Business Innovation - Getting It Right and Making It Real (Final Version)

Business Innovation: Getting it
Right and Making it Real

By Dr. Hitendra Patel
Locations:
BOSTON
BOLZANO
DUBAI
November 13, 2013 LONDON

SHANGHAI
SÃO PAULO
SEOUL
Medellin Innovation Summit V1.0 11/13/2013 © 2013 IXL Center Inc. All Rights Reserved TORONTO
Making What Can You
About IXL Demystifying
Innovation Do Monday
Center Innovation
Real Morning
About IXL Center Publications and Education
We live and breath innovation

We write books on Innovation We teach thousands of students about Innovation
We help companies build Innovation Capability
3
Medellin Innovation Summit V1.0 11/13/2013 © 2013 IXL Center Inc. All Rights Reserved
Making What Can You
Center Innovation
Real Morning
Demystifying Innovation Why Innovate?
Let us consider this questions…
Why do
companies
need to
innovate?
5
Demystifying Innovation Innovate or Die
Great companies can still die if they don’t continue to innovate
1980s 1990s 2000 2010+
B2C ?
B2B ?
6
Demystifying Innovation Innovation Premiums
Innovation leaders get greater shareholder returns, more loyal customers,

better partners and higher quality employees
Capturing the Innovation Premiums Who is Capturing it?
The Company to
Invest In or
The Brand to
Companies who pursue Buy or
Sustainable Profitable
Growth through
Innovation The Partner of
Choice or
A Great Place to
Work or
7
Making What Can You
Center Innovation
Real Morning
Making Innovation Real Challenges
What are ways to

sabotage innovation
or an innovation
initiative?
9
Making Innovation Real Key Elements
Making Innovation Real with three key innovation and business development
competencies
How to Innovate?
Where to Innovate?
How to sustain Innovation?
10
Making Innovation Real Innovation Management Framework
This presentation focuses on building an effective business innovation strategy

that addresses the key questions of What? Why? Where? And When?
11
Making Innovation Real Innovation Management Framework
Let us begin by reviewing What is the definition of business innovation
12
Making Innovation Real Definition Business Innovation
Business innovation is the creation AND capture of new value in new ways
New Networks New Pricing New Business

and Partners Strategies Models
PRICING MODEL
PRODUCTION OFFERING DELIVERY MARKETS

Technologies Products Occasions Customers
Processes Services Locations Needs
Assets Systems Channels Experiences
Brand
NETWORKS & PARTNERS
New Ways to New Customers +

Produce New New Ways to Experiences
Offerings Deliver
New Top Line New Cost New Strategic New Real

Growth Reductions Premiums Options
13
Demystifying Innovation Definition Example EXAMPLE
Business Innovation at McDonald’s
Wireless Point of Sale Franchising

New Networks and Partners New Pricing Strategies New Business Models
PRICING MODEL
PRODUCTION OFFERING DELIVERY MARKETS
Technologies Products Occasions Customers
Processes Services Locations Needs
Assets Systems Channels Experiences
Brand
NETWORKS & PARTNERS
New Ways to New New Customers +

New Ways to Deliver
Produce Offerings Experiences
14
Making Innovation Real Innovation Breakthroughs
Innovation Breakthroughs focus on four key components – trends, needs,

business models and combined capabilities
Innovation
Breakthroughs
OFFERING MARKET
BUSINESS
MODEL
PRODUCTION DELIVERY
COMBINE CAPABILITIES IN UNIQUE WAYS TO WOW
CUSTOMERS & BUILD BARRIERS TO ENTRY
16
Making Innovation Real Strategy Why Innovate?
Let us determine Why, How Much and When to innovate
INNOVATION DEFINITION
WHAT
BUSINESS INNOVATION BREAKTHROUGH
INNOVATION INNOVATION DISCIPLINE INNOVATION

