Innovation for Associations: Opportunity!Professor Danny Samson

1. Innovation definition and scope

2. The various levels of innovation management, from strategy, to project portfolio, to people3. Innovation project tests4. ‘Systematic innovation capability’: elements

Leading Innovation

Definition: Innovation can be the implementation of a new or significantly improved product

(good or service), process, organisational method,

technology, marketing method, or business model

Leadership in organisations is about influencing

people: (to do value creating activities)

Innovation is done by people, not machines

(yet).

When innovation is well led, there is no limit, whereas cost

reduction and quality improvement

are finite

Our research background

2010: DIST sponsored tencase studies of highly innovativeCompanies: best practices

2012: survey of 2000+ managers(partnered with AIM)

2014: INNOV-EX creation (diagnostic innovation audit)

2016: 18 more case studies, new book

2017/8: specific industry studies on digitalisation (revolution!)

Mainstream(of primary production of goods/ services)

Goal: manage for stability, business as usual, SOP, manage ‘abnormalities’, reduce waste, improve quality, productivity, safety…. Eg factory, hospital, bank operations, defence operationsCulture : Do it by the book, ‘same old, same old’ : BAU, daily operations

Newstream(Innovation), Lead the portfolio of projects and the pipeline

of developments…

Culture : progress (every day), change!

$ Ideas

Newstream versus mainstream management

LEADERSHIP!

Innovation for Associations...

• New Services

• Enhanced or New Processes (internal and member interfacing)

• New Business model (eg think Uber, AirBnb, rent instead of sell, change pricing basis, etc)

Example: NEW short-courses• Upgrading knowledge and capability for members• What courses will our members/ industry find of value?• From short, online to face-to face, to half day to 4 day...• Skill deepening topics.... Related to the specific skill

group• Some generic topics (real examples) that are popular:

• Business/ Organisation Strategy• Decision making / analysis• Project management• Innovation• Leadership• Operations Excellence• Service management• Marketing

Some fundamental questions..

• How important is it for your organisation to be innovative? 1..2..3..4..5..6..7..8..9..10

(1 means very low, 10 means very high)

• What is your organisation’s innovation capability: 1..2..3..4..5..6..7..8..9..10

• What is your importance minus capability?

Innovation

Innovation = Invention + Exploitation

Is inventing the light bulb enough?No : it must pass the eight tests of a new

innovation

8 Tests of New Products/ Services• Function test:

Does the new product /service /technology perform the function?

• Marketing Test:Will it sell ?

• Operations test:Can it be mass produced?.

• Management and key personnel: Do we have the people to make this work successfully?

• Financial Test:Will it provide a return on investment?

• IP Control Test :Do you have control over the intellectual property

• Strategic coherence test?Does this new initiative fit our strategy?

• Is there a new 8th test?Sustainable development!

8 Tests of New Products/Services

Build Innovation Excellence capability

innovationmeasures

innovation benefits

Outcomes

leadership of innovation

innovation strategy

Drivers

customer focus

radical and incremental innovation

resourcing innovation

sustainable development

innovation process

collaborative ‘open’

innovation

innovation behaviour and

culture

risk appetite and

entrepreneurial approach

Design

STRATEGY• Positioning INNOVATION in a market, fit INNOVATION with business environment and INNOVATIONcapabilities

OPERATING PRACTICES• Production and various support activities DRIVE AND RESOURCE INNOVATION

MEASURES OFPERFORMANCE• E.g. operating and business performance, PARTICULARLY INNOVATIONREWARDS &

RECOGNITION• Pay, promotion, recognition BASED ON INNOVATION

BEHAVIOURAND CULTURE• Performance oriented for the business :PEOPLE THINKINGAND WORKING ON INNOVATION

High Level Summary High Level Summary

Level of consideration Measurement Factor

Role and contribution of Innovation inthe organisation’s overall strategy andgoals

Innovation focus and priorities:Shape of the ‘new-stream’ (product,process, business models, technology,radical versus incremental etc)

Portfolio of projects: which projects, fit,dynamic, proactive management of stagegates

People and individual projects: creativity,project disciplines, activity!

Four levels of Innovation to manage (and measure)

Horizon 1Extend and defend core businesses (Today’s businesses)

Horizon 2Build emerging businesses (Tomorrow’s businesses)

Horizon 3Create viable future options (Options for growth)

Now

The Three Horizons

In business: Don’t be Kodak, Blockbuster, Borders etc. Do be Apple! Balance incremental innovation (Horizon 2) with radical innovation (Horizon 3), eg in military terms, consider what the innovation and introduction of tanks, machine guns, atom bomb did in terms of outcomes.

Invest in research and innovation, science and technology of AI, Space, Robotics. Cyber etc...... Or get ready for a ‘Kodak Moment’

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Systematic Innovation Capability

1.What is it?

2. Where is your organisation, on this curve?

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The Efficient Firm

The Quality Firm

The Flexible Firm

The Innovative Firm

Innovation• What are the challenges of innovation?

• Time lags and value creation (discounted cash flow)

• Risk/ Uncertainty• Newstream versus mainstream management• Product lifecycles

•We are interested in SYSTEMATIC INNOVATION, not the occasional lucky break

Innovation• What are the benefits of innovation?

• First, new revenue/ growth

• Second being a ‘first mover’ gives a margin premium

• Third it gives a reputation advantage in the market (grow and deepen

customer relationships)

• Stimulates creativity for staff, and employee satisfaction

Examples• Apple• Dell• Sony• 3M• Proctor and Gamble• Google• Nokia • Samsung• BP• Others?

Dimensions of innovative space

Product Service Process BusinessModel

What is changed

Perceived extent of change

low

high

New to the world products/services

New to the market products/services

New product/service line in a country

Additions to product service lines

Product improvements/revisions

New applications for existing products/services

Repositioning of existing products/services

Cost reductions for existing products/services

A range of options: innovativeness as it applies to products and services

Survey of Executives, “Most Innovative Companies”

Source BCG Study , survey of 1000 executives (global)

BCG STUDY of LEADING GLOBAL INNOVATORS

Outline concept Detailed design Testing Launch

The New Product Development Funnel: Is it an interesting place to work?

All this: While constantly striving to make the innovation pass the ‘seven tests’