Making Innovation Work - The 7 Rules

1. Innovation –Processes &Tools A Two-Day Workshop Session 2A: Making Innovation Work I 17/10/11

4. 17/10/11 The 5 Disciplines of Innovation The Definition of Innovation A relentless focus on the creation and delivery of new customer value to the marketplace within a framework of business viability

5. 7 Rules of Innovation 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton)

6. 17/10/11 The 7 Rules of Innovation Rule 1 Exert strong leadership on portfolio decisions and encourage significant value creation. Source: Making Innovation Work (Davila, Epstein, Shelton)

7. 17/10/11 The 7 Rules of Innovation Rule 2 Integrate innovation into the company's basic business mentality. Make it a core competency. Source: Making Innovation Work (Davila, Epstein, Shelton)

8. 17/10/11 The 7 Rules of Innovation Rule 3 Align the amount and type of innovation to the company's business. Select a "play to win" or a "play not to lose" innovation strategy. Source: Making Innovation Work (Davila, Epstein, Shelton)

9. 17/10/11 The 7 Rules of Innovation Rule 4 Manage the natural tension between creativity and value capture so that the company generates successful new ideas while gaining the maximum return on its investment. Source: Making Innovation Work (Davila, Epstein, Shelton)

10. 17/10/11 Neutralize organizational antibodies that kill off good ideas because they're different from the status quo. The 7 Rules of Innovation Rule 5 Source: Making Innovation Work (Davila, Epstein, Shelton)

11. 17/10/11 Recognize that the fundamental building blocks of innovation are networks that include people and knowledge -- both inside and outside the company boundaries. The 7 Rules of Innovation Rule 6

12. 17/10/11 Create the right metrics and incentives to foster innovation. The 7 Rules of Innovation Rule 7

13. 17/10/11 7 Rules of Innovation Source: Making Innovation Work (Davila, Epstein, Shelton) 2 1 3 5 7 4 6 1. Strong Leadership 2. Integrate into Business Model 3. Align Type & Amount 4. Manage the Tension 5. Netralize Antibodies 6. Recognize Networks 7. Metrics & Incentives

16. 17/10/11 Making Innovation Work To manage change successfully, we can look for ways to apply 3 levers of business model innovation and 3 levers of technology innovation . So there are 6 levers of innovation that you can use!

17. The 6 Levers of Innovation 17/10/11 Enabling Technologies Target Customer Process Technologies Supply Chain Product and Services Value Proposition Technology Innovation Business Model Innovation Source: Making Innovation Work (Davila, Epstein, Shelton)

18. 17/10/11 Making Innovation Work Source: Making Innovation Work (Davila, Epstein, Shelton) Nano - a car for Rs. 1 lakh Business Model Innovation Value Proposition

19. 17/10/11 Making Innovation Work Source: Making Innovation Work (Davila, Epstein, Shelton) Delivering a pizza in under 30 minutes Business Model Innovation Supply Chain

20. 17/10/11 Making Innovation Work Source: Making Innovation Work (Davila, Epstein, Shelton) Scooter for women Business Model Innovation Target Customer

21. 17/10/11 Making Innovation Work Camera on a cellphone Technology Innovation Source: Making Innovation Work (Davila, Epstein, Shelton) Product and Services

22. 17/10/11 Making Innovation Work ATMs for cash payment Technology Innovation Source: Making Innovation Work (Davila, Epstein, Shelton) Process Technology

23. 17/10/11 Making Innovation Work Email delivery platforms Technology Innovation Source: Making Innovation Work (Davila, Epstein, Shelton) Enabling technology

25. The 6 Levers of Innovation 17/10/11 Enabling Technologies Target Customer Process Technologies Supply Chain Product and Services Value Proposition Technology Innovation Business Model Innovation Source: Making Innovation Work (Davila, Epstein, Shelton)

26. 17/10/11 Making Innovation Work There are essentially 4 types of innovation Incremental Semi-Radical (2) Radical With business or technology innovation, they form a 2 X 2 matrix!

