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Innovative Leadership
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Innovative leadership.pptx

  1. 1. Innovative Leadership
  2. 2. Learning Objectives Oncompletion of this course, participants shallbe able to do thefollowing: Identify the Importance of InnovativeLeadership Identify various types of innovation Identify approaches to Innovation Leadorganisation-wide implementation of innovation strategy Coordinate evolution of innovationculture
  3. 3. “Whether you like it or not, your business profession or line of work will evolve and you have two choices. First, you canbe a proactive force and get yourself and your organization involved in making innovations; or second, you canchooseto ‘react’ to the innovations of others and miss opportunities to grow and apply your experience inexciting, new ways.” Source: Center for Management & OrganisationEffectiveness
  4. 4. “Innovation keeps businesses competitive – it is widely recognized asproviding areal impetus for growth and is at the heart of corporate strategy in many ofthe world’s leading firms.” Source: CBI
  5. 5. “ Innovation isn’t anything until it becomes part of your everydaybusiness” - Carina Kemp, Head of Insight and Planning, HSBC.
  6. 6. The“functional” source of innovationdepends upon the functional relationship between innovator and innovation: An innovation is aUSERinnovation when the developer expects to benefit by USINGit; An innovation is aMANUFACTURERinnovation when the developer expects to benefit by SELLINGit. Source: Eric Von Hippel, Innovate or Buy
  7. 7. Drivers of Innovation Improvement in CustomerExperience Demand of Customers CostReduction Organisational Culture Need to Changeor ReduceRawMaterials Regulatory Requirements Competitive Positioning Minimization of EnvironmentalImpact Gapin the Market Improving Quality Reduction of EnergyExpenditure Differentiation Enhancing Flexibility
  8. 8. SomeInnovative Companies and Innovation Drivers 1 Company Innovation Highlighted by Company Innovation Drivers 1.Arup Development of the Dongtan Ecocity Conceptin China Developed telematics insurance product for individual customers andfleets Foresight and long established company culture Need to respond torapid change in insurance market, strategic decision to seekoutorganic growth, inevitability of telematics provided opportunity In response to rapid company growthand need to free-up key staff to focus on core architecture work Declining opportunity in core market and strategic decision togrow, rather than have a managed retreat Toreplace existing foot measurement equipment at the end of its useful life, to reduce costs and determination to createa leading retail experience Company culture and strategy, foresight- looking for trends and tipping points, to reduce costs, requests for innovation from clients, todifferentiate themselves from the competition Toimprove customer experience, meet demands of new markets while reducingcosts and environmental impacts 2.Aviva-Norwich Union 3.Benoy Internal business reorganization 4. BTWholesale New ways of bundling services andproviding software (rather than hardware)solutions 5.Clarks Development and introduction of 3Dfoot scanning technology 6.Fujitsu Moving from technological solutionsto business-based outcome services 7.HSBC Sharia-compliant banking, green banking, self- service banking in branches and borderless banking
  9. 9. SomeInnovative Companies and Innovation Drivers 2 Company Innovation Highlighted by Company Innovation Drivers 8.KPMG Developing anew internal innovation framework incorporating skills, behaviour and process Tohelp them keep ahead of arapidly changing business environment where some traditional services have become commoditized and clients are more demanding Togain advantage over competitors with better training, thus raising standards, brand image and reputation while reducing costs, offering better career progression opportunities to retain the best staff Company culture, identified agapand sought to create anewmarket 9. Legal & General Starting underwriters academy in collaboration with Cardiff University 10. LochLomondSeaplanes Bringing seaplanes asamode of transport to west Scotland 11. MagicLantern Providing abridge between traditional and digital media with afocus on participative engagement Company culture, proactively identifying audience needs that seemunder-served, to grow by focusing on their areas ofexpertise in new technology, innovation and creativity Changemarket environment becoming more competitive, desire to differentiate themselves on service delivery and need to retain staff Toimprove overall customer experience while also maximizing revenue opportunities and meeting changing regulatory demands on security etc 12.Muckle Complete organisational culture change internally 13. NewcastleInternational Airport Increase ‘dwell time’ in key parts of the airport
  10. 10. SomeInnovative Companies and Innovation Drivers 3 Company Innovation Highlighted by Company Innovation Drivers 14.Nike Unique brand experience from social networking to aservice allowing customersto design their own footware- process of mass customization Business process improvement for Norwich City Council and black cab scheduling system for BAA Company culture, which promotesinnovation asone of four core values. Tocreate abrand that enhances the customer experience and grows Nike’s market-leading position Tostay ahead in competitive sector whereIP is difficult to protect; responding to the changing market where managed servicesare now seenasacommodity and customers are more demanding Company culture, to grow thebusiness, reduce costs and stay ahead of fastmoving competition 15.Steria 16.Texperts On-demand expert answers to customer questions by text service Source: CBI, Excellence in Service Innovation
  11. 11. Incremental Innovation Radical Innovation 1.It’s competence-enhancing becauseit builds upon existing knowledge and resources 2.It brings aboutchanges It’s competence-destroying becauseit needs new knowledge and resources wherein the existing products development that pushdown will still beviable. It brings about verygreat existing products into obsolescence
  12. 12. Forward Innovation vs. BackwardInnovation Forward Innovation involves development of new functions in new or existing products , market or technology; while Backward Innovation encompassesdevelopment of existing functions more rapidly andcheaper.
