Examination of innovation types final

www.agilityinnovation.comwww.ovoinnovation.com

Collaborative Innovation Reference FrameworkChoice of the Innovation Types

Nine different approaches to Innovation Examination of the Innovation TypesThis third presentation, Examination of Innovation Types, uses the innovation framework established above to examine a range of innovation “types” within the context of the innovation framework defined in the Core Innovation Framework deck. We have broken these up into two decks for absorbing the significant detail provided within each type to ‘value’ the often subtle differences in applying the different type to your organization. Using the framework we can establish which focus areas are critical for innovation success in the different innovation types. For example, we can see that Needs-based innovation relies on Trajectories, Discovery and Insight for success because of the importance placed on customer needs. Investigating the innovation “types” within the framework provides more detailed and careful examination of the actual work involved when innovating using that “type” or approach.


We are interested in explaining the many facets that make up a successful innovation endeavour. It can be extremely tough to capture and explain the complexity of innovation. We would like to see an emerging reference model for innovation from this starting point. The end result is to create a common innovation model or framework that accelerates acceptance, reduces mystery, constant rework and simplifies innovation efforts. Innovation is dynamic. Opening this set of models allows for it to be constantly improved for all to benefit - this is our stated aim in publishing these models.

We submit these suggested models as a starting point to deconstruct how innovation works and to encourage a “common” innovation model across all geographies, industries and markets. Developing a common innovation model and approach reduces confusion and simplifies innovation work. We believe we can remove a lot of the mystique around innovation and help accelerate its adoption and implementation by firms everywhere if we can agree on basic models and principles.

We would encourage you to feel free to send commentary, corrections, additions or changes to the models or types to Paul Hobcraft or Jeffrey Phillips. We in turn will re-publish the model as necessary under a Creative Commons License, so that anyone who cares can use it and adopt the innovation model. We want this to be open and a transparent process but we will retain copyright while allowing others to copy, distribute, and make some uses of their work as long as we are credited for the original creation.

These are collaborative work-in-progress to achieve a common position for understanding innovation

► Go to the Wiki on http://cirf.pbworks.com

Our intention behind these different models of Innovation


Deeper examination of innovation types

• We’ll examine the key differences between the NINE different innovation types or strategies that can be explored, recognizing that the innovation processes and many of the ‘core’ innovation capabilities DO remain the same regardless of innovation approach.

• The constantly shifting boundaries of innovation matter and understanding the multiple options available becomes increasingly important to master.

• Why do changing innovation boundaries matter so much? Because, at its most extreme, failure to detect, acknowledge, and respond to these changing boundaries can make the difference between organisational success and failure.

• Each type of innovation described here requires some distinct attributes to be successfully deployed- these “differentiation points” define the type of innovation you want to do and how to go about it


Approach Type – Innovation Models• Innovators need to choose specific innovation strategies, models or types:

– Management Innovation– Open Innovation– Design led Innovation– R&D led innovation– Service/Experience Innovation– Business Model Innovation– Technology Innovation– Needs-based Innovation– Operational innovation

What approaches to innovation should we choose? What is appropriate to our position?Different approaches are appropriate to different innovation goals

N.B. These choices aren’t dependent or mutually exclusive – a firm can conduct “open” innovation and design-led innovation simultaneously, for example


Innovation Strategies- Decision Path

• The choice of the strategy approach is determined by what your firm wants to achieve and equally what you have available to you.

• Any gaps need to be recognized and you need to gain the knowledge and experience to build those into your approach and time expectations to achieve the result you would ideally like.

• Choosing a specific innovation strategic approach has consequences on the people, skills, organizational structure and many other facets of the innovation model. These need to be equally addressed.


Exploring and selecting innovation types, models & philosophies

Service /Experienceinnovation

Design Led

Innovation

NeedsBased

Innovation

OpenInnovation

Technology Led

Innovation

Business Model

Innovation

Operational Innovation

R&D Innovation

Identify Potential

Screen & Rationalize

ManagementInnovation

Approach Type Summary – Nine Strategic ‘Types’ of Innovation

Models

Establish

Strategy

Evaluate Skills


Innovation Management Universal Need Environment Stage Key Sub Anchor Capabilities & Competences (triggers)

Service /Experienceinnovation

Design Led

Innovation

NeedsBased

Innovation

OpenInnovation

Technology Led

Innovation

Business Model

Innovation


R&D Innovation

Consideration Factors

Strategies/ Design Essentials of the Types of Innovation Approach

IP Aware &Sharing

Trust &Relationships

Problem Definition

Wisdom of Many

Structured Discovery Process

Search for Unarticulated

Needs

Opportunity Landscape & Uncontested Market

Space

Needs first approach NOT

ideas

VP: Customer Segments &

New Channels

Clear Revenue Streams & Cost

Structures

Identify Key Partnerships & Relationships

Key Resources & Activity Clarity

designer attitude & philosophy

Designing in novelty, function & aesthetics

Integrated design in all considerationsContext,

visualizing and framing

Relevant & Valuable to Client Lives

Co-create & Co-design

Front stage & back

stage needs

Turning Services into

Tangibles

Correlation & Convergence

Point

Unlock the Business Value

Seeing beyond incremental to

evolutionary

Collaborative & Cross Functional

Superior or Evolutionary

Champion & Advocate for

ChangeClarity of Purpose &

Potential Need

Disruptive Potential

‘Step’ change in performance

Understand ‘points of pain’

