Attachement 4: General innovation

ESF project 4895: Meer werk maken van innovatie voor werkgelegenheid en arbeidsmarkt

ANALYSIS FICHE OF LITERATURE

TITLE OF LITERATURE: “Is your genius idea really so great?”

AUTHOR : Bizz (inventors of concept RESTOC are C. and Y. Frey)

TYPE OF AUTHOR (academic, consultants, practitioners, other): Bizz June 2006 (business magazine)

COMMISSIONER OF LITERATURE (IF APPROPRIATE):

ORIENTATION OF LITERATURE (check with X):

• innovation in general: X • innovation by / within the public sector: • innovation oriented towards citizens: • innovation oriented towards social and employment issues typically dealt with by ESF:

LESSONS LEARNT REGARDING:

A. How to define innovation e.g. in types

Recognises three types defined by 8 criteria, the most relevant are described below:

a) Revolutionary innovation: requires 10-15 years. Starts from unaddressed need. Knowledge is emerging. Applied research is starting point for search of new concept. Market is new. Impact high.

b) Evolutionary innovation: 3-6 years. Starts from known and already served need. Knowledge is derived from combining known elements or from evolving them. Starting point for new concept are redefined / actualized needs. Market exists or is new. Impact medium.

c) Specialised innovation: 1-2 years. Needs are known and served. Starts from existing service to get improved/perfected but not new concept. Market exists. Impact low.

B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements)

C. How to organize innovation as a process in different stages?

Splits the process into 1) conceptualizing 2) development (operational prototype) 3) dissemination (produce and sell)

D. How to define outputs of innovation e.g. in terms of idea, concept, prototype…?

E. How to make decisions regarding progress of an innovation?

F. What roles exist for different actors in the innovation process? What competences are required for these roles?

G. How to organize interaction with external stakeholders (open innovation)?

H. Specific tools that are explained (list briefly for each tool in what stage, by which role, why, how it is to be used).

a) Tool 1:



TITLE OF LITERATURE: Innovation, the classic traps

AUTHOR : RM Kanter

TYPE OF AUTHOR (academic, consultants, practitioners, other): academic

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review Nov 2006






Strategy mistakes:

• Beware of screening out ideas that cannot directly demonstrate how much impact they would have (eg based on research, experience)

• Beware of focusing too narrowly on improving an existing service rather than redefining more fundamentally what is needed and how it can be addressed

• Linked to the above, beware of funding a range of smaller variations on the same service

• Remedies: create an innovation pyramid with 1) a broad base of early stage ideas of incremental innovations 2) a mid level of promising ideas pursued by dedicated temporary teams 3) a few big bets that receive most of the funding and that set clear directions for future by dedicated groups. The latter influence medium and small ideas, while also small tinkering may lead to big ideas. If smaller ideas find a place, people are liberated to come up with bigger ones too.

• Tip: wide funnels increase chances for big ideas alongside smaller ones.


Process mistakes:

• Applying the same planning, budgeting, review processes as for mature business with expectations that managers stick to their plans (leading them again to underpromise) and no separate innovation investment funds

• Remedies: Reserve pools of special funds. Follow the rhythm of the project, rather a fixed quarterly or annual calendar. Same may go faster, quickly reaching milestones that trigger a review and allocation of next funding, while others require more patience (eg when encountering an unexpected obstacle).

Structure mistakes:

• Game changing innovation often cut across existing silos, combining existing capacities in a different way. This may be perceived as a threat by those existing silos. This requires that interpersonal connections across silos are strengthened.

• Remedies: productive conversations should be held between business as usual and the inn ovation team. Senior leaders play a role here in focusing on mutual learning. Also, rotation from innovation to front line teams can be useful as can creating solutions oriented teams that span different silos.




Skills mistakes:

• Leaders should lead innovation development, not necessarily the best “experts, technicians”. They focus on building trust and interplay among the innovation team. Research is quoted that states team members relay start to perform after two years on board. Otherwise, they cannot stay involved from start to finish given average lead times of 24 to 26 months.

• Relationships outside the team need also to be nurtured by leaders to avoid the

project team to become closed off. This leads to failure to tap ideas from outside but also failure to create buy-in. Technical experts may rather mystify others, losing support along the way. Jumping out with something fully developed as a surprise will face unexpected objections that sink the whole project.



a) Tool 1:



TITLE OF LITERATURE: the Myths of Innovation

AUTHOR : J. Birkinshaw et al.


COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT SLOAN MANAGEMENT REVIEW






1) Financial triggers are not what motivates innovators. Recognition is much more important. This means face to face contact to present ideas matters.

2) At the front line, continuous experimentation facilitated by local seed-money for small scale bets is required. As some of these small scale bets start to develop further and need more financing, the idea goes to a higher level where it can become a pilot project.


Preliminary sorting, scoring and feed-back of large numbers of ideas take a huge amount of time and effort by stakeholders and experts. If there is a lack of capacity to act on the ideas, this is demotivating.

Remedy: be very clear what problem you intend to solve and start idea collection only if a lack of ideas is already certain. If you go for idea generation, be prepared for the work.





Using external sources for innovation creates issues of intellectual property and trust. Also, the capacity to use the insights offered by outsiders may be stretched, with really radical ideas finding no receptive ear.

H. Specific tools that are explained (list briefly for each tool in what stage, by which role, why,

how it is to be used).

a) Tool 1: web 2.0

Just building a web 2.0 interactive site does not guarantee success. Many ideas that get posted are half-baked. Few people take the trouble to build on ideas of others.

TIP: if 1) you want to generate a wide variety of views about existing ideas, or 2) you are looking for a specific answer to a question (e.g. choose between options, narrow technical questions with factual answers), then an online forum can be effective. To avoid: big conceptual leaps (we want a radical new approach in…). Here you need to provide a stimulus to encourage people to think differently (e.g. what would our service look like if it was like your favourite restaurant). Also, if you want people to build on ideas of others and take responsibility for their ideas, use workshops.



TITLE OF LITERATURE: The innovative climate

AUTHOR : Trends

TYPE OF AUTHOR (academic, consultants, practitioners, other): business magazine

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Trends, March 2007






Innovation can lie in new technology but also new processes and organisation.


Never reward individuals, only the team. Focus on recognition.



Failure is when you keep going too long with an unsuccessful project. Stopping such a project is not failure but just a moment to capture the lessons learnt and move on.

F. What roles exist for different actors in the innovation process? What competences are

required for these roles?

Leaders must create a motivating environment for innovators so they can follow their passion. These innovators should be able to “own” their projects.

Teams should not be too small (eg 3 people) as there is too little diversity, but also not too large (eg 10 persons) as then it becomes inefficient to exchange knowledge.



a) Tool 1:



TITLE OF LITERATURE: Reverse engineering Google’s innovation machine

AUTHOR : B. Iyer et al.

TYPE OF AUTHOR (academic, consultants, practitioners, other): Academic

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, April 2008





B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements) 1) Be strategic ally patient, have a long term vision in mind rather than short term gains. 2) Employees have to spend 20% of their time on innovation projects. Managers also have

to spend 20% of their time on related, but different new projects and 10% on totally unrelated projects. This allocation is not by month or week but by year with accumulation possible.

3) Trust placed in employees to work on the right things combined with possibility to engage rapidly in experimentation is highly motivating.


1) Prototype, pilot, test as a controlled experiment. 2) Multiple parallel offerings are presented to users whose choices lead to adoption or

rejection. 3) People should be able to bump into each other without knowing where to go to spark

creativity.

4) How to define outputs of innovation e.g. in terms of idea, concept, prototype…?

5) How to make decisions regarding progress of an innovation?

1) If you fail, you should fail fast, so that you can try again. 2) Be analytical, data focused.

6) What roles exist for different actors in the innovation process? What competences are


Leaders should assess staff on their contributions to stimulate innovation eg. how often they organized a “tech talk” (see below). They should also make sure there are lots of opportunities to meet and talk to people with other perspectives.

7) How to organize interaction with external stakeholders (open innovation)? 1) Testing and marketing with users blends into one. Users become essential members of

the development team. 2) Allow others to come up with complementary services and link them to you own core

service. 3) Capture the information related to all users, whatever service they access, including on

its usefulness. 4) Organise intellectually stimulating “tech talks “with global experts, researchers.

8) Specific tools that are explained (list briefly for each tool in what stage, by which role, why, how it is to be used).

a) Tool 1: The internet is used for randomized experiments (eg multiple versions of a webpage and then see who clicks more).

b) Tool 2: Prediction markets are used to assess user demand for new services (eg ask 300 people a specific question regarding the future)

c) Tool 3: online idea box where all staff can comment on and rate the idea.



TITLE OF LITERATURE: Mapping your innovation strategy

AUTHOR : S. Anthony et al

TYPE OF AUTHOR (academic, consultants, practitioners, other): consultants

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, May 2006





B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements) Need to define where to innovate by asking: what jobs can our existing clients not get done. Discover this by seeing if services are used in unintended ways or whether they are clumped together for a suboptimal solution. Also, see who the worst clients are. Next, check if accessing the service goes beyond the means, capacity/expertise of some clients or requires to go to a centralised place.




1. The early focus needs to be on a checklist of criteria derived as follows: check out the last 10 major innovations both flops (particularly those though to become a sure hit) and successes (particularly those considered unpromising at first). Derive from this list of criteria to meet. In this way, you can avoid going for similar solutions as before.

2. Avoid staring at innovations for well-known large user bases because they can be calculated in terms of demand and cost. Chances are that these are very incremental innovations only. Better is to come up with ball-park figures and then to think through what would have to be true to make these number stick. This procedure can handle innovations aimed at difficult to measure, seemingly small markets too.

3. Teams with too much money can affords to keep going in the wrong direction, even when faced with unfavourable info, for too long with too much money allocated too early. Best is to invest a little to learn a lot via focused experimentation. You must identify the critical assumptions that you focus your knowledge gaining efforts on. This implies weighing the costs of being wrong about an assumption with the costs and time required for finding out more. This also means you must be willing to kill projects early if key assumptions are not met.

