Innovation Management/ lecture 1: Course Intro Plus the Myths of Innovation
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The document discusses the concept of innovation, emphasizing its significance as a structured process that transforms new ideas into valuable products and services. It outlines key definitions of innovation, the importance of continuous improvement, and the role of organizational culture in fostering innovative practices. Additionally, it provides insights into the challenges of defining innovation and the necessity of aligning innovation efforts with customer needs for successful implementation.
Innovation Management/ lecture 1: Course Intro Plus the Myths of Innovation
- 2. Learning objectives / deliverable Learning objectives Real innovation is seldom an accident Effective innovation is built on business processes and follows rules Course deliverable Able to access the innovation potential of a company or business and make some clear recommendations
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- 4. Votes Num Definition 3 7 Innovation is really about responding to change in a creative way; it’s about generating new ideas, conducting R&D, improving processes or revamping products and services. At another level, it’s also a mindset in your business; your employees are always focused on continuous improvement and constantly thinking outside of the box 3 20 PEOPLE using new knowledge and understanding to experiment with new possibilities in order to implement new concepts that create new value 2 8 Innovation is the embodiment, combination, and/or synthesis of knowledge in novel, relevant, valued new products, processes, or services. 2 19 Innovation is The process of creating a product or service solution that delivers significant new customer value. The process begins with the selection of the customer and market, includes the identification and prioritization of opportunities, and ends with the creation of an innovative product or service. 2 18 Innovation is first of all, here is my own definition of innovation: ‘invention refers to new concepts or products that derive fromindividual’s ideas or fromscientific research. Innovation, on the other hand, is the commercialization of the invention itself 1 2 Innovation is a process of taking new ideas through to satisfied customers. It is the conversion of new knowledge into products and services 1 3 Innovation is a process, involving multiple activities, performed by multiple actors fromone or several organizations, during which new combinations of means and/or ends, which are new for a creating and/or adopting unit, are developed and/or produced and/or implemented and/or transferred to old and/or new 1 6 Innovation is not the result of thinking differently. It is the result of thinking deliberately (in specific ways) about existing problems and unmet needs. 1 9 Innovation is the specific instrument of entrepreneurship… the act that endows resources with a new capacity to create wealth. 1 14 Innovation needs structure. We need to originally explore the regions of creativity so we can bring method to the madness of originality. We need to expand that special resource known as innovativeness so that we are not dealing with a finite resource but with a renewable one. We need to give everyone in an organization the chance to develop innovative competencies. We need to make the systematic application of innovation real. 1 24 The act or process of introducing new ideas, devices, or methods 1 26 The process of translating an idea or invention into a good or service that creates value for which customers will pay. 1 27 The successful exploitation of new ideas
- 5. 27.5 NewDefintions 1 28 Innovation is the process of transforming an idea into a successful exploitation creating and/or capturing more value through new products, new services or new business models. 1 29 “Innovation involves the conversion of new knowledge into a new product, process or service and the putting of this new product, process or service into actual use”. 1 30 `It’s about doing something in a very different way from the way it’s been done before, a way that makes more sense or is more efficient than the established solution.` 1 31 Innovation is significant positive change 1 32 The execution of new ideas that creates or adds value. 1 33 "a new way of creating value" , with the condition that equal or less value than before for at least equal cost is excluded. 1 34 “Innovation is the creation of something that improves the way we live our lives” 1 35 Innovation is imaginative activity fashioned so as to produce outcomes that are both original and of commercial value 1 36 "Innovation is the creation of something that improves the way we live our lives" 1 37 "The act or process of introducing and commercializing new ideas, devices, or methods. It is the result of thinking differently and deliberately (in specific ways) about existing problems and unmet needs."