Engage hearts & minds, sense of

urgencyNew ways to work

& behaviours

Managementinnovation

Unchallenged Orthodoxies/

Beliefs

Unarticulated Needs of

Customers

Underleveraged Competencies

Underappreciated Trends


Execution

. 4.Go-to-market execution

5. Enabling and Scalable Infrastructure

Common Environment, Networking & Collaboration-Building Tools

3. Systematic Innovation Process

2. Trajectories, Discovery, Insight

Identify Potential Establish

Strategy

Screen & Rationalize Evaluate Skills

1. Strategic Context

Desire & Motivation to InnovationExisting Capabilities & Skills

Strategies, Strategic IntentResources and funding

Trend SpottingScenario Planning

Product DevelopmentLaunch

Software Infrastructure

ScoutingVoice of Customer

Align Market & Customer

Environment

Existing Product/Service

Portfolio andCapabilities

OrganizationalReadiness

Investigating “Types” using this framework

Strategic Alignment to Vision & MOST

(Mission, Objectives,

Strategies & Tactics)


Strategic Types of Innovation

Short Explanations


Management Innovation

ManagementInnovation

UnderleveragedCompetencies

UnchallengedOrthodoxies

UnderappreciatedTrends

UnarticulatedNeeds

We believe these four critical factors are distinctive to this type to highlight and for you to consider carefully .


Management Innovation DescriptionManagement innovation is the invention and implementation of a new management practice, process or structure that represents a significant and novel departure from generally accepted or standard management practices, and intended to further organisational goals. (Birkinshaw, Hamel & Mol, 2005)

Gary Hamel, in his book The Future of Management, focuses on the historic lack of management innovation, demonstrating that hierarchical organization structures haven’t changed in over 100 years.

In its broadest sense then, management innovation can be defined as a difference in the form, quality or state over time of the management activities in an organization, where the change is a novel or unprecedented departure from the past

Management Innovation’s goal is in generating positive outcomes for the innovating firm as a whole to further the organization’s goals, which include both traditional aspects of performance (e.g. financial goals) as well as softer aspects (e.g. employee satisfaction).

Management innovation is often not easy to copy as it goes to the heart of how firms operate. Even where firms do not invent new-to-the-world management innovations but instead adopt and implement existing ones, there is adaptation involved to fit these innovations to the particular firm.

Management innovation, in other words, is hard to reverse engineer and can therefore be a sustainable source of competitive advantage.


Management InnovationObviously, you can’t teach someone to be an innovator unless you know where game-changing ideas come

from. In other words, you need a theory of innovation – like Ben Hogan’s theory of the golf swing.

There is still a big gap between the rhetoric of innovation and the reality- addressing this fully requires a strong, clear conviction of what innovation can provide as the end result.

How can we game-change? By paying close attention to four things that usually go unnoticed:• 1. Unchallenged orthodoxies – the widely held industry beliefs that blind incumbents to new

opportunities.• 2. Underleveraged competencies – the “invisible” assets and competencies, locked up in moribund

businesses, that can be repurposed as new growth platforms• 3. Underappreciated trends – the nascent discontinuities that can be harnessed to reinvigorate old

business models and create new ones.• 4. Unarticulated needs – the frustrations and inconveniences that customers take for granted, and

industry stalwarts have thus far failed to address.

• The first and most important step for any company intent on building a capacity for continuous, game-changing, innovation is to teach its people how see what’s around them with fresh eyes. Until your company steps up to this challenge, it will be filled with innovation hackers whose ideas rarely find the fairway.”- Source: Gary Hamel


Initial management changes and experiments are validated and expanded

Changing roles and responsibilities

Explore, Trial and Adapt Development Program

Innovation education and training made mandatory for all managers and executives

Strategic Considerations: we’re really serious about innovation. In terms of the future of management, we’re at the beginning of what will be a fairly long journey where innovation lies at the very core, we are treating this as a radical departure from the existing ‘norms’

Resource Considerations: We need people who canmanage in very different organization structures and teams

Capability & Competency issues: Change what managers do by changing the processes that govern their work that will allow organisations to reach new performance thresholds

Culture & Climate: We need to change the orthodoxies that bound our thinking—the habits, dogmas, and conceits we have never taken the trouble to challenge

Insights: org structure is a present barrier to innovation

Critical Insight: New management thinking process, skills and capabilities are require:•Peer based decisions•Ideas compete on equal footing•Power is a function of competence rather than position•Agenda setting, idea linking approach•Opening up and exploring with fresh eyes•Achieving a more ‘sharper relief’ for opportunities

Testing and deploying new management structuresand practices that innovate the practice of management

Principles and processes that ultimately changes the practice of what managers do, and how they do it

novel or unprecedented departure from the past to further the organization’s future innovation goals

Roles, compensation and evaluation changes are deployed throughout the organizationto reinforce new management innovation practices

Problem Driven Search/ Contextualizing/ Refining/ Reflective

New Training, new hiring

Trends: Must make decisions and take action closer to the customer, and more quickly

Discovery: The value that “management” adds is more dynamic and changing

Management Innovation

Strategic Context

Trajectories,Discovery andInsight

Go To Market

Enabling and ScalableInfrastructure

Systematic Innovation Process

Revolutionizing the management hierarchy

Experimentation with newteam structures

Constructing a safe harbor to explore with C-Level commitment to experiment

A more reflective practitioner


Management Innovation Pros/ConsManagement Innovation is evolutionary• Positives:

– It retrains managerial minds– It unleashes further human imagination– Dramatically reduces the pull of the past– Retools management for a more open world– Reduces fear and increases trust– It redefines the work of leadership for innovation– Positions the firm for future growth and success

• Cons:– Requires new insights, perspectives and skills from the management team– Requires the development of holistic performance measures– Stretches executives time frames and perspectives– Requires significant change


Open Innovation

OpenInnovation

Wisdom ofMany

Intellectual Property

Problem Definition

BuildingTrusted

Relationships



Open Innovation• Open Innovation seeks and leverages ideas from partners, customers and

individuals external to the organization. This assumes that many great ideas exist outside of the corporate boundaries. Open Innovation was first defined by Henry Chesbrough in his book Open Innovation.

