THE INNOVATION SYSTEMS LINK Professor Roy Marcus.
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Transcript of THE INNOVATION SYSTEMS LINK Professor Roy Marcus.
Getting to Basics
• “Technology is ruled by two types of people:
1.Those who manage what they do not understand and
2.Those who understand what they do not manage”
Mike Trout
Getting to Basics
• “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency.
• The second is that automation applied to an Inefficient operation will magnify the Inefficiency” Bill Gates .
The Harsh Reality
• “We Live In A Society Exquisitely Dependant On Science And Technology, In Which Hardly Anyone Knows Anything About Science And Technology” Carl Sagan
A Quote From Einstein
• Without Changing our pattern of thought, we will not be able to solve the problems we created with our current patterns of thought.
Precursor – Wicked Problems
There is no definite formulation of a wicked problem.Wicked problems have no stopping rules.Solutions to wicked problems are not true-or-false, but better or worse.There is no immediate and no ultimate test of a solution to a wicked problem.
Where Systems Thinking Fails
Organisations where the people at the top always “know the answer” and the people below merely pull triggers when the target pops up are not places which systems thinking will flourish (Bolman 1997)
Example : Car Crash Problem
In the 1970s there were
many head-on car crashes resulting in injuries and deaths on the
George Washington Bridge (NY-NJ)
Problem: Reduce into Parts
Port Authority
Police
and EMS
Columbia-Presbyterian
Medical Center
Port Authority
Focused on the road markings so they regularly repainted the solid yellow lines. They measured their effectiveness by the degree of visibility of the lines by the drivers.
But, there was little overall improvement.
• Solid Yellow Lines
Police
Focused on driving behavior so they attentively issued fines to drivers who crossed the solid yellow lines or drove over the speed limit. They measured their effectiveness by the number of fines levied.
But, there was little overall improvement.
EMS
Focused on responding to emergencies so they kept themselves and their resources up to date. They measured their effectiveness by response time to the scene, quality of care, and response time to the medical center. But, there was little overall improvement.
Columbia-Presbyterian Medical Center
Focused on advanced medical care so they improved emergency facilities and treatment. They measured their effectiveness by quality of care feed-back and survival rate. But, there was little overall improvement.
Social System Thinking Model
The performance of the whole is NOT the sum of the performances of its parts.
Social System Thinking
In a system problem
the performance of the whole is derived from the
interactions of the parts.
A system problem cannot be solved by focusing on
independent parts.
Social System Thinking
In a social system the “parts” include
► people and groups
► who are purposeful, have their own interests, intentions, generate their own goals, AND exhibit choices
Goals are not always shared
Social System Thinking
Different methods are required to diagnose,
describe, and understand
a systemic problem
Head-on Car Crash Problem: System Diagnosis
When these methods were applied a different question emerged:
On the George Washington Bridge, under what conditions would a
head-on collision be impossible?
Head-on Car Crash Problem: System Diagnosis
And THIS produced a Systemic Solution:
Replace the solid yellow painted lines with a
solid concrete barrier
George Washington Bridge
Gambino, Raymond. Beyond Quality Control. Lab Report, 1990, Vol. 12, No. 5.
Systemic Thinking is Not New
“Systemic thinking has permeated virtually every functional area of business, and is taught, in one form or another, at most of the top-ranked schools.”
Atwater, JB, Kannan, VR, & Stephens, AA. Cultivating Systemic Thinking in the Next Generation of Business Leaders.
Academy of Management Learning & Education, 2008, Vol. 7, No. 1, 9-25.
Stakeholder View of the Organisation
Contextual Environment
Operating Environment
StructureCulture
Competencies Resources
Transactional Environment
Trade Association
Regulators
Union/employees
Competitors
Creditors Suppliers
Customers
Communities
Shareholders
EconomicForces Ecological
Forces
Socio-culturalForces
TechnologicalForces
PoliticalForces
The 3 States Of A System
THE “AS IS”STATE
THE “AS IT WILL BE”
STATE
THE “AS IT
SHOULD BE”
STATE
DESIGN
THE DA
VINCIWAY
EARLY
WARNING
SYSTEM – the
consequence of
the system's
current state of
affairs
Letter to Madiba
• “When I visited South Africa a few years ago, I had a chance to go to Robben Island and stand in your cell, and I reflected on your fundamental belief that we do not have to accept the world AS IT IS; that we can remake the world AS IT SHOULD BE.”
