Why Innovation Champions Fail And What To Do About It IIR Return on Innovation Conference 12/4/03 Jack Hipple, Innovation-TRIZ Tampa, FL [email protected] www.innovation-triz.com ©2002 JWH Consulting, Inc.
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Why Innovation Champions Fail And What To Do About It IIR Return on Innovation Conference 12/4/03 Jack Hipple, Innovation-TRIZ Tampa, FL [email protected] www.innovation-triz.com ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS ARE YOU AN INNOVATION CHAMPION? IN WHAT CONTEXT? HAVE YOU SURVIVED? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 I. WHY IS THIS TOPIC IMPORTANT? • Corporations are constantly looking for inventions, acquisitions, collaborations, and processes which can allow them to grow at a rate faster than the GDP of the country/world--and faster than their competitors! • Many unsuccessful attempts have been made to sustain internal efforts to support these goals-nearly all have been terminated (sometimes restarted years later!) • These efforts have spent HUNDREDS of millions of dollars! • Perception that there are untapped ideas within the organization • Even perceived “successes” have seen downsizings eventually ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 WHY IS THIS IMPORTANT? • Previous leaders of these programs, for the most part, are in successful consulting businesses or start-up companies--major corporations have lost them-probably forever • Their clients frequently include ex-employers! • Learnings? It seems we are starting all over again! ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 THE AMI STUDY ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 ASSOCIATION FOR MANAGERS OF INNOVATION (AMI) • An informal group of 50 innovators, most of whom have (had) responsibility for innovation programs within large companies, government agencies, or non-profits • Meets twice yearly with outside stimulus speakers and sharing of experiences • Active since 1986 • Sponsored by Stan Gryskiewiecz at CCL ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 AN OBSERVATION WAS MADE….. • A large percentage of corporate innovation managers had become consultants or joined start-ups, after downsizings and early retirements • These were usually associated with termination of the function • With further passage of time, the percentage rose more, with 15 people (out of 30-40 active members) identified • Note: trend has continued ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 AMI DECIDED TO….. • Survey and study this phenomenon • Jack Hipple, Innovation-TRIZ • David Hardy, Bank of Montreal • Steve Wilson, Eastman Chemical • James Michalski, Eastman Chemical • See if there were any learnings that could be shared • Publish if possible ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 Survey Questions • MBTI, KAI profiles • Funding mechanism • Leadership/sponsorship • Ideation process • Tools used • Personal insights ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 RESULTS • Study completed in late 2000 • Publication complete • Chemical Innovation, 11/01 • Leaders in Action, 5/02 • Condensed versions on various web sites • Presentation at World Future Society (7/01), CPSI meeting (6/02), ACA (7/02),Innovation Network (9/02), IIR (12/03) • Input to Harvard Business review article on innovation • Results can be shared anonymously • Findings significant • Additional data is supportive ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 LEARNINGS FROM STUDY • Significant differences between “styles” of innovation champions and “norm” around them • KAI™ and Myers Briggs Type Indicator™ analyses can help assess • Personal learnings and experiences--what would be done differently? KAI is a registered trademark of M.J. Kirton ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 Myers Briggs Type Indicator is a registered trademark of CPP, Inc. INSTRUMENTS FOR ASSESSMENT ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 MYERS-BRIGGS (MBTI™) • A tool which measures our “style” of social interaction and how we analyze external information • • • • • Extraverted/introverted (E/I) Sensing/intuition (S/N) Thinking/feeling (T/F) Perceiving/judging (P/J) 16 possible combinations • Ex: ESTJ, INTP • Not equally likely ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 MBTI is a registered trademark of CPP, Inc. MBTI™ • 90% of innovation champs were “N’s”, 70% “NT’s” • Less than 10% of the population are “NT’s” • >80% of corporate senior managers are “S’, typically ESTJ’s • This sets up major potential conflict ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 IMPACT OF MBTI™ DELTAS • Change always seems bigger to an “S” than an “N” • “N’s” are more comfortable with change in general • If desired change is not defined clearly, conflicts will result ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 EXAMPLES…. • “We need to do different things in this company…” • Does this mean get into an entirely new business, make an acquisition? • Does this mean we need to process existing orders more efficiently? