Design for Innovation Ltd, 2009 1

Success story Design for Innovation Ltd, 2009 2

Corporate Leadership: the Jack Welch WayJack Welch has been with the General Electric Company (GE) since 1960. Having taken GE with a market capitalization of about $13 billion, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500 billion, when he stepped down as its CEO 20 years later, in 2000. Although Jack Welch is "the celebrated leader of a global manufacturer often noted for its technological prowess, he has utilized a very human process to drive change through GE's vast organization. Having respect for the individual as a pivotal force in organizational change, Welch created a model of exceptional performance every corporate leader can learn from.The Role of the Leader in the New EconomyAs Jack Welch wrote in a letter to shareholders: "In the old culture, managers got their power from secret knowledge: profit margins, market share, and all that... In the new culture, the role of the leader is to express a vision, get buy-in, and implement it. That calls for open, caring relations with every employee, and face-to-face communication. People who can't convincingly articulate a vision won't be successful. But those who can will become even more open because success breeds self-confidence."Welch urged all GE leaders to stretch their business strategy, "Don't ever settle for mediocrity. They key to stretch is to reach for more than you think is possible. Don't sell yourself short by thinking that you'll fail." Do the best possible - and then reach beyond. Stretch "essentially means using dreams to set business targets - with no real idea of how to get there. If you do know how to get there - it's not a stretch target.Employee EmpowermentUnder Welch's leadership, managers had wide latitude in building their GE units in entrepreneurial fashion. Determined to harness the collective power of GE employees, Jack Welch redefined also relationships between boss and subordinates. He wrote: "The individual is the fountainhead of creativity and innovation, and we are struggling to get all of our people to accept the countercultural truth that often the best way to manage people is just to get out of their way. Only by releasing the energy and fire of our employees can we achieve the decisive, continuous productivity advantages that will give us the freedom to compete and win in any business anywhere on the globe."

Jack Welch said:The ability to learn more about our customers faster than the competition.The ability to turn that learning into action faster than the competition.

We have only two sources of competitive advantage: SuccessStory Design for Innovation Ltd, 2009 3

Corporate Leadership: the Jack Welch WayJack Welch has been with the General Electric Company (GE) since 1960. Having taken GE with a market capitalization of about $13 billion, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500 billion, when he stepped down as its CEO 20 years later, in 2000. Although Jack Welch is "the celebrated leader of a global manufacturer often noted for its technological prowess, he has utilized a very human process to drive change through GE's vast organization. Having respect for the individual as a pivotal force in organizational change, Welch created a model of exceptional performance every corporate leader can learn from.The Role of the Leader in the New EconomyAs Jack Welch wrote in a letter to shareholders: "In the old culture, managers got their power from secret knowledge: profit margins, market share, and all that... In the new culture, the role of the leader is to express a vision, get buy-in, and implement it. That calls for open, caring relations with every employee, and face-to-face communication. People who can't convincingly articulate a vision won't be successful. But those who can will become even more open because success breeds self-confidence."Welch urged all GE leaders to stretch their business strategy, "Don't ever settle for mediocrity. They key to stretch is to reach for more than you think is possible. Don't sell yourself short by thinking that you'll fail." Do the best possible - and then reach beyond. Stretch "essentially means using dreams to set business targets - with no real idea of how to get there. If you do know how to get there - it's not a stretch target.Employee EmpowermentUnder Welch's leadership, managers had wide latitude in building their GE units in entrepreneurial fashion. Determined to harness the collective power of GE employees, Jack Welch redefined also relationships between boss and subordinates. He wrote: "The individual is the fountainhead of creativity and innovation, and we are struggling to get all of our people to accept the countercultural truth that often the best way to manage people is just to get out of their way. Only by releasing the energy and fire of our employees can we achieve the decisive, continuous productivity advantages that will give us the freedom to compete and win in any business anywhere on the globe."

What you dont know about your customers and your business may be costing you millions! Design for Innovation Ltd, 2009 4

This presentation provides EGNRET members with an update on APEC-CPI project development.

Iain Sanders would like to express his apologies for not being able to attend this meeting due to other commitments. He extends his best wishes and sincerest thanks to all EGNRET members for their support in helping to get this project endorsed and funded by APEC.

D4I Framework SummaryWhere [are our stakeholders going]?Target key stakeholders unmet wants and needs.What [do they need to get there]?Identify problems to solve and opportunities to realize, that leverage existing resources and capabilities.How [will they get there]?Generate solutions with inventive problem-solving, product ideation and innovation tools.How Well [can they get there]?Evaluate feasibility and value of alternative solutions from multiple perspectives.When [will they get there]?Develop and execute an effective action plan for implementing solutions and monitoring progress. Design for Innovation Ltd, 2009 6

Design for Innovation Ltd, 2009 7Where [are our stakeholders going]?

