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Rainmaker Index. “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh , GE. “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh , GE. History/Background. - PowerPoint PPT Presentation
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______________Smart Moves, LLC
Rainmaker Index
______________Smart Moves, LLC
“If we get the right people in the right jobs, we’ve won the game.”
- Jack Welsh , GE
“If we get the right people in the right jobs, we’ve won the game.”
- Jack Welsh , GE
______________Smart Moves, LLC
History/Background Staged processes, management reviews for
NPD have been in existence for 50+ years Benchmarking studies for 50+ years
focused on success factors associated with industrial NPD
Top success factors are product advantage and high quality NPD process
But in spite of all the changes and improvements in NPD systems, commercial launch remains unchanged.
60% of NP launches succeed - true globally stat!
______________Smart Moves, LLC
Studies:- Most significant difference
between successful and unsuccessful products lie in the quality of execution of the first few stages of NPD, aka ‘Fuzzy Front End’
“The First Few Plays in the Game determines the
Outcome”
Where to Apply the Effort
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- NPD and Market Research in the early stages requires high risk tolerance, creativity, openness to the ‘irrational process’ of NPD, however, studies find that industry fills these positions with people that are risk adverse, patient and persistent.
BUT…….
______________Smart Moves, LLC
Despite the improvements in NPD systems, some
underlying factor remains unchanged…….?
Despite the improvements in NPD systems, some
underlying factor remains unchanged…….?
______________Smart Moves, LLC
Rainmaker uses several Orientation instruments in determining an Index score:◦ Myers-Briggs◦ Myers-Briggs Creativity Index,◦ Keirsey’s Four Temperaments◦ KAI
Overlooking the Human Factor
Rainmaker Index – What is it?
______________Smart Moves, LLC
Orientation InstrumentsMyers-Briggs
Extroversion Introversion
Sensory Intuitive
Thinking Feeling
Judging Perceiving
Keirsey’s Four TemperamentsRational“NT”12% of Population
Idealists“NF’12% of Population
Guardians“SJ”38% of Population
Artisans“SP”38% of Population
Myers-Briggs Creativity Index
= 3SN+JP-EI-0.5TF
Kirton Adaptor-Innovator (KAI)30-160
Perfect the systemFinishers
Change the SystemStarters
______________Smart Moves, LLC
Orientation InstrumentsMyers-Briggs
Extroversion Introversion
Sensory Intuitive
Thinking Feeling
Judging Perceiving
Keirsey’s Four TemperamentsRational“NT”12% of Population
Idealists“NF’12% of Population
Guardians“SJ”38% of Population
Artisans“SP”38% of Population
Myers-Briggs Creativity Index
= 3SN+JP-EI-0.5TF
Kirton Adaptor-Innovator (KAI)30-160
Perfect the systemFinishers
Change the SystemStarters
______________Smart Moves, LLC
Did more projects Branched the projects more frequently – redirected
or significantly ‘morphed’ them – Key to high success rate
Identified concepts that, when later commercialized, made far greater profits: $197.5MM vs. $15.2 MM
People selected to operate the NPD are as important as the process itself.
Success rates improved from 11% to 97% when compared on the Universal Success Curve.
Scores in the top third of the Rainmaker Index earned 95 times (9,500 percent!) more profit than those in the bottom third.
Top 20% RI produced 80% of the profits ( “80-20 rule”)
Findings When Rainmaker Index was Applied to NPD
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Rainmakers are typically difficult to manage and undisciplined in their thinking.
The top performing Rainmakers in the organization were actually the least well-thought-of employees
When staff reductions occurred (in the companies undergoing study), the results showed a loss of over half of the top third of the RI employees (the profit makers in the company) and none in the lowest third
Rainmakers
______________Smart Moves, LLC
Rainmaker IndexFirst time an orientation instrument
fixed an economic value to style
______________Smart Moves, LLC
Center of Creative Leadership sponsored study CCL established group in 1981, grew to 70
members by 1998 - AMI, leaders of innovation within corporations
By 1998, saw that about 1/3 of members were gone - consulting, downsized or early retirements. Decided to study phenomenon
Questionnaire- individual, programs, budgeting, why program ended
Findings:
AMI Study of Corporate Innovation Programs and their Champions
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All programs generated new ideas and significant new business ($50-100MM)
Higher level of interaction between Marketing, R&D, and customers
Stimulated the integration of other departments: Emerging Technology, CI/BI efforts, Venture, etc… in other words, the company adopted an “outside-in” perspective, became more comfortable with “being in the lead” and risk, and growth occurred
….so why were these programs terminated?????
What worked
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Two Different WorldsDimension R&D Marketing
Principal Mission Technology Development
Customer Satisfaction
Time Horizon Years Months
Pacing Metric Project Milestones Product Launches
Source of Esteem Peer Recognition Promotion/many Employers
Educational Background
BS, PhD BA, MBA
Tenure Medium to Long Short
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Continuously questioned the level of and number of successes vs. expectations…but expectations were never defined, just the ‘need to innovate’, ‘do something different’
Didn’t recognize that the culture needed to change in whole or at least in part
Exclusive focus on the R&D function with some Marketing assistance
Funded at the expense of existing Technology budgets or spreading innovation funding amongst SBU and almost no involvement with the Commercial or Marketing functions except as a service to them.