27. 17/10/11 Semi-Radical Little change: T Major change: BM Source: Making Innovation Work (Davila, Epstein, Shelton) The Innovation Framework: 4 types of innovation are possible Making Innovation Work Technology Innovation Business Model Innovation Semi-Radical Little change: BM Major change: T Radical Major change: T Major change: BM Incremental Little change: T Little change: BM

28. Making Innovation Work 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton) Incremental innovations are a way to squeeze out as much value as possible from existing products or services without making significant changes or major investments. Cell-phones (Nokia etc) constantly adding features to the basic model.

29. Making Innovation Work 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton) Semi-radical innovation involves substantial change to either the business model or technology – but not to both. Shopper’s Stop – supermarket business model applied to retailing. Major change in business model. Little change in technology.

30. Making Innovation Work 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton) Semi-radical innovation involves substantial change to either the business model or technology – but not to both. Optical disks or CDs distributed by the same market channels. Major change in technology. Little change in business model.

31. 17/10/11 Making Innovation Work Source: Making Innovation Work (Davila, Epstein, Shelton) A radical innovation is a significant change that simultaneously affects both the business model and the technology. DTH: Satellite impacting cable TV operators Pen Drives : Flash tech sold as gifts in shops

32. 17/10/11 Making Innovation Work Choose Your Innovation Strategy Is your innovation strategy play-to-win or play-not-to-lose? Play-to-win Play-not-to-lose

33. Making Innovation Work 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton) Play-to-Win (PTW) PTW is a risky market-leading strategy that relies heavily on semi-radical or radical innovation to drive transformation and create market-changing ideas and products. iPod and iTunes redefined the way music was enjoyed, as well as created and distributed

34. Making Innovation Work 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton) Play-Not-to-Lose (PNTL) PNTL is a safer strategy that includes more incremental innovation in the portfolio than a PTW strategy, and aims to ensure that a business can still stay in the game. Jet Airways acquired Air Sahara and renamed it as JetLite, a low- cost competitor to Kingfisher Red.

35. 17/10/11 Making Innovation Work Case Study Air Deccan

36. Making Innovation Work 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton) Choose Your Strategy Air Deccan Case Study I Q1. What type of innovation was Air Deccan using? Q2. What was Air Deccan’s strategy? Play-to-Win or Play-Not-to-Lose? Q3. Was this strategy successful as an innovative business model? Q4. How does this case relate to innovation in Tata Motors?

37. Making Innovation Work 17/10/11 Source: Making Innovation Work (Davila, Epstein, Shelton) Choose Your Strategy Air Deccan Case Study II Q1. What were the factors that led to Air Deccan becoming part of the UB Group’s up-market Kingfisher brand? Q2. What is Air Deccan’s strategy now? Play-to-Win or Play-Not-to-Lose?

40. The 6 Levers of Innovation 17/10/11 Enabling Technologies Target Customer Process Technologies Supply Chain Product and Services Value Proposition Technology Innovation Business Model Innovation Source: Making Innovation Work (Davila, Epstein, Shelton)

41. 17/10/11 Semi-Radical Little change: T Major change: BM Source: Making Innovation Work (Davila, Epstein, Shelton) The Innovation Matrix Making Innovation Work Technology Innovation Business Model Innovation Semi-Radical Little change: BM Major change: T Radical Major change: T Major change: BM Incremental Little change: T Little change: BM

42. 17/10/11 Making Innovation Work Is your innovation strategy play-to-win or play-not-to-lose? Play-to-win Play-not-to-lose

45. 17/10/11 The 5 Disciplines of Innovation The Definition of Innovation A relentless focus on the creation and delivery of new customer value to the marketplace within a framework of business viability

47. 17/10/11 Making Innovation Work System for e-ticket printing Technology Innovation Source: Making Innovation Work (Davila, Epstein, Shelton) Process technology

48. 17/10/11 Making Innovation Work Fail early – to succeed faster! Source: Making Innovation Work (Davila, Epstein, Shelton)