STRATEGY LEADERSHIP STRATEGY
WHERE WHY
INNOVATION CAPACITY
RESOURCES PEOPLE PROCESSES HOW MUCH
WHAT INVESTMENTS
WHEN
INNOVATION DISCIPLINE
METRICS BEHAVIORS
17
Making Innovation Real Strategy Why Innovate?
A Case for Change helps define the Growth Gap and the Investment Profile
defines acceptable types of projects to close the Growth Gap
Ambitious
How much? Local/Global
CEO
Changing Incremental/
Environment Breakthrough
When?
Core/
Competition
Far from Core
Stretch Targets
Demanding Small/Big
Customers Investment
Other Metrics Other
18
Making Innovation Real Case for Change Connecting Drives to Initiatives and Outcomes
Carlos Ghosn’s case for building electric cars that are affordable to the
masses
Our world is facing an environmental challenge.

Ambitious Strategic Initiatives
All of us that produce and use cars need to be
Leader part of the solution. • Build a car with less carbon
footprint
• Make it affordable to the masses
Stretch Targets
• Cars with zero emission
• Launch by 2011
Benefits
Changing
• Produce cars that are environment
Environment
friendly but still provide the
Demand for comfort, space, safety and
electric vehicles performance of traditional vehicles
19
Making Innovation Real Strategy Where to Innovate?
Now let us determine Where to focus our Innovate
WHAT

WHERE WHY
INNOVATION CAPACITY
WHAT INVESTMENTS
WHEN
METRICS BEHAVIORS
20
Making Innovation Real Where to Innovate? Example
Pick a new field of play focus innovation
“A new era is beginning in the global automotive industry. At Nissan and

Renault, we are working to lead the way to mass-market zero-emission
mobility.”
- Carlos Ghosn, President and CEO of Renault/Nissan
Industry Definition
Traditional
Automotive
Industry
Source: Jonash, Ronald and Patel, Hitendra. 21

Thinking and Acting Differently to Make Innovation Real. Medellin Innovation Summit V1.0 11/13/2013 © 2013 IXL Center Inc. All Rights Reserved
Making Innovation Real Where to Innovate? Concepts, Partners and Sequencing
Visualize opportunities through concepts and partners
Batteries Charging Technology Charging Station Network
Source: Jonash, Ronald and Patel, Hitendra. 22

Thinking and Acting Differently to Make Innovation Real. Medellin Innovation Summit V1.0 11/13/2013 © 2013 IXL Center Inc. All Rights Reserved
What Can You Do Monday Morning Recommendations
Strategy Recommendations
1 Agree on a definition of innovation
Create a compelling case for change that

2 gives Innovation a purpose (reason)
Pick your spot to focus innovation

3
Visualize opportunities through

4 concepts and partners
23
Making Innovation Real Framework
Innovation Capacity defines how to drive ideas to commercialization
WHAT

WHERE WHY
INNOVATION CAPACITY
WHAT INVESTMENTS
WHEN
METRICS BEHAVIORS
24
Making Innovation Real Capacity Innovation Roles
Have someone responsible to lead innovation management in your organization

Common Pitfalls of
Business Function-led Innovation
 Trained to make decisions based on hard facts and

STRATEGY numbers, pursuing only proven opportunities
STRATEGY FINANCE  Targets set based on budget and not stretch
Creating Space + Valuing Uncertainty,
Direction for Options + Pipelines
Growth  Plays a role of innovation gatekeeper by screening
ideas using financial index such as ROI and payback
FINANCE period
 Ideation scope is constrained by budget
A CHIEF INNOVATION
OFFICER must pull the  Tends to stick to incremental changes due to focus
pieces together on short-term visible results and existing customers’
MARKETING needs
 Not good at identifying unmet customer needs or
generate breakthrough ideas
MARKETING
R&D
Consumer +  Pursues endless technological excellence, ignoring
Seeing Opportunities marketability in many cases
Customer
for New Solutions May end up with over-engineered products
Insights 
R&D disconnected to customers, and lose best
commercialization timing
25
Making Innovation Real Capacity Concept to Customer
Build a flexible and disciplined concept to commercialization process
John Chambers
CEO, Cisco $$
$
Insights
Unmet Needs
$$$
Pain Points
Other…
$$
Multi-Horizon Multi-Track
Multi-Sourced Multi-Channel
Concept Pipeline
Idea Generation Execution
Development Management
26
Making Innovation Real Capacity High Performing Teams
Develop high performance teams that are cross functional and are well
networked to get information and insights quickly
Technology
Logistics Marketing
Business
Leader
Manuf. Sales
27
Making Innovation Real External Partnering Looking across the Value Chain - Examples
Teaming outside of your organization and learning to play with others

