Innovation & Change Management

Innovation & Change Management
SCAD SERV753 - Service, Innovation, and Enterprises | February 24, 2013

Prepared for Hot Studio by Play Nice Service Design / Richard Ekelman, Lauren Peters, Lindsay Vetell-and professor Robert Bau
Innovation & Change Management | SERV753 Service, Innovation & Enterprises | February 24, 2013 1

Contents
“The element of leadership, culture, and business strategy sets the environment for successful
innovation. Proficiency in this element distinguishes highly innovative companies from less
innovative ones.” - Koen

WHO IS HOT STUDIO? WHAT IS INNOVATION? WHAT IS INNOVATION @ HOT?
Intro Slide............................................. 4 Innovation Glossary............................. 16 Hot’s Current Services........................ 45
Quick Facts........................................... 5 Readings Intro...................................... 17 Expanding Hot’s Services................... 46
Capabilities.......................................... 6 Research Articles............................. 18-32 Co-creating Some Pie......................... 47
Service Package.................................. 7 SERV753 Innovation Intro................... 33 Tomorrow’s Value Proposition............ 48
Case Studies........................................ 8 SERV753 IPO Strategy Map................ 34 Hot’s New Innovation Offerings.......... 49
Value Proposition................................. 9 Inputs............................................... 35 Hot’s Innovation Process.................... 50
Design Consultancies..................... 10 Process............................................. 36 Diagnose.......................................... 51
Creative Agencies............................ 11 Outputs............................................ 37 Co-create......................................... 52
Innovation Consultancies............... 12 Success Factors.............................. 38 Train to Sustain................................ 53
Management Consultancies........... 13 Roadblocks to Innovation............... 39 Adapt & Maintain............................. 54
Competitive Landscape Overview.......... 14 Questions to Ask our Clients.......... 40 Application: Diagnose......................... 55
IPO Breakdowns.............................. 41 Application: Co-create......................... 56
Core Problems..................................... 42 Application: Train to Sustain................ 57
Core Building Blocks........................... 43 Application: Adapt & Maintain............. 58
References........................................... 60

Innovation & Change Management | SERV753 - Service, Innovation & Enterprises | February 24, 2013 2

Who is Hot Studio?


Hot Studio
An experience design company


Quick Facts
Hot Studio is a people-centered experience
design company founded in 1997.

“We collaborate with business leaders, innovative
organizations, and emerging companies to
create breakthrough products and services that
have global reach and local impact. “

CLIENT LIST EXPERTISE
AOL Branding
Ancestry.com Digital Strategy
Ebay Content
Cisco Research
Dwell Systems Design
Electronic Arts Engineering
Gap, Inc. User Experience
Guggenheim Visual Design
Nike
Salesforce

hotstudio.com Innovation & Change Management | SERV753 - Service, Innovation & Enterprises | February 24, 2013 5

Capabilities

STRATEGY DESIGN TECHNOLOGY

Customer experience Brand identity Analytics & measurement
Product innovation Data visualization Content management solution
Experience mapping Information architecture Implementation management
Brand strategy User-interface design Mobile & multi-touch
Content strategy Application design application development
Competitive analysis Website design Prototyping
Research Mobile & multi-touch devices Web application
Technology assessment Print communications development
& roadmapping Game design
Motion design


Service Package

DELIVERY SYSTEM
ENHANCING SERVICES
FACILITATING SERVICES
Hot Offices
CORE PRODUCT Pro-bono Consulting Website / Blog
Website Facebook Page
User Experience Design
Case Studies Twitter Page
Branding Design
Workshops Pinterest Page
Design Strategy
Implementation Word of Mouth
Co-creation Conference Talks


Case Studies

ANCESTRY.COM POPTECH! APP KIVA.COM

“The goal was to enhance the site experience “Blending geography, history, and ethnography “The goal was to improve Kiva’s online lending
for loyal contributors and rigorous researchers across multi-layered, dynamic graphics, the experience. Redesigning the site also meant
while delivering an intriguing, intuitive PopTech app lets users discover surprising the opportunity to better connect lenders
experience for the hobbyist newly acquainting information whose implications are paving the with borrowers, articulate Kiva’s mission and
themselves to the world of genealogy.” way for how we live and how we can live.” purpose, and provide better education to the
lending community.”


Value Proposition

HOT STUDIO

For companies that need people-centric design solutions, Hot Studio is an experience
design consultancy that delivers digital user-experience and visual design expertise.
Unlike other creative companies, our service is highly collaborative because of
cultivated trust and long-term relationships with our co-conspirators.


The Competitive Landscape / Design Consultancies
HOT STUDIO HUGE INC.

