Innovation, an EFQM perspective

Hervé legenvre

legenvre@efqm.org

My background

• Trained at the university of technology of Compiegne in technology transfer management

• Worked with product development teams - Renault

• Head of major account and Knowledge development – EFQM

• Phd on history of inventors – Paris sud economic department

EFQM: Our structure

Over 700 EFQM Member Organisations across every sector and size – both public and private

EFQM Governance BoardCEOs from 10-12 Members

EFQM CEO & Management Team

Major Accounts & Knowledge

Development

Membership Services andOperations

European Awards &

Recognition Schemes

•Pact•Leadership events•Communities of Practice

•Training•Publication•Benchmarking•Conferences

•Committed to Excellence•Recognized for Excellence•EFQM Excellence Award•Assessor network

EFQM, the driving force to Sustainable Excellence

EFQM vision

• Active membership

• Leadership group as role model

• Redefining the forefront of excellence

• Strong relationship with EEC

• More visible and upgraded recognition

THE VISION

• 1000 ambitious and active members

• A new and visible Pact across different industries

• Leadership event and cases –Connecting with Executives

• The enabling network to implement Lisbon Strategy

• One integrated EFQM Excellence Award and recognition scheme

BACK TO BASICS AS A FOUNDATION

Some key ideas I will share with you

• Uncertainty is the source of all innovation• We live in a very uncertain world• Innovation is not just luck• Leading innovation• Innovation strategy• Developing people for innovation• Innovation process• Measuring innovation

Innovation

Why should we care?

Uncertainties ahead

• Death

• Energy

• New competitors

• Climate changes

• Human enhancement

• Aging population

Innovation

Is it about luck?

One view on innovation

The lucky one

One view on innovation

Penguin effectMore hype than real innovation

What is Innovation?Characteristics of Innovative Organisations (I)

Source: BDU 2004

Innovation support byconscious exemplifying

and encouraging

Innovation as atop priority

Systematic detecting of market and

technology trends

Innovation as part of the

organisation strategy

Innovationbudget

Innovative organisations Less innovative organisations Not innovative organisations

in %

What is Innovation?Characteristics of Innovative Organisations (II)

84 84

77

23

6367

37

6360 58

33

67

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4

in %

Innovation is driven by the knowledge level

of employees

Innovation is driven by ideas of

people

Innovations comes from a pushing

position

Innovation is a reaction to market

requirements

Innovative organisations Less innovative organisations Not innovative organisations

Source: BDU 2004

Innovation supports a Strategy

Cost-LeadershipTechnologyleadership

Customersolutions

Reach target cost faster!

Bestperformance !

Customerintimate!

innovation

How can we make it happen?

The EFQM Framework for InnovationCharacteristics

• Complementarily between Excellence and innovation

• European flagship for innovation• Strengthen the innovation

capability and results of the organisation while taking into account different stakeholder perspectives

• Value Creation through innovation

• Assessment specialized in innovation

An alternative view on innovation

LeadershipLeadership

PeoplePeople

Partnerships& Resources

Partnerships& Resources

Policy &Strategy

Policy &Strategy

PeopleResults

PeopleResults

SocietyResults

SocietyResults

CustomerResults

CustomerResultsProcessesProcesses

KeyPerformance

Results

KeyPerformance

Results

The EFQM framework for innovation

Enabling innovation

As a leader,how do youencourage

innovation?

As a leader,how do youencourage

innovation?

How do you makeyour people

more innovative?

How do you makeyour people

more innovative?

How do youinvolve suppliers,

use information andensure appropriate

funding for innovation?

How do youinvolve suppliers,

use information andensure appropriate

funding for innovation?

How do you planfor innovation?

How do you planfor innovation?

How do you make surethat in the end

Innovationdelivers results?

How do you make surethat in the end

Innovationdelivers results?

And, of course how do you measure success?

Criteria of the EFQM Framework for InnovationLeadership (Overview)

Excellent leaders cultivate an innovation culture. They are personally involved in developing and enhancing a clear set of directives for successful innovation used by everyone in the organisation. They interact with stakeholders on innovation. They consider the following points:

Promoting innovation

Personal involvement

Engaging with stakeholders for innovation

Criteria of the EFQM Framework for InnovationLeadership (Engaging with stakeholders)

• Engaging with customers and other stakeholders as a source of innovation– „The divisions‘ technical directors are responsible for

communicating their customers‘ needs to the technologists throughout 3M. It‘s a 3M axiom that ‚products belong to the division, but technologies belong to the company.‘” (3M)

Source: Coyne 1997

Criteria of the EFQM Framework for InnovationPolicy and Strategy

Excellent Organisations continuously scan for innovation opportunities. They develop innovation policies and strategies that are integrated within the organisation overall strategy before being communicated, deployed, reviewed and updated. They consider the following points:

Scanning for innovation

Deciding on innovation priorities

Managing innovation as part of overall management system

Criteria of the EFQM Framework for InnovationPolicy and Strategy (Scanning for Innovation)

• Collecting innovation ideas from employees: IBM (“InnovationJam”)– Brainstorming with 140.000 people (including employees’

families and customers) in 104 countries in an internet workshop– 37.000 new ideas– Up to 100 million dollar funding is committed to develop the best

ideas of the jam process

www.globalinnovationjam.com

Criteria of the EFQM Framework for InnovationPolicy and Strategy (Deciding on Innovation Priorities)

• Defining the organisation’s appetite for innovation– BMW: Leading innovation– Dell: “"We're not the company that's going to convince you that one

architecture is better than the other. But we are the company that's going to deliver the most popular ones at the best value."