4. Four kinds of status exist: o Double down: move forward rapidly as most info gained points to success

with few tested assumptions being a big threat o Continue exploring: what is tested is positive, but some key assumptions

remain untested so keep testing o Adjust the game plan: the current approach seems not to be viable but

another may be so switch o Shelve: no clear path forward, move on to something totally different

5. The right kind of failure is success. Learning what is wrong and acting on this is a good thing.



Leaders must know that stage gate processes have led to us (project team) against them (decision-makers mentalities. However, senior leaders should act as problem solvers, not gatekeepers who only open or lock gates. They should get involved in the project, reviewing early prototypes, participate in brainstorms, help solve problems, to enable them to get a better feel for the project and its potential, rather than wait until the team presents itself in a meeting for a decision. This is not necessary for innovations in well-known markets where a traditional gate-keeper roles is OK.



a) Tool 1:



TITLE OF LITERATURE: Managing innovation strategy

AUTHOR : J. Duelli et al at Bain


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Bain







Step 1: identify and develop innovation options. First do a strategic review, drawing on the latest knowledge (from experts, literature, networks,…) in terms of approaches to get a basic understanding of possibilities. Then study the potential of these possibilities in terms of servicing clients and their needs. This entails proper segmenting according to characteristics different groups may value differently. Next for each possible approach and segment, come up with estimates for demand and cost. Finally, consider other service providers and whether or not they are already offering a particular approach or have a better capability to do so in the future.

Step 2: assess internal capabilities. For each option we investigate how much is really know for sure and what the probability could be of success. Next we look at the kind of capabilities we need (available in house or must they be brought in). Next, for the full portfolio of possibilities we map and cost and staff capacity requirements over time.

Step 3: value and prioritise options. Use decision trees to be able to compare various options based on probabilities of success of various phases they would go through. Also use qualitative criteria for elements hard to quantify.

Step 4: implement and manage. Multifunctional project teams start projects. They will need to go through pre-established go/no go checkpoints.

How to define outputs of innovation e.g. in terms of idea, concept, prototype…?

D. How to make decisions regarding progress of an innovation?

E. What roles exist for different actors in the innovation process? What competences are required for these roles?

F. How to organize interaction with external stakeholders (open innovation)?

G. Specific tools that are explained (list briefly for each tool in what stage, by which role, why, how it is to be used).

a) Tool 1:



TITLE OF LITERATURE: The eight esssentials of innovation performance

AUTHOR : M. De Jong et al. (McKinsey)


COMMISSIONER OF LITERATURE (IF APPROPRIATE): McKinsey






1. ASPIRE: A compelling vision is needed. But also, the innovation gap should be clear: how much of this vision will we be able to realise with current activity (existing, expanding)? Put it in numbers. The gap implies the need for innovation. Where there is no gap, there is no need for innovation or there is too little ambition. Try to break down the gap towards all those actors who are meant to contribute to it.

2. CHOOSE: a) Define innovation themes/spaces within which we will conduct searches for insights to create new value. This is helped by recognizing signals of change and understanding various possible scenario’s for the future. B) Create transparency in the portfolio of initiatives in terms of expected impact (scale of 1-10 depicted as a bubble), timing (1-2, 2-3, more than 3 years on X axis) and risk (high, medium, low on Y axis). Consider the distribution of initiatives (e.g. high risk, low value makes little sense; fewer high risk high value projects and more low risk lower value ones may make sense). Make sure all are linked to the themes. c) Ensure adequate funding to maturity for all initiatives. d) Keep the innovation gap in mind!

3. DISCOVER: this revolves around identifying the problems, issues that need an innovative response by an interdisciplinary team who draw up a list of possible actions and outcomes citizen want to realise. This is based on a) an analysis of the current value chains (who does

what when for/with whom until we reach the citizen). Consider if this can be reconfigured with the end customer in mind, given interests/positions of current actors and the regulatory context b) understanding citizen preferences through observation of behavior (ethnography, surveys, to find out about motivation for use of current services and how they are used). This may challenge existing segmentation based on demographics and current services. c) Understanding of (emerging or existing) technologies, approaches.

4. EVOLVE: act on the current value chain, reconfiguring it. Do this first with experiments.

C. How to organize innovation as a process in different stages? 5. ACCELERATE: get the innovations up and running fast by a) knocking down barriers (access to resources, channels, partners, people) that stand between an idea and the user who needs it. b) testing ideas early on, before they get diluted in stage/gate committees while keeping focus on the value proposition / concept c) have strong project managers who can say “yes” (rather than focus on “no”) d) have a cross-functional qualified team of project members dedicate 50% min of their time to the project to ensure the project focus and culture are in place to be successful. e) co-locate the team f) have frequent reviews with relevant managers/decision-makers driving towards decisions for next steps towards success rather than ticking boxes on “gate“ checklists. g) changes to the concept need to be deliberate and based on new info. They should be approved by a cross-functional review board to avoid accidental bias towards one viewpoint. Of course, enhancing the concept based on better understanding of the users’ needs or how to meet them is very much desired. 6. SCALE : a) consider the right scale to deploy the innovation. Sometimes something can only work a smaller scales, sometimes only at a larger one. b) use user test markets or reference customer installations to test before doing a large scale roll-out c) create anticipation and excitement d) think about and use all the different ways to get the service to the user e) ensure staff are trained, the facilities are adequate, partners are fully aligned, etc. and that everyone has the capacity to deal with the anticipated volume of users 5 strategies are described: Visionary:

driven by strong leader who sees paradigm shift early

Strategic: be in right position

Discoverer: focus on meeting hidden needs

Fast follower: outdeliver innovation to market

Experimenter: explore high number of avenues within broad areas

Aspire X

Choose X X Discover X Evolve X Accelerate X Scale X X X Mobilise X X



F. What roles exist for different actors in the innovation process? What competences are required for these roles? 8. MOBILISE: a) committed leadership is the greatest predictor of innovation success. b) innovation competitions are a good way to motivate but simply asking for good ideas is rarely effective. c) establish a dedicated team at business unit or corporate level responsible for driving innovation. d) support exchange of information (virtual/co-location; documenting lessons learnt from market, ideas, tests, …). e) visibly recognise innovators.

G. How to organize interaction with external stakeholders (open innovation)? 7. EXTEND: Use networks, co-create with partners and users. Foster a culture that welcomes ideas from outside and does not dismiss what does not seem useful initially too fast. This requires tightly managing the interface with the external community and being able to translate what is out there to something useful. Don’t just ask for ideas in general, ask them to source specific existing issues.


a) Tool 1:



TITLE OF LITERATURE: How the top innovators keep winning

AUTHOR : B. Jaruzelski et al

TYPE OF AUTHOR (academic, consultants, practitioners, other): consultant (Booz)

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy and Business issue 61





B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements) 1) Need seekers: superior end user understanding, active and direct interaction, first to

market. 2) Market readers: focus on incremental change and proven market trends 3) Technology drivers: driven by technical expertise, both in incremental and breakthrough

innovation, often focusing on unarticulated needs.





required for these roles? Common:

1) At ideation: ability to gain insights into customer needs and understand potential of emerging approaches

2) Engage actively with users to prove validity of concepts during development 3) Work with pilot users to roll out service carefully

Depending on strategy: a) Need seekers: connect directly and constantly even before selecting ideas for

development. Go back with prototypes to same sites were research was done originally and testy with users. Leave users to think about it, play with it and then come back to collect info.

b) Market readers: disciplined stage/gate processes to make sure right service hits users at right time. Engage with users throughout development to make sure it is feasible to deliver the service.

c) Technology drivers: pursue open innovation and give time to own staff (eg google % rule) to capture as many ideas as possible. Anticipate issues for users. Make long range scenario’s/road maps of future trends in terms of technology/techniques. Rigorous decision making in R&D portfolios to funnel the wide ranging ideas. Life cycle management.



a) Tool 1:



TITLE OF LITERATURE: Match your innovation strategy to your innovation ecosystem

AUTHOR : Ron Adner


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review April 2006









Initiative risk: feasibility of the service itself, likely benefit to users, relevant competition (if relevant), appropriateness of the supply chain (if relevant), quality of the project team.

NOTE: Venture capitalists expect 9 out 10 investments to be losses.



G. How to organize interaction with external stakeholders (open innovation)? The article focuses on the risks associated with external parties. 1. Interdependence risks: will different partners be able to satisfy their commitments

within a given timeframe towards a component of a larger solution that has to b co-delivered? Consult managers, double check with partners, check track records. Partners may be late due to internal development challenges, regulatory delays, incentive problems, financial problems, leadership crises or their own interdependence with others. Mathematically, if 5 partners have to co-deliver, the probability they will deliver on time is based on multiplying each individual probability. This means one weak link has a large impact on overall probability of delivering on time. The longest time it takes one of them to deliver determines the overall time (parallel timing).

2. Integration risks: as the number of intermediaries rises, so does the risk. In this case probabilities of delays are added. If benefits do not exceed costs at every intermediate step, intermediaries will not move the offering down the line. These intermediaries also need time to adjust to offering / cooperating in a new service (sequential timing).



a) Tool 1: ecosystem map

1) Identify all intermediaries and all complementors 2) Estimate delays related to all of them 3) Arrive at time to market

Maps vary according to the target market, even if the core innovation is the same.



TITLE OF LITERATURE: Creating value through business model innovation

AUTHOR : R. Amit et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT Sloan Management Review spring 2012





Business model innovation: “bundle of interconnected/dependent activities to satisfy a perceived need along with the specification of which parties conduct which activities and how they are linked to each other”.

An new business model can either a) create a new market b) allow to tap new opportunities in existing markets by:

a) Adding new activities to deal with shifts in needs (content) b) Linking activities in novel ways (structure) c) Changing the parties (incl customers themselves) that perform the activities (governance)

These elements can themselves be highly interdependent.





Success depends on whether value is generated via 1) innovativeness of the activities 2) incentives for partners / users to stay engaged (switching costs, network effects) 3) value enhancing complementarities 4) costs savings through the inter-connections

It is necessary to consider the interdependence between the business model and the revenue model (how the business model gets financed) for all parties involved.




a) Tool 1:



TITLE OF LITERATURE: Meeting the challenge of disruptive change

AUTHOR : C. Christensen et a;


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review March 2000





1) Sustaining innovations: make a service perform better in ways that users already value. Usually introduced by well-established organisations via fixed processes and consistent with values of more mature organisations.

2) Disruptive innovations: a new kind of service, initially worse if judged by mainstream customers. Usually bred by start-ups who can embrace small markets and revenues.


Change (to embrace an innovative idea) is very difficult for organisations where capability resides in its processes and values (priorities that enable to make judgments), as in mature organisations. It is less problematic when it resides mostly in people (as in start-ups).

To embrace change that requires new processes and values a new organisational space is required. Two ways are:

a) Create a “heavy-weight team” with its own resources and authority, allowing new processes to emerge, if the old processes are not compatible with the innovation.

b) Create a spin-out only when new processes are necessary AND the cost structure must be radically different for the new service to be viable or the size of the opportunity is too insignificant to be considered by the mainstream organization (no fit in values). Top management must take charge of this and adequately resource such a spin-out.

