In this presentation you will find a course on Innovation Management This course was developed to compliment other courses being held at the same time in the Solvay Masters of Innovation and Entrepreneurship program. In total there are 7- 3 hour lectures 1/. The Myths of Innovation 2/. People and Teams for Innovation Success 3/. Customer Focused Innovation 4/. Speed: New thoughts on an old idea 5/. Co-Creation to build more value 6/. Eco-system development 7/. Selecting Ideas / Theories to tie things together

2. Learning objectives / deliverable
Learning objectives
 Real innovation is seldom an accident
 Effective innovation is built on business processes and follows rules
Course deliverable
 Able to access the innovation potential of a company or business and make
some clear recommendations

3. 3

4. Votes Num Definition
3 7
Innovation is really about responding to change in a creative way; it’s about generating new ideas, conducting
R&D, improving processes or revamping products and services. At another level, it’s also a mindset in your
business; your employees are always focused on continuous improvement and constantly thinking outside of
the box
3 20
PEOPLE using new knowledge and understanding to experiment with new possibilities in order to
implement new concepts that create new value
2 8
Innovation is the embodiment, combination, and/or synthesis of knowledge in novel,
relevant, valued new products, processes, or services.
2 19
Innovation is The process of creating a product or service solution that delivers significant
new customer value. The process begins with the selection of the customer and market, includes the
identification and prioritization of opportunities, and ends with the creation of an innovative product or service.
2 18
Innovation is first of all, here is my own definition of innovation: ‘invention refers to new concepts or products
that derive fromindividual’s ideas or fromscientific research. Innovation, on the other hand, is
the commercialization of the invention itself
1 2
Innovation is a process of taking new ideas through to satisfied customers. It is the conversion
of new knowledge into products and services
1 3
Innovation is a process, involving multiple activities, performed by multiple actors fromone or several
organizations, during which new combinations of means and/or ends, which are new for a creating and/or
adopting unit, are developed and/or produced and/or implemented and/or transferred to old and/or new
1 6
Innovation is not the result of thinking differently. It is the result of thinking deliberately (in specific ways)
about existing problems and unmet needs.
1 9
Innovation is the specific instrument of entrepreneurship… the act that endows resources with a new capacity
to create wealth.
1 14
Innovation needs structure. We need to originally explore the regions of creativity so we can bring method to
the madness of originality. We need to expand that special resource known as innovativeness so that we are
not dealing with a finite resource but with a renewable one. We need to give everyone in an organization the
chance to develop innovative competencies. We need to make the systematic application of innovation real.
1 24 The act or process of introducing new ideas, devices, or methods
1 26
The process of translating an idea or invention into a good or service that creates value for which customers
will pay.
1 27 The successful exploitation of new ideas

5. 27.5 NewDefintions
1 28
Innovation is the process of transforming an idea into a successful exploitation creating and/or
capturing more value through new products, new services or new business models.
1 29
“Innovation involves the conversion of new knowledge into a new product, process or service
and the putting of this new product, process or service into actual use”.
1 30
`It’s about doing something in a very different way from the way it’s been done before, a way
that makes more sense or is more efficient than the established solution.`
1 31 Innovation is significant positive change
1 32 The execution of new ideas that creates or adds value.
1 33
"a new way of creating value" , with the condition that equal or less value than before for at
least equal cost is excluded.
1 34 “Innovation is the creation of something that improves the way we live our lives”
1 35
Innovation is imaginative activity fashioned so as to produce outcomes that are both original
and of commercial value
1 36 "Innovation is the creation of something that improves the way we live our lives"
1 37
"The act or process of introducing and commercializing new ideas, devices, or methods. It is the
result of thinking differently and deliberately (in specific ways) about existing problems and
unmet needs."