• Open Innovation is perhaps the innovation “type” attracting the most attention in the media.

• OI supplements but does not substitute conventional practices

• There are four components that are uniquely different and applicable to open innovation:

– Intellectual Property Thinking– Crowdsourcing/Wisdom of Crowds– Problem definition– Building trusted broader open relationships


Resource Considerations: Finding the best partners, engaging the partners and customers, vetting ideas and intellectual property, abilities to make clear connections, networking emphasis.

Culture & Climate: Establishing the value of an open collaborative model and its more different social practices

Business Development/PartneringExternal Network & Collaborative Management & Protocols

IP Transfer

Social Media Application

Strategic Development: Developing a partnering strategyand identifying the best possible innovation partners, concernfor constant fit and relevance of propositions

Software / Information Networks

Outward facing collaboration & contribution positions

Interactive Value Creation : Degree of Connectivity x Degree of Interactivity x Degree of Sharing

Absorptive Capacity. Relationship Capacity & Multiplication Capacity

Fast concept work

Rigorous Business Case: factors for projected value captured, risks highlighted, licensing costs outlined, opportunity costs of use of key resources, likely impacts, need for ‘hard’ evidence

Communications: Establishing the need for open innovation, creating channels and messages to third parties, clearly identifying innovation needs, conceptual thinking, clarifying value and need

Legal: Establishing a rapid vetting process for the provenance of new ideas, reflecting on the sharing of IP, shared meaning & solutions.

Shared market analysisand trend spotting/evaluation

ScoutingNetworking

Crowd sourcing

Market & Customer Related Research

Open Innovation

Contests

Co-branding/Co-marketing


How ideas are GENERATED changes: Crowdsourcing, etcbut how ideas are managed remains the same

Incorporate partner goals in evaluation and selection of ideasDistributed ‘Co-creation ‘in a web of networks to explore outside the boundaries of the Org.

Incorporate legal and IP into the innovation team

The growing role of the customer within the open collaboration process

OI Readiness

Strategic Context


Go To Market



The consistent flow of knowledge to explore breaking opportunities

Managing more on platforms and through ecosystems

A clarity within the value proposition but flexible to explore alternatives

The management of internal and collaborative tensions

“We use people to find content, we find content to find people”


Open Innovation Model Maturity• Managing open, distributed, modular innovation means managing conflicting criteria and rationales,

including conflicts between innovation and dependability, flexibility and efficiency, and flexibility and reliability

• As the use of Open Innovation progresses within a firm, the model will mature through these three phases:

Partner Firm

Partner Firm

Partner Firm Customers & Clients

Supplier

Externally aware – receivingideas from third parties

Integrated – exchanging ideas with customers and partners

Orchestrated Marketplace – All participants in a valuechain involved in innovation

Institute or University Competing

Firm


Open Innovation Pros/Cons

Open Innovation presents powerful incentives and some significant challenges•Positives:

– Many ideas from a wide variety of sources provide enhanced perspective

– The “voice of the customer” has more weight– More minds applied to the problem

•Cons:– Intellectual Property concerns based on idea origin– Expose strategic direction to outside parties– Identifying the “right” people to address a problem


R&D Led Innovation

R& D LedInnovation

Deep TechnicalCapabilities

Collaborativeand

Cross-Functional

Research andMethodologies

Unlock BusinessValue



R&D Led Innovation• The most “typical” product driven innovation strategy, led by internal

research and development teams

• Mostly focused on discovering new products for new and existing needs across multiple time frames

• Unique factors include– Highly collaborative & cross functional coordination, a converging point of

knowledge.– Deep technical capabilities for ‘seeing beyond’ balancing incremental with

evolutionary research– Strong research focus and methodologies- the convergence point and highly

structured.– Different product life cycles to ‘unlock’ the business value


Business Case: justify, validate, emerging metrics & measurement of returns

Lifecycle Recognition Management- central and distributed timeline differences

Common Environment, Networking & Collaboration-Building Environment

ScoutingNetworking

Trend Spotting

Regular Innovation Development Program is Established

Synthesize, theorize, explore, hypotheses, clarify, investigate, design, develop, test, implement and improve

Scalable, repeatable, end-to-end need, relationship focused

Strategic intent: Leadership in creating “new to the world “technology that create defensible intellectual property, and unlock value

Communications: clear internal communications about targeted market opportunities. More restricted and limited external communication.

