experimentation and innovation presentation v0.3

Drive value and productivity with

EXPERIMENTATION AND INNOVATION

A publication of Daniel Lock Consulting.

Want to skip ahead? Here’s what we’re going to cover.

A. COMMON MANAGEMENT APPROACH • The test and learn environment B. INNOVATION THROUGH PARTNERSHIP • How competitive collaboration works C. THREE KEY STAGES • Create the perfect managed experimentation process D. MAKING INNOVATION FLY • How one of today’s great innovation leaders works

COMMON MANAGEMENT APPROACH The Test and Learn Environment

•  Large scale and company-wide, or •  Conducted by small focus groups

targeted for purpose The problem with these approaches: •  Can be large, unwieldy, and

difficult to manage, or •  Lack of resource and seen as

peripheral to business strategy

How experimentation works in business today

Properly managed and measured experimentation affects a business by charting: •  Business course and strategy •  Products and Services •  Industry and business positioning

EFFECTS OF EXPERIMENTATION ON A BUSINESS

INNOVATION THROUGH PARTNERSHIP How Competitive Collaboration Works

•  Create an innovation culture •  Go large scale, and bring on board external expertise •  Create faster innovation •  Increase internal knowledge base •  Extend customer base

Spreading your experimental wings

The Story of Nestlé An inbred innovative culture

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Partners with some of the world’s largest companies

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Managed internally to large scale

Created ‘Sharing is Winning’ Strategy

THREE KEY STAGES Create the perfect managed experimentation process

1) ESTABLISH TRUST

CEO’s and Strategy Officers must learn to trust middle management • Reward innovative failure • Release the middle manager from constraints of risk aversion • Allow greater experimental nature

Middle managers are often unwilling to take risk: •  Failure often leads to no bonus, no pat rise, possible firing

•  So business strategy is narrowly framed •  Conducted in a risk averse atmosphere •  Leading to Rigidity and over-planning

2) ESTABLISH GOODWILL

•  Leadership from the top •  Direction that creates an innovative and experimental culture •  Metrics of success (and failure) measurement •  Learning from past experience and innovating the experimental model

Establishing goodwill requires

The Example of 3M

A mandate for employees to ‘change the basis of competition within your business unit.’

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Further to establishing such a high level of goodwill from board level all the way down, 3M also expects 25% of revenues to come from products launched in the previous three years.

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Allowing risks to be taken

Time allotted to develop novel and revolutionary strategies, products, and services.

In establishing company-wide goodwill 3M management took several initiatives:

3) CREATE BUSINESS VALUE

Without value creation, then an innovative and experimental culture is redundant, even bankrupt. Ensure the partners to your innovation are encouraged to be innovative and experimental in their approach. Lead from the top, with a culture of innovation and experimentation pointed firmly toward value creation

VALUE

•  Ensure your innovation partners benefit from the following:

•  Well defined responsibilities •  Encouraged to take risks •  A defined set of success metrics

Set a charter for risk and experimentation, and an

expectation of a flow of new products and services.

MAKING INNOVAGTION FLY How one of today’s great innovation leaders works

Chief Innovation Officer at Airbus, Head of EADS Innovation Works •  Fostered trust and goodwill throughout internal innovation partnerships •  Mandated fast and systematic screening at each decision making level •  Provided senior management guidance down the line •  Encouraged experimental attitudes to strategy and product development •  Defined clear roles and goals

Learn to innovate from Yann Barbaux

Without the leadership, and experimental entrepreneurship of Yann Barbaux, Airbus may never have produced the….

AIRBUS A320

BY Daniel Lock.

Twitter: @DanielLock | Web: DanielLock.com

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