One can also purchase capability via acquisitions. If the capability is embedded in processes and values, it should not be integrated. Better is to infuse it with the new owner’s resources. However, if it is the people, technology or customers one wanted, these can be integrated.







a) Tool 1:



TITLE OF LITERATURE: Innovations uncertain terrain

AUTHOR : N. Rosenberg

TYPE OF AUTHOR (academic, consultants, practitioners, other): consultant

COMMISSIONER OF LITERATURE (IF APPROPRIATE): McKinsey Quarterly nr 3 1995




A. How to define innovation e.g. in types Truly major innovations have a knock-on effect: they induce further innovations across a wide front.

B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements) We have a remarkable inability to foresee the uses to which new technologies, techniques, approaches can be put. This is because they may at first be in a primitive state as well as have characteristics that cannot be immediately appreciated. This is due to the fact that we look at a new approach only from the point of view of the current and what it can do to improve the current. Sometimes, complementary evolutions are required before something becomes useful. This can have very long timeframes. Sometimes, old approaches become useful again in combination with the new. It also can take a long time before an innovation becomes embedded because people have to learn by doing and organizational change may also be required. Uncertainty is so large, that it is not a good idea to bet on only one thing but better to have a diversified portfolio .







a) Tool 1:



TITLE OF LITERATURE: Half your R&D is wasted, but which half and on what?

AUTHOR : JP Deschamps

TYPE OF AUTHOR (academic, consultants, practitioners, other): academic/consultant

COMMISSIONER OF LITERATURE (IF APPROPRIATE): AD Little






Deciding which customer needs or wants to address and on which ideas that address these to focus innovation resources remains a huge challenge. The tools for handling innovation AFTER these choices are made, in terms of developing and launching the best solutions, are much better established.

What is needed?

1) A set of clear strategic guidelines regarding where and how to play in the future together with unambiguous mandates for innovators on which problems or opportunities it should focus. This helps avoid the “cure all” problem work on everything at the same time).

2) Consistent commitment over time to these from decision-makers 3) Opportunities for innovator to get their own feel for how these priorities evolve in the world

of users (getting market exposure), to become better partners and challenges for their mainstream colleagues and

a. to avoid wrong focus by market immersion: talk to customers

b. to avoid tunnel vision by talking also to non-customers and other organisations

customers as well as the customers of customers or end-users down the chain to avoid missing opportunities missed by direct customers

c. to avoid searching for irrelevant perfection when a need has been met but one continues to look for a better solution anyway, one should have regular reviews of customer’s perceptions of what constitutes value

4) Tools for enhancing dialogue with others in the organisation (especially marketeers to avoid technology/solutions push and / or unaffordable solutions by

a. Having regular workshops with the rest of the organization to discuss potentials of new approaches and insights from market immersions

b. Providing funding only for short exploration at first. To move on, the innovators must find a sponsor in the organization. If they cannot sell it to themselves, then how will they ever sell it to anyone else.

c. Design to cost approaches. d. Constructive review processes enriched with outsiders (e.g. experts) to help find

cost)-effective solutions







a) Tool 1:



TITLE OF LITERATURE: Bringing open innovation to services

AUTHOR : H. Chesbrough


COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT Sloan Management review





Service innovation refers to something different than product innovation. While for the first, there is a linear process of material inputs being processed into outputs and then shipped to a customer, with services there is an iterative process between customer and service provider but also partners, complementors and others that results as a whole in a customer experience.

It may run like this: a customer comes with a problem. The customer is then invited to co-create the service, which may lead to provider eliciting tacit knowledge (usually with open ended questions) from customer (and vice versa), this is put to use to design/refine “experience points” (direct outputs for the customer based on the providers expertise and their understanding of the customer’s issue and context). Finally this is then offered. Not everything needs to be done by one provider. In fact, the provider may just be coordinating others. Then it is checked by the customer if this is addressing all needs or if some needs have not yet been addressed well enough. If OK, service provision starts, if not, then co-creation continues. All of this creates a customer experience.

A classification of innovation is offered:

-improve a service that is already offered

-extend this service

-come up with entirely new service offerings

B. How to formulate an innovation strategy (in terms of scope, types of innovation,

requirements)

Open innovation: this entails

1) Bring outside in: make use of ideas and resources of others (incl. users e.g. where they do part of the service provision themselves)

2) Bring inside out: bring ideas and resources to others

Fostering open innovation can be done by:

1) Team up with a particular customer (group) to solve a problem in a pilot, then offer more widely.

2) Focus on utility rather than instruments. People don’t want the instrument, they want their needs addressed.

3) Embed yourself into the customer organization (if relevant).







a) Tool 1:



TITLE OF LITERATURE: Reinventing R&D through open innovation

AUTHOR : H. Chesbrough


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy and Business, 2003 (Booz)





B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements) Open innovation =

• Rethinking the R&D function from research all the way up to development into a unit that looks for opportunities to exchange Intellectual property with others

• This requires switching from a focus on depth to one on breadth and integration








a) Tool 1:



TITLE OF LITERATURE: The era of open innovation

AUTHOR : HW Chesbrough


COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT SLOAN Management review, Spring 2003





Open innovation means ideas can become real not by deploying them internally where they started, but somewhere else (eg in a new perhaps even joint venture, via licensing). It also means ideas from elsewhere can be brought in an deployed. This means that IP (intellectual property) is not about “locking it up”, keeping it secret from others anymore but finding ways to benefit from sharing.





Open innovation idea screening not only tries to get rid of false positives (look good but are bad) but also retain false negatives (look bad, but are actually good). This is possible because what looks bad

from one point of view, due to a constraint given by the current business focus, may look good to someone else.


1. Funding: a. Innovation funders: have money to move ideas into the market (g via start up) and

offer advice in this. b. Innovation benefactors: money for early stages of research discovery.

2. Generating: a. Explorers: specialise in discovery research for innovation’s sake b. Merchants: also explore but focus more narrowly to create IP that can be sold to

others c. Architects: organize others to develop a complex offering where they need to make

sure all parties benefit sufficiently d. Missionaries: selflessly , because they want to see a higher cause achieved, develop

and share an innovation (eg open source movements) 3. Deploying:

a. Marketers: keep finger on pulse of user needs and focus on bringing in ideas from others that could meet these needs

b. One-stop centres: do the same but for a more comprehensive offering, to be deployed together with others.

A new function will be “brokers” who form markets for Intellectual Property.


If an idea generated somewhere is not acted on by an organization within, say 3 years, then it should be offered to others.



a) Tool 1:



TITLE OF LITERATURE: A better way to innovate

AUTHOR : HW Chesborough


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, July 2003






Mobile knowledge workers more widely dispersed than ever + the internet (cheap and fast flows of info) = demise of old model of ‘closed’ innovation (based on shielding Intellectual Property from others).

Examples of open innovation:

1) Export: a. Delivering services for others under their name. b. Sell ideas to others c. Sell competences/capabilities to others

2) Import: a. Academics, researchers are “rotated” into an organization for time (eg 2 years) and

then return to the university b. Use external idea scouts (like Big Idea Group) to find ideas “out there” c. Use online knowledge brokers







a) Tool 1: online knowledge broker tools like a. http://www.innocentive.com/

http://www.innocentive.com/



TITLE OF LITERATURE: The new business logic of open innovation

AUTHOR : H. Chesborough

TYPE OF AUTHOR (academic, consultants, practitioners, other): acedmic

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business School, 2003





B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements) One principle is : It is not necessarily having the very best individual service that matters, but how it is integrated with other offerings by others. There are other principles:

Closed Innovation Principles Open Innovation Principles

The smart people in the field work for us.

If we create the most and the best ideas in the industry, we will win.

To profit from R&D, we must discover it, develop it, and ship it ourselves.

External R&D can create significant value: internal R&D is needed to claim some portion of that value.

If we discover it ourselves, we will get it to the market first.

We don’t have to originate the research to profit from it.

The company that gets an innovation to the market first will win.

Building a better business model is better than getting to the market first.


If we make the best use of internal and external ideas, we will win.


We should profit from others’ use of our IP, and we should buy others’ IP whenever it advances our business model.







a) Tool 1:



TITLE OF LITERATURE: Design thinking

AUTHOR : Tim Brown


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review June 2008


• innovation in general: X • innovation by / within the public sector: • innovation oriented towards citizens: X • innovation oriented towards social and employment issues typically dealt with by ESF:




Initiate revolutionary innovation from the top, while expecting incremental from below.


Edison’s approach was not to set out to validate pre-conceived hypothesis but to help experimenters learn something new from each iteration / try (99% perspiration).

The innovation design process is best seen as a system of three spaces, that must all be (re)visited at some point, rather than a predefined series of orderly steps: 1) inspiration for the circumstances 2) Ideation for the process of generating, developing, testing ideas that may lead to solutions 3) Implementation for charting a path to roll out for the solutions that were withheld. Projects will loop back more than once (especially in the first two spaces).

Innovation should focus on human needs e.g. by using direct observation to detect these.

Teams should come up with a first prototype in the first week of a project. They should expose rapid prototypes to many users throughout the project.

Co-create with users, exploit web 2.0

Get designers involved.

Ensure people can stay involved the full length of the project from start to finish.




Teams should be interdisciplinary.

Design thinkers have the following profile:

• Empathy: see the world through different perspectives incl. users and focus on needs of people. Observe in minute detail, noticing things others do not.

• Integrative thinking: can see beyond the obvious • Optimism: believe at least one potential solution will be better • Experimentalism: pose questions, explore constraints in creative ways • Collaborative: most have a diverse background, master more than one discipline. This goes

beyond just working with other disciplines.



a) Tool 1:



TITLE OF LITERATURE: IDEO service design

AUTHOR : INSEAD case


COMMISSIONER OF LITERATURE (IF APPROPRIATE): INSEAD







1) Observe: observe and empathise with users instead of sending surveys 2) Synthesise: step back and distill info into guiding principles for the solutions that are to be

designed 3) Generate ideas: cast a wide net using brainstorming. Go for quantity, build on other’s ideas,

no judgment, stimulate wild, stay on topic, be visual (write ideas on cards and put on walls) 4) Rapid prototyping: quick and dirty (no frills) prototypes (using mock-ups of spaces, services

etc, videos, role plays with different kinds of user roles ) are used to refine ideas and flesh them out early. Each iteration brings the idea closer to the final solution.

5) Refine: narrow down to a few possibilities now, focusing prototyping now on a few key ideas to arrive at an optimal solution. Get agreement from stakeholders.

6) Implement: bring all resources to bear when making the service happen.




