Leading for Innovation

1. Welcome
To Leading For
Innovation614 MSOP Scott Bohlin Phase 6.1

2. Formal Strategy
o For formal strategy to work we need “Strategic Planning”- which is
a systematic process of envisioning a desired future, and translating
this vision into broadly defined goals or objectives and a sequence
of steps to achieve them.

3. Innovation
o The Business Dictionary defines Innovation as-The process of translating
an idea or invention into a good or service that creates value or for
which customers will pay. However, to truly be an innovation, an idea
must be repeatable at economical cost and must satisfy a specific need.
o Harvey Schachter describes three types of innovation in his writings-
1. Core innovation: This covers incremental changes to existing products and
incremental inroads in new markets.
2. Adjacent innovation: This involves leveraging something the company does
well in a new market space.
3. Transformational innovation: This focuses on creating new offerings to serve
new markets.

4. Here is another look at the three
innovations. Take a moment before
moving on.

5. Innovation cannot do it alone
o How Innovation is brought to reality, is with tools such as the value
chain.
o Value Chains are defined in two ways-
1. Within a company they describe the various value-added stages from
purchasing materials to distributing, selling, and servicing the final
product.
2. They also delineate the value-added stages from raw material to end-
user as a product is manufactured and distributed, with each stage
representing an industry.
o These are also known as the internal and external value chains.

6. Organizational Tension
o For an organization to grow and mature there must be tension and
that tension must be generated by conflict--the conflict of honest men
and women seeking to improve the organization as a whole.
o Understand- simple change and interaction create tension because it is
a new interaction to our environment. Try to make changes
productive.
o A productive tension example would be something like a change to a
production line, to ease that tension on the workers and make it a
positive change try using their collective input on the new design.

7. Stress Reduction Technique

8. Strategic Experiments
o The next important part to successful Innovation is the Strategic
Experiment.
o Historically, planning and control systems were designed to
implement a proven strategy by ensuring accountability under the
presumption of reliable predictability. Planning systems for strategic
experiments, by contrast, should be designed to explore future
strategies by supporting learning, given the unpleasant reality of
reliable unpredictability. In other words an organization must be
willing to invest time and resources without its usual safety barriers or
assurances.
o In order to get access to the technology needed for certain R&D a
company must be willing to make lasting partnerships so they do not
have to shoulder the financial weight of everything needed for some
experiments.

9. Innovation and Organizational
Growth
o Successful results feed growth within an organization.
o Company growth is based on three dimensions-
1) Dimension 1- ‘Existing market growth’- once established a firm can
expand by increasing existing market share through price and other
sources of competitive advantage.
2) Dimension 2- ‘Customer driven market growth’- A business grows by
helping to create new customers for existing offerings.
3) Dimension 3- ‘Innovation driven products and services growth’- This
occurs when companies create new markets by offering innovative
products, services, or business models.
o How this growth happens is in the form of organizational
development.

10. In Closing
The long-term health of organizations has always
depended, and will always depend, on innovation.
Competitors relentlessly copy great products, creative
services and best practices. The only way to avoid
becoming old is continuously to create the new.
“Ideas are not solutions; they are the raw material of
solutions.” —Arthur VanGundy
Thank you for your time

11. References
 Competitive Advantage, Porter, Michael E., 1985, Ch. 1, pp 11-15. The Free
Press. New York.
 Strategic Management: a methodological approach, Rowe, Mason,
Dickel, Mann, Mockler. 4th Edition, 1994. Addison-Wesley. Reading Mass.
 Strategy: the motivation for innovation, Ian Stewart Technology
Innovation Centre, University of Central England, UK and Peter Fenn
MACE, University of Manchester, Manchester, UK
 Using value-chain analysis to discover customers’ strategic needs,
David W. Crain and Stan Abraham
 Organizational Learning and Strategic Renewal , Crossan, Mary M ;
Berdrow, Iris . Strategic Management Journal 24.11 (Nov 2003): 1087-1105.
 Business is sent back to the classroom, By Vijay Govindarajan and Chris
Trimble: Financial Times [London (UK)] 08 Oct 2004: 1.
 Strategic Innovation and the Science of Learning, Vijay Govindarajan
and Chris Trimble