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When in Newport
Strategic Innovation
3. Strategic Innovation in the Industry 4.0 context
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 116 May 2018
OUTLINE. Strategic Innovation
When In Newport Stopover
02Innovation vs
Invention
03Strategic Innovation
Context
Industry 4.0
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved
04Strategic
Innovation
Paradigm
05Summary and
Conclusions
15 May 2018
01Innovation 101
We are here
2
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
Since the Industry 4.0 is led by European countries who are trying to find holistic solutions to
deploy it in better terms than the US or other countries, we will start today´s topic as follows:
3
Strategic Innovation in the context of Industry 4.0
The European Commission has established 10 strategic priorities for Europe. The second strategic
priority is the Digital Single Market. This priority has put together a OISPG team. Why?
Jobs, Growth and
Investment
Digital Single
Market
Energy Union and
Climate Change
Internal Market Deeper and Fairer
economical
monetary union
Balanced and
progressive trade policy
to harness globalization
Migration Stronger Global
Actor (protagonist)
Democratic Change
OISPG is the
EU’s Open
Innovation
Strategy and
Policy Group
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
The OISPG is the European Commission “Open Innovation Strategy and Policy Group” (OISPG).
It unites industrial groups, academia, governments, and private individuals (civil participants)
to support policies for open innovation.
4
Strategic Innovation in the context of Industry 4.0
Let´s ask some questions to ourselves:
• Why do the European Commission has established a group to
support policies for open innovation?
• The OISPG belongs to the Digital Single Market Priority in the
European Commission Big Strategy.
• What is the relation of the OISPG work and the context of
Industry 4.0?
• Specifically, why would we care about the OISPG research and
policies in our area of domain, strategic innovation?
• What is the link between the traditional concept of Strategic
Innovation and the context of Industry 4.0?
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
Let´s see where we are right now in relation to innovation evolution and the new context of Industry 4.0
5
Strategic Innovation in the context of Industry 4.0
The way we do
innovation has evolved
from a closed
perspective to what is
defined today as Open
Innovation Version 2.0
perspective
Diagram Source: Curley&Salmelin.
Open Innovation 2.0, a new
paradigm. Open Innovation Strategy
and Policy Group (OISPG), 2018
Strategic Innovation in the context of Industry 4.0
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
According to the OISPG, we are now going forward to reach the era of Open Innovation 2.0
6
Closed Innovation Open Innovation Open Innovation 2.0
Dependency Independency Interdependency
Subcontracting-outsourcing Cross-Licensing Cross-fertilization
Solo Bilateral Ecosystem
Linear Linear-leaking Nonlinear mash-up
Planning Validation, pilots Experimentation
Control Management Orchestration
Win-lose game Win-win game Win more-win more
Box Thinking Out of the box No boxes
Single Entity Single discipline Interdisciplinary
Value Chain Value Network Value Constellation
For the OISPG, the
Innovation modes
have evolved and the
ideal destination is
Open Innovation 2.0
But reality is different
depending on the
degree of evolution in
our companies and
the readiness to join
Industry 4.0
Strategic Innovation in the context of Industry 4.0
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
For example, in Latin America, a company located in Guatemala, may have a different innovation
landscape than than one in Switzerland or other European countries.
7
Closed Innovation Open Innovation Open Innovation 2.0
Dependency Independency Interdependency
Subcontracting-
outsourcingCross-Licensing Cross-fertilization
Solo Bilateral Ecosystem
Linear Linear-leaking Nonlinear mash-up
Planning Validation, pilots Experimentation
Control Management Orchestration
Win-lose game Win-win game Win more-win more
Box Thinking Out of the box No boxes
Single Entity Single discipline Interdisciplinary
Value Chain Value Network Value Constellation
Switzerland Guatemala
Closed Innovation Open Innovation Open Innovation 2.0
Dependency Independency Interdependency
Subcontracting-
outsourcingCross-Licensing Cross-fertilization
Solo Bilateral Ecosystem
Linear Linear-leaking Nonlinear mash-up
Planning Validation, pilots Experimentation
Control Management Orchestration
Win-lose game Win-win game Win more-win more
Box Thinking Out of the box No boxes
Single Entity Single discipline Interdisciplinary
Value Chain Value Network Value Constellation
There is a gap in the innovation
landscape in several regions of the
world
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
Why do the European Commission has established a group to support policies for open innovation?
For the European Brains, Pre-Existing Standards and Regulations have an impact on the innovation and diffusion
of new high-tech products and services.
8
Strategic Innovation in the context of Industry 4.0
• Many Europeans are firm believers that pre-existing standards and regulations on
the innovation process are beneficial for the society.
• The question whether standards and regulations hamper or enable innovation
has created controversy among scientists, while the policy and managerial
importance of resolving it goes undisputed.
• The OISPG is helping to guide in the process.
• And this is key, when we wish to do Strategic Innovation.
