Product: not the innovation be-all end-all · The Ten Types of Innovation . Industry innovation analysis . Innovation tactics . Innovation mindset -All EndAll ... Doblin Ten Types

Product: not the innovation be-all end-all Adrian Mak, Gen Re Australia Presented to New Zealand Society of Actuaries Conference 2014

Proprietary Notice

The material contained in this presentation has been prepared solely for informational purposes by Gen Re. The material is based on sources believed to be reliable and/or from proprietary data developed by Gen Re, but we do not represent as to its accuracy or its completeness. The content of this presentation is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Product: Not the Innovation Be-All End-All | Adrian Mak | NOV 2014 Proprietary and Confidential | © General Reinsurance Corporation 2

Contents

Defining Innovation The Ten Types of Innovation Industry innovation analysis

Innovation tactics Innovation mindset

Proprietary and Confidential | © General Reinsurance Corporation 3 Product: Not the Innovation Be-All End-All | Adrian Mak | NOV 2014

• “Innovation is the creation of a viable new offering” – Larry Keeley • Disruptive innovations*

- Transform complicated, costly products that previously had been available to the few, into simpler, cheaper products available to the many.

- The disruptive product may not be as good as existing products in the marketplace but it usually isn’t intended to be sold to mainstream customers. Low-end disruptive innovation offers a “good enough” solution for low-end customers who cannot afford, or do not need, the high end solutions currently available.

- Eventually, low-end disruptions move up-market and disrupt the business models of the companies that provide those solutions.

- New-market disruptions convert non-customers into new customers and create new markets through delivery of new technologies.

• Sustaining innovations - Target high end, demanding customers with expensive and/or high margin solutions that offer

improved performance and features in markets where product attributes are already well defined (i.e. incremental innovation).

- Most common in economies. Found in mature markets. *based on the work of Professor Clayton Christensen

Defining innovation

“The most certain way to fail is to focus only on products. Successful innovators use many types of innovation.” – Larry Keeley


Doblin Ten Types of Innovation*

Source: Keeley, Pikkel, Quinn & Walters 2013


Profit Model

Network

Structure

Process

Service

Channel

Brand

Customer Engagement

Product Performance

Product System

Offering Experience Configuration

Profit Model

• How the company makes money

Network

• How the company connects with others to create value

Structure

• How the company organises and aligns its talent and assets

Process

• How the company uses signature or superior methods to deliver their offerings

Configuration Innovation Type Category



Product Performance

• How the company differentiates features and functionality to delight customers

Product System

• How the company creates complementary products and services

Offering Innovation Type Category



Service

• How the company supports and reinforces the value of its offerings

Channel

• How the company delivers its offerings to customers and users

Brand

• How the company represents its name and offerings

Customer Engagement

• How the company develops meaningful customer interactions

Experience Innovation Type Category



Product warfare


Industry innovation analysis


Industry innovation analysis

Industry: Life insurance Oceania, 2014


Service Channel Brand Customer Engagement

Product Performance

Product System


Profit Model Network Structure Process

Profit Model

Bundled pricing

Float (level premium)

Freemium

Marginal pricing

Unit rating

Network Alliances

Merger & Acquisition

Structure IT integration

Merger & Acquisition

Process Predictive analytics

Process automation

Process standardisation

Product Performance

Added features

Customisation

? Focus

Plain English guide

Product System

Complements

Modular

Product Bundling

Platforms

Service Added value

Free look

Loyalty program

Product upgrade guarantee

Premium rate guarantee

Self-service

Supplementary service

Channel Cross-selling

Diversification

Pop-up presence

Sell direct

Brand Cobranding

Customer Engagement

Gaming

Newsletter

Status and recognition

• What do your customers expect and what do they hate about the status quo?

• Do an honest analysis – look within and look around you

• Look to other industries for inspiration • Which T.I.T. do you use most? • Which T.I.T. do you want to deliver first? • Which others do you want to add later? • Technology is just one enabler • Don’t just reach for the low hanging fruit • Innovate through simplicity, not complexity

Company innovation playbook

Play offense not defense


• Apple’s products, services and extensions operate and connect together seamlessly to provide consistently elegant customer experience

Combine the basic 10 Types into innovation tactics

Case study: Apple iTunes


Service Channel

•Go Direct •Flagship store

Brand Customer Engagement

Product Performance

•Performance Simplification

Product System

•Platforms


Profit Model

•Licensing

Network

•Alliances

Structure Process

•Strategic Design

Give others permission

to place songs, videos,

media, apps while taking a cut of each

Get major record

labels, film and TV show producers to

sell their music and videos in

iTunes

A core team of designers

carefully lead and

execute the design of all

Apple products

A touch screen

instead of superfluous

details, features, buttons

make the products simple to

use

All devices in Apple’s

ecosystem interact

seamlessly e.g. synch

with iTunes iCloud

Terms of distribution to ensure

Apple controls the

quality of customer

interactions ***

Showrooms to showcase brand and products

Begin with a focal point for innovation

Three innovation shifts - each industry has a centre of gravity – decide to stay or go in a total different direction


Service Channel Brand Customer Engagement

Product Performance

Product System


Profit Model Network Structure Process

Platform innovation

Business model

innovation

Customer experience innovation

• Creativity – being creative is not sufficient to innovate • Discipline – use these tools to diagnose, plan and solve innovation problems • Analysis – define the problem to solve by breaking down into its parts • Synthesis – solve the problem by creating new solutions from building blocks • Ambition – dare to be different • Sponsor – support (time and funding) for innovation from the top • Accountability – trust teams to execute and be accountable for delivering results • Measure results – both qualitative and quantitative (stage dependent) • Incentivise – monetary and non-monetary rewards to innovate • Discovery skills of individuals – refer The Innovator’s DNA

Cultivating an innovation mindset


The Innovator’s DNA Five Discovery Skills

1. Associating

2. Questioning

3. Observing

4. Networking

5. Experimenting

Source: Dyer, Gregersen and Christensen. The Innovator’s DNA. HBR 2009;87(12):60-67


• Training • Travel • Gain diverse exposure • Force associations

- Link objects that don’t logically fit

• Assemble curiosity box - Relate random items

Associating


• Make connections across the seemingly unrelated ideas and practices

• The most important discovery skill

• Be curious and detached • Have the courage to challenge • Pay deep attention • Why? • Why not? • What if?

Questioning


• Ask provocative questions • Challenge the status quo • Challenge assumptions

• Watch workers looking for their workarounds to resolve specific frustrations

• Watch customers use your offering

Observing


• See the world like an anthropologist • Zoom in to the detail • Zoom out to the whole system

• Invite outsiders • Engage experts • TED conferences • People dimensions

- Age - Gender - Education - Religion - Geography - Function - Rank - Industry

Networking


• Idea networking • Seek out different life experiences

and perspectives • Not resource networking

• Build prototypes to test new ideas • Try out new experiences

- Travel - Learn new/different disciplines - Trend spotting

• Take things apart

Experimenting


• Test, develop and rework ideas • Iterative process • Learn from results • Accept failure • Be persistent

Visit genre.com for more info.

Contact for more information Adrian Mak Senior Reserving Actuary

[email protected]

Documents

Product: not the innovation be-all end-all · The Ten Types of Innovation . Industry innovation analysis . Innovation tactics . Innovation mindset -All EndAll ... Doblin Ten Types