Knowledge sharing is done via stories (Monday morning meetings, leadership meetings, lunchtime show and tell, …)



a) Tool 1: customer journey map: account for all the different service “touch points” where the users interacts with the provider.

b) Tool 2: fly on the wall: watch what people actually do c) Tool 3: “Be a” . Choose an inanimate object (not people but eg a file) and observe the path it

takes and the interactions that occur within a system. d) Tool 4: Customer segmentation based on insights from observation e) Tool 5: Experience architecture: visualization of the “new” customer journey f) Tool 6: user evolution pathway: shows how user experience evolves over longer term with

multiple interactions g) Tool 7: Extreme user research: extremely familiar or unfamiliar with service h) Tool 8: Design principles and style guide: principles and more detailed rules for design

derived from observation /interviews i) Tool 9: brainstorming j) Tool 10: rapid prototyping: use mock-ups, movies to depict user experience, storyboards,

role playing (all stakeholders) k) Tool 11: shadowing: tag along with people to observe their daily routine l) Tool 12: visualize user experience with drawings and diagrams m) Tool 13: character profiles (archetypes) based on observation: the typical customers come to

life (may attach different value to different concepts) n) Tool 14: Camera journal: visual diary of user experience o) Tool 15: narration: ask to describe aloud what users are thinking as they engage



TITLE OF LITERATURE: Design thinking for social innovation

AUTHOR : Tim Brown et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Stanford Social Innovation review Winter 2010





B. How to formulate an innovation strategy (in terms of scope, types of innovation, requirements) You need to think systemically. Consider not only form and function but also channels .

C. How to organize innovation as a process in different stages? System of overlapping spaces (see also article 20, Design thinking by Tim Brown) as they are visited more than once as the team refines ideas and explores new directions. 1. Inspiration:

a. identify problem/opportunity. Brief also gives constraints: price/costs, available techniques/technology (how), market segment (who). The brief should not be too abstract as the team will wander, nor too constrained as only incremental solutions will develop.

b. Discover needs: although people cannot tell what their needs are, their behavior reveals it. Need to work with local partners: serve as cultural guides and interpreters, make introductions, help build credibility.

2. Ideation: generating, developing, testing ideas. a. Synthesis of finding

b. Brainstorm of ideas: multidisciplinary people required for divergent thinking.

100s from absurd to obvious. Use visuals. No devil’s advocates allowed. At the end, grouping and sorting. The best ideas naturally rise to the top. These should be competing ones to increase chances for bolder outcomes.

3. Implementation: get it into people’s lives. a. Prototype, test, iterate. Uncovers unforeseen implementation challenges and

consequences. Can concern a detail in an interaction in a service or b almost like the full real life thing as time goes on.

b. Communication plan: storytelling via multimedia helps to communicate the solution across a wide range of stakeholders, across language and cultural barriers.




Openness, curiosity, learn by doing, empathy



a) Tool 1: positive deviance: find people who are already doing well, unexpectedly (as most others are not). These are a form of ‘extreme’ people who think and act differently than the regular people.



TITLE OF LITERATURE: The innovation value chain

AUTHOR : MT Hansen et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review






An innovation process is only as strong as its weakest link. All links must function.


Three sub-processes:

A) Idea generation: look first 1) inside, but bigger sparks come when fragments of ideas come together, 2) across units or from 3) external sources, even outside the sector.

a. Needs a solution network where “briefs” (the challenges that need to be tackled and constraints) can be launched or specific problems/technical issues put forward for answers (where the best can get a financial reward)

b. Other way is a discovery network. This can be a scouting unit where staff only spend time unearthing new ideas in broad domains / themes. These staff cultivate personal relations with researchers, academia and others who generate ideas. Diversity of contacts, NOT number is key here.

c. Support internal networks: it is not enough to just bring people together for a

brainstorm one in a while. Ongoing dialogue and knowledge exchange and the trusting relationship that goes with it is key.

B) Idea conversion: Need to balance the tendency to kill innovation by too strict criteria, tight budgets and conventional thinking with the one to let everything pass through weak screens where the organization overflows with new ideas of varying quality (often underfunded and understaffed) and no sense of how these fit into an overarching strategy.

a. Specific seed funds allow to fund ideas from anywhere until they reach “proof of concept” stage and go into further development elsewhere. These are like venture capitalists.

b. A specific unit can be set up for new ventures, with a project champion leading them. This helps shield new ideas from the business as usual. On the other hand, it is necessary to keep line managers on board eg via a board; to enable access to line resources.

C) Idea diffusion: it is necessary to get the right stakeholders, incl. users, to support and spreads the innovation. Hence, someone must make sure innovations do not just languish somewhere as everyone is too busy doing other things. You need to create a “buzz” for new concepts. “Idea evangelists” use their deep, personal networks to do this.


Proof of concept is mentioned but not explained.



See above in process: scouts, idea evangelists, internal venture capitalists, project champions. These need not be full-time roles.



a) Tool 1: www.innocentive.com used to resolve specific technical issues (where the best can get a financial reward)

b) Tool 2: Shell Gamechanger (start with submission into website)

http://www.innocentive.com/

Ideas are submitted by anyone from anywhere at any time (1) via a web portal, and are also developed in focused-topical workshops. Submissions are kept very simple – a single free-form paragraph giving a rough description of the idea. Every idea’s submitting ‘Proponent’ is assigned a ‘Sponsor’ within the GameChanger team in weekly meetings. The Sponsor arranges for a ‘Screening Panel’ (2) wherein any two members of the Gamechanger team hear a brief summary of the idea from the ‘Proponent,’ and decide on the spot whether it was worth developing into a formal proposal. If needed, modest funds (<$25,000) can already be allocated by that two-person panel to do the work necessary to Mature a more robust investment proposal (3). When ready, the investment proposal is pitched to an ‘Extended Panel’ (4), consisting of any three Gamechanger team members, plus at least three experts with deep relevant knowledge in the technology and business the idea was addressing. Experts are hand-picked by the Sponsor and are generally energized to have an opportunity to see and comment on ideas in their field of expertise at an early stage. The GameChanger ‘Sponsor’ orchestrates a simple process that creates room for questions to be asked before opinions or judgments can be made. In a key design attribute, the expert panelists are asked to render their recommendation, but the decision is left to the Gamechanger team members present, who after brief private deliberation, immediately take the decision whether to invest in the proposal or not using a consensus decision process. Proposals are frequently modified based on input from experts. The decision and the reasoning for it was recorded in summary minutes and delivered to the proponent promptly – usually within 24-48 hrs.

If approved, the project is allocated a tranched schedule of funding to Execute the approved proof-of-concept experimental program (5). The Extended Panel is reconvened at ‘Tollgates’ to take decision and modify plans for continued funding (6). An average project plan invests ~$500k over ~24 months in about 3 phases of work. Sponsors proactively work with Proponent teams to drive their projects through this plan, and adapt to changes and new opportunities along the way. The best projects ‘attract’ other people to help develop the opportunity by filling critical skill gaps along the road. The project is considered complete only if and when another team or department in Shell accepts a proposal to continue development of the proven concept (7).



TITLE OF LITERATURE: The stage-gate idea to launch process update

AUTHOR : R G Cooper


COMMISSIONER OF LITERATURE (IF APPROPRIATE): J. Product Innovation Management, Volume 25, Number 3, May 2008







There are 5 stages, AFTER “discovery”:

1) Scoping 2) Build business case 3) Development 4) Testing and validation 5) Launch

Stages 1 and 2 involve very little funding.

Each stage is designed to gather info to reduce key uncertainties. Each costs more than the preceding one. Within 1 stage activities are undertaken in parallel by different functional areas: there is no R&D or marketing or engineering or production stage. They are all involved in each stage. This team must

be engaged from start to end, under leadership of a project captain. There are NO hand-overs between functions.

Open innovation can happen at all stages.

As of stage 2, spirals to users are foreseen (build/test/feedback/revise loops)

• In stage 2, this is done a first time to understand unmet needs, benefits sought, problems with the new service. Not much is showed to users, it is more about listening and watching. The second time it is done with a representation of the proposed service. This should be enough to give users a feel for the service. Think about a dummy brochure, a storyboard to simulate a TV ad, … The aim is to gauge interest, liking, preference and intent to engage. Dislikes and necessary changes are input to the next phase.

• Successively more detailed, integrated prototypes are fed to users and adapted based on their feed-back.

This also means that although stage 4 is a testing phase, tests are conducted also in 2 and 3 but then on parts / mock-ups.

Certain projects (smaller, less risky such as improvements, modifications, extensions) should go faster. They make takes stage 1+2 together as wells as 3,4,5. Others may do 1+2, 3+4 and 5.

Some key mistakes to avoid:

a) It is NOT a linear process: • Not all project go through all stages or gates • Activities can be moved from one stage to another • Activities and deliverables can be by-passed • Activities and Stages may overlap. This increases risks so the benefit of this (e.g. speed)

versus the risk has to be weighed. • Inside stages there is much iteration but also between stages there can be iteration. b) It is not a substitute for project management. Project management (team building, timelines,

critical paths, milestone reviews) must be applied within each stage (as appropriate). c) Have long lists of required activities / deliverables per stage everyone must do. There is NO

universal list. It is the project team that proposes a “go-forward” plan from which next gate gate deliverables are derived in advance.

A final stage is the post-launch review: how well did a new service actually do in the end, relative to what the project team foresaw? Typically about three months after launch. After that a monitoring of 2 years is done. If projections were very wrong, try to ascertain why and try to trace it back to the innovation process to avoid this happening again.



Gates consist of 1) deliverables (decided at the previous gate) , 2) criteria with “must meet” knock out criteria and “should meet” (with points) for prioritization, 3) outputs namely a decision and action plan for the next stage (timeline, resources, deliverables).

Gatekeepers should be only the senior people who OWN the resources, required for the project team to move forward. Seniority increases with funding: at gate 1 and 2 mid-level managers, ramping up to senior for 3,4,5 for major projects (for smaller ones, mid-level again suffices).

Mistakes to avoid:

a) If all resources are approved for a project at the first gate, it will not be possible to kill it anymore.

b) If the gatekeepers are also the same people as the project leaders this usually means gatekeepers want to use gates as control systems to micromanage the project.

c) Deliverables over-kill: detailed explanations or research, overly detailed descriptions, etc. add no value for decision –making. Gatekeepers should know the project and whether the deliverables were properly done before the meeting (the meeting is not an education session). The quality of the data is NOT the focus of the gate meeting. The focus is now on risks and commitments required, based on the data. Try to go for one-two pages (with four pages as attachments) and three slides. It is NOT about showing the work that was done but to highlight the results from work that help decision-making.

A 60-90 minute meeting should go as follows: 1) project team present 2) vigorous Q&A session where gatekeepers challenge the project team 3) each gatekeeper scores individually 4) results displayed. Areas of disagreement highlighted and discussed. It is also possible here to see how a team scored themselves.

An example of a list of criteria:

Extra ‘process’ criteria could relate to the project team’s capability: eg how well they deliver on their own plans (costs and timing), how good their work is, how well they are able to keep users on board.

