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© Stage-Gate International 2014
www.stage-gate.com
Driving
Innovation:
A Critical
Capability
Scott Edgett
CEO
Stage-Gate International
October, 2014
© Stage-Gate International 2014
www.stage-gate.com
Innovation is a Journey… Executive Roundtable
Innovation is probably the most complex thing we do in our organization. It touches all aspects of our business. We realized that unless we do this successfully we will not be able to survive in a market as competitive as ours. Our challenge is how to do this right and then internalize it so that being a successful innovative company is at the heart of our culture and the way we do business.
© Stage-Gate International 2014
www.stage-gate.com
Innovations are Rapidly Emerging as Technologies Evolve and Consumers Expect More
CONVENIENT SECURE DISRUPTIVE
MOBILE and DIGITAL
© Stage-Gate International 2014
www.stage-gate.com
Global Players are Leading Banking Innovation
Product and Service Innovation
Channel Innovation
Innovation in Internal Process Improvement
Innovation in Societal & Community Impact
Disruptive Innovation in Banking
Most Innovative Bank
Source: Retail Banker International (RBO) awards of excellence in retail banking 2014
© Stage-Gate International 2014
www.stage-gate.com
However, Many Organizations are Struggling…
1. Late to market
2. Revenue levels are not met; poor return on innovation
3. Not meeting customer needs
4. Competitors seem to have an innovation edge
5. Pipeline is clogged – not enough is coming out
6. Too many low value projects – too much incremental
7. Lack an innovation engine – too much focus on the short term/no balance
8. Process seems too slow and bureaucratic versus an enabler
9. Increasingly becoming a ‘commodity’ offering
10. Have we lost our innovation edge? How do we regain it?
© Stage-Gate International 2014
www.stage-gate.com
How Can We Improve Our Capabilities to Drive Innovation More Successfully
Within Our Organizations?
© Stage-Gate International 2014
www.stage-gate.com
Align to an innovation vision
Do projects right
Invest in the right projects Create the right environment
Innovation & Technology Strategy
Portfolio Management
Culture & Leadership
Idea-to-Launch Process: Stage-Gate®
Innovation Performance Framework™
© Stage-Gate International 2014
www.stage-gate.com
Align to an innovation vision
Do projects right
Invest in the right projects Create the right environment
Innovation & Technology Strategy
Portfolio Management
Culture & Leadership
Idea-to-Launch Process: Stage-Gate®
Innovation Performance Framework™
© Stage-Gate International 2014
www.stage-gate.com
Practice is in Place and Working Well
3.9
5.4
7.2
0 1 2 3 4 5 6 7 8 9 10
Well defined innovation strategy
1. Innovation & Technology Strategy
Top Performers Average Performers Bottom Performers
Clearly articulated Innovation Strategy with defined goals/objectives Role in achieving goals is clear and well communicated Strategic arenas clearly defined - areas of strategic focus Strategic buckets - funds are allocated to defined arenas of focus Good balance - long-term strategic needs vs. short-term Innovation roadmap in place - multi-year/product/service
© Stage-Gate International 2014
www.stage-gate.com
Attack Planning
Business Strategy
Defining & Selecting
New Service/Product Innovation Strategy Working Model
Arenas
Industry
Company
Situational Analysis
Arena
Goal
Plan
Arena
Goal
Plan
Arena
Goal
Plan
Arena
Goal
Plan
Investments ($’s, FTEs, #’s)
Deployment Portfolio Alignment Roadmaps
Future Analysis 1. 2. 3.
Actions:
Degree of Fit Gaps 1. 2. 3.
Portfolio Alignment 1. 2. 3.
