Innovation Everywhere For Manufacturing + Services
- 1. INNOVATION EVERYWHERE Together We’re Brilliant Premier Mfg Support Services – Oct 07
- 2. WHO WE ARE Tom Morgan – General Manager/Innovation – Premier Manufacturing Support Services David Wallace – Innovation/Communications consultant – Gamechange LLC Program What Is Innovatio n ? Both companies and countries can be innovators Services – The new frontier of innovation Innovation and Premier Mfg. Support Services
- 3. INNOVATION WHAT IS INNOVATION? INNOVATION – Implementing an idea or improving upon products and services of today; and discovering new clients, delivering unique and benefits. To customers, this can mean a prouduct, services, process or a tool that makes their tasks easier, faster, more comfortable, less expensive, safer – above all, delivering greater value or improving their lives.
- 4. TYPES OF INNOVATION Inventing an interesting new “thing” isn’t necessarily “Innovation.” The light bulb was an invention, but the larger innovation was the system of wires, services, distribution, companies that sold light and electric power to consumers. New services, new business models or formats, technologies, pricing or business methods – or combinations – all represent opportunities for innovation. Other MP3 players came before the iPod – this one from 2001 cost USD$500, made by Sony, well-known for innovations in music players and electronics .
- 5. INVENTION vs. INNOVATION Don’t confuse them, they are NOT the same. INVENTION A new concept originating from study or experiment. INNOVATION Trrying to do something better than ever Frequently, is part of a program that is broader or more complete Find new applications or combinations of existing resources Above all, innovation is NOT invention. It’s a word from economics not technology . Peter Drucker
- 6. INVENTION vs. INNOVATION Although Thomas Edison receives the credit for inventing the lightbulb, in reality. . . The innovations include the sale of electricity, wiring, lights and appliances, repairs for devices and networks that continue today.
- 7. Invention Innovation Telephone The Network (Ma Bell) MP3 player iPod and iTunes (innovations can be the result of inventions) INVENTION or INNOVATION? Gas Stations Auto Club OnStar™ Autos WHAT NEXT? (innovations improve over time and can get more complex with additional services, features, clients or new technologies)
- 8. TYPES OF INNOVATIONS TYPE EXAMPLE Breakthrough VCR Apple II and IBM PC (products) Models Dell (sells directly without stores) Grupo Elektra (flexible financing) Technology impact Southwest Airlines (efficiency) Process Toyota (continuous improvement )
- 9. THE POWER OF DIFFERENT TYPES OF INNOVATION An idea implemented in isolation is less likely to support substantial value or promote a major change – for companies or customers. . . . But combining various ideas and types of innovation result in a more powerful combination, that can achieve more and be harder to duplicate – remember the iPod – and has greater value (and a higher price) for your company.
- 10. DEPENDS ON YOUR PERSPECTIVE Mount Everest in Nepal/Tibet is the highest with 9678 meters altitude. But Mauna Kea in Hawaii measures 10,314 meters – with only 4205m visible above sea level. It is taller but also known as a volcano or island. What is the tallest mountain on Earth?
- 11. GLOBAL INNOVATION Economist Intelligence Unit in 2007 identified the most innovative countries based on the number of patents filed per-capita. Top 10 Japan Germany Switzerland Denmark U.S. Taiwan Sweden Netherlands Finland Israel
- 12. GLOBAL INNOVATION Forrester Research 2007 – identified nations with the top-ranked innovation networks (government, educational, corporate and university participants) Countries with the highest ranked networks were: Finland Ireland Sweden Switzerland U.S.
- 13. GLOBAL INNOVATION Yet economic giants such as Russia, China, India, Brazil and Mexico NOT included among the top nations for innovation. WHY? The Economist survey predicts that Mexico increases its ranking six places in the next five years (2012) yet the top four ranked nations show no significant change. And the return-on-innovation in Mexico will be greater than in Japan, U.S. or other countries considered innovation leaders.
- 14. GLOBAL INNOVATION In 2003, the Mexican economy ranked 10 th -largest in the world. In 2004, it was the 11 th largest By 2005 it had declined to 12 th The future depends on the use of knowledge, networks, technology and science. Lowering prices is a strategy any person, company or country can employ – and is not a sustainable advantage. . source: CSIS
- 15. WHERE DOES INNOVATION LIVE? 2006 Business Week/Boston Consulting Group surveyed where research/devt spending goes
- 16. GLOBAL INNOVATION This list of companies described as most innovative shows that results often depend on location, as people recognize companies from their own region. Source: Business Week/ Boston Consulting
- 17. GLOBAL INNOVATION Some of the companies recognized as the Most Innovative Corporations in the World -- Business Week/Boston Consulting Group.
