Nasscom overview

1. September 2009
Making Innovation
Work in New Times
NASSCOM 2009 INNOVATION AWARDS
Management
Consultants
Where Innovation Operates

2. Three Questions
Why don’t companies develop
strong, effective innovation?
Why do companies find it so hard to
sustain robust levels of innovation?
How do leaders create meaningful
levels of innovation?
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 2

3. Innovation Originates with Business Strategy
Innovation
Business Operational
Goals and Model
Strategy Management
Strategic
Insight Blueprint
Innovation
Innovation Execution
Strategy and Growth
Goals
How You Innovate Determines What You Innovate
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 3

4. Insight Bridges Strategies and Goals
Insight
Customer
Business Model
Product/s
Business Services Innovation
Goals and Strategy and
Strategy Regulations/ Goals
Society
Operations
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 4

5. Strategies Must Align
Business
Goals and
Strategy
Insight
Where Do We Focus
Innovation Efforts?
Innovation
Strategy and How Much Innovation?
Goals
What Types of
Innovation Do We Need?
How You Innovate Determines What You Innovate
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 5

6. Blueprint Translates Strategy Into Operations
Strategic Blueprint
New BREAKTHROUGH RADICAL
Technology
Change
Close to INCREMENTAL BREAKTHROUGH
existing
Innovation Close to existing New
Innovation
Strategy and Business Model Change
Operational
Goals Business Model
Model Technology
Innovation Innovation
Value Products/
Proposition Services
Value Process
Network Technologies
Target Supporting
Customer Technologies
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 6

7. Innovation Portfolio Describes Innovation Goals
How Much Innovation? Where Do We Focus
Innovation Efforts?
Change
Drive
the
Growth
Game
New BREAKTHROUGH RADICAL
Technology
Change
Close to
existing
INCREMENTAL BREAKTHROUGH
Close to existing New
Stay in Drive
the Business Model Change Growth
Game
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 7

8. Six Major Levers of Innovation
What Types of Innovation Do We Need?
Business Model Technology
Innovation Innovation
VALUE PRODUCTS/
PROPOSITION SERVICES
VALUE PROCESS
NETWORK TECHNOLOGIES
TARGET SUPPORTING
CUSTOMER TECHNOLOGIES
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 8

9. Six Major Levers of Innovation: Technology
Technology
Innovation
What product or service should the company offer
in the marketplace?  Performance
PRODUCTS/
What features or offering should the company  Packaging Integral
SERVICES
develop? to Customer Value
Can we reduce the cost of our current offering?
 Manufacturing
Can we improve the quality of existing products or PROCESS and Assembly
services? TECHNOLOGIES
 Service Delivery
Can we improve the inventory or quality control?  Information
How can we leverage the IT backbone to create a SUPPORTING Systems
faster, better, cheaper product?
TECHNOLOGIES  Logistics/
Inventory
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 9

10. Six Major Levers of Innovation: Business Model
Business Model
Innovation
 Customer VALUE How do you define the customer experience?
Experience PROPOSITION What value do customers want?
 Brand Value “What” What is the solution?
 Value Network/
VALUE How can you optimize the supply chain?
Supply Chain
NETWORK What part will you play in the ecosystem?
 Ecosystem of
Value Offerings “How” How do you shape the customer experience?
 Buyers and Who are the targeted customers? Who is
Influencers
TARGET excluded and why?
CUSTOMER
 Marketing What do different segments want with regard to
Methods “Who” the customer experience?
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 10

11. Companies Underutilize Business Model Levers
Recent PRTM Client Example
Products/
Value Innovation traditionally
focused on product Services
Proposition
Business Model Innovation
Technology Innovation
Value Process
Network Technologies
Recent global
supply chain
transformation
Target Supporting
Customer Technologies
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 11

12. Design Operational Model to Fit
Innovation
Business Operational
Goals and Model
Strategy Management
Strategic
Insight Blueprint
Innovation
Strategy and
Goals
How You Innovate Determines What You Innovate
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 12

13. Partnerships Are a Core Competency of Leaders
Innovation is a team sport
Customers Customers
Universities
Competitors
External Resources
INNOVATION PLATFORM
Universities
Brainiacs Internal Resources
Suppliers Suppliers
Suppliers
Suppliers
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 13