Physical Portfolio “Create a cross-platform “We work to understand and
experience that leverages the translate user behavior into
strengths of each platform.” solutions that meet business
Portfolio reflects strictly digital work. and brand objectives. “ Integrates
marketing strategy unlike competitors.
ADAPTIVE PATH Portfolio reflects strictly digital work.
“We help companies create
products and services that REBOOT
deliver great experiences for their “We help the world’s leading
customers.“Portfolio reflects strictly organizations become more
digital work. responsive to the communities
Small Business Clients

they serve. “ Strictly social

Fortune 500 Clients
innovation and policy reform.
FJORD
“We don’t just create
breakthrough digital services for VERY DAY
our clients; we redesign people’s “We passionately believe that
relationships with the world user-centric solutions based
around them. “ Expertise in service on genuine user insights can
design. Portfolio reflects strictly digital empower, enrich and energize
work. both people and brands. “
Expertise in service design.

FROG DESIGN
“frog works with leading ZIBA DESIGN
“Obsessive love for the beautiful
companies...design, engineer,
experience: that moment when
and bring to market meaningful
products and services. “ an object, space or event makes
a powerful connection with the
Digital Portfolio person experiencing it.”
Portfolio reflects strictly physical work.
* comapnay’s webpage

The Competitive Landscape / Creative Agencies
TOMORROW’S HOT STUDIO BBDO
High internal collaboration Will take branding and strategy to “Our mission is to create
another level, instilling branding and deliver the world’s most
values throughout the entire compelling commercial content
organization. across all mediums and screens.
“ Portfolio focuses
on commercial content.
CRISPIN PORTER + BOGUSKY
“Our focus is on solving business
WIEDEN KENNEDY
challenges first, not making
ads, and we have a media- “As advertisers, our job is
neutral creative approach with a generally to communicate – to
particular strength in interactive. tell stories that can motivate
people to do something. “ Partners
“
with NGOs to help improve the world.

Designs with
consumers

Consumers
Designs at

Also is an incubator.
RAZORFISH
“Razorfish is a full-service digital
J WALTER THOMPSON
agency at the intersection of
“JWT is the world’s best-known
creativity,
marketing communications
media and technology.”
brand. “ More traditional than
competitors.
R/GA
“The Agency for the Digital Age.”
Ad agency transforming offerings into
designing more for the experience
economy.

Siloed work habits


The Competitive Landscape / Innovation Consultancies
TOMORROW’S HOT STUDIO DOBLIN GROUP
Will be actively involved in helping “We use a range of proprietary
Organizational Innovation
clients solve organizational methods and tools that
problems that will best support generate sophisticated insights
their customer’s experience. and increase your innovation
effectiveness. “
ARICENT GROUP
“The Aricent Group provides INNOSIGHT
consulting, design, and “We work with companies around
engineering services that help the world to develop and bring to
companies innovate better.” market simple, convenient, low-
They own Frog Design cost solutions that change the
game—and even change lives. “
Small business

Fortune 500
AT KEARNY Focus on portfolio management.
“We are a global team of forward-
thinking, collaborative partners INNOVATION LABS
that delivers immediate results “InnovationLabs is recognized
and a long-term transformational as one of the world’s leading
advantage.“ innovation consulting firms
offering a complete suite of
CONTINUUM innovation services. “
“focus has been to help
organizations drive business OVO INNOVATION
innovation through the design “Our goal is help every company
of products, services and we work with define and build
experiences .“ Very close to a innovation capabilities, leading
creative consultancy. to the concept of innovation as a
business discipline.”
Product & Service Innovation


The Competitive Landscape / Management Consultancies
TOMORROW’S HOT STUDIO BOSTON CONSULTING GROUP
Front-stage Focused Services Will combine their design skills “BCG is a global management
with business skills and be able consulting firm and the world’s
fill the gap between management leading advisor on business
and creative consulting. strategy. “

ACCENTURE MCKINSEY & COMPANY
“Using our industry knowledge, “Knowledge development occurs
service-offering expertise and within our eighteen industry
tech capabilities, we identify new practices, eight functional
business and technology trends practices, and the McKinsey
and develop solutions to help Global Institute. “ Focuses more on

Sector Generalists
clients around the world.“
Sector Specialist

exploring and solving problems than
Focused on technology innovation. on performance and results.

ARTHUR D LITTLE SDG GROUP
“We are acknowledged as a “Global management consulting
thought leader in linking strategy, firm, leadership in the
technology and innovation.” practices of Business Process
Focused on technology innovation. Reengineering, Corporate
Performance Management
BAIN & COMPANY and Collaborative Business
“On a mission to redefine the Intelligence. “
management consulting industry
to focus on delivering client
results not just producing report.“

Back-stage Focused Services


Tomorrow’s Competitive Landscape

DESIGN CONSULTANCIES CREATIVE AGENCIES INNOVATION CONSULTANCIES MANAGEMENT CONSULTANCIES

Hot’s biggest competitor Tomorrow’s agencies are Hot could position While we don’t have to
would be VeryDay who caught-up in connecting themselves as a design compete with the big
focuses their efforts on with the experience consultancy focused boys here, there is an
creating products and economy. Because Hot on providing the right opportunity to become
services with people is already doing this, we organizational tools to a smaller management
in mind, but also work can move on to bigger support good design, consultancy focused on
to help organizations and better things. resulting in a culture good design and great
grow within to provide that supports the best results.
the right foundation for customer experience.
innovation.


What is Innovation?