Resource Considerations: Increase the stock of knowledge, broad & narrow ‘in-house’ expertise, responsiveness, commercially aware, experimental learning, profit-sharing view

Capability & Competency: Creative thoughts, experimentation, selection, testing, market appraisal, resolution of scientific and technical uncertainty, to ‘see beyond’ for potential discovery

Culture & Climate: Focus on investigation and research into critical problems. Careful to avoid “blockbuster” mentality. Reward mentality for orientation, project delivery emphasis and resolving roadblocks

Metrics & ROI must be well articulated constantly for investments made

Road mapping

High Knowledge Acquisition

Partnering with universities, independent research institutes, government labs, open market

Seeing beyond Science & Technology shift

“Blue sky” & “White spaces”

Carefully planned market launch

Tight linkages with product Development and commercialization

Granting ‘degrees’ of freedom to researchers

Intellectual Property Mining

Well-documented research methodologies

Innovation internally driven by R&D

Research &Development Innovation

Strategic Context


Go To Market



“Recognition return “of positive results from enhanced R&D work

Linkage to Growth strategy and business platforms

Established levels of internal collaboration

‘Controlled ‘risk taking

End result orientation to market


R&D Innovation Model Maturity

As the model matures, R & D innovation becomes increasingly more difficult

• As a result the R&D led innovation effort must identify new technology or breakthrough developments to solve and grow the business (extend capabilities, explore adjacent markets for expertise)

• Alternatively the R&D led innovation effort can apply its methodologies to research service, experience and business model innovations (apply existing capabilities to new problems)

• Seek collaboration or extend internal knowledge through institutions, universities or its existing partners (Open Innovation)

• Reflect on how to move beyond traditional boundaries.


R&D Innovation Pros/Cons

Relying on R&D alone for innovation presents a number of opportunities and challenges•Positives:

– Clear provenance for intellectual property– Focused innovation efforts

•Cons:– Innovation centered in only one portion of the business– Typically tied to product innovation ignoring opportunities in

services, business models– Limited inputs and discussions with outside entities– Too focused on protection of ideas


Service/Experience Innovation

Service/ExperienceInnovation

Turning servicesinto tangibles

Based on CustomerNeeds/Experiences

New, differentResearch andinsights req’d

Co-create andCo-design



Service/Experience Innovation• Increasingly many firms are focusing on service and customer experience

innovation to provide a more comprehensive set of solutions to its clients. These innovations create differentiated services or experiences for customers. The work of firms like Doblin and IDEO is instructive here.

• These innovations are more difficult to create, often more intangible but more sustainable when appropriate.

• Unique factors include– Based on customer experiences that they regard as valuable and

relevant– Not product oriented but – Requires differentiated experiences– New research and insights are needed



People Trained in new interaction skills

Time scale recognition & scalable considerations

Common Environment, Networking & Collaboration-Building Environment

Customer focus groups

Changes the “outcome” of innovation from product to experience but doesn’t change how to create or manage ideas


Strategic Understanding of Service Systems- language, taxonomy, value propositions, transition points to service value, the differences between product & service needs.

Communications: education on policies, knowledge, resolution, compliance, expectations of consumer.

Resource Considerations: service and/or experience innovation demands an increased focus oninternal, capable resources who delight customers. Rapid assembly of diverse views in teams

Capability & Competency: High levels of ‘contact’ intensity and interactivity, empathic, discovering latent needs, invest in wider sources of knowledge for skilled, creative, open minded people

Culture & Climate is consistently on people issues: behaviors, service culture, deep insight methods, skill

retention, thinking and service mindsets

Interactions & Engagement by Customers provide the experience and feedback of value

Understanding customer needs and expectations

Customer Experience Journey

Dramatic changes to service levels and customer experiences

Voice of Customer / Ethnography

Roadmap of enquiry

Touchpoint mapping expertise of interaction points

Systems that manage customer interaction in all channels equally

Empathy

Aware of Customer Interface Focal Points

The promises you make need to be delivered

Experience Design capabilities

Analytical & Interpretation skills

Service/Experience Innovation

Accountability and decision making as closeto the customer as possible

Strategic Context


Go To Market



Delivering experiences not productsDiversity of expertise for inputs

High use of data mining

High knowledge intensive process

The ‘art’ of bundling to find the value points

Entire Lifecycle management- ruthless Exnovation

Issue path: nature of problem, function to resolve & structure to deliver solution


Service/Experience Model Maturity

Service models rapidly alter, expectations rise and service gives way to ‘experience’ innovation that builds value to all involved

• Firm progresses from meeting customer expectations to exceeding expectations, going beyond the norm.

• From satisfying customers in all touch points to delighting customers in all touch points with rapid and anticipatory responses that ‘delight’ and are appreciated.

• Moving from reacting to existing needs to anticipating new needs and surfacing unarticulated needs


Service/ Experience Innovation Pros/Cons

Service and experience innovation is valuable but difficult to achieve•Positives:

– Most distinctive form of innovation– Most difficult to copy or reproduce

•Cons:– Often requires a change in corporate culture– Hard to sustain without significant investment in people and

training– Difficult for firms with a product mentality to make the switch to

services or experiences


Needs-Based Innovation

Needs-Based Innovation

Needs-firstapproach, not

ideas-first

Search for Unarticulated

Needs

StructuredDiscoveryProcess

Opportunity Landscape



Needs Based Innovation• Needs based innovation is an approach that involves understanding

the “jobs to be done,” that a consumer is seeking to complete that a product or service can resolve. Developed from Christensen’s work and documented in Anthony Ulwick’s book What Customers Want.

