Grabbing Lightning: Building a Capability
     for Breakthrough Innovation

       Gina Colarelli O’Connor (oconng@rpi.edu...
Defining Innovation Along a Continuum

               Lower Uncertainty                                  Higher Uncertaint...
Comprehensive Framework for Managing Radical Innovation



     Technical              Resource                Market     ...
Early vs. Mature RI Capacity: Our Point of Departure

                      Early                                         ...
Not just one competency….but 3

              Oversee Transitions/Interfaces


      Discovery              Incubation    ...
DIA isn’t Linear

    Three RI Competencies




            Incubation




Discovery                Acceleration
The Discovery Competency

                  Incubation




      Discovery                Acceleration
Describing Discovery

The creation and identification of opportunities that may have
major impact in the marketplace, eith...
Discovery Activities

  Three Broad Categories:




Scientific                 Opportunity
  Work                     Arti...
The Incubation Competency
  A Long & Winding Road

                   Incubation




       Discovery                Accel...
Incubation Defined

A competency of experimentation. The ability
to experiment with technology and business
concepts/model...
Incubation: Objective

To nurture a portfolio of opportunities (options?) of
highly uncertain outcome, but immense possibi...
Incubation
          In Incubation many avenues are
    explored initially, but few enter Acceleration

                  ...
Incubation Competency




 Coaching     Brokering




              Thinning
                  &
 Nurturing
              ...
The Acceleration Competency
                   or
Gathering Steam & Building Critical Mass


                          Inc...
Describing Acceleration

Driving fledgling businesses to a point where they
can stand on their own relative to mature busi...
Acceleration Objectives

Predictability
 Sales forecasts with some level of accuracy
 Manufacturing with respectable yie...
The DIA System


            Incubation




Discovery                Acceleration
The DIA System Defined



The set of activities that
manage the links and
interfaces within DIA,                   Incubat...
System Imbalances
     Can’t get heard                                                  Big Ideas, Incrementally Executed
...
DIA System Activities


Screening and evaluating businesses
Coaching
Assembling and re-assembling Project Teams
Providing ...
Project vs. Portfolio Orientation

 PROJECT ORIENTATION         PORTFOLIO ORIENTATION

 Tactical (operational)            ...
Model of Radical Innovation Capability
External                                                 economic expansion
Influen...
Identifiable
                          Organization
      Culture and           Structure      Rich Interfaces
      Leade...
Concluding Thoughts for a Systems Approach


Building a breakthrough innovation capability requires
a systems approach…pro...
Thank you!
                        E-mail: oconng@rpi.edu
                         ron@cameronusa.com
                    ...
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Pierantozzi 19 01 10

