1. What ‘strategic innovation’ means 2. Why you should care about it 3. How you can do it

1. Strategic Innovation: Coming to an Industry Near You
Brian Christian, President, The Inovo Group
2013 International Polyolefins Conference

2. Three Topics
2
1. What ‘strategic innovation’ means
2. Why you should care about it
3. How you can do it
Copyright © 2013 The Inovo Group, LLC

3. WHAT ‘STRATEGIC INNOVATION’
MEANS
3
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4. Too
Risky
Sustaining
Innovation
Disruptive
Incremental
Core Horizon
Zone
Newness to
the World
Newness to
the Company
What ‘Strategic Innovation’ Means
The Strategic Innovation Zone
Probable success
but won’t move the
growth needle
Wasted time, capital
& resources pursuing
probable failures
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4
Significantly new offerings
at risk levels that stretch but
do not break the company

5. Disruptive
Incremental
Core Horizon
Newness to
the World
Newness to
the Company
What ‘Strategic Innovation’ Means
Strategic Innovation Examples
Copyright © 2013 The Inovo Group, LLC
5
Too
Risky
Sustaining
Innovation
Strategic
Innovation
Zone
direct
publishing

6. WHY YOU SHOULD CARE ABOUT IT
6
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7. Why You Should Care About It
Coming to an Industry Near You!
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• Not just about growth…can be a matter of survival
• Industries in flux are ripe for strategic innovation
• Your industry is in flux

8. Why You Should Care About It
Corporate Turnover is Accelerating
8
Turbulence in Fortune 500 List
Year (1955–2011)
#ofCompaniesRemoved
Notable Victims of
Strategic Innovation
in Last 5 Years Alone
• Blockbuster
• Borders Group
• Tribune Company
• Ziff Davis
• AbitibiBowater
• Kodak
• Vivitar
• Silicon Graphics
• Bethlehem Steel
• Global Crossing
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82 of Fortune 100
disappeared

9. Why You Should Care About It
Industries in Flux are Ripe for Strategic Innovation
9
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Industry Cause of Flux Resulting Innovation
Telecom Break-up of AT&T in 1984
Rapid rise of cable and cellular
voice & data as well as devices
Auto
Oil prices, global warming,
energy independence
New wave of hybrid and electric
vehicle innovation starting in 1997
with the Toyota Prius
HVAC
(et al)
Environmental restrictions on
fluorinated hydrocarbons
Three generations of non-ozone
depleting, low global warming
refrigerants and blowing agents
Corporate
Services
Fall in cost of international
communication in early 2000’s
Boom in business process
outsourcing (BPO) to India

10. Why You Should Care About It
Your Industry Is in Flux
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Design-Driven Flux
1. Designer Plastics: catalyst technology (metallocene, chain
shuttling) driving transformation in polyolefin value chain
2. Shale Gas: upstream technology driving massive shift in
cost and mix of C2-C3-C4 paraffin and olefin feedstocks
Demand-Driven Flux
3. China/India: rapid growth and future potential driving
transformation in polyolefin industry business models
4. Sustainability: regulatory incentives/constraints and
consumer preference driving bioplastics, PVC replacement

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Design-Driven Flux
1. 3D printing
2. Metal organic frameworks (MOFs)
Demand-Driven Flux
3. Smart packaging
4. Africa
Why You Should Care About It
Other Flux Forces on the Horizon

12. Why You Should Care About It
This Flux is Driving a Lot of Strategic Innovation
12
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Strategic
Innovation
Types
Drivers of Strategic Innovation
Design-Driven Demand-Driven
Designer
Plastics
Shale
Gas
China &
India
Sustaina-
bility
New Products
New Services
New Processes
New Biz Models
Molecule &
application
design
‘On-purpose’
C3/C4 olefins
JVs and
Specialty
M&A
Biomass to
chemicals
(butadiene)

13. HOW YOU CAN DO IT
13
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14. 14
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How You Can Do It
Four Basic Requirements
1) Clearly define your starting point
2) Clearly define your end point
3) Develop a set of process design principles
4) Design a discovery process

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Design
Side
Demand
Side
CORE
Demand–Design Canvas
ADJACENCY
(design
forward)
ADJACENCY
(demand
backward)
WHITE
SPACE
Property of The Inovo Group, LLC
How You Can Do It
Step 1: Clearly Define Your Starting Point
Design
Side
Demand
Side
PC
(iMac)
Apple’s Canvas in 1999
Branded
Retail
(Apple Stores)
Consumer
Electronics
(iPod)
Music
Business
(iTunes Store)
Demand–Design Canvas

16. How You Can Do It
Step 2: Clearly Define Your End Point
16
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Strategic Opportunity Model Illustrative Example
Offering: iPod
Develop: Partner with music
industry; exclusive rights to
Toshiba drive
Produce: Chinese contract
manufacturers (e.g., Foxconn)
Deliver: Apple branded
stores plus Apple website
Value: Consumers, Apple up;
artists, distributors down
Develop
Deliver
Offering
Produce
Value
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17. 17
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How You Can Do It
Step 3: Develop a Set of Process Design Principles
Be hypothesis-driven and needs-based
Employ concept of ‘iterative deepening’
Ensure end-to-end business model focus
Reach outside for new knowledge
Incorporate the ‘wisdom of crowds’
Separate ‘should do’ from ‘could do’
Inovo’s Discovery Process Design Principles
1
4
2
6
3
5

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15-20
4-6
80-100STAGE 1
STAGE 3
STAGE 2
Opportunities
Property of The Inovo Group, LLC
community engagement
How You Can Do It
Step 4: Design a Discovery Process…
evaluation/selection tools
Demand–Design
Canvas
1
4
2
6
3
5

19. 19
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15-20
4-6
80-100STAGE 1
STAGE 3
STAGE 2
Opportunities
Property of The Inovo Group, LLC
community engagement
How You Can Do It
…Which Reflects These Principles
evaluation/selection tools
Demand–Design
Canvas
1
4
2
6
3
5
Be hypothesis-driven and needs-based
Employ concept of ‘iterative deepening’
Ensure end-to-end business model focus
Reach outside for new knowledge
Incorporate the ‘wisdom of crowds’
Separate ‘should do’ from ‘could do’

20. Thanks for Your Attention
20
Copyright © 2013 The Inovo Group LLC
President
35 Research Drive
Suite 400
Ann Arbor, MI 48103
(269) 930-0574
Bchristian@TheInovoGroup.com
Brian Christian