• These insights are derived from a close attention to the consumers needs

• Unique factors include– Needs first- they lead, not ideas or technology first– Jobs (wanting)to be done, unarticulated needs– Structured and disciplined search process for unarticulated needs– Search for uncontested market space through opportunity landscaping


Business Case: value of ideas can be quantified when all needs are known

Lifecycle Management of Need: purpose, structure, content & syntax


EthnographyVoice of Customer

Scalable, repeatable, need based on the structure of the Desired Outcome Statement as the contextual clarifier and direction of improvement intent

Traditional commercializationand launch issues

Strategic Need: A rigorous controlled approach to collecting needs, formulating growth strategies and generating and validating breakthrough ideas.

Communications : Consistency in focus to find out the jobs customers are trying to get done

Resource Considerations: resources for turning job outcomes into insight, insight into products that resolve needs

Capability & Competency to manage projects from discovery to delivery based on rules-based disciplines, turning job outcomes into fresh insight, emphasis on market research

Culture & Climate requires intense focus on customer needsand jobs to be done.

Immersive research emphasis

Opportunity landscape modeling

Opportunity-based segmentation

Universal Job Map

Features & platforms, core jobs or related jobs, over served/ under served

Co-design with people’s needs

Needs first not ideas first

Underserved/ Overserved

Identifying Jobs-to-be-done

Needs Based Innovation

Ranking, evaluation, selection processes unchanged

Ideas generated based on “jobs to be done” methodology

Opportunity identification, data collection, pattern recognition, conceptualization, prototyping, testing, implementing

Strategic Context


Go To Market


Systematic Innovation Process Successful outcome measure: when it gets the job done to the satisfaction of the customer

When outcomes meets needs!

Idea Quadrant ranking-different paths

Setting desired outcome options

Exploring for uncontested market space


Needs Based Model Maturity

– As the model matures, needs based innovation becomes a fully integrated part of the innovation culture regardless of method or type of innovation practice.

• Perspectives shift from internal Brand Premise to understanding more of the customer expectations

• New solutions combine internal skills and external capabilities built around consistent customer experiences and how best can the jobs to be done that give value and more uncontested market space opportunities

• Culture shifts from “what we do best” to delivering Brand Reality that meets customers needs to do the jobs they want too achieve.


Needs Based Innovation Pros/Cons

Needs based innovation improves outcomes by reducing innovation “misses”•Positives:

– Ensures ideas are in line with customer needs and expectations•Cons:

– Requires very clear understanding of customer requirements– Insights may run counter to company strengths or investments– Insights may be difficult to acquire in firms with a technology-

led or R&D innovation focus


Design-led Innovation

Design-LedInnovation

Context, visualizingand framing

Designerattitude andPhilosophy

Designing functionand

aesthetics

IntegratingDesign



Design Led Innovation

• Design led innovation examines the concept of new product, process, service or experiences that connect with customers on a broader appeal of function and novelty through intentional design.

• Design provides the visual appeal, greater connection and identification for more value extraction.

• Unique factors include– Design considerations become integral to development– Implementing a design philosophy and in-built designer attitude.– Translating context, visualizing and framing concepts delivers new

dimensions of insight and discovery for ‘greater’ innovation potential– The aesthetic and symbolic to add novelty to any functional value


Business Case: justify, validate, and contribution of design into the processLifecycle Management: foresight, insight and alignment


Integrating into the Common Innovation Environment, Networking & Collaboration-Building Environment

Shaping Human Behavior Usability EngineersVisual Interface techniquesInformation Architects

Customer insights, concept designs, prototyping & testing, design implementation


Design thinking drives Strategy: visualize the future, create new markets, new offerings, different business models with new applications, new ways to connect with customers and in different collaborations

Resource Considerations: design treats innovation as holistic, synthesis, integrative, generative and optimistic in nature, it is visual and interactive

Capability & Competency: understanding contexts, framing problems, exploring alternatives, envisioning solutions, listening, interpretation and addressing problems or concepts

Culture & Climate- Design considerations are paramount

Use of deep workable core customer insights

Interactive design stimulus, cutting edge exploration

Designers role in a team- getting design ‘attitude’ into the long term mix

Context mapping

Creative sessions/ workshops

Design principle definitions

Design of Customer Journey Maps

Co-design and Co-create sessions with end users

Touch Points to explore

High levels of customer input

Reframing problems

Aesthetic, stylistic emphasis rather than functional change

Design Led Innovation

Strategic Context


Go To Market



Design considerations become the key criteriafor idea generation and evaluation

Impacts on commercialization and marketing

for firms with little priordesign focus or experience

Assessing quality of interactions

Result:“design is where problems are defined in new ways with design solutions generated.

Outcome: New dimensions of innovation come through design involvement


Design Led Model Maturity

– Many of the products and services we offer aren’t the result of an intentional, design led process

• “Design-led” innovation often starts with the design of physical products or spaces

• Design thinking then enters into customer service, process and customer experience

• As the firm matures, all new innovations are considered from a design perspective and with design tools and thinking paramount


Design Led Innovation Pros/Cons

Design thinking adds a unique approach but can lead to significant changes and costs•Positives:

– Design thinking creates holistic products and services– Products and services are innately attuned to customer needs

and expectations•Cons:

– Requires a very different perspective and approach than exists in many companies

– More beneficial for services or experiences than products– Requires far more research and investigation into needs and design

than many firms will invest


Business Model Innovation

Business ModelInnovation

Changing revenuestreams and cost

structures

New ValueProposition,

Constant Reiteration

Key resourcesand

Activity Clarity

Key Partnershipsand

Relationships




• Business model innovation reinvents the “model” of the business – changing the revenue streams or cost structures of the business. Drawn from Business Model Generation by Alex Osterwalder.

