Scrum Alliance Future of Innovation FINAL · ©IMD$2016 (200512013):)Zero)Distance)To)Customer)–...
Transcript of Scrum Alliance Future of Innovation FINAL · ©IMD$2016 (200512013):)Zero)Distance)To)Customer)–...
The Future Of Innovation:Making it real & personal
Bill Fischer
February 24, 2016
© IMD 2016
• Bill Fischer is Professor of Innovation Management at IMD. He co-founded and co-directs the IMD program on Driving Strategic Innovation, in cooperation with the Sloan School of Management at MIT and also authors a regular column for Forbes.com entitled “The Ideas Business,”
• Steve Denning is a board member of Scrum Alliance. He led the Learning Consortium in 2015. He writes for Forbes.com and is the author of eight books, including The Leader’s Guide To Radical Management (2010) and The Leader’s Guide To Storytelling (2010).
2
Who is presenting today?
© IMD 2016
Innovation, Agile and Scrum
• Software development is inherently about innovation• “Software is eating the world.”
Marc Andreessen• All organizations are now software organizations• Innovation is the key to the future of all organizations
3
© IMD 2016
The organization I work for is very innovative.
Yes
No
Not relevant/not sure
4
Poll
© 2015 IMD – International Institute for Management Development. Not to be used or reproduced without permission.
The Future of InnovationTwitter: @bill_fischer
www.fischerideas.com
© IMD 2016
The Future of innovation
Innovative organizations deserve innovative leadersIs not about so much about new products…nor new processes
It’s more about business models & organization
& Leadership!!
As seen in the IMD-MIT/Sloan Driving Strategic Innovation program:
© IMD 2016
The Last Innovation Frontier
Leadership behavior!!
If we can’t create organizations whereinnovation is part of what everyoneregards as their responsibility
we will miss significant opportunities!
© IMD 2016
We need to think differently about moving into the future:
© IMD 2016
Innovation as a verb, not a noun!
& everyone involved!
© IMD 2016
Here are my beliefs on what the Leadership of Innovation in the Future will look like:
vCustomer Experience is the beginning for every conversation!
vAnticipatory rather than Reactive vContinuous not Episodic vMore involved with the Unknown than the Uncertain – exploring: lots of small bets!
vOpen & Inclusive rather than protective & solitary
vDigital (not analog) leadership behaviors
© IMD 2016
Let me show you a traditional company in an old-economy, commodity industry that is practicing these very behaviors
They believe that their ultimate advantage is not lower costs, but the knowledge that they have – if only they can release it! – so, this is about creating a smarter firm!
© IMD 2016
Haier
vOne of China’s big 3 global brandsvHas reinvented itself 3x in 3 decadesv80,000 peoplev& comes out of Confucian/former centrally planned emerging market
© IMD 2016
They recognize that external change is continuous
Innovation is marked by successive generations of new ideaswhich disrupt the old ideas
Custom
er Desire
sIndustry Evolution
© IMD 2016
& that message is shared with everyone so that everyone realizes that change never ceases
Jin Xing, Equipment Parts Department
Ri Xin, Refrigerator Products Department
© IMD 2016
Innovation is More Than Technology & Products
Copyright Alexander Osterwalder& Yves Pigneur, Business Model Generation
Where should we start?
Innovation can start anywhere…. we can all be innovators!
© IMD 2016
Copyright Alexander Osterwalder & Yves Pigneur, Business Model Generation
Customer-centricity & business model innovation arekey for driving change at Haier
1984: to build better products and gain brand recognition as a result
© IMD 2016
(1984-‐1991): Brand Building through Focusing On Quality & Manufacturing Excellence
© IMD 2016
The Star Model: what managerial choices are you making to affect behavior?
Source: Jay R. Galbraith, Designing Organizations: An Executive Briefing on Strategy, Structure, and Process (San Francisco: Jossey-Bass, 1995), adapted by Bill Fischer
VisionStrategy
Market DirectionCompetitive Advantage
Skills & TalentStaffing and Selection
Performance FeedbackLearning and Development
How We OrganizePower and Authority
Reporting RelationshipsOrganizational Roles
Values, Measures & RewardsGoals, Scorecards and Metrics
Values and BehaviorsCompensation/Rewards
How We WorkNetworks, Processes,Teams,
Integrative Roles, Matrix StructuresIDEA – Knowledge Flow
© IMD 2016
Business Model Innovation Must be Reinforced by Organizational Culture
Started with an inheritedworkforce, with no workethic
Visionary Value PropositionQuality à Brand
Daily measurements to daily account for Performance & quality
Tied wages directly to the performance measurement process
Strong top-down leadershipEveryone is in the reportingprocess… start to attackhierarchy
© IMD 2016
Along the way (1998) Haier chose to Become a Service Company
© IMD 2016
Market Chains – the power of pull Another Visionary Value Proposition
Moving from Products to Service Responsiveness
Same workforce but now with confidence in
ZRM
Performance measurementprocesses built upon
OECwith some slightmodifications
Abolition of functionalhierarchical
reporting – emphasison market linkages
Rewards based onMarket linkages & individual performance
© IMD 2016
Then, in 2005, they chose to create an organization that moved from responsiveness to intimacy
Zero-distance with the customer!