- 6. Comments/ thoughts I liked It is about sustainability not fads (long term solutions) It has to improve our lives It about thinking different then finding value in thinking different (difference alone is not innovation) Good innovation needs to be realistic and pragmatic Real innovation is pore than the number of seeds in the ground, it about making things grow It is about breaking paradigms and reinvention People that pay define what is innovation Innovation = invention + commercialization Steve jobs: Innovation is about connecting the unconnected dots…. (and selling the new things created… my addition) 6
- 7. Questions Why is innovation something hard to define ? What are the key elements ▫ New ▫ Creative ▫ Value ▫ Profitable ▫ ? ▫ ? Can we agree on a common definition Would google/ apple be innovative according to your definition 7
- 8. My view … 8 Creativity is about new ideas Innovation is the profitable implementation of these ideas
- 9. Innovation is about: Acting different (Questioning, Association) So you can think different And making things happen (execution) 9
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- 12. In Fortune 500 companies… New products account for 50% of revenues And 40% of profits 12 Why Innovation matters
- 13. companies value innovation, are innovative The perception gap: of companies think they had a major innovation in the last 6 months. of consumers agree The hard road from ideas to impact of valuable ideas do not reach their full implementation
- 14. A warm up exercise 1000 40 1000 30 1000 20 1000 10 5,000 90 % of business executives agree
- 15. Paradigms = models, patterns the basic way of perceiving, thinking, valuing A dominant paradigm is seldom if ever stated explicitly; it exists unquestioned… transferred through culture and unspoken business practices William Harmon- An incomplete guide to the future
- 16. 16 It is about what we do behind closed doors Innovation just happens We need to reward innovation It is about working harder Innovation is about big ideas We need our brightest and best on the case It is all about selecting the best ideas and doing more The Innovation Paradigm
- 17. 17 These are comfortable, logical business ideas and what we have been taught…. But, they are not the whole story
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- 19. 19 It is about opening doors and listening Myth: It is about what we do behind closed doors
- 21. Innovation = Size ^ power value Power value Cities Companies 1.3 0.7 Innovation output 1 100% 100% Size 5 690% 309% 25 4759% 952% Innovation per person 1 100% 100% Size 5 138% 62% 25 190% 38% Source: Geoffrey West: The surprising math of cities and corporations 21 The Power Laws of Innovation As cities grow and contact increases… innovation increases (25 X bigger = 2X more innovative) Why: contact increases … As companies get bigger and have more resources… innovation falls (25 X bigger = 60% less innovative ) Why: contact decreases
- 22. 22 Imagine this… BMW has some of the best designers in the world and sells their designers by the day below cost Why: to build creativity…
- 23. 23 Innovation is something you make happen Myth: Innovation just happens
- 24. 24 Innovation is about Being committed to better satisfying unmet unarticulated needs Working to build insights Staying focused on consumer (customer) value Habits
- 25. 25 Needs first, not ideas first ! Develop a solution Find a need Find a market Ideas First Success Rate* 5-10% Find a need Develop a solution Find a market Needs First 70 % * According to Strategyn research on outcome driven innovation…
- 26. 26 It is more than talking to consumers today’s business Mobile phone Computers Internet…
- 27. It is about hard questioning… You can't just ask consumers what they want and then try to give that to them. Sometimes (actually often) they don’t know what they want It is often about “golden questions” 27
- 29. 30 More importantly you need to reward good failures Myth: We need to reward innovation
- 30. 31 The danger of the Internet… Is there anything someone hasn’t done on the internet ? A big idea Look it up on the internet Someone has done it already
- 31. The big innovation Paradox Whoever Makes the Most Mistakes Wins Richard Farson & Ralph Keyes 32
- 32. Introduction 33
- 33. “Reward excellent failures. Punish mediocre successes.” Phil Daniels, Sydney exec
- 34. Introduction 35
- 35. Introduction 36
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- 37. 38 No, it is about working smarter Myth: It is all about working harder
- 38. Introduction 39 “90 % of what we call ‘management’ consists of making it difficult for people to get things done.” – Peter Drucker
- 40. Your new creativity office 41
- 41. The test, solve a difficult task while… Reading emails or smoking marijuana… Test 1 Test 2
- 42. A few simple ideas Stop the email notifications Create a way back computer Block (and keep) time for weird and fun stuff 44 No email No Internet No chat
- 43. 45 Real innovation is about the adjacent possible Myth: Innovation is about big ideas
- 44. Introduction 46 How many people think Apple invented the MP3 player ? Almost 50% of US consumers
- 45. Introduction 47 More memory More features Better song management Simplicity and coolness
- 46. More Examples
- 47. Managers increasingly need to take “ors” and turn them into “ands” Roger Martin The design of business
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- 49. 51 Actually, what you need is people that think differently Myth: We need our brightest and best on the case..