Sufficiency & Affordability
Sufficiency
Critical Drivers
Roles
Goals
Strategic Buckets
Type Market
© Stage-Gate International 2014
www.stage-gate.com
Align to an innovation vision
Do projects right
Invest in the right projects Create the right environment
Innovation & Technology Strategy
Portfolio Management
Culture & Leadership
Idea-to-Launch Process: Stage-Gate®
Innovation Performance Framework™
© Stage-Gate International 2014
www.stage-gate.com
Strategically Aligned Portfolio
© Stage-Gate International 2014
www.stage-gate.com
3.8
5.3
6.9
0 1 2 3 4 5 6 7 8 9 10
Portfolio management process inplace and working well
Portfolio Management Can Have a Big Impact on your Innovation Performance
Top Performers Average Performers Bottom Performers
Ensure that you have… 1. Well defined portfolio management process in place 2. Projects are aligned with Business's strategy 3. Spending (resources) breakdown reflects Business's strategy 4. Excellent balance in project types 5. Portfolio contains high value-to-the-business projects 6. Good job of ranking/prioritizing projects 7. Good balance between number of projects & resources available
© Stage-Gate International 2014
www.stage-gate.com
Unfortunately many are struggling with portfolio management
Pipeline is clogged – • Not enough is coming out • Too many projects underway • And, often the wrong ones • Too many incremental
Not enough resources – • Spreading resources too thinly across too many projects; often low value
Too much focus on the short- term/no balance
• Lack an innovation engine
Metrics are not used effectively • Or, tracking the wrong metrics • Not using the information • Data quality can be an issue
• Projects take too long to get to market
• Much work goes to low-
value projects • Poor success rate
• Poor return on
investment
• Projects take too long to get to market
• Much work goes to low-
value projects • Poor success rate
• Poor return on
investment
© Stage-Gate International 2014
www.stage-gate.com
Align to an innovation vision
Do projects right
Invest in the right projects Create the right environment
Innovation & Technology Strategy
Portfolio Management
Culture & Leadership
Idea-to-Launch Process: Stage-Gate®
Innovation Performance Framework™
© Stage-Gate International 2014
www.stage-gate.com
4.9
6.6
8.0
0 1 2 3 4 5 6 7 8 9 10
Idea-to-launch process in place andworking well
Idea-to-launch Process
Top Performers Average Performers Bottom Performers
Ensure that you have… Well defined Idea-to-Launch process in place Flexible, adaptable, scalable process Clear governance: Go/No Go decision meetings are effective
with defined decision makers Accountable, empowered cross-functional teams Process is really used
© Stage-Gate International 2014
www.stage-gate.com
Three key yet simple questions…
“Real, Win, Worth”
Is it Real?
Can we Win?
Is it Worth it?
Gate 1
Idea Screen
Gate 2
2nd Screen
Gate 3
Go to Development
Gate 4
Go to Test
Gate 5
Go to Launch
PLR
Post Launch Review
Discovery Stage 1: Concept
Stage 2: Feasibility
Stage 3: Development
Stage 4: Testing,
Operations
Stage 5: Launch/
Commercialization
The Customer or User
Flexible Speed Adaptive Accelerated
Modern Stage-Gate Processes are Efficient, Scalable, Flexible and Adaptable
For Less Complex and Smaller Development Projects,
Use an Abbreviated Version: 2-3 Gates
© Stage-Gate International 2014
www.stage-gate.com
Align to an innovation vision
Do projects right
Invest in the right projects Create the right environment
Innovation & Technology Strategy
Portfolio Management
Culture & Leadership
Idea-to-Launch Process: Stage-Gate®
Innovation Performance Framework™
© Stage-Gate International 2014
www.stage-gate.com
Practice is in Place and Working Well
4.8
6.2
7.5
0 1 2 3 4 5 6 7 8 9 10
Strong culture and leadershp forinnovation
4. Culture and Leadership for Innovation
Top Performers Average Performers Bottom Performers
Culture clearly supports innovation Senior management committed - provides strong and visible support People rewarded/recognized Open communication among employees across functions/locations Business's climate is not risk averse - invest in some risky projects
© Stage-Gate International 2014
www.stage-gate.com
Align to an innovation vision
Do projects right
Invest in the right projects Create the right environment
Innovation & Technology Strategy
Portfolio Management
Culture & Leadership
Idea-to-Launch Process: Stage-Gate®
Innovation Performance Framework™ the Four Cornerstones of Performance
© Stage-Gate International 2014
www.stage-gate.com
Desired Results
More effective
More efficient
Faster and …
More successful developments
Better results
What distinguishes top performing firms
is how they implement the Innovation Framework
© Stage-Gate International 2014
www.stage-gate.com
Align to an innovation vision
Do projects right
Invest in the right projects Create the right environment
Innovation & Technology Strategy
Portfolio Management
Culture & Leadership
Idea-to-Launch Process: Stage-Gate®
Innovation Performance Framework™
© Stage-Gate International 2014
www.stage-gate.com
Thank You
Stage-Gate® is a registered trademark and Innovation Performance Framework™ is a trademark of Stage-Gate Inc. © 2014 Stage-Gate International
United States 888.405.8758
Andean Region +57.301.288.0532
Corporate Head Office 1.905.304.8797
www.stage-gate.com © 2000-2014 Stage-Gate International
Stage-Gate® is a registered trademark and Innovation Performance Framework™ is a trademark of Stage Gate Inc.
© Stage-Gate International 2014
www.stage-gate.com
Dr. Scott J. Edgett
Internationally recognized as one of the world’s top experts in product innovation and is a pioneer of portfolio management for product innovation.
Chief Executive Officer and co-founder of both Stage-Gate
International and the Product Development Institute.
Has spent more than 25 years researching and implementing innovation best practices, and working with multinational companies in a wide range of industries around the globe to work with many of the world’s best innovators and companies.
A prolific author, having published more than 80 articles and
coauthored seven books including the popular Product Innovation and Technology Strategy.
Dr. Edgett is a Faculty Scholar at the Institute for the Study of Business Markets (ISBM) at Penn State University and a former professor at the School of Business, McMaster University.
He has a Bachelor of Business Administration in Accounting, an MBA in Marketing/Finance and a Ph.D. in Marketing (New Product Development).