Discover the newest insights in understanding value drivers and their impact on new products and services. From technology improvement towards platform economy with the value pyramid. How to use new design skills and service design to create experience economy?

1. 1.1 The drivers of value creation: 50 years of research 1
CONFIDENTIAL Template Innovation Day 2019CONFIDENTIAL
VALUE DRIVERS FOR INNOVATION
Dany Robberecht
Director Consulting Office
Dany.robberecht@verhaert.com
TRACK 1
MyFutureProduct

2. 1.1 The drivers of value creation: 50 years of research 2
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CONTENT
Warm up
The formula for value
How did it work over time?
An attempt towards a new value model

3. 1.1 The drivers of value creation: 50 years of research 3
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WARMING UP QUIZ …
One simple question …
In what year was the product launched?

4. 1.1 The drivers of value creation: 50 years of research 4
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IN WHAT YEAR WAS THIS PRODUCT LAUNCHED?
2011
LACKED MUST HAVE GAMES
SONY PS VITA
© SONY

5. 1.1 The drivers of value creation: 50 years of research 5
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IN WHAT YEAR WAS THIS PRODUCT LAUNCHED?
1964
CLEAR WIN THROUGHOUT THE ENTIRE
VALUE CHAIN
GEBERIT BUILD IN
TOILET FLUSH SYSTEM
© GEBERIT

6. 1.1 The drivers of value creation: 50 years of research 6
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THE ARCHITECTURE OF MY FUTURE PRODUCT
MyFutureProduct
How to create value?
© VERHAERT

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“IF IT DOESN’T ADD VALUE, IT’S WASTE”
HENRI FORD

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BUT WHAT IS THE MAGIC FORMULA FOR VALUE ADD …
What can we
LEARN from
50 years of
innovation?
ƒ usefulness * usability * desirability
cost of feasibility
VALUE ADD
* scalability * allowance factor * differentiation
allowableusabledesirablefeasibleuseful
© VERHAERT

9. 1.1 The drivers of value creation: 50 years of research 9
CONFIDENTIAL
GIVE IT A TRY …
WOULD YOU
BUY THIS ONE?
ƒ usefulness * usability * desirability
cost of feasibility
VALUE ADD
* scalability * allowance factor * differentiation
PATENT US4320756A

10. 1.1 The drivers of value creation: 50 years of research 10
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HOW DID IT WORK?

11. 1.1 The drivers of value creation: 50 years of research 11
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12. 1.1 The drivers of value creation: 50 years of research 12
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TECHNOLOGICAL ADVANCES PROVIDED ASPIRATION FOR PEOPLE
BOEING 474 – 1969
MOONLANDING – 1969
“Basic value elements corresponding with
hope. Affordable things that worked.”
ƒ usefulness
cost of feasibilityVALUE ADD
* allowance factor
BOM/BOL© VERHAERT

13. 1.1 The drivers of value creation: 50 years of research 13
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What changed?

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INDUSTRIALIZATION CAME ACROSS THE CORNER…
CONSUMER PRODUCTS
Barcode ----- 1973 USA
E-Mail ----- 1971 USA
Floppy Disk ----- 1971 USA by Alan Shugart
Genetic Engineering ----- 1973 USA by S. Cohen
and H. Boyer
Ink Jet Printer ----- 1976 USA
In Vitro Fertilisation ----- 1978 England "test tube baby"
Laser Printer ----- 1975 USA
Microprocessor ----- 1971 USA
MRI Scanner ----- 1977 USA by Raymond Damadian
Personal Computer ----- 1975 USA
Space Station ----- 1973 USA Skylab
#democratizingtechnology #massproduction

15. 1.1 The drivers of value creation: 50 years of research 15
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…AND LED TO MASS MARKETING OF UNDIFFERENTIATED PRODUCTS
Cost
Market size
Prosperity increased
Technology got a bit smaller
© VERHAERT

16. 1.1 The drivers of value creation: 50 years of research 16
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THE FUTURE PRODUCT FOCUSED ON CHEAPER PROPOSITIONS
ƒ usefulness * usability
cost of feasibilityVALUE ADD
* scalability * allowance factor
Lowering labor costs
Ability to manufacture
© VERHAERT

17. 1.1 The drivers of value creation: 50 years of research 17
CONFIDENTIAL
AND THEN WHAT HAPPENED?

