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Killer InnovationsIntroduction to a better way to innovate
Philip McKinney
www.killerinnovations.com
Killer Innovations Workshop www.killerinnovations.com
• Why Innovation?
• Other Approaches
• A Better Approach
• Benefits
• Lessons Learned
Agenda
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Innovation Acceleration
Time
Impa
ct
-Innovations are having a larger impact
-The lifecycle of innovations is getting shorter
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Technology Adoption is Accelerating
Phone 74 years
Radio 38 years
PC 16 years
TV 13 years
Internet 2 years
Blogs 1 year
How long does it take to get to 50 million users?
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The Innovation Reality
Innovation GapThe shortfall between a organizations rapidly rising need for ideas/innovations and their inadequate supply
Innovation DelayThe delay between the time when decisions to adopt strategic innovations are made and their eventual impact to the organization.
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Innovation Impact
Innovation has increased in importance over the last 10 years
Innovation plays an important role in assessment of company value
Confident in ability to manage and measure innovation impact
35%
73%
92%
Source: Arthur D. Little Research
0%0% 20%20% 40%40% 60%60% 80%80% 100%100%
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Executive View of Innovation
• 87% rank innovation as one of their top 5 priorities
• Executives boast that their companies excel at innovation
• Executives, however couldn’t differentiate between incremental improvements and breakthroughs
• Very few executives said their firms have any kind of structured approach to innovation
Source: DiamondCluster International, Techtrend Group
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The Challenge of Innovation
• Maintain efficiency while fostering innovation
• Stressing bottom-line results without restricting
innovation
• Adapting to changing markets and environments while
maintaining stability
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Value From Innovation
R&D
86%
14%
Revenue
62%
38%
Margin
39%
61%
Incremental Innovations to existing offerings
Creating new offerings/markets/industries
Source: Harvard Business Review, October 2004
What’s wrong with the current approaches to find ideas?
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What’s wrong with current brainstorming approaches?
• Innovations are either incremental or totally unrealistic
• Rarely any real follow-up
• No confidence that there aren't better ideas to be had
• Lack of executive/organizational support
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Incremental versus Breakthrough
Incremental improvements• Reduce expenses
• Extend brand/product line
Breakthrough improvements• Find new markets
• Create new strategic assets
• Launch new businesses
Evolutionary change tools• BPR/TQM/Six Sigma
• Feature enhancement
Revolutionary change tools• Killer Innovation
• Lateral Thinking
• TRIZ/TIPS
Killer Innovations
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What is a killer innovation?
A Killer Innovation is defined as significant and highly profitable departures from current offerings or practices that is difficult to imitate
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• Tools– The tools to find/create, rank and execute
against killer ideas
• Skills– Tricks to help change your perspective and
improve your ability to apply empathic design through observation
Killer Innovation Approach
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Killer Innovation ToolsUsing FIRE
• Focus The Innovation Search– Focus the problem– Depth is better than breadth for idea quality
• Ideation– Structured questions that drive discovery/insight
• Rank The Ideas– Will this idea change the customer expectation?– Will this idea change the competitive landscape?– Will this idea change the economics of the industry?
• Execution– Define clear milestones– Kill projects early
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• Question based methodology– Based on Socratic method of asking questions to eliminate ideas … the
best ideas are the ones left standing
• Build around a core of +70 killer questions– Based on “reverse” innovation analysis
– Designed to unlock unique insights
• Structure is based on a “gated” model
• Tested– HP, Agilent, CSC and many start-ups
History of the KI Approach
Tool: Focus
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Focus the search
Moving into new competitive
arenas
Expansion into new geographies
Improvement in industry structure
New or existing customers
Innovation in products or
services
Innovation in value delivery system
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Search Areas for InnovationSix degrees of freedom Such as …
Creating a new business by selling existing products/services to existing or new, unfamiliar customer segment
Creating a new product or service, normally in a cocooned manner
Creating an innovation that redesigns the business system sufficiently to alter the value proposition
Changing the value proposition, value delivery system, or competitive relationships that improve/change the industry structure or redefine the industry
Expanding into a new geographic area with high value-added transfer from existing geography or when the activity is new
Developing a new business in an industry within which a company has not previously competed or when there is no overlap in customer value proposition
New/Existing customers
Innovation in products or services
Innovation in value delivery system
Improvement in industry structure
Expansion into new geographies
Moving into new competitive arenas
Source: Techtrend Group
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Focus on the customer
YUPPIES Young Urban Professionals
YUFFIES Young Urban Failures
MOBY/DOBY Mom/Dad Older – Baby Younger
WOOFS Well Off Older Folks
SKIPPIES School Kids with Income + Purchasing Power
“Sandwichers” Adults caught between caring for their children and their older parents
Which are the right segments?