Examples from the Koreans
“Partnerships and alliances are key to our success”
“We believe that in markets driven by common

Kun-Hee Lee,
standards, alliances are an important way to spur
Chairman consumer acceptance and overall success”
28
Capacity Recommendations
Have someone responsible to lead

5
innovation management in your organization
Design a flexible and disciplined concept

6
to commercialization process
(not stage-gate)
Collaborate across the value chain to go

7 fast
Make Collaborate Buy
29
Making Innovation Real Framework Discipline
Innovation Discipline enables people to finish what they start
WHAT

WHERE WHY
INNOVATION CAPACITY
WHAT INVESTMENTS
WHEN
METRICS BEHAVIORS
30
Making Innovation Real Discipline Company Sandbox – Time and Space
Leaders must create time and space for employees to experiment
Directors
Managers
• Strategy requires you to define your

sandbox
• Execution requires you to play inside
your sandbox
• There are other “cool” things to play
outside of your sandbox
31
Making Innovation Real Discipline Ambidextrous – Near and Long Term
Keep the ball on your feet (near term) while looking around for what-if and
what’s-next (long term)
32
Making Innovation Real Discipline Embrace Diversity - Think Differently
Embrace differences to source ideas and gain complementary capabilities
33
Making Innovation Real Discipline Metrics – Rewards & Recognition
Use metrics to measure innovation and recognize your innovators
34
Discipline Recommendations
Look around for what-if and what’s-next

8 while delivering on the near term
Create time and space for employees to

9 experiment
Embrace Differences to source ideas and

10 gain complementary capabilities
Use system-wide Innovation metrics to

11 drive the right behaviors and innovation
results
35
Making What Can You
Center Innovation
Real Morning
36
What Can You Do Monday Morning Framework
Innovation Management Framework
WHAT
WHY
HOW MUCH
WHEN
CRITERIA
WHERE WHY
INNOVATION CAPACITY
WHAT INVESTMENTS
WHEN
METRICS BEHAVIORS
37
Strategy Recommendations
1 Agree on a definition of innovation
Create a compelling case for change that

2 gives Innovation a purpose (reason)
Pick your spot to focus innovation

3
Visualize opportunities through

4 concepts and partners
38
Capacity Recommendations
Have someone responsible to lead

5
innovation management in your organization
Design a flexible and disciplined concept

6
to commercialization process
(not stage-gate)
Collaborate across the value chain to go

7 fast
Make Collaborate Buy
39
Discipline Recommendations
Look around for what-if and what’s-next

8 while delivering on the near term
Create time and space for employees to

9 experiment
Embrace Differences to source ideas and

10 gain complementary capabilities
Use system-wide Innovation metrics to

11 drive the right behaviors and innovation
results
40
Thank you Follow us on...
Hitendra Patel
Managing Director
+1-617-259-8417 @IXL_Center
Hitendra.Patel@ixl-center.com
www.ixl-center.com
41
About IXL Center A Unique Heritage
IXL has a unique heritage in innovation consulting and management education
Management Consulting + Management Education
Management Consulting Innovation Management Management Education