18. 1.1 The drivers of value creation: 50 years of research 18
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‘BUSY’ LIFESTYLE SUPPORTED WITH MORE COMPLEX PROPOSITIONS
THE DIGITAL ERA ARRIVED
Gameboy ----- Nintendo 1989
Motorola DynaTAC 8000x ----- 1983
The Clapper -----
ZX Spectrum ----- Synclair
Worldwide Web ----- 1991USA
Amazon ----- 1995 USA
Alibaba ----- 1999 CHN
Linux open source ----- 90’s
Apple Newton ----- 1992 USA
NFC ----- Hasbro 1997
DVD ----- 90’s
USB ----- 1999
2G Cell Phones ----- 90’s Nokia
DVR ----- 1999 by Tivo & Replay TB
MP3 player ----- 1999 Korea Saehan
Information Systems
Byclycklen ----- 1995 DK

19. 1.1 The drivers of value creation: 50 years of research 19
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DIFFERENTIATED PROPOSITIONS OFFERING CHOICE
“Functional innovation is
spurred with emotional
element of value (e.g. badge
value). Value based pricing
strategies and target based
costing methods were
introduced.”
Personalization
ƒ usefulness * usability * desirability
cost of feasibilityVALUE ADD
* scalability * allowance factor * differentiation
© VERHAERT

20. 1.1 The drivers of value creation: 50 years of research 20
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SUBSEQUENTLY …

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BUSINESS MODEL INNOVATION REPAINTED OFFERINGS
NEW BUSINESS MODELS
Digital transformation in services
Experience economy boomed
We try to create a better world ..
iTunes ----- 2003 USA
iPhone ----- 2007 USA
Toyota Prius ----- JP
Uber ----- 2009 US
BetterPlace ----- 2008 USA/IS
“Experiences and simplification of things,
often at a lower cost of ownership, became
the most important drivers of the early nillies.”

22. 1.1 The drivers of value creation: 50 years of research 22
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DISRUPTIVE ECOSYSTEMS WITH ALTERNATIVE EARNING MODELS SURFACED
ƒ usefulness * usability * desirability
cost of feasibilityVALUE ADD
* scalability * allowance factor * differentiation
CHANGE! Go to market
CHANGE! UX
© VERHAERT

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TODAY WE SEE …

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“the reason for which something is done or created or for which
something exists.”
WHAT IS THE PURPOSE LED ECONOMY?
Often linked to societal needs
The ‘WHY’ emerges
Innovation gets another
dimension, again.

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1. Create purpose by
2. Create purpose by
HOW COULD YOU CREATE PURPOSE?

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THE TABLE STAKE IS ABOUT LIFE CHANGING INNOVATIONS
ƒ usefulness * usability * desirability
cost of feasibilityVALUE ADD
* scalability * allowance factor * differentiation
CHANGE! Purpose & societal impact
CHANGE! AI summer, …
© VERHAERT

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CAN WE IDENTIFY PATTERNS?
“VULNERABILITY IS THE BIRTHPLACE OF INNOVATION, CREATIVITY AND CHANGE”
- BRENE BROWN

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#1 - PROPOSITIONS MATURE OVER TIME

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Value add by performance
#1 – PROPOSITIONS GET MORE COMPLEX OVER TIME
1
2
3
Value add by feature differentiation
Value add by servitization
1
2
3
1969
© VERHAERT

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#2 – Elements of value change over time
because needs evolve in terms of prosperity
Why timing is important for innovations

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ELEMENTS OF VALUE ARE UNLOCKED BY PROSPERITY
ƒ usefulness * usability * desirability
cost of feasibilityVALUE ADD
* scalability * allowance factor * differentiation
Hierarchy of needs:
• Social
• Life changing
• Emotional
• Functional
When prosperity increases, new levels of value elements are unlocked (Maslow theory).
shape of the pyramid
size of the region / segment
© VERHAERT

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#3 – Mastering the innovation game
needs more integrated thinking

33. 1.1 The drivers of value creation: 50 years of research 33
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MASTERING THE GAME OF PRODUCT INNOVATION
MyFutureProduct
1969 2019
ƒ usefulness * usability * desirability
cost of feasibilityVALUE ADD
* scalability * allowance factor * differentiation
User experiences
IP, hardware, software
Platform & ecosystems
Servitisation
Business model
Company, regulatory, …
Data, personalization, open
platforms, remote updates, …
© VERHAERT

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One group, five brands
Our services are marketed through 5 brands each addressing
specific missions in product development.
INTEGRATED PRODUCT DEVELOPMENT
ON-SITE PRODUCT
DEVELOPMENT
DIGITAL PRODUCT
DEVELOPMENT
OPTICAL PRODUCT
DEVELOPMENT