Innovation Glossary

CHANGE MANAGEMENT INNOVATION CO-CREATION SERVICE DESIGN

Managing a company or A new idea, product, process, An approach that aims to A design discipline that
organization’s shift, in part of or concept that creates a serve the interests of all combines research, strategy,
in whole, from one industry competitive advantage or stakeholders by focusing and design to co-create
position to another. improves one already in on their experiences and innovations that are viable for
existence. how they interact with one the client, desirable to the end
Change Management is another. user, and delivered reliably.
closely associated with a shift Innovation is closely
in strategic direction. associated with competitive Co-Creation is closely Service Design is closely
advantage. associated with lowering associated with both
costs and employee turnover incremental and radical
while raising customer value.* innovation.

Ramaswamy(2010) Innovation & Change Management | SERV753 - Service, Innovation & Enterprises | February 24, 2013 16

Innovation & Change Management Readings
The next 16 pages are overviews of research that was conducted to familiarize
ourselves with the historical and current state of innovation and change
management from several author viewpoints.

ARTICLES

Innovation: The Classic Traps The Holy Grail of Design Measurement
Breathing Life into Delicate Ideas Help Wanted 2.0: Engaging Other to Tackle Wicked
Innovation Metrics Problems
Organizing to Innovate Manging Your Innovation Portfolio
Doing it Right Building the Co-Creative Enterprise
Ten Faces of Innovation Innovating a Turnaround at LEGO
Fuzzy Front End: Effective methods, Tools, and Techniques Customer Intimacy and other Value Disciplines
Leading Change: Why Transformation Efforts Fail
McKinsey Global Survey Results: Assessing Innovation Metrics


“Innovation: The Classic Traps” Kanter(2006)

“Every few years, innovation resurfaces as a prime focus of growth strategies.
And when it does, companies repeat the mistakes they made the last time.””

KEY CONCEPT INNOVATION BUILD THE RIGHT TEAM DON’T STRANGLE INNOVATION

Companies repeat the “Too often grand “Groups that are “Classic mistakes lies
mistakes that fall into four declarations about convened without in process; specifically,
categories; innovation are followed by attention to interpersonal the impulse to strangle
mediocre execution that skills find it difficult innovation with tight
• Strategy(Culture) produces anemic results, to embrace collective controls—the same
• Process (Flexibility) and innovation groups are goals, take advantage of planning, budgeting, and
• Structure(Connection) quietly disbanded in cost- the different strengths reviews applied to existing
• Skills(Team Leaders) cutting drives.” various members bring, businesses.”
or communicate well
enough to share the tacit
knowledge that is still
unformed...”


“Breathing Life Into Delicate Ideas” Gardien(2006)

“An often-heard statement in the innovation discussion is that companies need more ideas, where in
fact they are in need of better ideas and they are in need of a more disciplined implementation.”

KEY CONCEPTS INNOVATION INNOVATOR’S DILEMMA DESIGN PROBES

“Innovation often has a “Innovator’s Dilemma “The probe comes from
Growing complexities
higher chance of success describes the familiar the world of conversation
around innovation require
if it is considered as a scenario whereby products and dialogue; it is non-
wider integration of
network of options that have established linear and adapted to
different stakeholders.
that can be explored to find themselves on the market discovery and illuminating
the best route to market.” attempt to maintain situations.”
Companies must manage
their position by dint
their core business, new
of a succession of new
business, and creating
features.”
viable options for the
future all at once to
successfully Innovate.


“Innovation Metrics” Scott Et Al(2008)

“Metrics that seem to make sense can actually lead to behavior that is antithetical
to the long-term pursuit of profitable growth.”

KEY CONCEPTS FOCUS FOCUS FOCUS CONSTANTLY REVIEW METRICS ACCURATE MEASUREMENTS

Companies need to be “To determine the metrics “Often, the right metrics “Organizations trying to
mindful of metrics traps, that should be on every are available only in improve the internal flow
such as focusing on too executive’s dashboard, a hindsight, so senior of innovative ideas might
few metrics, funneling company needs to come management should measure the number
activities toward low-risk to a consensus with regard always be ready to add, of employee-submitted
or low-reward activities, to its innovation strategy drop, or change any metric ideas.”
& biasing inputs over and identify the company- adopted.”
outputs. specific barriers that inhibit
its ability to create growth
Continually refresh their through innovation.”
list of metrics to maintain
gain alignment around
selected metrics.


“Organizing to Innovate” Scott Et al (2008)

“Success ... requires going beyond winning once to developing deep capabilities that
allow a company repeatedly to disarm disruptive threats and seize new oportunities.”

KEY CONCEPTS TAKE ON INNOVATION INNOVATION TRAINING UNITS INNOVATION ADVISORY BOARDS

Companies need to “Companies need to “Training unit may reside “An ideal advisory board
organize in ways that ensure that the structures within an established includes representatives
maximize their ability to they create are appropriate training infrastructure or that can provide input into
leverage individual wins given the innovation exist as an autonomous the full range of innovation
and churn out successful challenges they face.” group of specialized, levers— business models,
growth businesses year innovation-focused management approaches,
after year. resources.” and technology—making
it distinctly different from
Common language helps groups commonly formed
avoid many mind-set traps as a means to enhance
that make innovation R&D.”
difficult,


“Doing It Right” Cooper(2000)

“An estimated 46 percent of the resources that companies devote to the conception, development and
launch of new products go to ventures that don’t succeed—they fail in the marketplace or never even
make it to market.”