While stage/gate is focused on individual projects, portfolio management is required as well to manage the whole set of projects. Portfolio management requires good stage/gate processes: how else will it be possible to compare projects if the data required to make comparisons is not agreed at

a gate. But it happens twice to four times a year and looks at the mix of projects (eg short term vs long term, high vs low impact, high risk vs low risk) within a strategic theme/area.




a) Tool 1: rules of engagement for gatekeepers



TITLE OF LITERATURE: Developing products on internet time

AUTHOR : M. Iansiti


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review Sept/ Oct. 1997







The article describes a flexible development process (eg as used for IT but also at Toyota).

Flexible innovation development delays until as late as possible any commitment to a final design configuration. Several options are kept until finally only one is kept for final implementation. Concept development and implementation therefore overlap.

The key is to come early to users with not fully developed (parts of) prototypes. Then go into numerous (parallel for parts) design/build/test iterations, gradually adding functionalities and integrating them. This allows to continuously integrate (changing) user input.

Three guiding principles are:

1. Sensing the market: creating intensive links with the user base (via experimentation with many users to selective experiences with a few lead users, if otherwise less adept users

might be frustrated). Users need not be external. Ask questions like: what do you hate most in…

2. Testing solutions: experiment with various options first eg starting with simple prototypes, making them increasingly complex to see dis/advantages for the user. Then based on the data, make choices for an option.

3. Integrating user needs with solutions: if different team members are working on different parts (all iteratively with users), it is crucial to anticipate and guard interactions between parts. Otherwise, it will be hard to integrate to a whole, with significant delays. Therefore, someone needs to have the overview, allow sub-teams to check-out a part of the whole, work on it, check for interaction with the whole and then check it back in. IT can support this (eg wiki showing versions and what changed when).






a) Tool 1:



TITLE OF LITERATURE: Stage gates can kill innovation

AUTHOR : W. Koetzier, et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Accenture








E. How to make decisions regarding progress of an innovation? In stage gate processes decision-making bodies often weed out big ideas in favor of small safe ones, sending proposals back for more research, creating time consuming, motivation / creativity numbing rework loops. Traditional risk aversion skews decisions to improving / extending existing services. Missing new opportunities and discontinuities.

A failed experiment is seen as a real failure, rather than a cost-effective way to avoid dangerously wrong future steps. Venture capitalists understand that only one out of ten experiments will really yield results. The other 9 are part of the investment for the 1. Rewards should be given for such failures. An approach is required with cross-functional teams working iteratively through the market with frequent tests. A dialogue has to be held to determine which risks (financial, operational, reputational,…) are acceptable and which not. Within this risk tolerance, failure is acceptable.




a) Tool 1:



TITLE OF LITERATURE: Next generation product development



COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy and Business (Booz), May 2011







First generation stage-gates were rigid and linear, locking in user preferences and risks in at the beginning. Second generation (lean) became better by adding continuous touch points with users (for concepts, prototypes, features) alongside development and launch. But they also lock in service attributes/requirements too early, rather than iterating, optimizing and trading off various requirements to get to the final design.

Third generation is based on frequent iterations of multiple design options early in the process, based on multiple testing and user driven design change.

This third generation (as used by Toyota) attempts to deal with the issue that up-front, user needs cannot really be properly understood. When design issues are then decided at the start, risk increases that much will have to be reworked later on (with cost overruns and delays).

There is a front and a back end.

1) Front end:

a) Rapid, iterative development: generate multiple concepts and in period of weeks, rather

than months, test prototypes. As results come in, cross-functional teams work together in problem-solving sessions to produce a blueprint, based on user responses and then new ideas that this generates.

b) Modularity: a concept can be broken in parts that can be worked on in parallel. Design teams have to reunite the models before the next iteration takes place. This is done in “architecture sessions” where integration issues must be addressed.

c) Early risk identification: by iterating and synthesizing, risk become clear. These must be addressed by scheduling more tests.

d) Intensive stakeholder involvement: someone on the project team needs to have the dedicated role to do this and bring stakeholders at crucial points into the process. For suppliers/channels helps to define critical to quality elements so these stakeholders are ready for it by the time of roll-out.

2) Back end: work to launch

a) Reusable platforms and modules: features that are necessary but on their own not highly valued by users are separated into common modules to which what users DO value can be connected.

b) Just in time info and resources: pull expertise on demand for some specialised work. Helps save resources.

c) Lean supplier integration: derives from the stakeholder involvement of the front end. d) Responsive change-control system: constantly think how to reduce time to market by

removing bottlenecks.




Requirements are a highly collaborative culture, including with outsiders. Continuously scout, filter, and channel info from outside.

Deep well of sophisticated user knowledge, derived from spending substantial time in the field, observing users.



a) Tool 1:



TITLE OF LITERATURE: Building an innovation factory

AUTHOR : A. Hargadon et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, May-June 2000










Knowledge brokers:

1) Capture good ideas: as they span multiple locations, sectors, disciplines, they find “old“, existing ideas in operation elsewhere and play with it in their minds (how and why it works

there, what is good and bad, how it could be used in a different context). They may also do more focused work on specific issues (collecting research, doing some research of their own, eg observation studies of users).

2) Keeping ideas alive: rather than filing ppts and docs in online systems, it is more important to have good “yellow pages” , listing who knows what on what. A rapid response team can link anyone with useful knowledge to anyone with a problem within 24 hours. Those willing to share knowledge should be recognized for their efforts.

3) Imagining new uses for old ideas: organize meetings, brainstorms, informal conversations where people share problems AND solutions.

4) Putting promising concepts to the test: early enough, drop it when evidence is against it. Keep the lessons for use later on (learning why an idea failed is key knowledge when looking for solutions in the future.

They are relentlessly curious, don’t care where ideas come from as long as they work –they reach out for help and ideas often-, they are not arrogant but humble while still confident.



a) Tool 1:



TITLE OF LITERATURE: Is your company choosing the best innovation ideas?

AUTHOR : M Reitzig


COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT Sloan Management Review Summer 2011







Idea generation: best is to begin with as many people as possible and the encourage to contribute their ideas, before discussing them in groups.



Innovation is characterized by uncertainty: long term benefits are not visible and hard to predict at the moment a first selection is made.

If the project selection process is delegated to lower level managers, the risks are:

a) Promoting ideas seniors would not find OK b) Skipping those seniors would have wanted

But seniors can never review all proposals. They need funnels where a) lower managers do a first selection and follow up afterwards b) ideas are flagged for attention of top management

There are several biases that should be accounted for and can be used to control the flow of decision-making

Rejecting/approving:

a) Proximity bias: belonging to a same reference group and knowing each other will help get selected. To reduce/increase selections: have dis/similar evaluators paired with proposers

b) Theme bias: a theme that is more familiar to the decision-maker will also be favoured. To reduce/increase selections: have evaluators less/more familiar in terms of the theme paired with proposers

c) Length of the proposal: in an example the optimal was about 250 words (1/2 to 1 page). Too long = lack of focus. Too short = insufficiently thought through. Standards for length have to be communicated.

d) Tone of the proposal: highlighting impact based on opportunities instead of the problem/threat that will be addressed helps selection. If you want more / less proposals approved ask for stress on positive versus negative.

Passing on the senior managers

e) Size of the organization: if there are more colleagues, proposals will be passed on more rather than rejected.

f) Degree of hierarchy: the more hierarchical, the more they will pass on to superiors.




a) Tool 1:



TITLE OF LITERATURE: How to let 999 flowers die

AUTHOR : F. Vermeule,

TYPE OF AUTHOR (academic, consultants, practitioners, other): consultant (Booz)

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy+Business Autumn 2013









Many lower end managers do not choose bold, risky ideas as they think their superiors might reject these and this would be bad for reputation.

Senior managers tended to choose proposals they liked, usually those that fit their preconceived notions.

In both cases this leads to lack of variation in selection.

1) A key recommendation is therefore that top managers should accept they should not make selections themselves. Rather, they should enable selection to happen elsewhere eg organizing markets where creators of a proposal can explain their proposal and answer probing questions from colleagues. Then, ideas can be funded if someone wants to sponsor them. Lack of interest means being selected out.

2) As it is hard to make predictions, use the wisdom of crowds: ask a lot of internal / external people and average.

3) Objectivize the process: rather than keep committing to something that does not work (anymore), make decision on the basis of hard facts only eg by using numbers into a formula.

4) The information revealed at one decision point should guide the next investment, and so on. 5) Maintain bottom up driven internal experimentation and selection while at the same time

maintaining top down strategic intent: this creates boundaries within which meaningful variation/selection can happen. People need a ‘box’ to channel creativity. But do not make them too narrow as this will inhibit new ideas.




a) Tool 1:



TITLE OF LITERATURE: Enlightened experimentation

AUTHOR : S. Thomke


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review February 2001







1. Organise for rapid experimentation: a. Use small development groups with key people with all knowledge required b. Parallel experiments only when time matters, cost is not an issue, developers do not

expect to need to build on the current round for another one. Otherwise, use sequential experiments.

c. Beware of rapid prototyping if you lack capacity to process all the info from each round.

d. Also beware of thinking only of the cost of experimenting eg when people from the frontline are necessary to engage in the process. The cost of taking them away from their work is small compared to the benefit for the innovation process.

2. Fail early and often

a. OK when this advances knowledge. Mistakes (eg a poorly planned and executed

experiment) on the other hand do not produce an knowledge. A mistake is also to repeat a prior failure.

b. Requires learning objectives and hypothesis (what do you expect) c. Requires cheap, rough prototypes, rather than expensive fully developed ones. Straw

men are easier to throw away. 3. Low fidelity experiments (cheaper) are best at the early stages, high fidelity later to verify the

final service. Low fidelity can still force problem solving and communication with down-stream groups at an early stage. Keep them rough, rapid and right (=incomplete but still getting specific aspect right).Forces people to think about which aspect need to be right and which can be rough. Helps keep up with evolving user preferences.

4. Do not expect new approach to just replace the old. Usually combinations work best.






a) Tool 1:



TITLE OF LITERATURE: Is it real? Can we win? Is it worth doing?

AUTHOR : G. Day


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review December 2007





Small I: 85-90% of total portfolio. Incremental, safe.

Big I: risky, push into new markets or use new approaches


Risk matrix: the less familiar the intended market and the service or its technology/approach, the higher the risk.

For market / users ask how: same partially overlap different

a) user behavior and decision-making b) current intermediaries c) position of other providers

Highly relevant somewhat relevant irrelevant

d) current user relations e) our reputation

For approach ask:

fully applicable requires significant adaptation not applicable

f) current development capabilities g) current approach h) current delivery system

identical to current overlap somewhat not applicable

i) The required knowledge bases j) The necessary service functions k) The expected quality standards

Scales are always from 1 to 5 and subscales are added to find the total. This is then mapped onto an X (market similarity) and Y (service/approach similarity) axis.