14. PRTM Model for Open Innovation Excellence
Becoming Openly Innovative
• Overcoming “Not Invented Here” mindsets
• Finding and establishing relevant partners and networks
• Establishing new organizational roles and responsibilities
• Building the culture to become a partner of choice
Opening Up
Organization
and Culture
Opening Up
Opening Up Practices and
Strategy Capabilities
Defining Open Innovation Executing Open Innovation
• Choosing Open Innovation “paths to value” • Defining missing innovation assets
• Clearly defining Open Innovation goals and • Establishing IP strategy and policies
implications for the business • Building partner and ecosystem
• Aligning Open Innovation goals and models management capabilities
with business strategies • Establishing information exchange
• Establishing a vision, metrics, and a path for (and control) capabilities
change • Executing and demonstrating open
innovation behaviors
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 14

15. Open Innovation Has a High Return on Investment
Venture Funds Returns Increased
Tech Licensing Revenue Revenues
New Market Access from
“Open”
New Products & Services
Model
Mergers & Acquisitions
“Closed Model” Growth
Our Our
Market Market
Revenue Revenue
Net
Income 0
Internal Development
Internal Costs
Development Savings from
Open Innovation “Costs”
Costs Leveraging
Reduced & Avoided Costs External
Development
Closed Model Open Model
Source: Adapted from Open Business Models, Henry Chesbrough © 2006, Harvard Business School Press

16. Management Systems Bridge to Execution
Management
Governance
Strategic Language
and Processes
Decision-Making
Innovation Framework, Systems
Innovation
Operational
Organization and Execution
Model Culture
Metrics and Motivators
Customers
Customers Making It Happen
Universities
Competitors
External Resources
Focus and Discipline
INNOVATION PLATFORM
Universities
Brainiacs Internal Resources
Suppliers Suppliers
Suppliers
Suppliers
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 16

17. Management Systems Bridge to Execution
Management
Governance
Strategic Language
and Processes
Decision-Making
Innovation Framework, Systems
Innovation
Operational
Organization and Execution
Model Culture
Metrics and Motivators
Customers
Customers Making It Happen
Universities
Competitors
External Resources
Focus and Discipline
INNOVATION PLATFORM
Universities
Brainiacs Internal Resources
Suppliers Suppliers
Suppliers
Suppliers
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 17

18. Breakthrough Innovations Often Use Incubation
Incubation Governance (IG)
 Clearly-defined decision makers
 Innovation coaches
 Effective resource allocation
Chair
Strategy Finance PC Reps External
Loop Reviews Structured
 Mechanism through
1 2 3
Development
which IG assesses
value, provides direction,
Process
LOOP KEY  Roadmap for
and manages scope QUESTION
breakthrough / radical
 Event and time based
innovation development
reviews
Next  Guidelines steer
 Business opportunity
Loop development activities
perspective
 Tools and templates that
 Collaborative team
help teams quickly identify
guidance and
Loop innovative value
empowerment Exit
Development Teams
 Small and cross-functional
 External as well as internal resources
 Intrapreneurial and nimble
 Clear responsibility and authority for innovation
development
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 18

19. Management Systems Bridge to Execution
Management
Governance
Strategic Language
and Processes
Decision-Making
Innovation Framework, Systems
Innovation
Operational
Organization and Execution
Model Culture
Metrics and Motivators
Customers
Customers Making It Happen
Universities
Competitors
External Resources
Focus and Discipline
INNOVATION PLATFORM
Universities
Brainiacs Internal Resources
Suppliers Suppliers
Suppliers
Suppliers
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 19

20. Metrics and Motivators Help Create the Culture
Organization Structure
Leadership
Metrics
and
Motivators
Culture
Learning Organization
Making Innovation Work, Davila, Epstein, Shelton: Wharton School Publishing, 2006
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 20

21. Optimize Alignment to Drive Growth
Innovation
Business Operational
Goals and Model
Strategy Management
Strategic
Insight Blueprint
Innovation
Innovation Execution
Growth
Aspiration
How You Innovate Determines What You Innovate
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 21

22. Questions and Answers
Why can’t companies develop strong,
effective innovation?
They are unwilling or unable to fix what is
broken or underperforming
Why do companies find it so hard to
sustain robust levels of innovation?
They use an outdated strategy or
operational model for innovation
How do leaders create meaningful levels
of innovation?
They manage innovation as if their future
growth depends on it—because it does
Making Innovation Work NASSCOM Awards— September 2009 | © 2009 PRTM Proprietary CONFIDENTIAL | 22

23. PRTM Contacts
ROBERT SHELTON MAHESHWAR SINGH
Managing Director
Director
India
Embassy Classic., 3rd Floor
T +1 650 864 3517 444 Castro Street T +91 80 4010 0900 11, Vittal Mallya Road,
M+1 650 218 3519 Suite 600 M+91 96 1195 5116 Bangalore 560001
Mountain View, CA 94041
India
USA
rshelton@prtm.com msingh@prtm.com
www.prtm.com www.prtm.com