______________Smart Moves, LLC. “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh, GE “If we get the right people in the

______________Smart Moves, LLC

Rainmaker Index


“If we get the right people in the right jobs, we’ve won the game.”

- Jack Welsh , GE

“If we get the right people in the right jobs, we’ve won the game.”

- Jack Welsh , GE


History/Background Staged processes, management reviews for

NPD have been in existence for 50+ years Benchmarking studies for 50+ years

focused on success factors associated with industrial NPD

Top success factors are product advantage and high quality NPD process

But in spite of all the changes and improvements in NPD systems, commercial launch remains unchanged.

60% of NP launches succeed - true globally stat!


Studies:- Most significant difference

between successful and unsuccessful products lie in the quality of execution of the first few stages of NPD, aka ‘Fuzzy Front End’

“The First Few Plays in the Game determines the

Outcome”

Where to Apply the Effort


- NPD and Market Research in the early stages requires high risk tolerance, creativity, openness to the ‘irrational process’ of NPD, however, studies find that industry fills these positions with people that are risk adverse, patient and persistent.

BUT…….


Despite the improvements in NPD systems, some

underlying factor remains unchanged…….?

Despite the improvements in NPD systems, some

underlying factor remains unchanged…….?


Rainmaker uses several Orientation instruments in determining an Index score:◦ Myers-Briggs◦ Myers-Briggs Creativity Index,◦ Keirsey’s Four Temperaments◦ KAI

Overlooking the Human Factor

Rainmaker Index – What is it?


Orientation Instruments

Myers-Briggs

Extroversion Introversion

Sensory Intuitive

Thinking Feeling

Judging Perceiving

Keirsey’s Four Temperaments

Rational“NT”12% of Population

Idealists“NF’12% of Population

Guardians“SJ”38% of Population

Artisans“SP”38% of Population

Myers-Briggs Creativity Index

= 3SN+JP-EI-0.5TF

Kirton Adaptor-Innovator (KAI)30-160

Perfect the systemFinishers

Change the SystemStarters


Orientation Instruments

Myers-Briggs

Extroversion Introversion

Sensory Intuitive

Thinking Feeling

Judging Perceiving

Keirsey’s Four Temperaments

Rational“NT”12% of Population

Idealists“NF’12% of Population

Guardians“SJ”38% of Population

Artisans“SP”38% of Population

Myers-Briggs Creativity Index

= 3SN+JP-EI-0.5TF

Kirton Adaptor-Innovator (KAI)30-160

Perfect the systemFinishers

Change the SystemStarters


Did more projects Branched the projects more frequently – redirected

or significantly ‘morphed’ them – Key to high success rate

Identified concepts that, when later commercialized, made far greater profits: $197.5MM vs. $15.2 MM

People selected to operate the NPD are as important as the process itself.

Success rates improved from 11% to 97% when compared on the Universal Success Curve.

Scores in the top third of the Rainmaker Index earned 95 times (9,500 percent!) more profit than those in the bottom third.

Top 20% RI produced 80% of the profits ( “80-20 rule”)

Findings When Rainmaker Index was Applied to NPD


Rainmakers are typically difficult to manage and undisciplined in their thinking.

The top performing Rainmakers in the organization were actually the least well-thought-of employees

When staff reductions occurred (in the companies undergoing study), the results showed a loss of over half of the top third of the RI employees (the profit makers in the company) and none in the lowest third

Rainmakers


Rainmaker Index

First time an orientation instrument fixed an economic value to style


Center of Creative Leadership sponsored study CCL established group in 1981, grew to 70

members by 1998 - AMI, leaders of innovation within corporations

By 1998, saw that about 1/3 of members were gone - consulting, downsized or early retirements. Decided to study phenomenon

Questionnaire- individual, programs, budgeting, why program ended

Findings:

AMI Study of Corporate Innovation Programs and their Champions


All programs generated new ideas and significant new business ($50-100MM)

Higher level of interaction between Marketing, R&D, and customers

Stimulated the integration of other departments: Emerging Technology, CI/BI efforts, Venture, etc… in other words, the company adopted an “outside-in” perspective, became more comfortable with “being in the lead” and risk, and growth occurred

….so why were these programs terminated?????

What worked


Two Different Worlds

Dimension R&D Marketing

Principal Mission Technology Development

Customer Satisfaction

Time Horizon Years Months

Pacing Metric Project Milestones Product Launches

Source of Esteem Peer Recognition Promotion/many Employers

Educational Background

BS, PhD BA, MBA

Tenure Medium to Long Short


Continuously questioned the level of and number of successes vs. expectations…but expectations were never defined, just the ‘need to innovate’, ‘do something different’

Didn’t recognize that the culture needed to change in whole or at least in part

Exclusive focus on the R&D function with some Marketing assistance

Funded at the expense of existing Technology budgets or spreading innovation funding amongst SBU and almost no involvement with the Commercial or Marketing functions except as a service to them.

