Gorilla Game2
Managing InnovationITSICopyright @2009
ITSICopyright@2009AgendaIntroductionThe different types of
InnovationTechnology Adoption Life CycleComplex Systems vs. Core
OperationsDifferent Types of InnovationInnovation for Growth
MarketsInnovation for Mature MarketsInnovation for Declining
MarketsLeveraging Innovation
ITSICopyright@2009Introducing InnovationITSICopyright @2009
ITSICopyright@200910 Myths of Innovation10. We don't innovate
around here any more.9. Product life cycles are getting shorter and
shorter.8. We need a Chief Innovation Officer.
7. We need to be more like Google. 6. R&D investment is a
good indicator of innovation commitment.5. Great innovators are
usually egotistical mavericks.
4. innovation is inherently disruptive. 3. It is good to
innovate2. Innovation is hard.
1. When innovation dies, it's because the antibodies kill
it.
ITSICopyright@2009Return on
InnovationNeutralizationWasteDifferentiationProductivity* Based on
the work by Geoffrey Moore Dealing with Darwin
ITSICopyright@2009Innovation StrategyRemember Your Vector
Math!=0Multiple innovation initiativesBubble-up management
ITSICopyright@2009Core & Context
Context
Core
ITSICopyright@2009Technology Adoption Life CycleITSICopyright
@2009
ITSICopyright@2009Underlying Drivers in Growth Markets
Technology Adoption Strategies
Techies:Just try it!Pragmatists:Stick with the
herd!Conservatives:Stick with whats proven!Skeptics:Just say
No!Visionaries:Get ahead of the herd!
ITSICopyright@2009Technology Adoption Life
CycleChasmEarlyMarketBowling Alley
Tornado
Main Street
ITSICopyright@2009TimeMarket GrowthTechnology AdoptionLife
CycleGrowthMarketMatureMarketDecliningMarketIndefinitely
elasticmiddle periodEnd of LifeAFaultLine!EDCBThe Category Maturity
Life Cycle
ITSICopyright@2009Complex Systems vs. Core
OperationsITSICopyright @2009
ITSICopyright@2009Complex Systems vs. Volume
OperationsComplexSystemsVolumeOperationsSweetSpotSweetSpotComplexityVolumeEffectivenessSmallBusinessSocietalProjectsSocietalEntitlementsEnterpriseConsumer
ITSICopyright@2009Legacy SystemLegacy SystemLegacy SystemLegacy
SystemIntegration PlatformConsulting & Integration
ServicesSolution SalesTarget CustomersSolution
ArchitectureElement#1Element#2Element#33rd partyelement3rd
partyelementTechnology ArchitectureComplex Systems Model
ITSICopyright@2009Volume Operations
ModelConsumersConsumersConsumersConsumersConsumersConsumersConsumersConsumersDistributionChannelSharedInfrastructureOfferOfferOfferOfferOfferOfferOfferOfferTechnologyBrand
AdvertisingPromotions
ITSICopyright@2009Simple Value
ChainSOURCEMAKEMARKETSELLSERVICEDESIGNRESEARCH
ITSICopyright@2009Category EvolutionVolume OperationsComplex
SystemsTimeMainframesMinisWorkstationsPCsLaptopsPDAs
ITSICopyright@2009Business Model Innovation at Category
Transitions2Volume OperationsRule1 Complex SystemsRule3
Next-GenComplexSystemsEmerge A B C
ITSICopyright@2009Cyclicality & StrategyC1V1Volume
operations commoditize categories created by complex
systemsComplexSystemsVolume OperationsComplex systems respond by
creating the next level of complexityC2C3V2V3
ITSICopyright@2009Different Types of InnovationITSICopyright
@2009
ITSICopyright@2009DisruptiveInnovationApplicationInnovationProductInnovationPlatformInnovationEnhancementInnovationIntegrationInnovationExperientialInnovationProcessInnovationMarketingInnovation
A Broad Universe of Innovation TypesValue
MigrationInnovationLine ExtensionInnovationValue
EngineeringInnovationHarvest& ExitRenewal
InnovationOrganicRenewalAcquisitionRenewal
ITSICopyright@2009Four Innovation
ZonesDisruptiveInnovationApplicationInnovationProductInnovationPlatformInnovationEnhancementInnovationIntegrationInnovationExperientialInnovationProcessInnovationMarketingInnovationBusiness
ModelInnovationLine ExtensionInnovationValue
EngineeringInnovationHarvest& ExitRenewal
InnovationProductLeadershipZoneOperationalExcellenceZoneCustomerIntimacyZoneCategoryRenewalZone
ITSICopyright@2009Innovation for Growth MarketsITSICopyright
@2009
ITSICopyright@2009DisruptiveInnovationApplicationInnovationProductInnovationPlatformInnovation
Innovation Types for Growth MarketsThe Product Leadership
Zone
ITSICopyright@2009Innovation Types for Growth
MarketsProductNewExistingMarketNewExistingDisruptiveInnovationProductInnovationApplicationInnovationPlatformInnovation
