Download - 8 steps to innovation: An introduction
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Rishikesha T. Krishnan & Vinay Dabholkar [email protected]; [email protected]
8 Steps to Innovation:
Building a Systematic Innovation Capability
April 26, 2013
1
Build a
pipeline
3 Improve
Batting Avg
2 Improve idea velocity
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From Jugaad to Systematic Innovation:
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Innovation by
Firms
Inputs
People
Funding
Knowledge
Infrastructure
Capacity to Innovate
Incentive to
Innovate
Benefits
Competition
Appropriability
Rewards
Social
Environment
Political
Environment
Economic
Environment
Technology
Environment
Government Policy
International
Environment 3
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Innovation by
Firms
Inputs
People
Funding
Knowledge
Infrastructure
Capacity to Innovate
Incentive to
Innovate
Benefits
Competition
Appropriability
Rewards
Social
Environment
Political
Environment
Economic
Environment
Technology
Environment
Government Policy
International
Environment
Improved since
1991
Remain areas
of concern
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INNOVATION STRATEGIES
DEPEND ON YOUR SOURCE OF
COMPETITIVE ADVANTAGE….
Look at the
disciplines of market leaders….
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1. Operational Excellence
Provision of consistent quality at the best price
through a standardized business system that minimizes the cost & difficulty faced by the customer in acquiring the product
• Wal-Mart • Southwest Airlines
Low-cost transaction processing systems Optimization of business processes
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2. Customer Responsiveness
Emphasis on careful tailoring and adaptation
of products & services to increasingly specific requirements
• Merrill-Lynch • Nordstrom’s
Microsegments Long-term relationships Empowerment
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3. Performance Superiority
Continuous, fast-paced innovation that yields a steady flow of leading-edge products that
consistently push the state-of-art
•3M •Sony •Gillette
Openness to new ideas Sensitive to latent needs Mobilize NPD teams
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8 Steps to Innovation:
Building a Systematic Innovation Capability
1
Build a
pipeline
3 Improve
Batting Avg
2 Improve idea velocity
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Build a Pipeline
1. Lay the Foundation
2. Create a Challenge Book
3. Build Participation
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Improve the Idea Velocity
4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model
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Increase the Batting Average
7. Build an Innovation Sandbox
8. Create a Margin of Safety
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LAY THE FOUNDATION
STEP 1 14
8 Steps to Innovation Excellence
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Build a Pipeline
1. Lay the Foundation
Create Innovation Program
E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
Idea Management
Buzz Creation
Training & Development
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3 Key Processes
in an Innovation Program
Idea
Management
Buzz
Creation
Training &
Development
(who submits?
who selects?
who funds?)
(campaigns,
communication,
rewards,
innovation day)
(prototyping,
TRIZ,
design thinking,
idea communication,
leadership development)
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Idea Box
source scope stages
technology selection funding
Idea Management
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Year No of Suggestions Participation Adoption
suggestions per person Rate(%) Rate(%)
1951 789 0.1 8 23
1971 88,607 2.2 67 72
1986 2.6million 48 95 96
40 years, 20 million ideas
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The Power of Small Ideas
“There is no genius in our company. We
just do whatever we believe is right, trying
every day to improve every little bit and
piece. But when 70 years of very small
improvements accumulate, they become a
revolution”
From Interview with Katsuaki Watanabe
in HBR, July-Aug 2007
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Build a Pipeline
Lay the Foundation
Create Innovation Program
E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
Idea Management
Buzz Creation
Training & Development
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Buzz Creation (creative campaigns)
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Garib Rath
(Heavier & longer) Axle load
Heavier, faster and longer
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Some Titan Innovation Campaigns
2004: “What is new?”
