1. BY
Shay Merritté
Erin Keeler
Andy Ireton
Shawn White
UNDER
Prof. Michael Lieblein
Prof. Michael Bills
FOR
BUS MHR 894.60
Innovation Field Studies
Fisher College of Business,
The Ohio State University
JUNE 7 2011
3. PROBLEM STATEMENT
Create the underlying structure for
an Innovation Brief that captures the
development criteria, business case and
commercialization aspects of a proposed
innovation. The brief should be able to be
easily evaluated by an executive council
for funding and further development in
relation to Resource Interactive’s core
competencies and business objectives.
3
9. STAGE-GATING IMPLEMENTATION
Stage #1
Stage #2
Stage #3
Gate #1
Gate #2
Resource Interactive
employees populate RIB #1.
Executive Director of RI
Labs reviews RIB #1 and
selects ideas with merit
and provides feedback.
Innovation Council
Reviews RIB #2 and selects
projects to move forward
to fund and possibly
commercialize.
Innovation Council
completes the 20Q
questionnaire to determine
the best strategic decision
moving forward.
RI employees who
developed a meritorious
RIB #1 refine the concept
through RIB #2.
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10. PHASES OF INNOVATION
PHASE 1
VALUE CREATION
PHASE 3
VALUE DELIVERY
PHASE 2
VALUE CAPTURE
How will consumer needs &
technological solutions evolve?
What is the central
source of innovative
advantage? How can
we best protect this
advantage? How
is this advantage
affected by change
What projects should
we fund? How
should we organize to
support
innovation within the
firm? What
work should we do
inside and what
should we outsource?
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11. PHASES OF INNOVATION
PHASE 1
VALUE CREATION
PHASE 3
VALUE DELIVERY
PHASE 2
VALUE CAPTURE
How will consumer needs &
technological solutions evolve?
What is the central
source of innovative
advantage? How can
we best protect this
advantage? How
is this advantage
affected by change
What projects should
we fund? How
should we organize to
support
innovation within the
firm? What
work should we do
inside and what
should we outsource?
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12. CORPORATE INNOVATION OPPORTUNITY
Macro Socio-Political
FORESIGHTS
Consumer/Customer
INSIGHTS
Technological &
Scientific
CAPABILITIES
BUSINESS
CASE
CORPORATE
INNOVATION
OPPORTUNITY
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13. RESOURCE INNOVATION BRIEF (RIB) 1
SubmiSSionDate:innovation#:
microSummaarycLientbenefitDigitaLSpaceiDeaname
pointperoSn: commraDeS: front
How?
mobiLe facebook commerce in-Store twitter ipaD
1
otHerpartnerorganizationS
cLientSrv. tecHn. creative SocStrat XDD
partnerDiScipLineS
contract/LicenSe internaLDev. partnerSeLL Spin-off
commerciaLization
proceSS
Captures an
idea, is it
appropriate for
Resource?
13
15. RESOURCE INNOVATION BRIEF (RIB) 2
SubmiSSionDate:innovation#:
WhatiStheproject’SvaluepropoSition(Whatvalue/benefitSDoeSitDelivertoitScuStomer)?
WhoiSthetargetmarket/cuStomer?
WhatarecuStomerScurrentlypayingforthenextbeStalternative?WhatarethenextbeStalternativeS?
hoWDoeStheinnovationfitWithinreSource’ScurrentStrategicplan?
iSthetimingofthiSprojectappropriate?iSthemarketreaDy?iSthetechnologythere?
pointperoSn: commraDeS: front
2
BUILDS A
BUSINESS
CASE FORTHE
IDEA
16. KEY CONSIDERATIONS FOR INNOVATION
INDUSTRY
• Physical Assets of the Industry
• Importance of Brands
• Complexity of Supply Chain
• Intensity of Rivalry
•Type of Innovation: Radical or Incremental
• Product’s Complements
• Infrastructure Necessary to Innovate Ideas
• Will the Product Produce what it Promises?
• Consumers Interest into the Good/Service?
• Likelihood of a Substitute Product?
• Amount of Investment to Commercialize Idea?