ITSICopyright@2009Innovation for Mature MarketsITSICopyright
@2009
ITSICopyright@2009Fractalization in Mature MarketsPC123456
ITSICopyright@2009Fractal Markets: The nth DeviceThe Example of
TelephonesSecuritySystemPDAKitchenPhoneOfficePhoneBedroomPhoneCarPhoneCordlessPhoneBroadbandLineCellPhoneIntercomBabycamEmailDeviceGamePhoneSpeakerPhoneFaxEmergencyPhoneWiFiPhoneVOIP
PhoneVideo Phone
ITSICopyright@2009Innovation Types for Fractal
MarketsPCIntegration InnovationProcess InnovationMarketing
InnovationExperiential InnovationLine Extension InnovationCustomer
intimacy adds value at the surfaceOperational excellence extracts
resources from the substrateValue Engineering InnovationEnhancement
InnovationValue Migration Innovation
ITSICopyright@2009ExperientialInnovationMarketingInnovationInnovation
Types for Mature MarketsThe Customer Intimacy ZoneCustomer Intimacy
ZoneEnhancementInnovationLine ExtensionInnovation
ITSICopyright@2009Innovation Types for Mature MarketsThe
Operational Excellence
ZoneIntegrationInnovationProcessInnovationValue
MigrationInnovationValue EngineeringInnovationOperational
Excellence Zone
ITSICopyright@2009Innovation for Declining MarketsITSICopyright
@2009
ITSICopyright@2009
Innovation Types for Declining MarketsLeveraging Category
RenewalHarvest& ExitCategory RenewalOrganicAcquisition
ITSICopyright@2009Core Becomes Context Over TimeThe End of Core
is Commoditization Subsidized cell phonesSMS messagingFashionable
accessoriesColor screensCamera functionalityCoreLonger battery
lifeVideo games & downloadsContextCellular Telephony
Example
ITSICopyright@2009Leveraging InnovationITSICopyright @2009
ITSICopyright@2009ContextCoreContext
Build-upCoreContextStart-upEstablishedEnterprise
ITSICopyright@2009Two Birds, One StoneExtract resources from
context to repurpose for core
ITSICopyright@2009Core/Context Analysis FrameworkCoreProcess
creates differentiation that wins customersContext
All other processesMission CriticalProcess shortfall creates
serious and immediate riskNon-Mission-CriticalAll other
processesDifferentiationRisk
ITSICopyright@2009The Cycle of
InnovationDeployInventOffloadCoreContextMission
CriticalNon-Mission-CriticalManageManageMission-criticalProcessesAt
ScaleExtractResourcesTo RepurposeFor CoreInventDifferentiated
OfferingDeployDifferentiationAt ScaleFund next
innovationIVIIIIII
ITSICopyright@2009Mission CriticalNon-Mission-CriticalClinging
to Context How Resources Get StuckResourcesget stuckhereResources
areadded here forsupportResourcesstill getinvested hereBut lack
ofresources hereresults in failure to deploy!Mission-critical
riskCoreContextIVIIIIII
ITSICopyright@2009CoreContextThe Five Levers ModelExtracting
Resources from Mission-Critical ContextCentralize. Bring operations
under a single authority to reduce overhead costs and create a
single decision-making authority to manage riskStandardize. Reduce
the variety and variability of processes delivering similar outputs
to further reduce costs and minimize risks.Modularize. Deconstruct
the system into its component subsystems and standardize interfaces
for future cost reductions.Optimize. Eliminate redundant steps,
automate standard sequences, streamline remaining operations,
substitute lower-cost resources, and instrument the process for
monitoring and control.Outsource. Drive processes out of the
enterprise entirely to further reduce overhead, variabilize costs,
and minimize future investment. Incorporate monitoring systems into
Service Level AgreementRequires specializedsupport
ITSICopyright@2009The Problem with OutsourcingWhat Happens to
the Work Force?Resources
AvailableHereResourcesWantedHereCoreContextMissionCriticalEnablingPeople
being released lack the skillsto fill the positions being
openedIVIIIIII
ITSICopyright@2009Resource RecyclingACBWork circulates
clockwisePeople recycle counter-clockwiseIVIIIIII
ITSICopyright@2009Resource-Recycling
ZonesIVIIIIIIInventionZoneDeploymentZoneOptimizationZoneHandoff#
1Handoff# 2Entrepreneurs Think outside the box to create new
coreProgram managers Think inside the box to deploy processes at
scaleProcess optimizers Think inside and outside the box to extract
resources
ITSICopyright@2009Resource Recycling Meets Outsourcing
Zone rotations drive perpetual innovation1234567IVIIIIII
ITSICopyright@2009
