a holistic approach to innovation excellence

Innovation Excellence

Elements to build the future of organizations

Kienbaum Management Consultants August 2016

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New world

Old world Today

Businesses must combine continuous innovation and optimization in times of

agility and rapid transformationsS-Curve description of innovation

Adapted from F. Malik: Navigating into the Unknown, 2016

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Business Case for Innovation

Transformations & innovations today are increasingly rapid and more common and thus require proactive

models and sophisticated approaches to maintain or increase success rates.

» Companies with an innovation culture & strategy show on average an 22 % higher return of R&D (Booz & Company)

» Innovation attracts future talent: 66 % of Millennials state that innovation is a key ingredient for an employer choice (Deloitte study 2015)

» Creates Revenue Growth: Innovative companies show a CAGR that is 60 % higher than the overall S&P Global 1200 (S&P Global 2011)

» Besides operative data a strategic dimension needs to be developed to make decisions

» Innovation is of central strategic importance as transformations are abrupt and market changing

» If you see the operative necessity to innovate, it is too late to act effectively

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Sources and triggers of innovation

Data

Technology

Customer

Operational

» Operational: Innovation imperative driven through the internal, operational need to improve

» Data: Observations from within the organization find innovation opportunities that would

improve existing processes, systems, products, and interfaces

» Technology: Technological advances create innovation drivers through asset improvements

» Data: Data mining of external sources to identify market opportunity or competitive

challenges that may be applied to internal operations

» Technology: Technology change in supply chain require innovations from internal processes

» Customer: Innovations drawn from changing customer or market demands

Innovation Triggers Internal

External

Innovations can be necessitated from triggers both internally and from the

external operating environment

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Innovation Tools and Methodologies

Cooperation & Collaboration

Innovation Strategy

Promoter & Team Concepts

Innovation Performance Management

Innovation Training & Development

OperativeStrategic

A successful approach toward innovation excellence needs to be holistic,

integrated and flexible while connecting people with the organizationApproach overview

Source: Kienbaum

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Innovation Processes

Management Control &

Communication System

Innovation Leadership

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Moving towards a holistic and modern approach identifies and maximizes

innovations in your organizationKienbaum Model: Elements of an integrated and holistic innovation process (1/2)

1. Align your innovation strategy with corporate strategy and follow a strategic approach that leaves behind

hindrances, optimizes current processes, and focuses on creating new linear and non-linear innovations.

2. Maintain balanced innovation leadership for a consistently stable innovation journey, creating a culture of

discipline. Ensure team members are content with agile culture, a vital value-adding component.

3. Develop processes for the entire organization on how to streamline innovation from idea generation to

implementation. Utilize fluid agile components, a stage gate process, and a robust delivery process.

4. Facilitate a creative environment with innovation tools to best stimulate employee creativity and

innovative mindset, such as DfSS and Design Thinking that bring value to the entire organization.

5. Ensure integration and multi-level alignment of systems, track innovation and measure significant KPIs.

Define success of innovation an ensure adherence to processes and strategy.

Innovation

Strategy

Innovation

Processes

Innovation Tools & Methodologies

Innovation

Leadership

Management Control & Communication System

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Moving towards a holistic and modern approach identifies and maximizes

innovations in your organizationKienbaum Model: Elements of an integrated and holistic innovation process (2/2)

6. Encourage extensive collaboration across cross functional departments, retaining all ideas, concepts,

and insights from employees and leveraging the collective expertise an a powerful asset.

7. Develop employee skills through innovation tools and training concepts. Ensure employees are

constantly obtaining training and continuously learning.

8. Evaluate team-based performance based on innovation and reinforce behaviors consistent with an

innovative culture where failures are accepted and lessons learned improve future endeavors.

9. Provide consistent and comprehensive training and development opportunities for employees across all

functions to foster a creative culture and innovative mindset.

10. Ensure the organization is ready to absorb innovation with Kienbaum’s Readiness Check. Assess current

state and develop actionable plan regarding innovation strategy, processes, and tools.



ChangeManagement

Cooperation &

Collaboration


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Divide old from new: Optimization of the current business needs

to be separated from new creationsInternal strategy and focus

Create the future

Manage the present

Forget the past

Potential Strategic Solution

Inte

rnal

Inn

ova

tio

n Identify products or processes that are not profitable or beneficial,

identify customers or activities that are dragging down the organization

Through strategic tools, selectively forget the past, letting go of values

& practices that fuel the current business but fail the new one

Learning precedes innovation: Innovate and invent the future

maintaining simplicity to counterbalance growing complexity, implement

design thinking principles

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» Identify where and how to focus the innovation efforts and resources

» Build innovation capabilities and structures

» Align internal and external factors for a holistic and fundamental approach

Innovation Strategy

Inn

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Product Innovation

Process Innovation

Business Model

Innovation

Customer Operations Strategic

Based on the book “The Three-Box-Solution” by Vijay Govindarajan, 2016

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Great ideas alone are not enough – the organization as a whole

must be ready to absorb innovation for a robust processProcess from idea generation to implementation

» ....