One can expect 75-95% to fail if both dimensions are “new”. Only 25-40% fail if both dimensions are similar to current.




The screen is elaborated for the early stages of a proposal, to test concepts. In later stages, testing prototypes and early in the launch would need modification of the details, not of the larger headings.

The following questions need to be answered. A no to any of the five fundamental questions results in termination of the project. The sixth question is more forgiving.

a) Is the market real? This question comes before the question “can we make it happen” as market robustness is almost always less certain. Failure tends to be greater if market is uncertain. Also, it is important to prevent a technology push that emphasizes how to solve a problem rather than whether and what problem should be solved

1. Is the market real?

i. Need for the service? Surfaced through market research, ethnography,…to

explore user behavior, desires, motivations, frustrations ii. Can the user access it / afford it? Objective barriers, regulatory

requirements, … iii. Are there enough users?

• Will they use? What are subjective barriers? Why would they (not) want to switch from another service to this one? Eg because of habit, something else is on the horizon, perception it is risky to change,

iv. Important to keep asking user oriented questions, especially if compromises are made in the service concepts, to see whether the appeal is still there.

2. Is the service real? i. A clear concept?

• What are the requirements for the service? ii. Can it be delivered?

• Can it be done within current approach with current resources? Or is a big change necessary?

• Can it be delivered /accessed cost-effectively? Or so costly no one would want to deliver/access it? Will required intermediaries/ complementary service providers cooperate? Is it legal/ within regulations?

b) Can we make it happen? 1. Does the service have something better to offer than what exists?

i. What is the superiority over a current service? Both in terms of tangible (lower costs, better achievement, …) and intangibles (social acceptability, reduced risk perception,…).

ii. Is it sustainable (incl. in terms of financing)? iii. Will others want to offer the service?

2. Can we (and/or others) do it? i. Do we have the resources? Can we get them?

ii. Do we have the management? Passionate go-between who can convince others?

iii. Can we understand and respond to users? Do we have iterative feedback cycles foreseen?

iv. What about others? How will they react? Is this good /bad? c) Is it worth doing?

1. What is the hoped for impact relative to risk? i. Cost-effectiveness

ii. Risk: what could go wrong? What would be the consequence for cost-effectiveness?

2. Does launching make strategic sense? i. Does the service fit within the overall strategic orientation?

ii. Will it create opportunities to expand into new areas afterwards?





a) Tool 1:



TITLE OF LITERATURE: Review of Roger’s diffusion of innovation theory

AUTHOR : I. Sahin


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Turkish journal of educational technology April 2006





“An innovation is an idea, practice or project that is perceived as new by an individual or other unit of adoption”







Uncertainty is a major obstacle to adoption of innovations.

To reduce it information should be available about advantages / disadvantages of adopting AND rejecting.

The factors below all play a role in different stages.

1. Knowledge: • Awareness of the innovation first • This is a trigger to get two other kinds of knowledge:

o How to use it correctly: critical for trials and hence for complex innovations where one needs to be able to try something first (see below )

o How and why it works: influences attitudes 2. Persuasion: • Social reinforcement of others, particularly close peers subjective assessments (more than

experts, science):

Innovators and early adopters are key in getting others to adopt.

Innovators - These are people who want to be the first to try the innovation. They are venturesome and interested in new ideas. These people are very willing to take risks, and are often the first to develop new ideas. Very little, if anything, needs to be done to appeal to this population. They can bring in the new ideas first, but they are rarely widely respected leaders but tend to be “technicians” who have complex technical knowledge.

Early Adopters - These are people who represent opinion leaders. They enjoy leadership roles, and embrace change opportunities. They are already aware of the need to change and so are very comfortable adopting new ideas. Strategies to appeal to this population include how-to manuals and information sheets on implementation. They do not need information to convince them to change. THEY reduce uncertainty for others.

• Perceived characteristics of the innovation: o Relative advantage:

Prevention (averting unwanted futures) less quick to be adopted than when need is acute and benefits are therefore quick

Includes also social status aspect for innovators and early adopters o Compatibility:

With existing values, past experiences, needs of adopters o Complexity:

Difficulty of understanding and using o Trialability:

Can it be experimented with on a limited basis? Very important for early adopters! Very important for complex innovations!

o Observability: Degree to which results are visible to others

3. Decision:

• Possibility to try innovation in own situation

4. Implementation:

• Uncertainty about outcomes can still be a problem. Technical assistance from change agents

may still be required to reduce uncertainty. • Reinvention usually happens now (modification by users). The more this happens, the more

chance that and speed for institutionalization of the innovation

5. Confirmation

• Decision can be reversed if there are conflicting messages about the innovation. Usually, one stays away from these kinds of messages. However, it can lead to disenchantment and hence abandonment. It is also possible a better innovation comes along that pushes out the intended one.

On all stages communication channels are to be applied:

• For knowledge: cosmopolite (connect with outside) and mass media

• For persuasion/decisions : localite (connect individuals with inside sources) and interpersonal channels


a) Tool 1:



TITLE OF LITERATURE: Going slow to go fast

AUTHOR : M. Mass et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): McKinsey Quarterly 1995






Go slow and spend enough time/resources up front (concept, prototype development) actually yields less costs and delays downstream. This works because:

• Overall design costs increase only to a small extent, as the bulk of spending is still downstream and less rework costs there will be the result

• Also, lower costs of fixing the service after launch can be expected

This means “quality” gates early in the process are of key importance, while later ones matter less.

Tips:

• The CEO or other senior manager must be the visible sponsor of innovation. • Dissect root causes of failure / success of innovations in the innovation process. • Try out improvements in how you run innovation processes with pilots. Check if they bring

indeed the hoped for improvements.







a) Tool 1:



TITLE OF LITERATURE: Using prizes to spur innovation

AUTHOR : J. Bays et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): McKinsey Quarterly July 2009







Prizes are used not just to reward excellence anymore (eg in research). These are the traditional “exemplar prizes” that focus attention on standards of excellence in a theme (Nobel prize).

Prizes are now also used to stimulate innovation:

• Exposition prize: set a challenge to get a range of best practices, ideas or opportunities to be highlighted. Also promote ideas that did not win.

• Network prize: to celebrate a community for its innovation efforts. • Participation prize: offer training or mentorships for winners. • Market stimulation prize: drive development cost down through competition. • Point solution prize: solve a challenging, well defined problem / issue.

Prizes require:

a) A clear objective (measurable and achievable within a reasonable time frame)

b) Availability of relatively large population of potential problem solves c) Willingness of participants to bear some risks and costs

If these conditions are not met, grants or a combination of a prize with other instruments may be better. See figure below:






a) Tool 1: Ashoka Changemaker competition. Set prizes at 5000 USD.



TITLE OF LITERATURE: Spurring innovations through competitions

AUTHOR : A. MacCormack


COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIT Sloan Management review







Unlike contracting or writing a grant which requires to select best approaches in advance and invest in only a small number of providers, competitions leverage the entire ecosystem.

Drawbacks are questions about ownership of intellectual property and potential duplication of resources. It is also necessary to invest in the infrastructure to identify proposals, a cost of be added to the prize money itself. Evaluation of many proposals is also costly if it cannot be automated in some way.

They are based on:

1) Motivation effects: winning the prize is less important than gain publicity or enhancing reputation , as well the fun of competing for the sake of it.

2) Assumes it is impossible to predict who will have the best ideas or what combination of skills will best solve a problem. Sometimes the best solution already exists but in a different context. Competitions tend to attract a diversity of non-traditional participants. This increases the variation of ideas.

3) Organisations tend to influence strongly the type of innovation they can come up with (due

to their engrained problem solving routines, governance, communication patterns defining the search space). Drawing on more organisations again increases diversity.

When to use them?

1) To move into a) new needs/problems with existing/emerging solutions (eg IBM Innovation jam) b) unfamiliar solutions/capabilities to familiar/known issues

2) For moving into new solutions for new needs: detect early stage opportunities, evaluating them and building communities in emerging areas (eg Brightidea).

Steps:

1) Frame the problem: carve the issue into chuncks. But this may limit ideas as the nest solution may not conform to preconceived notions of the issue or how it can be solved. For more radical innovation participants need to think as broadly as possible.

2) Establish the prize: bolder and difficult challenges usually have larger prizes. But non-monetary reward can also be addressed: a) advertise one’s skills and achievements b) excitement . Therefore, nurture a sense of community and support interaction among competitors, with investors, partners and users.

3) Select the participants: prequalifying reduces the amount of proposals. 4) Define the process: encouraging collaboration to acquire the skills and resources to compete

is key. This can be facilitated by hosting meetings for competition entrants. This tends to work because competitors often share a passion and sense of purpose and this mlakes them more willing to share and help.

5) Build the platform: third party infrastructure exists (see tools). But the more unusual the needs are and the more diverse a range of solutions you want, the more a dedicated prize infrastructure become useful.






a) http://www.innocentive.com/ (London): used to resolve specific technical issues (where the best can get a financial reward)

b) Brightidea (US): https://www.brightidea.com/ c) X prize foundation (US): http://www.xprize.org/about/contact-us d) Nine Sigma (Leuven): http://www.ninesigma.com/europe



TITLE OF LITERATURE: Using the crowd as an innovation partner

AUTHOR : K. Boudreau et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review, April 2013











Crowd is loose, decentralized, numerous, with diverse skills, experience and perspectives. The crowd operates on intrinsic motivation such as the desire to learn as well as to burnish reputation. There are four ways to go about this. 1) Contests:

a. this works well when it is not obvious what combination of skills or even which approach leads to the best solution as the problem is complex or novel. This requires experimenting with multiple solutions. It is therefore useful for highly challenging analytical problems as well as design problems / aesthetic projects.

b. Challenges are: identifying a problem important enough to warrant experimentation; putting it forward in a way all can understand ( eg breaking it down into sub-problems); it must yield solutions that can actually be implemented. Sufficiently skilled participants need to be attracted hence the prize and possibility for increasing status need to be well conceived. Intellectual property issues should be resolved at the start.

2) Collaborative communities: a. whereas contest separate contributions and maximize diverse experiments,

communities get multiple contributors to aggregate into a whole e.g. Wikipedia. b. Require norms, knowledge sharing, teams and leadership to emerge to deal with

the little coordination required. Hard to control. c. Protecting IP is impossible

3) Crowd complementors: create an open platform that others can complement with their own services. Requires giving good insight to the crowd into the features of the core platform.