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 A COMPANY CAN HAVE A CULTURE…. • SJ---Likes stage gates, continuous improvement teams • NJ---Likes targeted breakthroughs • SP---Continuous improvement, bottoms up • NP---Internal venturing, sustaining ideas ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 THE KAI™ INSTRUMENT ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 KAI is a registered trademark of M.J. Kirton WHAT KAI™ MEASURES • MBTI™ measures how people relate to each other • KAI™ measures how people relate to problems--their problem solving style • Instrument sub-scales measure originality, rule/group conformity, and efficiency ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 THE INSTRUMENT • A 32 question assessment with a range of responses • Range of score, 32-160 (32 questions X (1-5) response • 15-20 minutes to complete • Highly validated across many areas and cultures globally • Dr. Michael Kirton, Occupational Research Centre, Hatfield Polytechnic Institute, England • Indiana State University, Terre Haute, IN ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 KAI™ DIFFERENCES • Managerial “norm” is 95 • Total norm around 90 • Average of innovation champs was 135 • Friction visible with differentials of 10-15 (at any point) • Warfare visible with differentials of 30+ ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 KAI™ DISTRIBUTION 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 N O R M Number 95 +/- 5 105 +/- 115 +/- 125 +/- 135 +/- 145 +/- 155 +/5 5 5 5 5 5 ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 IMPACT OF KAI™ DELTAS….. • Replacing vs. improving • Reaction to internal vs. external threats • Appreciation for detail • “Right” vs. risk ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 OTHER TOOLS • Alternative tools for evaluation • BCPI™ • 16 Types™ • Gatehouse Alliance Discovery/Insights™ BCPI is a registered trademark of Gerard Puccio 16 Types is a registered trademark of True Type Testing Insights is a registered trademark of Andrew Lothian, Insights ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 ACCEPTANCE OF PERSON AND THEIR IDEAS DISLIKE IGNORE SABOTAGE ATTITUDE TOWARD PERSON SUPPORT LIKE HELP LOW Source: Charlie Prather ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 ENCOURAGE HIGH NOVELTY OF IDEA ACCEPTANCE OF IDEA HIGH M O T I V A T I O N LOW EQUIVOCALITY BLACK HOLE GRAND SLAM DEAD IN THE WATER LONG SHOT COMMUNICATION Source: National Center for Mfg Sciences Study ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 LOW D I S T A N C E HIGH WHAT’S BEEN TRIED? • A specially funded “enterprise”, usually under the umbrella of the R&D organization • Funding usually (but not always) outside the control of existing business units and sometimes at the expense of these existing businesses • Sometimes combined with other corporate initiatives in acquisitions or venture capital efforts • Sometimes minimally funded for support staff only-”can’t fund and can’t say no”---primary responsibility was encouragement, moral support, and guidance • Programs sometimes focused around a unique physical facility • Leadership of program frequently in the hands of one key senior leader ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 WHAT WORKED • Ideas were stimulated and new businesses were started • R&D personnel were allowed to explore outside their normal focus area • Special meetings, demonstrations, exercises highlighted the importance of the activity and demonstrated support • New tools and techniques were introduced ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 WHAT DIDN’T WORK • Ideas, in general, were not integrated with complete corporate business structure and environment • New business $ not at the rate desired • Ignorance of the amount of effort and investment required to change the corporate climate and/or business • Business/commercial involvement after the fact caused priority conflicts and resentment • Virtually no involvement of the sales/marketing organization • Time horizons and impact poorly estimated • Narrow and individual sponsorship • “get the bandit on board the train”----Charlie Prather • Lack of skill training ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 CONSEQUENCES • Subtle forms of sabotage • Corruption of funding process • Lack of staying power during economic downturns • Program “died” with the loss of sponsor • Maybe this wasn’t such a good idea after all • Uneven skill and tool training produced uneven results across an organization ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 CONCEPTS PROVED VALID • People within an organization DO have new and unique ideas • There ARE new business opportunities which will not be discovered by normal business visions and processes • Independent funding mechanisms, no matter what kind, can stimulate different activities ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 CONCEPTS PROVED INVALID • A single location (“creativity centers”), by itself, within an organization, can facilitate broad organizational innovation • The R&D function can do it alone, or in spite of other functions ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 RECENT BUSINESS TRENDS • Customer driven vs. technology driven ---the balance has shifted significantly • Core competencies being used to identify focus areas and frequently used as shadow organization structures • Alliances and strategic partnerships that are not necessarily permanent • New problem solving tools • scientific vs. psychological • “Business” teams and organizations vs. functional leadership of activities ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 RECENT PERSONNEL TRENDS • Dramatic decline in loyalty, downsizings • Increased specialization • “Temporary” assignments and more rapid turnover Impact Capturing and broadening of intellectual property (not just patents, but “know how”) much more important AND difficult ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 TECHNOLOGY ADVANCEMENT VS. TIME Desired Advancement Actual Time ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 WHAT ELSE HAS CHANGED? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 A DRAMATIC CHANGE…. GENERATING COST OF INFORMATION Source: Jim Palmer, P&G DISSEMINATING TIME ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 COST OF INFORMATION….. • Generation • Must be right in the first place • Must be focused on the right problem • Problem definition more critical than ever • Must be protected and provide value • Dissemination • Retrieval • Access ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 LONG TERM BUSINESS TRENDS (NOT CYCLES) Emergent Action Creative Network Rational Action Charismatic Leadership Constrained action Conservation CRISIS CHOICE Confusion Entrepreneurial action ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. Strategic Management ®Innovation-TRIZ, 2003 Source: Crisis and Renewal, David Hurst, Harvard Business School Press, 1995 REGARDLESS OF WHERE YOU ARE IN THE CYCLE…. Innovation is ALWAYS NEEDED! ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 HOW SHOULD WE DO IT RIGHT--IN AN ORGANIZATIONAL SENSE? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 “Money isn’t everything…..but it’s right up there with oxygen” Rita Davenport, Entrepreneur ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 FUNCTIONAL INTEGRATION • All innovation efforts and initiatives must include or have a mechanism to trigger inclusion of the commercial and manufacturing base of the organization • • • • Who is going to buy? How are we going to make? Do we have the required competencies? Should we license and/or find a partner? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 IDENTIFICATION AND ASSESSMENT • These skills are not usually present in one individual--must be paired up early • Can be a great mechanism to involve commercial organization • Simple skills can be taught and learned by everyone • What happens if this actually works as planned? • The new monomer example • The B-2 bomber ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 “Six months in the lab will save at least an hour in the library” ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 LONG TERM TREND ASSESSMENTS • What is affecting your customer? Their customer? • What could put both of you out of business? • What are the impacts of broad new trends? • Lines of evolution from TRIZ methodology ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 USEFUL TECHNIQUES • Simulate emergencies, surprises • Deliberate articulated strategies • Expansion of core competencies • Separate thinking from criticism (Six Hats™ process) • Corporate crusades • Meetings and visiting with totally unrelated people and technologies ™APTT and Edward DeBono ©2002 JWH Consulting, Inc. and organization Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 ™Six Hats is a registered trademark of Edward DeBono and APTT Peter Drucker, 1982 “Innovative companies do not start out with a research budget. They end with one. They start out by determining how much innovation is needed for the business to stay even. They assume that all existing products, services, and markets are becoming obsolete--and pretty fast at that. They try to assess the probable speed of decay of whatever exists, and then determine the “gap” which innovation has to fill for the company not to go downhill. They know that their program must include promises several times the “innovation gap”, for more than a third of such promises--if that many-- ever becomes reality. And then they know how much of an innovation effort--and how large the innovative budget--they need as the very minimum” ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 Hamel and Prahalad “Slimming down the workforce and cutting back on investment are less intellectually demanding for top management than discovering ways to grow output on a static or only slowing growing resource base. Cutting the buck is easier than expanding the band; thus organizations prefer the former over the latter. Managers and operational improvement consultants must ask themselves just how much of the efficiency problem they’re working on. If their view of “efficiency” encompasses only the denominator, if they don’t have a view of resource leverage that addresses the numerator, they have no better than half a chance of achieving and sustaining world class efficiency” ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 Hamel and Prahalad (2) “Few companies seem to have asked themselves what is the opportunity cost of the hundreds of millions--or even billions-- of dollars that have been written off for reengineering and restructuring. What if all that “redundant” brain power had been applied to creating tomorrow’s markets? Far from being a tribute to senior management’s steely resolve or far-sightedness, a large restructuring and re-engineering charge is simply the penalty that a company must pay for not having anticipated the future” …Competing for the Future ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 Desi DeSimone, ex CEO, 3M “Why did you get into a position that you had to lay off a bunch of people? How come you’re so smart now that you’ve laid off a bunch of people?” Fortune, 1985 ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 HOW DO YOU KNOW IF IT’S GOING WELL? • You are getting