ITI Challenge Briefing 2012

Intro / Why are we here?

Challenge: The ExperienceBreda Moore

TE Labs

Achieving Ambitious Business GrowthMatrix

Innovation Team

Challenge: Programme Overview

Programme Application / Networking

Matrix

Innovation Team

Why are we here?Aidan Gough |

“achieving ambitious

business growth”

Graeme Crombie & Jamie McCallum | Matrix Innovation Team

What strategic approaches

are most successful?

Define successful?

What strategic approaches

are most successful?

Turnover Growth Profitability

Turnover Growth

Q: What grows the top line most significantly?

A1: Increasing loyalty from existing customers.

A2: Getting new customers.

A2: Getting new customers.A

vera

ge G

RO

WT

H R

AT

E

Number of NEW CUSTOMERS over the past 3 years

“number of customers was

found to be 2.8 times more

important than amount

bought per customer.”

Your existing customers can only….

EAT | DRINK | SPEND

so much!

Share of

stomach.

Share of

throat.

Share of

pocket.

You need more……

Stomachs. Throats. Pockets.

Turnover Growth

Growth Rate (%) vs No. New/Improved Products/Services in 3 year period

Profitability

Q: What’s the highest margin strategy?

A3: Low cost.

A2: Quick turnaround.

A5: Listen / Create around customer demand.

A1: High quality.

A4: Create regardless of market demand.

A4: Create regardless of market demand.

“If I had asked

my customers

what they

wanted, they’d

have said faster

horses.”

Henry Ford

A4: Create new regardless of market demand.

“If you’re not

unique you’d

better be

cheap.”Doug Hall

Monopoly

Commodity

7

8

9

10

11

12

13

14

15

16

Low Cost Quick Delivery Voice of Customer High Quality Innovation

Average % Profit Margin vs Core Business Strategy

Georgia Tech

n=738

Be honest about your growth aspirations……

Time

£ / €

(now) 5 Years

Want to get to here?

Normal Incremental

Growth Continues.

Sales stay the same.

Past Future

New and Different

Same Old Stuff

A4: Create new regardless of market demand.

“Insanity: Doing the same

thing over and over again

and expecting different

results.”

Albert Einstein

NE

W

MA

RK

ET

S

EX

IST

ING

MA

RK

ET

S

EXISTING

PRODUCTS

NEW

PRODUCTS

market

development

market

penetration

unrelated

diversification

product

development

Problem………

So if innovation is the key to achieving

the growth that companies desire. And

it’s at the top of the agenda of your

governments and support agencies….

what’s holding us back????

TIME | MONEY | RISK

INNOVATION =

Pu

rchase Inte

nt:

Me

an

ing

fuln

ess

New & Different: Uniqueness

TIME | MONEY | RISK

= FEAR

FEAR =

NO CULTURE OF INNOVATION

Human error is high.

Humans <10%

success at picking

winning ideas.

Even fruit

machines

pay out 32%

of the time!

ANSWER

A Reliable & Repeatable Strategy

of Innovation Needs a System.

GOOD NEWS!Through the

InterTradeIreland Challenge Programme

you will learn a highly effective system.

Responsible for £1.5Bn in new

products & services globally.

effectiveness endorsed by…

based solely on research into…

• The factors which make products/services

succeed or fail.

• The factors that make business

development teams effective.

by reverse engineering….

• Over 4,000 real products and services.

• Over 6,000 business development teams.

but don’t take our word for it….

[VIDEO MASH-UP]

Consumer /

Market

Research

Concept

Development

R&D and

Product/Supply

Development

Sales

Forecasting

Evaluation

Rework - Redo - Restart

Rework - Redo - Restart

Usual Company Systems Approach

• Typical marketplace success of 5-15%.

• Designed to deal with cost & risk.

• Reduces risk by holding ideas back from the

market.

• Ignores the biggest risk of missing the

opportunity.

Usual Company Systems Approach

Product

Development

Business

Model

Development

Marketing

Development

The Simultaneous Engineering Approach

Rapid Cycles

of Test &

Learn

• Typical marketplace success of over 45%.

• Products accelerate to market in a fraction of

the time.

• Utilises “Fail Fast. Fail Cheap.” methodology

to kill costly losers dead ASAP.