Identifying Problems and Opportunities with your Stakeholders including Business Patterns2.What [do they need to get there]?Identify problems to solve and opportunities to realize, that leverage existing resources and capabilities. Design for Innovation Ltd, 2009 8

Design for Innovation Ltd, 2009 9Stakeholder Partnerships for Stakeholder-driven Innovation:Involve Your Stakeholders as Co-innovatorsBoardMarketingLeadershipR&DFinanceOperations

StakeholdersSalesPurchasing

Customer Partnership DefinedCustomer partnership is a shared journey to create a future for both parties that is better than either could have developed alone. Customer partnership is more than "putting customers first", or finding mutually satisfactory solutions to shared problems, or a dedication to excellence in every sale or service encounter. It also requires commitment to forging long-term relationships that create synergies of knowledge, security, and adaptability for both parties.Why Customer Partnership?The customer influences every aspect of your business and is the foundation of your organization's success. In today's turbulent times of rapid and chaotic change, no force is more grounding and stabilizing than a partnership with customers.1 Fierce competition today forces companies to become much more creative and flexible in their dealings with customers to give them exactly what they want faster. Partnering with customers represents your firm's capacity to anticipate what customers need even before they know they need it.2Case in Point: NikeWhen Nike partnered with their running customers, they discovered that, apart from running shoes and apparel, they also needed sport watches, MP3 players, and heart monitors. Nike developed these offerings and their equipment business boasted sales in excess of US$400 million within few years.Case in Point: BMWIn partnership with its customers and external innovators, BMW is constantly seeking to discover new technologies and design features to put into future cars. To harvest the insights of creative minds outside the BMW Group, the firm's Virtual Innovation Agency (VIA) is the point of contact for all external innovators who do not as yet have contacts within the firm. VIA makes it easy for car fans to communicate their ideas through its web-site, with additional online discussions that solicit ideas from enthusiasts around the world.References:1. "Leading on the Edge of Chaos", Emmett C. Murphy and Mark A. Murphy, 20032. "Results-Based Leadership", Dave Ulrich, Jack Zenger, and Norm Smallwood, 1999

3.How [will they get there]?Generate solutions with inventive problem-solving, product ideation and innovation tools. 10

Examine the Critical Factors:4.How Well [can they get there]?Evaluate feasibility and value of alternative solutions from multiple perspectives. Design for Innovation Ltd, 2009 11

Design for Innovation Ltd, 2009 12Design for Innovation provides a simple yet deeply insightful frame of reference formaking better decisions and achieving better results by design, on a continuous basisStakeholder Perspectives Examined: Investors Customers Intermediaries Employees Suppliers Regulators Communities Pressure Groups Alliance Partners Other Stakeholders

Stage- / Phase-Gate Project Management for Any Process (e.g.)5.When [will they get there]?Develop and execute an effective action plan for implementing solutions and monitoring progress. Design for Innovation Ltd, 2009 13Operating Processes:

Develop Vision & StrategyDesign & Develop Products & ServicesMarket & Sell Products & ServicesDeliver Products & ServicesManage Customer Service

Management & Support Processes:Develop & Manage Human CapitalManage IT & KnowledgeManage Financial ResourcesManage Environmental Health & SafetyManage External RelationshipsChange Management

The D4I Framework Facilitates Value Creation, Management and Innovation Design for Innovation Ltd, 2009 14

PlanningValue CreationValue Impacts

Value Outcomes

Value Outputs

Value Drivers

Value Builders

Primary Focus:Performance Improvement

Primary Focus:Customer Solutions

Primary Focus:Ideation & Innovation

Primary Focus:Project Management

Design for Innovation Ltd, 2009 15D4I Framework Core Competencies

D4I Framework Tools & ResourcesWhere [are our stakeholders going]?Performance improvement audits & roadmapsStrategic planning workshops & seminarsWhat [do they need to get there]?Tools for maximizing existing & potential lifetime value of customers & prospectsCustomer-product interaction discovery workshopsBusiness-Market-Customer opportunity discovery workshopsBusiness-Market-Customer problem solving workshopsHow [will they get there]?Inventive problem solving workshops & seminarsProduct ideation & innovation workshopsProduct-process-service innovation auditsHow Well [can they get there]?Better decision making guides and toolsCollaborative innovation capture, assessment & optimizationWhen [will they get there]?Process mapping and workflow optimizationStage-gate project management; and stage-gate product ideation & developmentLean six sigma & design for six sigma tools & resourcesTools & resources for facilitating collaboration & change managementMarket research and technology R&DTechno-economic analysis & modelling for business investments Design for Innovation Ltd, 2009 16