KEY CONCEPTS INNOVATION KNOW YOUR CUSTOMER CROSS FUNCTIONAL TEAMS

Seek differentiated, “Product innovation is now “The voice of the customer Move to team approaches
superior products. the No. 1 plank in many must be an integral part of that cut across functional
companies’ strategic plat- your new-product process. lines. Functional managers
More time and resources forms.” This begins with idea must increasingly play the
must be devoted to the generation. Use market role of resource providers
activities that precede the research and customers to project teams and
design and development of as input into the product’s team advisers, rather than
the product. design, not just as a bosses.
confirmation of it.”
The voice of the customer
must be an integral part of
your new-product process.


“The Ten Faces of Innovation” Kelly(2006)

“The right project at the right time can spark a culture of innovation that takes
on a life of its own ... these ten types of innovators that can make it happen.””

KEY CONCEPTS LEARNING PERSONAS BUILDING PERSONAS THE TEAM

Recognition that fostering These “personas are driven These personas build “Make sure these ten
a culture of innovation is by the idea that no matter “roles that apply insights personas have a place in
critical to success, how successful a company from the learning roles and your organization. Together
currently is, no one can channel the empowerment you can do extraordinary
There are ten personas afford to be complacent.” from the organizing roles to things.”
that each team needs to make innovation happen.”
facilitate innovation.

These personas are
about being innovation,
rather than merely doing
innovation.


“Fuzzy Front End: Effective methods, Tools, and Techniques” Koen(2002)

“Lack of research into best practices made the FFE one of the most
promising ways to improve the innovation process. ””

KEY CONCEPTS CULTURE OF INNOVATION PLANNING OPPORTUNITY ANALYSIS

There must be a culture “The element of “Scenario planning “Roadmapping, technology
that encourages innovation leadership, culture, and provides a disciplined trend analysis, competitive
and creativity. business strategy sets the approach for imagining intelligence analysis,
environment for successful and preparing for the customer trend analysis,
Companies need a innovation. Proficiency in future. It stimulates and scenario planning
collaborative culture that this element distinguishes decisions that one would are all employed in this
encourages knowledge highly innovative otherwise ignore, and it element. In opportunity
creation. companies from less confronts the prevailing identification, these tools
innovative ones” mind-set. The challenge were used to determine if
Opportunity analysis for the company is to use an opportunity existed.”
should be built into the scenario development
innovation process.. methods to create multiple
views of the future.”


“Leading Change: Why Transformation Efforts Fail” Koetter (1995)

KEY CONCEPTS INNOVATION LESSONS ABOUT CHANGE A GUIDING COALITION

“A successful change Successful innovation and “The most general lesson “Major renewal programs
process goes through a change is the long process to be learned from the often start with just one
series of eight distinct that should be done in more successful cases is or two people. In cases of
stages. These stages specific steps that must be that the change process successful transformation
should be worked through done in sequence for long goes through a series of efforts, the leadership
in sequence. Skipping term success. phases that, in total, usual- coalition grows and grows
steps to try to accelerate ly require a considerable over time. But whenever
the process invariably length of time. Skipping some minimum mass
causes problems.” steps creates only the is not achieved early in
illusion of speed and never the effort, nothing much
produces a satisfying worthwhile happens.”
result.”


“McKinsey Global Survey Results: Assessing Innovation Metrics”
“A recent McKinsey Global Survey shows that companies are satisfied, overall, with their
use of metrics to assess innovation ... many findings suggest that they shouldn’t be.””

KEY CONCEPTS METRICS CAN SHAPE INNOVATION POORLY CHOSEN METRICS METRICS NEED ALIGNMENT

Companies use innovation “The many companies “Many companies Although executives are
metrics to provide that don’t track their would gain a deeper on the whole satisfied with
strategic direction for innovations can probably understanding of their the way their companies
innovation projects, gain innovation performance use innovation metrics,
and to diagnose and a better understanding if they paid more the findings indicate
improve overall innovation of their innovation attention to input significant room for
performance. performance just by metrics as well as output improvement in many
introducing some of these metrics, benchmarked individual applications—
Metrics are important for metrics.” themselves against their most notably, aligning
evaluating both input and competitors, and dug into metrics with individual
output metrics. the relationship between performance incentives
innovation spending and and using them to
shareholder value.” communicate effectively
with investors.”


“The Holy Grail of Design Measurement” Mrazek (2011)
“To get a better handle on innovation, some companies have attempted to
constrict the process with existing measurement techniques.””

