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INNOVATION TO THE CORE Peter Skarzynski, CEO Strategos Copies: [email protected]

Innovation to the Core

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Peter Skarzynski, the CEO of Strategos (an innovation strategy co

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2. AN INNOVATION IMPERATIVE?Gary HamelInnovation is the only way tostay ahead ofthe curve www.strategos.com 3. OROVER-HYPED?www.strategos.com 4. A BIG problem OF INNOVATION USUALLY FAILS www.strategos.com 5. WHY THEFAILURE? www.strategos.com 6. www.strategos.com 7. MAYBE BECAUSE IT IS DIFFICULT?Dilbert: Scott Adams/Dist. By United Feature Syndicate, Inc. www.strategos.com 8. EFFORTLESSLY www.strategos.com 9. REFLEXIVELYwww.strategos.com 10. INSTINCTIVELYwww.strategos.com 11. SEVEN INNOVATION MYTHS:1. Innovation is risky. 12. FOR ONCE, ITS NOT ABOUT THE MONEY! THERE IS NO RELATIONSHIP BETWEEN R&DSPENDING AND THE PRIMARY MEASURES OFECONOMIC OR CORPORATE SUCCESS, SUCH AS GROWTH, ENTERPRISE PROFITABILITY, AND SHAREHOLDER RETURN. 13. DARE TO BE RADICAL 1. Does it have the power to changecustomer expectations? 2. Does it have the power to change thebasis for competitive advantage? 3. Does it have the power to changeindustry economics?Source: Professor Gay Hamel 14. LowHighRisk RiskSource: Professor Gay Hamel 15. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products. 16. Cost? 17. RADICAL: LOW COST AND STYLE Redefining ExpectationsA Wine Cellar With Refined TasteYour finest wines will be preserved and safe in this wine cellar. Settingsfor red and white wine make it easy to select the optimum temperature tomaintain quality and taste. The grey-blue tinted glass door provides a fullview of your collection while protecting it from harmful UV rays. With 7slide-out wood racks and room for 54 bottles of wine, you can keep all ofyour favorites on hand in this modern, stylish wine cellar. This wine cellaralso has a dual electronic FlexZone, with two separately controlledtemperature zones so you can store combinations of white wine, redwine, and champagne in the same cellar. 18. Experience? 19. Management Innovations? 20. BUSINESS MODEL INNOVATION 21. Simply Saidthe key to sustained success is business model innovation. - Clay Christensen, Harvard Business School Who do we serve?How do weWhat do wemake money?provide? How do we differentiate &How do wesustain advantage? provide it? 22. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas. 23. INNOVATION MATHIdeas Innovations1,000 ArithmeticExperimentsNumber of options 100Projects10 Winners1 Increments of risk 24. Easier than you think 25. but, please link to operating processes 26. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught. 27. Its always Sit, Stay, Heel--neverThink, Innovate, Be yourself. 28. ENCOURAGE, TEACH, & SUPPORTOut of context toRisk of bizarre business flowoverreaction Not grounded inIrrelevant to usany observed(our competences)customer need 29. FRAME BREAKING NEW PERSPECTIVE 1 2ChallengeHarness industry emerging orthodoxiestrends34AddressLeverageunarticulated Know How needsAssets 30. SELL BY THE TANK? 31. SERVING CARE GIVERS2001 WinnerAn all-in-one portable medicaloxygen system Eliminating the need for aseparate regulator, flow meter,cylinder wrench, and special valveseal Allowing medical personnel toeasily adjust oxygen flow with theturn of a dial and verify contentsat a glance 32. WORK FROM THE FUTURE BACK Future StretchWe Create Future-based migration path Future FitWe AcceptPresent Traditionalextrapolation Past37 33. 38 34. Crash in the Garage! Discontinuities Core Competences An Example Low costFrom: Bedroom suburbshigh-quality,To: McMansions stationary electro- mechanicalMen are Appliancesrelegated toare sold tothe garage womenCustomer Insight Orthodoxies 35. Gladiator Solution 36. START HEREDiscontinuitiesCore CompetencesAn ExampleBetter lifeFrom: Mom approved through colorTo: Kid preferred chemistrySurprisingexperiences whichPerfection is theare mine are only acceptableexciting and more standardattractiveConsumer Insight Orthodoxies 37. End HereNo Mess but still fun (i.e., messy) for kids!AspirationXXXX New Oppty 5 Color ExplosionOutdoorOppty 7CapabilitiesOppty 6 ColorWonderErasable ExistingWashables Existing New Markets 38. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught.5. Innovation is a diversion. 39. Beyond the Suggestion Box 40. AN INNOVATION PROCESS Building a Generating Managing foundation of a portfolio of a pipeline of truly novelgame-changing strategic insightsideasexperiments DiscoveryOpportunity Innovationto the coreHow widely & deeply How radical and How efficient in termsunderstood? coherent? of risk-reward? 41. Perspectives from DifferentSourcesInside Your OrganizationWe are sixty thousand employees around the world in 170 countries,with efficiency and productivity unparalleled in any industry. We havethirteen high-tech manufacturing facilities and eighteen world-classtechnology centers with engineers designing in virtual teams fromaround the worldHundreds of innovators from all levels and types ofjobs, sometimes from where you might least expect them, are workingto invent on behalf of the customer, enjoying and maximizing theircontributions to the company.Nancy Snyder Strategic Innovation 42. FINDING GOLDThe Goldcorp Inc. Challenge First global brainstormingChallenge: Where to find the gold Half a million hits in four months 1400 people from 50 countries Accelerated the exploration program 43. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught.5. Innovation is a diversion.6. Innovation is expensive. 44. INNOVATION EFFICIENCYNo. of innovatorsK 1 No. of employeesE No. of radical ideasY 2 Total no. of ideas RIdeas from outside3 A Ideas from inside TLearning I4Investment O SCommitment5 PrioritiesSource: Adapted from Professor Gary Hamel 50 45. Learn, Fail, ScaleExperiment # 123 452. Can we do it?Competencies?Operating Model? 3. Can we make money? Revenues? Costs? Profit? 1. Do they want it? Customer Value Proposition --who, what, how differentiated?Time51 46. SEVEN INNOVATION MYTHS:1. Innovation is risky.2. Innovation is (only) about products.3. Innovation is about "big" ideas.4. Innovation cant be taught.5. Innovation is a diversion.6. Innovation is expensive.7. Innovation is an exception. 47. HOW FRIENDLY? Leadership & OrganizationProcesses & Innovation Culture & Tools EffectivenessValues People &Skills 48. Take you back an analogy 49. SUSTAINING AT CEMEX 50. W.L. GORE:1. No VPs, no directors, no managers, no titles.2. Every employee can spend 10% of his or her time "dabbling."3. Theres a "market for talent."4. No division can grow to more than 200 people. 51. $3.3 Billion in Innovation ValueSource: Business Week; Creativity Overflowing, May 8, 2006 52. MAKE IT INESCAPABLE "Tomorrow, if I went to the organization and said, Well, weve had enough of this [innovation], lets go back to cutting costs and running the business like everyone else is running the business in the appliance area I think Id have a revolt on my hands." David Whitwam, Former CEO, Whirlpool 53. ASK YOURSELF1. Are you creating the time and space?2. What new conversations and connections?3. What % portfolio should meet the test of radical?4. What am I doing to make growth inescapable? 54. Thank you for your timeCopies? [email protected] www.strategos.com