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D4I Framework for Technology Innovation ManagementWhere [is the need]?What is the next winning technology to satisfy the potential or perceived market need?What [is the problem definition]?Transform the need into a clearly defined problem, or a set of problems accompanied by a list of various constraints.How [will the problem be addressed]?Generate conceptual solutions to the problem(s) with TRIZ.How Well [do the alternative solutions work]?Evaluate the concepts generated against various criteria, & select the most promising ones for designing a prototype.When [will the best solution be ready]?Develop the detailed design, determine the dimensions of all the components, specify material requirements etc. Design for Innovation Ltd, 2009 18

D4I Tools for Technology Innovation ManagementProblem analysis, definition & development audit:Level 1: Routine design problems Level 2: Minor improvementsLevel 3: Fundamental improvementsLevel 4: Next generation technologiesLevel 5: Pioneering discovery / inventionAlgorithm for Inventive Problem Solving (ARIZ)Laws of technological system evolution:Tools for development of conceptual designsTools for identification & development of next-generation technologies76 Standard Solutions for fundamental improvements to existing systems with Substance-Field Analysis:Improving the system with no or little changeImproving the system by changing the system System transitionsDetection and measurementStrategies for simplification & improvement

100s of Patterns of Invention (Operators) to:Eliminate, reduce or prevent harmful effectsProvide alternative ways to obtain useful effectsResolve physical & other technical and non-technical contradictions1,000s of scientific effects for supporting Substance-Field Analysis, and discovering / enhancing ready-to-use, derived & insufficient resources:Fields: absorbing, accumulating, detecting, preventing, producing other fields & resourcesSubstances: accumulating, combining, detect-ing, eliminating, forming, moving, changing phase, preserving, producing & separating other substances & resourcesParameters: changing, decreasing, increasing, measuring, stabilizing other parameters & resourcesAccess to and searching of US patents & patent applications, EP documents, Japan-ese abstracts, and WIPO (PCT) documentsAccess to and searching of 7,000+ detailed scientific & engineering encyclopedia topics100s of searchable technical guidebooks

Design for Innovation Ltd, 2009 19

Companies we have worked with * Industrial Research Limited * National Institute of Water & Atmospheric Research * Meridian Energy * Orion Networks * IAG Insurance * MainPower * Coca Cola Amatil * Eastland Networks * General Cable New Zealand * Asia Pacific Economic Cooperation (APEC) * Canterbury Development Corporation * Ravensdown Fertiliser Cooperative * Canterprise, University of Canterbury * New Zealand Trade and Enterprise * Business Mentors New Zealand

* Rocky Mountain Institute, USA * Ideation International, USA * PD-Trak Solutions, USA

* Broken Hill Proprietary, Australia

* Centre for Exploitation of Science & Technology, UK * Department of Trade & Industry (DTI), UK * The Design Council, UK

* The European Commission (Belgium, Luxembourg)

* Mitsubishi Research Institute, Japan * Tokyo Electric Power Company, Japan

* McMer Corporation, Philippines Design for Innovation Ltd, 2009 20

For further information contact:

Dr. Iain SandersMobile: +64 (027) 356-6401Skype: iain.designforinnovation.comEmail: iain@designforinnovation.comWeb: http://www.designforinnovation.com Design for Innovation Ltd, 2009 21