• Unique factors include– The value has to be well articulated so its ‘disruptive’ aspects are seen

and evaluated against existing models– The level of resources and the activities need to be well stated– The key understanding of different partnerships and relationships

needs identifying to provide difference.– Identifying revenue streams and likely cost structures provide the ROI

and impact evaluation.– Articulating the VP through different customer segments and channel

identification targets.


Business Case: high level justification for risk assessment, validate, cost sided & value sided considerations, articulating the exact proposition, recognition this can undergo a number of

iterations

Lifecycle Management

Launch & Measure Impact- is it disruptive, designed to do as intended, can it be copied easily

Primary Focus


ScoutingTrend Spotting

Scenario Planning

Discovery, Clarification

Execution of ideas may mean dramatic changes to

existing models and processes or designing new

‘stand alone’ ones

Synchronize Build Manage Test Monitor Measure

Scalability issue as business model innovation is infrequent/rare

Providing consistent, early warning, fast feedback to fine-tune and adapt to knowledge learnt

Strategic Considerations: Business model innovation impacts thestrategic framework of the business, changing how the firm delivers value

and how it gains revenue. initiatives. Clear philosophy in intent and conceptResource Considerations: Knowledge of business resources available/ needed, supporting processes that can be different, the target groups and channels to focus upon. Strategic development , communications and broad negotiation experience.

Capability & Competency issues: process tensions, content issues and context paradoxes, system design understandings

Culture & Climate: Alignment to existing practices or degree of separation and the impactContext, design

drivers & constraints

Defining new value proposition

White Space Exploration

Opportunity recognition & positioning skills

Synthesizing skills

Work flow and job design


Difficult idea generation as new business modelschallenge the status quo

Evaluation and selection difficult as criteria for business model innovation challenges existing concepts

Fresh insights on potential market and customer needs not being delivered today

High initial levels of adaptability & flexibility

Strategic Context


Go To Market



Exploring the full linkage of any BM in evaluation The ability to ‘pivot’ through testing

Clarity of Competitive positions


Business Model Innovation Maturity

– As the model matures, Business Model innovation focuses on increasingly exploring :

• Unarticulated market needs• White space opportunities• Entirely new business models, that explore different channels,

products or services not seen before.• Improve, disrupt or transform existing BM into new better models

that meet changing market needs• Disrupting existing practices, networks or relationships• Breaking the existing BM into different parts to extract more value• Bringing new technologies that require different approaches.


Business Model Innovation Pros/Cons

Business model innovation is dramatic but can change market dynamics•Positives:

– Create entirely revenue streams or cost models– Change the structure of the market or industry– Force competitors to react

•Cons:– Requires a change to an embedded business model



OperationalInnovation

Knowing Your Pain Points

Step Change in Performance as Goal

Current Sources of Inertia

New Ways of Working& New

Behaviours



Operational Innovation• Operational innovation is when breakthroughs in existing performance have to

be made, a ‘step’ change not an incremental one to extract cost or improve just efficiency .

• At this operational level, we can identify management practices, management processes, management techniques and organizational structures as those potentially requiring significant change to the rules and routines by which work gets done inside organizations

• A high competence of change-ready needs to be present• Unique factors include:

– This requires a ‘step change’ on performance caused by changing events and shifts that need responding too

– Having a clear understanding of the different (multiple) pain points that need reflecting upon and changing

– The need is to engage the hearts and minds of all involved in the evaluation promoting a strong sense of urgency, overcoming inertia

– Ending up with new ways of working and different behaviors.



Lifecycle Management approach

Primary Focus


Areas of Operational Innovation opportunity :

-Customer Loyalty-Cycle time reduction-Development process

-Time to service initiation-Outsourcing

-Shared Services-Integrated Global Delivery

- Cost Drivers- Pain points for customers

Clear Investigation & Validation methods

Regular Innovation Development Program is Established and Separate from these more breakthrough initiatives

Scalable, repeatable, well integrated end-to-end need.

Strategic Intent: redesign of operational processes to achieve internal breakthroughs in innovation performance

Communications need to articulate the problems and be disciplined

Resource Considerations: This is not TQM/ Six Sigma, Incremental, it is thinking through a ‘step-change ‘and needs a high competency of change readiness, industry awareness, shared accountability, objectivity,, risk management Capability & Competency Build Elements: taking a more holistic

approach to redesigning for breakthrough results as markets mature and change, products and processes shift and the result in performance diminishes. Strong positioning skills & business development process

Culture & Climate ‘must’ alter the ‘status quo, realign and commit fresh resources, HR reinforces new behaviors, watch for systemic inertia as trigger for change

For operational innovation to succeed,the process must be persistent, constantlyconsidering new ideas with clearly defined

evaluation criteriaQuick, accurate measurement of benefits and ROI impact

‘The invention and deployment of new ways of doing work’

Ongoing targets: Achieve scale, breakthrough in efficiency , flexibility, effectiveness and agility

Process expertise

Engineering & Design Skills

Operational innovation

Rapid testing and deployment of newoperational processes

Strategic Context


Go To Market



Degree of change and strategic need

Change measurement criteria1) cost drivers of the business, 2) competitive differentiation points, 3) problem areas for satisfaction points for

customers.

