PowerPoint Presentation
and solutions for the future7Myths of Business Innovation
What is innovation?2Creativityis about new ideasInnovationis the
profitableimplementationof these ideas
In Fortune 500 companiesNew products account for 50% of
revenuesAnd 40% of profits3Why it is important
The Hard Facts99% companies value innovation, 5% are
innovativeThe perception gap: 29% of companies think they had a
major innovation in the last 6 months. 5% of consumers agreeThe
hard road from ideas to impact 85% of valuable ideas do not reach
their full implementation
A warm up exercise
1000401000301000201000105,000
90 % of businessexecutives agree
Paradigms = models, patternsthe basic way of perceiving,
thinking, valuingA dominant paradigm is seldom if ever stated
explicitly; it exists unquestioned transferred through culture and
unspoken business practicesWilliam Harmon- An incomplete guide to
the future
6
4/2/20157It is about what we do behind closed doorsInnovation
just happensWe need to reward innovationIt is about working
harderInnovation is about big ideasWe need our brightest and best
on the caseIt is all about selecting the best ideas and doing
moreThe Innovation Paradigm
Test Layout8These are comfortable, logical business ideas and
what we have been taught.But, they are not the whole story
9Its not what we dont know that is really dangerous
Its what we know that aint so
10It is about opening doors and listeningMyth:It is about what
we do behind closed doors1
Conversations are the key driver of innovationBut we are afraid
to manage or join them.
1
11
Innovation = Size ^ power valuePower value
CitiesCompanies1.30.7Innovation
output1100%100%Size5690%309%254759%952%Innovation per
person1100%100%Size5138%62%25190%38%Source: Geoffrey West: The
surprising math of cities and corporations
Test Layout12
1The Power Laws of InnovationAs cities grow and contactincreases
innovation increases (25 X bigger = 2X more innovative)
Why: contact increases
As companies get biggerand have more resources innovation falls
(25 X bigger = 60% less innovative )
Why: contact decreases
Test Layout13
1Imagine thisBMW has some of the best designers in the world and
sells their designers by the day below cost
Why: to build creativity
14Innovation is something you make happenMyth:Innovation just
happens2
Test Layout15
2Innovation is aboutBeing committed to better satisfying unmet
unarticulated needsWorking to build insightsStaying focused on
consumer (customer) valueHabits
Test Layout16
2Needs first, not ideas first !
Develop a solutionFind a needFind a
marketIdeasFirstSuccessRate*5-10%
Find a needDevelop a solutionFind a marketNeedsFirst70 %*
According to Strategyn research on outcome driven innovation
17
2It is more than talking to consumers We should ask the consumer
because she isnt stupidUnarticulated needsArticulated needstodays
businessServed Un-served
unexploited opportunitiesMobile phoneComputersInternet
It is about hard questioning You can't just ask consumers what
they want and then try to give that to them. Sometimes (actually
often) they dont know what they want
It is often about golden questions18
2
A 1 year projectHow could we identify the people buying
Sheba
IncomeType of catType of personFamily compositionAgeYears
togetherTest Layout19The answer was simpleDo you buy your cat A
Christmas present
21More importantly you need to reward good failuresMyth:We need
to reward innovation3
22The danger of the Internet
Is there anything someone hasnt done on the internet ?
3A big ideaLook it up on the internetSomeone has done it
already
The big innovation ParadoxWhoever Makes the Most Mistakes
WinsRichard Farson & Ralph Keyes 23
2
Introduction24
3
Introduction25
3
Introduction26
3
Reward excellent failures. Punish mediocre successes.Phil
Daniels, Sydney exec
28
29No, it is about working smarterMyth:It is all about working
harder4
Introduction30
4
90 % of what we call management consists of making it difficult
for people to get things done. Peter Drucker
Your new creativity officeTest Layout32
4
4/2/2015Introduction33
4
Successful organization are simply those with successful habits.
Brian Tracy (Time to think / do can be a habit you build through
organizational processes)
The test, solve a difficult task whileReading emails or smoking
marijuana
Test 1Test 2
A few simple ideasStop the email notificationsNo internal email
Fridays5,10,20% time like 3M, GoogleGet people to block (and keep)
time for creativity in their agendasTest Layout35
36Real innovation is about the adjacent possibleMyth:Innovation
is about big ideas5
4/2/2015Introduction37
5
How many people think Apple invented the MP3 player ?
Almost 50% of US consumers
4/2/2015Introduction38
5More memoryMore featuresBetter song management
Simplicity and coolness
More Examples
Managers increasingly need to take ors and turn them into
ands
Roger MartinThe design of business
40
41
42Actually, what you need is people that think
differentlyMyth:We need our brightest and best on the case..6
43 Two Groups
6Best 20 agentsGroup 1Random 20 agentsGroup 2Have each group
work collectively
When one agent gets stuck at a point, another agent tries to
find a further improvement.
Group stops when no one can find a better solution.
44The IQ View
6
Alpha Group121132155139135137
Diverse Group1218411110513595
45The Toolbox View
6
Alpha GroupABDADEBCDABCBCDACD
Diverse GroupAHKFDAEGEZBCDIL
46
6
Bringing new members into the organization, even if theyre less
experienced and less capable, actually makes the group smarter
simply because what little the new members do know is not redundant
with what everyone else knows. James Surowieckiauthor Wisdom of
crowds..
