TRY. LEARN. REPEAT - Shiftin...MARCH 2017 TRY. LEARN. REPEAT THE ROAD TO INNOVATION IN THE MIDDLE...

MARCH 2017www.shiftINpartners.com

TRY. LEARN. REPEATTHE ROAD TO INNOVATION IN THE MIDDLE EAST

How innovation pioneers such as 3M, Ericsson and DAFZA are navigating internal barriers to drive innovation in the Middle East

Written by Carlos Guevara and Dr. Hitendra Patel, with special collaboration ofDr. Saeed Al Dhaheri, Sudarshan Chakravarthi, Lisa Nyman, and Anthony Denatale

ABOUTTHIS PAPER

The 30th of November 2014, Sheikh Mohammed bin Rashid, Prime Minister of UAE and Ruler of Dubai, led Cabinet in a special meeting at a historic fort in the emirate of Fujairah. Under the directions of Sheikh Khalifa, the President of UAE, the Cabinet approved the designation of 2015 as the Year of Innovation.

During the last 2 years we have been collaborating closely with government and private organisations that aim to harness innovation. But has there been any progress? This article analyses the achievements, chal-lenges, and lessons learned from organisation in the Middle East trying to master the art of innovation.

Try. Learn. Repeat. The Road to Innovation in the Middle East2

A common viewon innovation

3

Mastering the innovation process

Before we talk about the state of in-novation in the region we must first clarify how innovation works. There are 5 stages in the innovation process:

Setup This is the step in which the manage-ment team must decide on where and where not to innovate, define growth targets, and strategic thrusts for breakthrough innovations.

DivergeThis is the step in which organisations typically brainstorm over a problem. Some organisations do this using in-ternal ideas only, while others decide to crowdsource ideas beyond their organisational boundaries. During the ‘diverge stage’ organisations de-termine the trends that could impact their businesses and identify insights and idea fragments across the com-

pany, competitors, partners and the future.

ConnectThe connect stage is one of the most forgotten steps in innovation manage-ment, yet one of the most important. At this point the company should pro-vide spaces for ideas to mingle and connect with each other. A powerful marketing idea is useless unless it is connected to relevant means of pro-duction and delivery, and wrapped up by the right business model.

ConvergeAt this stage, the organisation must have connected new idea fragments around a desired ‘field of play’ to gen-erate a range of new business con-cepts. The ‘convergence’ occurs when the organisation conducts some initial due diligence to validate the priority

SET THEGOAL

SETUP DIVERGE CONNECT CONVERGE EMERGE

REFRAME THE PROBLEM +

GENERATE IDEAS

ORGANISE + CONNECT THE DOTS

PRIORITISE +REFINE SOLUTIONS

SET ACTION PLANS

A common view on innovation

If you ask a group of 20 people what innovation is, you will prob-ably get 20 different answers. In today’s world some people think innovation is the creation of new products and services, for others innovation is about R&D, or creat-ing new experiences. The truth is that innovation encompasses all of these together.

The innovation process introduced by Dell to its supply chain man-agement, the quality systems de-veloped by Toyota, a practice like Walmart’s inventory management, Google’s use of mathematics to change the media and communi-cations industries, or even Star-bucks’ reimagining of the coffee shop experience have all been game-changing innovations.

Simply put, innovation is finding ‘new ways of creating value’. This is the definition that most busi-nesses embrace today in order to drive the generation and applica-tion of innovative approaches not only in the development of new products and services, but across the whole value chain.

SHIFTIN PARTNERS Knowledge Library 3

The importance of innovation

Regardless of its importance in any priorities scale, an objective must be mastered in order to be successfully achieved. Spreading the word about innovation and its importance doesn’t make us inno-vative. The organisation that fails to in-novate is on the road to obsoles-cence. Major companies such as AT&T, Nokia, Dell, and Kodak used to be industry leaders, even domi-nators, but they all fell behind as their challengers relegated them into a second place (or worse).

