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A keynote talk that I gave to the Boston Chapter of the Society of Information Management.
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Incubating Innovation in the Enterprise: Harnessing Mindlessness and Mindfulness
Larry Gioia, Director PwC IT Strategy & Enterprise Architecture
Boston SIM March Monthly Meeting March 22, 2013 Cafe Escadrille Burlington, MA 7:00pm-8:00pm
The Candle Problem
The new age of innovation …
• Innovation should extend throughout the enterprise – not limited to R&D, innovation should be part of everyone’s DNA
• The challenge is enabling people to step outside their mindless jobs (e.g., functional fixedness) to engage in mindful innovation
• Everyone can become more innovative if provided with the right leadership, tools, and support
• Incubators provide an effective structure and process to harness creativity and drive mindful innovation
Innovation is value-creating novelty; the creation and delivery of new value for customers, consumers, and the company
The rate of change continues to accelerate …
Source: Go-Global.com
Change advances at a double exponential rate
We won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at
today’s rate). – Ray Kurzweil
Source: The Singularity is Near, Ray Kurzweil
The magnitude of this change is overwhelming
Source: http://visual.ly/exploding-interenet-2008
Are you playing to win or playing not to lose?
Play Not to Lose (Defensive)
Protect and Maintain
Learn and Prove
Build High-Potential Brands
Build New Growth
Platforms/ Business Models
Manage for Margin
Play to Win (Offensive)
What’s your flavor of innovation?
Process Service Product Business Model
I I Incremental Radical
• Typically focused around improving what is existing
• Less disruptive
• More “defensive” in nature
• Typically focused around invention and creation
• Higher potential for disruption
• More “offensive” in nature
How can we measure the potential disruption?
Cost
Confidence
Convenience
Compensation
C4 Innovation
Cost
Genomics and the resulting disruption …
Confidence
Convenience
Compensation Source: The Economist Source: Oxford Nanopore
Source: http://cmbi.bjmu.edu.cn/news/report/2001/02/view/4093.htm` Source: Oxford Genomic Health
Mobility and the resulting disruption …
Convenience
Confidence
Cost
Compensation Source: http://www.huffingtonpost.com/nathan-newman/in-att-tmobile-debate-
Source: The Economist Source: PwC analysis
Mindfulness vs. Mindlessness
Exploiting today
Organized
Stability
Incremental improvement
Efficient
9.99999 success
Predictable
Hierarchical
Exploring tomorrow
Chaotic
Change
Radical invention
Wasteful
10:3:1 failure
Plausible
Organic
Mindlessness Mindfulness
13
Min
dfu
lne
ss
Min
dle
ss
ne
ss
Source: PwC
The paradox of mindfulness and mindlessness
Should all innovation be treated equally?
Those who are leading the innovation game acknowledge that not all innovation is created equal and have adopted different op models
Innovation Operational Model
Incremental Innovation
(2-5 years out)
Radical (Disruptive) Innovation
(5+ years out)
Idea
Generation
Channels and Markets
Idea Generation Idea Management Execution
Source Ideas
Build on Ideas
Record / Document Ideas
Capture Ideas
Evaluate Ideas
Channel Ideas
Experimentation
Prototype
Pilot
Roll out / Commercialization
Ste
ps
Bu
ild
ing
Blo
cks Required Tools: Learnings Capture, Communications, Documentation / Record Keeping
Culture: Incentives / Rewards, Marketing Campaigns, Visible Leadership Support
Support: Training on Processes / Available Resources, Clear Guidelines, Coaching / Mentoring, Funding
Governance and Oversight: Roles / Responsibilities
Development
Filter Ideas
With some common plumbing …
Source: PwC Innovation Benchmarking Analysis
Incubators are a popular method to begin the innovation journey …
Data mining
Partner collaboration
Innovation networks
Innovation tournaments
Rapid prototyping
Breakthrough innovations
Deep customer insights
Constraint-based innovation
New boundary conditions
Early acquisition
Companies Began Experimenting With Find New Ways to Grow
Stage Gate Product
Development Stage Gate
Product Development
Open Innovation
Incubators
Corporate Venture Capital
Co-Creation
Reverse Innovation
Design Thinking
Innovation generally requires and may draw from a mixture of operating models:
A Number of New Operating Models Have Emerged …
Frugal Innovation
A Case Study: How a Large Global Pharma is Incubating Innovation
Shifting the cultural mindset away from the traditional (mindless) IT and focusing on understanding the potential for disruption and determining where to “place bets”
Building the Foundation …
1
IT Leadership Champions
2
Assimilation of Disruptive Ideas
3
Global Candidate Application Process
4
Selected Teams and Aligned to Topics
5
Lite-weight Innovation Orchestration Team
6
External Advisory Panel
A few final design considerations …
1. Show traceability of your innovation efforts to overall strategy
2. Get the right employees and partners engaged
3. Promote frequent interactions of disparate groups
4. Invest in the fundamental plumbing
5. Incubation requires dedicated staff – no “stretch” assignments
6. Have a bias towards a lean corporate innovation team
7. Create separate structures that support each innovation type
8. Identify champions and customers in the business
9. Learn how to run your businesses ambidextrously
10.Foster innovation as a discipline in your organization
Ta
cti
ca
l S
tra
teg
ic
Let’s Continue the Conversation …
Larry Gioia Director PwC IT Strategy & Enterprise Architecture [email protected] 412.916.9960 www.linkedin.com/in/lgioia