INNOVATION
RISK
16
17. DECIDING WHATTO DO WITHTHE IDEA
CONTRACT
INTERNAL
DEVELOPMENT
SPIN-OFF
SELL
Less Control &
Smaller Investment
More Control &
Greater Investment
5 DIFFERENT
WAYSTO PURSUE
AN IDEA
• No “Black
Box” exists to
ensure Executive
Management
makes correct
decisions.
• Management
needs to be
cognizant of its
own capabilities &
limitations when
choosing a route
to pursue.
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19. EVALUATION OF MODEL AVAILABLETO RI
INTERNAL
DEVELOPMENT
Provides the most
amount of control over
Project
Company can utilize
Complementary
Assets if they relate to
innovation proposal
Great to use if
current infrastructure
already exists within
organization
Beneficial if
organization innovation
proposal mirrors
Company Culture
Involves high amount
of Proprietary
Information
CONTRACT/
LICENSE
Provides a certain
amount of control over
project and direction
Company can
extend beyond its
Complementary
Assets
Does not involve same
amount of investment
in idea as Internal
Development
Consider if a great
amount of Proprietary
Information
A better option if
current infrastructure
does not exist
PARTNER
Outsourcing to gain
complementary assets
Organization gives
up control, but also
decreases investment
Good to use if there
is a constant need for
innovation
Allows for organization
to extend beyond its
current customer base
Allows organization
to respond quickly in
changing landscape
SPIN-OFF
Generate new
business ideas
in collaborative
environment with RI
Allow RI to focus
more clearly on Core
Competencies
Avoid confusion
regarding services
provided to client and
project objectives
Organization avoids
large spend in project
that does not match
what company does
best
Company loses control
and direction of idea
Company loses
ownership of the idea
SELL
Should be considered
if organization would
have to develop
infrastructure
A good alternative if
idea does not match
core competencies
Avoid confusion
regarding services
provided to client and
project objectives
Organization decreases
its risk if innovation
proposal is not
successful
19
20. 20 QUESTIONSTO COMMERCIALIZATION
The questionnaire asks 20 yes/
no questions, the answers to
which feed an algorithm which
generates a graph which shows
the comparative amplitude of
each commercialization option,
and then the individual strength
of each commercialization option.
20
21. 20 QUESTIONS BACKGROUND
1. Complimentary assets – Assets, infrastructure or capabilities needed to support the successful commercialization
and marketing of a technological innovation, other than those assets fundamentally associated with that innovation.
2. Inherent assets - Assets that are existing as a permanent, essential, or have characteristic attributes to the
organization
3. Core competencies – Features of Resource Interactive, or their employees, that are vital to the way the organization
operates. - digital consumers (example)
5. Innate culture - Inherent in the essential character of a business that is a set of shared attitudes, values, goals, and
practices
6. Risk - The potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable
outcome). The notion implies that a choice having an influence on the outcome exists (or existed).
7. Confusion - The inability to think with your usual speed or clarity, including feeling disoriented and having difficulty
paying attention, remembering, and making decisions.
8. Control - To exercise authoritative or dominating influence over
9. Secrecy - Concealing information from certain individuals or groups, perhaps while sharing it with other individuals.
9. Proprietary information - Information that is sensitive, which is owned by a company and provides advantages over
the competition
10. Systems - A set of detailed methods, procedures, and routines established or formulated to carry out a specific
activity, perform a duty, or solve a problem.
10. Hierarchy - Is an organizational structure where every entity in the organization, except one, is subordinate to a
single other entity
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22. 20 QUESTIONS BACKGROUND
11. Speed to Market- This means, it is important to introduce your product in the market as fast as possible. The reason
is stiff competition, globalization and access of technology to all competitors. The idea of new product penetrates the
market rapidly. Therefore, first company to hit the market is likely to capitalize the virginity of market.
12. ProvenTechnology- technology that has already been marketed and proven to work.
13. ConsumerTastes- are the tastes of intended consumers for this product likely to vary in the near future?
14. Strong Substitutes- are there products already being marketed that would be a strong substitute/competition for
this products?
