Innovation StrategiesLeo Barella, Vice President & Chief Technology OfficerExcellus BlueCross BlueShield

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Kodak Video goes here

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“There were no digital consumer products”

“Digital was difficult to understand”

“Transition from a 70-80% margins to 3-4%”

“It was run by experienced Kodak managers

who grew up in the Kodak style”

Corporate Culture and Processes could not value Disruptive

Innovation

Styles of Innovation

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Sustaining vs. Disruptive Innovation

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Sustaining Innovation

Innovating in Response to Customers’ Feedback

Innovation Pre-emptive to Customers’ Desires

Disruptive Innovation

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Wallace Carothers

Pattern RecognitionTrial & Error Cause & Effect

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Pattern RecognitionTrial & Error Cause & Effect

Types of Innovation

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Disruptive Products

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Disruptive Products

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Disruptive Products

Steel Industry

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Integrated Mill Minimill

Steel Industry

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Integrated Mills Minimills

Stee

l Qua

lity

7%

12%

18%

25-30%

4%

8%

Rebar

Bars - Rods

Structural

Sheets

22%

55%

1975 1980 1985 1990

% of Tons

Who’s the customer and why are they buying our products

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Job Mapping

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STEP EXAMPLE

LocateGather items and information you need to do the job

Simplify input and simplify when and where they are available

PrepareSetup the environment to do the job

Easier setup of product and work area

ConfirmVerify that they are ready to perform the job

Giving information on how to confirm readiness

DefineDetermine their goals and plan resources

Simplify Planning

CUSTOMER INNOVATION

Job Mapping

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STEP CUSTOMER INNOVATION EXAMPLE

Execute Carry out the job Preventing problems or delays

MonitorAssess whether the job is being successfully executed

Linking Monitoring with Improved Execution

Modify Make alterations to improve executions

Reducing the need to make alterations or the number of alterations needed

Conclude Finish the job or prepare to repeat it

Designing products to simplify the process to conclude the job

Innovation Evolution

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I need to get this item from here to there with perfect certainty as fast as possible

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Primary Question What Do Customers Need?

Needs Assessment Surveys & Focus Groups

Innovation Goal Planning Before Action

Innovation OutcomeMeeting Current Customer

Technology Needs

Innovation Process Structured & Linear

Organizational Models Traditional Models & Roles

What Do Customers Do?

Ethnography

Action Before Planning

Learning & Exploring

Dynamic & Spontaneous

New Structures & Quick Development Cycles

Innovation Headquarters

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Disruptive Innovations Feed Into Portfolio Management

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Standard Portfolio Management Process:• Disciplined milestone definition and reviews• Includes entire product life cycle• Aligns technology and product development• Technology is developed to expected level of maturity• Continuous improvement of products and processes

Disruptive Innovation Development Process:• Defines critical assumptions• Rapid assessment of assumptions• Validated assumptions pace critical technology development