course intro (1)
TRANSCRIPT
Foundations of Business Innovation
Andrew Maxwell
Agenda Explain who we are Get to know you Provide an outline of the course Provide an introduction to innovation concepts Deal with any administration issues
Text - Managing Creativity and Innovation – Harvard Business Press Web site – U of T portal and CIC Downtown course
Expectations and registration Class 6 – 9 pm Mondays at IB 270
• Director Business Partnerships CIC • Professional engineer and MBA• 15 years with tech. multinationals• Cofounded several technology businesses
• Created U of T’s technology incubator • Teaches technology entrepreneurship• Completing Ph.D. in innovation and new
venture creation at University of Waterloo• Industry advisor CBC Dragons’ Den.
Who are we:Andrew Maxwell
1. Understand the innovation imperative
Definition of InnovationMacro-economic impactMicro-economic impactInnovation imperative
Country levelRegional levelFirm level
The Economic Conception of Innovation Joseph Schumpeter
Innovation is:• Introduction of a new good, or a new quality of a good• Introduction of a new method of production (need not
need include new technologies)• The opening of a new market • The securing of a new source of supply• The creation of a new organization
Canada lags at innovation & gets worse
Canadian Council Of Academies
Innovation in the news
2. Importance of Firm-Level Innovation In a knowledge based economy, organizations that
are able to do more with less, outperform competitors
In the private sector, higher productivity makes you the acquirer, rather then the acquiree
In the public sector, exceeding benchmarks is encouraged, while falling behind has negative repercussions
“In the road to the future, there are drivers, passengers and roadkill” Gary Hamel
3. Recognize different types of innovationInnovation is often confused with invention and
specifically research and development leading to new technologies. In fact innovation includes:
a. Product Innovationb. Process Innovationc. Supply chain Innovationd. Service Innovatione. Business model Innovation……….. And can be applied to all areas of an organization
a) Product innovation Technology
Internal ExternalC
ust
om
erN
ew
E
xist
ing
b) Process innovation
A change in the way a product or service is manufactured, created, or distributed
Process innovation involves implementation of new or improved production or delivery method.
Process innovations can be intended to decrease unit costs of production or delivery, to increase quality, or to produce or deliver new or significantly improved products.
What product/service will be delivered to customers What components or services will be acquired
externallyHow you will add value internally This involves consideration of:
Core competencies necessary for long term success Availability of partners in supply chain Strategic risk management of relationship
c) Supply Chain Innovation
• New raw materials• Alternate suppliers• Outsource manufacturing• Third party distribution• Sales agents or on-line sales Consider:
Risk management Financial implications Market issues
Supply Chain Innovation Opportunities
Majority of individuals in Canada (and US) work in service industry
Even where people work in manufacturing, many of these individuals provide support services
Service innovation is biggest opportunity to increase competitiveness
Improvements in service innovation can be measured in terms of increases productivity and value added
d) Service Innovation
Contributes to competitive advantageRequires specific social and technical skills Involves development and new technology applicationCostly to develop needed specialist and generalist skillsRequires integrated thinking and agile environmentCan be implemented in all service areasMost significant possibilities in financial and medical
services
Opportunities for Service Innovation
“An automobile is actually art, entertainment and mobile sculpture, which, coincidently, also happens to provide transportation.” Robert Lutz, Chairman, GM
Can you change your product into a service?
