Innovate or die
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Transcript of Innovate or die
Innovate to succeed
Introduction to Foundations of Business Innovation
September 8, 2011
Innovate to fail
It’s about balancing the risk of innovating against the
risk of not innovating
Why are we here?Philosophical reasons:
Take the course SCS 1724 Essential Western PhilosophersMeta-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 InnovationToday 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 innovation2. Fail to clarify innovation goals3. Don’t recognize innovation barriers4. Fail to engage entire organization5. Lack of recognition of importance of communication6. Underestimate need for innovation resources7. Unclear process for selecting innovation projects8. Recognize the importance of change management9. Failure to create an innovation culture10. Recognize innovation is a journey not a destination
1. Confuse the role of innovationInnovation 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
Internal drivers1. Unexpected event2. Contradiction3. Change of work
process4. Change in industry
structure
Identify Innovation Drivers
External Drivers5. Socio-economic changes6. Political changes7. Technology changes
Drucker‘s Innovation Framework
Innovation not just technology developmentInnovation includes:Product InnovationProcess InnovationService InnovationBusiness model Innovation ………..
Greatest opportunities seen in business model innovation.Can be applied to both private and public organizationsIf 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.
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
Understanding Service Innovation
Contributes to competitive advantageRequires specific social and technical skills Involves development and new technology applicationCostly to develop needed specialist and generalist skillsRequires integrated thinking and agile environmentCan be implemented in all service areasMost significant possibilities in financial and medical
services
Opportunities for Service Innovation
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 goalsImprove top line (revenues/market share)Improve bottom line (profit/cost effectiveness)Strengthen brand/reputationImprove 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
DisruptiveInnovation
ApplicationInnovation
ProductInnovation
PlatformInnovation
EnhancementInnovation
IntegrationInnovation
ExperientialInnovation
ProcessInnovation
MarketingInnovation
Value MigrationInnovation
Line ExtensionInnovation
Value EngineeringInnovation
Harvest& Exit
Renewal Innovation
OrganicRenewal
AcquisitionRenewal
Recognize different types of innovation
Geoffrey Moore Dealing with Darwin
3. Fail to recognize innovation barriersOver time successful organizations developProcesses and procedures Management and leadership styles Organizational structures and chartsCustomer relationships and partnersCompensation and recruitment policies“Organizations, by their very nature are designed to promote order and routine. They are inhospitable environments for innovation”
Ted Levitt
Focuses on financials & timelines
Has strict guidelines & controlHas a hierarchical structureHas multiple bosses & “dotted
lines”Fosters attitude of “Everyone
is for himself”
Is your organization innovative?Embraces and learns
from failureFosters high energy
activitiesCreate a “Can do”
environmentDevelop support & trustIs a fun place to work
Your organization’s innovation readiness?Resources
FinancialTechnology
PeopleExternal
Business InformationQuality ManagementProject Management
Decision Support
Processes
LeadershipIncentivesCommunicationsRisk Tolerance
Culture
StrategyProduct LeadershipCustomer IntimacyOperational ExcellenceDisruptive Offerings
• Process & tools that support idea generation & experimentation
• Disciplined approach to building innovation
• Desire to do things better
• Collaborative & open culture.
• Incentives that reward challenging the status quo
• Company leaders and organization aligned to achieve a vision
Leadership and
Organization
Culture and
Values
Processand
Tools
Peopleand
Skills
Architecting an Innovative Environment
4. Fail to engage entire organization
Internal Technology- Product innovations- Process innovations- Platform innovations
External Technology- Embeddable technologies- Process technologies- Value added technologies
Employees- Sales- Operations- Support
Customers- Current- Potential- Unknown
Supply Chain- Suppliers- Distributors- Integrators
Competitors- Direct- Indirect- Alliance
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 madeResources 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 expectationsLack 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
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
Implementing The Innovation Process
The Inno-Gate Innovation Process
Product Innovation
Service Innovation
Process Innovation
Business Model
Innovation
Resources
ProcessesCulture
Strategy
Ideation Evaluation Realization
InnovationInputs
Innovation Outputs
Creating the environment and processes to support innovation
Employees
Suppliers & Partners
Customers
Competitors
Implement process in organization’s context
8. Recognize the importance of change management
1. Change through Leadership2. Create a Shared Need3. Shape a Vision4. Mobilize Commitment5. Make Change Last6. Monitor Progress7. Change Systems and Structures8. Change Culture from Control to Trust9. Communicate10. Incentivize ”If you always do what you always did, you will always get what you
always got” Albert Einstein
9. Create an innovation cultureUse mentoring / coaching approach to managementLead by exampleLearn from failureMake resources for innovation availableEncourage / incent team rather than individual
performanceBuild 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
implementationDevelop cross functional teams to embrace innovation
across organizationFocus on communications and engagement
Creating an Innovation CapabilityThe
organization’s reputation for
innovation
Attraction of creative people
Organizational encouragement of
creativity & innovation
Development of innovative
products
A willingness within the organization to accept new ideas
Motivates people within the organization and reduces frustration
High morale and retention of
creative people
Common Causes of Innovation Failure Organizational Causes
1. Poor leadership2. Poor organization3. Poor communication 4. Lack of empowerment of
stakeholders 5. Poor knowledge
management 6. Resource limitations
Process Causes
1. Poor goal definition2. Poor alignments of goals
and actions3. Poor team effort4. Poor monitoring of results5. Poor communication and
access to information 6. Inappropriate decision
making
10. Innovation is a journey not a destination
Re-evaluate corporate strategy to examine innovation opportunities
Monitor innovation projects and review perfromanceReview innovation process and identify opportunities
for improvementUse 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 orWait 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
“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
Starts Monday 19th in Mississauga and Tuesday 20th in Toronto
http://innovationcentre.ca/learning-centre/education-partners/