• Barack Obama July 2008
• Speed to market
• Response to changes
• New world flexibility
Profits and value returns
TIPS Holism : Hypercompetition
TIPS Holism : Hypercompetition
• Speed to market
• Response to changes
• New world flexibility
Profits and value returns
Costs of Incentivesand variable pay
TIPS Holism : Hypercompetition
• Speed to market
• Response to changes
• New world flexibility
Profits and value returns
Costs of Incentivesand variable pay
• Creative motivation & people retention
TIPS Holism : Hypercompetition
• Speed to market
• Response to changes
• New world flexibility
Profits and value returns
Costs of Incentivesand variable pay
• Creative motivation & people retention
• Skills in place
• Matching new technology skill needs
• Developing from within
Cost of up-skilling Hypercompetition =
Synthesis + Synovation + JVs and Alliances
CONTRIBUTION TO ORGANISATIONAL
ECOLOGY
MAKING A DIFFERENCE TO
COMMUNITIES
En
vir
on
men
tal E
E, B
-BB
EE
, Jo
b C
reatio
n, P
PP
TIPS Final Focus : Sustainability
SUSTAINABILITY
SS
The Da Vinci Competitive Model
D = defining the business (Discriminants)
A = assessing innovative competence
V = value chain
I = intelligence - competitor
N = new product/process development
C = commercialisation (compressing time)
I = improvement – the feedback loop
D = Defining the Business
This is all about identifying the mission and should answer the following questions:
What business are you in? What are your products/services? What is your market segmentation – product
and geographical? – who are your customers? What are your core competencies? What is your growth/market share objectives? What are your profit/ return expectations? How do you measure success? What are your values and beliefs?
• No organisation can be all things to all people – what are our key discriminants?
• The key issues which an organisation will fail or succeed in delivering unique value can be identified and discussed with the value disciplines model:– Operational excellence– Product leadership– Customer intimacy
• With MOTIP you can excel in all 3
D = Defining the Business
The Da Vinci Competitive Model
D = defining the business (Discriminants)
A = assessing innovative competence
V = value chain
I = intelligence - competitor
N = new product/process development
C = commercialisation (compressing time)
I = improvement – the feedback loop
A = assessing innovative capabilities and competences
Distinctive competencies are the unique resources and strengths that management considers when formulating strategy: Workforce Facilities Market and financial know-how Systems and technology Global strategies
Collaborative effort Joint venture Licensing technology
Intellectual Property, Knowledge
The Da Vinci Competitive Model
D = defining the business (Discriminants)
A = assessing innovative competence
V = value chain
I = intelligence - competitor
N = new product/process development
C = commercialisation (compressing time)
I = improvement – the feedback loop
• Competitive advantage grows out of the way organisations organise and perform discrete activities (Porter)
• All the activities in the value chain contribute to buyer value
• It is an interdependent system or network of activities
• Gaining competitive advantage requires that the organisation’s value chain is managed as a system rather than a collection of separate parts
V = Value Chain
The Da Vinci Competitive Model
D = defining the business (Discriminants)
A = assessing innovative competence
V = value chain
I = intelligence - competitor
N = new product/process development
C = commercialisation (compressing time)
I = improvement – the feedback loop
I = Intelligence - competition
• Maximising the “flow and control” of information is key to competitiveness
• Ability to compete is determined on how well the organisation collects, analyses, disseminates and safeguards information
• Most organisations treat and organise the functions of competitive intelligence, decision making and security as separate distinct activities
• WarRooms (Strategic Navigation Centres) integrate these activities
I = Intelligence - competition
5%
15%
80%
55%
25%
20%
INTELLIGENCE
INFORMATION
DATA
REENGINEERING THE DECISION MAKING PROCESS FROM SEAT OF THE PANTS TO INTELLIGENCE BASED
The Da Vinci Competitive Model
D = defining the business (Discriminants)
A = assessing innovative competence
V = value chain
I = intelligence - competitor
N = new product/process development
C = commercialisation (compressing time)
I = improvement – the feedback loop
New Technology Selection
New technology selection process (Adapted from: Dream Spring SA. The New Product Process)
N= new product/process
Ansoff’s matrix – the 5 business strategies
1. Product/market scope2. Growth vector3. Competitive advantage4. Synergy – by making use of
existing strengths or by acquisition of competencies
5. Make or buy
N= new product/process
2MARKET
DEVELOPMENT
4DIVERSIFICATION
1 MARKET
PENETRATION
3PRODUCT
DEVELOPMENT
PRODUCTSCurrent New
Current
New
MA
RK
ET
S
ANSOFF’S MATRIX
VerticalHorizontalConcentric
Conglomerate
Reasons For New Product Failures
0
5
10
15
20
25
30
35
40
45Lack of understandingof marketLack of internalsupportPoor planning andimplementationWeak competitivepositionMarketing support
Benefits not perceived
N = New Products/ProcessesKeep Your Eye On The Innovation Ball
• Donald Petersen - Ford Motor Company– Focus on products instead of profits, and the latter will naturally follow
– Give your people a say in running the show and a share in the rewards as well
– Be consistent
N = New Products/ProcessesEffect On Senior Management
• How will all of this impact top managers in the 21st century?
