Transcript Slide 1

Innovate to
fail
succeed
Introduction
to Foundations
It’s about balancing
the risk
Business Innovation
ofofinnovating
against the
September
8, 2011
risk
of not innovating
Why are we here?
Philosophical reasons:
Take the course SCS 1724 Essential Western Philosophers
Meta-physical reasons:
Read Stephen Hawking’s book “The Grand Design”
To identify ways we can increase the likelihood of
innovation success in our organizations
Take SCS 2539 Foundations of Business Innovation
Today we will provide an overview of the Business
Innovation course by identifying:
“The top ten causes of failure to innovate”
Ten key causes of failure:
1. Confuse the role of innovation
2. Fail to clarify innovation goals
3. Don’t recognize innovation barriers
4. Fail to engage entire organization
5. Lack of recognition of importance of communication
6. Underestimate need for innovation resources
7. Unclear process for selecting innovation projects
8. Recognize the importance of change management
9. Failure to create an innovation culture
10. Recognize innovation is a journey not a destination
1. Confuse the role of innovation
Innovation is:
• Introduction of a new good, or a new quality of a
good
• Introduction of a new method of production (need
not need include new technologies)
• The opening of a new market
• The securing of a new source of supply
• The creation of a new organization
Joseph Schumpeter
Identify Innovation Drivers
Internal drivers
1. Unexpected event
2. Contradiction
3. Change of work
process
4. Change in industry
structure
External Drivers
5. Socio-economic changes
6. Political changes
7. Technology changes
Drucker‘s Innovation
Framework
Innovation not just technology development
Innovation includes:
Product Innovation
Process Innovation
Service Innovation
Business model Innovation ………..
Greatest opportunities seen in business model innovation.
Can be applied to both private and public organizations
If your organization doesn’t innovate, someone else will..
Understanding Process Innovation
A change in the way a product or service is
manufactured, created, or distributed
Process innovation involves implementation of new or
improved production or delivery method.
Process innovations can be intended to decrease unit
costs of production or delivery, to increase quality, or
to produce or deliver new or significantly improved
products.
Understanding Service Innovation
Majority of individuals in Canada (and US) work in
service industry
Even where people work in manufacturing, many
of these individuals provide support services
Service innovation is biggest opportunity to
increase competitiveness
Improvements in service innovation can be
measured in terms of increases productivity and
value added
Opportunities for Service Innovation
Contributes to competitive advantage
Requires specific social and technical skills
Involves development and new technology application
Costly to develop needed specialist and generalist skills
Requires integrated thinking and agile environment
Can be implemented in all service areas
Most significant possibilities in financial and medical
services
Understanding Business Model Innovation
New ways of doing business can also increase
competitiveness and productivity by:
 Creating enhanced utility for the customer
 Enabling a different pricing strategy
 Providing alternate purchasing options
To truly disrupt a market a technology innovation
requires a business model innovation
2. Fail to clarify innovation goals
Improve top line (revenues/market share)
Improve bottom line (profit/cost effectiveness)
Strengthen brand/reputation
Improve shareholder/stakeholder perceived value
"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
"I don’t much care where--" said Alice.
"Then it doesn’t matter which way you go," said the Cat.
"--so long as I get SOMEWHERE," Alice added as an explanation.
"Oh, you’re sure to do that," said the Cat, "if you only walk long enough."
Lewis Carroll
Recognize different types of innovation
Line Extension
Innovation
Enhancement
Innovation
Marketing
Innovation
Experiential
Innovation
Platform
Innovation
Organic
Renewal
Product
Innovation
Acquisition
Renewal
Renewal Innovation
Harvest
& Exit
Disruptive
Innovation
Application
Innovation
Value Engineering
Innovation
Integration
Innovation
Process
Innovation
Value Migration
Innovation
Geoffrey Moore Dealing with Darwin
3. Fail to recognize innovation barriers
Over time successful organizations develop
Processes and procedures
Management and leadership styles
Organizational structures and charts
Customer relationships and partners
Compensation and recruitment policies
“Organizations, by their very nature are designed to promote order
and routine. They are inhospitable environments for innovation”
Ted Levitt
Is your organization innovative?
Embraces and learns
from failure
Fosters high energy
activities
Create a “Can do”
environment
Develop support & trust
Is a fun place to work
Focuses on financials &
timelines
Has strict guidelines & control
Has a hierarchical structure
Has multiple bosses & “dotted
lines”
Fosters attitude of “Everyone
is for himself”
Your organization’s innovation readiness?
Strategy
Product Leadership
Customer Intimacy
Operational Excellence
Disruptive Offerings
Leadership
Incentives
Communications
Risk Tolerance
Culture
Resources
Financial
Technology
People
External
Business Information
Quality Management
Project Management
Decision Support
Processes
Architecting an Innovative Environment
• Company leaders
and organization
aligned to achieve a
vision
• Disciplined
approach to
building
innovation
• Desire to do
things better
Leadership
and
Organization
Culture
and
Values
People
and
Skills
Process
and
Tools
• Collaborative & open
culture.