6. Comments/ thoughts I liked
 It is about sustainability not fads (long term solutions)
 It has to improve our lives
 It about thinking different then finding value in thinking different (difference alone is
not innovation)
 Good innovation needs to be realistic and pragmatic
 Real innovation is pore than the number of seeds in the ground, it about making
things grow
 It is about breaking paradigms and reinvention
 People that pay define what is innovation
 Innovation = invention + commercialization
 Steve jobs: Innovation is about connecting the unconnected dots…. (and selling the
new things created… my addition)
6

7. Questions
 Why is innovation something hard to define ?
 What are the key elements
▫ New
▫ Creative
▫ Value
▫ Profitable
▫ ?
▫ ?
 Can we agree on a common definition
 Would google/ apple be innovative according to your definition
7

8. My view …
8
Creativity
is about new
ideas
Innovation
is the profitable
implementation
of these ideas

9. Innovation is about:
Acting different
(Questioning, Association)
So you can think different
And making things happen (execution)
9

10. 10

12. In Fortune 500 companies…
 New products account for 50% of revenues
 And 40% of profits
12
Why Innovation matters

13. companies value innovation, are innovative
The perception gap: of companies think they had a major
innovation in the last 6 months. of consumers agree
The hard road from ideas to impact of valuable ideas do
not reach their full implementation

14. A warm up exercise
1000
40
1000
30
1000
20
1000
10
5,000
90 % of business
executives agree

15. Paradigms = models, patterns
the basic way of perceiving, thinking, valuing
A dominant paradigm is seldom if ever stated
explicitly; it exists unquestioned…
transferred through culture and unspoken
business practices
William Harmon-
An incomplete guide to the future

16. 16
 It is about what we do behind closed doors
 Innovation just happens
 We need to reward innovation
 It is about working harder
 Innovation is about big ideas
 We need our brightest and best on the case
 It is all about selecting the best ideas and doing more
The Innovation Paradigm

17. 17
These are comfortable, logical
business ideas and what we have been
taught….
But, they are not the whole story

18. 18

19. 19
It is about opening
doors and listening
Myth:
It is about what we do
behind closed doors

21. Innovation = Size ^ power value
Power value
Cities Companies
1.3 0.7
Innovation output
1 100% 100%
Size 5 690% 309%
25 4759% 952%
Innovation per person
1 100% 100%
Size 5 138% 62%
25 190% 38%
Source: Geoffrey West: The surprising math of cities
and corporations
21
The Power Laws of Innovation
As cities grow and contact
increases… innovation increases (25
X bigger = 2X more innovative)
Why: contact increases …
As companies get bigger
and have more resources…
innovation falls (25 X bigger = 60%
less innovative )
Why: contact decreases

22. 22
Imagine this…
BMW has some of the best
designers in the world and sells
their designers by the day
below cost
Why: to build creativity…

23. 23
Innovation is
something you make
happen
Myth:
Innovation just happens

24. 24
Innovation is about
 Being committed to better satisfying unmet
unarticulated needs
 Working to build insights
 Staying focused on consumer (customer) value
 Habits

25. 25
Needs first, not ideas first !
Develop a
solution
Find a need Find a market
Ideas
First
Success
Rate*
5-10%
Find a need
Develop a
solution
Find a market
Needs
First
70 %
* According to Strategyn research on outcome driven innovation…

26. 26
It is more than talking to
consumers
today’s
business
Mobile
phone
Computers
Internet…

27. It is about hard questioning…
You can't just ask consumers what they
want and then try to give that to them.
Sometimes (actually often) they don’t
know what they want
It is often about “golden questions”
27

29. 30
More importantly you
need to reward good
failures
Myth:
We need to reward
innovation

30. 31
The danger of the Internet…
Is there anything someone
hasn’t done on the internet ?
A big idea
Look it up
on the
internet
Someone
has done it
already

31. The big innovation Paradox
Whoever Makes the
Most Mistakes Wins
Richard Farson & Ralph Keyes
32

32. Introduction 33

33. “Reward excellent failures.
Punish mediocre successes.”
Phil Daniels, Sydney exec

34. Introduction 35

35. Introduction 36

36. 37

37. 38
No, it is about working
smarter
Myth:
It is all about working
harder

38. Introduction 39
“90 % of what we call ‘management’
consists of making it difficult for people
to get things done.”
– Peter Drucker

40. Your new creativity office
41

41. The test, solve a difficult task while…
Reading emails or smoking marijuana…
Test 1
Test 2

42. A few simple ideas
 Stop the email notifications
 Create a way back
computer
 Block (and keep) time for
weird and fun stuff
44
No email
No Internet
No chat

43. 45
Real innovation is
about the adjacent
possible
Myth:
Innovation is about big
ideas

44. Introduction 46
How many people think Apple
invented the MP3 player ?
Almost 50% of US consumers

45. Introduction 47
More memory
More features
Better song management
Simplicity and coolness

46. More Examples

47. Managers increasingly need to take “ors” and
turn them into “ands”
Roger Martin
The design of business

48. 50

49. 51
Actually, what you need
is people that think
differently
Myth:
We need our brightest
and best on the case..