15. Incremental Innovation- one that leads to small improvements to existing products and business processes
or involves modest technological changes on existing products and the existing products on the market will remain
competitive.
16. Customer Base Needs- would the innovation exceed the needs of the intended customer base?
17. Branding- would the innovation need to be branded in order to be successful?
18. Market Space- is the innovation outside of retail, technology or packaged goods?
19. Intended Investment- has it been determined that Resource looks to spend as little money as possible developing
this idea?
20. Infrastructure- would this innovation require the development of an new infrastructure (organizational structure,
including facilities, services or ways of conducting business)?
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23. 20 QUESTIONS BACKGROUND
Question 1&2 – An organization needs to identify and understand the assets that are already integrated into the business. An
innovation idea that mirrors skills previously existent within the company will be more likely to succeed as the organization can rely
upon these talents and not need to invest in outside resources. However, if the organization does not have a high historical aptitude in
this area they will need to increase their investment, which will also increase the risk associated with the innovation idea.
Question 3 & 4, 18 - The need for a company to compare its inherent core competencies to the innovation proposal is essential
because it helps determines if the organization already has established knowledge in the area it is looking to compete. If the
organization already has proven methods for competing in this industry, it will be able to support the innovation idea as it can it rely
on its historical practices. However, if the organization does not have core competencies in the identified field the innovation could
struggle to in understanding the industry and how to best achieve success. The organization will have no ‘frame of reference’ to
determine its strategy or be able to seek competitive advantages.
Question 5, 10 & 20 – A solid understanding of the innate culture is necessary for determining how well the innovation proposal
will fit within the organization. If a new project does not match already established ways of thinking, it will not provide the necessary
fertility for the idea to blossom into a profitable business venture. Employees should be able to understand how the idea matches
other processes or practices already being produced by the company.
Question 6 – Understanding the level of risk involved in the innovation proposal will help management determine how much
investment is necessary. An organization must realize up-front the amount of risk it is willing to assume. Failure to understand the risk
quotient could lead to underestimating the amount of cash necessary to fully fund idea that would result in a loss for the organization.
Question 7 – An organization must determine if the innovation idea would confuse its core customer base. If its core customers
would not understand the concept, or worse be insulted by it, then the organization should consider alternative strategies than
internally developing this product. By understanding how the concept relates to its core customer base allow the company to
determine what it is they are looking to obtain from producing the innovation proposal.
Question 8 – At the initial stage of the innovation production process, the organization must consider how much ownership and
direction it wishes to demonstrate in creating the idea. This will also allow the company to determine the amount of risk it is willing to
undertake.
Question 9 – The organization must acknowledge how secretive its innovation proposal is.
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25. IMPORTANCE OF CULTURE
As Resource Interactive grows in size, retaining a strong
entrepreneurial and innovative culture will become more
difficult.
Characteristics of a Strong Culture:
1. Clear philosophy about how business is to be conducted
2. Considerable time spent communicating values and beliefs
3. Explicit statements made that describe organizational values
4. Set of values and norms exist that are shared widely and rooted deeply
5. New employees are screened carefully to ensure cultural fit
The use of slogans, symbols, ceremonies and statements
of principle can be all be utilized in order to ensure the
sustainability of a strong organizational culture.
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26. HOWTOP COMPANIES SUPPORT INNOVATION
3M
MICROSOFT
GE
NOKIA
Scientists inside the company apply independently for “Genius Grants” that give
them generous budgets for funding the development of new products.
Each year, “Hack Day” is held in which software developers are pulled from
their routines, coming together for a fun event that relieves pressure and
hopefully inspires creativity.
Among more traditional bases for evaluation, GE’s 5,000 top managers are rated
on innovation-related themes such as “imagination and courage.”
Nokia rewards engineers who have at least 10 patents by inducting them into its
prestigious “Club 10.”