- 50. 52 Two Groups Best 20 agents Group 1 Random 20 agents Group 2
- 51. 53 The IQ View Alpha Group 121 132 155 139 135 137 Diverse Group 121 84 111 105 135 95
- 52. 54 The Toolbox View Alpha Group ABD ADE BCD ABC BCD ACD Diverse Group AHK FD AEG EZ BCD IL
- 53. 55 “Bringing new members into the organization, even if they’re less experienced and less capable, actually makes the group smarter simply because what little the new members do know is not redundant with what everyone else knows.” James Surowiecki author Wisdom of crowds..
- 54. 56 A UCLA MFA 3 X harder to get into than Harvard MBA The bigger surprise… Average starting salaries for MFAs are now higher than MBAs * MFA = Masters of fine arts
- 55. What you can do… Diversity Independence Aggregation + + =
- 56. What you decide not to do is just as important Myth: It is all about selecting the best ideas and doing more
- 57. “Fail . Fail again. Fail better.” – Samuel Beckett
- 58. “With so many things to do and so many great ideas… what we decide not to do is infinitely more important than what we decide to do” – Steve Jobs
- 59. Research on innovation 211 companies Worst Avg Best Top vs. bottom % of revenues from new products 17% 28% 47% 2.76 % of profits from new products 11% 25% 44% 4.17 % of products that meet profit targets 43% 48% 66% 1.53 Go / Kill criteria set up front 26% 57% 85% 3.28 Decisions are objective / fast based 15% 42% 57% 3.85 Decisions are made in review meetings 26% 51% 60% 2.32 Cooper, Robert G. "Perspective: The Stage‐Gate® Idea‐to‐Launch Process Update, What's New, and NexGen Systems*." Journal of Product Innovation Management 25.3 (2008): 213-232.
- 60. Let’s have some fun and exercise your innovative muscles…
- 61. A checklist for ideas… Is there a benefit (real or perceived) People willing to pay (enough) Cost of cut-through acceptable People will see the benefit buy again / recommend to others Will someone hate it
- 62. A simple evaluation system… Pets.com Kosmo Despair.com Etoys.com Petrock Flooz Webvan Is there a benefit (real or percieved) People willing to pay (enough) Cost of cut-through acceptable People will see the benefit buy again / recommend to others Will someone hate it Kill Puppy (0 = kill, 1 = love)
- 63. 66 Pets.com Pet supplies via the internet Save big, save time Stay at home
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- 65. 68 Kosmo.com Instant delivery of products purchased via the internet in big cities Order a wide variety of products, from movies to snack food, and get them delivered to your door for free within an hour.