4) Labor markets: match skills to tasks. Use supporting platforms that allow reputation and skills evaluation, bidding systems for jobs, escrow services to keep payment into a third party account. This functions well when you know the solution you are looking for and what a solver looks like and where it would be too expensive to hire someone full time.



a) Tool 1: Open ideo http://www.openideo.com/

http://www.openideo.com/



TITLE OF LITERATURE: The World Bank’s innovation market

AUTHOR : G Hamel et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review November 2002


• innovation in general: • innovation by / within the public sector: • innovation oriented towards citizens: X • innovation oriented towards social and employment issues typically dealt with by ESF: X





As an innovation market: put funders and people with idea together in a big room with stalls (+/-100) where ideas are marketed (with posters etc.).

Money to be awarded is in 10000s of euros rather than 100000’s or millions for unproven but promising ideas. Some of these could prove to be breakthrough ideas.

Motivation comes from competition in a marketplace. There Is also a “peoples choice” award where all those who attend the marketplace can distribute stickers to stalls (no funding attached but recognition).



Panel of judges, incl. from government, philanthropy, NGOs, business (CSR, other) … Divided 3Million USD in one day among 11 ideas out of 120.




a) Tool 1: there is a guidebook for organizing such marketplaces



TITLE OF LITERATURE: turn customer input into innovation

AUTHOR : A. Ulwick


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review January 2002






Customers only know what they have received. They can make suggestions only for incremental improvement. As they have extensive experience with something already and of course have their own personality and taste. Lead users on the other hand can be too sophisticated in their requirements.

They cannot imagine what they do not know about new methods etc. If you ask them to venture outside what they know, then there are 2 blocks:

a) Functional fixedness: users find it hard to imagine a different use of a product or service to what they are used to.

b) People may have more than one need, and these needs may contradict each other, apparently (eg parents do not want their kids to wear diapers, but they also do not want them to wet their beds. Hence: the pull up diaper).

They should be asked what they want the solution for (need), the outcome, not what it should be. For this we need open ended interviews and especially observation of behavior if people find it hard to articulate their needs.

Step 1: plan outcome oriented interviews

Deconstruct the process of the users. Need to identify users directly involved with the service. Need to cover all customer types and within that the full range (diversity).

Step 2: capture desired outcomes

Whenever user comes up with a solution rather than a need, force to think about the underlying process and need. Most users will just bring loose ideas and statements. Thye have to be turned into outcomes which requires to make clear some unit of measure (time, number, frequency) and if it should increase or decrease (eg from “easy to maneuver” to “minimize the time it takes to maneuver through a winding vessel” in surgery).

The majority of needs are uncovered quickly (eg 75% in a first session). Pushing through may be worth it (15-20% in second session, 5-10% in third).

Step 3: organize the outcomes

Categorise outcomes into groups, corresponding to each step in the process.

Step 4: rate the outcomes for opportunity

Step 5: use the outcomes to jump start innovation

Identify a diversity of ideas to meet the most important outcomes.








a) Tool 1: formula (Importance of outcome+ (importance outcome-is it satisfied today) (on scales of 1-10) . Note: importance –satisfaction cannot go below 0. This yields an opportunity index.



TITLE OF LITERATURE: creation nets, getting the most from open innovation

AUTHOR : JS Brown et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): McKinsey Quarterly 2, 2006


• innovation in general: • innovation by / within the public sector: • innovation oriented towards citizens: • innovation oriented towards social and employment issues typically dealt with by ESF:




1) Why?

Use networks with 100-1000s of diverse participants to create new knowledge and learn from each other, under guidance of a network organizer.

Knowledge becomes obsolete very quickly so you must connect more rapidly and effectively with others to create new knowledge rather than jealously guard it.

Best used when 1) demand for the services is uncertain 2) many different specialisms need to be mobilized 3) performance requirements change rapidly

2) How?

But knowledge is “sticky”, it resides in individuals and is very context specific. You need close relationships with diverse sets of people: technology providers, talented amateurs, users,…. This requires rich, sustained interaction and collaboration.

Practical issues are 1) trust 2) the size of groups 3) their decentralized distribution.

A network organizer first needs to decide who can participate (gatekeeper). He must also establish simple rules about how to resolve disputes and how to measure performance (eg with action points and milestones during development, when participants must come together and deliver outputs, but leaving participants free for the rest).

Development typically splits up into modules so integration must be thought of in advance.

Important is to build long term relations with promise of repeated interactions to avoid short term opportunistic behaviour.

Choice to be made are:

1) Different types of coordination a) Practice networks: loose form of coordination among people who share extensive sets of

practices (eg linux, interest networks). Coordination focuses on the integration stage of the contributions.

b) Process networks: more active coordination, on people with different specialisations. Because of the greater diversity, more orchestration is required: who to invite for each creation initiative, what role they will play (eg design networks) and what performance requirement they must meet.

2) Balancing local vs global: managed vs unmanaged behaviour a) Managed is most used at integration. Governance structures then are critical to resolve

differences. Some of the greates insights come as groups clash and seek to address each others concerns.

b) Aggregation and development of talent is more emergent, especially on the periphery of the creation net (interaction with local business ecosystems and online forums).

c) Experimentation, tinkering is least managed. 3) Design effective action points:

Diverse participants MUST confront and resolve differences in approach. Rather than determine outcomes with blueprints, it is better to design action points (activities that must occur to come together and hand-off work, accompanied with governance structure to resolve and escalate disputes) that specify high level performance requirements. When incompatibility emerges, network organizer encourages participants to swarm the problem and resolve it on their own.

4) Performance feed-back: get feed-back form users often. Requires rapid movement from concept to prototype (and assembling different modules into more complete prototypes). Performance info is distributed in the network quickly.







a) Tool 1:



TITLE OF LITERATURE: Your company’s secret change agents

AUTHOR : R. Tanner et al

TYPE OF AUTHOR (academic, consultants, practitioners, other): Academic

COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review May 2005







Rather than: 1) dig deep to uncover root causes of problems 2) hire experts / import best practice 3) Have leaders act as champions

A better way is: capturing positive deviance.

This is applicable to problems that are not merely technical, with a correct proven solution or just requiring brainpower to find a good solution.

It is applicable to issues that require behavioural/attitudinal change and where there is no apparent off-the-shelf remedy (complex issues).

Step 1: make the group the guru

Rather than have a “champion” which absolves the community from owning any solutions, those in the trenches need to look for those others in the trenches that already do things better by doing

different. These deviants are like the rest of the community, which makes it easier to transfer their practice.

This goes against “best practice” thinking where an external authority decides what is best and should be adopted. This tends to ignore the specific circumstances that made a practice successful somewhere. This is also a warning: it does not suffice to have a champion look for positive deviants and then impose their practice. Implementers need to go and find out, see for themselves,take ownership. The leader only facilitates this.

Step 2: reframe through facts

First, take the conventional presentation of the problem. Second, find out if there are exceptions. Use hard data for this. Third, reframe to focus attention on the exceptions (how are they managing it…?)

Rather than experts coming in with best practice, the community identifies pre-existing solutions.

Rather than send the message: why are we not doing best practice (outside-in) already (are we stupid?), solutions from inside out are leveraged.

Step 3: make it safe to learn

Positive deviants may fear being “exposed” if doing so challenges the status of powerful others.

Therefore, it may be good to use low-profile positive deviance workshops to explore “safe” problems first. After that, quietly move into harder topics.

Step 4: make the problem concrete

Portray the issue in a compelling way, no one can ignore. Reality must hit home! Even dramatise it.

Step 5: leverage social proof

Get those who are “deviating” to talk about it and about the benefits and start a movement where participants take small steps.

Also, participants in this way act themselves into new ways of thinking, rather than think into new ways of acting.

Step 6: confound the immune defense response

Introduce already existing ideas (so they are context adapted) into the mainstream without excessive use of authority.






a) Tool 1:



TITLE OF LITERATURE: Creating employee networks that deliver open innovation

AUTHOR : E. Whelan et al

TYPE OF AUTHOR (academic, consultants, practitioners, other): academics and consultants

COMMISSIONER OF LITERATURE (IF APPROPRIATE): MIt sloan Management review









F. What roles exist for different actors in the innovation process? What competences are required for these roles? There are idea scouts and idea connectors.

30 years ago, innovation brokers could fulfill both roles.

Today, scouts are tuned in to emerging knowledge, connected as they are to external knowledge sources, primarily via the web (online fora, RSS feeds, industry blogs, google searches). But they are not so well connected inside. But with so much “smog” on the web, this is a time consuming and compex process that requires specialized scouts.

Ideally, they connect to an idea connector who does have good connections inside. These connectors are the hub of the social network, the go to’s. They know who can use an idea and have the social capital to organise their network so the right people will do something with it. They can tackle internal barriers.

These roles have a different importance in the innovation process:

Ideation: time, a computer (for access to new social media etc.) and access to external networking events (eg conferences) demonstrate commitment of management to a front-runner role for scouts. Also, the scouts should be from inside with ideas/knowledge to share.

Idea selection: happens in interaction between scouts and connectors.

Idea diffusion: connectors are generalists whose knowledge and interests embrace many areas. This makes it easier for them to connect to the right people to take an idea on board. Having rotated jobs helps in this respect.



a) Tool 1: Social network analysis as a tool to find out who is connected to who (eg free tools

can be applied on Linkedin profiles).



TITLE OF LITERATURE: Finding and grooming breakthrough innovators

AUTHOR : J. Katzenbach et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Harvard Business Review December 2008







• Innovators propose new ideas • Various experts sort through enormous amounts of info and often conflicting opinions • Then innovators home in on most critical components, see connections and discern how to

bridge elements • They recombine • They cultivate internal buy-in




Innovators :

1) Have excellent analytical skills, able to zero in on the essentials. This is important given the large amount of (conflicting) info.

2) They think strategically, seeing how to fit pieces together 3) Never rest: frame and reframe challenges from multiple perspectives. Identify which

solutions are likeliest to be embraced by powerful players. 4) Socially aware: persuasive. Know how to extract info and garner organizational support.

Need to be able to clearly and convincingly defend and sell a point of view. 5) Curious, always shopping for new ideas, but not intrusive. 6) Must be able to say immediately what they do badly.

To groom them: provide multiple mentors (themselves to be coached by the CEO) to test ideas on and to anticipate reactions from others. Also have peer networks where innovators can bounce ideas of each other.

These innovators will then be able to bridge silos, where specialist expertise may reside that is required to bring an innovation to fruition.



a) Tool 1:



TITLE OF LITERATURE: Making ideas work



COMMISSIONER OF LITERATURE (IF APPROPRIATE): Stategy+business (Booz)







Idea generation:

• Data gathering: most common method is “observation” (42%). Then “market research” (31%).

• Tapping into external sources: first customers, next intermediaries (channels). • Internal idea capturing: first are “innovation champions” (people assigned to capture,

develop and promote ideas internally), followed by cross-functional collaboration.

