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Strategic and business model innovation 101510

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Strategic and business model innovation 101510

  1. 1. Strategic and Business Model Innovation Howard Rasheed, Ph.D. University of North Carolina Wilmington, Business Strategy and Innovation Institute for Innovation, Founder Idea Accelerator Technologies, LLC: 1 Licensing agent for Institute for Innovation, Inc.®
  2. 2. “Creative Disruption” is a metaphorfor strategic renewal that is analogousto life cycles in nature. The Strategic Ecosystem for Sustainable InnovationIn this ecosystem metaphor theenergy of an innovative organization isknowledge. The creation of new Innovative Stakeholdersknowledge serves as the energysource for recognizing and exploitingopportunities. Knowledge energypasses through the semi-permeableorganizational boundaries.The Sustainable Innovation Ecosystem(SIE) perpetually uses new knowledgeto stimulate innovative minds, in anurturing environment, with a Collectiveproductive system and efficient tools, Intelligence Collaborativeto produce ideas that can beharvested for value-creating activities. TechnologyA dynamic view of knowledge isfocused on relevant future issues fromyour value network of energizestakeholders, both internal andexternal. We identify the roles of theinnovation actors and how to Value Networksempower them for innovation, whichparallels the mutual interaction,known as the co-evolution of eco-system organisms.
  3. 3. Strategic Transformation ParadigmIn Strategic Transform their businessorganizations engage in Opportunity macroRecognition and Exploitation. StrategicOpportunity recognition activitiesrepresented in the top half of the Foresightdiagram is commonly defined as theperception of a potential to create a issuesprofitable new venture, or to improve the Product Strategicstrategic position of an existing business. Development PlanningOpportunity recognition includes technology strategystrategic foresight related to the macroenvironment and new productdevelopment and strategic planning at Opportunitythe organizational level. RecognitionIn Opportunity Exploitation managers Businessfocus on problem solving by engaging in Modelnew market development, processimprovement, and productivity Innovationenhancement. external internal OpportunityOpportunity Exploitation includes Business Exploitation Organizationalventure development, organizational Development Changechange and business process activities. performance venture alignmentStrategic innovation focuses onevaluating opportunities using Business BusinessModel Innovation process before Processengaging in exploitation activities. micro
  4. 4. In Strategic Transform their businessorganizations engage in OpportunityRecognition and Exploitation. Strategic and Business Model InnovationOpportunity recognition activities Strategicrepresented in the top half of the Foresightdiagram is commonly defined as the Technology Scenarioperception of a potential to create a Roadmaps Modelsprofitable new venture, or to improve thestrategic position of an existing business. New Product StrategicOpportunity recognition includes Development Planningstrategic foresight related to the macroenvironment and new product new ideasdevelopment and strategic planning atthe organizational level. Value Business Model Innovation Strategic network PlanIn Opportunity Exploitation managersfocus on problem solving by engaging in value propositionnew market development, processimprovement, and productivityenhancement. New Venture infrastructure market MarketOpportunity Exploitation includesventure development, organizational Plan planchange and business process activities. cost revenueTo better evaluate opportunities we use efficiencies sourcesthe Business Model Innovation processbefore engaging in exploitation activities. Business Process Innovation Balanced Improvement value—profit—growth Scorecard 5 Institute for Innovation, copyrighted material, 2010
  5. 5. A business model is the way anorganization conducts business in orderto sustain itself. Business Model InnovationA business model is the logic of how anorganization creates value, whethereconomic or social.During the past decade (1997-2007), 14of the 19 entrants into the Fortune 500have achieved significant success becausetheir business model innovations have value propositiontransformed existing industries or creatednew ones.A business model is the conceptual and Infrastructure Marketarchitectural implementation of abusiness strategy and as the foundation strategic partners target customersfor the implementation of businessprocesses. The business model is core capabilities customer relationshipscomposed of four main pillars, which areProduct Innovation, Infrastructure key activities distribution channelsManagement, Customer Relationship andFinancial Aspects.Business modeling addresses a broad cost revenuerange of core aspects of a efficiencies sourcesbusiness, includingpurpose, offerings, strategies, infrastructure, organizational structures, tradingpractices, and operational processes andpolicies. sustainable value 9 Institute for Innovation, copyrighted material, 2010
  6. 6. Business Model Innovation Trends • In a 2005 survey by the Economist Intelligence Unit more than 50% of executives predicted that by 2010, business model innovation will be even more important for success than product or service innovation. • In a 2008 IBM survey of nearly all corporate CEOs polled reported the need to adapt their business models, while more than two-thirds said that extensive changes were needed. • According to a recent American Management Association study no more than 10% of innovation investment at global companies is focused on developing new business models. 6 Institute for Innovation, copyrighted material, 2010