Tool: Ideation
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The typical brainstorming session begins with a simple question ….
“Create some new product ideas”
“Develop some differentiators for x”
…. you get simple answers.
The Current Method ….
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Better Questions = Killer IdeasNew or Existing Customers
• What emotional, psychological, or status benefit do (could) people derive from using the product?
• How can you create a social or group experience with the product?
Industry Structure• What are some of the basic assumptions under which the industry
operates?• What external jolts have the potential to significantly impact the
operational rules of the industry?
Product & Services Innovation• Who uses the product because of some benefit we did not foresee?• What regularly used makeshifts can we capture in a product design?
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Exploring Beyond the Obvious
S Substitute?C Combine?A Adapt?M Modify – Magnify?P Put to other uses?E Eliminate or minify?R Reverse – Rearrange?
• Everything that is new is an addition or modification of something that already exists
• Based on the answers to the questions, use SCAMPER to generate a wide variety of ideas
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Idea Quota
Idea quotas force you to actively generate ideas and alternatives
• The first 1/3 of the quota will be the easiest• The second 1/3 will typically extensions from first 1/3• The final 1/3 will be the hardest yet typically contain
the kernel of a killer innovation
Always fill the quota even if the ideas seem far fetched or outlandish.
The best ideas come to those that work at it ….
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Characteristics of the Best Killer Ideas
• Purpose - the yield of high quality ideas is significantly higher with a clear business purpose and a supportive business sponsor.
• Timeliness - the difference between a great idea and a so-so idea is market/technology timing.
• Diversity - the pool of contributors needs to be broad, broader than you intuitively think.
• Perspective Change - the very best ideas come through individuals looking at things in a different way.
• Collaborative Development - environment, where people can comment and build on ideas thereby significantly increasing the overall yield of high impact ideas.
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Suspend Disbelief
Let’s shelve that for the time being
Who is going to do it?
I have something better.
We tried that before.
It won’t fit our operation.
It’s against all our combined logic.
Not enough return on investment.
It’s great, but . . . . . .
Someone must have already tried it.
I thought of that a long time ago.
We can’t afford that.
You’ll never get approval.
You’re on the wrong track.
Don’t rock the boat.
The market it not ready yet.
It’s not a new concept.
Tool: Rank The Ideas
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Idea Criteria: Key QuestionsMust have a YES to at least one of the following:
– Will this idea change the customer experience/expectation?
– Will this idea change the competitive landscape/position?
– Will this idea change the economic structure of the industry?
Must have a YES to the following:
– Do we have a contribution to make in this space?
– Will this idea generate sufficient margin to the business?
For each key question, give a score from 0 to 5.
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Idea Criteria: Ability To Execute
For the top 10 ideas based on the Key Questions, score each idea from 0 to 5 for the following questions:
• Can we get our groups/teams excited?• Will senior management support it?• Do we have the skill/expertise to pull this off?• Can we access the customers preferred
channel?
You now have a ranked list of your best ideas.
