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1Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Innovation is probably p ydifferent thanyou think…
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 1
On innovation effectiveness…A quick look at key processes
1 Fundamentals: look for the right things22Processes: look in more effective ways
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 2
2Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Innovation fundamentals.1fundamentals
R hi ki h i i i[ ]
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 3
Rethinking what innovation is…[ ]
Structural drivers behind the growth in “innovation”
A new discipline of innovation is emerging today because:• Companies need new discoveries and strategies to drive organic growth• Innovation successes are now noticed and even expected by analysts• Industries and enterprises must grapple with an increased rate of change• Operational excellence is no longer differentiating enough• Methods and tools are emerging that vastly improve innovation success rates• Design, from cell phones to hotels, is now an imperative for competitiveness• Innovation has evolved beyond technology planning to embrace a broad
array of strategy, market opportunity and operational questions• It adds new options to consider along with where to play and how to win
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 4
It adds new options to consider along with where to play and how to win…
3Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
“It is not the strongest of thespecies that survive, nor the mostintelligent, but the ones mostresponsive to change ” Except in responsive to change.Charles Darwin
pKansas…
“If you are not moving at the speed of the marketplace you’re already dead—you
just haven’t stopped breathing yet.”Jack Welch
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 5
Don't know our customers well enough. Worse yet, many here think we do. • We're too inwardly focused.We look at EVERYTHING through our company lens, all the time. • Keep trying to fix the problems of thepast instead of looking for future opportunities. • We always look in the same places for innovation ideas.• No implementation/ execution. Good ideas go to a shelf. • Our problems are in generating sales of ourexisting products, not making new products. We’re good at that. • We never talk to each other aboutinnovation. • People are afraid to try anything innovative. Failure is punished severely, so just don't stickyour neck out. • Our systems/ structures inhibit/ punish people for trying to innovate. • Our seniorleaders are not fully committed. • Our culture is anti-innovation, pro-incrementalism. • We don't have theright mindset/ culture for innovation. • Pressured to exceed quarterly expectations or Short termincentives = incremental innovation. • Innovation seen only as new products. • We have too manyproblems fighting off our competitors me to products • We're stuck right where we were 5 years ago Iproblems fighting off our competitors me-to products. • We re stuck right where we were 5 years ago. Idon't know what the obstacle is! • No burning platform to innovate. • If it ain't really, really broken . . . •We fear cannibalization. • We can't bring big ideas from 50,000 feet to the ground. • Lack the ability toturn a bright idea into reality. • The ideas we have just aren't big enough to significantly impact our topline • We don't have the guts to take a risk. • Too many internal factions among our business leaders. •Other business units don’t want to play nice together. • We can't even see across the organization. Wedon't share information or ideas. We may have 5 groups working on similar initiatives. • Our departmentdoesn't have the right skill-sets for innovation. • We're all too busy. Nobody has time. • R&D is the placeresponsible for innovation, not here. • We only have one person who is allowed to innovate (CEO or othersenior leader). • We think we know all the answers already. • We prioritize judgment over passion,predictability over validity. • Our Innovation management process strangles any powerful ideas through
Obstacles Abound—there are plenty of excuses not to innovate
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 6
p y y g p g y p gthe hurdles. • We never invest in major innovation, except with our IT spend. • We have an engineeringculture. We focus on product performance and functionality alone. • We need proof of success beforewe'll invest anything. • We don't know how to prioritize ideas, or what to do with our huge database ofideas. • We don't know how to be creative/ generative, only analytical/evaluative. • We are soentrenched in our value chain – they dictate what we do. • We don't partner well with others. We fight withour partners on price. • Our channel resists change and innovation, so we're wasting our time. • Wehave to concentrate on our core market to garner any support & that business has too many legacyproblems to deal with. • We can't break away from competitors. We're fast followers. ‘Not invented here…’
4Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
What if almost everythingwe believe aboutwe believe aboutinnovationi ?
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 7
is wrong?
