Innovation beyond current borders

SEB Innovation Lab March 2014 Dr. Patrick Stähler, fluidminds

Disruptive

Innovation

Models and

Growth

Easy innovation in the past In a market of scarcity, all products were bought as long as money was there

Times are changing We live in a world of abundance. There is everything. Dozens of Yoghurts. 100s of T-Shirts……..

“Well, I know we are in a commodity market where the price is key, but I believe we can sell the good for 10x as much as before.”

Would you dare to say this? What would be the answer of your boss?

„The firm dominates the global market with a market share of 40% and has outperformed technology giants like Siemens or Motorola. No other firm brings out more new products (around 80 p.a.) to the market. Among youngsters, it the most admired brand in its field. ”

Would you invest in this firm?

Dr. Patrick Stähler | 7

1 device

Once Apple disrupted the market, sustaining innovation started Samsung is playing the old game of more of very similar devices to suit everybody.

A great innovation has to wow your customers. What companies wowed you lately?

Innovation is all about being different

But if everybody is doing he same, you have to find something else

The best is if your customers love your business due to your fantastic value proposition and and your ability to deliver what you promise

„Which innovation expanded the global market for mobile communication the most?*“

*After the invention of mobile telephony itself

Dr. Patrick Stähler | 15

Which innovation made this possible?

Prepaid

A small change in billing opened new markets in Africa, Asia, Latin America, Youths, etc..

Technological Innovation

Process Innovation

Product Innovation

Business Model Innovation

iEngines Start your innovation engines!

Dr. Patrick Stähler | 24

Do you know this man? Hans Rausing = Inventor of the Tetra Pack Systems

He could have sold his packaging machines, but…

But he sold packaged services

Tetra Pack is not a product innovation but an implementation of an innovative value proposition aka business model

We need new engines for innovation.

Outside the box thinking

What are engines

that drive

innovation?

product/services happy customers

creates

X

value proposition

solves

delivered by

business model

The customer perspective: Technology does not create value. It is the value proposition the customer loves

customer problem

addressed by

„What is a

business model?“

The business model is the DNA of your business

Are you aware of your DNA?

The business model gives meaning to your employees and customers

4 key questions for a successful business:

What excites our customers?

Value Proposition

How do we create value for our customers?

Value Architecture

How do we earn money?

Revenue Model

Who is on our team? What values do we pursue?

Team & Values

What industry are we in? Who are our competitors? “

„

In which industry are we in? “

„

Dr. Patrick Stähler | 36

That was the job the customer wanted to do. “

„

Customer job to be done We do not need a drilling machine, screws and dowels. We want to hang up a picture. Customers hire a product or service to get a job done. The products are a means to an end, not an end in themselves.

The value proposition creates the value for the customer, not the product!

Value Proposition The job-to-get-done is solution neutral. The job is to hang up a picture. Potential solution: §  The drilling machine, the

dowel and screws §  Hammer and nail §  Powerstrips® by Tesa

§  A friend with a drilling machine

It is of uttermost importance to understand the core job we solve for our customers

Value Proposition

Customer •  Who is our

customer? •  What job do we

solve for them?

Value •  What value do we

create for our customers? What value do we create for our partners?

What excites our customer?

Customer job to be done Is it easy to put a Christmas tree straight up and keep it there safely and green?

There was no big market for Christmas tree stands until Mr Krinner saw the badly solved job

Value architecture

Offer •  What is our offer?

Distribution & Communication Channels

•  How do we reach our customers?

•  How do we communicate with our customers?

How do we create the value?

Value Chain •  What activitites do

we have to do to produce our offer?

•  How does our value chain look like?

Partner •  What partners do

we need?

Core Capabilities •  What are the core

capabilities we need?

Architectural innovation Customers have to transport and assemble the furniture by themselves, thereby saving IKEA two expensive steps in their value chain Value Proposition A new value proposition beyond price and good design is created: Instant satisfaction without waiting for the later delivery of the furniture

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Revenue Model

Cost Structure •  Cost structure is

defined by your value architecture.

Revenue Sources •  With what do we

earn money?

How do we earn money?

Revenue Model Innovation Power-by-the-hour: Jet engine maintenance paid by the hours in service Value Proposition Airlines get variable costs that depend on their business success.

Team & Values

Team •  Who is in our

team? •  What

competencies do we have in our team?

Values •  What values do we

life in our team? •  How do we

interact with each other and with customers?

Who is on our team? What values do we live?

Geberit – a product innovator or is there more?

From plumber supply to under-the-wall systems for baths

Customer job to be done Geberit understood that the badly solved job in the sanitary industry was, how fast a bath room can be renovated. With Geberit’s products you can renovate bathrooms faster and in better quality. And they understood that plumbers are their core sales channel.

Geberit is the master in understanding how to build and use bathrooms.

Customers

Customer Benefit

O!er

Value Chain

Core Capabilities

Distribution & Communication Channels

Partner

Business Model:

Cost Structure Revenue Sources

Team Values

Revenue Model

Team & Values

Value PropositionValue Architecture

Why homeowners love Geberit?

•  Architects •  Plumbers

•  Homeowners Job-to-be done: •  Get my bathroom renovated very

well (design & quality) with as little hassle as possible

•  Faster and more convenient renovation of baths

•  Actually, it needs a lot of initiative not to get Geberit (Plumbers offer only Geberit)

•  Installation systems are more expensive than pure toilette tanks

•  Willingness of homeowners to pay more is higher due to the benefits speed & design

•  Deep understanding how baths are renovated & used

•  Understanding how homeowners decide to procure sanitary equipment

•  Plumbers are the sales channel •  Architects are used for direct

communication with homeowner

•  Plumbers, Engineers, Marketeers •  Diverse team

•  high quality •  long lasting products •  looking for better solution. Always!

Customers

Customer Benefit

O!er

Value Chain

Core Capabilities

Distribution & Communication Channels

Partner

Business Model:

Cost Structure Revenue Sources

Team Values

Revenue Model

Team & Values

Value PropositionValue Architecture

Why plumbers love Geberit?

•  Plumbers •  Job-to-be done: •  Have little hassle as possible with a

customer job and still earn a high margin

•  Easy to plan, order, prefabricate and install all components

•  All components from one supplier •  Satisfied homeowners that pay a

higher price •  New products for upselling

•  All these tools for plumbers cost money •  Geberit earns money via end customers •  Some income for trainings

•  Deep understanding how plumbers work and think about their business

•  Training know-how •  Partner & eco system mgm’t

•  Plumbers are reached with direct sales, classical marketing

•  via training

•  trade schools (Handwerkerkammern)

•  Planning tools (CAD, product handbook)

•  integrated logistics •  trainings, material, certificates

•  long-term thinking, willingness to invest long-term in relationship with plumbers

•  innovative solutions

•  Plumbers, Engineers, Marketeers •  Diverse team

Your innovation engines can start at all elements of your business model

What excites our customers?

Value Proposition

How do we create value for our customers?

Value Architecture

How do we earn money?

Revenue Model

Who is on our team? What values do we pursue?

Team & Values

Doing is the essence of Innovation