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Innovation factory
- 1. First the Revolutionaries (Innovators) will take your markets and your customers.
- 2. Next they will take your best employees.
- 3. Finally, they will take your assets!!!
- 4. First the Revolutionaries (Innovators) will take your markets and your customers. Next they will take your best employees. Finally, they will take your assets!!!
- 5. Dream, create, explore, invent, pioneer, imagine! Do these words describe what you do?
- 6. Innovation Assembly Line Why? What? How?
- 10. Hence, business success is now derived out of…
- 12. Therefore, today’s greatest challenge is…
- 15. Because… In an overcrowded and demand-starved economy profitable growth is not sustainable without creating and re-creating markets and market spaces Economies rejuvenate themselves through cycles of innovation only In a non linear world only non linear ideas will create new wealth
- 16. Value Opportunity YOU Competition Catch-up Don’t Know Competitive advantage Commodity Know Don’t Know Know
- 17. Value Opportunity Innovation leading to opportunity YOU Competition Catch-up Don’t Know Competitive advantage Commodity Know Don’t Know Know
- 18. Value Opportunity Innovation leading to opportunity YOU Competition Catch-up Don’t Know Competitive advantage Commodity Know Don’t Know Know
- 19. That’s all fine…but how do we do it? By creating an organisation that’s an innovation assembly line!
- 20. I know that I don’t know. But I will.
- 21. Definitions
- 22. innovation renew; alter; make new
- 23. Systematic Innovation Purposeful and organised search for change
- 27. What is an assembly line? a series of workers and machines in a factory by which a succession of items is progressively assembled from raw materials to finished goods/services that the customers will buy
- 28. Why an innovation assembly line? The life span of an average business idea is longer than a butterfly’s but shorter than a dog’s. Therefore continuous cycles of innovative ideas are the only tools of long-term survival available to any organisation
- 29. Constituents
- 30. Constituents of any assembly line Resources Value Created Processes Organisational Values
- 37. Institutionalising the innovation process HOW
- 41. Idea Filtering The process of selecting, combining, refining the best creative idea(s) to turn into reality The goal is to make sure you have a winner, not to make sure there are no losers
- 43. The Buyer Utility Map Six Stages of the Buyer Experience Cycle Six Utility Levers By locating a new product on one of the 36 spaces one can clearly see how new ideas create a different utility proposition from existing products Maintenance Environmental friendliness Fun & Image Risk Convenience Simplicity Customer Productivity Disposal Supplements Use Delivery Purchase
- 45. Creating New Market Space What factors should be reduced well below the industry standards Reduce Raise What factors should be created that the industry has never offered Eliminate What factors should be raised well beyond the industry standards What factors should be eliminated that the industry has taken for granted Create NEW VALUE CURVE
- 46. The price corridor of the mass Different form and function, same objective Different form same function Same form Low High Three Product Types Upper level pricing Mid level pricing Upper level pricing Low degree of legal & resource protection Easy to imitate Same degree of legal & resource protection Relatively easy to imitate High degree of legal & resource protection Difficult to imitate PRICE
- 48. Hurdles to innovation adoption
- 53. I am no longer a captive to history. Whatever I can imagine, I can accomplish. I am no longer a vassal in a faceless bureaucracy. I am an activist, not a drone. I am no longer a foot soldier in the march of progress I am a Revolutionary (Innovator).
- 54. The gap between what can be imagined and what can be accomplished has never been smaller!!! Thank You
Hinweis der Redaktion
- Setting Expectation:
- Setting Expectation:
- Setting Expectation:
- Setting Expectation:
- O know that I don’t know. But I will
- The environment is an amoeba uncertain shape – unpredictable CK Prahlad – interpreting the above in the Indian context
- Draw from C K Prahald’s quote Easiest to replicate by competition Develop a mindset to squeeze value at each step of the value chain Principal tool for unfixing the fixed costs is out-sourcing Outsourcing enables Scalability Flexibility - Quick In and Out of opportunity However Pay the price for it Loyalty
- The Art of Co-creation of Value – See Saturn story below The traditional company-centric view says: (1) the consumer is outside the domain of the value chain; (2) the enterprise controls where, when, and how value is added in the value chain; (3) there is a single point of exchange where value is extracted from the customer for the enterprise. The consumer-centric view says: (1) the consumer is an integral part of the system for value creation; (2) the consumer can influence where, when, and how value is generated; (3) there are multiple points of exchange where the consumer and the company can co-create value. Create WoW at each possible touch point More importantly as product differentiation diminishes The Maruti Luxury car experience The ‘Titan/ Tanishq’ story – Developing new experience in delivery SATURN STORY In the customer-centric mass production and marketing of automobiles, for example, suppliers provide raw materials, components, subcomponents, and systems to manufacturers, who create value by assembling these inputs into vehicles. Consumers actively decide what vehicle to buy, but companies decide what their choices will be. Cars are sold by dealers acting as inter-mediaries for the automakers. The Saturn Corporation, billing itself as “a different kind of car company,” has spurned the industry’s traditional ways. In 1985, when the General Motors Corporation launched Saturn, it didn’t just start a new car company, it created a “community.” Saturn works with its customers in the design, manufacturing, and sales processes, and it engages Saturn owners to help continuously innovate and improve its cars. Consumers think about the place of a car in their life — how it fits their budget, their desire for comfort, their need for peace of mind, their aesthetics. Companies think about their competitive strategy and their operations — engineering, differentiation, logis-tics,pricing, and, above all, revenue and profit. Although these views of value do clash, they’re not irrec-oncilable. Saturn is a company trying to merge these two ways of looking at value. Shopper’s stop, Nike, Barista, Pizza Hut, TGI Fridays, Nokia, Sony, Arrow
- T he classic approach to corporate strategy starts with a presumption: that with sufficient analytical rigor and an adequate assessment of the probabilities, businesses can pave a predictable path to the future from the matter of the past. In this world, we make reasonable assumptions about the evolution of product markets, capital markets, technology, and government regulation and, in effect, "assume away" most risk – A grave and possibly a fatal error in a market like India. Template changes not as rapid as environmental changes Mindsets do not change as fast as the environmental changes – of suppliers/ employees / internal and external customers Pace of change in India (and other developing countries) is even more rapid - Toffler’s time compaction Loss of opportunity when you manage with old templates in the changing environment – Certain level of conservatism Major Environmental changes Technology (May not be consumer led, For e.g. SMS where you need to work on consumer mindsets) Regulations (Usually no clear path forward, 2 steps forward, one step back)
- HLL Ice-cream softies, Amul Pizzas
- I know that I don’t know. But I will.