Effective innovation blows up many cherished myths…
Start with brainstorming!Mostly enhance
your creativity…Build on your
segmentation…
Think outsidethe box…
Protect your patents!Innovation is
pla f l
Do financial analytics after brainstorming…
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 8
Study your users! Trust the
stage gates…
playful…
Build fast prototypes…
5Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Effective innovation blows up many cherished myths…
Abandon thebrainstorming!Use discipline
above creativity…Ditch your
segmentation…Apply multiple
Use several innovation types… Pursue platformsnot products!
Think insidethe box…
Share your patents!It isn’t playful,
Do financial analytics after prototypes…
pp y pdiagnostics…
Use explicit step
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 9
Study non-users! Crash the
stage gates…
it’s brutal…
Build conceptprototypes…
Use explicit step-by-step protocols…
Ten types of innovation: move beyond products to win
6. Product systemextended system that surrounds an offering
5. Product performancebasic features, performance and functionality
2. Networkingenterprise’s structure/
l h i & t i
1. Business modelhow the enterprise makes money
7. Servicehow you service your customers
Product performance
OfferingProduct system
ServiceBusiness model
FinanceNetworking
value chain & partnering
Core process
Process.Enabling process
3. Enabling process
Channel
DeliveryBrand Customer
experience
8. Channelhow you connect your offerings to your customers
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 10
assembled capabilities you typically buy from others
4. Core processproprietary processes that add value
10. Customer experiencehow you create an integrated experience for customers
to your customers
9. Brandhow you express your offering’s benefits and ideas to customers
6Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Dell: innovation assessment
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 11
Eight types:
Apple integrated music offering…
iPod familyThird party accessories
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 12
Eight types:
7Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Google: Innovation assessment
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 13
Eight types:
Target: innovation assessment
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 14
Seven types:
8Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Time to play: Spot the innovation!
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 15
All companies need to innovate… – Innovation improves the appeal and value of your brand– Innovation protects your margins
Fundamentals: some basics
p y g– Innovation helps you stand out in a crowded marketplace– Innovation helps you attract and keep talent throughout the firm– Innovation can help change negotiations with tough customers– The topic is heating up—in firms, in schools and for governments
But most innovations fail!– A “normal” failure rate worldwide is 96%!
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 16
A normal failure rate worldwide is 96%!– Most firms generate too many ideas and don’t execute well
This is evidence of bad assumptions compounded by bad methods
9Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Innovation processes.2processesGetting innovation to work…[ ]
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 17
Use proven innovation protocols…
Protocols help people do what is f f
p
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 18
most useful in the heat of battle…
10Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
So what’s the deal with stage gate processes?
Stages
Conception Preliminary investigation
Detailed investigation
Development Testing and validation
Full production and launch
Idea funnel
Second screen
Business case
Post-development
reviewPre-launch
analysisInitial
screenGates
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 19
Source: adapted from R. G. Cooper
foster initiativesdiagnose situation
Innovation Discipline Model
declare intent
set conditions
authorinitiatives discover invent launch extend
Leaders are responsible for defining prioritizing,
Project teams are responsible for managing innovation programs -
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 20
fo defining p io iti ing, developing and managing the firm’s innovation resources and capabilities – the units of optimization
g g p gthe units of action
11Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
AbstractInnovation operations
Know
Know Make
FrameInsights
Know
ExploreConcepts
MakePlans
KnowCompany
KnowUsers
Real
KnowIndustry
KnowContext
RealizeOfferings
Platform developmental protocols…Innovation toolkits replace brainstorming…
22A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9
12Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Invent: grounded, collaborative ideationInnovation prototypes–clarify your boldest business bets...
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 23
How do you sell insurance to 18-35 year old people convinced that there is nothing in the world less cool than insurance?
PerceptionsAffordabilityTrust
Design principles were developed for use in concept development.
