Copyright © 2013 by Deloitte Touche Tohmatsu Limited.

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COMPANY CONFIDENTIAL

Innovation to Drive Results

Singapore, August 14th 2013

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

For centuries, innovation has been a key flag raised by

global leaders and thinkers

2

How would you define Innovation?

Is Innovation important? Why?

Are you and your organization good innovators?

3

4

Doing

something

different

For our customers,

our enterprise, and

our society

Which is

different than

invention

Innovation is the creation of new

value for the world

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

Study on Innovation in

Singapore

5

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Companies with CEOs Interviews

In a study, conducted by Monitor Deloitte and IPS, we asked

similar questions to local and MNC’s based in Singapore

Sample of Companies Surveyed

6

Source: IPS – Monitor Innovation Study

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Results suggested CEOs consider Innovation important ...

How Important is Innovation for

Achieving Your Company’s Goals and

Ambitions?

0%

10%

24%

26%

40%

Important

Very

Important

Essential

Somewhat

Important

Not Important

Who is Directly Responsible for

Innovation in Your Organization?

18%

3%

23%

28%

28%

No One Explicitly

R&D Director

Team of Directors

Senior Executive

or a Member of the

Board

CEO or Director

for Innovation

90%

56%

7

Source: IPS – Monitor Innovation Study

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Do You Have Sufficient Innovation

Assets (e.g. Labs, Equipment, Tools,

etc.)?

Do You Have the Human Resources

to Implement Innovation?

… and have effectively invested in the process, systems and

people to drive innovation

48%

33%

5%

15%

Lackingneeded skills

Having skillsand critical

size

Top-notchskills and

size

37%

47%

3%

13%

LackingMany Assets

LackingSome

HavingMost

World-ClassFacilities Needed

skills but not

sufficient size

87% 85%

8

Source: IPS – Monitor Innovation Study

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Corporations are moving towards a more innovation-

friendly culture

9

49%

82%

45%

15%

6% 3%

0%

25%

50%

75%

100%

Today Desired In 3 Years

Empowered

Innovative

but

Command

& Control

Command &

Control

Quotes from Interviews

“We see ourselves as an ‘innovator company.’

That’s something we strive for. So driving

innovation is a constant part of the culture

around here.”

“People’s minds are clear that this company is

about innovation. And so they are clear as to

what they should be doing and what they

should be rewarded for.”

“Innovation is almost a culture in our

company.”

“Yes, people can try and fail in our

organization, but only once”

“ How can I innovation in a company that

makes billion-dollar projects”

“I need to fix my daily problem, after that I can

innovate”

What is the culture of your organization

towards innovation?

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Percentage of Respondents Citing Element Innovation is ...

59%

49%

13%

10%

Channels, Business

Models, Partnerships

Businesses / Growth Engines

However, most of the focus is still given to a traditional

and limited definition of innovation

Process, Materials, Methods

Products, Services

Traditional

Innovation

Broader

definition of

innovation

10

Source: IPS – Monitor Innovation Study

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Additionally, even though leadership owns Innovation, it is

often delegated to managers

11

18%

3%

23%

28%

28%

No One

Explicitly

R&D

Director

Team of

Directors

Senior Executive

or a Member of

the Board

CEO or Director

for Innovation

56% Managers: Dept. Managers

Temporary Staffing

Other Initiatives: Quality Circle

Six Sigma

Who owns Innovation in your

organization?

Results

Source: IPS – Monitor Innovation Study

Focus on Tactical Innovation

Delegation of

Responsibility

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Innovation is largely limited defined and tactical rather

than broad and strategic

Cost Reduction,

Efficiency,

Quality

Short Term and

Incremental

Operational

levels

Growth

Long Term and

Breakthrough

Top leadership

Focus of Innovation Limited and Tactical Broad and Strategic

Fo

cu

s o

f th

e c

om

pan

ies s

tud

ied

New and better

Products

and Services

New business

model, new ways

of working, new

partnerships

12

Source: IPS – Monitor Innovation Study

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

Lessons from Successful

Innovators

13

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Successful innovators apply a number of core principles

to innovate reliably and repeatedly

14

1. Set a clear ambition and focus for innovation

2. Think about innovation as a portfolio

3. Use multiple types of innovation

4. Be intensely curious about customers (and non-customers)

5. Continuously challenge orthodoxies to reframe opportunities

6. Look outside company for insights, ideas and opportunities

7. Take a disciplined approach to innovation — and to building

innovation capabilities — to ensure ongoing success

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Thinking broadly about innovation

