Upload
joebarkai
View
1.135
Download
1
Embed Size (px)
DESCRIPTION
Product organizations spend considerable effort and resources on innovation. However, many companies are engages in unfocused and inefficient innovation that does not support the company\'s strategic vision. In fact, many companies seem to engage in innovation for innovation sake and can be characterized as reckless innovators. This presentation discusses the role of lean and efficient innovation and how successful companies focus innovation to help connect business strategy to execution.
Citation preview
The CEO’s Dilemma
How to drive efficient innovation in the organization
Joe Barkai
© IDC Manufacturing Insights Page 2
Out of the Recession – It’s All About Innovation
0% 10% 20% 30% 40% 50% 60%
Industry Consolidation
More innovation
Decrease in industry growth rate
Stricter regulation
New competition
Lower risk tolerance
Increase reliance on low cost suppliers
Increased reliance on global sales
Customer shifting to less expensive products / services
Increased reliance on local sales
Increased reliance on local suppliers
Business' inability to get credit
Stricter consumer lending standards
Less innovations
What structural changes do you expect to be affecting your industry in 5 years from now (end of 2014)?
Source: McKinsey Study, 2009n=1549
© IDC Manufacturing Insights Page 3
And We Do…
0
100,000
200,000
300,000
400,000
500,000
600,000
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Filed
Issued
Source: USPTO, 2009Minyuan Zhao, University of Michigan
U.S. Patents
0
10,000
20,000
30,000
40,000
50,000
60,000
1998 1999 2000 2001 2002 2003 2004 2005
Domestic
Foreign
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
Japan
Korea
Germany
Taiwan
Canada
UK
France
China (PRC)
Netherlands
Israel
2007
2006
2005
2004
Foreign Patents Filed in the U.S.
Patents Filed in China
© IDC Manufacturing Insights Page 4
It’s All About Innovation
� Internal R&D spend. Many invest in innovation through acquisitions.
� Size = Revenue FY 08
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
0% 5% 10% 15% 20% 25%
R&D (% Revenue)
Mkt Cap
3Com3MAppleApplied MaterialsBoeingBoston Scientific
CaterpillarCiscoDeere & Co.DellEMCGoogleHPIBMIntelJ&JJuniper Networks
MedtronicMicrosoftOracleQualcommSunTexas Instruments
Source: IDC Manufacturing Insights, 2009
Dell
MSFT
HP
IBMJ&J
Juniper
Cisco
Qualcomm
Apple
© IDC Manufacturing Insights Page 5
0
20
40
60
80
100
120
140
160
180
200
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
The Tipping Point
Source: Adapted from Sketching User Experience (Buxton, 2007), TechDigest.tv, Yahoo! Finance
© IDC Manufacturing Insights Page 6
Return on Innovation
Waste
Differentiation
Neutralization
Productivity
0%
10%
20%
30%
40%
50%
60%
2007 2008 2009
Yes
No
Not Sure
Source:Business Week, September 2009Geoffrey Moore: Dealing with Darwin
© IDC Manufacturing Insights Page 7
Wasteful InnovationRidicu
lous
Source: USPTO, 2009
US Patent 5,443,036: Method of Exercising a cat
U.S. Patent 6,796,467: Device for quick and easy use of a small size cellular phone
U.S. Patent 6,805,657: Body-connected Bike
U.S Patent 7,475,086 (IBM): Method of automatically removing leading and trailing space characters from data being entered into a database system
U.S Patent 4,555,775 (AT&T Bell Labs): Dynamic generation and overlaying of graphic windows for multiple active program storage areas
The Dot Com Era!U.S. Patent 6,368,227: Method of swinging
on a swing
© IDC Manufacturing Insights Page 8
The CEO’s Dilemma
� Innovation isn’t enough– Apple’s Newton
– Microsoft’s Bob
– Segway
– Gateway
– Your favorite – now defunct – startup
� Boost innovation while maintaining balance and efficiency– Thoughtful vs. reckless innovation
– Disruption vs. continuity
Thinking Circa 1997
� It’s all about disruptive innovation
�Companies feel much more comfortable with sustaining technologies for existing markets
�Companies that do not invest in disruptive technologies fail
�Companies that lead in adopting disruptive technologies are new entrants, not incumbent leaders
© IDC Manufacturing Insights Page 9
The Vitality-Stability Balance
Vitality
High
Low
HighStability
Aggressive
Low
Leaders
Laggards Defensive
© IDC Manufacturing Insights Page 10
The Archetypes
Market
New
Existing
New
Technology
Technology
Innovation• MSFT (Windows)• Toyota (Prius)• Gillette / P&G
Existing
Visionaries
• Apple• RIM• Cisco
Fast
Followers•Autodesk•Teva
Product
Innovation• GE• Salesforce.com• Starbucks
High End Disruption
Low End Disruption
© IDC Manufacturing Insights Page 11
Product Innovation
� Technology barriers going down
� Low cost competitors
� Customer loyalty? What’s that?