KEY CONCEPTS STAY FOCUSED ON GOALS METRICS HELP INNOVATION TEAMS SHOW YOUR STORY

“While companies continue “If the company “To help demystify design “Metrics shouldn’t be
to innovate through is currently focused on and innovation, a metrics opaque figures they should
technology, it’s important cutting out inefficiencies system should reassure its show how your actions link
that they innovate through from the organization to stakeholders by providing to the outcomes you’ve
other means, as well.” better compete with more- structure for an otherwise achieved. By documenting
efficient rivals, the team nebulous process.” assumptions and clearly
“A good metrics system may want to focus on stating the methodology
should also add value to driving either supply chain behind your results, you’ll
the project work itself.”. or product development make the numbers more
efficiencies.” meaningful, win credibility
along the way, and help
your organization learn.”


“Managing Your Innovation Portfolio” Nagji &Tuff (2012)


KEY CONCEPTS MAINTAIN THE RIGHT BALANCE TOTAL INNOVATION SHARE THE ROLE OF INNOVATION

Transformational “Firms that outperform “Targeting a healthy “Managing total innovation
initiatives require a unique their peers tend to allocate balance of core, adjacent, will require a significant
management approach. their investments in a and transformational shift for most companies,
certain ratio: 70% to safe innovation is a vital step which are used to a less
Funding should come bets in the core, 20% to toward managing a total orderly approach. But the
from outside of the normal less sure things in adjacent innovation portfolio, but pathway to such discipline
budget. spaces, and 10% to high- it immediately raises is clear. The first step is to
risk transformational an issue: To realize the develop a shared sense
Management should focus initiatives.”. promise of that balance, a of the role innovation
on a few promising ideas, company must be able to plays in driving the
not the ruthless filtering of execute at all levels.” organization’s growth and
many. competitiveness.”


“Help Wanted 2.0: Engaging Other to Tackle Wicked Problems”
“Every organization has the capacity to attack the world’s wicked problems –
or their own complicated, intractable challenges – by welcoming collaborators.”

KEY CONCEPTS ATTACH WICKED PROBLEMS THE RIGHT PEOPLE ARE CRITICAL LAUNCH A JOINT VENTURE

Companies need to know “Tackling the wicked “As he put it in a recent “Joint ventures are nothing
when to ask to help. problems of our age is not interview, “In effect, people new, but the way in which
optional. We will have to should only be paid to executives have begun to
Finding the right help face up to them eventually solve wicked problems. approach them to tackle
is critical to successful – or we will pay the price Others can be solved complex challenges has
innovation. for ignoring them.” by robots.” In practice, evolved to become less
executives urgently need to about ‘command and
Companies can get help focus on finding the right control’ and more about
by Sourcing the crowd, ask people to tackle the right ‘watch and learn.”
experts, or create a joint tasks at the right time.”
adventure.


“Building the Co- Creative Enterprise” Ramaswamy & Gouillart (2010)

“Realizing that interactive technologies have changed people’s behavior, a small but growing
number of companies have invited customers to participate directly in the design of products
and services.”

KEY CONCEPTS CO-CREATIVE FOCUS WHY CO-CREATE? QUOTE SUBJECT

Give stakeholders the Co-creation “Focuses New business insights, In most organizations,
opportunity to manage on the interests of all new sources of revenue work is hierarchical &
their own work experiences stakeholders and how the and profit, lower costs and sequential ... What gets
and solve problems ecosystem can maximize risks. lost is the ability of multiple
the size of the pie; individuals to have a
Co-creative companies maximizing the share of dialogue. And that’s a big
benefit from lower costs value captured by the firm loss. Business problems
and less exposure to risk. is secondary” are complex... a wide
range of expertise and
perspectives are often
need to come together to
hear and see the issues
firsthand and work on a
resolution.”


“Innovating a Turnaround at LEGO” Robertson & Hijuler (2009)

“Today, as the overall toy market declines, LEGO’s revenues and profits are
climbing, up 19% and 30% respectively in 2008..””

KEY CONCEPTS THE VALUE OF LEADERSHIP HOW LEGO MANAGES INNOVATION ENGAGE CUSTOMERS

Innovation radiates from “Central to LEGO’s “LEGO managers take a “Drawing on input from
leadership. turnaround is a new broad view customer communities
structure for strategically of innovation that includes supported by cED, the
Distribute innovation coordinating innovation not only new products concept Lab invents LEGO
across a range of activities, led by but pricing plans, com- games, a new product
departments. a cross-functional team: munity building, business category. Though most
the Executive Innovation processes, and channels to LEGO products are bought
Support customer Governance Group.” market, all of which can be by fathers for their sons,
communities and support powerful business drivers.” games are purchased
them for product ideas and more often by mothers and
creating games. played by the whole family.”


“Customer intamacy and Other Value Disciplines”
And when it does, companies repeat the mistakes they made the last time.”

KEY CONCEPTS ACHIEVING CUSTOMER INTIMACY PRODUCT LEADERSHIP QUOTE SUBJECT

Every company must This discipline is reached “Companies in this “Companies that sustain
understand and strive to by “continually tailoring discipline seek to value leadership within
reach their Value Discipline. and shaping products continuously stream their industries will be
There are three types of and services to fit an state-of-the-art products run by executives that
value discipline increasingly fine definition and services. These focus the business on
- Customer Intimacy of the customer.” companies must be its value discipline. They
- Operational Excellence Creative. They must able will personally lead the
- Product Leadership to commercialize their company’s drive to develop
products quickly, and new capabilities and to
they must be relentless in change the embedded
pursuing new solutions to work habits, processes,
the problems that their and attitudes that do not
latest product just solved.” align with the discipline
they have chosen.”