© IMD 2016
Zero-distance with the customer
© IMD 2016
Zero-‐Distance Inverted Pyramid
ZZJYT
© IMD 2016
(2005-‐2013): Zero Distance To Customer – From Responsiveness to Intimacy
ZZJYTs
Create PullMechanismsIn Channels
Real Market
Segmentation based on more
knowledge
Additional Revenues from
New Brands
Personalized offerings in real
time at affordable price
Immediate downstream presence via
B2B companies
additional revenues from customized service
Reduced Administrative costs via ZZJYTs
Increased reliance on
external experts
Creation of GoodayLogistics
Partnering with other appliance
makers via GoodayLogistics
B2B companies with
downstream partners
Entrepreneurial workers
Zero-Distanceto
Customers
Reduced Inventory Costs
additional revenues as retail service provider
Internet skills
© IMD 2016
Zero Distance To the CustomerAnother Visionary Value Proposition
Moving beyond Responsiveness to intimacy
Begin to hire for new skills& people looking for freedom
Creating of self-organizingCompetitive work units
Everything is up for bids& is competitive
Everything is performancebased
© IMD 2016
Do you see:
vOpenness?
vRestlessness?
vCoherence?
© IMD 2016
Poll: Which of these do you see in your own organizations?
vOpenness?
vRestlessness?
vCoherence?
Check all that apply!
© IMD 2016
Results 2014
© IMD 2016
5 Lessons of Haier’s Innovativeness
1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary
© IMD 2016
5 Lessons of Haier’s Reinvention
1. Successful reinvention has a higher probability of success if it occurs before the time that it is necessary
2. Revolution through accretion – building on the familiar
© IMD 2016
Haier never jumped “into the unknown”
Markets
Distinctive Competencies
New
Existing
Existing
New
Source: Chakravarthy & Lorange
Protect & Extend
TransformLeverage
Build
© IMD 2016
5 Lessons of Haier’s Reinvention
1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary
2. Revolution through accretion 3. When it comes to creating a culture of
widespread innovation, fewer ideas are better§ Customer centricity§ The principle asset of the firm is its talent
© IMD 2016
5 Lessons of Haier’s Reinvention
1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary
2. Revolution through accretion 3. When it comes to creating a culture of
widespread innovation, fewer ideas are better4. Successful innovation = dreams + details
© IMD 2016
1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary
2. Revolution through accretion 3. When it comes to creating a culture of
widespread innovation, fewer ideas are better4. Successful innovation = dreams + details5. Visionary leadership is key to all of this
5 Lessons of “Big-‐Bang” Reinvention
© IMD 2016
What’s Next in Haier’s Reinvention Journey
An organization without boundaries (a platform)
Zhang Ruimin argues that there are at least four big changes todayoccurring outside of Haier, that Haier must adjust to:
• Asset access > Ownership• What you know > What you make• We are all living our private lives in internet time, but not our
organizational lives• We live in a world of endless & abundant interconnectivity
As a result, organizations should pursue:• Speed• Openness• Boundarylessness• Value-ecosystem opportunity
© IMD 2016
One way to achieve this is organizational innovation
To move from the traditional wayof thinking about an organization(which Haier had abandoned some time ago)
& to think of an organization thatwould be fast, open, without boundaries & which would createopportunities for its eco-systempartners
© IMD 2016
Copyright Alexander Osterwalder & Yves Pigneur, Business Model Generation
This, once again, involves building new business model for Haier
Leveragewhat youhave toseek newopportunities
¬ be
hostage tolegacy
Best Logisticssystem
Openness&
SpeedNew Partners
• Fisher & Paykell• Sharp
• GE Appliances
Boundaryless
DeHaierization
EntrepreneurialWorkersZZJYTs
New Customers
In ManyNew
markets
Revenue Growth& new revenue sourcesCost Reduction
© IMD 2016
Think About How Haier is Living Each of These:
vCustomer Experience is the beginning for everything!
vAnticipatory rather than Reactive vContinuous not Episodic vMore involved with the Unknown than the Uncertain – exploring: lots of small bets!
vOpen & Inclusive rather than protective & solitary
vDigital (not analog) leadership behaviors
© IMD 2016
Poll: Which of these characterizes your organization?
§ Customer Experience is beginning for everything!
§ Anticipatory rather than Reactive § Continuous not Episodic § More involved with the Unknown than the Uncertain – exploring: lots of small bets!§ Open & Inclusive rather than protective & solitary
§ Digital (not analog) leadership behaviors
© IMD 2016
Incidentally, This Reminds Me of Three Things That They Never Teach You About Change Leadership
Be immodestBe impoliteBe unreasonable
© IMD 2016
Questions?
Questions?
42
© IMD 2016
Thank You For Your Interest
The conversation is continued at:§@bill_fischer§www.fischerideas.com
43
© IMD 2016
Wednesday March 16, at 11am ET
Joel Semeniuk
What is a Culture of Innovation and How Do You Get It?
Next month
44
Thank you!
February 24, 2016
The Future Of InnovationBill Fischer