The 4Cs of innovation
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Transcript of The 4Cs of innovation
Innovation: The 4 Cs
Or the few things I have learned over the past decade
about innovation in large companies
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Disclaimer- these are observations from my experience, no textbooks were harmed in the making of this
presentation- your mileage may vary
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A little about me….
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• Always wanted to find out how things work• ‘Is there a better way?’
• But what happens when you ask why or why not?• What does Immunology have to do with
Architecture anyway?
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“The future is not a place we will go: it is a place that you get to create.”
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1. Customer Focus2. Culture3. Consensus4. Commitment
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For most organizations innovation is not easy
But it is a fundamental way to create value
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What is Innovation?
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• Over 409M results• Maybe the question is not what but
how?
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Importance of Innovation to Senior Executives in the US
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Obstacles to generating a return on innovation
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1. Customer focus (Markets are conversations, but you
have to actively participate to hear the right words)
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Who is this?
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What do some companies notice about how their customers use their products?
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2. Culture
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Wouldn’t it be great if an organization would be able to continually innovate
and release products that were significantly better than its
competitors’ ?
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In reality what I’ve observed is that there is an inherent tension in
corporations between improving the current model and investigating new
models/new markets
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Experiment:Choice 1: Get a certain $1,000
Choice 2: Get $2,500 50% of the time, $0 the rest
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1.Firms and key decision makers are simply risk-averse
2.It's difficult to make assumptions about the unfamiliar
3.It's difficult to get a budget for new ideas
4.It's easy to kill an innovation project.
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3. Consensus (or “why wasn’t I consulted?”)
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In a totally aligned organization• Everyone feels like they contribute• Executives are comfortable with
innovation (because it is not just a ‘trophy’ but part of everyone's objectives)
• Other stakeholders are able to give feedback to the process willingly
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But in reality, need to involve stakeholders from all levels of the
organization• There are domain experts who might
feel threatened• There are executives who might
want credit• There are others who just want to be
heard
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4. Commitment
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So, what if we could design a firm that is committed and easily moves into
execution mode to drive from concept to prototype?
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Framework for evaluating new innovative opportunities
Low risk but many competitors (e.g.
Twitter)
Incremental
High risk/ high reward must be
balanced against opportunity cost of
other initiatives (e.g. iPod)
Disruptive
High risk but a defensive strategy
against other competitors (e.g
Hulu)
AugmentationMember
experience; requires reduced cost to serve for
success (e.g. Walmart)
Sustaining
Min
imal p
rod
uct
changes
Existing markets
Create new markets
Sig
nifi
cant
pro
du
ct c
hanges
Key consideration is developing a portfolio approach in order to mitigate risk in any one quadrant
Enhancement Breakthrough© Incite Design and Strategy
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New ways of approaching challenges
© Tim MacKay
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What I try with my innovation portfolio:1. Build in 1:1 customer feedback2. Help people in organization
understand need for change in existing model
3. Allow people to have voice heard 4. Portfolio approach (and prototyping)
to lessen perceived risk