Idea Generation Market Launch

» Generate, identify, and

prioritize ideas

(incremental and

disruptive),

» Evaluate methods driving

innovation (internal,

operational, customer,

data)

» Implement and handover

innovation

» Full and integrated

product & market launch

» Post-implementation

review and continuous

improvement

Co-operational Concepts Innovation CultureInnovation StructureInnovation Strategy

Innovation Process

Creativity

Generating new ideas

Innovation

Implementing new ideas

Innovation Stage Gate Process

» Teams or individuals select top projects & transform the

idea using tool driven, stage gate process

» Self management promoting method that can be applied to

processes, systems & procedures

» Minimize planning in the early stages with a fluid Agile

team-based approach

» During each development stage implement solution

focused mindset of Design Thinking

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Innovation tools and methodologies provide a structured approach

innovation process and strategy deploymentInnovation toolbox & tool deployment

Innovation Toolbox Example of Innovation Tool Deployment

» Innovation Excellence utilizes numerous tools

and methodologies to ensure structured

ideation and implementation, such as:

• Design for Six Sigma (DFSS)

• Design Thinking

• Catalyst Workshop

• Big Data Innovation through CRISP-DM

» Training is vital for the innovation tools,

allowing for understanding of the process

» The innovation strategy dictates the

importance of specific factors, such as speed

of innovation or required investment

Innovation Tools & Methodologies

The tools are selected and deployed in a way best suited for the organization, strategy, and teams involved.

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Open innovation networks add tremendous value as they leverage

ideas & innovation assets from outside sourcesSharing, learning & connecting through an Open Innovation Network

Remarks

» Grow the organization's innovation community where

diversity is key, which is best achieved through leveraging

relationships from open innovation networks

» Avoid challenges of isolated internal teams that may be

too small to reach their full potential, limiting innovative

solutions

» Build the bridge between the organization's core innovation

team(s) and outside influencers and peers

» Select innovation partners that show consistent positive

collaborative innovation behaviors

» Create cross functional teams that pool collective

knowledge and expertise from different areas

Learning Institutes

• Universities• Research institutes• Other academic

institutions

Knowledge Transfer

• Technology labs• Consultants,

Engineers• Conferences

Market Forces

• Customers• Suppliers• Competitors• Shareholders

Government

• Patent Offices• Contract Labs• Research Grants

Innovation Company

Innovation Network

Cooperation & Collaboration

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Integration and multi-level alignment of fundamental systems

determine the success of open innovation practicesPersonnel and cultural influence are underlying factors for sustainable and value-added results

Remarks

» Define innovation in an actionable way, develop steps and

measure through a monitoring and reporting system

» Track ROI in the form of

• “speed of learning”

• “the existence and level of a failure culture”

• mood of teams and individuals

• other KPIs like innovation rate, number of patents, etc.

» Uncover innovation & growth opportunities in all areas of

the organization

» Ensure completeness of the innovation process and

implementation without disrupting the organizational structure

» Maintain a culture of continuous improvement of your

innovation system & efforts

Plan

Check

Act

DoHigh

High

Autonomy

Alig

nm

ent

Low

Micro-management

Conventional

Chaos

Agile

Management Control & Communication

System

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Empowered Single Innovation Unit

Once the right people are selected for the right teams, the

structure around them super charges their work processInnovation units and team concepts

Agile Teams and Promoter ConceptExample of a conceptual team approach

High

High

Autonomy

Alig

nm

ent

Low

Micro-management

Objectives are not clear but specific instructions are given

Conventional

The goal is givenbut so is the way to achieve it

Chaos

Neither the goals norany tasks are determined

Agile

The vision is clear and people contribute the way to get there

» Work quickly & autonomously, change on demand,

and provide quick iterations and review of work

» Act within a general structure with ability to change

and adapt as needed

» Any team member can work with any other on a

smaller sub project

Agile Innovation

Team

PowerPromoter

Relationship Promoter

Expert Promoter

ProcessPromoter

Gets resources & removes obstacles

Ensures team is aligned with other units

Acts as a knowledge expert on the topic

Makes sure processesare followed & team is on track


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Innovation performance evaluation and management play an

important role in reinforcing the culture of innovationInnovation performance management development

Value-based Team Evaluations

» Performance evaluation and management is based

around metrics that align with the innovation strategy

» These metrics should emphasize beliefs that influence

behaviors & activities that are consistent with the

innovation culture and values

» Failures are accepted, provided they offer learnings and

takeaways that improve future endeavors

» Team evaluations are more effective than individual

assessments

» Encourage engagement in innovation throughout the

organization

Innovation Culture Innovation Values

Innovation Metrics

Innovation Strategy

Innovation Units or Teams

Innovation Hierarchy


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Innovation training & development fosters a creative culture and

builds a competitive advantage that drives growthInnovation Training & Development