• The only question will be how much to invest and when.
• The “if” question goes away.• The “how” question becomes paramount.• An innovation mindset will be
acknowledged as a precursor for creating a stable of new products that will greatly contribute to future earnings.
N = New Products/ProcessesInnovation And Corporate Vision
• CORPORATE VISION:– To be recognised as the global leader in
electronic equipment that satisfies consumers leisure needs. To achieve aggressive returns to our shareholders by continuing robust growth.
• INNOVATION VISION:– We will effectively use innovation to reshape
our company from how we know it today. Within 10 years we will be recognised as the global leader of home leisure and recreational electronic equipment products.
The Da Vinci Competitive Model
D = defining the business (Discriminants)
A = assessing innovative competence
V = value chain
I = intelligence - competitor
N = new product/process development
C = commercialisation (compressing time)
I = improvement – the feedback loop
C = commercialisation (compressing time) The Game Is Changing !
•Production (output) focus to customer focus•Mass production to lean production to customised mass production•Access to information•Access to technology•Intensifying competition•Borders disappearing•Need to focus•Need a strategy and a game plan !
ALL OF THIS TO BE EXECUTED WITHIN THE REALITIES OF INCREASING COMPLEXITY
C = commercialisation (compressing time) The Theme
• The elimination of non-value-adding activities
• The provision of customer satisfaction in service industries
• Whole systems “supply chain” approach, from supplier through service provider to customer and back again.
• People are an organisation’s greatest resource.
Strategic Direction
CostStrategies
Quality
Technology&
Innovation CustomerFocus Time
Based
Level ofDevelopment
High
Low
Old New
New CorporateStrategy =
The most for lesscost in the least
time.
Age
Rapid Innovation
Time is a Competitive WeaponTime is a Competitive Weapon
“ My job is to make our products obsolete,
before our competitors do”
Akio Morita, Akio Morita, Chairman of SonyChairman of Sony
They Place Emphasis on:
Responsiveness
Customer Focus
R&D and Innovation
Key Features of Organisations that Compress Time
• Increased Customer Demand
• Increased Product Variety
• Customer Lock-in
• Attract the most Profitable
Customers
• De-stock due to Short Lead Times
Benefits of a Time Based Strategy
MacDonald Saves $100 mil
• No food is prepared in advance –except the meat patties which are kept hot in the cabinet
• Total production process shortened to 45 seconds-toaster which browns buns in 11 seconds instead of 30 seconds (Technology)
• Bread suppliers to change texture of the bread to withstand additional heat (Suppliers)
• Workers involved in the design of condiment containers (Staff)
The Da Vinci Competitive Model
D = defining the business (Discriminants)
A = assessing innovative competence
V = value chain
I = intelligence - competitor
N = new product/process development
C = commercialisation (compressing time)
I = improvement – the feedback loop
I = improvement - feedback loop
• Measuring innovation value
dv = T + I + PINPUT
T + I + P
PROCESSES
AlignmentEngagement
Agility
OUTPUT
dv
Innovation Value
The Final Word
• There is an inextricable link between thinking systemically and the quality of the innovative process.
• Innovation in the business environment is moving more towards innovating the business process than product development.
• The new world of Design Thinking demonstrates the urgent need for operations to appreciate the Innovation – Systems Thinking linkage