Subtle forms of sabotaging if SBU believed Innovation funding and time is inhibiting their ability to accomplish short-term objectives

Financial and staffing requirements were significantly underestimated

Sponsorship was too narrow. Leadership base of only one of two senior executives who frequently were near retirement age. Too shallow to have staying power

What didn’t work


Time projections for bottom-line impact were seriously underestimated. For shorter development time companies, innovation didn’t have a chance and shut down prematurely.

The 3000 to 1 universal rule was not understood. The thinking that R&D, R&D management - acting alone,

can significantly affect organization’s long term bottom line development

Managers didn’t know what to expect. Low KAI profile of Innovation champion and leadership High KAI profile of innovation (champion) verses mid-lower

range KAI profile of managers: ...when asked to change or improve something an innovator profile will prefer to replace existing with new and different, whereas managers profile more likely to focus on improving existing

Innovation champions more likely to see threats and opportunities outside the organization, managers more likely to focus on threats and opportunities inside the organization.. Do the right thing vs. do things right

What didn’t work


Look at former Innovation champions: of the number that had not return to AMI, over 60% became consultants, retained by Fortune 500 companies and in many cases their former employers

Traditional physical innovation center format is no longer sufficient to sustain effort

Everyone involved Divided into Hunting (developing and assessing the New)

and Gathering functions (design, manufacturing and marketing)

Intellectual property emphasis with Innovation Independent funding - TI’s IDEA program, HP Grassroots

program, Zenith’s Bull Market KAI/ Rainmaker placement - Gifted high KAIer’s in front-

end of project, gifted low KAIer’s in back-end of project. ( 900% more speed, effectiveness in commercialization rates)

Future Trends in Corporate Innovation


Fast approvals through few, if any, layers Empower leaders Don’t expect the perfect plan or traditional

ways of execution with no deviations. Get your hands dirty and learn

Stay the course - abrupt changes makes people turn passive

Understand the 3,000 to 1 ratio* Incentives for innovation will not fit standard

compensation methods*The “universal industrial success curve”, Research and Technology Management, March-

April 2003



Organization structure that separates the innovative initiative from the main business and protects the new

Leadership that buries the corpse of failed ideas and learn from mistakes

Leadership that understands the psychology of innovation in corporations and remains alert/recognizes to unconscious “bandit actions”

Leadership that strokes the protocol of Innovation: a culture, a way of leading, doing, an awareness…. not an event or training session.



ManagedRisk

Platforms

Incremental Products

Cu

ltu

re(160 KAI)

(32 KAI)

Degree of Difficulty

-+

Horizon #2

Horizon #1

Adapter

Innovator

Invention/ Innovation

PROJECT MANAGEMENT & STAGE/GATE

IDEA BANK

PHASE/GATE

PORTFOLIO

MANAGEMENT

PORTFOLIO MANAGEMENT

INNOVATION PROCESS

INNOVATION PROCESS

Horizon #3E

ntr

epre

neu

rial

Horizon #4


ManagedRisk

Platforms


Sales & Marketing (Expediting)

Marketing & Sales

(Anthropolgy)Tech Center

Cu

ltu

re(160 KAI)

(32 KAI)

Acquisition / Affiliation

Degree of Difficulty-

+Horizon #3

Horizon #2

Horizon #1

Adapter

Innovator

Invention/Innovation


IDEA BANK

PHASE/GATE

PORTFOLIO

MANAGEMENT

PORTFOLIO MANAGEMENTManufacturing


The 7 Levels of Change

• Level 1: Doing the right things

• Level 2: Doing things right

• Level 3: Doing things better

• Level 4: Stopping doing things

• Level 5: Doing things others are doing

• Level 6: Doing things no one else is doing

• Level 7: Doing things that can’t be done


Managed Risk

Platforms


Sales & Marketing (Expediting)

Marketing & Sales

(Anthropolgy)

Tech Center

Cul

ture

(160 KAI)

(32 KAI)

Acquisition / Affiliation

Degree of Difficulty

Seven Levels of ChangeDo The Right Things (Programs)

Doing Things Right (Management)

Doing Things Better (CI Effort)

Stopping Doing Things (Portfolio)

-

+

Doing Things Other People Are Doing (Benchmarking)

Doing Things No One Else Is Doing (Market Driven)

Doing Things That Can’t Be Done (Innovation)

#1#2#3#4#5#6#7

Horizon #3

Horizon #2

Horizon #1

Adapter

Innovator

Growth Chart for Corporate New Business Development


IDEA BANK

PHASE/GATE

PORTFOLIO

MANAGEMENT

PORTFOLIO MANAGEMENT

CI

Base

Key

Pacing

Emerging

Tec

hnol

ogy

Manufacturing


UPSHOT TO ALL OF THIS…………..

• People have KAI

• Job titles have KAI

• Cultures have KAI

• Innovation Process have KAI

….Match the people to the job to the culture to the process.

Documents

______________Smart Moves, LLC. “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh, GE “If we get the right people in the