Innovation A Driver for Value Creation

Innovation

A Driver for Value Creation

by QMD

Innovation and Value Creation Technical Committee

http://www.asq-qm.org/innovation-and-value-creation

Innovation Creates Value

• Innovation is Profitable…IBM– Companies with fastest profit growth

• Innovation must be Radical…Morgan Stanley– Create ten times more shareholder value

• Innovation needs Speed…Accenture– Commercialize patents fast and outperform by 1000%

Quality Management Division Innovation and Value Creation Technical Committee

What Is Innovation?

• In – nova – tion means

…..doing things…..

• In - a new – way

So, how can we define innovation? >>>

What Is a Definition of Innovation?

Innovation is

the successful conversion of

new concepts and knowledge into

products and processes that

deliver new customer value

in the marketplace

So, why is this important? >>>

We Need Innovation Because…

• The World is Changing – for example

– In the Market Place, Asia is growing

– Our population is Aging

– Technology is becoming Digital

– The environment is warming

We Need Innovation Because…

It is not the strongest of the species that survive,

nor the most intelligent, but ….

the one most responsive to change.- Charles Darwin

So, how do we respond to change ? >>>

• The World is Changing – for example

– In the Market Place, Asia is growing

– Our population is Aging

– Technology is becoming Digital

– The environment is warming

Innovation Must be Radical

• Photographic Film >>>> Digital Photography

• Notebook Computers >>>> BlackBerry

• Electricity Companies >>>> Fuel Cells

• Open Surgery >>>> Arthroscopic Surgery

So, is there a process for radical change?

What Is the Innovation Process?

• The Innovation process is

• The conversion of

New Knowledge into

New Products and Services to enable

New Ways of doing things

What does the process look like?

The Innovation Process Flow Is:

• 1) Find the Opportunity and then

• 2) Connect to Conceptual Solutions

• 1) Find the Opportunity and then

• 2) Connect to Conceptual Solutions

Select the preferred Solution and then

• 3) Make the solution User Friendly

• 4) and then get it Get to Market

Showing this as a model >>>

The Innovation Process Flow Is:

The Innovation Process

Finding the „Opportunity‟

• The World is changing

• Know where your customers feel pain

• Change Product not Customer

• Find „Green Field‟ Market Space

Necessity is the mother of Invention - Plato

Connect to the Solution

• Connect to a new environment…Henry Ford

• No sudden epiphany… Archimedes

• Find many solutions – Linus Pauling

• Sacrifice the sacred

If I had an hour to save the world

I would spend 55 minutes defining the problem and

5 minutes finding the solution. - Einstein

The Tipping Point

• Need data and information for decisions

• Set strategy….time, skills, $

• Narrow focus

• Change mode from „loose‟ to „tight‟

If you see a bandwagon, its too late – James Goldsmith

Innovation – Executing the Solution

Creating Knowledge

Executing the Solution

Development

• Make it “user friendly”

• Be fast and not secretive

• Involve the customer

Genius is 1% inspiration and 99% perspiration

– Thomas Edison

• Best ideas don‟t always make it

• Create a simple „Value Proposition‟

• Work with a Market Partner

• Move with speed…

– Remember Alexander Graham Bell and Elisha Gray

The best way to predict the Future is to create it

– Peter Drucker

Innovation Needs Different Types

Creating Knowledge

Creators and Connectors

Developers and Doers

What Is Your Best Role in This Process?

• Are you good at

– Creating opportunities?

– Linking opportunities to solutions?

– Making solutions practical?

– Getting solutions out there?

You can find out from a simple assessment

What Type of Innovator Are You?

The Innovation Committee has provided a

simple self assessment find what type of an

innovator you are

The assessment looks like this >>>

1 I ‘Connect the

Dots’1 I get things done 4 I like Possibilities 2 I bring things

‘down to earth’3

2 I need to

understand2 I make things work 3 Everything has a

good and bad side4 There has to be a

right answer1

3 Don’t tell me what

to do4 Give me facts not

theory2 I create choices 3 I like to analyze

4 A Concept must

be sound2 I like ‘energy’ 1 Don’t fuss with

details4 I like precision 3

5 I think things

through3 I take risks 2 I like to hear about

problems1 I focus 4

6 I like the big

picture2 I find a way that

works3 I want to own the

problem1 I am thorough 4

7 I like to define the

problem2 I push for

acceptance1 I find out the facts 3 I Plan 4

CONNECTOR16 TOTAL

DOER16 TOTAL

CREATOR18 TOTAL

DEVELOPER20

Creator, Connector, Developer or Doer?