  7. 7. 7 Steps to Strategic Innovation • Step 1: Assess your innovation stakeholders • Step 2: Visualize your environment • Step 3: Explore dynamic knowledge • Step 4: Discover Future Possibilities • Step 5: Innovate New Ideas • Step 6: Envision Scenarios • Step 7: Actualize: Measure Effectiveness 7 Institute for Innovation, copyrighted material, 2010
  8. 8. One of the activities used in Step 1: Assess Innovation Stakeholders engagements using this methodology is the Innovation Style Assessment tool.Innovation Stakeholder Profiles•Radiator: Visionary Leader There are four dimensions of Visioning envision and idealize innovation styles: visioning, Radiator experimenting, exploring and Visionary leader•Rainmaker: Innovation Champ modifying. Visioning/Exploring Rain Maker intuition, insights, and images Innovation Champ Harvester It measures your typical•Harvester: Intrapreneur Intrapraneur approach to problem solving andExploring/experimenting idea creation.broad, perceptive, learning-oriented Cultivator Landscaper Analyst Project leader•Cultivator: Analyst The 4 dimensions results in eight Modifying innovation profiles. Pollinator refine and optimize Thought leader•Landscaper: Project Leader Six of the profiles are reflected Experimenting as roles in the strategic combine and test ecosystem metaphor.•Pollinator: Thought leader Experimenting/Modifyingfacts, details, and analysis 9 Institute for Innovation, copyrighted material, 2010
  9. 9. Innovation Style Assessment•Participants complete an onlineassessment.•Participant receive a 28 pagereport on their innovation style.•Administrators/Facilitators get anonline administration tool forgroup formation.•Groups get a report ofinnovation styles of the group.•Assessment facilitates groupformation process for maximumdiversity and effectiveness.
  10. 10. Step 2: Visualize Strategic Environmenttechnology Macro Environment economic environment Value Network economic development stockholders investors labs auditors R&D Administration finance engineering IT infrastructure workforce HR procurement Value Chain customers suppliers customer inbound process outbound marketing service education health care outsourcing intermediaries complimentaries social regulatory
  11. 11. Step 2: Visualize your Business Model 11
  12. 12. Value Proposition TemplateFirst Sentence: Value of the OfferingFor…target Customerwho…need or opportunityour product/service…Product/servicethat…statement of benefitSecond Sentence: Positioning ValueUnlike…primary competitorsour product…primary beneficiarybecause of our…proof of benefit
  13. 13. Step 3: Value Proposition Future Scan• Are customer needs changing? • Is the current competitive strategy effective?• Are consumer tastes and perceptions changing? • Is the economic climate changing?• Are customer demographics • Are the economies of scale changing changing? • Are the barriers to market entry• Are social customs changing? changing?• Are the core technologies in the • Are the supplier cost structures industry changing? changing?• Are you developing new products? • Is the availability of supplies changing?• Are your competitors developing new products? • Are there new substitutes in the market place?
  14. 14. Look for Trends in your environment•Prevailing trends: historical data thathas a pattern of change and currentimpact. (there has been an x% increase iny over z time)•Emerging issues: information thatmay not have historical pattern but hasrecently become a factor of change in theenvironment. (there has been a recentincrease in…)•Expert predictions: expectedchange that has some validity but nohistorical pattern. (Dr. Jones predicts…)•Probable scenarios: anticipatedfuture events based on trends, issues, andpredictions. (What if x happens based on yand z?) Institute for Innovation, copyrighted 14 material, 2010
  15. 15. Step 4: Bisociation Brainstorming® The interaction of seeming unrelated concepts—aha momentTechnology trend Social trend Inspirational spark More Home Internet travel More computers booking travel Orbitz Expedia $6 billion 15 Institute for Innovation, copyrighted material, 2010
  16. 16. Step 5: Generate New Ideas Innovations Applications• Products • Strategic Foresight Study – Incremental • Intelligence Think Tanks – Breakthrough • Economic Development• Strategy • New Ventures• Markets • Technology Commercialization• Business Models • Product Development• Policy initiatives • Strategic Plans• Programs • Social Ventures • Public-Private Business Models Institute for Innovation, copyrighted material, 2010 16
  17. 17. Institute for Innovation, copyrighted 17 material, 2010
  18. 18. Step 6: Envision Future Scenarios Scenario Methodology:Descriptions of alternative plausible futuresSignificantly different views of the future“Movies” of the evolving dynamics of the futureSpecific decision-focused views of the futureResults of management insight and perceptions Institute for Innovation, copyrighted material, 2010 18
  19. 19. Step 7 Actualize: Measure Effectiveness Innovation Balanced Scorecard innovation value proposition Learning and growth perspectives infrastructure market Internal processes Customers and external perspectives perspectives financial model Financial stakeholder expectations 19 Institute for Innovation, copyrighted material, 2010