50. 52
Two Groups
Best 20 agents
Group 1
Random 20 agents
Group 2

51. 53
The IQ View
Alpha Group
121
132 155
139
135
137
Diverse Group
121 84 111
105 135 95

52. 54
The Toolbox View
Alpha Group
ABD
ADE BCD
ABC
BCD
ACD
Diverse Group
AHK FD AEG
EZ BCD IL

53. 55
“Bringing new members into the
organization, even if they’re less
experienced and less capable, actually
makes the group smarter simply because
what little the new members do know is
not redundant with what everyone else
knows.”
James Surowiecki
author Wisdom of crowds..

54. 56
A UCLA MFA 3 X harder to get into
than Harvard MBA
The bigger surprise…
Average starting salaries for
MFAs are now higher than MBAs
* MFA = Masters of fine arts

55. What you can do…
Diversity Independence Aggregation
+ + =

56. What you decide not to
do is just as important
Myth:
It is all about selecting
the best ideas and doing
more

57. “Fail . Fail again. Fail better.”
– Samuel Beckett

58. “With so many things to do and so many
great ideas… what we decide not to do
is infinitely more important than what
we decide to do”
– Steve Jobs

59. Research on innovation
211 companies
Worst Avg Best
Top vs.
bottom
% of revenues from new products 17% 28% 47% 2.76
% of profits from new products 11% 25% 44% 4.17
% of products that meet profit targets 43% 48% 66% 1.53
Go / Kill criteria set up front 26% 57% 85% 3.28
Decisions are objective / fast based 15% 42% 57% 3.85
Decisions are made in review meetings 26% 51% 60% 2.32
Cooper, Robert G. "Perspective: The Stage‐Gate® Idea‐to‐Launch Process
Update, What's New, and NexGen Systems*." Journal of Product Innovation
Management 25.3 (2008): 213-232.

60. Let’s have some fun
and exercise your innovative
muscles…

61. A checklist for ideas…
 Is there a benefit (real or perceived)
 People willing to pay (enough)
 Cost of cut-through acceptable
 People will see the benefit buy again / recommend to others
 Will someone hate it

62. A simple evaluation system…
Pets.com
Kosmo
Despair.com
Etoys.com
Petrock
Flooz
Webvan
Is there a benefit (real or
percieved)
People willing to pay (enough)
Cost of cut-through acceptable
People will see the benefit buy again
/ recommend to others
Will someone hate it
Kill Puppy (0 = kill, 1 = love)

63. 66
Pets.com
Pet supplies via the
internet
Save big, save time
Stay at home

64. 67

65. 68
Kosmo.com
Instant delivery of products
purchased via the internet in
big cities Order a wide variety
of products, from movies to
snack food, and get them
delivered to your door for free
within an hour.

66. Despair.com
We hate all the senseless, wasted time on employee
motivation and un-founded optimism
We imagine you do to, buy our products and show your
true colors
69

67. 70
Continuous effort is the key to unlocking your potential
Winston Churchill

68. 71

69. Etoys.com
The new place to buy toys. Find you want on
the internet
72

70. 73

71. 74
Petrock.com
Pets take a lot of
time and energy.
Your kids can have
almost as much fun
with a pet rock.
We even include a
care guide

72. Flooz
75

73. Webvan.com
Buying groceries should be easier. With webvan you
can get all your groceries, so you have time for other
things
76

74. 77

75. Now the most important question
Why would this business fail …
Pets.com
Kosmo
Despair.com
Etoys.com
Petrock.com
Flooz
Webvan
Why will this business fail…