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27. INNOVATION SYSTEM
Efficiency
Communication
Coordination
Learning
Alignment
Efficiency-
Standardized processes that bring prospective ideas
from concept to commercialization
Communication-
Platform that allows employees to interact with each
other and external partners, promoting collaboration
and continuous learning
Coordination-
Promotion of cross-functional teams and partnerships
in order to utilize respective talents
Learning-
Continuous commentary and feedback for all
submissions
Alignment-
Integration of executive guidance through executive
strike zone concept to ensure the business case pro-
posals adhere to company strategy
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28. CONNECTING INNOVATION CHANNELS
INDIVIDUAL
SUBMISSION
Provides opportunity for employees
passionate about their ideas to
continue to strive for possible
implementation and receive valuable
feedback
EXECUTIVE
STRIKE ZONE
Leadership of the
organization is dynamically
involved in the projects, thus
ensuring that innovation and
ideation is an organization
priority.
COUNCIL
EVALUATION
Provides opportunity
for organization to meet
and discuss ideas that
would provide the use of
company’s resources to
pursue corporate initiatives
28
29. EXECUTIVE STRIKE ZONE
Proposal Strike
Zone
RISK
REWARD
• Specific areas of focus
that have strategic
objectives for the
business that employees
can concentrate on
ideation
• Each employee must
choose to submit one
proposal directly from
the specific topics
provided by executive
management
• Tied back to employee
reviews – incentives
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30. HOWTO MEASURE INNOVATION
PROCESSINPUT OUTPUT OUTCOME
Resources
devoted to
innovation.
Real-time
measures
tracking progress
toward creation
of outputs
Results of
innovation effort
Value Creation
Describes
quality,
quantity and
timeliness
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31. INNOVATION HEAT INDEX
1
2
3
4
5
6
7
8
9
10
FINANCE
1. Business Model- What is the project’s
value proposition (how the innovation
makes money)?
2. Networking- Do the project’s value chain
& partners make this offering distinctive?
PROCESS
3. Enabling Process- Does this innovation
assemble capabilities typically bought from
others?
4. Core Processes- Does this innovation
create proprietary processes that add value?
OFFERING
5. Product Performance- Does the innovation
offer valuable features and functionality?
6. Product System- Is there an extended
system surrounding the offering?
7. Service- Does this innovation service its
customers?
DELIVERY
8. Channel- Is there a strong, clear
connection of the customer to the offering?
9. Customer Experience- Is there an
integrated experience?
10. Brand- Is the innovation’s value properly
expressed to customer?
INCREMENTAL
ECONOMIC VALUE
(THE SUM OF THE INCREASED
REVENUE OR DECREASED
COSTS ASSOCIATED WITH
EACH INNOVATION TYPE)
REFERENCE VALUE
(WHAT CUSTOMERS PAY FOR
THE NEXT-BEST
ALTERNATIVE)
IEV ÷ RV = EVE FACTOR31
32. INNOVATION HEAT INDEX
FIRST,TAKEYOUR IDEA’S AMBIENTTEMPERATURE:
To find out if your idea is hot enough, consider how it is kindled. Each flame represents one
of the Ten Types of Innovation, developed by Doblin (a part of Monitor Group) on the basis of
research with hundreds of companies. The more ways in which your idea is innovative, the
better able it is to stand up to competitors’ offerings. According to our research, ideas that
innovation six or more areas are well positioned for success. Fewer than three types and your
idea is cold: Chances are, it’s not distinct enough from products already on the market. Most
companies focus their innovations on product offerings, but you’ll get more heat from ideas
that also innovate new business models and customer experiences.
NEXT, MEASUREYOUR IDEA’S HEAT INDEX.
So your idea is hot, but will it deliver measurable value to customers? Doblin and Monitor have
developed a simplified version of the pricing tool Economic Value Estimation (EVE) to calculate,
by innovation type, how much increased value your idea offers over what’s already available.
Interpreting the EVE factor depends on the industry. A hot number in a B2B business could be
as low as 1.5, whereas in a CPG context, where brand matters so much, the number will most
likely need to be much higher, say 3 to 5. Anything below 1.1 would be cold, and anything less
than 0.75 would be a nonstarter.
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33. NEXT STEPS
Pilot: Test with Distributed Commerce Platform
Feedback: Important to Continue Culture of Ideation
Catalog of Ideas: Portfolio Analysis Used for Quick
Reference to Past Ideas
33