Mastering the Dynamics of Innovation by Bernt Kristian Jensen and Tore Hundsnes, CapGemini Norway

Mastering the Dynamics of InnovationA Capgemini Consulting Point of ViewSeptember 2009September 2009

Innhold

1. Capgemini Consulting2. Innovation introduction3. Norwegian CEO’ s on Innovation4. Learning from others5. A new Innovation approach emerges6. Getting innovation right

© 2009 Capgemini – All rights reserved 1

Capgemini is one of the leading companies globally within Management Consulting and Technology

Talent and skills• 90.000 employees

globally• 3000 i the Nordic

Global presence• 300 offices in more

than 30 countries• Several branches in

the each of the

Financially Strong• Turnover on € 7,7

billion • Noted on the Paris

Stock Exchange • 600 in Norway • Ranked among the

top 100 of the most attractive employers (Fortune Magazine)

the each of the Nordic Countries

Stock Exchange

Three strongservice lines

Technology Services Outsourcing ServicesCapgemini Consulting

• Accelerated solutions• Technology consulting and

development

• AM (Application Management)• IM (Infrastructure Management)• BPO (Business Process

• Strategy• Business transformation• Finance & Employee


p• Business solutions

• BPO (Business Process Outsourcing)

• Finance & Employee transformation

In Norway, Capgemini Consulting focus on Strategy and Transformation within five sectors

Strategy Transformation Finance & Employee Transformationa s o at o

Financial GovernanceSourcing AdvisoryHR Strategy

Operational Excellence Business TransformationIT strategy and transformation

Business StrategyStrategic MarketingM&A and strategic transformation transformationtransformation

Energy & Utilities Distribution & Transport Financial Services Public Telecom & Media

We consult leading businesses and organisations in various sectors in order to help clients make the right strategic choices, transform their businesses and deliver results.


strategic choices, transform their businesses and deliver results.

Innhold



Innovation can be understood both as a process and an outcome, which embodies ideas, conversion of ideas and diffusion that creates an economic impact

I ti i th f id th h d l t t i d b fitInnovation is the process from idea, through development, to received benefits:

Idea generation Conversion Diffusion

CREATIVITY AND ADOPTIONThe mental phenomena skills,

INVENTION“Converting ideas into something

IMPLEMENTATIONThe process of transforming an

cognitive ability, structures, culture and/or tools capable of originating

(and subsequently developing) new ideas, innovation, inspiration or

insight”

new and specific with value creating potential”

invention into products or activities in order to successfully create

impact of the invention”

insight

We do not classify an invention as an innovation until it has been developed and implemented to an extent where it has an economic impact in an organisation and/or society.


economic impact in an organisation and/or society.

While product innovation receive the majority of investments, business model innovation which has the lowest investment levels offer superior returns

Return on Innovation

Financial Process Offering Delivery

Investment levels and returns last 10 years

According to Keeley the average global innovation success rate is 4%

Product innovation is by far the largest area of investments, but offer overall very limited returns

Busin

ess

Mode

l

Netw

orking

Core

Proc

esse

s

Enab

ling

Proc

esse

s

Prod

uct

Perfo

rman

ce

Prod

uct

Syste

m

Servi

ce

Chan

nel

Bran

d

Custo

mer

Expe

rienc

e

In estment le els Ret rns

Business Model innovation is the smallest area of investments, but offer superior returns

Customer focused innovation in channels, brand and experience offer moderate returns

Companies destroy business value by generally focusing too much on product innovation compared to other innovation types !

Investment levels Returns


Source: Calculation based on Prof. Larry Keeley (Doblin Analysis), The Taming of the New, Harvard Business School Press 2004

p yp

Innhold



While other Nordic countries are considered as innovation leaders, Norway is heading towards the rock bottom of the Innovation Scorecard

European Innovation Scoreboard 2007

The European Innovation Scorecard is a comparative analysis of innovation

f EU

Scorecard definitions

performance among EUSummary Innovation Index is measured on input and output factors, for example Population with tertiary education pr 100 population (input) and European and US patents per million population (output)The secondary axis of the Innovation Scoreboard is the average growth rate of the Summary Innovation Index on the primary axis

The countries plotted have been grouped The countries plotted have been grouped by those that are ‘leading’, those that are ‘average’, those that are ‘catching-up’ and those that are ‘trailing’