The value of an idea

A large majority of our clients have implemented systems for idea col-lection (i.e. idea box), but how ef-fective are these ideas in driving innovation? “An idea by itself is worth nothing unless it is trans-lated into value”. The journey of an idea throughout the innovation life-cycle is quite interesting: it usually starts as a small concept (we call it an ‘idea dot’) that grows by con-necting with other concepts; “ide-as get connected, disconnected and reconnected with other idea dots until a viable business con-cept emerges…” says Dr. Hitendra Patel at the IXL Center for Innova-tion.

concept. Out of this process, a few highly viable concepts should emerge.

EmergeUnderstand what conditions need to be tested first. Find the right partners. Summarise the business concept in a

compelling, visually stimulating, and insightful way. Test with real clients. Build prototypes to ensure the new concepts meet the organisation’s in-ternal conditions for new business de-velopment.


INNOVATION PROCESS

SET THEGOAL

SETUP DIVERGE CONNECT CONVERGE EMERGE

OBJECTIVE

• Set a bold Vision• Scenario

Planning• Innovation

Challenge

• Strategic Planning

• Leadership Ambition

• Understanding future forces

• Innovation intent

• Future insights• Open Innovation• Idea Box• Eureka workshop• Innovation

Challenge• Cross industry

benchmarking

• Idea management platforms

• Start up incubators

• Innovation eco-system of partners and customers

• Business opportunities map

• Cross functional experts task force

• Pursue workshops

• Collaboration platforms

• Out of the box thinking

• Business concepts

• Reverse engineering of business concepts

• Pressure testing (first to failure test)

• Brochures and visual artifacts

• Stage-gate process• Flexible and agile

resource allocation process

• Robust business concepts

• Brochures• Business plans

• Lean innovation• Prototyping• MVP (minimum

viable product)

• Lean execution and project management

• Prototypes• Ready-to-be-

scaled innovative business concepts

BESTPRACTICES

KEY ORG.CAPABILITIES

OUTPUTS

REFRAME THE PROBLEM +

GENERATE IDEAS

ORGANISE + CONNECT THE DOTS

PRIORITISE + REFINE SOLUTIONS

SET ACTION PLANS


Managing the suggestion box is one of the most com-mon challenges we observe among our clients, as or-ganisations try to get the most out of their employees’ ideas. The problem is that ideas without direction are like a chicken without a head. A suggestion box without a focus and lacking strategic priorities can indistinctively produce ideas that aim to change the world and/or ideas to improve the food in the cafeteria.

The quest for the ‘next big thing’

What is notworking well

“Regionally, the main challenge is striking the balance between risk and return on investment” says Lisa Ny-man, Head of Strategy & Business Innovation at Erics-son RMEA. This becomes increasingly difficult as indus-tries are under pressure and tend to focus on short term growth and profitability.

Balancing risk with ROI

Many organisations in the region understand the importance and have started the journey of inno-vation. We have seen organisations seriously in-vest in the first two stages of innovation process, Setup and Diverge; however, most do not get past the space of ‘idea box’, Post-Its, and PowerPoint.

Here we present the main barriers preventing in-novation that ultimately impede ideas to reach the market, as reported by our clients:


Everybody has the capacity to come up with great ideas, although it is obvious that not everyone is generating them. Which could have something to do with the fact that some individuals have more ‘dots’ than others. “You have to teach people to have more curiosity. Every kid has it and somewhere along the way we, as parents and school systems, shut it down”, says Dr. Hitendra Patel of the IXL Center.

Moreover, we have observed that many organisations are limiting the idea-sourcing initiatives to their own em-ployees, and although this is a good practice the real potential lies in collaborating with customers and sup-pliers, and searching for idea dots beyond their natural fields of play.

Not getting enough ‘dots’

There are two prerequisites to innovation: acceptance to failure and tolerance to waste. “The biggest chal-lenge is to change the culture of the organisation, from autocratic to democratic”, says Anthony Denatale, Head of the Innovation Unit at DAFZA.