- 18. GLOBAL INNOVATION Companies recognized as The Most Innovative Corporations in the World -- Business Week/Boston Consulting Group. Recognized by Accenture as a 100-year-old company, and a commodity product. Adding new services, time-specific deliveries and other innovations changed everything. Today, Cemex is growing its business, selling more than cement. No company or country has a monopoly on innovation
- 19. SERVICES AND INNOVATIONS Now is the prime time for service innovation Since 1987, the majority of the U.S. economy has been in service delivrey not sale of products. In 2006, 85% of payrolls were service workers. By 2006, 84% of all companies in the U.S were service providers Tipping Point 1987 Source: Tim Ogilvie/Peer Insight 1980s 1990s 2000s US Economic Output
- 20. A HISTORY OF SERVICE INNOVATIONS The ‘Avon Lady’ was created in 1886 to sell cosmetics products door to door in the U.S. In 1950, Diner’s Club created the charge card – initially to meet the needs of traveling salesmen. After the ‘Tipping Point’ (1987) Dell, Capital One, Amazon, Bital, eBay and other companies changed the rules of various industries by use of technology or created entirely new categories by using service innovations.
- 21. SERVICES ARE PROFITABLE Hewlett-Packard reported that 20% of income in 2005 came from services – representing 46% of profits! NCR service income surpassed income from sale of products in 2004. Xerox said its service business is growing at 2X the rate of its sale of products. Source: Tim Ogilvie/Peer Insight And many auto makers earn more from the sale of services – repairs, financing, logistics and parts than from the sale of their products.
- 22. SERVICES ARE CREATIVE Instead of “things” companies offer solutions to the problems of their clients. In a study of work activities in 2005, consultants McKinsey & Co. found that 40% were “interactiions” – collaboration, design and development of solutions. Creativity is difficult to study and manage because it is different everywhere – and has no basic materials like oil or cement. Service providers need the power and knowledge to make decisions that assist their clients.
- 23. 21 st CENTURY SERVICES New clients, complex services / solutions and entirely new systems have developed from service innovation. MinuteClinic now offers limited medical services to people in stores of retailers Target and CVS. Bital opened its branches until 7pm to serve its clients with more convenient banking hours.
- 24. THE FUTURE OF SERVICE INNOVATION THE GOOD NEWS Every company can see the opportunities presented by services and deliver them worldwide. The ease of creating services, the return-on-investment, global presence and other benefits make it easier than ever to be a service company. THE BAD NEWS . . . All the competition and new features that can come from any industry or country. The rate of change will only get faster and require you to stay ahead!
- 25. Innovation is a process and we’re just starting our journey. . . . Like students of karate, there are various skills and levels, with increasing levels that indicate mastery and expertise. SERVICE INNOVATION AT PREMIER The best way to get a good idea – is to get lots of ideas. Linus Pauling
- 26. PREMIER’S INNOVATION JOURNEY Innovation requires change and adapting knowledge or skills while learning new abilities Belts Actions Level White Decide Yellow Define Orange Communicate Green Plan Purple Execute Blue Examine errors Red Learn Pardo Repeat processes Black Innovation culture
- 27. INNOVATION ISN’T EASY OR QUICK INNOVATION PROGRAMS OFTEN FAIL 80 to 95% of innovation activities commit errors or fail – Clayton Christensen, Innosight SUCCESS Only about 8 % of innovation projects exceed their goal for return on investment and about 12% exceed their R&D cost of capital – Peer Insight THEN WHY DO IT? There is a better way – find it. Thomas Edison
- 28. Experts say that innovation today – as a practice – is similar to the ‘Quality’ movement in the 1980s. Processes are moving from randomness toward repeatable, measured systems. It’s described as a long train with service innovation as the caboose. Very shortly, innovation will be a critical, standard business tool. THE RISKS OF NOT INNOVATING If you are not reinventing your company, I guarantee you are falling backwards. Fujio Cho, Toyota
- 29. Some rules for winning the game of innovation Ask questions. Look for ways to improve. Talk with other people. Make suggestions. Celebrate small wins. Be persistent. Have a positive attitude. Take small steps. Release control. Invest quality time, not just quantity. Don’t punish failure. Learn from every experience. THE ROUTE TO SUCCESS
- 30. EVERYONE MAKES A DIFFERENCE Anyone can be an innovator by Sharing experiences, knowledge and suggestions. Taking initiatives to pursue improvements. Looking for opportunities – some are simple but others have huge potential. Participating when your knowledge is requested or valued. Working together – ideas get stronger when they’re combined and good ideas are moved to action. Innovation is a voyage and you’re all invited along