“SERV-753” Innovation Process
Throughout our research, our team affinitized key concepts into a
strategic flow map that represents a holistic view of all articles. In
order to create a sustainable and viable organizational culture and
business that result in the best innovative prodcuts and services,
companies must take into consideration the following slides...

Inputs Process

Company’s
Vision

Sustainable & Viable
Outcomes
Outcomes Organizational
Culture & Business

Company’s
Goals

Outputs



Inputs Process

Company’s
Vision

Outcomes
Culture & Business

Company’s
Goals

Outputs

Koen et al. (2002) Innovation & Change Management | SERV753 - Service, Innovation & Enterprises | February 24, 2013 34


INPUTS
• Proper input metrics to ensure innovation
Inputs
culture, avoid fear of innovation. Process
• Innovation requires real commitment of
resources.
• It is critical that an organization focus not
merely on the innovation, but also; hiring
Company’s the right team components.
Vision • Allocate specific funding while
diversifying their portfolio against excess
risk that may stifle future innovation. Outcomes
Culture & Business

Company’s
Goals

Outputs


PROCESS

• Ideas should be generated and quickly
brought to critical decision points that
either move the project forward or kills it.

• Ideas should come from a broad range of
Inputs Process
stakeholders close to the product or idea.

• The gap between strategic objectives and
an outcome should be updated regularly
and adjusted for risk or new opportunities.

• Process stage should indicate whether
Company’s a cultural shift is taking hold..
Vision

Outcomes
Culture & Business

Company’s
Goals

Outputs



Inputs Process

Company’s
Vision

Outcomes
Culture & Business

Company’s
Goals
OUTPUT

• Where innovation process will begin to
bare fruit. Organizations should be able to
identify new customers and profit growth
as innovations come to test.

• ROI must be combined with other metrics
such as number of percentage of profits
from new products in an industry.
Outputs
• Metrics should tell an accurate story
about how effectively the organizations
innovation process has been
implemented.


Success Factors of Innovation

INPUT PROCESS

• Culture • Allocated Financial • Speed/Turnover • Outside-in
Inputs
Assessment Tools Resources Process
• Co-creation • Growth Gap
• Allocating • Diverse Portfolio;
HR Focused Core, Adjacent,
Resources Transformative

Company’s
Vision

Outcomes
OUTCOMES Culture & Business
• ROI • Reform Culture

Company’s • % of Profits From • # New Patents
Goals New Customers

• % of Profits in
New Categories
OUTPUT

• Better Hiring • External Metrics
Techniques System

• Internal Metrics • Positioning
Transparency

Outputs


Roadblocks to Innovation
PROCESS

• Arbitrary • Broken/
Metrics Wasteful
Processes
Inputs • Micromanaging Process
INPUT • Un-user-
• Unclear Mission
centered Design
• Poor Hiring • Fear Failure
Procedures
• Poor Organizational
• Poor Culture
Communication
Company’s
Vision

Outcomes
OUTCOMES
Culture & Business
• The need to
show success
Company’s early on in the
Goals process.

OUTPUT

• No Organization/Vision
Alignment

• Fear of Risk

• Unbalanced Portfolio
Outputs


Questions to Ask Clients
PROCESS

How can we
INPUT work together to
Inputs Process
How do you innovate better?
innovate now?

Company’s
Vision

Outcomes
OUTCOMES Culture & Business

How can we
Company’s
Goals help you sustain
innovation?

OUTPUTS

How can we help
you create a successful
Outputs
product, service, and
business?


Review of Innovation Problems & Breakdowns

“A mistake is to act as if only products count, even though transformative new
ideas can come from a range of functions, such as production and marketing.”

INPUT BREAKDOWNS PROCESS BREAKDOWNS OUTPUT BREAKDOWNS

• Poor Hiring Procedures • Arbitrary Metrics • No Organization/Vision Alignment
• Poor Communication • Micromanaging • Fear of Risk
• Fear Failure • Unclear Mission • Unbalanced Portfolio
• Poor Organizational Culture • Broken/Wasteful Processes
• Un-user-centered Design

Kanter. (2006), Koen (2002) Innovation & Change Management | SERV753 - Service, Innovation & Enterprises | February 24, 2013 41

Core Problems of Innovation

LACK OF ALIGNMENT OF POOR UNDERSTANDING OF POORLY ASSEMBLED TEAMS POORLY CHOSEN METRICS
VISION/PROJECTS EMPLOYEES & CUSTOMERS
Companies do not Companies often use
Existing companies only Employees are not apart of strategize their hirees, their metrics improperly
focus on a handful of the internal decision making resulting in the lack of key by overemphasizing
deliverables; which ensures processes. This prevents thinkers and doers to fit output results rather than
the success of only one area employee buy-in. their profile for innovation. applying them to the entire
of expertise. innovation process.
Companies are removed Internal culture is
This leaves company’s from the customer uncondusive when teams Sometimes they also
with a fragmented mission and frontline employee are micromanaged and lack choose inadequate metrics
for employees and an experience, due to the trust for their employers. that don’t suit their specific
inconsistent experience for misuse of customer needs or company goals.
customers. research.