“Middle East organisations must adapt to changing times”, says Sudarshan Chakravarthi, Head of Market-ing & Communications at 3M Gulf. It is getting easier and easier for new entrants to start to compete with the increasing possibility of acquiring business elements through partners or suppliers. Harnessing the forces that will shape the future and doing it at the right time has become an increasing concern of organisations to-day.

While having a good number of ideas is important, with-out proper connectivity there is little hope for innovation.

If ideas are treated as individual projects, we cripple the potential of connecting them with other ideas to gener-ate even a bigger idea.

Providing space for ideas to mingle is one of the least common attributes exhibited by organisation in the re-gion.

“Innovation always comes with change and in some cases cost”, says Sudarshan Chakravarthi, head of Mar-keting & Communications at 3M Gulf. If you want to kill a great idea, just ask for a business plan. Nowadays, organisations are struggling to justify new ventures in light of the strict protocols for budgeting and resource allocation.

While for many organisations crowdsourcing innovative ideas is a big achievement, the biggest challenge lies in the execution. Organisations struggle with testing and scaling up ideas to produce bigger, bolder, and more innovative concepts that can be taken to reality and gen-erate value.

The culture killers

Embracing digital, now or later?

Connect, disconnect, connect again

The business plan road to nowhere

Moving beyond Power Point


Ensure frequent informal meetings with the CEO and Chief Innovation Officer. These encounters create the optics that innovation is important, they facilitate decisions and sup-port commitment to innovation. “We pay great attention to our Quarterly Global New Product Launch”, says Sudarshan Chakravarthi, Head of Marketing & Communications at 3M Gulf, about the mechanisms used by this innovation giant to

put innovation at the centre of the top management’s agen-da. “To make innovation happen, we need to make people believe in it”, says Anthony Denatale, Head of the Innovation Unit at DAFZA, who is leading a major cultural change in his organisation by raising innovation awareness levels, from CEO to floor employees.

Focusing on results is not sustainable, it only helps to keep the consultants hired, whereas focusing on capability build-ing only results in lots of people, processes, and systems development. This only increases impatience from manage-ment, who believe that time and money are being squan-dered. The solution is finding the optimal balance between innovation results and capacity building. “At Ericsson we use a wide range of initiatives to keep innovation alive” says Lisa Nyman, Head of Strategy & Business Innovation at Ericsson RMEA, whose company is investing heavily in certifying in-novation coaches, has created innovation incentives, and also has recently established a Chief Innovation Officer role commissioned as a disruptive force to further augment and accelerate innovation via incubation and venture funding.

“At 3M we have the 15% rule, where we allow our em-ployees to spend 15% of their work time on experimen-tal doodling or experimental projects that could give way to new products”, says Sudarshan Chakravarthi, Head of Marketing & Communications at 3M Gulf. In-novative organisations encourage their employees to try and experiment on concepts that will drive the future of their businesses.

1.

3.2.

Get your CEO excited about innovation

Balance results and capacity buildingCreate spaces to innovate

What the most innovative organisations are doing to speed up innovation

We asked our clients and experts for their recommendations

for organisations trying to master the art of innovation. Here is

what they answered.


8

Failing fast and cheap is not a new concept, but many or-ganisations are still reluctant to endorse failure of any kind. “One way to overcome this is to use the Lean Startup meth-od, which focuses on reducing the upfront investment and thus the risk by creating a Minimum Viable Product (“MVP”) to be tested in the market, and based on the customer re-sponse pivot or persevere. Another option is to work closer

with customers and partners and thus share the risk and potential return”, says Lisa Nyman, Head of Strategy & Busi-ness Innovation at Ericsson RMEA. Companies like Google and 3M encourage innovation time among all their employ-ees. Failure does not need to be expensive. Neither should it lead to career risk.

Big ideas are exciting for managers, employees, suppliers, partners, and customers. Big Ideas move the needle on busi-ness results. “Focus on game-changing initiatives has to be the starting point… companies mistakenly use six-sigma, TQM or lean management tools for driving breakthrough business growth. These tools are for process improvement, cost reduction, increased predictability, exactly the opposite of innovation”, says Dr. Hitendra Patel at the IXL Center for Innovation.