unsolicited business plans • People are making suggestion as to what might replace your existing business • Ideas from strange places and meetings • Hiring changes ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 PERSONAL CHALLENGES FOR INNOVATION CHAMPIONS • Recognize that your social style is most likely to be “N” (intuitive) vs. the “S” (sensing”) which characterizes over 80% of corporate management • You will be very comfortable with vague, broadly shaped exciting opportunities without necessarily being specific about sales and profit dollars and timing • Those who are funding your effort, as excited as they may be about new stuff, will quickly want to know who is going to buy the new stuff, when they will start buying, what it will compete with, how much the plant will cost, and when it can start producing • As you progress in this role, follow one of the well established quality rules and know what your customer wants--and frame your “gut feels” into hard data. If you need help to do this, get it! ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 More challenges…… • Recognize that your “problem solving” style is likely to be much more unstructured and not obvious to those around you, especially those in corporate management. This is your problem to deal with, not theirs • They are the ones who will have to commit large sums of money at risk and it is important for you to recognize this. Our experience in this area is that a gap of 15-20 in a KAI score is sufficient to cause dissension in problem solving and communication • The study of the failed corporate innovation programs showed that it is likely that the difference between your KAI profile and that of corporate management around you is closer to 35-45 points, setting up a potentially significant communication gap in the area of technical opportunity definition and the perceived need for hard data and analysis, group focus, etc. Again, this is your problem to deal with • Clearly explain how your data and information supports your ideas and conclusions, focus your meeting and communication processes. Again, if you need help to do this, find an adaptive KAI person and gain their insights. Study what these differences imply and use these differences pro-actively ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 More challenges… • Be flexible in evaluating possibilities and options and help those around you do this as well. • As opposed to the last generation of innovation efforts, the large scale of most significant new business opportunities and the focus of most large organizations on their “core competencies” argue for flexible commercial strategies including in-licensing, out-licensing, joint ventures, temporary collaboration, and global manufacturing options. • Help those around you see all the possibilities out there, before large amounts of money are committed. ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 And still more… • Use both inside-out and outside-in thinking and help those around you see the value in both. Though the days of “here’s what I have or can make, now go sell it” are long gone, it is important to have external driving forces and current customer input balanced by considering what opportunities exist to expand the commercial impact of existing core competencies as well as talking with potential customers who might replace your current customers • There may need to be some tact and diplomacy needed here, but it is imperative that these externally generated imperatives do not come solely from short term product improvement needs. ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 GOOD LUCK! Q and A ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 YOUR ACTION PLAN FOR ORGANIZATIONAL INNOVATION ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER What is the objective of the organizational innovation program? State clearly in relation to the current organizational or business objective. ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER What is the current climate inside the organization? How do you know? How was it measured? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER What is the objective of the organizational innovation program? State clearly in relation to the current organizational or business objective. ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER What is the current climate inside the organization? How do you know? How was it measured? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER What is the potential gap between the objective of the organizational transformation and the current organizational climate? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER Who is going to lead this transformation? What is their “style”? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER What is the “style” of the managers to whom this activity will report? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER How large is the gap between (4) and (5)? How do you plan to close this gap of behavior and understanding? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER How deep is the senior management support for this activity? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER How will success be measured? By whom? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003 QUESTIONS TO ANSWER What is the time frame for implementation and impact? Who decided? How realistic is it? ©2002 JWH Consulting, Inc. and Innovation-TRIZ Inc. ®Innovation-TRIZ, 2003