- 31. Innovation means change but the choice is yours RESISTING CHANGE Same as it ever was Maintaining traditions Giving clients familiar results PURSUING CHANGE Uncertainty and flexibility Always asking “What’s next?” Unexpected but better A BALANCING ACT/ PLANNING THE FUTURE
- 32. Thank you
Editor's Notes
- #4: INNOVATION is a concept – like “beauty” or “delicious” or “truth” means we all have different definitions. Later on we’ll examine what this means for Premier. But not everyone agrees on definitions -- What I think is creative you might say is ordinary – so we have to share what we know. Just because something is new or better may not be innovative unless it creates a value to the customer (loyalty, prices) and benefits the supplier (profits, new business, new markets)
- #5: – esto no es el primero o el mejor – pero el diseño, y la tienda de iTunes y el precio muy barato fueron combinaciones de innovación fuertes y difíciles de copiar. One reason why everyone can be so innovative is it can take years to succeed and longer to see results. Products can change to suit the market or markets/people can change to adapt to products. And innovation doesn’t always come from where you expect – bet the people at Kodak, Fuji or Polaroid never predicted the popularity of cell phone cameras and instant online photo sharing.
- #6: In general, invention is a thing – innovation is more vague. Whirlpool counts its ‘innovation yardstick” as the profits created by new products within three years of introduction – after that the products/services are just part of ongoing business. Services, new profits, savings or changes all can be part of an innovation strategy – and have to be for maximum benefit
- #8: Shows the power of networks and
- #9: One company has as many as 22 different elements that are part of innovation. Kaizen I like the 10 outlined by Chicago consulting firm Doblin. Another popular list of 10 comes from IDEO. Now can we agree that we know what innovation is and why it’s a good idea?
- #10: That’s why it’s important for you and the organization to define what you want to achieve and process for doing it.
- #11: When you see it from above this is an island near Hawaii – taller than Everest but most of it is not visible to the ordinary eye. Power of language and confusion, units of measure or different words for the same thing
- #12: Also known as “What’s wrong with surveys”
- #15: You might think this is bad news but instead look at the good news
- #16: Spending shows where money is flowing to innovators --
- #17: Apple and Google ranks tops but what companies are most innovative depends on where you live/work A 2006 Business Week/Boston Consulting Group survey asked where R&D spending goes
- #18: Companies take risks and introduce products/surveys but another problem with surveys is a history of successful innovations can build a reputation even if you hit a slow period or fail to innovate for a time. No company or country has exclusive breakthroughs
- #19: Companies take risks and introduce products/surveys but another problem with surveys is a history of successful innovations can build a reputation even if you hit a slow period or fail to innovate for a time. No company or country has exclusive breakthroughs
- #20: Failure rates in innovation as high as 96 percent don’t give much support to corporate innovation programs – small companies can innovate as well or better than large ones and the stakes for service providers is high – services are mobile, scalable, rapidly adaptable and global
- #22: Services are mobile, scalable and global – they can go where the action is.
- #24: Priceline se puede decidir el precio para boletos de aviones, auteles, carros, -- Con e-bay cualquier persona puede abrir una tienda ts risk by electronic reporting systems. Larry Keeley of Doblin says the days of innovation process excellence are finally here with repeatable, documented, methods for improving innovation in companies, particularly in service areas such as health care, financial and other industries where regulation or tradition preserve the status quo.
- #26: G
- #27: Every step along the way will have some degree of failure
- #29: Standards of measurements, high customer expectations and competition for quality management all remade the manufacturing world – innovation is now at that early stage. And it’s not going to take 20 years.. . .
- #30: Using tools like idea management software, events such as this Fair. . . Premier is building a toolkit that supports corporate innovation .
- #31: Someone had to be the first to put a lime in a Tecate or Corona. Who decided it was a good idea and repeated it? I bet someone said “Don’t do that – we only use limes for throwing at horses” Can you see a new way of combining things or changing the status quo to save money, offer new value or create a flavor no one else can match?
- #32: Having a system is critical to gather ideas, estimate their value and store them for the future – and we have to decide what type of organization you want to be and what do your customers want or need – do they come to you for creativity or tradition, for new solutions or reliable, traditional choices.