“Make sure I don’t run out of cash”
“Product, service or experience”
“The customer rarely buys what the company thinks it is selling him” - Peter Drucker
e) Business Model Innovation The goal of innovation is to increase competitivenessNew ways of doing business can also increase
competitiveness and productivity by: Creating enhanced utility for the customer Enabling a different pricing strategy Providing alternate purchasing options
Sometimes a technology innovation requires a business model innovation to achieve commercial success
Xerox Developed photocopying technology Initial capital costs of machines perceived as
excessive Introduced pay per copy business model
Some Innovative Revenue Models
Google Automated search-engine technology Provided free to end users Revenues generated by advertising
4. Need to identify what innovation success looks like
Improve top line, bottom line or market shareStrengthen balance sheetStrengthen brand/reputationIncrease workforce retention (incent stakeholders)Enhance community engagementImprove environmental performanceAttract investors/acquirers
Establish specific innovation goals Improve quality of
processes, products and services
Create of new markets Extend product range Reduce labour costs Improve production
processes
Reduce use of raw materials
Reduce environmental damage
Reduce energy consumption
Conform to regulations
If you don’t have specific goals, your chance of reaching them are small
5. Need to find a way to create and capture innovation opportunities
Communicate vision and innovation imperativeStimulate creativity and idea generation Develop innovation decision-making process that:
Captures ideasMakes decisionsActivate resources
Implements projects and encourages accountability
Yes ……I know we are meant to be more innovative … can you give me some guidelines
Internal drivers1. Unexpected event2. Contradiction3. Change of work process4. Change in industry structure
External Drivers5. Socio-economic changes6. Political changes7. Technology changes
Drucker‘s Innovation Framework
Identify sources of innovation Internal sources1. Research2. Shop floor3. Sales/service4. Customer service External Sources5. Customers6. Suppliers7. Competitors
6. Recognize that innovation is a process Innovation is a management process the requires
specific tools, techniques and discipline Innovation involves the development of organizational
processes and procedures for generating, considering and acting on innovative ideas
Innovation research focussed on technology; but real challenge is to understand innovation process and the cognitions and behaviours of people in that process
Innovation failures due to lack of understanding people
“Stage Gate” Innovation Process
Stage-Gate Institute (Bob Cooper)
Identify innovation imperative and establish objectives Create innovation framework Assess current resources (Business Analysis) Analyze current environment and external trends Source and capture innovative ideas Create an innovation decision system Compare each opportunity to agreed criteria Implement pilot project Measure performance Scale up or cancel
Implementing The Innovation Process
7. Establish innovation resourcesTimePeopleMoneyProcesses
8. Understand innovation constraintsSuccessful innovation usually involves:Changing current processes and proceduresModifying management style and communicationsDeveloping new organizational structuresAbandoning existing customers and finding new onesModifying incentives, compensation and recruitmentChange company culture and attitude to riskImportant to raise questions and ask how far you will go
Focuses on financials & timelines
Has strict guidelines & controlHad a hierarchical structureHas multiple bosses & “dotted
lines”Fosters attitude of “Everyone
is for himself”
Is your organization innovative?Embraces and learns
from failureFosters high energy
activitiesCreate a “Can do”
environmentDevelop support & trustIs a fun place to work
Change management approach can help an organization become innovative
1. Change through Leadership2. Create a Shared Need3. Shape a Vision4. Mobilize Commitment5. Make Change Last6. Monitor Progress7. Change Systems and Structures8. Change Culture from Control to Trust9. Communicate10.Incentivize
Focus on the people issuesWhat works:
Mentoring and coachingSkills & experience developmentFree information exchange (networking)Resource availability
What doesn’t:Strict personal objectivesIndividual performance over team performanceThe “right” way of doing things
• Process & tools that support idea generation & experimentation
• Disciplined approach to building innovation
• Desire to do things better
• Collaborative & open culture.
• Incentives that reward challenging the status quo
• Company leaders and organization aligned to achieve a vision
Leadership and
Organization
Culture and
Values
Processand
Tools
Peopleand
Skills
Architect an innovative environment
Creating an Innovation CapabilityThe
organization’s reputation for
innovation
Attraction of creative people
Organizational encouragement of
creativity & innovation
Development of innovative
products
A willingness within the organization to accept new ideas
Motivates people within the organization and reduces frustration
High morale and retention of
creative people
Develop an Innovation Culture Create an innovation-friendly organization, that embraces
a culture of “risk” and “rewards failure” (and success)Develop a “ project and portfolio management” approach
to innovation around decision-making and implementationDevelop a cross functional “matrix organization” to
embrace innovation across organizationFocus on “communications” and “engagement”Design “incentives” to support innovation
Common Causes of Innovation Failure Organizational Causes
1. Poor leadership2. Poor organization3. Poor communication 4. Lack of empowerment of
stakeholders 5. Poor knowledge
management 6. Resource limitations
Process Causes
1. Poor goal definition2. Poor alignments of goals
and actions3. Poor team effort4. Poor monitoring of results5. Poor communication and
access to information 6. Inappropriate decision
making
Assignments
1. If you haven’t done register for courselearn.utoronto.ca/bps/innt.htmwww.slideshare.net/andrewmaxwell/innovate-or-die-
91903542. Find someone else you think might be interested and tell
them to watch the videohttp://vimeo.com/29112717
3 Identify a key innovation challenge you are willing to share
Thank you
“I don’t mind failure. I’ve always thought that schoolchildren should be marked by the number of failures they’ve had.” – James Dyson
Thank you
“Innovation comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much.” – Steve Jobs
Thank you
“If the people running Amazon.com don’t make some significant mistakes, then we won’t be doing a good job for our shareholders because we won’t be swinging for the fences.”- Jeff Bezos
Thank you
“You have three choices…. Innovate, find a partner who you can innovate with… or wait to be innovated by someone else….” – Andrew Maxwell.