The document outlines 8 steps to build a systematic innovation capability:
1. Build a pipeline by laying the foundation of an innovation program with processes for idea management, buzz creation, and training.
2. Create a challenge book to source ideas by identifying pain points and opportunities.
3. Improve idea velocity by experimenting quickly and cheaply, rapidly prototyping, and iterating business models.
4. The final steps to increase success rate include building an innovation sandbox to safely test ideas and creating a margin of safety.
1. Rishikesha T. Krishnan & Vinay Dabholkar
rishi@iimb.ernet.in; vinay@catalign.com
8 Steps to Innovation:
Building a Systematic Innovation Capability
April 26, 2013
1
Build a
pipeline
3 Improve
Batting Avg
2 Improve idea velocity
4. Innovation by
Firms
Inputs
People
Funding
Knowledge
Infrastructure
Capacity to Innovate
Incentive to
Innovate
Benefits
Competition
Appropriability
Rewards
Social
Environment
Political
Environment
Economic
Environment
Technology
Environment
Government Policy
International
Environment
Improved since
1991
Remain areas
of concern
4
7. 1. Operational Excellence
Provision of consistent quality at the best price
through a standardized business system
that minimizes the cost & difficulty faced
by the customer in acquiring the product
• Wal-Mart
• Southwest Airlines
Low-cost transaction
processing systems
Optimization of
business processes
7
8. 2. Customer Responsiveness
Emphasis on careful tailoring and adaptation
of products & services to increasingly
specific requirements
• Merrill-Lynch
• Nordstrom’s
Microsegments
Long-term relationships
Empowerment
8
9. 3. Performance Superiority
Continuous, fast-paced innovation that yields
a steady flow of leading-edge products that
consistently push the state-of-art
•3M
•Sony
•Gillette
Openness to new ideas
Sensitive to latent needs
Mobilize NPD teams
9
10. 8 Steps to Innovation:
Building a Systematic Innovation Capability
1
Build a
pipeline
3 Improve
Batting Avg
2 Improve idea velocity
11. Build a Pipeline
1. Lay the Foundation
2. Create a Challenge Book
3. Build Participation
11
12. Improve the Idea Velocity
4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model
12
13. Increase the Batting Average
7. Build an Innovation Sandbox
8. Create a Margin of Safety
13
15. Build a Pipeline
1. Lay the Foundation
Create Innovation Program
E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
Idea Management
Buzz Creation
Training & Development
15
16. 3 Key Processes
in an Innovation Program
Idea
Management
Buzz
Creation
Training &
Development
(who submits?
who selects?
who funds?)
(campaigns,
communication,
rewards,
innovation day)
(prototyping,
TRIZ,
design thinking,
idea communication,
leadership development)
18. Year No of Suggestions Participation Adoption
suggestions per person Rate(%) Rate(%)
1951 789 0.1 8 23
1971 88,607 2.2 67 72
1986 2.6million 48 95 96
40 years, 20 million ideas
19. The Power of Small Ideas
“There is no genius in our company. We
just do whatever we believe is right, trying
every day to improve every little bit and
piece. But when 70 years of very small
improvements accumulate, they become a
revolution”
From Interview with Katsuaki Watanabe
in HBR, July-Aug 2007
19
20. Build a Pipeline
Lay the Foundation
Create Innovation Program
E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
Idea Management
Buzz Creation
Training & Development
20
24. Some Titan Innovation Campaigns
2004: “What is new?”
Identification and implementation of 5 new ideas by
every supervisor on the shopfloor
2006: HOD Fund
Every head of department authorised to spend upto Rs. 1
lakh on an idea without any approvals
2008: “Simplify & Automate”
Most successful theme at Titan
2009: “Innovation School of Management”
Making every employee an innovator
24
25. Titan: The 3M of India?
25
Karatmeter resulted in transformation of jewellery
business
“Anyone can be an Innovator”
Innovation School of Management
Process innovations result in 100s of crores savings
26. Build a Pipeline
Lay the Foundation
Create Innovation Program
E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
Idea Management
Buzz Creation
Training & Development
26
27. Training & Development
Titan Innovation School of Management
“Everybody an innovator by 2015”
27
Focus area Techniques
Design thinking Immersive research, rapid
prototyping, brainstorming
Systems thinking TRIZ
Systems archetypes
Theory of constraints (TOC)
Lateral thinking Edward de Bono’s six thinking
hats
32. Disguster Delighter
Annoyance Frills
Negative Positive
Low
High
Emotions
Importance
to
customer
A Relentless Focus
on User Experience is Critical
Source: H. Rao, Stanford GSB, 2007
32
40. Creating a Climate for Experimentation
Failure plays a critical role in innovation
Post-It Notes & failed adhesives
Nylon: a lab experiment that went wrong
TVS Spectra failed, but Victor succeeded
Time-to-market is important…but don’t forget the role
of earlier innovations
Separate intelligent failure from unnecessary failure -
in language and managerial response
Create infrastructure, give resources for expts
Have a high trial rate: fail fast, learn fast
Can you do the “last” experiment first?
40
46. Difficult to
make money
Holder of
complementary
resources makes
Money
(EMI, Coke)
Inventor
makes
money
Party with
Innov .+ Compl.
resources makes
Money
(Pixar vs Disney)
Freely available
or unimportant
Tightly held
and important
Low
High
Complementary Assets
Ease of Imitation
Inimitability/Complementary Assets Framework
Source: Afuah, 2004
49. The Power of Platforms
7 Themes
Digital consumers
Emerging economies
Sustainable tomorrow
Smarter organizations
New commerce
Pervasive computing
Healthcare economy
49
WalletEdge
Platform Offering
http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html
50. Open Innovation
50
As one of the biggest players
in the water purification market,
Eureka Forbes is a natural
partner for new technologies.
EFL keeps itself open to new
ideas from all over the world
E.g. : Nanoceram technology
developed by Argonide Corp.
USA – takes care of viruses
without chemicals