What is strategic innovation?
What is strategic innovation in the context of Industry 4.0?
https://www.igi-global.com/chapter/impact-of-industry-conditions-
on-innovation/197470
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
Costas Markides PHD, coined the Strategic Innovation outlook around 20 years ago.
9
Strategic Innovation in the context of Industry 4.0
London Business School Professor of Strategy and
Entrepreneurship; Robert P Bauman Chair in
Strategic Leadership.
Strategic Innovation is a term that I heard for the first time when at
London Business School.
Costas Markides, Professor of Strategy at LBS, explained it as follows:
“Strategic Innovation occurs when a company identifies gaps in
the industry positioning map, decides to fill them, and the gaps
grow to become the new mass market.
By gaps, Markides means:
1. New emerging customer segments or existing customer segments
that other competitors have neglected, (WHO)
2. New emerging customer needs or existing customer needs not
served well by other competitors, (WHAT) and
3. New ways of producing, delivering, or distributing existing or new
products or services to existing or new customer segments
(HOW)”.
https://sloanreview.mit.edu/article/strategic-innovation/
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
Once we understand What is Strategic Innovation, it is easy to grasp that Industry 4.0 is and
will continue to show us gaps to expand our businesses. Industry 4.0 will push our current
boundaries and will force us to develop a new business game plan.
10
Strategic Innovation in the context of Industry 4.0
Five Ways to Kick-Start Strategic
Innovation, By Costas Markides PhD.
How can a company proactively and
systematically think about and develop a
new game plan? Five generic approaches
of the successful strategic innovators can
provide clues:
1. Redefine the business.
2. Redefine the who. Who is our customer?
A company should think of new
customers or new customer segments
and develop a game plan that serves
them better.
3. Redefine the what. What products or
services are we offering these customers?
A company should think of new customer
needs or wants and develop a game plan
that better satisfies these needs.
4. Redefine the how. Companies should
leverage existing core competencies to
build new products or a better way of
doing business and then find the right
customers.
5. Start the thinking process at different
points. For example, instead of thinking,
“This is our customer, this is what he or
she wants, and this is how we can offer
it,” start by asking: “What are our unique
capabilities? What specific needs can we
satisfy? Who will be the right customer
to approach?
https://sloanreview.mit.edu/article/strategic-innovation/
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
Costas Markides Strategic Innovation framework was the origin of several others which have
been developed during the last 20 years. Another example: the Doblin Ten Types of Innovations
Model.
11
Strategic Innovation in the context of Industry 4.0
“The Ten Types of
Innovation framework
provides a more complex
way to identify new
opportunities beyond
products and develop
viable innovations.
Source:
https://www.doblin.com/ten-types/
What?
How?What?What?
How?
How?
How?Who?
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018
Each consulting company has its own strategic innovation framework. One interesting fact is that
Markides Strategic Positioning Map has been improved or it has evolved over the years. Bain Core
Adjacencies Expansion model is an evolution of Markides original model.
12
Strategic Innovation in the context of Industry 4.0
Source: Bain & Company.
“GROWING A CORE BUSINESS”
Scale Up Summit. San Antonio
Texas, May Summit 2017.
What?
Who?What?
How?
How?Where?
• Industry 4.0 is a door of opportunities: new wants and
new needs will arise. New products, new services, new
whats, whos and hows…
• Strategic Innovation is the way to go when trying to find
new business models in the context of Industry 4.0. We
can use any framework which has evolved from Markides
first approach. Including the Business Model Canvas too.
• Nevertheless, it is dramatically urgent to establish some
kind of protection to our societies. The European
Commission has created the OISPG as an initiative to
their second strategic priority called Digital Single
Market.
• Pre-Existing Standards and Regulations have an impact
on the innovation and diffusion of new high-tech
products and services.
Is this the best mechanism to protect our societies? Can
we add ethical self-control? What do you think?
• Industry 4.0 (as everything in life) has outstanding
benefits, but dark risks too. My personal perception or
intuitive feeling, is that we need to establish some ways
to protect our future generations from the dark side of
the wrong mental models which will come up through
Industry 4.0.
• If Industry 4.0 is a force for good (as Sumantra Ghoshal
said it) we will be successful. If we put integrity and
ethical values at the core of our value propositions, we
will choose right. Otherwise our corporate strategy is
going to drain our humanity.
• Then, in addition, If we try to force creativity and
innovation through Industry 4.0, nothing good will come
up from it. Creativity needs a nurturing environment.
Education and ethics are the self control filters which
will keep us safe.
When In Newport Stopover. Strategic Innovation
Eleonora Escalante MBA-MEng, Strategic Corporate Advisory Services
© 2017-2018 Eleonora Escalante-all rights reserved 16 May 2018 13
Let me finish today with the following reflections:
Strategic Innovation in the context of Industry 4.0
Thank you!
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