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8 steps to innovation: An introduction
- 1. Rishikesha T. Krishnan & Vinay Dabholkar rishi@iimb.ernet.in; vinay@catalign.com 8 Steps to Innovation: Building a Systematic Innovation Capability April 26, 2013 1 Build a pipeline 3 Improve Batting Avg 2 Improve idea velocity
- 2. From Jugaad to Systematic Innovation:
- 3. 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
- 4. 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 4
- 6. INNOVATION STRATEGIES DEPEND ON YOUR SOURCE OF COMPETITIVE ADVANTAGE…. Look at the disciplines of market leaders…. 6
- 7. 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 7
- 8. 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 8
- 9. 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 9
- 10. 8 Steps to Innovation: Building a Systematic Innovation Capability 1 Build a pipeline 3 Improve Batting Avg 2 Improve idea velocity
- 11. Build a Pipeline 1. Lay the Foundation 2. Create a Challenge Book 3. Build Participation 11
- 12. 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 12
- 13. Increase the Batting Average 7. Build an Innovation Sandbox 8. Create a Margin of Safety 13
- 14. LAY THE FOUNDATION STEP 114 8 Steps to Innovation Excellence
- 15. 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 15
- 16. 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)
- 17. Idea Box source scope stages technology selection funding Idea Management
- 18. 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
- 19. 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 19
- 20. 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 20
- 21. Buzz Creation (creative campaigns) 21
- 23. Garib Rath (Heavier & longer) Axle load Heavier, faster and longer
- 24. 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 24
- 25. 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
- 26. 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 26
- 27. Training & Development Titan Innovation School of Management “Everybody an innovator by 2015” 27 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
- 28. CREATE A CHALLENGE BOOK STEP 228 8 Steps to Innovation Excellence
- 29. 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 29
- 30. The Bajaj Pulsar exploited a discontinuity.. 30
- 31. 7 Themes Digital consumers Emerging economies Sustainable tomorrow Smarter organizations New commerce Pervasive computing Healthcare economy 31 http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
- 32. 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 32
- 33. 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 33
- 34. BUILD PARTICIPATION STEP 334 8 Steps to Innovation Excellence
- 35. Examples Role model Community of practice Innovation catalyst Rewards & recognition 35
- 36. 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 36
- 37. EXPERIMENT WITH LOW COST AT HIGH SPEED STEP 437 8 Steps to Innovation Excellence
- 38. Improve the Idea Velocity 4. Experiment with Low Cost at High Speed 38
- 39. itch idea demo impact Feasibility Loop Viability Loop 2 months Sep 2003 Nov 2003 Feb 2004 3 months 2 months Apr 2004
- 40. 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? 40
- 41. Avoid the “Failure Fallacy” 41
- 42. GO FAST FROM PROTOTYPE TO INCUBATION STEP 542 8 Steps to Innovation Excellence
- 43. Improve the Idea Velocity 5. Go Fast from Prototyping to Incubation 43
- 44. ITERATE ON THE BUSINESS MODEL STEP 644 8 Steps to Innovation Excellence
- 45. Improve the Idea Velocity 6. Iterate on the Business Model 45
- 46. 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
- 47. BUILD AN INNOVATION SANDBOX STEP 747 8 Steps to Innovation Excellence
- 48. Increase the Batting Average 7. Build an Innovation Sandbox 48
- 49. The Power of Platforms 7 Themes Digital consumers Emerging economies Sustainable tomorrow Smarter organizations New commerce Pervasive computing Healthcare economy 49 WalletEdge Platform Offering http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
- 50. 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
- 51. CREATE A MARGIN OF SAFETY STEP 851 8 Steps to Innovation Excellence
- 52. Increase the Batting Average 8. Create a Margin of Safety 52