  13. 13. OpenInnovation Open Innovation is an intentional course of action for identifying and exploitinginternal and external novel initiatives in order to develop new products andservices. It involves multi-stage collaboration with other entities outside afirm, in order to value capture and optimize the standard andvalue of the finalproduct.
  14. 14. Sourcesof External NovelInitiatives in OpenInnovation Competitors Distributors Suppliers Freelance Commentators Contract ResearchOrganisations Independent ResearchOrganisations Practicing Experts Customers
  15. 15. ClosedInnovation ClosedInnovation is apractice in which afirm focuses on internal sources of novelinitiatives asits sole innovation provider, in order to maximize intellectual property exploitation and market control.
  16. 16. TheDifference Between Open and Closed Innovation Microsoft’s OS Google IBM LinuxCode MySpace YouTube LinuxKernel Pirated Music Complementors Wikipedia Source: Henry Chesbrough & Melissa Appleyard Company Ecosystem Value Capture In-House Community-Driven Value Creation
  17. 17. Determinants of InnovationApproach Competition Internal Capabilities Scarcityof Expertise Marketing Strategy Mission Extent of Opportunities forCollaboration
  18. 18. 10 Attributes of SuccessfulServiceInnovation 1. Start with unmet user needs, notnew ideas 2.Researchmethods are basedon deep customer empathy(e.g., ethnography) 3. Focusis on the customer journey – not merely your own touch points 4. Emphasison identifying and winning the moments oftruth 5. Rapid,low-fidelity serviceprototyping 6. Open innovation – including the customer in the earliest stages 7. Openinnovation – bringing together aunique valuenetwork 8. Creating evidence of the brand attributes within the touch points 9. Useof storytelling to convey the experienceintent 10.Overcoming metrics that run counter to creating compelling experiences Source: Customer Perspectives on Service Innovation
  19. 19. “Unsuccessful leaders often display stereotypical fallacies in theirthinking.” -Sternberg
  20. 20. Stereotypical Fallacies Against Innovative Leadership • Egocentric fallacy • Invulnerability fallacy • Omnipotent fallacy • Unrealistic optimism fallacy • Omniscience fallacy
  21. 21. “ Thebest organisations understand design and do not seeinnovation assomething happening in alaboratory on itsown” - JoeHeapy, Co-founder and Director, Engine.