Identification and implementation of 5 new ideas by
every supervisor on the shopfloor
2006: HOD Fund
Every head of department authorised to spend upto Rs. 1
lakh on an idea without any approvals
2008: “Simplify & Automate”
Most successful theme at Titan
2009: “Innovation School of Management”
Making every employee an innovator
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Titan: The 3M of India? 25
Karatmeter resulted in transformation of jewellery
business
“Anyone can be an Innovator”
Innovation School of Management
Process innovations result in 100s of crores savings
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Build a Pipeline
Lay the Foundation
Create Innovation Program
E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
Idea Management
Buzz Creation
Training & Development
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Training & Development
Titan Innovation School of Management
“Everybody an innovator by 2015”
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Focus area Techniques
Design thinking Immersive research, rapid
prototyping, brainstorming
Systems thinking TRIZ
Systems archetypes
Theory of constraints (TOC)
Lateral thinking Edward de Bono’s six thinking
hats
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CREATE A CHALLENGE BOOK
STEP 2 28
8 Steps to Innovation Excellence
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Build a Pipeline
2. Create a Challenge Book
U & I Portal at HCL
Petition Box at Tihar Jail
Feel the Pain
Sense the Wave
See the Waste
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The Bajaj Pulsar exploited a discontinuity.. 30
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7 Themes
Digital consumers
Emerging economies
Sustainable tomorrow
Smarter organizations
New commerce
Pervasive computing
Healthcare economy
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http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
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Disguster Delighter
Annoyance Frills
Negative Positive
Low
High
Emotions
Importance
to
customer
A Relentless Focus
on User Experience is Critical
Source: H. Rao, Stanford GSB, 2007
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Disguster
Delays
Missing Bags
Delighter
Upgrades
Annoyance
Pepsi instead
of Coke
Frills
Inflight
Magazine
Negative Positive
Low
High
Emotions
Importance
to
customer
A Relentless Focus
on User Experience is Critical
Examples from the Airline Industry
Source: H. Rao, Stanford GSB, 2007
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BUILD PARTICIPATION
STEP 3 34
8 Steps to Innovation Excellence
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Examples
Role model
Community of practice
Innovation catalyst
Rewards & recognition
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Improve the Idea Velocity
4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model
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EXPERIMENT WITH LOW COST
AT HIGH SPEED
STEP 4 37
8 Steps to Innovation Excellence
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Improve the Idea Velocity
4. Experiment with Low Cost at High Speed
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itch idea
demo impact
Feasibility Loop Viability Loop
2 months
Sep 2003
Nov 2003
Feb 2004
3 months 2 months
Apr 2004
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Creating a Climate for Experimentation
Failure plays a critical role in innovation
Post-It Notes & failed adhesives
Nylon: a lab experiment that went wrong
TVS Spectra failed, but Victor succeeded
Time-to-market is important…but don’t forget the role
of earlier innovations
Separate intelligent failure from unnecessary failure -
in language and managerial response
Create infrastructure, give resources for expts
Have a high trial rate: fail fast, learn fast
Can you do the “last” experiment first?
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Avoid the “Failure Fallacy” 41
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GO FAST FROM PROTOTYPE
TO INCUBATION
STEP 5 42
8 Steps to Innovation Excellence
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Improve the Idea Velocity
5. Go Fast from Prototyping to Incubation
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ITERATE ON THE
BUSINESS MODEL
STEP 6 44
8 Steps to Innovation Excellence
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Improve the Idea Velocity
6. Iterate on the Business Model
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Difficult to
make money
Holder of
complementary
resources makes
Money
(EMI, Coke)
Inventor
makes
money
Party with
Innov .+ Compl.
resources makes
Money
(Pixar vs Disney)
Freely available or unimportant
Tightly held and important
Low
High
Complementary Assets
Ease of Imitation
Inimitability/Complementary Assets Framework
Source: Afuah, 2004
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BUILD AN
INNOVATION SANDBOX
STEP 7 47
8 Steps to Innovation Excellence
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Increase the Batting Average
7. Build an Innovation Sandbox
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The Power of Platforms
7 Themes
Digital consumers
Emerging economies
Sustainable tomorrow
Smarter organizations
New commerce
Pervasive computing
Healthcare economy
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WalletEdge
Platform Offering
http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
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Open Innovation 50
As one of the biggest players
in the water purification market,
Eureka Forbes is a natural
partner for new technologies.
EFL keeps itself open to new
ideas from all over the world
E.g. : Nanoceram technology
developed by Argonide Corp.
USA – takes care of viruses
without chemicals
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CREATE A
MARGIN OF SAFETY
STEP 8 51
8 Steps to Innovation Excellence
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Increase the Batting Average
8. Create a Margin of Safety
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THANK YOU
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