76. 79

77. A summary…
 Getting people out of the building asking the right questions
 Structuring your innovation process around customer needs
 Changing the reward systems to encourage good failures
 Changing the organization so people have time to be innovative
 Helping your team leverage opportunities in the “adjacent
possible”
 Building team diversity/ better ways to work in teams
 Creating systems to kill bad ideas so you have more time for
good ones

78. Break …

79. What is an innovation audit
 A systematic review of a companies innovation potential
 Something action orientated
 I would like you to use a template created for this class
▫ A spreadsheet with 10 areas of measurement (http://tiny.cc/solvayaudit)
▫ Places for comments and summary chart
This is something I would like you to update in your groups… and then use
individually
82

80. Sample category
83

81. Processes
 4. Our organization or team frequently engages in brainstorming to
generate wild or very different ideas by drawing analogies from
other products, companies, or industries.
 5. Our organization or team encourages team members to ask
questions that challenge the status quo or conventional ways of
doing things.
 6. Our organization or team cultivates new ideas by giving people
frequent opportunities to observe the activities of customers,
competitors, or suppliers.
 7. Our organization or team has instituted formal processes to
network outside the company to find new ideas for processes or
products.
 8. Our organization or team has adopted processes to allow for
frequent experiments (or pilots) of new ideas in search of new
innovations.
84

82. Getting your 10 categories …
1. People
2. Clarity of vision/ Customer focus
3. Speed
4. IP
5. Co-creation
6. Place
7. Process
8. Your thoughts
9. Your thoughts
10.Your thoughts
85

83. 86
1
8
7
6
5
4
3
2

84. Your output
87

85. Suggested content for final report
 Your innovation assessment
 Strengths to build on
 Weaknesses to correct
 Action plan
▫ Action 1 + Recommendation for action
▫ Action 2 + Recommendation for action
▫ Action 3 + Recommendation for action
88

86. Suggestions: Take home final exam (40%)
▫ Read a bit to add depth (don’t go crazy…)
▫ Do your audit class by class as a group
▫ Follow the suggested structure
▫ Make me laugh/cry/smile/get angry.. Boring sucks
▫ Keep is short !!!!
89

87. Now something fun..

88. Are you the next Steve Jobs ?

89. 92

90. The Science of
being Innovative
Hundreds of
Inventors, Founders
and CEOs of
innovative companies

92. The ability to generate
innovative ideas is not
merely a function of the
mind, but also a function
of the exercise of
behavioral skills.

93. Imagine
You Your Twin

94. You both are given 1 week to
come up with a new creative idea.
Alone Talking to people
Going strange places
Questioning

95. Innovation is not genetic
Study of identical twins separated at birth
indicate or ability to think creatively come :
1/3 rd from genetics and
2/3 rd comes from habits (5 big habits)
98
Aristotle We are what we repeatedly do.
Excellence, then, is not an act, but a habit.

96. Sample results…
99

97. Assignment Number 1
 Step 1: Take the innovators DNA assessment. You will be sent a link later
today
 As a group you need to make an innovation audit template and the results of
your DNA tests will show you have different skills…
▫ What will be your strategy to work together as a group ?
 eg. Work split, how can you make sure your group develops something creative and
useful (Innovative)/ Suggestion think about: Discovery, Questioning, Observing,
Experimenting
▫ What 2-3 insights do you get from this test to put in your audit ?
100

98. Suggested Readings
For your assignment (skim)
 The innovators DNA, Harvard business review summary
 Page 157-173 of the Innovators DNA (see test page 171)
For the next class
 Choose one of the following articles
▫ The Wisdom of crowds
▫ Making a difference: Applying a logic of diversity
http://tiny.cc/class1read
101

99. Course Resources (I will send you these links)
 A blank innovation audit http://tiny.cc/solvayaudit
 A huge collection of articles presentations on innovation
(38 articles, 40 presentations)
https://dl.dropboxusercontent.com/u/704747/all_innovation_stf.zip
 A collection of books and book summaries on innovation
https://www.dropbox.com/s/48dhv9j9d95qbqx/Extra%20readings%20_%20bo
oks%20innovation.zip
 Class readings (not complete yet)
https://www.dropbox.com/s/kdcy10jvektl72o/Readings.zip
102