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Relentless Innovation Presentation by Jeffrey Phillips, OVO
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Birds of a Feather Relentless Innova3on
June 7, 2012
Relentless Innova3on
Ques3on
How do we get ahead, and stay ahead, when everything is so uncertain?
Agenda
• Introduc3ons • Five Innova3on Drivers • Where and why we lost our way • Why “business as usual” is a barrier • What do we do now?
Introduc3ons
• OVO is an innova3on consul3ng and soHware development firm, focused primarily on development of sustainable, repeatable innova3on processes
• I’m Jeffrey Phillips, a senior consultant with OVO and author of two books – Relentless Innova3on and Make us more Innova3ve
Our Publica3ons Our Blog
Our whitepapers Our books
OVO Capabili3es
We help firms Innovate on Purpose™ by defining strategic goals and implemen3ng consistent processes
Five Innova3on Drivers
Disappearing Trade Barriers
Free trade provides access to markets for far more compe3tors, increasing offerings and heightening compe33on
Increasing Rate of Change
• The rate of change is accelera3ng
• Adop3on rates increasing
• ATen3on spans decrease
Increasing Customer Expecta3ons
• We want more, expect more and demand more from our products and services and the firms we buy from
• As technologies improve, we expect more from our products and services
Increasing Access to Informa3on
• The cost of compu3ng power is dropping, and access to the internet is increasing
• BeTer informa3on access means more people have more opportuni3es
Decreasing Cost of Entry
• The internet reduces cost of entry, reduces marke3ng costs and increases awareness
• Anyone can sell anything to anyone else
• Costs and barriers decrease or disappear
Ready, Set, …
Well, how did we get here?
The “way back” machine
Return with me, if you will, to the 1970s
1970s: Balance
There was a 3me, not so long ago, when there was greater balance between efficiency and innova3on
Innova3on Efficiency
Quality Movement
In the 80s, Japanese imports placed great emphasis on quality
Six Sigma, Lean
In the 80s and 90s, programs like Six Sigma and Lean increased focus on efficiency, crea3ng less focus on innova3on
Foreign Compe33on/Outsourcing
Other factors, such as lower trade barriers, emerging economies and outsourcing redoubled a focus on efficiency
Result?
Innova3on Efficiency
One Trick Pony?
Return to Today
What’s blocking innova3on?
Two Barriers – BAU and Middle Management
Business as Usual
Every firm relies on a set of well-‐defined and well understood business processes, expecta3ons, perspec3ves and decision making policies that become the basis for how the business operates. This “business as usual” model ensures work is done efficiently and effec3vely.
Highly Efficient/Second Nature
Business as usual ensures that the business hits on all cylinders, driving greater efficiency and effec3veness. Middle managers work to ensure the business as usual opera3ng model is constantly improved and reinforced.
No room for Innova3on
Innova3on is unusual
Many firms aTempt to manage innova3ve ideas in their “business as usual” frameworks. But these frameworks reject everything about innova3on. Innova3on detracts from the efficient, effec3ve model that has delivered consistent quarterly results.
You are cer3fiably insane
Insanity: Doing the same thing over and over again and expec3ng different results.
The Third Way
Stop modifying the ideas and start modifying the processes.
Guardians of Status Quo
Efficiency Experts
Middle Managers are the efficiency experts in the business. They know how to get more done with less. While execu3ve may request innova3on, compensa3on and rewards are 3ed to short term goals. Middle Managers have received training in Six Sigma, Lean and other efficiency tools, but liTle or no innova3on training.
Stuck in the Middle
Middle Managers are stuck in the middle, aTemp3ng to balance the demands for innova3on from the execu3ves while keeping the rest of the organiza3on working to an efficient, effec3ve, consistent model. Middle Managers benefit more than any other group from “business as usual”
Crea3ng an Innova3on Business as Usual
Where do you start? With the things that mo3vate your team. Communica)on and compensa)on and culture. People will do what they are led to do (communica3on), what they are paid to do (compensa3on) and what the environment indicates they should do (culture).
Communica3on
Compensa3on
Asking for innova3on but compensa3ng and rewarding for business as usual is excep3onally frustra3ng to your team. As ra3onal actors, people will naturally revert to their “day jobs”, since innova3on is risky anyway, and not part of their compensa3on or reward systems. If you want innova3on, change compensa3on and reward structures to recognize it.
Culture
One of my favorite sayings is “Culture eats strategy for breakfast”. In other words, corporate culture is more powerful than any individual or strategy. If your corporate culture is structured to favor business as usual, innova3on will always be difficult. You must change the culture to create an innova3on business as usual.
The Fab Four
Create Clear Innova3on Goals
Link innova3on ac3vi3es to strategic goals and define innova3on outcomes
Rebalance tools and skills
Improve innova3on skills while maintaining efficiency
Define and sustain an innova3on process
Rework culture, incen3ves, rewards
Pavlov told us that people will do what they expect they’ll be rewarded to do