The Simultaneous Engineering Approach

What is Fail Fast Fail Cheap?

Death Threat!= major unknown

1. With no time and no budget what can we

do to validate our concerns?

2. Result = Yes | No | Yes – with changes

Launch

Ideas

Evaluate

IdeasCreate Ideas

the three challenge areas…

A system for

creating as many

ideas as possible.

A system for picking

ideas with the highest

probability of success.

A system for getting

ideas to market with

the minimum of time,

money and risk.

the five stages of the I.E. system…

sales

services

CREATE

TOOLS

•CREATE New

•Capture Existing

•Customer

•Problem

•Promise

•Proof

•Difference

•Concept

•Maths Model

(£ + Costs)

•Threats(unknowns)

•LPD

•Stagegate

•Design 6 σ

•FFFC

1/3 (30 – 90 Days)

£ 5%

2/3

£ 95%

£•Faster (6x)

•Less Risk(30-80%)

Define Discover Develop DeliverIdeas

COMMUNICATE TOOLS

COMMERCIALISE TOOLS

Fail F

ast F

ail C

heap

High Probability Ideas (£/€)

Medium Probability Ideas (£/€)

Low Probability Ideas (£/€)

Pipeline Management of Innovation

=

More Accurate

Understanding of

Value

Max Chance of

Hitting Growth

Targets From

Innovation

• Number of potential customers.

• Strength of concept persuasion.

• Your own marketing capability/budget.

• First purchase revenue.

• Repeat Purchase Revenue.

• Frequency of first & repeat purchase.

• Life span of customer.

**Your confidence in all of the above.**

Some Key Metrics to Measure Concept Value

• Strategic fit.

• Internal Passion for the Idea

Also consider...

• New Products, Services, Customers & Markets that you are not delivering today

are the fastest way to achieve significant business growth.

• Meaningfully Dramatically Different products and services are the route to high

profit margins.

• Consistently faster, less risky growth from innovation requires an objective and

reproducible system – human gut feel has a poor record of success.

• Utilise real world test-and-learn to reduce levels of unknown and therefore risk.

Kill poor ideas quickly. Accelerate and evolve winners.

• Focus on the biggest issues first.

• Have a diverse innovation team.

• Leverage passion for ideas.

Some Key Learning Points

The Business Life Cycle

CONFRONT REALITY

• Tonnes of ideas that float around forever and nothing ever

happens.

• Commercialisation is painfully slow and takes up huge amount

of time by very expensive people.

• Sector demands innovation, but we are bad at ideas.

• Ideas are always iterative, “me-too”, we follow the market and

react to customer demand.

• We “used to be innovative”, now we’re fast approaching

commodity and are being squeezed on price.

Do you recognise...?

“challenge: the experience”Dermot Dinan | DCM Compliance

“challenge: the experience”Carson Mulholland | Fast Engineering Ltd.

“challenge: the experience”Breda Moore | TE Laboratories Ltd.

“challenge: the experience”Joseph Owens | Clada

Challenge Programme

Overview

Graeme Crombie & Jamie McCallum | Matrix Innovation Team

What you get…….

2 Full Day Workshops Covering:

• Business Strategy & Planning

• Innovation System TrainingPlus

An innovation culture assessment gauging

your readiness to innovate.

A max of 30 Selected Companies will get:

In-company intensive mentoring to output:• 30 - 70 new ideas generated.

• At least one real new product/service/business

improvement idea being commercialised.

• Started the implementation of your own innovation

system to create ideas, pick high probability

winners and rapidly commercialise them on an

ongoing basis into the future.

• The documents and processes required.

A final 12 Selected Companies will get:

What’s expected of you…..

• Senior management availability / attendance of workshops

on:

• Commitment of your team with senior management support

to 6 days “contact” time over a period of 6 months. Plus

action delivery between 7-day cycles.

• Completion of a business growth plan for application to the

final stage.

You must be committed to:

Dublin Belfast

6th & 14th of November 7th & 15th of November

Application Process:

Written Part Online Part

Application Form Innovation Audit Company Culture

Responsibility: Senior Manager Senior Manager All Staff

Deadline: TODAY12:00 Noon

18th Oct

12:00 Noon

18th Oct

Application Time / Networking

Slides available from Thursday at:

www.intertradeireland.com/challenge/