John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
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How Finance can shape Innovation
John Devlin, MBA, FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 2 -
Innovation or Bingo
Topic
1
Sustaining Innovation 2
Disruptive Innovation 3
Comparison 4
5
John Devlin
Content
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 3 -
Are we playing Management Bingo?
Innovation N
EW
Fu
ture
Strategy G
row
th
Ins
igh
t
Customer
Disruptive
Breakthrough R
ad
ica
l
Pro
du
cti
vit
y
Imp
rove
Change
Solution
Business
Performance
Implementation
IDE
AS
TE
CH
NO
LO
GY
Process
Process
Value-Add
Partner D
yn
am
ic
Market Creative Opportunity Innovative
LA
B
X
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 4 -
“Through innovation,
in years we are
going to be number
in the market
We need to analyse of statements
like…
v
v
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 5 -
We need to dissect statements like…
“Our Innovation lab
will produce new
products to market in
the next year
x
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 6 -
We need to question statements
like…
“In a tough market our
Innovation strategy will
deliver our %
growth target required
for next years budget
u u
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 7 -
Are we following the zeitgeist or…
Is our business afraid of not being seen as
“on trend” or…*
0
500
1,000
1,500
2,000
2,500
1998 2000 02 04 06 08 10 12 14
# o
f In
ovati
on
Refe
ren
ces
*Frequency of use of “Innovation strategy” in peer reviewed Journals 1998 – 2012. Source: HBR December 2015
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 8 -
…is there substance?
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 9 -
When we dig behind the words can
we…
Identify
• Who our clients will be
• What our clients will value
• How we create value for clients
• How we capture value for us
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 10 -
This identification enables us to…
Understand
• Our future
• Type of innovation required
• Resources required
• Areas of focus
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 11 -
If you can’t identify your areas of focus
…we need to question our innovation “strategy”
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 12 -
Innovation or Bingo
Topic
1
Sustaining Innovation 2
Disruptive Innovation 3
4
5
John Devlin
Content
Comparison
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 13 -
Sustaining Innovation is
inward looking
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 14 -
Sustaining Innovation is
customer centric
• Current clients are the
foundation of our future
• How can we improve their
experience
• Focus on functions of our
products
– Quicker, Faster, Cheaper, More
• Focus on our processes
• Major clients will influence
our future direction
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 15 -
Sustaining Innovation focusses on
process
Innovation
Process
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 16 -
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6
How do we meet clients expectations
Delivery
Client
Expectation Under
Delivery
Exceed
Expectation
Strategic Variables
Low Cost
Reliability Flexibility
Accessibility Speed Quality
Dependability
Deli
very
/Exp
ecta
ito
n
High
• Meeting clients needs is
fundamental to growth
• But not as important as..
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 17 -
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6
…Knowing where it matters
Delivery
Exceed
Expectation
Importance to client
Deli
very
/Exp
ecta
ito
n
Low
High
Under
Delivery
Low
Accessibility
Reliability Dependability
Cost Quality Speed
Flexibility
Client
Expectation
• Are we good in areas that
are important to our
clients
• If not, we have a bad
business model
High
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 18 -
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6
Remembering clients expectations
change
Importance to client
Accessibility
Reliability Dependability
Cost Quality Speed
Flexibility
Under
Delivery
Low
Under
Delivery
Delivery
Deli
very
/Exp
ecta
ito
n
High
Client
Expectation
• Factors that Influence
change expectations
• Competitor offerings
• Technology
• Anchoring
Low High
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 19 -
Sustaining Innovation when…
• Industry profitability
exceeds ours
• Our services/products are
seen as inferior
• Productivity is below
Industry benchmarks
• Not meeting clients
expectations
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 20 -
Innovation or Bingo
Topic
1
Sustaining Innovation 2
Disruptive Innovation 3
4
5
John Devlin
Content
Comparison
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 21 -
Disruptive Innovation is confronting
• New clients are the
foundation of our future
• What “jobs” we do for clients
• New products/services
• Our future direction will
attract new clients
• We will create markets
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 22 -
Disruptive Innovation focuses on
Strategy
Strategy
Innovation
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 23 - John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
Strategy means different…
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 24 - John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
…different means decisions….
Who How When
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 25 - John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
…decisions mean some people (may)
get upset
Product’s Geographies Channel’s (Will be challenged)
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 26 -
4 Area of Action
Raise Eliminate
Reduce Create
Disruptive Innovation
Which factors should be reduced
well below the industry standard
Which factors should be created
that the industry has never offered
Which actors that the industry
takes for granted should be
eliminated
Which factors should be raised
well above the industry standard
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 27 -
Disruptive Innovation when
• Industry profitability under
pressure
• Our services/products are
market leaders
• Productivity is above Industry
benchmarks
• Exceeding clients
expectations
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 28 -
Innovation or Bingo
Topic
1
Sustaining Innovation 2
Disruptive Innovation 3
4
5
John Devlin
Content
Comparison
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 29 -
Sustaining v Disruptive Innovation
Sustaining Disruptive
Competing in existing Market Space
Beat the Competition
Create uncontested market space
Make the competition irrelevant
Exploit Existing Demand Create and capture new demand
Make the value-cost Trade-off
Align the whole system of a firm’s activities with its strategic choice of
differentiation or low cost
Break the value-cost trade-off
Align the whole system of a firm’s activities in pursuit of differentiation and low cost
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 30 -
Our innovation type Influences
required measurement
Systems Clients Products
Sustaining
Disruptive
Internal
Efficiencies
Exploration
Reporting
External
Mkt. Intelligence
Proposing
Share of wallet
Same Market
New Clients
New Markets
Features
Development
Cycle
Outcome
Job to be done
Innovation
Type
Business
Model
Existing
Refine
New
Develop
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
John Devlin MBA FCCA https://au.linkedin.com/in/JohnDevlinSydney
- 31 -
Sustaining V’s Disruptive Innovation
Sustaining Disruptive
Focuses on rivals within its industry
Focuses on competitive position within strategic group
Looks across alternative industries
Looks across strategic groups within industry
Focus on better serving the buyer group
Redefines the industry buyer group
Focuses on maximising the value of product and service offerings
within the bounds of its industry
Focuses on improving price performance within the functional
emotional orientation of the industry
Looks across to complementary product and service offerings
Rethinks the functional emotional orientation of the industry
Focuses on adapting to external trends as they occur
Participates in shaping external trends over time
Industry
Strategic Group
Buyer Group
Scope of Product offering
Functional Emotional orientation
Time