1Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Learning from Leo…

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Innovation Innovation is probably is probably yydifferent thandifferent thanyou think…you think…

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2Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

On innovation effectiveness…Finding innovation frontiers

11 FundamentalsFundamentals:: some basicssome basics

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Platforms:Platforms: amplifying innovation ROIamplifying innovation ROI

Patterns: Patterns: seeing new challengesseeing new challenges

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..11 Innovation fundamentalsRethinking what innovation is…Rethinking what innovation is…[[ ]]fundamentals

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3Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

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…

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It adds new options to consider along with where to play and how to win…

“It is not the strongest of thespecies that survive, nor the mostintelligent, but the ones mostresponsive to change ” Even in responsive to change.Charles Darwin

Even in Kansas…

“If you are not moving at the speed of the marketplace you’re already dead—you

just haven’t stopped breathing yet.”Jack Welch

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4Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

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

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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

Finance innovation in detail

Business ModelMeans of obtaining sustained revenue and profit

FINANCE

NetworkingJoining forces with other companies for mutual benefit

Enabling ProAugmenting intoperations by lothers’ capabili

PROCESS

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Process innovation in detail

Enabling ProcessAugmenting operations, often by leveraging others’ capabilities or assets

PROCESS

Core ProcessCreating and adding value to offerings in unique, proprietary ways

kingces with panies for nefit

Product PerEnhancing perfeatures and fand reducing c

OFFERING

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Offering innovation in detail

ServiceComplementingand enabling the goods on offer

Product PerformanceEnhancing performance, gratification, features and ease of use

OFFERING

Product SystemLinking offerings to interoperate or build upon another

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6Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Delivery innovation in detail

Customer ExperienceEnabling users to engage in the creation of value, often through delightful interactions 

BrandPortraying the company and offerings to grow or leverage loyalty

ChannelConnecting offerings to customers

DELIVERY

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Time to play: Spot the innovation!

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Dell: innovation assessment

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Eight types:

Apple integrated music offering…

iPod familyThird party accessories

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Eight types:

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Google: Innovation assessment

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Eight types:

Dyson: Innovation assessment

Four types:

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New Yorker: September 20th, 2010

9Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Chef Grant Achatz: NEXT Restaurant

Business model innovations:

Seven types:

Initial destination:Paris 1914

• Four “destinations” per year—each carefully researched and staged• Subscription payments—no tipping• Book & pay in advance, all online• $ 45-75 per person per meal

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The Ten Types of innovation—exploded and explored

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10Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Doblin INNOVATION TACTICS CARDS

• 104 unique innovation tactics spanning across the Ten Types of

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Innovation

• Definitions and examples for each tactic

• Simple protocols for how to use the cards for innovation activities

All companies need to innovate… – Innovation improves the appeal and value of your brand

– Innovation protects your margins

Fundamentals: Fundamentals: some basicssome 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%!

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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

11Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Platforms Rule!

All the important stuff now cutsAll the important stuff now cutsAll the important stuff now cuts All the important stuff now cuts across companies and marketsacross companies and markets

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Structural analysis of industries…

SSOMETIMESOMETIMES WHENWHEN WEWE INNOVATEINNOVATE, , WEWE RETHINKRETHINK WHATWHAT’’SS VIABLEVIABLE……

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23Classical tools of industry analysis

Economics always wins

Technology triumphs

Beware of new entrantsBeware of new entrants

…and substitutes

SSOMETIMESOMETIMES WHENWHEN WEWE INNOVATEINNOVATE, , WEWE TRYTRYTOTO CHANGECHANGE WHATWHAT’’SS POSSIBLEPOSSIBLE……

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Low-weight, tear-resistant, water-repellant, zero-porosity, high-stability, fast-handling sails

High compression loadAdjustable-angle, sensor-triggered trim tab to increase the lift of the keel sail

“Intelligent” sails with optical fiber sensors

High compression-load-withstanding, wind-resistant mast with twisting rig

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31st America’s Cup winner

Strong, rigid, incredibly light, low-porosity hull constructed from a composite sandwich

“Intelligent” hull with optical fiber sensors

Delamination-resistant adhesion between skin and core layers

Short, stubby rudder for maximum maneuverability and minimum drag

Wetted-surface-drag and form-drag minimizing bulb

Platform: a working definition

A platform is an integrated offering that creates a unique and holistic customer experienceonly loosely controlled by the platform owner;only loosely controlled by the platform owner;

It is usually supported by proprietary technologies,and typically characterized by interdependent products and servicesprovided through a network of business partners.

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Most popular consumer platforms…

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Most popular B2B platforms…

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15Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

FarmVille innovation assessment

Founded in 2007$150 million in revenue

56 million membersOutnumber real farmers in the U.S. 60 to 1

In-game sales of $15 millionin micropayments from FarmVille farmers

Sweet Potato seed packets netted $854,000 in three weeks

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,

Eight types:

..33 Innovation patternsFostering new forms of value creationFostering new forms of value creation[[ ]]patterns…

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16Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Innovation patterns in manufacturing that drive growth…

Design to achieve greater efficiencies… Help firms lower their carbon footprints and save money

Design for reassembly, reuse and reinvention

1

2 Design for reassembly, reuse and reinvention This demands process and material

Reinvent a known category…Find frontiers of materials, concept, business models, or value

Create new solutions and integrated systems…Sensors, predictive algorithms and dynamic optimization

C i i i d i i i i

2

4

3

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Create signature new innovation processes and initiatives…By injecting special experience, metrics, methods, and team support

Develop future platforms that radically alter total costs…Helping develop pervasive and profitable franchises

6

5

Developing new uses for waste—creating new profits

GARP

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17Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Rapid prototyping evolves for greater range of applications

True Surface System(TruSurf)

KOR EcoLogic Urbee: First 3D Printed Car

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( )

IBM Tools for a Smarter Planet campaign

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18Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

Shift to small production, tailoring and open source

BMW Introduces 'Build-to-Order' Vehicles From S.C. PlantBMW Introduces 'Build-to-Order' Vehicles From S.C. PlantBMW Introduces 'Build-to-Order' Vehicles From S.C. Plant

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Using core expertise to create solutions

MILLTEC® Rolling Mill Program

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Seven types:

19Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

MIT Manufacturing renaissance: materials & processes

The Future of M f t iManufacturing -Advanced Technologies

Intel invests $8 billion into highly complex chips—and rapid turnaround for Dell

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First OLED manufacturing line in the United States

Systems designed for end to end process streamlining

Fifteen story hotel built in six days…

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Four types:

20Copyright © 2011 Doblin Inc AMT • MFG Conference • Chandler AZ• March 2011 •

FOSTER A TRANSFORMATIONEMBRACE A SHIFTREDUCE COSTS

SIMPLE RADICAL

Zero waste in all plants

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1-3 types of innovation 4-5 types of innovation 6+ types of innovation

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Innovation effectiveness