75%
80%
85%
90%
95%
100%
6.5 7 7.5 8 8.5 9 9.5
70%
75%
80%
85%
90%
95%
100%
6.5 7 7.5 8 8.5 9 9.5
IT
U.S. Automakers
Source: IDC Manufacturing Insights from JD Powers & Associates Data and other sources
� Products as platforms
�Derivatives
�Value add services
© IDC Manufacturing Insights Page 12
Exploring New Markets
� From globalization to localization to “glocaliziation”
� What’s next?
© IDC Manufacturing Insights Page 13
Reverse Innovation
� New markets as catalysts to expansion in established markets– P&G. Cheaper brands for emerging economies to penetrate
new low-cost segments in the US
– GE Healthcare. ECG for the rural Indian market comes back as a product for emergency room and EMT
� How GE reinvents itself– Segmentation
– Decentralization of innovation
– Getting close to the market (local P&L)
Source: GE Healthcare
© IDC Manufacturing Insights Page 14
� Reuse
� Products as platforms– Multiple product and services derivatives
– Expanded demographics
© IDC Manufacturing Insights Page 15
� Technology leadership through innovation
� M&A
– Technology acquisition & integration
– Foundation and options (50 acquisitions during 1998-2000)
– New market segments (Linksys)
� Products as platforms
– Security
– Telepresence
– VOIP
– NAS
– WiFi Audio Streaming
� Globalization strategy
� Next?
– Mass storage? Content?
– Connected home?
– Cloud services?
© IDC Manufacturing Insights Page 16
Market InnovationCustomer Innovation
Operation Innovation
Technology & ProductInnovation
Growth Maturation Decline End of Life
Purposeful Innovation
Market Extension
Accelerate Time
to Value/Volume
Accelerate Product
Innovation
Accelerate Market
Penetration
Protect Brand & Market Share
Manage End
of Life
Renewal
$$$
© IDC Manufacturing Insights Page 17
Continuous Improvement
Opportunities are Abound
Research Design Make
Amend
Sustain End of Life
Enhance
Minimize
Waste
Maximize for
Performance,
Quality &
Compliance
Maximize
Efficiency &
Productivity;
Quality
Maximize
Service Level
& Value-add
Services
Minimize Costs & Inventory Minimize Time & Costs
Maximize
ReuseMaximize
Compliance
Reapply
Sell
Improve
Segmentation
Maximize
Channel
Efficiency
© IDC Manufacturing Insights Page 18
Voice of Technology
• Innovation
Voice of the Customer
• Customer information
• Market intelligence
Utility
Cost
Voice of the Business• Portfolio planning
Voice of Sustainability• Supply chain• Regulations• Lean
Value Analysis
Collaboration Platform
Balancing and Harmonization
© IDC Manufacturing Insights Page 19
The CEO’s Solution: Lean Innovation
� Align innovation with business strategy
� Innovation for growth– Bolster customer loyalty
– New products vs. new markets
� Role of business disruption
� Leaning innovation– Innovate as necessary
– Reuse as much as possible
– Outsource when appropriate
� Open innovation networks
� Goals and strategies change as a function of lifecycle phases– Product
– Market
– Customer
© IDC Manufacturing Insights Page 20
Thank You
Join Our Community: http://idc-insights-community.com
To learn more
• Best Practices: The Value Engineering Process in Technology-Oriented Value Chains
• Knowledge Management Improving Assets Failure Rate
• Global PLM Study: Implementation Landscape and Investment Priorities
• Global PLM Study: Observations and Lessons Learned
• Asia/Pacific (Excluding Japan) Product Life-Cycle Drivers in the Manufacturing Sector
• Redefining Design for X
• Engineering Change Management — How Manufacturers Manage Product Design Changes