  1. 1. Grabbing Lightning: Building a Capability for Breakthrough Innovation Gina Colarelli O’Connor (oconng@rpi.edu) Andrew Corbett (corbea@rpi.edu) Ron Pierantozzi (ron@cameronusa.com) Radical Innovation Research Program
  2. 2. Defining Innovation Along a Continuum Lower Uncertainty Higher Uncertainty Type of Incremental [------------------------] Platform and Innovation Breakthrough/Radical Strategic New Products to [------------------------] New Business Models Drivers Extend Existing and Advanced Business Technologies for Growth and Renewal Opportunity Customer Driven [------------------------] Vision/Possibilities Tied Selection and Analytical to Strategic Intent Tools Market Focus Existing Base [------------------------] New Customers, Applications and Unknown Areas to be Discovered Process Stage Gate and [------------------------] Discovery Driven Concurrent Processes and Learning
  3. 3. Comprehensive Framework for Managing Radical Innovation Technical Resource Market Organization Uncertainty Uncertainty Uncertainty Uncertainty Challenge 1: Capturing Breakthroughs Challenge 2: Living with Chaos Challenge 3: Market Learning Challenge 4: Business Model Challenge 5: Resource Acquisition Challenge 6: Transition Challenge 7: Mgt. Individual Initiative
  4. 4. Early vs. Mature RI Capacity: Our Point of Departure Early Mature Executives act as provocateurs, patrons, and The firm’s leadership sets expectations, champions to compensate for lack of supportive develops RI culture, establishes facilitating culture. organizational mechanisms (hubs) and develops goals & reward systems. Mavericks try to catch the attention of patrons. RI idea hunters seek opportunities. Hubs There is a lack of infrastructure and systematic establish effective evaluation boards. Non- approach. traditional marketing & business creation personnel work with RI technical teams to develop business models. There is a learning orientation to project management Acquisition of resources is ad hoc. Project Individual managers with authority to provide teams often expect a budget allocation for seed funding and internal VC organizations funding. provide multiple sources of capital for RI. The firm adopts a portfolio approach to funding RI projects. Completion of RI tasks, project staffing and RI hubs work with HR to develop a strategy for champions rely on individual initiative. identifying, selecting, rewarding and retaining RI champions, experts and team members. Communication difficulty makes transition Transition team established with funding and difficult, often flounders and relies heavily on senior mgmt support continues development intervention of senior management. until uncertainty reduced for successful transition.
  5. 5. Not just one competency….but 3 Oversee Transitions/Interfaces Discovery Incubation Acceleration Evolving the Ramping Creation, opportunity into up the recognition, business to elaboration, a business stand on its articulation proposition own of opportunities. Conceptualization Experimentation Commercialization •Basic Research •Technical •Focus •Internal Hunting •Market Learning •Respond •External Hunting •Market Creation •Invest /License/Purchase •Strategic domains /Invest
  6. 6. DIA isn’t Linear Three RI Competencies Incubation Discovery Acceleration
  7. 7. The Discovery Competency Incubation Discovery Acceleration
  8. 8. Describing Discovery The creation and identification of opportunities that may have major impact in the marketplace, either through the delivery of new performance benefits or greatly improved performance.  Can be originated by technology push or clear market need. • One company indicated that they had a 50/50 split  Can be originated from inside the company or external. • Open Innovation model practiced in nearly every one of our companies. Discovery ≠ Invention  Can discover phenomena in the world around you that are used in another capacities.  Invention is to create something new. Discovery ≠ R&D  Mead-Westvaco story. Scientist knew he had something. I could’ve done what scientists typically do….ask for more money and a bigger lab. But the fact is, I wouldn’t have known which direction to go with this on Monday morning….I got forced out of the research lab because I didn’t know who my customer was (so which BU could take this). So I wandered down the hall and talked with Laura about it…and she started asking some really interesting questions.
  9. 9. Discovery Activities Three Broad Categories: Scientific Opportunity Work Articulation Opportunity Generation
  10. 10. The Incubation Competency A Long & Winding Road Incubation Discovery Acceleration
  11. 11. Incubation Defined A competency of experimentation. The ability to experiment with technology and business concepts/models simultaneously to arrive at a demonstrated model of a new business that brings breakthrough value to the market and consequently to the firm.  Allowances for failures, but expectations of continued pursuit of new frontiers.  Creation and pursuit of options.  Movement in multiple directions simultaneously.  Focus on learning and redirecting.  Focus on enriching and extending internal and external networks to enlarge scope of the company’s knowledge base and commercial opportunity space….in big ways.