Despite the low Norwegian innovation score at an European level, only 4% of interviewed CEO’s perceive their company to be lagging behind among their peers.


y p p y gg g g p

Source: The European Innovation Scoreboard 2007; Capgemini Consulting CEO Study 2007

Norwegian CEO’s recognise severe challenges in pursuing innovation types producing high returns

High

BusinessModel

BusinessNetwork

Innovation type and returns

orma

nce

High

Product performance

Product system

Norwegian CEO’s view on innovation

Leve

l of r

eturn

sMo

dera

te

CustomerExperience

Core

Enabling Process

ed in

nova

tion p

erfo

Mode

rate

system

Brand

CustomerExperience

Low

Product performance

Product system

Deliverychannel

Brand

Process

Perce

iveLo

w

BusinessModel

BusinessNetwork

CoreProcess

Enabling Process

Level of investmentsLow Moderate High

Source: Doblin analysis; KeeleyPerceived improvement need

Low Moderate High

Source: Capgemin CEO study 2007

Despite a poor Norwegian position on the EU Innovation Scoreboard, Norwegian CEO’s are confident about their


esp te a poo o eg a pos t o o t e U o at o Sco eboa d, o eg a C O s a e co de t about t ebasic innovation capabilities in bringing product innovations to the market!

Norwegian companies have challenges across the innovation value chain

Idea generation

Idea management in place

39 %48 %

30 %40 %50 %60 %

Norwegian CEO’s highlight a strong presence of new ideas within Norwegian companiesHowever, as much as 48% of the interviewed CEO’s admit there is a lack of a structured process to

t id

Idea management in place

13 %

0 %10 %20 %30 %

To a largeextent

Moderate To a smallextent

capture new ideas39% of interviewed CEO’s claim to have implemented some sort of ‘idea management system’

48% of the participants cannot quantify their Funding –(Conversion -selection)

48% of the participants cannot quantify their investments in innovation68% of the participants fund their innovation within the operations, while only 9% are dedicated project budgets

Innovation spending

Measurement –Revenue, sales and EBIT are most widely used by the participants to measure successful innovation, but the respondents are not particularly satisfied with th KPI

Percentage of revenue spent on innovation

48 %35 %

30 %40 %50 %60 %

(Diffusion - impact) the KPIs40% of the respondents find it very hard to measure successful innovation

9 % 9 %

0 %10 %20 %30 %

Can'tquantify

0-2% 4-5% 12-13%


Source: Capgemini Consulting CEO Study 2007

Innhold



Leading Internet and software players have adopted radical innovation methods across the value chain

Early Adopters of New Approaches to Innovation

Idea generation Conversion Diffusion

In-House Cross-Pollination External SpreadDevelopmentSelection

Multi-Idea submissionOpen APIs Leverage

d t f Prototypes Leverage O Sfunctional

teams

Hack Days and Code contests

Idea submission to top executives

Web 2.0 Tools

and platforms

Consumer-led

data from betas

ypand beta releases

VC funding for tiv

es External ideas - Open

Open Source and Mashups

Tapping into open

20% time

Code contests Toolsinnovationemployee

ideasIniti

at ideas Open Innovation

Balanced

Leverage customer data from Mashup

developer communities

Brainstorming

Distribute development kit broadly

Alliances, co-opetition and common

Social networks

explorationdata from betas

papplications

gSessions

kit broadly and common standards


Source: Capgemini C4 Lab analysis. Harvard Business Review, “The Innovation Value Chain”, 2007

En godt kommunisert strategi gir en god ramme for idégenerering

En godt forankret strategi Idéer som bidrar til å realisere strategien

Idea generation

Trender impulser ideer og nye brukerbehovSamle, spre og Vi gjør det enkelt Vi skal bekjempe

økonomisk Vi skal

samarbeide

En godt forankret strategi Idéer som bidrar til å realisere strategien

Trender, impulser, ideer og nye brukerbehov videreutvikle ideer som kan

bli til nye tjenester

Kontinuerlig evaluere og Strukturert

gjå handle riktig økonomisk

kriminalitetsamarbeide

aktivt med andre

Velge ut de beste

konseptene for gjennomføring

evaluere og forbedre

tjenestene

Strukturert innovasjons-

prosess

Realisere de beste

konseptene

Levere tjenestene


Innovasjon i en stor organisasjon krever dedikerte ressurser som kan kjøre gode prosesser

