plays a critical role in innovation  Post-It Notes & failed adhesives  Nylon: a lab experiment that went wrong  TVS Spectra failed, but Victor succeeded  Time-to-market is important…but don’t forget the role of earlier innovations  Separate intelligent failure from unnecessary failure - in language and managerial response  Create infrastructure, give resources for expts  Have a high trial rate: fail fast, learn fast  Can you do the “last” experiment first? 40
  • 41. Avoid the “Failure Fallacy” 41
  • 42. GO FAST FROM PROTOTYPE TO INCUBATION STEP 542 8 Steps to Innovation Excellence
  • 43. Improve the Idea Velocity 5. Go Fast from Prototyping to Incubation 43
  • 44. ITERATE ON THE BUSINESS MODEL STEP 644 8 Steps to Innovation Excellence
  • 45. Improve the Idea Velocity 6. Iterate on the Business Model 45
  • 46. Difficult to make money Holder of complementary resources makes Money (EMI, Coke) Inventor makes money Party with Innov .+ Compl. resources makes Money (Pixar vs Disney) Freely available or unimportant Tightly held and important Low High Complementary Assets Ease of Imitation Inimitability/Complementary Assets Framework Source: Afuah, 2004
  • 47. BUILD AN INNOVATION SANDBOX STEP 747 8 Steps to Innovation Excellence
  • 48. Increase the Batting Average 7. Build an Innovation Sandbox 48
  • 49. The Power of Platforms 7 Themes  Digital consumers  Emerging economies  Sustainable tomorrow  Smarter organizations  New commerce  Pervasive computing  Healthcare economy 49 WalletEdge Platform Offering http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
  • 50. Open Innovation 50 As one of the biggest players in the water purification market, Eureka Forbes is a natural partner for new technologies. EFL keeps itself open to new ideas from all over the world E.g. : Nanoceram technology developed by Argonide Corp. USA – takes care of viruses without chemicals
  • 51. CREATE A MARGIN OF SAFETY STEP 851 8 Steps to Innovation Excellence
  • 52. Increase the Batting Average 8. Create a Margin of Safety 52