– Sony: Leader in many market niches• Defining the organisation’s appetite for innovation

– „We identify customer problems, anticipate their unarticulated needs, and come up with innovative solutions. We are not a commodity marketer.“ (3M)

• Aligning the innovation strategy with the lifecycle of existing products and services

– Splitting itself into two companies to avoid catching only „blockbuster ideas“ but also enter small, emerging markets (high tech industries e.g. pharmacy, IT)

Criteria of the EFQM Framework for InnovationPeople

Excellent Organisations empower and educate people by creating a context that allows innovation to happen. They consider the following points:

Empowering people for innovation

Educating for innovation

Creating an innovation friendly context

Criteria of the EFQM Framework for InnovationPeople (Empowering People for Innovation)

• Providing entrepreneurial challenges– “Our researchers often come up with their own new product

notions, which they shop around the company. In effect, our researchers need to be entrepreneurs as well as innovators. They play a direct role in bringing technology from the lab to the marketplace.” (General Electric)

• Rewarding and recognising people and teams for innovative ideas– Implementation of annual innovation awards (different

industries)

Criteria of the EFQM Framework for InnovationPeople (Innovation Friendly Environment)

• Ensuring people have the resources and space to explore innovative opportunities– „15 percent rule: „Allows all technical personnel to dedicate

as much as 15 percent of their time to working on projects of their own choosing.“ (3M)

• Creating a workspace that supports creativity and communication through co-location and connections– Building companywide communities of practice to share

knowledge and experience (Hilti AG)

Criteria of the EFQM Framework for InnovationPartnerships and Resources

To innovate, excellent organisations continuously build on their network of partners. They manage finance, technology and knowledge accordingly. They consider the following points:

Partnering for innovation

Funding innovation

Managing technology and knowledge for innovation

Criteria of the EFQM Framework for InnovationPartnerships and Resources (Partnering for Innovation)

• Building an innovative partnership network– Scoring the world for the top scientists to develop new

refrigerants. Networking with them to save time, energy and manpower. (DuPont)

Criteria of the EFQM Framework for InnovationProcesses

Excellent organisations develop and enhance relevant organisations structure, processes, methods and tools to successfully manage innovation projects and activities that focus on customer current and future needs. They consider the following points:

Developing appropriate structures

Managing / enhancing the innovation process

Managing innovation projects / programmes

Criteria of the EFQM Framework for InnovationProcesses (Developing appropriate structures)

• Using small entrepreneurial cross-functional teams to quickly scope ideas and opportunities– Setting task forces to explore the potential of discoveries.

(Different industries)

• Establishing separate structures or ventures to enable radical innovation– Establishing a process that actively manages spin-offs to

foster innovation that doesn’t fit into the overall innovation strategy (different industries)

Criteria of the EFQM Framework for InnovationProcesses (Managing the Innovation Process)

• Using a structured stage-gate logic to steer and manage the innovation process– Stage gate process with a mixture of examination / critique

of senior scientists / research managers and benchmark data from other projects. (Pfizer)

• Eliminating innovation bottlenecks and optimising time to market– Integrating testing groups into innovation teams at the very

early stages of development to reduce sources of errors (e.g. software development)

Criteria of the EFQM Framework for InnovationProcesses (Managing Innovation Projects – Innovating

Together with Lead Users; 3M)The lead user process• Phase 1: Laying the foundation

– Identifying markets– Identifying key stakeholders within the company

• Phase 2: Determining the trends– Talking to experts to find out where the trend leads to

• Phase 3: Identifying lead users– Identify users at the leading edge of the target and related markets– Gathering information to identify especially promising innovations / ideas that may lead

to breakthrough products– Begin to shape preliminary product ideas / assess the business potential

• Phase 4: Developing the breakthroughs– Move preliminary concepts toward completion– Hosting workshops with marketing / technical people and the lead user team– Develop recommendations and present them to senior managers– At least one member of the lead user team should stay involved in further steps of

development

Source: Von Hippel, Thomke, Sonnack 1999

Criteria of the EFQM Framework for InnovationResults

• Customer Results

• People Results

• Society Results

• Key Performance Results

Excellent organisations comprehensively measure and achieve outstanding results. They consider the following points:

The EFQM Framework for Innovation

How the frameworks can be used

• An idea box and a set of guidelines to fuel the organisation with improvement opportunities

• A way to demonstrate that it is possible to have an integrated management framework (bringing things under one roof)

• A framework for assessment as part of an improvement project on innovation management…

• A regular assessment framework integrated or not with the EFQM excellence assessment