- I know that I don’t know. But I will.
- I know that I don’t know. But I will.
- Resources People Equipment Technologies Cash Product designs Information Brands relationships Processes : Patterns of interaction, coordination, communication and decision making that employees use to transform resources into products and services of greater worth Values: Standards by which employees set priorities that enable them to judge whether an order is attractive or unattractive, whether a customer is more important or less important, whether an idea for a product is attractive or marginal and so on.
- The process is based on the fact that many important commercially important are initially thought of and even prototyped by “lead users” – companied, organisations, or individuals that are well ahead of market trends. Their needs are so far beyond those of the average user that lead users create innovations that on their own may later contribute to commercially attractive breakthroughs. Phase-1 : Laying the foundation : The team identifies the markets it wants to target and the type and level of innovations desired by key stake holders in within the company. Phase-2 : Determining the Trends : The team talks to experts in the fields that they are exploring-people who have a broad view of emerging technologies and leading-edge applications in the area being studied. Phase-3 : Identifying Lead Users: The team identifies and learns from users at the leading edge of the target market and related market and gather innovations and ideas that that might contribute to the development of a break through products. Phase-4 : Developing the breakthrough: To move preliminary products towards completion. A workshop is hosted with lead users, in-house technical and marketing team. The idea is to design final concepts that fir the company’s needs. After the workshop the project team hones the concepts, determines the fit to the targeted users and present recommendations to seniors managers. Some of these may finally be marketed
- Capturing good ideas “ To invent, you need good imagination and a pile of junk” – Thomas Edison Keep your eyes and ears open for new ideas. They can come from any where. Keeping the ideas alive – plying with them, discussing them, and using them. Keep the ideas visible in tangible objects on white boards etc. otherwise they die very quickly. Also ideas need to be shared across – spread information about who knows what. Imagining new uses for old ideas – the steam boat. Putting promising concepts to the test “ The real measure of success is the number of experiments that can be crowded into 24 hours” – Thomas Edison Testing shows whether an innovation has commercial potential and also teaches valuable lessons (for future) even when an ideas is a complete flop. For more details read: Building and innovation Factory by Andrew Hargadon and Robert I. Sutton, Harvard Business review on Innovation.
- Organize for rapid experimentation – Examine and, if necessary, revamp entrenched routines, organisational boundaries and incentives to encourage rapid experimentation. Use small development groups with all the knowledge required to iterate rapidly. Determine experiments that cam be performed parallel instead of sequentially. (eg. Virtual simulation of crash tests for automobiles) Fail early and often, but avoid mistakes: Embrace failures that occur early in the development process and advance knowledge significantly. Well designed test must have clear objectives and hypothesis. When variables cannot be controlled, allow for multiple, repeated trials. Anticipate and exploit early information: Identify problems upstream where they are easier and cheaper to solve (front loading). Acknowledge the trade off between cost and fidelity Experiments of lower fidelity are best suited in the early stages and high fidelity in the later staged to verify the products. Combine new and traditional technologies: Do not assume that new technologies will replace an established one. Usually new and old technologies are best used in concert. Remember that new and old technologies emerge and evolve continually.
- How to distinguish a wining idea (CNN) from a bad one (Motorola’s Iridium) The buyer utility map – creating exceptional utility The price corridor of the mass The business model guide
- Three possibilities: Using a new utility lever in the same stage – Starbucks and Barista: Injected fun and experience Using the same utility lever in a new stage: Dell delivers computers tailored to the user needs faster than any other manufacture Using a new utility lever in a new stageAlso to see if the space is occupied by someone else. Had motorola used this test probably iridium would never have been launched.
- Looking across substitute industries – Home Depot, Quicken, FedEx, United Parcel Service, Southwest Airlines Looking across strategic groups within industries – Polo Ralph Lauren, Toyota Lexus, Champion Enterprises Looking across chain of buyers: Bloomberg, Philips – North America Looking across complementary Product and service offerings – Borders Books & Music, Barnes & Nobles, Zeneca’s Zalicks cancer centres Looking across functional and emotional appeal to buyers – Swatch, Starbucks, The Body Shop Looking across Time – Cisco,
- Two steps Identifying the price corridor of the mass Specifying a level within the price corridor
- Which price model should we use? – video cassette rentals and time share holidays