I Skattedirektoratet er det etablert en egen stab som har dette som ansvarsområde

OppgaverEvaluere og utvikle etatens samlede innovative evneUtvikle, samle inn, foredle, utrede og sikre iverksetting av ideerSette ’Innovasjon’ på dagsordenen i organisasjonsutvikling, leder- og ledelsesutvikling, kompetanse- og personalutvikling kultur- og samspillsutviklingkompetanse- og personalutvikling, kultur- og samspillsutviklingAnsvarlig for ”idea generation” og ”idea conversion” i nnovasjonsprosessen:

Fange idéer Behandle idéer Kvalifisere idéer Utvikle/utrede idéer

Beslutning om handling

Innovativ og dyktig på forretningsutvikling, analyse og utredning

Bidra til å øke innovasjonstakten og utviklingen av nye interne og eksterne løsninger

Evne til å engasjere med gode prosesserStruktur og systematikk

Kompetanse


Capgemini’s large scale workshop methodology was adjusted in collaboration with Oz’Tel and Vodafone UK to enhance acceleration and creativity in NPD

ExperienceBackground for “Collaboration Zone”New product development projects used to take 8 months from concept to feasibility stage and 60% of the projects ‘got st ck’ in the process

Vodafone and Capgemini modified and compressed the analysis process focusing on acceleration collaboration and innovation 60% of the projects ‘got stuck’ in the process

Based on experience from Oz’Tel in Australia the model consistent of 4 facilitated events was designed and implemented at Vodafone

acceleration, collaboration and innovation The result was a reduction of the analysis process from 8 to 2 monthsThe model is perceived by Vodafone as positive, creative and fundamental to speeding up the

f th i b ipace of their business

Collaboration Zone - Model with ‘explore-specify-design-sign off’ logic

W k 1 W k 2 W k 3 W k 4 W k 5 W k 6 W k 7 W k 8Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8

Event 1ExploreEvent 1Explore

Event 2SpecifyEvent 2Specify

Event 3DesignEvent 3Design

Event 4Sign offEvent 4Sign off

Business requirements &Business model iterations Solution design iterations

Further adjustments were required in order to create a “fit” with the Telenor organization and the business processes.

© 2009 Capgemini – All rights reserved

g p

“Think if…

A project manager’s dream world?Think if…

all the right experts were gathered in one

place”

“Think if…

all project participants were

ti t d dmotivated and engaged in the work”

“Think if…

the analysis phase l t k 8 k ”

“Think if...only took 8 weeks” “Think if…

decisions could be taken continuously to

secure progress in th j t”

you always had answers to questions

from the steering committee”

the project”

“Think if…

there was a methodology that


methodology that could solve all this”

Fast Lane is a collaborative workshop model consisting of four key components together building an accelerated experience

A rigorous facilitation process

Concept design including Use C & B i R i t

Improved quality of content

The Fast Lane methodology consists of 4 main components:

The Fast Lane concept consists of a sequence of facilitated events which process work in parallel Representatives from different domains working together in each

Cases & Business Requirements

Technical Design

IS Architecture

Gallery Event 3

ActEvent 4Sign -off

Event 1Scan

Week 4 Week 5Week 3Week 1 Week 4 Week 5Week 3Week 1

4 hours 6 hours 2 hours6 hours

Event 2Specify scope

do a s o g toget e eacevent drives the quality of content and secures speed and direction in the process

Securing that all the right people are involved at the same time enables

ContentProcess

Environt

People

Process

People

Environment

Content

involved at the same time enables the team to focus on the right things, and kill ‘bad’ ideas early

The environment can be developed over time, in the beginning it is important to have a dedicated 4’ Si l P l M bl

5’ Round Table Seats 5 – 8 Participants, easily

bl d/ t d

phone lines and network ports for project team

MAP KEY

Collaborative Highly configurable environment

mentPeople

People

important to have a dedicated environment with flexibility to re-organize between different events

Entrance

Plenary Area

(sits 30)

Project Team Workstation area)