Core Innovation Building Blocks

ALIGNMENT OF THOUROUGH UNDERSTANDING OF PROPERLY ASSEMBLED TEAMS APTLY CHOSEN METRICS
VISION/PROJECTS EMPLOYEES & CUSTOMERS
Service designers Service designers use
Service design thinking Empathy is an integral have multidisciplinary methods to create well
provides the foundation part of a service design backgrounds which allow balanced metrics that go
that allows for a holistic approach. Understanding them to assemble great beyond ROI and holistically
expression of the customers and employees teams. They understand align with company vision.
company’s vision and and the context in which team dynamics and how Oftentimes, companies only
goals which permeates they operate is essential to skillsets are best utilized. focus on output metrics
throughout all products and creating buy-in. rather than metrics that
services. They also create and support the front-end
This deep understanding facilitate executive training process of innovation.
ensures a holistic vision programs that are inline
throughout the entire brand with desired culture.
ecosystems.


What is Innovation @ Hot?


Hot’s Services
Hot currently helps clients define what they need designed and then
collaboratively executes that design as needed. Often times, issues
within the client’s organization can hinder Hot’s progress...

What Hot
controls now

What the
client
controls Strategy/
Branding/ Product/Service
Delivery Systems
UX/Visual

Vision/Goals
Customer
Relationship
Management

Internal
Company
Culture


Extending Hot’s Services
If Hot can reach beyond their current portfolio of digital design
and development, they can co-create more efficient systems that
support holistic innovation within their client’s organizations.
Poor delivery
systems can affect
What Hot the entire customer
controls now experience.

What the
client
controls Strategy/ Service does
Branding/ Product/Service not stop at the
If the company’s Delivery Systems purchase-point.
UX/Visual
vision is not clear,
this may negate all If not recognized, it
project work. can be detrimental
to previously
Vision/Goals designed work.
Customer
Relationship
Management

Internal
Poor internal culture Company
can hinder project Culture
progress.


Co-Creating the Whole Pie
Success is magnified when Hot and their clients
can begin holistically creating company value.

What Hot & the
client control
together

Strategy/ Product/Service
Branding/ Delivery Systems
UX/Visual

Mission/Vision
Customer
Relationship
Management

Internal
“Give all your stakeholders a Company
Culture
bigger say, and they’ll lead you
to better insights, revenues,
and profits.”

Ramaswamy(2010) Innovation & Change Management | SERV753 - Service, Innovation & Enterprises | February 24, 2013 47

Tomorrow’s Value Proposition

HOT STUDIO

For organizations looking for holistic innovation , Hot Studio is an experience design and innovation
consultancy that works with you to create products and services that resonate throughout your
company’s culture and customer experiences. Unlike other creative companies, we reach beyond
aesthetic design to co-create building blocks
that cultivate innovation.


Innovation & Change Management @ HOT
Innovation takes place within three areas of your organization: organizational
architecture, the inner workings of your product and service offerings, and
the elements that influence your customers’ experience.

At Hot, we take a detailed look at each of these areas to diagnose the
breakdowns of your company’s highest potential.

INNOVATION PACKAGE
Adapted from Ten Types of Innovation - Doblin

ORGANIZATIONAL ARCHITECTURE PRODUCT & SERVICE OFFERINGS CUSTOMER EXPERIENCE

Profit Models Brand Back-stage Services
Networking Product Performance Distribution Channels
Structure Product Systems Customer Engagement
Processes Front-stage Services


High-level Process

DIAGNOSE CO-CREATE TRAIN TO SUSTAIN ADAPT & MAINTAIN

First-and-foremost, Every company is Once a strategy is in Since innovation is
we have to figure different, with no one- place, we give you the forever evolving, we
out the source of the size-fits-all solution. tools to sustain and want to make sure your
roadblock or breakdown. That’s why we would cultivate the system. innovation strategy
Once inspected and work with your company Whether it be through stays alive. On-going
diagnosed, we can to develop an innovation a personalized metrics redefinition and
isolate and design strategy that will work system, hiring process, maintenance will provide
around it. just for you. or executive training the basis for a long-
program, we want to lasting partnership.
make sure it lasts.


Our Process

DIAGNOSE

GOAL

Pinpoint and isolate roadblocks and breakdowns in any/all of the three
innovation categories. This way we can find what’s working, what isn’t,
and where to go from there.

HOW

Business mapping, journey mapping, blueprinting, contextual
research, culture assessment surveys, employee tree analysis,
metrics assessment tools, portfolio audits.


Our Process

CO-CREATE

GOAL

To tap into the inner-workings of your organizations current dynamic and
processes. By understanding all the stakeholders in your organization, we can
tap into the collective genius that already exists within your organization, as
well as finding a solution that works for your unique organization.

