The document outlines 8 steps to build a systematic innovation capability: 1. Build a pipeline by laying the foundation of an innovation program with processes for idea management, buzz creation, and training. 2. Create a challenge book to source ideas by identifying pain points and opportunities. 3. Improve idea velocity by experimenting quickly and cheaply, rapidly prototyping, and iterating business models. 4. The final steps to increase success rate include building an innovation sandbox to safely test ideas and creating a margin of safety.

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

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

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

53. THANK YOU
53
rishi@iimb.ernet.in
http://jugaadtoinnovation.blogspot.in