- 66. Despair.com We hate all the senseless, wasted time on employee motivation and un-founded optimism We imagine you do to, buy our products and show your true colors 69
- 67. 70 Continuous effort is the key to unlocking your potential Winston Churchill
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- 69. Etoys.com The new place to buy toys. Find you want on the internet 72
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- 71. 74 Petrock.com Pets take a lot of time and energy. Your kids can have almost as much fun with a pet rock. We even include a care guide
- 72. Flooz 75
- 73. Webvan.com Buying groceries should be easier. With webvan you can get all your groceries, so you have time for other things 76
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- 75. Now the most important question Why would this business fail … Pets.com Kosmo Despair.com Etoys.com Petrock.com Flooz Webvan Why will this business fail…
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- 77. A summary… Getting people out of the building asking the right questions Structuring your innovation process around customer needs Changing the reward systems to encourage good failures Changing the organization so people have time to be innovative Helping your team leverage opportunities in the “adjacent possible” Building team diversity/ better ways to work in teams Creating systems to kill bad ideas so you have more time for good ones
- 78. Break …
- 79. What is an innovation audit A systematic review of a companies innovation potential Something action orientated I would like you to use a template created for this class ▫ A spreadsheet with 10 areas of measurement (http://tiny.cc/solvayaudit) ▫ Places for comments and summary chart This is something I would like you to update in your groups… and then use individually 82
- 81. Processes 4. Our organization or team frequently engages in brainstorming to generate wild or very different ideas by drawing analogies from other products, companies, or industries. 5. Our organization or team encourages team members to ask questions that challenge the status quo or conventional ways of doing things. 6. Our organization or team cultivates new ideas by giving people frequent opportunities to observe the activities of customers, competitors, or suppliers. 7. Our organization or team has instituted formal processes to network outside the company to find new ideas for processes or products. 8. Our organization or team has adopted processes to allow for frequent experiments (or pilots) of new ideas in search of new innovations. 84
- 82. Getting your 10 categories … 1. People 2. Clarity of vision/ Customer focus 3. Speed 4. IP 5. Co-creation 6. Place 7. Process 8. Your thoughts 9. Your thoughts 10.Your thoughts 85
- 84. Your output 87
- 85. Suggested content for final report Your innovation assessment Strengths to build on Weaknesses to correct Action plan ▫ Action 1 + Recommendation for action ▫ Action 2 + Recommendation for action ▫ Action 3 + Recommendation for action 88
- 86. Suggestions: Take home final exam (40%) ▫ Read a bit to add depth (don’t go crazy…) ▫ Do your audit class by class as a group ▫ Follow the suggested structure ▫ Make me laugh/cry/smile/get angry.. Boring sucks ▫ Keep is short !!!! 89
- 88. Are you the next Steve Jobs ?
- 89. 92
- 90. The Science of being Innovative Hundreds of Inventors, Founders and CEOs of innovative companies
- 92. The ability to generate innovative ideas is not merely a function of the mind, but also a function of the exercise of behavioral skills.
- 94. You both are given 1 week to come up with a new creative idea. Alone Talking to people Going strange places Questioning
- 95. Innovation is not genetic Study of identical twins separated at birth indicate or ability to think creatively come : 1/3 rd from genetics and 2/3 rd comes from habits (5 big habits) 98 Aristotle We are what we repeatedly do. Excellence, then, is not an act, but a habit.
- 97. Assignment Number 1 Step 1: Take the innovators DNA assessment. You will be sent a link later today As a group you need to make an innovation audit template and the results of your DNA tests will show you have different skills… ▫ What will be your strategy to work together as a group ? eg. Work split, how can you make sure your group develops something creative and useful (Innovative)/ Suggestion think about: Discovery, Questioning, Observing, Experimenting ▫ What 2-3 insights do you get from this test to put in your audit ? 100
- 98. Suggested Readings For your assignment (skim) The innovators DNA, Harvard business review summary Page 157-173 of the Innovators DNA (see test page 171) For the next class Choose one of the following articles ▫ The Wisdom of crowds ▫ Making a difference: Applying a logic of diversity http://tiny.cc/class1read 101
- 99. Course Resources (I will send you these links) A blank innovation audit http://tiny.cc/solvayaudit A huge collection of articles presentations on innovation (38 articles, 40 presentations) https://dl.dropboxusercontent.com/u/704747/all_innovation_stf.zip A collection of books and book summaries on innovation https://www.dropbox.com/s/48dhv9j9d95qbqx/Extra%20readings%20_%20bo oks%20innovation.zip Class readings (not complete yet) https://www.dropbox.com/s/kdcy10jvektl72o/Readings.zip 102