  12. 12. Incubation: Objective To nurture a portfolio of opportunities (options?) of highly uncertain outcome, but immense possibility for the market and the company. To develop proposals (not plans) for new businesses, based on experimentation with the technology, production processes, value chain and potential customers. To clarify new strategic growth frontiers for the company. 2 foci:  Individual Opportunity level  Competency level
  13. 13. Incubation In Incubation many avenues are explored initially, but few enter Acceleration I I I I I I I I I I I D I I I I A I I I I
  14. 14. Incubation Competency Coaching Brokering Thinning & Nurturing Enriching
  15. 15. The Acceleration Competency or Gathering Steam & Building Critical Mass Incubation Discovery Acceleration
  16. 16. Describing Acceleration Driving fledgling businesses to a point where they can stand on their own relative to mature businesses in their ultimate home (existing BU, new division). Building critical mass of sales and operational infrastructure. Establish market presence. Develop the management team. Scaling Prepare the business to blend into the fabric of the rest of the organization.
  17. 17. Acceleration Objectives Predictability  Sales forecasts with some level of accuracy  Manufacturing with respectable yields.  Economics are at least heading toward profitable, can demonstrate a pathway to profitability Scaling for Viability  I need a landing zone for projects that the business unit does not feel comfortable with. If I transfer these projects too early, the business unit leadership lets them die. I need a place to grow them until they can compete with ongoing businesses in the current operating units for resources and attention.
  18. 18. The DIA System Incubation Discovery Acceleration
  19. 19. The DIA System Defined The set of activities that manage the links and interfaces within DIA, Incubation and oversee its health in terms of the RI Discovery Acceleration mandate, it’s perceived role in the firm, and its portfolio of businesses.
  20. 20. System Imbalances Can’t get heard Big Ideas, Incrementally Executed Incubation Incubation Acceleration Acceleration Failure to leverage learning Discovery Discovery Discovery Incubation Acceleration No Courage to continue Open Innovation at the Extreme Incubation Incubation Discovery Discovery Acceleration Acceleration
  21. 21. DIA System Activities Screening and evaluating businesses Coaching Assembling and re-assembling Project Teams Providing & enabling project infrastructure Barrier removal Broker external and internal liaisons Strategic alignment activities Providing help for project resource acquisition Education about role of Radical Innovation in the company viz a viz rest of innovation system and ongoing operations. Pacing of projects Oversee transitions from DIA landing zone Attend to portfolio health and diversity
  22. 22. Project vs. Portfolio Orientation PROJECT ORIENTATION PORTFOLIO ORIENTATION Tactical (operational) Strategic Short term focus Balanced focus Granular view Broader context No kill Reality check Within platform/business Across businesses/platforms Local Global Just do it Assess value, risk, & resources Progress check Review & analysis Monitor Pacing
  23. 23. Model of Radical Innovation Capability External economic expansion Influences new competition strained stock market industry Internal lawsuit consolidation Influences Sr. leadership financial declares need stress of for more innovation company poor earnings I CEO change refocus on innovation CAPACITY1 I D A D A Internal CAPACITY2 culture, history of innovation Influences External pace of technological change global economic expansion Influences TIME
  24. 24. Identifiable Organization Culture and Structure Rich Interfaces Leadership Connecting That Values Internal and RI External Appropriate Powerful RI Requirements Metrics Networks Governance at Project, Portfolio RI Specific and System Skills & Talent Level RI Specific Process & Tools
  25. 25. Concluding Thoughts for a Systems Approach Building a breakthrough innovation capability requires a systems approach…process is only one of the elements. The system must be designed within the context of a company’s culture, strategy and leadership. Transition criteria and metrics vary based on the DIA model or maturity level of the project. Innovation scorecards need to incorporate: Activity and Performance Based Metrics. Strategic, Portfolio and Project Objectives. Appropriate Timeline for Measuring Success. Operations world metrics are not suitable for the front end of innovation and applying them will derail the project!
  26. 26. Thank you! E-mail: oconng@rpi.edu ron@cameronusa.com corbea@rpi.edu Blog: www.grabbinglightning.com www.radicalinnovation.com www.lallyschool.rpi.edu/public/executive-education/ice For More: Leifer, McDermott, O’Connor, Peters, Rice and Veryzer. Radical Innovation: How Mature Firms can Outsmart Upstarts. Harvard Business School Press, 2000. O’Connor, Leifer, Paulson and Peters. Grabbing Lightning: Building a Capability for Breakthrough Innovation. Jossey-Bass, 2008.

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