• Use channels that are
WellPoint: Creating value for non-users
Entitlement
BehaviorsProcrastination
ComprehensionComplexityChannelsShopping beliefs
familiar to this demographic
• Limit plan variations to reduce complexity
• Focus on the risk of accident from active lifestyles
• Communicate the high cost of uninsured hospital care
• Provide some kind of benefit to people who use minimum
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 24
ProcrastinationBudgeting
to people who use minimum care during a year
• Market to parents of the prospect as well as the prospect
13Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
The role of Business Concept Illustrations…
The surprising impact of faking a new business fast and cheap
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 25
business fast and cheap…
Business Concept Illustrations—two types
1. Brand & business experienceStep-by-step scenario of the customer experience how it will feel
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 26
2. Business operational conceptValue proposition and clear operational consequences—how it will work
experience—how it will feel
14Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Business Concept Illustrations—type 1: experience story
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 27
Business Concept Illustrations—type 1: experience story
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 28
15Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Business Concept Illustrations—type 1: experience story
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 29
Business Concept Illustrations—type 2: operational story
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 30
16Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Tonik: the business concept, as implemented
Tonik is a health plan aimed at 19-29 year olds, a population that is hard pressed to see the need for, let alone shop for health insurance. Tonik is Blue Cross of California’s f t t lli h lth l ith thfastest selling health plan with more than 50% of sales going direct, bypassing the agent channel.The plan provides first dollar coverage for doctor’s visits, eye exams and dental work, features young
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 31
people care about.
Tonik: the business concept, as implemented
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 32
17Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Working with the client and prospective customers, the business concept was refined and implemented in record time.
Helmet: Impact
Went to market as Tonik33,000 customers in year one
(443% over plan)
>$2 million contribution to the bottom line in year one.
More than 70% of sales are being made online, bypassing the
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 33
, yp gagent channel.
Six innovation types:
Develop a signature innovation competence
Sometimes HOW you do something proves to
p
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 34
be as important as WHAT you choose to do…
18Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
Decoding P&G’s Connect & DevelopSM, 2001-2008
Technology &
Invent it in-house
Leverage others
DesignBusiness
ManufacturingTechnology
Game Boards
Study convergences
Choose where to play
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 35
Top Ten Consumer Needs
Adjacencies
Embed designers within BUs
Engineeringdriven
Customerdriven
Innovate with teeth
A huge shift in innovation success rates occurs
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 36
when it is tied to metrics and incentives…
19Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
GE Imagination Breakthroughs… 2007
GE under Immelt has attached innovation to global variable pay– 130 projects that are getting direct CEO-level attention– Designed to move its organic growth rate from 5% to 8%g g g– Blockbuster projects that will take GE into a new lines of business,
geographic areas or customer bases. – Each IB needs to give GE incremental growth of at least $100
million in 3 to 5 years – CEO Jeff Immelt has agreed to invest $5 billion in 130 IB’s—from
microjet engines to the GE Money Bank in Europe—to generate $25 billi i b YE’09
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 37
$25 billion in revenue by YE’09
Each division integrates sustainable product & production
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 38
20Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
GE commits $6B towards sustainable healthcare by 2015
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 39
Consumer health media
So how do we act effectively amid uncertainty?
Look backwards to discern facts, conditions & trendsKey fields: business analysis; trend tracking; innovation diagnostics
Look sideways to find out what else is going onLook sideways to find out what else is going onKey fields: benchmarking; pre-cursor analysis; pattern recognition
Look at people to understand their behaviors and needsKey fields: behavior modeling; ethnography; behavioral economics
Look ahead to predict future possibilities and situations Key fields: demography; simulation; scenarios; genetic algorithms
40A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9
21Copyright © 2009 Doblin Inc ABPMP • On Innovation Processes • Keeley • June 2009 •
A short summary… the basics that matter for innovation
Know the fundamentals1Get beyond productsUse many types of innovationDiagnostics help here
Have an innovation goal2
Build fewer, bolder concepts3
Make customer discoveries Identify changing themesBuild an innovation intent
Use clear protocols Have teams author platformsBusiness development toolkits
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 41
4 Implement clearly & swiftly
You should now expect innovation hit rates between 35 and 70%
Prototypes not spreadsheets Focus on hardest challengesBusiness concept illustrations
A t th tAccess to these notes:http://clientweb.doblin.comlogin: ABPMPpassword: innovationAccess will expire in two weeks
Innovation effectiveness
A B P M P • O N I N N O V A T I O N P R O C E S S E S • J U N E 2 0 0 9 42
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