Less than 15% of all companies ranked social media and open innovation as important.

Use of idea generation tools however varies by strategy:

1) Need seekers (seek un/articulated needs and try to serve them quicker than others): use internal networks around innovation champions. Cross-unit staffing, formal idea

conferences, communities of practice are also popular. Externally they use networks of customers, channels and suppliers. Within those they look for early adopters.

2) Market readers (monitor markets, focus on incremental innovation, fast followers): go for market research and use their frontline staff for ideas. Use networks less. If they use them internally, they prefer communities of practice and focused innovation networks. Externally, they go for suppliers and users, less for universities and government.

3) Technology drivers (develop knowledge in the hope it will meet some known/unknown needs): use regular external idea and technology scouting. But depend most on internal mechanisms eg regular meetings of own experts, communities of practice and technology road mapping to develop far reaching ideas that go beyond anything the market could suggest.

Approaches used at idea conversion stage do not vary much among the three strategies. ¾ depend on internal networks. The only external mechanism, especially among market readers, is “leading customer reviews” where lead users are given an early glimpse.

For conversion what matters most is not tools or processes but the right people! They need to use experience and judgment capacity to rigorously make decisions.






a) Tool 1:



TITLE OF LITERATURE: Are you killing enough ideas?

AUTHOR : J. Katzenbach et al


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy+business Autumn 2009






Production is governed largely through the formal side of an organization: decision rights, reporting, incentives, codified processes, metrics. This is geared towards efficiency.

Creative work taps into the informal side (mutually understood rituals, shared values, social networks, commonly held ideas, emotional connections to the work itself). Creative people also sit in formal groups and have bosses but they are far more likely to draw on informal connections (incl. to gather support) with people at all level, be driven by passion about searching for the best idea and take risks.

A balance between formal and informal is required to avoid a great deal of waste but also to avoid killing of nascent ideas quickly and only engage in incremental innovation.

A high number of losing ideas is a sign of balance. There is creativity enough, but also discipline.

The losing ideas have to planned for too: their resources freed up, lessons identified and shared. When the balance is unequal the informal parts kick in to “protect the abandoned children”. This happens in “hero” cultures where there is a cult of the “creative genius”. From the formal side, there is also no incentive to admit failure. Since no one captures lessons of failure, the same

mistakes get made all over again. In the worst case, this means winning ideas are not resourced appropriately and hence also fail. This undermines the credibility of the formal system and encourages even more informal influencing.

1 A first step is to map informal networks and detect critical nodes who sharpen creative ideas and then advance support for the best.

2 Capture ideas from widest possible net. The challenge is to capture ideas without constraining them. Eg online systems to gather and codify ideas or decision-markets to decide on them.

3 involve multiple perspectives in go/no go choices. This is a formal use of different lenses where three major questions need to be answered: will users want it? can we do it? can we finance it? Productive fights between formal groups are the only way to resolve tensions without forcing to compromise. This formal side needs to be balanced with an informal side by conducting in depth and high-stakes conversations constructively across formal groups. This must be reinforced with formal decision-making and enforcement of these decisions.







a) Tool 1:



TITLE OF LITERATURE: How to shut down a project gracefully

AUTHOR : R G McGrath


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy+ business (Booz)






C. How to organize innovation as a process in different stages? D. How to define outputs of innovation e.g. in terms of idea, concept, prototype…?


This is about making the decision to stop a project. This is sometimes not taken because of

1) Psychological entrapment where team members feel committed to staying the course 2) Rationalised entrapment where the team feels success is just around the corner 3) Social entrapment where the team members have made commitments to each other and to

outsiders. The following questions help to find out if there is entrapment. •I feel we will lose the respect of others if this project is shut down.

•Stopping this project would have a negative effect on my career or that of other team members. •We made a public commitment to this project, and it would look bad to break it. •We’ve made commitments to outside parties (investors, suppliers, distributors, customers) and inside parties (directors, management, other divisions, employees), and we cannot or should not break them. •We have had some good results and are at a turning point; it would be premature to stop now. •At this point, it would cost us more to stop than it would to finish. •People who want us to fail (rivals, competitors) will gloat. If most of the project’s team agrees with a third of the statements, there is a big risk. Disengaging from a project requires balancing the emotional commitment of team members with the business logic. A plan for this should be written (no more than 5 pages). It should list all stakeholders that will be disappointed. Specify for each what they were hoping for but will not get. Next, try to mitigate (apologise, compensate,…). Diligent montoring if the stakeholder is satisfied is required. Also, the plan should foresee an after action review where lessons learnt are catalogued for every aspect of the project. This is the back-drop for an opportunity review: what can we do with this knowledge.





a) Tool 1: http://www.discoverydrivengrowth.com/

http://www.discoverydrivengrowth.com/



TITLE OF LITERATURE: Recombinant innovation

AUTHOR : A. Kleiner


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy + business (Booz)







Most innovation processes act not to foster open minded, giving and taking among talented, imaginative people, but to control. There needs to be a balance between the two eg set up a skunk works long enough for a small team to produce results, then rein it back in.

Some R&D staff use brainstorm sessions to impress others with their creativity. At the same time, operations works hard to avoid any public mistakes and hence suppress new ideas rather than risk anything.

In this environment, innovators work quietly and alone to solve problems, often at cross-purposes with others.




It is about reconverting old ideas into new ones, adapting from one context to another.

People should therefore have very different backgrounds. Eg at IDEO people have worked in 3 or 4 very different industries. Together, in a team, they may have 15 different bodies of knowledge to draw on.

Innovators do not only benefit from deep, intensive teamwork but also from casual connections (weak ties) that lead to chance encounters with unfamiliar ideas. They also draw on communities of practice. And finally, “serious play” can stimulate innovation.

An innovative culture has 4 elements:

1) Connections across disciplines 2) A good balance between freedom and constraint 3) Community base that has the opportunity to work intensively 4) Respect, appreciation for those who innovate seeing them as more as just sources of ideas.



a) Tool 1:



TITLE OF LITERATURE: How aha really happens

AUTHOR : W. Duggan


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Strategy+business (Booz)







1) Define the problem 2) Identify criteria 3) Gather and evaluate data 4) List and evaluate alternatives 5) Select the best 6) Implement and follow up

But how to do 4? The most frequent answer is: brainstorm. This refers to the idea to switch of logic / analysis / rational side (right brain) and use the creative, artistic, intuitive side of the brain. However, the left-right brain division turned out to be incorrect. As new info comes in, the brain does a search to see how it might fit with other info already stored in memory. When

there is a match, these older memories come off the shelf and combine with the new and the result is a thought. Breaking down and storing is analysis, the searching and combining intuition. When pieces come of the shelf easily, in familiar patterns, you do not even realize it. However, when lots of different pieces combine into a new pattern, you get the “aha” moment. You get you best ideas not in a brainstorm but in the shower, driving, falling asleep, when you brain is relaxed and wandering instead of focused on a specific problem. The common pattern for innovation is therefore: 1) examples from history 2) presence of mind, calmness 3) flash of insight 4 ) solution (Von Clausewitz –On War).






a) Tool 1: idea matrix At the top write your current understanding of the situation. Then comes analysis where you list in rows actions you think you need. Then ask: has anyone else ever made progress on any piece of this puzzle. List sources to answer this question as columns. Then a team start a treasure hunt in those sources.

As they progress, they may restate the situation, rows, columns. Flashes of insight will occur as a promising combination is hit. To capture this, you can do reverse brainstorming where you ask team members to meet and bring their ideas of the past week.



TITLE OF LITERATURE: Cut loose from the usual path

AUTHOR : V. Govindarajab


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Trends (summary from Harvard Business Review), June 2012





Reverse innovation: take something from a minor, marginal market and then apply in a mainstream market.


Innovation resources have to be redirected at these “niches” by top leadership. Bold goals need to be set there. Project leadership must be free from interfering goals from mainstream market. A separate structure may be set up (start-up like).








a) Tool 1:



TITLE OF LITERATURE: Innovate low cost

AUTHOR : L. Bettencourt


COMMISSIONER OF LITERATURE (IF APPROPRIATE): Trends (summary from Harvard Busines Review), Sept 2011






The potential of older ideas is sometimes overlooked. Organisations should systematically review:

a) Whether reasons for earlier failures have not been resolved, whether it could not have worked in another context.

b) Surges in use of existing services may be an indication that these services are being used for other purposes than originally intended. It should be analysed what is going on.

c) Sometimes users would like to use only a component which is currently integrated in an offering. This offers potential to offer it as a stand-alone.

d) Sometimes the innovation is the reverse: integrating existing pieces into a new services may be what is required.

e) Sometimes services have too many features and are too complex. It may be innovative to simplify them and focus them more on the basics.







a) Tool 1:



TITLE OF LITERATURE: Scale your innovation initiatives

AUTHOR : R. Wolcott et al








2 challenges: 1) keep teams small and nimble 2) provide sufficient funding for innovation

How can you take successful models of innovation, typically tested at smaller scale within a special purpose team and expand their impact (scaling up)?

1) Complicated initiatives depending on a few key individuals or assets cannot just be replicated. You need to define core principles of the initiative and ensure that mentorship (from within the existing successful initiative) is available to help make those principles real in different circumstances (in a new version)

2) Invest in broader areas, building capabilities that have wider use, beyond just a single initiative that may or may not fail as a standalone, but where the experience gained will remain of use for other initiatives.

3) Recruit and support customer evangelists to jointly work on innovation. 4) Nurture internal and external ecosystems: Connect innovation teams with mentors, partners,

investors, expertise. In this way the initiatives become part of a set of dense relationships among players critical for success.

5) Activate broad networks: wheareas ecosystems are abvout depth and active engagement,

networks are about breadth of access to diverse knowledge and capability. Make sure your team’s objectives and challenges are socialized with broad networks.







a) Tool 1:



TITLE OF LITERATURE: Navigating the digital future


TYPE OF AUTHOR (academic, consultants, practitioners, other):consultant







Need seekers have gone forward in digital tools. Market readers much less (specifically at the front end of innovation).

Digital tools can be useful but only if enough resources invested in learning how to use them effectively.


1 Customer insight: new tool that is highly effective is “customer immersion lab” with 3D real time virtual depictions of a product. Passive, automated collection of user data are also deemed effective. Analysis of big data is also effective. Discussion platforms are used a lot but deemed not so effective.

2 Ideation: crowdsourcing (online idea platforms) has mixed effectiveness but is used a lot. At the top in effectiveness is rapid prototyping.

3 Development: project management tools are widely used and rated effective. Also collaborative environments like messaging, video, file sharing, webinars arewidely used but moderately effective.

4 Launch






a) Tool 1:

Government & Nonprofit

Attachement 4: General innovation