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10 Ingredients for your Innovation Recipes

Key Points for Success

Amsterdam, 10.10.2010

Strive for Success through Innovation

Mr. Jean F. Schrurs Expert Advisory Team

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Introduction

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1. Use 4 Innovation Types 2. Align with your Strategy 3. Capitalize on Trends 4. Where to get Innovative Idea’s ? 5. Concept is not Development 6. Qualify and Quantify 7. Trust Yourselves 8. Allow for different Paces 9. Communicate and Sell 10. Just do it !

Highlights

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- practitioner’s shared experience - no non-sense > pragmatic recommendations - based on : 20+ years of experience (Coke, ABI, FMCG clients) 50+ new product launches 20+ developed technologies 50+ new concept developments - holistic approach - from ideation to product launch

Introduction

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- Four types

Technology widely available in the target industry (process improvements and material reductions).

Non-existing technology in the target industry : medium level of complexity, risks and rewards.

Non-existing technology or in embryonic stage, high level

of complexity, risks and rewards.

Existing technology in the target industry : low levels

of complexity.

H0 Efficiency Improvements

H1 Evolutionary

or Incremental

H2 Revolutionary

H3 : Pre- Revolutionary

Consumer

Hint n°1 : use 4 Innovation Types !

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Key points : - local versus global innovations - leadership versus consulting - documenting knowledge (specs, procedures, results)

Background - roles and responsibilities - management of expectations - observations - most R&D functions “technical services experts” - technology reapplications - innovation R&D steps

Hint n°2 : Align with your Strategy !

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technical assistance

regional local projects local brands

to drive business growth

strategic

to sustain current business

tactical

maintain/improve the fundamentals : • renovation • base business support • low risk

Innovation as growth and profitability driver : • breakthrough innovation • incremental innovation • competency development

Objective

Focus

Scope

Method

key corporate projects global brands

new concepts competence development

local project leadership

global initiatives leadership local project consulting

Involvement

Differentiated Innovation Mandates

Headquarter Division

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Hint n°3 : Capitalize on Trends !

The Siemens-Method to Plan the Future

based on the combination of Extrapolation and Retropolation

INFLUENCING FACTORS

Operating Units

“Extrapolating” over roadmaps Products Technologies Customer Requirements

STRATEGIC VISIONING

today short term medium term long term

“Retropolating” from Scenario’s new Markets new Customer Requirements new Technologies New Business Opportunities

Time horizons are heavily dependent on strategic opportunity area

Services

Materials

Lighting

Medical

Transportation

Power

Information & Communications

Automation & Control

SCENARIO’s FOR SIEMENS

STRATEGIC OPPORTUNITY AREA’S AND

CROSS-SECTION TECHNOLOGIES

Individual

Company

Politics

Economy

Environment

Technology

Customers

Competition

Source : Siemens

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Recommendations : - scout your marketplace - talk to consumers - visit tradeshows in : - your industry - adjacent industries - read, read and read more - invest in scouting

Hint n°4 : Where to get Innovative Ideas ?

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Concept Development “Fuzzy Front End”

Hint n°5 : Concept is not Development !

Idea generation

and enrichment

Concept definition

Concept selection

Opportunity identification

Opportunity analysis

Engine

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Source : PDMA Toolbook for New Product Development Chapter 1 : Fuzzy Front End : Effective Methods, Tools and Techniques (P. Koen, G. Ajamian, S. Boyce, A. Clamen, E. Fisher, S. Fountoulakis, A. Johnson, P. Puri, R. Seibert)

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2

Start 1

Start 2

to NPD

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PHASE I : Idea &

Concept

PHASE II : Project &

Development

PHASE III : Launch & Volume

Manufacturing

Ranking

H0 Efficiency Improvements

H1

Evolutionary

Pre- Revolutionary H2

Revolutionary

H3

Consumer

Technical Feasibility

Financial Opportunity

Global Brand

Innovative Score

Strategic Endorsement

Score

Time to Market

Competitive Insulation

Process

Mapping

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- use scorecards to prioritize your initiatives - map your projects and resources against time horizons - measure the value of your innovation portfolio regularly using risk-weighted project valuation - maximize your portfolio - ultimate Innovation KPI : Σ (NPV)last 5 years ------------------------- Σ (FTE)innovation and R&D

Hint n°6 : Qualify and Quantify !

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I. Technical Feasibility

IV. Financial Opportunity

V. Global Brand

VI. Innovative Score

VII. Strategic Endorsement

TOTAL SCORE

II. Time to Market

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6

3

Sure Thing

Likely

Low 3

> 3 years

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1 < … < 3 years

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< 1 year

III. Competitive Insulation

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6

3

First to Company

First to Industry

IP Protected/Patented

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6

3

2

1

0

3

No

Yes

3 6

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Re-application New to Company

New to Industry

3

0

« must do »

other

>1 M Euro

1..3 M Euro

3..5 M Euro

5 .. 15 M Euro

>15 M Euro

Scorecard

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- feed your left and right brain - document > get the learnings > go to the next level - invest in yourself - keep track of your time - communicate

Hint n°7 : Trust Yourselves !

Hint n°8 : Allow for different Paces

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- measure your time as an accountant Examples - time usage ratio’s in R&D departments - 70% project work - 30% organization excellence - 2/3 projects with direct impact - 1/3 longer term projects - use time-sheets

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Communication and Innovation - you are in competition for resources (M&A, …) - give your portfolio a 6th dimension - feed your intuition - commercialize your innovation function - generates idea’s > identify gaps - ‘operationalizes’ innovation

Hint n° 9 : Communicate and Sell !

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Raw material supply

Finished goods supply

Replenishment, delivery &

merchandising

Market channel

Petroleum Convenience

Stores

Vending Channel

Super Markets

Hotels, Cafés

Restaurants

Warehouse Delivery

New Channel

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- take one risk per day - experiment, experiment, experiment - put yourself into difficult situations - put things in writing, take a distance and reflect - make assumptions, share, validate, proceed - athletic behavior : norm/storm/perform/transform - build credibility using business cases and success stories - welcome constraints, drivers for innovation

You take big risks by not taking one !

Hint n° 10 : Just do it !

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Contact : Jean F. Schrurs john@capedecision.com M +32 498 53 04 58

Key Points for Success