Most of the clients and experts agree that digital forces are about to disrupt the world as we know it. Some industries will feel this stronger than others. Pioneer organisations are currently developing digital capabilities to be the disrupters, rather than being disrupted.

Pioneer organisations place the customer at the cen-tre of their innovation process, then iterate, connect and disconnect ideas until they find a unique space in which they can add value. “An example is the Adhe-sive platform in 3M; it goes from a simple Scotch Tape which can hold the back side of an envelope, all the way up to Scotch solutions raising an 800 kilo car in Germany off a crane”, says Sudarshan Chakravarthi, Head of Marketing & Communications at 3M Gulf.

7.

4.

5.

6.

Fail…fast and cheap

Focusing on BIG ideas

Embrace the digital forces

Customer-centric innovation


Google created Alphabet because its founders were con-cerned that the company had become too big and it had stopped innovating. Innovation is typically associated with startups and SMEs, but startups face many challenges as they navigate the infantry stage. But what about SMEs? Could SMEs hold the magic formula to nurture innovation?

SMEs have a higher success rate with new ideas to com-mercialisation than startups or large companies. In startups, the CEO is not a proven businessman or manager; and in large companies inputs and decisions are distributed across the organisation, slowing down or even stopping innovation. In SMEs, the CEO already knows how to buy, make and sell, hire and fire, and navigate complexity while in a startup the CEO is still learning. In SMEs, the CEO is often present in innovation meetings and decisions are made at the moment,

and so are resource allocations; while in big companies the CEO delegates responsibilities and is not present.

Innovations pursued by SMEs are oftentimes me-too prod-ucts but offered with a better value proposition along the val-ue chain of an existing company. SMEs unlock value by inno-vating these inefficiencies. The impact of innovation growth in SMEs is significant, as it creates accelerated growth com-pared to big corporations.

About Colciencias: 10x SME program in Colombia has promoted re-

gional economic growth by building innovation capacity at hundreds

of small enterprises. Delivered in cooperation with the Colombian

National Administrative Department of Science, Technology and In-

novation (Colciencias) and five metropolitan governments, it guides

companies from idea to purchase order.

Lessons from the largest SME accelerator in the worldBy Dr. Hitendra Patel – IXL Center for Innovation and Project Leader of Colombia’s 10x SME Accelerator - Colciencias


Can you provide a brief history of innovation in the UAE government and why it is so important today?

Innovation in UAE government can be traced back to 1997, with the establishment of the first Dubai Government Excel-lence Program DGEP, followed in 2009 by Abu Dhabi Award for Excellence in Government Performance, and in 2010 by the Federal Government - Sheikh Khalifa Government Excel-lence Program. These programs emphasised innovation as a necessary ingredient for government excellence. In 2015, the UAE government launched the ‘National Inno-vation Strategy’, emphasising innovation in government as a cornerstone for social and economic development and key for increasing UAE competitiveness, providing new job op-portunities, and improving the overall quality of life and hap-piness of people. The 4th cycle of UAE government excellence model adopted in 2016 is now emphasising innovation as an enabler, and giving 20% weight in the evaluation of innovation manage-ment practices in government organisations. The Initiative for Government Innovation (IBDAA) has now four innovation categories: the most innovative government department, the most creative idea, the most creative government employee and the most creative government leader. These innovation programs have significantly helped instill a good innovation culture and practices in UAE government entities.

What are the most common challenges that government entities face when it comes to innovation?

The Innovation climate in UAE government is becoming more and more visible as innovation is supported and championed by leadership on many levels of government, and exercised in almost all of government entities. Yet, there exist some challenges including insufficient al-

located budgets to implement the accepted creative ideas coming through ideation systems. This can result in delaying the implementation of good ideas, which slows down innova-tion pace, or sometimes renders those ideas irrelevant if not implemented on time. Providing and linking incentives to performance of staff is an-other challenge that government entities are facing. Without proper incentives, recognition, and reward for staff efforts to innovate, employees tend to lose momentum and passion, and become discouraged to come up with creative ideas or solutions.Last but not least, organisations struggle with creating a risk environment that nurtures new ventures. Innovation requires experimentation and risk taking. If the environment does not allow employees to experiment and try new things with ac-ceptable risk of failure, they will be afraid to test and try dif-ferent approaches/ways to implement their ideas, which will stifle innovation.