  22. 22. Characteristic Features of Innovative Leadership Guidance Ground breaking Control Novel Direction Modern Inventive Headship Pioneering
  23. 23. Thinking Skills in Innovation i. Multi-screen Thinking vs.SpotThinking ii. Abstract Thinking vs.SpecificThinking iii. Breakthrough Thinking vs.Trade-offThinking iv. Intensification Thinking vs.ShelteredThinking v. Non-linear Thinking vs.LinearThinking vi. Diversity Thinking vs.Uniformity Thinking vii. Structured Thinking vs.RandomThinking viii. Ideality Thinking vs.ConsumptionThinking ix. Ultimate GoalThinking vs.ShallowThinking x. Evolutionary Thinking vs.RandomThinking xi. Long-TermThinking vs.Short-Term Thinking xii. Wild Thinking vs.GroundedThinking xiii. Analytical Thinking vs.Jump-to-SolutionThinking xiv. Problem Flow Thinking vs.Single Solution Thinking Source: Valeri Souchkov, Power Thinking Skills For Innovative Leadership
  24. 24. 7 Dimensions of StrategicInnovation 1. AManaged Innovation Process:Combining non- traditional and traditional approaches to business strategy. 2. StrategicAlignment: Buildingsupport. 3. Industry Foresight: Understanding articulated emerging trends. 4. Consumer/ Customer Insight: Understandingarticulated and unarticulated needs. 5. CoreTechnologies and Competencies: Leveraging and extending corporate assets. 6. Organisational Readiness:Theability to takeaction. 7. Disciplined Implementation: Managing the pathfrom inspiration to busiS no eu sr c se : imI n n po av ca tt i .o nPoint
  25. 25. SystemicApproach to Innovation Marketing Innovation Organisational Innovation Product Innovation Strategy Innovation Technology Innovation Process Innovation Business Innovation Source: Vadim Kotelnikov
  26. 26. BusinessInnovation Shifting the dimensions of BusinessModel Examples 1.General Electric: Evolving one of themost competitive firms 2.Coscharis: Resolvingmultiple value streams into total valueproposition
  27. 27. Organisational Innovation Shifting from Industrial to Knowledge-Driven Organisation (Learning, Teachingand Coaching) Examples 1.Microsoft Corporation: Raisingaverage intelligence quotient ofemployees 2.First Bank: Eliminating internal bureaucracyand building internal capacity for upwardchange
  28. 28. Strategy Innovation Shifting from Strategic Rigidity toFlexibility in Approaching Opportunities Examples 1.Charles Schwab:Development of corporate guiding principles for leveragingopportunities 2.Zenith Bank: Realignment of strategic intentto expansion opportunities
  29. 29. Technology Innovation Developing Radical Innovation Capability and S trategic Alignment of TechnologyPortfolio. Examples 1. Zensys:Wireless technology for controlling home lighting, entertainment and securitysystems 2. MTN: Collaboration with Innovation Hub’sCoachlab for advancement of InnovativeTechnology
  30. 30. ProcessInnovation Shifting from Functional to Cross-Functional ProcessMethodology and Integration of Novel ProcessSystemsSuchasLeanand EBPM. Examples 1.Fidelity Investments: Processimprovement for boosting financialsolution 2.RusselSmith:Processoptimization for safety and quality enhancement
  31. 31. Product Innovation Developing new products for providingcustomer satisfaction and veritable solution Examples 1. Multispectral Solutions: Development of Ultra Wideband product technology for RFID,wireless communications, radar andgeo-positioning 2. Starcomms: Introduction of iZap super fast broad band internet connection into theNigerian Market
  32. 32. Marketing Innovation Exploring Value, Customer-Centricity andCompetitive Advantage for NovelPositioning Examples 1. Dell Computers: Development of customer partnership for tracking and exploitingvalue engineering 2. Friesland Foods(WAMCO): Built competitive advantage based on value-driven branding
  33. 33. Empowering Cross-Functional Teams for LeadingInnovation Define what work isrequired Identify the keyinterdependencies Parsethe innovation subtask to small,interlocking teams with definedleaders Agree on goals, schedule, and accountability Provide resources but stay out of each team’stask unless itis not meeting its major commitments Craft the firm’s overall shape, keep all thesubtasks together, and link non-adjacent subtasks as necessary Source: Christopher Meyer, Relentless Growth
  34. 34. Customer-Inspired Innovation • Customer-Inspired Innovation is the imaginative discovery ofnew business concepts (products, services, business models, strategies, etc.) by matching deep insight into customer needs with an organization’s capabilities in unprecedentedways • New insight into customers’ needs are discovered, new growth opportunities are identified, new organizational competencies are mobilized, new solutions arecreated • “Articulated Customer Needs” – Needs that are recognized and communicated (stated) bycustomers • “Unarticulated Customer Needs” – Needs unrecognized by customers that – when recognized and satisfied – lead to products and services that delightthem • While exploring customer behavior the challenge is to “read between the lines” and “make non-obviousconnections” Source: InnovationPoint
  35. 35. Asuccessful Innovative Leader must provide guidance for implementationof innovation culture in every stratum of organisational hierarchy.