Tool: Execution
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Execution = Stage Gate Management
Beta Coordinator's Role
Product Marketing
Software Development
QA/Test
T raining
Documentation
Customer Service
Marketing Communications
Release Control
Sales
Operations
Milestones T imeline
Customer
A greem enton w ants
P roductIdea
ConceptP resentation
M kt. Req.Def. &P lng
B us inesscase
S W Req. Def. &P lng - P relim X
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P re lim X
Train ingP lan -
P re lim X
Doc. P lan- P re lim X
S upportIm pl. P lan- P re lim X
IdentifyA pplicable
S tds.
ReviewS W Req.
M ARCOMP lan -
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ReleaseP lan -
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S alesP lan -
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OperationsP lan - P relim
X
A greem ent onDeliverables
Com m ittto
Custom er
P ITCreation
P rojec tDefin ition
W orkB reakdow n
P rojec tP lan
Issue X
P otentia lP roblemA nalys is
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Doc. P lan- Issue X
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ReleaseP lan -
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OperationsP lan - Issue
X
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Im plem en-tation K ickoff
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P re lim inaryP roduct
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S ales ForceP reperation
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B etaRelease
DetailedDefin ition of
Contents
1st Rev.Docum ents
Ready
P relimDocum ent
P ackage Ready
DetailedDefin ition of
Contents
P re lim Train ingP ackage Ready
Doc P artNum ber
Released
Custom er ServiceV erification B egins
P roduct S upportP ackage Ready
P relim Sales /S upport
M ateria ls
Com petitiveS elling S trategy
- Issue X
P relim BetaP lan
FieldV erification
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Ready to S ell Custom erA cceptance/
S tandard ization
B eta B uild B eta ReleaseA pproved
P rod Build P roductionRelease
S ales /SupportM ateria ls Ready
CS /P S RepsTra ined
ReleasedDocum ents
Ready
Custom erTra in ingReady
B eta IssuesFixed
P roductRelease
P roductReleaseA pproval
P ro jec tReview
Product Proposal Phase Definition Phase Development Phase Release Phase Deploy
Ops - B etaP lanning
Ops - 1s tCustom er
P lanning M tg
Ops - B etaP roduction
Ops -B eta B ills
Ops - B etaB ill/Rev
V erificaton
Ops - P rod.Ready
Ops -P rocedure
Doc
Ops -Testing
Ops -Tra in ing
P roductTest P lan
P roductTest
B etaTesting
Com plete
RevisedTest P lan
P roductTest
P rodTesting
Com plete
QA /TestReview of
Req.
TargetCustom er
S elling P lan
Go/No Go Decision Go/No Go Decision Go/No Go Decision Go/No Go Decision
Source: Techtrend Group
“The Best” use some from of a Milestone/Stage Gate process to introduce new products and services
“The Best” use some from of a Milestone/Stage Gate process to introduce new products and services
Skills: Observation
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What do you see?
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What do you see?
Minimum space which can represent the full alphabet!
Look beyond the obvious ….
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• Empathic Design (observational design)– In-house visits/recording– In-the-world observations– Trend Safari
• Ethnographic Studies/Analysis– Deep study of a “customer” social group
• Objective– Discover unspoken needs and wants of the target
customer segment
Observation Skills
Skills: Changing Perspective
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What is half of thirteen?
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Half of thirteen6.5
6 or 7 (rounded)
“thir” and “teen”
XII = VII and IIV(split horizontal)
1 and 3
. . . How many more can you come up with?
Be careful .. Don’t assume the definition of words (e.g. “half”)
Benefits of KI
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• 360° search for innovations ensures you avoid a blind spot – Six degrees of innovation
• Generate higher quality ideas– Killer Questions based on reverse innovation approach
– Forces participants to dig deeper for answers
• Work on the right ideas– Process to rank the best ideas
• Execution management– Gated/Milestone to ensure alignment of funding and execution
The benefits of the KI Approach
Lessons Learned
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• Changing the culture
• Metrics
• Finding Innovation Champions
• Reward failures & successes
• Adapt to your organization
Lessons Learned
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45
Thank you
Q & A