What would you recommend to a government entity em-barking in the journey of innovation?

Government entities should establish innovation strategies, link them to their organisational strategy, and ensure to have a clear innovation process that should be reviewed and as-sessed from time to time.Adopting agile mindset and agile practices such as agile software development framework is of importance to govern-ment entities to be responsive to changes and for their provi-sion of new innovative services.Innovation is more about collaboration; internal collabora-tion within the organisation and external collaboration with customers and other stakeholders. Government entities need to capitalise on innovation technology to make collaboration possible.

Public Sector Case Study – The UAE Journey Towards Innovation Interview with Dr Saeed Al Dhaheri – Chairman of Smartworld and Advisor to several UAE government Entities


Carlos Guevara –Partner and co-founder at ShiftIN Partners.

Founding Partner of ShiftIN Partners. Author and speaker on Strategy and Innovation. Board Member of the Institute for Strategy Execution. Certified Trainer by the Global Innovation Management Institute. A Mechanical engineer with MBA from IE Business School.

You can reach Carlos at [email protected]

Dr. Hitendra Patel – Founding Partner of the IXL Center for Innovation and Board Member of the Global Innovation Management Institute

Founding Partner of the Boston-based global innovation consulting firm IXLCenter, Board member of the Global Innovation Management Institute and ex-head of innovation of Monitor Group. Member of the Hult Prize judges in collaboration with President Bill Clinton. MBA from Kellogg School of Management, a BSEE from Washington University in St. Louis and a Ph.D. in Materials Science and Engineering from Iowa State University.

You can reach Hitendra at [email protected]

Dr. Saeed Al Dhaheri – Chairman of Smartworld and Advisor to UAE Space Agency

Dr. Saeed is an academician and ICT expert. Former Director General of the Emirates Identity Authority. Member of the international advisory committee of the UAE space agency. Has led several programs including Dubai government excellence program (DGEP), the GCC e-government award, and the UAE Drones and AI & Robotics for Good Awards. Holds a Ph.D degree in biomedical engineering from Drexel University

You can reach Saeed at [email protected]

ABOUT THE AUTHORS


ShiftIN Partners is a leading strategy management consulting firm focused on helping clients manage strategy and innovation programs that enable organisations to achieve the necessary Shift, working from withIN. With decades of accumulated experience from around the world, our consultants have a track record on helping organisations in the emerging markets to overcome the challenges related to strategy execution. We are recognised for our obsession towards implementation, simplification and results.

ShiftIN Partners has Offices in Abu Dhabi, Dubai, Riyadh, Chicago and Lisbon.

For more information visit: www.shiftINpartners.com

Sudarshan ChakravarthiMarketing Excellence & Corporate Marketing & Communications Leader 3M Gulf

Lisa Nyman Head of Strategy & Business Innovation at Ericsson RMEA

Anthony DenataleHead of the Innovation Unit at the Dubai Airports Freezone (DAFZA)

IXL Center helps corporations, governments, universities, and individuals develop breakthrough strategic solutions and world-class innovation management capabilities in order to drive significant, sustainable growth.

COLLABORATORS

Founded in 2009, the Global Innovation Management Institute, GIM Institute or GIMI, is the global nonprofit standard certification board for innovation and innovation management.


TRY. LEARN. REPEAT - Shiftin...MARCH 2017 TRY. LEARN. REPEAT THE ROAD TO INNOVATION IN THE MIDDLE...

Documents

Transcript of TRY. LEARN. REPEAT - Shiftin...MARCH 2017 TRY. LEARN. REPEAT THE ROAD TO INNOVATION IN THE MIDDLE...