47
6A UCLA MFA 3 X harder to get into than Harvard MBAThe bigger
surpriseAverage starting salaries for MFAs are now higher than
MBAs* MFA = Masters of fine arts
6What you can doRead one of 2 books the wisdom of crowds or The
difference and follow their simple
adviceDiversityIndependenceAggregationEffectiveGroups(Wise
Crowds)++=
What you decide not to do is just as importantMyth:It is all
about selecting the best ideas and doing more7
7
Fail Forward Fast High Tech CEO, Pennsylvania
7
Fail . Fail again. Fail better. Samuel Beckett
7
With so many things to do and so many great ideas what we decide
not to do is infinitely more important than what we decide to do
Steve Jobs
7Research on innovation211 companiesWorstAvgBestTop vs. bottom%
of revenues from new products17%28%47%2.76 % of profits from new
products11%25%44%4.17 % of products that meet profit
targets43%48%66%1.53 Go / Kill criteria set up front26%57%85%3.28
Decisions are objective / fast based15%42%57%3.85 Decisions are
made in review meetings26%51%60%2.32
Cooper, Robert G. "Perspective: The StageGate IdeatoLaunch
ProcessUpdate, What's New, and NexGen Systems*." Journal of Product
Innovation Management 25.3 (2008): 213-232.
Lets have some fun
and exercise your innovative muscles
And lets be honest .
Many of you have products / ideas only a mother could love !
The biggest 3 mistakes of Entrepreneurs/ InnovatorsInvesting in
the wrong business
Staying too long in the wrong business.. (after you should know
it is time to change)
People dont buy your product or service cause they understand
why they should
I will see it when I believe itVS.I will believe it when I see
it
An example: global warmingHot summersWarm winters
Evidence of global warming
Cold summersCold winters
Evidence of global warming
Clearly there is evidence of global warming ?!
SUGGING
Youre not alone !More than nine out of ten consumable products
launched in the last ten years offered absolutely nothing new to
the consumer.More than eight out of ten new products fail. You dont
need to be a statistician to realize theres a correlation between
the two numbers. Robert McMath
A checklist for ideasIs there a benefit (real or perceived)
People willing to pay (enough) Cost of cut-through acceptable
People will see the benefit buy again / recommend to others Will
someone hate it
A simple evaluation system
63
Pets.com
Pet supplies via the internet
Save big, save timeStay at home
63
64
64
65Kosmo.com
Instant delivery of products purchased via the internet in big
cities Order a wide variety of products, from movies to snack food,
and get them delivered to your door for free within an hour.
65
Despair.comWe hate all the senseless, wasted time on employee
motivation and un-founded optimism
We imagine you do to, buy our products and show your true
colors66
66
67
Continuous effort is the key to unlocking your potentialWinston
Churchill
67
68
68
Etoys.com
The new place to buy toys. Find you want on the internet69
69
70
70
71Petrock.com
Pets take a lot of time and energy. Your kids can have almost as
much fun with a pet rock.
We even include a care guide
71
Flooz72
72
Webvan.com
Buying groceries should be easier. With webvan you can get all
your groceries, so you have time for other things73
73
74
74
Now the most important questionWhy would this business fail
76
76
Arguing the other directionWhy is this a bad ideaIf it fails,
why will it failAnd then deciding what can be done about it
Costs per stage
Ideas, screeningConcept, analysisProd. develTest
mktgcommercialization
The time toMake mistakes !
BudgetTime
A checklist Talk to 20 people (that are not your friends)If no
one hates the idea, be scaredAsk people if this fails why would it
fail (youll get a lot more information than asking what they think
of the idea !)Keep it simple check do people really understand
Moving forwards
What you need is a bit of innovation magic
Magic
Make innovation Central
Thinking Different
Good ideas inBad ideas out
A summaryGetting people out of the building asking the right
questionsStructuring your innovation process around customer
needsChanging the reward systems to encourage good failuresChanging
the organization so people have time to be innovativeHelping your
team leverage opportunities in the adjacent possibleBuilding team
diversity/ better ways to work in teamsCreating systems to kill bad
ideas so you have more time for good onesWho will be your good
conscience helping you do the things you know you should do better
?
What is the real danger ?Flavor of the monthSuggestions:No
announcement of a big new innovation program/focusBuilding
enthusiasm for innovation from the bottom up
The solutiongo slow to go fast build on what you haveyou dont
need to change everything to be innovative
Sheet2Group
NumberPets.comKosmoDespair.comEtoys.comPetrockFloozWebvanIs there a
benefit (real or percieved)People willing to pay (enough)Cost of
cut-through acceptablePeople will see the benefit buy again /
recommend to othersWill someone hate it
Kill Puppy (0 = kill, 1 = love)Why would it fail
Pets.comKosmoDespair.comEtoys.comPetrock.comFloozWebvan
Sheet1Is there a benefit (real or percieved)People willing to
pay (enough)Cost of cut-through acceptablePeople will see the
benefit buy again / recommend to othersKill
Puppy1Pets.com2Kosmo3Despair.com4Etoys.com5Petrock.com6Flooz7Webvan
Sheet3Is there a benefit (real or percieved)People willing to
pay (enough)Cost of cut-through acceptablePeople will see the
benefit buy again / recommend to othersWill someone hate
itPets.comKosmoDespair.comEtoys.comPetrockFloozWebvan
Sheet2Group
NumberPets.comKosmoDespair.comEtoys.comPetrockFloozWebvanIs there a
benefit (real or percieved)People willing to pay (enough)Cost of
cut-through acceptablePeople will see the benefit buy again /
recommend to othersWill someone hate it
Kill Puppy (0 = kill, 1 = love)Why will this business fail
Pets.comKosmoDespair.comEtoys.comPetrock.comFloozWebvan
Sheet1Group NumberIs there a benefit (real or percieved)People
willing to pay (enough)Cost of cut-through acceptablePeople will
see the benefit buy again / recommend to othersKill
Puppy1Pets.com2Kosmo3Despair.com4Etoys.com5Petrock.com6Flooz7Webvan