The Power of Innovation Culture Development

» Empower employees and teams to be creative, building on

skills and creating an open & innovative mindset

» Set up agile training networks targeting staff across all

functions and facilitate regular brainstorming sessions

» Facilitate external trainings to enhance employee skills when

new knowledge cannot be developed internally

» Develop employees to be trainers as well as trainees with

proven, effective and powerful tools & techniques

» Create opportunities to maximize interaction in a team

environment

Source of Innovations and Ideas


Traditional top-down approach

Organization wide approach

Instill innovation training culture

Develop employees as trainers

Agile Innovation Training & Development

Support top-down ideas

Encourage innovative thought leaders

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Select leaders for a stable innovation journey that facilitate an

agile & continuously innovating cultureLeading Innovation Principles

Based on the book “The Three-Box-Solution” by Vijay Govindarajan, 2016

Balanced Innovation Leadership BehaviorCreate a stable innovation journey

» Develop discipline of selectively forgetting the past that

will refrain from creating the future

» Challenge all issues and discover opportunities; taking

risks is important and often underestimated

» Optimize current processes while simultaneously

developing new innovative processes

» Measure and decide on team happiness and learning

speed to better build an agile culture

» Balance and manage all leadership components for a

continuous and stable journey

Balance your culture and assess your leaders, including yourself.

Innovation Leadership

Avoid Traps of

the Past

Be Alert to

Weak Signals

Experiment &

Learn

Build the

Future

Every Day

Practice

Planned

Opportunism

Exert proactive

control over

unpredictable

situations

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» Innovation strategies are only rudimentarily developed

» Management incentives not set up to reward innovation

» Focus on past success rather than future challenges

» Unwilling to learn from past failures

» No brainstorming or creative thinking process

» Organization not ready for change

Innovation managements requires constant transformational and

change efforts in order to be sustainable and effective Internal & External change drivers for Innovation

Change Management

» Revenues and costs

» Employees

» Increasing complexity

» Risk Management

» Market demands & customer

» Customer competitive advantage

Internal change drivers

External change drivers

» Increasing competition

» Customer Demands

» Globalization

» Technology

» Policy & legislative initiatives

» Market environment & complexity

Obstacles to Innovation

ContinuousImprovement

Sustainability

Implementation

Usage

Understanding

Compliance

Installation

Awareness

Behavioral Change

Cultural Change

Procedural Change

Change Process Steps

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Determine the starting point with the Innovation Readiness Check

and determine the roadmap with CatalystInnovation Readiness Check & Catalyst Workshop

» Use the collective intelligence of the organization to determine

the future to be state with a one day Catalyst workshop

» Identify the biggest obstacles to innovation within the

organization via “Liquid Democracy”

The Readiness Check will determine the current and future states of innovation within your organization. When

appropriate level has been reached, a Catalyst workshop guides you to the desired state.

» Check the current state of the organization on innovation

strategy, processes, systems, tools, leadership and people

» Identify shortcomings within innovation organization and

assess level of development

Flexible,

adaptable,

integrated

solution

Liquid Democracy

Quick Solutions

Collective Intelligence

Implementation 1st Step

Innovation Readiness Check Catalyst Workshop

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Value addition comes from different aspects arising from the combination of

Kienbaum's experience and the organization’s specific expertiseValue-added for organizations

Extensive industry experience from Kienbaum and your organization, combined with our Innovation

excellence experience leads to a best practice approach.1

As an experienced partner for strategic re-orientations of organizations, Kienbaum is able to

positively challenge the current innovation organization and shift to an improved, adaptable one.

The holistic approach, which also considers the HR aspects, e.g. by taking into account the performance

management and leadership of the innovation organization, supports a successful implementation.

Implementing innovation excellence means a major change to the organization, which will be supported by

Kienbaum, with a deep understanding of change processes in organizations.

The flexible, implementation oriented approach of Kienbaum helps organizations to focus on the right

things within the management system.

A deep understanding of the specifics of the business makes sure that the concept generated is

accepted by the management and the relevant people within the organization.2

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Eric M. LavellePrincipal Phone: +1 843 804 0020Fax: +1 213 805 5337Mobile: +1 843 804 [email protected]

Dr. Andreas NordheiderConsultantPhone: +49 211 96 59186Fax: +49 211 965 9335Mobile: +49 173 920 [email protected]

Rialda IsovicConsultantPhone: +1 404 643 0230Fax: +1 213 805 5337Mobile: +1 404 643 [email protected]

Kienbaum Consultants Inc.Contact information for US Kienbaum Consultants

Contacts

Kienbaum Consultants Inc.2300 Lakeview Parkway, Suite 700 Alpharetta, GA 30009 USA

Address

www.kienbaum.com

mailto:[email protected]



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