• Incentives that
reward challenging
the status quo
• Process & tools that
support idea
generation &
experimentation
4. Fail to engage entire organization
Customers
- Current
- Potential
- Unknown
Employees
Internal Technology
- Sales
- Operations
- Support
- Product innovations
- Process innovations
- Platform innovations
Competitors
- Direct
- Indirect
- Alliance
External Technology
- Embeddable technologies
- Process technologies
- Value added technologies
Supply Chain
- Suppliers
- Distributors
- Integrators
5. Recognise the importance of
communication
 Communicate vision and innovation imperative
 Stimulate creativity and idea generation
 Develop decision-making process that communicates how:
Decisions are made
Resources are allocated
 Create a feedback loop that updates status of innovation
projects and encourages accountability
“The greatest barrier to communication is believing that it has
occurred”
Oscar Wilde
6. Lack of commitment to innovation
resources
 Greatest single barrier to stimulating innovation ideas, is
the lack of action around previous innovation suggestions
 Many ideas are not implemented without clarity or
feedback as to why not
 Implemented ideas are not successful because of:
Insufficient clarity of outcomes and expectations
Lack of required resource commitment (money, people,
time)
Assumption that resources appropriate for one activity
can be used in another
7. Unclear innovation process
Innovation is a management process the requires
specific tools, techniques and discipline
Innovation involves the development of
organizational processes and procedures for
generating, considering and acting on innovative ideas
Without an innovation process, the likelihood of
innovative projects being pursued is minimal
Implementing The Innovation Process
 Identify innovation imperative and establish objectives
 Create innovation framework
 Assess current resources (Business Analysis)
 Analyze current environment and external trends
 Source and capture innovative ideas
 Create an innovation decision system
 Compare each opportunity to agreed criteria
 Implement pilot project
 Measure performance
 Scale up or cancel
The Inno-Gate Innovation Process
Implement process in organization’s context
Innovation
Inputs
Resources
Strategy
Product
Innovation
Employees
Suppliers &
Partners
Innovation
Outputs
Ideation
Evaluation
Realizatio
n
Customers
Competitors
Culture
Processes
Service
Innovation
Process
Innovation
Business
Model
Innovation
Creating the environment and processes to support innovation
8. Recognize the importance of change
management
1. Change through Leadership
2. Create a Shared Need
3. Shape a Vision
4. Mobilize Commitment
5. Make Change Last
6. Monitor Progress
7. Change Systems and Structures
8. Change Culture from Control to Trust
9. Communicate
10. Incentivize
”If you always do what you always did, you will always get what you
always got”
Albert Einstein
9. Create an innovation culture
Use mentoring / coaching approach to management
Lead by example
Learn from failure
Make resources for innovation available
Encourage / incent team rather than individual
performance
Build trust rather than controls, and accountability
rather than monitoring
Innovative organizations:
Embraces a culture of risk, reward success and learn from
failure
Develop a project and portfolio management approach to
innovation
Create open decision-making processes and focus on
timely implementation
Develop cross functional teams to embrace innovation
across organization
Focus on communications and engagement
Creating an Innovation Capability
High morale and
retention of
creative people
The
organization’s
reputation for
innovation
Motivates people
within the organization
and reduces frustration
Attraction of
creative people
A willingness within
the organization to
accept new ideas
Development
of innovative
products
Organizational
encouragement of
creativity &
innovation
Common Causes of Innovation Failure
Organizational Causes
Process Causes
1.
2.
3.
4.
1. Poor goal definition
2. Poor alignments of goals
and actions
3. Poor team effort
4. Poor monitoring of results
5. Poor communication and
access to information
6. Inappropriate decision
making
Poor leadership
Poor organization
Poor communication
Lack of empowerment of
stakeholders
5. Poor knowledge
management
6. Resource limitations
10. Innovation is a journey not a destination
Re-evaluate corporate strategy to examine innovation
opportunities
Monitor innovation projects and review perfromance
Review innovation process and identify opportunities
for improvement
Use projects and process to build awareness
Review and reduce innovation constraints
Learn from failures
Innovation for success
Three choices:
Innovate your organization,
Partner with an innovative organization or
Wait for innovation to happen………..
“In this road to the future, there are drivers, passengers or road kill”
Competing for the future: Hamel & Prahalad, 1994
Innovate or die
See You in SCS 2539 Foundations
of Business Innovation
Starts Monday 19th in Mississauga
and Tuesday 20th in Toronto
http://innovationcentre.ca/learningcentre/education-partners/
“Well, in our country," said Alice, still panting a little, "you'd generally
get to somewhere else — if you run very fast for a long time, as we've
been doing.” “A slow sort of country!" said the Queen. "Now, here, you
see, it takes all the running you can do, to keep in the same place. If you
want to get somewhere else, you must run at least twice as fast as that!”
Lewis Carroll