PRODUCTION

Used by Facilitation Team

4’ Single Panel Moveable Whiteboard Wall

8’ Double Panel Moveable Whiteboard Wall

assembled/stowed

Alternative arc formation of chairs

PlantSmall waste bin

2 x Photocopier

/Printers

Power points around

the walls

Workstation

workstation

Workstation

Workstation

Workstation

Tea/Coffee/

Catering

PRODUCTION


The Fast Lane process is a collaborative event model which seeks to do activities in parallel rather than in sequence

Fast Lane is a collaborative workshop methodology based on Telenor’s project model:

The Fast Lane design consists of a sequence of facilitated events in an 8 week period,

d i th l i

-model

Event 2 Event 3 Event 4Event 1

Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1 Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1

reducing the analysis phase significantly

S f t it

A rigorous facilitation process Event 2 Event 3 Event 4Event 1

Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1 Week 8Week 7Week 6Week 5Week 4Week 3Week 2Week 1

The Fast Lane process seeks to scan the opportunity area early in order to focus right:

Scan area of opportunityFocus on the best ideasAct on the right solutionsBespoke design for every eventHighly experienced facilitators


Highly experienced facilitatorsScanScan ActActFocusFocusScanScan ActActFocusFocus

Fast Lane is an iterative process, involving and challenging different domains of the organization by breaking up ‘silo’s’

Concept design including use cases & business requirements

Each Event in the NPD process covers:Business requirements

The approach to Collaboration is iterative

Business requirementsTechnical designIS architecture

Representatives from different domains working together in each event drives the quality of content and secures speed and

Technical design

IS Architecture

direction in the process

Conceptual illustration of involvement from different domains:

Business requirements

Technical design

IS architecture

volv

emen

t

Event 1

EXPLORE

Event 2

SPECIFY

Event 3

DESIGNEvent 4

SIGN OFF

requirements

Time

Inv

(sub event) (sub event) (sub event)


EXPLORE SPECIFY DESIGN SIGN-OFF

Innhold



Innovation success today requires a marked departure from traditional principles

The Innovation Value ChainIdea generation

The Innovation Value ChainConversion

In-House Cross-Pollination External Selection SpreadDevelopment

Diffusion

In House Pollination External Selection SpreadDevelopment

onal

Prime Source of Ideas is the

R&D D t t

Limited, through formal

Ch l

Partner to Create

Proprietary IPR

Financing Dependant on Organisation

P i iti

Linear process

Disjoint

Limited to market

segments or d li

Trad

itio Department Channels IPR Priorities Disjoint

Ownership Across Teams

delivery platforms

ach

Ideas can Emerge Anywhere in the

Organization

Collaboration across diciplines

Adequate, through

Open Innovation -source ideas

externally

Financing Based on Merit of the Idea

Structured prioritising and

Iterative process

Prototyping and beta-testing

Rapid diffusion across markets and platforms

Consumer

New

Appr

oa Provide individual freedom to pursue

own ideas

Web 2.0 tools

Establish incentives for collaboration

Collaborate to Evolve Common

Standards

prioritising and portfolio

management

Balance exploration and

exploitation

End-to-end Ownership with

Single Team

Strong consumer

Consumer involvement and

fast upgrades

Openness to encourage

l t


exploitation projects

involvement complementary products

Source: Capgemini C4 Lab analysis. Harvard Business Review, “The Innovation Value Chain”, 2007

Innhold



Getting innovation right, organisations have to master seven different, but certainly interlinked, dimensions

Select the right people to fuel the organisation’s innovative capabilities1

Seven dimensions of innovation success

Apply appropriate organisational levers to develop a culture of innovation2

Foster creativity and collaboration across divisions and functional silos3 Foster creativity and collaboration across divisions and functional silos

Bring structure and discipline to all phases in the innovation value chain4

Leverage data to prioritise projects and maintain a balanced project portfolio5

Ensure resources and infrastructure to get speed into project execution andproject upgrades based on customer feedback

6

Track innovation performance, learn quickly and continuously upgrade practices 7


The road to innovation leadership is demanding, but rewarding !

BackupBernt Kristian JensenCapgemini ConsultingPrincipal | Chief of Staff

Mobile: +47 41 43 18 [email protected]

Tore HundsnesCapgemini ConsultingManaging Consultant | Telecom Media Entertainment

Mobile: +47 46 42 57 [email protected] t je se @capge co to e u ds es@capge co

Education

Mastering the Dynamics of Innovation by Bernt Kristian Jensen and Tore Hundsnes, CapGemini Norway