15

Network Connections with others to create value

Process Signature or superior methods for doing your work

Product System Complementary products and services

Channel How your offerings are delivered to customers and users

Customer Engagement Distinctive interactions you foster

Profit Model The way in which you make money

Structure Alignment of your talent and assets

Product Performance Distinguishing features and functionality

Service Support and enhancements that surround your offerings

Brand Representation of your offerings and business

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

10 Types of Innovation

16

80% of the

Innovation

Efforts

80% of

Innovation

Returns

Building an Innovation Engine involves four critical building

blocks

APPROACH Clear definitions for

the work to be done

in creating

innovations—the

phases, activities,

deliverables, and

decision rights

ORGANIZATION The units that house the

innovation competency –

teams, divisions,

leadership—along with

the interfaces that

connect it to the broader

enterprise and the world

RESOURCES & COMPETENCIES The individuals who

perform the work of

innovation; the skills,

tools, and training they

need to do it capably, as

well as the funding and

time to fuel it

METRICS & INCENTIVES The targets to guide

performance; the

measures to evaluate

progress and the

incentives (monetary and

otherwise)

to drive supporting

behaviors

“Innovation should be not only a function but also a discipline”

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

Case Examples

18

Examples of 10 Types of Innovation

© 2 0 1 2 M o n i t o r C o m p a n y G r o u p L P —

C o n f i d e n t i a l

20

SIMPLE RADICAL

TRANSFORMATIONAL ADJACENT CORE

1-3 types

of innovation 4-5 types

of innovation 6+ types

of innovation

in FMCG

in other industries

Services

Recycling

Centers

Sense and

Learn

NEXT

Restaurant

Smart City

Starbucks: Innovation Strategy

“A Third Place Between Work and Home”

7 TYPES:

© 2013. For information, contact Deloitte Touche Tohmatsu Limited. 22

Providing safety for less

6 Types:

DuPont: Armura

Affordable safety

Kingfisher: Innovation Strategy

Premium Brand and Performance Across Categories

5 Types:

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

P&G: Open Innovation Platform

24

6 Types:

© 2013. For information, contact Deloitte Touche Tohmatsu Limited. 25

Cemex is a top 3 global cement manufacturer

The company faced big challenges in its ready-mix concrete business

– Relatively low profitability, compared to cement

– Traffic, weather and other urban conditions pose a major problem to an efficient delivery of ready-mix

– Several “recipes” customized for each project and client

– Very erratic demand and when needed, ready-mix delivery is always very urgent

Source: Cemex website, Cemex Annual and Quarter Reports, Clippings

Solution

Deliver ready-mix concrete using the same model and efficiency of Houston 911 Emergency Centre

Cemex created GINCO - Gestión Integral del Negocio del Concreto (Spanish) or Integrated Management of the Ready-mix Concrete Business

The target is to deliver the right ready-mix concrete within 15min

“Cemex delivers faster than Domino’s Pizza” – Los Angeles Times

Context

CEMEX: GINCO

Reliable Ready-mix Concrete Delivery

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

CEMEX: GINCO

Reliable Ready-mix Concrete Delivery

26

Overview of the Elements of GINCO System

How Ginco Works Client calls Cemex call centre hotline (1-800CEMEX) and

inputs order Based on pre-orders and demand analysis, Cemex ready-mix

trucks loaded, equipped with GPS, are strategically positioned near the main potential clients

The GINCO selects the most appropriate truck to deliver the order using the most efficient route, supported by the GPS

Implemented in Mexico City, Houston, and Bogota, 40 ready-mix plants, 330 ready-mix trucks, ~ 6,700 trips/wk

More than 90% deliveries within a 15-minute window, from previous 34%

Total delivery costs were reduced in around 35% It also significantly reduced the rate of wrong deliveries

and product waste

Results

“Cemex treats its trucks like taxicabs”– Book: Building Your Business

with Customer-focused Solutions

6 Types:

GINCO IT Platform

GPS

Mobile Phone

Microwave Antenna

Automated Ready-mix Plants

Demand Analysis / Pre-orders

Call Centre

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

How to enhance Innovation in your organization; four

important next steps

27

1. Learn Where are you innovating today? Will your

portfolio achieve your overall objectives?

2. Declare What is the right level of innovation ambition

for you? Declare … and communicate it

clearly

3. Enable Use different resources (people, tools,

money, time) for different levels of innovation

ambition

4. Lead Lead, and manage, your innovation portfolio

as a total system

© 2013. For information, contact Deloitte Touche Tohmatsu Limited.

Backup Slides

28

© 2 0 1 2 M o n i t o r C o m p a n y G r o u p L P —

C o n f i d e n t i a l

29

make money

align your talent and

assets

connect with others to

create value

use signature or superior

methods to do your work

create complementary

products and services

employ distinguishing

features and functionality

support and enhance

the value of your offerings

represent your

offerings and business

deliver your offerings to

customers and users

foster distinctive interactions

How you… Such as…

© 2013. For information contact, Deloitte Touche Tohmatsu Limited.

Acknowledgements of Companies and

Government Agencies that Supported the Study

Government Agencies Companies

Organization Committee