Exploring upstream and downstream potential & implication assessments

Early warning systems awareness


Operational Innovation Maturity

As the model matures the key to operational innovation needs to centered around certain criteria:– Processes that influence (perception of) value– Processes that influence strength of (changing) relationships– Processes that influence (perception of) adding greater service– Processes that when combined with other parties accelerates and reduces

costs.

Consistently looking at– The cost drivers of the business– The competitive differentiation points– Problem areas for satisfaction points for customers– For example: when the design, production and maintenance of products,

processes and services, are distributed across extended organisational networks, are they at the same time, innovative and dependable?


Operational Model Innovation Pros/Cons

Operational Model innovation differs from Lean/Six Sigma•Positives:

– Focuses on “step change” operation or process needs– Dramatically improves or eliminates process steps or operations– Radically reduces costs or improves process or service

•Cons:– Very easily confused with Six Sigma or Lean processes– Often focused on very incremental issues


Technology-led Innovation

Technology-LedInnovation

Clarity of Purpose& Potential

Disruptive Potential

Evolutionary or Superior

to Existing

Advocate of Change Leads



Technology-led Innovation• Technology-led innovation looks to exploit advances.

• The choice is does technology lead or support concepts, market ‘pull’ or technology ‘push’ and depends on its potential to disrupt or enhance to contribute to innovation change.

• Unique factors include– Technologies ‘disruptive’ potential has to be seen and evaluated

against existing offerings for assessing its value– Is it evolutionary or superior to what is available– The clarity of its purpose and potential needs defining, correct arenas,

targets and actions.– A clear champion & advocate of the change needs to lead.


Business Case: justify, validate, disruptive nature or supporting technology clarity/ role

Lifecycle Management: links of technology to R&D

Launch & Measure Impact & EffectsGame changing or Incremental


Common Environment Needs: Platforms, Networking & Collaboration-Building Environment

ScoutingNetworking

Trend Spotting

Execution Management dependant on solution sought

Synchronize Build Manage Monitor Measure


Providing Consistent Feedback for updates, modification

Strategic Position: Addresses the effective identification, selection, acquisition, development, exploitation and protection of technologies

and their contribution to innovation.

Resource Considerations: Does technology lead or support the application of concepts? Has it the potential for disruption or promoting/ supporting through technology change ? Is the technology superiority or evolutionary.? Does it advance a market position & extend business performance based on the innovation strategy to be taken?

Capability & Competency Build: Curiosity, building of distinctive competencies, clarity of purpose., having a strong stable plan of advocacy if technology can ‘disrupt’

Piloting Prototype & Testing Environment

Metrics & ROI: acceptable, feasible and enduring in value to customers

Growth platform validation

External supporting networks for application of concept

Market ‘pull’ or technology ‘push’

Orientation- needs based diffusion strategies

Synchronization & Visibility

New or Unexpected markets to watch for

Strong linkage to design innovation in synthesis potential, style and humanity considerations and science and technology

‘’Crossing the technology chasm’’ for adoption success

Pattern recognition

Focus on cross development and integration skills

Clear Links between engineering, research and design

Value chain opportunities

Adoption/ Diffusion understanding

Culture & Climate: Highly skilled and focused competencies, open environment to explore and experiment, looking to extend beyond the existing

Technology-led Innovation

Strategic Context


Go To Market



Utility or Mechanism decision for Competitive Advantage


Technology-Led Innovation Maturity pathRecognize the stages to go through with technology-led innovation

• Innovation Decision Process theory. Adopters of a technology progress over time go through five stages in the diffusion process. First, they must learn about the innovation (knowledge); second, they must be persuaded of the value of the innovation (persuasion); they then must decide to adopt it (decision); the innovation must then be implemented (implementation); and finally, the decision must be reaffirmed or rejected (confirmation). The focus is on the user or adopter.

• Rate of Adoption theory. Diffusion takes place over time with innovations going through a slow, gradual growth period, followed by dramatic and rapid growth, and then a gradual stabilization and finally into a decline.

• Perceived Attributes theory. There are five attributes upon which an innovation is judged: that it can be 1) tried out (trialability), that results can be 2) observed (observability), that it has an advantage over other innovations or the 3) present circumstance (relative advantage), that it is not 4)overly complex to learn or use (complexity), that it fits in or is 5) compatible with the circumstances into which it will be adopted (compatibility).

• Need-based Diffusion Strategies - Need for recognition and process involvement. The chances of successfully "selling" - Need for vertical support structure to overcome technophobia. Support provided by staff for discipline/content credibility - Need for well-defined purpose or reason. If the innovation can be demonstrated as an effective, efficient and easily applied solution to those focused needs, it is more likely to be adopted and integrated. - Need for ease of use and low risk of failure. Need for ease of use and early success - Need for institutional/administrative advocacy and commitment. Promote the conditions and activities that can enable adoption to prevail.


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Strategic Considerations: we’re really serious about innovation. In terms of the future of management, we’re at the beginning of what will be a fairly long journey where innovation lies at the very core

Capability & Competency issues: In a company you often can't change what managers do in any direct way. You can only change it by changing the processes that govern their work that will allow organisations to reach new performance thresholds

Strategic Development: Developing a partnering strategy and identifying the best possible innovation partners, concern for constant fit and relevance of propositions

Capability & Competencies based upon ‘Distributed’ Co-creation in a web of networks of suppliers and independent specialists

Strategic Partner and Preferred Choice Clarity

Strategic intent: Leadership in creating new to the world ideas that create defensible intellectual property, and unlock value

Capability & Competency: Creative thoughts, experimentation, selection, testing, market appraisal, resolution of scientific and technical uncertainty, to ‘see beyond’ for potential discovery

Strategic Understanding of Service Systems- language, taxonomy, value propositions, transition points to service value, the differences between product & service needs.