  36. 36. Obstacles to Innovation 1. Lackof ashared vision, purposeand/or strategy 2. Innovation not articulated asacompany-wide commitment 3. Lackof ownership by SeniorLeaders 4. Constantly shifting priorities 5. Short-termthinking 6. Internal process focus rather thanexternal customer focus 7. Focuson successesof the past rather thanthe challenges of thefuture 8. Unwillingness to change in the absenceofa burning platform 9. Politics —efforts tosustain the status quo to support entrenchedinterests 10. Rewarding crisis management rather than crisis prevention 11. Hierarchy —over-management and reviewof new ideas 12. Under-funding of new ideas in thename of sustaining current efforts 13. Reluctanceto kill initiatives that are not succeeding,but have been funded andstaffed Source: Mitchell Ditkoff 14. Fearthat criticizing current practicesand commitments is ahigh-risk activity 15. Workforce workloads (i.e. too much todo, not enough time) 16. Riskaversion (i.e. punishment for "failure") 17. Micromanagement 18. Inelegant systems and processes 19. Addiction toleft-brained, analytical thinking ("data is God") 20. Absenceof user-friendly ideamanagement processes 21. Unwillingness to acknowledge and learn frompast "failures" 22. Inadequate understanding of customers 23. Innovation not part of the performance review process 24. Lackof skillful brainstormfacilitation 25. Lackof "spec time" todevelop new ideas and opportunities 26. Inadequate "innovation coaching" 27. No creative thinking training 28. No reward and recognitionprograms 29. "Innovation" relegated to R&D
  37. 37. 11 Practice Tipsfor Innovation 1. Provide strategic alignment 2. Define the innovation processpublicly 3. Build cross-functional expertise 4. Establish acreative chaos environment 5. Challenge assumptions 6. CrossPollinate 7. Reward idea generation 8. Experiment to pursueopportunities 9. Allow freedom to fail 10. Measure the progress 11. Make business fun Source: Vadim Kotelnikov
  38. 38. TheCase Of Innovation in Unilever
  39. 39. Background Until 1990 • Highly decentralized • Federation of Companies • 5 Central Laboratories • Common Codeof BusinessPrinciples • Innovation and Marketing all at Companylevel (circa 200)
  40. 40. Start of Modern InnovationJourney 1990-1995 • Conference to establish need forInnovation Process • Dedicated Innovation Resources • Development of Concept ofInnovation Centers • Randomsoftware developments • 14,000 odd databases were created • Someinnovations at InnovationCenters
  41. 41. Unilever’s Mission Unilever's mission is to add vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brandsthat help people feel good, look good and get more out oflife.
  42. 42. In TheEvolving Journey 2005 onwards • Additional features – Group Executive announced – R&Daligned within the businesses – Focusis on Consumers, Brands& Customers
  43. 43. KeyFeatures of Unilever Innovation ProcessManagement Objectives Big, bold consumer relevant innovations- rolled out fast; and we always remind ourselves that: - Theprocess is only there to help enable innovation: the ITsoftware is just tosupport the process.
  44. 44. KeyFeatures of Unilever Innovation1 • Innovation is Consumerfocused – Unilever reach in 150countries – Respectfor individual tastes, preferences and wayof living • All the 16,000 people who are involved in Innovation are connected via acommon software in all the countries around the world – Global Community on line with commonpurpose • Senior people manage, allocate and guideresources – Senior management commitment
  45. 45. KeyFeatures of Unilever Innovation2 •Regular meeting mechanism to review andmove the Innovation agendaahead •Formal process to seizeopportunities and to make business daring –Tomanage risks and to assessopportunities • TheInnovation output is measured by three Key Performance Indicators; viz Underlying VolumeGrowth, Innovation Rate and Expenditure on R&D – What you measure is what people focuson
  46. 46. KeyFeatures of Unilever Innovation3 • There is formal process of capturinglearning to build acontinuous learningorganisation •There is aSteering Group and network of Innovation to keep the capability building programmes, processesand systemsleading edge
  47. 47. KeyFeatures of Unilever Innovation4 Capability building programmes • Leadership Courses • Marketing AcademyCourses • Project Management andCreativity Modules/Facilitations
  48. 48. KeyLearning 1 Picklist codings highlighted the enormous complexity of managing 1800 odd brands,hence Brand FocusInitiative: –Tofocus on 40 Power Brands • Like many other companies, Consumer Disconnect became apparent when the modern journeybegan, hence this initiative on ConsumerRe-connect • Brand fragmentation had created aweak and inefficient supply chain system, hence the World ClassSupply Chain Initiative
  49. 49. KeyLearning 2 Tomake Innovation top of the mind agendahas resulted in Enterprise Culture Initiative inwhich leadership is being focused ongrowth • Common process and systemshave brought simplicity and focus towardsgrowth • Advent of E-Economycoupled with other developments in Market Environment like growing Service Sectorsgaveimpetus to innovate new-Channels hence the initiative on Pioneering New Channels