For the e-version of the self assessment go to

www.petermerrill.com/self-assessment

You can download a pdf which explains each type

of innovator

Have your team members assess themselves to

better understand each other

Self Assessment

Your Next Step?

• Go to the website

( http://www.asq-qm.org/innovation-and-value-creation )

• Contact the QMD Innovation Committee

(Chair; Jane Keathley jkeathley@rals.com

• Assess yourself

(go to www.petermerrill.com/self-assessment )

Backup Slides

I&VC Committee Mission

• Turning Good Ideas into Great Results

• Mission Statement: To extend strategic development and problem-solving

methodologies into creative design practices to satisfy

increasingly sophisticated customers and marketplace

environments with innovative solutions; to promote an

environment where innovative ideas are actively

planned, executed, and rewarded, and teach others to

do the same.

I&VC Committee Charter

• Responsible for developing high-level content,

in the form of articles, books, conference

publications, courses, web-based media, and

other products, that:– Educate executive, business, and quality professionals in

the development of business strategies that include

innovation, as well as the technologies, methodologies and

tools needed for effective innovation management.

– Provide business leaders with necessary perspective to

support innovation and value creation as part of quality

management.

– Maintain relevant content for the CMQ/QE certification and

other Bodies of Knowledge.

Innovation System Framework

• Organizations that evolve a

framework for long-term innovation

react faster to threats or surprises,

are more likely to take effective

action, and are better at sustaining

the momentum of change. As such,

they are more likely to succeed.BS 7000-1 DMS. Guide to managing

innovation

• Changes in the organizations

environment could require innovation in

order to meet the needs and

expectations of interested parties. The

organization should:

– Identify the need for innovation

– Establish and maintain an effective

and efficient innovation process

ISO 9004:2009, Sect 9.3.1

• Innovation can be applied to issues at all

levels, through changes in

– The organizations management

system

• To ensure that competitive advantage is

maintained and new opportunities are

utilized, when there are emerging

changes in the organizations environment

ISO 9004:2009, Sect 9.3.2

Web Resources

ASQ Quality Management I&VC

http://www.asq-qm.org/innovation-and-value-creation

ASQ Discussion Board - Innovation Network

http://www.asq.org/discussionBoards/forum.jspa?forumID=64

Front End of Innovation (FEI) - LinkedIn Group http://www.linkedin.com/groups?gid=41615&trk=myg_ugrp_ovr

Standards

• ISO 9004:2009: Managing for the

sustained success of an organization – A

quality management approach

• Section 9 – Improvement, Innovation

and Learning

• BS 7000-1: 2008, Design Management

Systems. Guide to managing innovation

Some noteworthy articles:

The Contribution Revolution: Letting Volunteers Build Your

Business Scott Cook Harvard Business Review (HBR) Oct 2008

Is It Real? Can We Win? Is It Worth Doing?

Managing Risk and Reward in an Innovation Portfolio George S. Day HBR Dec 2008

The Customer-Centered Innovation Map Lance A. Bettencourt, Anthony W. Ulwick HBR May 2008

Tapping the World's Innovation Hot Spots John Kao HBR May 2009

Buyer's Guide to the Innovation Bazaar Satish Nambisan, Mohanbir Sawhney HBR June 2007

Some noteworthy books:

Blue Ocean Strategy: How to Create Uncontested

Market Space and Make Competition Irrelevant

W. Chan Kim

ISBN-13: 978-1591396192

Harvard Business School Press; 1st edition (February

3, 2005)

Innovation Generation: Creating an Innovation

Process and an Innovative Culture

Peter Merrill

ISBN-13: 978-0873897341

Publisher: ASQ Quality Press (May 7, 2008)

Crowdsourcing: Why the Power of the Crowd Is

Driving the Future of Business

Jeff Howe

ISBN-13: 978-0-307-39620-4

Publisher: Crown Business; 1 edition (August 26, 2008)

The Innovator's Toolkit: 50+ Techniques for

Predictable and Sustainable Organic Growth

David Silverstein, Philip Samuel, Neil DeCarlo

ISBN-13: 978-0-470-34535-1

Publisher: Wiley (October 27, 2008)

The Innovator’s Solution: Creating and Sustaining

Successful Growth

by Clayton Christensen, Michael Raynor

ISBN-13: 978-1-57851-852-4

Publisher: Harvard Business School Publishing; (2003)

Open Innovation: The New Imperative for Creating

and Profiting from Technology

Henry Chesbrough

ISBN-13: 978-1-4221-0283-1

Publisher: Harvard Business School Publishing;

(2006)

Innovation A Driver for Value Creation

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