Capability & Competency: High levels of ‘contact’ intensity and interactivity, empathic, discovering latent needs, invest in wider sources of knowledge for skilled, creative, open minded people

Strategic Need: A rigorous controlled approach to collecting needs, to then formulating growth strategies and generating and validating breakthrough ideas.

Capability & Competency to manage projects from discovery to delivery based on rules-based disciplines, turning job outcomes into fresh insight, emphasis on market research

Design thinking can drive Strategy: visualize the future, create new markets, new offerings, different business models with new applications, new ways to connect with customers and in different collaborations

Capability & Competency: understanding contexts, framing problems, exploring alternatives, envisioning solutions, listening, interpretation and addressing problems or concepts

Strategic Considerations: BM are bound inextricably to the type of philosophy you want to pursue, it is a design process within its self, the heart of it is the value to the consumer and how it links to other strategic innovation initiatives. It is the point of departure where all else flows

Capability & Competency issues: process tensions, content issues and context paradoxes, system design understandings

Strategic Intent: redesign of operational processes to achieve internal breakthroughs in innovation performance

Capability & Competency Build Elements: taking a more holistic approach to redesigning for breakthrough results as markets mature and change, products and processes shift and the result in performance diminishes. Urgency need

Strategic Position: Addresses the effective identification, selection, acquisition, development, exploitation and protection of technologies and their contribution to innovation.

Capability & Competency Build: Curiosity, building of distinctive competencies, clarity of purpose., having a strong stable plan of advocacy if technology can ‘disrupt’

Strategic statements Capability & Competency statementsSummary


Culture & Climate: We need to change our orthodoxies that bound our thinking—the habits, dogmas, and conceits we have never taken the trouble to challenge

Resource Considerations: We need to quickly discover that there is still a big gap between our rhetoric of innovation and the reality.

Culture & Climate: Establishing the value of an open collaborative model and its more different social practices

Resource Considerations: Finding the best partners, engaging the partners and customers, vetting ideas and intellectual property, abilities to make clear connections, networking emphasis.

Culture & Climate: Focus on investigation and research into critical problems. Careful to avoid “blockbuster” mentality. Reward mentality for orientation, project delivery emphasis and resolving roadblocks

Resource Considerations: Increase the stock of knowledge, broad & narrow ‘in-house’ expertise, responsiveness, commercially aware, experimental learning, profit-sharing view

Culture & Climate is consistently on people issues: behaviors, service culture, deep insight methods, skill retention, thinking and service mindsets

Resource Considerations: dynamic configurations that rapidly change and need to respond, that focus on solutions that people see compliment their lives, quick team assembly, diversity of views

Resource Considerations: the structure for turning job outcomes into insight, insight into products that meet customer needs correctly through a very collaborative internal process

Culture & Climate needs to provide a sequenced and focused idea generation environment based on customer expertise.

Culture & Climate- people first, business second- the human side of innovation Resource Considerations: design treats innovation as holistic, synthesis, integrative,

generative and optimistic in nature, it is visual and interactive

Culture & Climate: Alignment to existing practices or degree of separation and the impact

Resource Considerations: Knowledge of business resources available/ needed, supporting processes that can be different, the target groups and channels to focus upon. Strategic development , communications and broad negotiation experience.

Resource Considerations: This is not TQM/ Six Sigma, Incremental, it is thinking through a ‘step-change ‘and needs a high competency of change readiness, industry awareness, shared accountability, objectivity,, risk management, shared reporting, engaging hearts and minds in the need for change

Culture & Climate ‘must’ alter the ‘status quo, realign and commit fresh resources, HR reinforces new behaviors, watch for systemic inertia as trigger for change

Resource Considerations: Does technology lead or support the application of concepts? Has it the potential for disruption or promoting/ supporting through technology change ? Is the technology superiority or evolutionary.? Does it advance a market position & extend business performance based on the innovation strategy to be taken?

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Climate & Culture statements Resource Considerations statements


Why does structuring innovation really matter?Many companies fail to extract the most from their investments in innovation, this can be attributed to many pitfalls, to name a few:

1.Not having a complete understanding of innovation, all the different options to achieve a sustaining innovative organization2.Insufficient insight into what customers really want 3.Failure to make innovation connected and explicit in vision, objectives and part of the strategy and fabric of the organization4.Lack of balance between the ‘dynamic’ parts required to be successful5.Weak links between business strategy and product portfolio6.Insufficient engagement of the whole organization to pursuit innovation7.A lack of resources or not placed in the appropriate part that brings value in your high priority areas.8.A weak innovation process that places its focus on one part, not appreciating the whole process needs equal emphasis9.A missing set of enabling structures within the organization10. Knowing that different types of innovation require ‘distinctive’ recognition

Nurturing and managing innovation is an intricate process that is demanding.


Paul Hobcraft• Email :

[email protected]• Phone Number

+65 91 751 4350

Jeffrey Philips

• Email: [email protected]

• Phone Number+01 919-844-5644

For Europe, Africa, Middle East & Asia For North & South America

Contact Details Collaborative Innovation Reference Framework

►Go to the Wiki on http://cirf.pbworks.com