Subtle forms of sabotaging if SBU believed Innovation funding and time is inhibiting their ability to accomplish short-term objectives
Financial and staffing requirements were significantly underestimated
Sponsorship was too narrow. Leadership base of only one of two senior executives who frequently were near retirement age. Too shallow to have staying power
What didn’t work
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Time projections for bottom-line impact were seriously underestimated. For shorter development time companies, innovation didn’t have a chance and shut down prematurely.
The 3000 to 1 universal rule was not understood. The thinking that R&D, R&D management - acting alone, can
significantly affect organization’s long term bottom line development
Managers didn’t know what to expect. Low KAI profile of Innovation champion and leadership High KAI profile of innovation (champion) verses mid-lower
range KAI profile of managers: ...when asked to change or improve something an innovator profile will prefer to replace existing with new and different, whereas managers profile more likely to focus on improving existing
Innovation champions more likely to see threats and opportunities outside the organization, managers more likely to focus on threats and opportunities inside the organization.. Do the right thing vs. do things right
What didn’t work
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Look at former Innovation champions: of the number that had not return to AMI, over 60% became consultants, retained by Fortune 500 companies and in many cases their former employers
Traditional physical innovation center format is no longer sufficient to sustain effort
Everyone involved Divided into Hunting (developing and assessing the New)
and Gathering functions (design, manufacturing and marketing)
Intellectual property emphasis with Innovation Independent funding - TI’s IDEA program, HP Grassroots
program, Zenith’s Bull Market KAI/ Rainmaker placement - Gifted high KAIer’s in front-end
of project, gifted low KAIer’s in back-end of project. ( 900% more speed, effectiveness in commercialization rates)
Future Trends in Corporate Innovation
______________Smart Moves, LLC
Fast approvals through few, if any, layers Empower leaders Don’t expect the perfect plan or traditional
ways of execution with no deviations. Get your hands dirty and learn
Stay the course - abrupt changes makes people turn passive
Understand the 3,000 to 1 ratio* Incentives for innovation will not fit standard
compensation methods*The “universal industrial success curve”, Research and Technology Management, March-
April 2003
Future Trends in Corporate Innovation
______________Smart Moves, LLC
Organization structure that separates the innovative initiative from the main business and protects the new
Leadership that buries the corpse of failed ideas and learn from mistakes
Leadership that understands the psychology of innovation in corporations and remains alert/recognizes to unconscious “bandit actions”
Leadership that strokes the protocol of Innovation: a culture, a way of leading, doing, an awareness…. not an event or training session.
Future Trends in Corporate Innovation
______________Smart Moves, LLC
ManagedRisk
Platforms
Incremental Products
Cul
ture
(160 KAI)
(32 KAI)
Degree of Difficulty-
+
Horizon #2
Horizon #1
Adapter
Innovator
Invention/ Innovation
PROJECT MANAGEMENT & STAGE/GATE
IDEA BANK
PHASE/GATE
PORTFOLIO
MANAGEMENT
PORTFOLIO MANAGEMENT
INNOVATION PROCESS
INNOVATION PROCESS
Horizon #3En
trep
rene
urial
Horizon #4
______________Smart Moves, LLC
ManagedRisk
Platforms
Incremental Products
Sales & Marketing (Expediting)
Marketing & Sales(Anthropolgy)
Tech Center
Cul
ture
(160 KAI)
(32 KAI)
Acquisition / Affiliation
Degree of Difficulty-+
Horizon #3
Horizon #2
Horizon #1
Adapter
Innovator
Invention/Innovation
PROJECT MANAGEMENT & STAGE/GATE
IDEA BANK
PHASE/GATE
PORTFOLIOMANAGEMENT
PORTFOLIO MANAGEMENTManufacturing
______________Smart Moves, LLC
The 7 Levels of Change
• Level 1: Doing the right things• Level 2: Doing things right• Level 3: Doing things better• Level 4: Stopping doing things• Level 5: Doing things others are doing• Level 6: Doing things no one else is doing• Level 7: Doing things that can’t be done
______________Smart Moves, LLC
Managed Risk
Platforms
Incremental Products
Sales & Marketing (Expediting)
Marketing & Sales(Anthropolgy)
Tech Center
Cul
ture
(160 KAI)
(32 KAI)
Acquisition / Affiliation
Degree of Difficulty
Seven Levels of ChangeDo The Right Things (Programs)
Doing Things Right (Management)
Doing Things Better (CI Effort)
Stopping Doing Things (Portfolio)
-+
Doing Things Other People Are Doing (Benchmarking)
Doing Things No One Else Is Doing (Market Driven)
Doing Things That Can’t Be Done (Innovation)
#1#2#3#4#5#6#7
Horizon #3
Horizon #2
Horizon #1
Adapter
Innovator
Growth Chart for Corporate New Business Development
PROJECT MANAGEMENT & STAGE/GATE
IDEA BANK
PHASE/GATE
PORTFOLIO
MANAGEMENT
PORTFOLIO MANAGEMENT
CI
Base
Key
Pacing
Emerging
Tech
nolo
gy
Manufacturing
______________Smart Moves, LLC
UPSHOT TO ALL OF THIS…………..
• People have KAI
• Job titles have KAI
• Cultures have KAI
• Innovation Process have KAI
….Match the people to the job to the culture to the process.