Corporate Leadership: the Jack Welch WayJack Welch has been with the General Electric Company (GE) since 1960. Having taken GE with a market capitalization of about $13 billion, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500 billion, when he stepped down as its CEO 20 years later, in 2000. Although Jack Welch is "the celebrated leader of a global manufacturer often noted for its technological prowess, he has utilized a very human process to drive change through GE's vast organization. Having respect for the individual as a pivotal force in organizational change, Welch created a model of exceptional performance every corporate leader can learn from.The Role of the Leader in the New EconomyAs Jack Welch wrote in a letter to shareholders: "In the old culture, managers got their power from secret knowledge: profit margins, market share, and all that... In the new culture, the role of the leader is to express a vision, get buy-in, and implement it. That calls for open, caring relations with every employee, and face-to-face communication. People who can't convincingly articulate a vision won't be successful. But those who can will become even more open because success breeds self-confidence."Welch urged all GE leaders to stretch their business strategy, "Don't ever settle for mediocrity. They key to stretch is to reach for more than you think is possible. Don't sell yourself short by thinking that you'll fail." Do the best possible - and then reach beyond. Stretch "essentially means using dreams to set business targets - with no real idea of how to get there. If you do know how to get there - it's not a stretch target.Employee EmpowermentUnder Welch's leadership, managers had wide latitude in building their GE units in entrepreneurial fashion. Determined to harness the collective power of GE employees, Jack Welch redefined also relationships between boss and subordinates. He wrote: "The individual is the fountainhead of creativity and innovation, and we are struggling to get all of our people to accept the countercultural truth that often the best way to manage people is just to get out of their way. Only by releasing the energy and fire of our employees can we achieve the decisive, continuous productivity advantages that will give us the freedom to compete and win in any business anywhere on the globe."Corporate Leadership: the Jack Welch WayJack Welch has been with the General Electric Company (GE) since 1960. Having taken GE with a market capitalization of about $13 billion, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500 billion, when he stepped down as its CEO 20 years later, in 2000. Although Jack Welch is "the celebrated leader of a global manufacturer often noted for its technological prowess, he has utilized a very human process to drive change through GE's vast organization. Having respect for the individual as a pivotal force in organizational change, Welch created a model of exceptional performance every corporate leader can learn from.The Role of the Leader in the New EconomyAs Jack Welch wrote in a letter to shareholders: "In the old culture, managers got their power from secret knowledge: profit margins, market share, and all that... In the new culture, the role of the leader is to express a vision, get buy-in, and implement it. That calls for open, caring relations with every employee, and face-to-face communication. People who can't convincingly articulate a vision won't be successful. But those who can will become even more open because success breeds self-confidence."Welch urged all GE leaders to stretch their business strategy, "Don't ever settle for mediocrity. They key to stretch is to reach for more than you think is possible. Don't sell yourself short by thinking that you'll fail." Do the best possible - and then reach beyond. Stretch "essentially means using dreams to set business targets - with no real idea of how to get there. If you do know how to get there - it's not a stretch target.Employee EmpowermentUnder Welch's leadership, managers had wide latitude in building their GE units in entrepreneurial fashion. Determined to harness the collective power of GE employees, Jack Welch redefined also relationships between boss and subordinates. He wrote: "The individual is the fountainhead of creativity and innovation, and we are struggling to get all of our people to accept the countercultural truth that often the best way to manage people is just to get out of their way. Only by releasing the energy and fire of our employees can we achieve the decisive, continuous productivity advantages that will give us the freedom to compete and win in any business anywhere on the globe."This presentation provides EGNRET members with an update on APEC-CPI project development.

Iain Sanders would like to express his apologies for not being able to attend this meeting due to other commitments. He extends his best wishes and sincerest thanks to all EGNRET members for their support in helping to get this project endorsed and funded by APEC.

Customer Partnership DefinedCustomer partnership is a shared journey to create a future for both parties that is better than either could have developed alone. Customer partnership is more than "putting customers first", or finding mutually satisfactory solutions to shared problems, or a dedication to excellence in every sale or service encounter. It also requires commitment to forging long-term relationships that create synergies of knowledge, security, and adaptability for both parties.Why Customer Partnership?The customer influences every aspect of your business and is the foundation of your organization's success. In today's turbulent times of rapid and chaotic change, no force is more grounding and stabilizing than a partnership with customers.1 Fierce competition today forces companies to become much more creative and flexible in their dealings with customers to give them exactly what they want faster. Partnering with customers represents your firm's capacity to anticipate what customers need even before they know they need it.2Case in Point: NikeWhen Nike partnered with their running customers, they discovered that, apart from running shoes and apparel, they also needed sport watches, MP3 players, and heart monitors. Nike developed these offerings and their equipment business boasted sales in excess of US$400 million within few years.Case in Point: BMWIn partnership with its customers and external innovators, BMW is constantly seeking to discover new technologies and design features to put into future cars. To harvest the insights of creative minds outside the BMW Group, the firm's Virtual Innovation Agency (VIA) is the point of contact for all external innovators who do not as yet have contacts within the firm. VIA makes it easy for car fans to communicate their ideas through its web-site, with additional online discussions that solicit ideas from enthusiasts around the world.References:1. "Leading on the Edge of Chaos", Emmett C. Murphy and Mark A. Murphy, 20032. "Results-Based Leadership", Dave Ulrich, Jack Zenger, and Norm Smallwood, 1999