Innovation Practice Leaders at Capability Building Innovation Department Heads
Arthur D. Little and Monitor Group of Graduate Business Schools
1985 1964
2002 2009 2004
2007
42
About IXL Center Value Proposition
Our programs help organizations get started, deliver breakthrough results

while building innovation capabilities
High Performance Innovation Programs
Breakthrough Develop bigger, better and

Results bolder concepts and drive
Program them faster and cheaper to
implementation
Jump Start
Program
Capability Develop strong organizational
Building and performance capabilities
Build organizational excitement, Program around Innovation Strategy,
clarity and alignment to start Capacity and Discipline
the innovation journey
That Drive Sustainable Business Growth

43
About IXL Center Thought Leadership
IXL builds thought leadership through books and codification of innovation

management methods and tools
Books on
Leading
Trends
How To
Manuals Courses &
Making it Real
Certificates
Audit Tool Eureka Online Team Feedback Tool
Online
Tools
44
About IXL Center Partnerships
We have many strategic partnerships to drive innovation globally
University
Partnerships
Strategic
Partnerships
45
About IXL Center Locations
IXL is a global firm with offices and teams in locations around the world
Boston
Bolzano
Dubai
Cairo
London
Istanbul Istanbul
San Francisco
Seoul
Shanghai
Singapore
Sao Paulo
46

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Business Innovation - Getting It Right and Making It Real (Final Version)

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Business Innovation: Getting it

Right and Making it Real

November 13, 2013 LONDON

We live and breath innovation

We help companies build Innovation Capability

Let us consider this questions…

Great companies can still die if they don’t continue to innovate

1980s 1990s 2000 2010+

Innovation leaders get greater shareholder returns, more loyal customers,

Capturing the Innovation Premiums Who is Capturing it?

What are ways to

How to sustain Innovation?

This presentation focuses on building an effective business innovation strategy

Let us begin by reviewing What is the definition of business innovation

New Networks New Pricing New Business

PRODUCTION OFFERING DELIVERY MARKETS

NETWORKS & PARTNERS

New Ways to New Customers +

New Top Line New Cost New Strategic New Real

Business Innovation at McDonald’s

Wireless Point of Sale Franchising

NETWORKS & PARTNERS

New Ways to New New Customers +

Innovation Breakthroughs focus on four key components – trends, needs,

Let us determine Why, How Much and When to innovate

INNOVATION INNOVATION DISCIPLINE INNOVATION

Other Metrics Other

Our world is facing an environmental challenge.

Now let us determine Where to focus our Innovate

INNOVATION INNOVATION DISCIPLINE INNOVATION

Pick a new field of play focus innovation

“A new era is beginning in the global automotive industry. At Nissan and

Source: Jonash, Ronald and Patel, Hitendra. 21

Visualize opportunities through concepts and partners

Batteries Charging Technology Charging Station Network

Source: Jonash, Ronald and Patel, Hitendra. 22

1 Agree on a definition of innovation

Create a compelling case for change that

Pick your spot to focus innovation

Visualize opportunities through

Innovation Capacity defines how to drive ideas to commercialization

INNOVATION INNOVATION DISCIPLINE INNOVATION

Have someone responsible to lead innovation management in your organization

 Trained to make decisions based on hard facts and

Build a flexible and disciplined concept to commercialization process

Teaming outside of your organization and learning to play with others

“We believe that in markets driven by common

Have someone responsible to lead

Design a flexible and disciplined concept

Collaborate across the value chain to go

Innovation Discipline enables people to finish what they start

INNOVATION INNOVATION DISCIPLINE INNOVATION

Leaders must create time and space for employees to experiment

• Strategy requires you to define your

Embrace differences to source ideas and gain complementary capabilities

Use metrics to measure innovation and recognize your innovators

Look around for what-if and what’s-next

Create time and space for employees to

Embrace Differences to source ideas and

Use system-wide Innovation metrics to

Innovation Management Framework

1 Agree on a definition of innovation

Create a compelling case for change that