HOW

Innovation agenda, scenario planning, opportunity mapping, contextual research,
customer needs assessments, innovation labs, mind-mapping, business model
innovation, cultural probes, system models, innovation portfolio balancing.


Our Process

TRAIN TO SUSTAIN

GOAL

After diagnosing and creating an innovation strategy that works for you,
we have to make sure it’s sustainable! In this phase, we transmit our tacit
knowledge and skills to you.

HOW

Innovation metrics, process metrics, output metrics, executive and
leadership training programs, hiring strategies, portfolio metrics.


Our Process

ADAPT & MAINTAIN

GOAL

Just like life, innovation is always evolving! What works for you today, might not
tomorrow. For this reason, an established, open-dialogue will help us to maintain
a long-lasting relationship, to help your company keeping growing.

HOW

Adapting custom metrics, quarterly audits, ongoing workshops, resident
facilitators.


Applying our Process

DIAGNOSE

ORGANIZATIONAL ARCHITECTURE

Organization cultivates a micromanagement culture that stunts innovation

PRODUCT & SERVICE OFFERINGS

Company’s has an unbalanced portfolio that results in marginal profits

CUSTOMER EXPERIENCE

Fragmented experience across various touchpoints



CO-CREATE


Conduct workshops to isolate culture problem


Develop innovation metrics that align with company voice & mission

CUSTOMER EXPERIENCE

Survey / research customers to pinpoint, resolve, and transcend existing offerings



TRAIN TO SUSTAIN


Develop executive training and leadership programs to instill brand management
techniques


Workshops encouraging all employees to collaboratively generate innovative ideas

CUSTOMER EXPERIENCE

Corporate research excursions allow employees to experience the front-stage
of service



ADAPT & MAINTAIN


Quarterly culture audits to determine employee satisfaction


Re-approach metrics to ensure relevance to changing economy

CUSTOMER EXPERIENCE

Periodically evaluate customer satisfaction with surveys and metrics


“Engaging the whole organization in understanding that
innovation is the fundamental way that the company brings
value to its customers.”

Koen et al. (2002) Innovation & Change Management | SERV753 - Service, Innovation & Enterprises | February 24, 2013 59

References

Anthony, S. D., Johnson, M.W., Sinfield, J.V., Altman, E.J. (2008). Innovation Metrics Innovator’s Guide to growth: Putting

Disruptive Innovation to Work Harvard Business Review, 1-14.

Anthony, S.D., Johnson, M.W., Sinfield, J.V., Altman, E.J. (2008). Organizing to Innovate Innovator’s Guide to Growth:

Putting Disruptive Innovation to Work: Harvard Business Press.

Cooper, R.G. (2000). Doing it Right: Winning with New Products. Product Innovation Best Practices Series (pp. 1-11).

Review: Harvard Business Press.

Gardien, P. (2006). Breathing Life into Delicate Ideas (pp. 1-20): Koninklijke Phillips Electronics N.V.

www.hotstudio.com


References cont.’d

Kanter, R.M. (2006). Innovation The Classic Traps. Harvard Business Review(November 2006), 1-13.

Kelly, D.. (2006). The Ten Faces of Innovation. Rotman, Spring/Summer, 30-33.

Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy: How to create uncontested market space and make competition

i rrelevant. Harvard Business Press.

Koetter, J.P. (2000). Leading Change: Why Transformation Efforts Fail. Harvard Business Review, 59-67.

McKinsey. (2008). Assessing Innovation Metrics. The McKinsey Quarterly.

Mrazek, D., Lucente, S., Wakid, K., Sato,S., Wai, C., Menter, A., Hartley, P. (2001). The Holy Grail of Design Measurement.

The Design Management Institute(Reprint #11222WAK06), 6-16.


References cont.’d

Nagji, B , Tuff, G. (2012). Managing Your Innovation Portfolio. Harvard Business Review(Mayb 2012), 3-11.

Nagji, B. , Walters, H. (2012). Help Wanted 2.0: Engaging Others to Tackle Wicked Problems. Rotman(Spring 2012), 73-76.

Koen, P.K. , Ajamin, G.M. , Boyce, S. , Clamen, A. , Fisher, E. ,Fountoulakis, S. , Johnson,A. , Puri,P. Seibert,R. (2002). Fuzzy

Front End: Effective Methods, Tools, and Techniques. The PDMA Toolbook for New Product Development, 5-32.

Ramaswamy, V. Gouillart, F. (2010). Building the Co-Creative Enterprise. Harvard Business Revie2002&w(October 2010),

1-9.

Treacy,M. ,Wiersema,F.(1992). Customer Intimacy and Other Value Disciplines. Harvard Business Review(January-

February 1993), 84-93.


Thank You
SCAD SERV753 - Service, Innovation, and Enterprises | February 24, 2013

Prepared for Hot Studio by Play Nice Service Design / Richard Ekelman, Lauren Peters, Lindsay Vetell-and professor Robert Bau
Innovation & Change Management | SERV753 Service, Innovation & Enterprises | February 24, 2013 63

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