Colorado State University PLI Presentation

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Colorado State University PLI Presentation

Chris J . Chr istopherA p r i l 3 , 2 0 1 4

Innovation – Growth & RenewalI. Reasons to Innovate

II. Context and Challenges

III. Create an environment for Innovation

IV. Innovation Delivery Requirements

V. Success story

VI. Innovation & you

VII. Take-aways

2 Chris J. Christopher – April 3, 2014

Innovation


Innovation is the application of resources

to produce a new or improved product or service that delivers superior value

to the market

Chris J. Christopher – March 30, 2012

The Innovation Lift

Chris J. Christopher – April 3, 2014

Innovation

+DGross Margin

Higher Investment

Business Growth

Competitive Differentiation

+DValue

Resources

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Why Innovate?

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Defensive

Offensive

SocialEconomic

• Survival• Preserve Jobs• Preserve the

environment

• Market Share Growth

• Revenue• Profit

• Improve quality of life• Growth in jobs• Meet personal

aspirations • Have fun


Why Not Innovate?

• What we have works• It is too expensive• No work-arounds on our patents• Our markets do not change• We do not want to confuse our

customers• We intend to sell the company


Innovation Exercise #1

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• Identify a product or service that you believe represents an innovation

• What criteria did you use to come to that conclusion?


Organizational Structure

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Business Groups&

Operating Divisions

CEO

Corporate Functions

ProcurementSupply Chain

ProcessesResearch

LabsBus #NBus #1


Business Drivers• Deliver on Financial

commitments−Revenue

−Profit

• Focus on the next product cycle• Take care of current customers• Respond to competition


Inhibitors to Innovation

• Management short term focus• Lack of resources devoted to

innovation• Core business commoditized lower

margins lower investment for innovation

• Risk avoidance• Lack of core competence on how to

innovate10 Chris J. Christopher – April 3, 2014

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Innovation in Context

Existing Enterprise New Venture

Culture +++ +

Structure +++ +

Management Know-how +++ +

Processes +++ +

Resources +++ +

Market Research +++ +

Ambitious Aim + +++

Focus Customer Product11


Create an Environment for Innovation

Hard Moves• Fenced allocated

resources• Explicit expectations &

measures• Specific Rewards• Core competency

− Multi-disciplined− New talent

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Soft Moves• Management interest &

attention• Public recognition• Nurture a culture of

innovation


Innovation Strategies

• Part of the ongoing business processes−Aggressive goal setting

−Disciplined leadership & management

• Structured, focused innovation team• Ad-hoc• Acquire from the outside


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Operating Division #1

R&D

Program #1… Program # N

Marketing Supply Chain Quality

Innovation expected as part of the ongoing

programs

…

…

EVPBusiness Group


Investment Model

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New developments

Adjacent products & markets

Core product lines70%

20%

10%


Key Success Factors

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Innovation

Quality

Time to MarketCost

Chris J. Christopher – April 3,2014

Innovation & the Value Chain

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• Innovation opportunities• Explicit identification of

differentiation• Value chain stage dependencies

Product Generation Marketin

gSales Supply

ChainCustomerSupport


Transformation of a Business

Average Selling Price $25K-$40K $2K

Average GM 35% - 40% 20%

R&D as % of Revenue 6% - 8% 2%

Opportunities for Innovation Multiple Few

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Business Model Proprietary Technologies Industry Standard


Innovation Exercise #2

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• You have been promoted to a business manager and are facing the ominous shift of the business model from proprietary to industry standard technologies.

• What do you intend to do about the business you inherited?


Innovation & Team Work

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Do the right thing

Brea

king

Gla

ss

Do it right

Optimum Results


Status quo

How Do I Innovate?

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Innovator

Personal Attributes• why is it so?• be resourceful• engage with customers

Broad Interests• look outside your

industry• partake in the arts• smell the flowers

Commitment• passion• perseverance• energy


Take-aways

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• Your current product, process, value proposition and/or business model will lose the competitive edge

• Innovation is the lifeblood of the entity that enables growth

and renewal • Understand the broader context• Gain in-depth understanding of the customer

needs• Set an innovation expectation for yourself &

demonstrate the initiative and leadership to nurture innovation


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Back up Material

Creation of an OEM Business

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Design Prototype Test Manufacture/Sell

Design Proto/Test FDA Approval Manuf/Sell

Vendor

Customer

Introduction Obsolescence

Introduction

• Focus on the customer need• Innovate in multiple stages of the value chain• Innovate on the relationships with the customer


Documents

Colorado State University PLI Presentation