Creativity & Innovation

Building capability and a path to Growth

Anand Subramaniam

Imagination is more important than knowledge."

- Albert Einstein

Highlights
Creativity & Innovation Innovation Innovation Model, Programs & Roadmap Innovation - Data Sources / Relationships Innovation - Using DMAIC Innovation Framework Metrics & Measures
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Creativity & Innovation

Creativity & Innovation

Creativity
Generative novel ideas.

Innovation
the process of converting novel ideas into something of value

Ideas
Voice of the customer Competitors Market Creativity Events Lead User Days Other Quality Function Operations Function Merchandisers / Distributors All Staff / Employees Market Research Suppliers Trade Publications Technology External Research Internal Research Technical Publications Trade Shows

IDEAS

Innovation

Why Innovate
The enterprise that doesnt innovate inevitably ages and declines New products & innovativeness usually increase company value Companies that are doing well today invariably have an enviable stable of new products New products represent an increasing % of companies sales revenues & profits
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Critical Success Factors

Innovation culture within the organisation and led by CEO Develop unique products that solves and meets customers needs better than competitive products Define the new products strategy along with the process which has acceptance from all stakeholders Follow a disciplined and systematic Innovation process Define program and project structure including stage gate reviews Do your homework with regard to technical, financial and market assessment Use an Outside In customer focused perspective
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Perspective
Innovation is a strategic imperative Requires innovation functions as a core competency within an organisation Incremental or radical innovation New Products Innovation Process is a key business process
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Challenges
Change management implication Process ambiguity Visualisation of vision, goals and progress Internal and external stakeholder communication Collaboration and communication between cross functional teams Learning curve
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Minimise Risk Exposure

Base innovative efforts on your experience. Focus on products or services that have been largely overlooked. Be sure there is a market for the product or service you are hoping to create. Pursue innovation that customers will perceive as adding value to their lives. Focus on new ideas that will lead to more than one product or service. Raise sufficient capital to launch the new product or service.
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Innovation Model, Programs & Roadmap

Innovation Model
Current Practices Today Direction Generate innovation Operational performance Technology Resource capabilities and competencies Industry partnership Resource forecast and allocation Surveys Sustainable growth Outcomes ROI IRR / NPV Client assessments Intellectual property Corporate viability Industry association Future Growth Change competition landscape Competition Scenario planning / Game theory Extrapolated trends Market consequences Alliances partner and third party National association Thought leader

Leadership Vision Governance Focus Creativity

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Innovation Program
Focus Environment Scan (Know Why) Strategies Understand the markets, customer, competitors, industry trends, legal & fiscal requirements along with the drivers Segment the market and identify target in the attractive segments Determine new customer and their purchasing reasons Develop a marketing communication strategy Translate current and future customer needs and preferences (unsatisfied / unstated needs) into product performance requirements Decide how to differentiate our offerings Set multi-year (3 ~ 5 years) targets and plan for product / R&D evolution Align resources for product performance Define capabilities and competencies for differentiation and the value proposition along with investments Identify and capture potential disruptive strategies including technologies Align demand and supply chain to fill the gaps Understand and integrate process, procedures, systems and people required to deliver the products and services Define time lines and get acceptance from the senior management along with the business case, blue print and governance

Product / Services (Know What) Process (know how)

Resources competency (know who) Time Lines (know when)

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Innovation Roadmap
Area Market Roadmap Inputs Customer needs Competitive threats Emerging markets and trend analysis Window of opportunity Prioritised customer needs Existing capabilities Process evolution plans Existing capabilities Benchmarking Outputs Prioritised customer needs Opportunities and risks Key growth area and opportunities to have first mover advantage Product / service evolution plans Desired attributes products & services Fix the gaps Process / resources / technology development plans Scorecards Gaps Risks and mitigation Project process, transition, product outputs and business case management

Product / Services

Technology / process

Program office

Program process, transformation change, governance and outcomes

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Innovation - Data Sources / Relationships

Innovation Data Sources

Scope Trend analysis Competitive intelligence Purchasing scenarios Data Customer database & CRM Benchmarking Sales Data Customer Connection Customer immersion techniques Personal contacts Observation and shadowing Research Quantitative and qualitative research Ad-hoc research

Use (Six Sigma / Lean / TQM) PDCA or DMAIC

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Innovation Relationship
System Sub System Example 1 = transportation Engine Brakes Seats Paint Car Transportation Example 2 = Health care Equipment Doctor Nurse Records Doctors surgery Healthcare Example 3 = Healthy Society Hospitals Healthcare Drug companies Doctors Healthcare Healthy Society

Current System Super System

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Innovation - Using DMAIC

For Idea Generation..

A vision for change Remove fear of change Move thinking towards a venture capitalist Incorporate dynamic suggestion scheme Introduce lateral thinking Give everyone 2 jobs Collaborate Welcome failure Environment for calculated risk taking Build prototype Be PASSIONATE
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Using DMAIC - Define

Realise that there is a decision to be made. Define the problem statement Form the issue as a single sentence. An issue is the statement about the problem being solved or the question being answered. List the stakeholders. The stakeholders include everyone who will be affected by the decision.

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Using DMAIC - Measure

Develop multiple alternatives for resolving the issue. Identify necessary and sufficient conditions for the mode of failure Work to generate a set of discriminating criteria and their targets.
Identify targets as 1) qualitative, 2) quantitative (<, >, =)

Assign the appropriate criteria to the appropriate stakeholder(s).

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Using DMAIC - Analyse

Study the system to identify conditions present during failure and eliminate potential causes until mode is verified Assign cause and create cause and corrective action Evaluate the alternatives relative to the criteria by
level of evidence, level of certainty rationale.

Manage and visualise the evaluation uncertainties (using belief maps, for example). Fuse the evaluations using a structured method to find
alternative satisfaction alternative risk

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Using DMAIC - Improve

Base future activity on a what-to-do-next evaluation.
understand the cost and benefit of doing more work to improve the decision.

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Using DMAIC - Control

Document the decision and the reasoning behind it.

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Innovation Framework

Need for a Framework

Framework for cross-functional alignment and integration Enables effective decision making in line with the vision Align future goals and product plans Align R&D spending and product development initiatives Aligns product portfolio with corporate and market needs Provides visibility into strategic and program direction Integrates data, product plans, and goals Identifies gaps in product, technology & capability plans Provides direction to project teams Shared vision of strategy alignment and execution Capture knowledge as the effort progresses
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Framework
Set the Innovation Objectives

Conduct Industry & Market Analysis

Assess Internal Resources & Capabilities

Identify Potential Innovation Development Areas

Evaluate & Select targeted Innovation Areas Identify Development Projects Identify other Capability building actions

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Innovation Objectives
Sales/Profits from new products
By product group By market By geographic areas

Percentage of sales/profits from products that are less that 3/5 years old Product strategy objective statements
Gain a presence in a new market Exploit new opportunities in an existing market Defend market share
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Industry / Market Analysis

Industry / Market Analysis
Understand the industry structure Market segment, sizes and trends Changing customer needs

Competitor Analysis
Outline the market / segment share Understand products offered and how they are differentiated
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Resource Capabilities & Competencies

Core capabilities & Competencies
In / Out bound logistics Marketing Research & Development Manufacturing After Sales Finance Operations
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Development Areas
Industry segment / value chain attractiveness Changes in customer needs or values & impact on the industry and its key players New opportunities that better meet customer needs and / or capitalise on a changing environment Opportunities for new product development options
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Evaluation & Selection

Business Strength / Market Opportunity Matrix
Business Strength
Ability to leverage capabilities (Marketing, R&D, Technical, Manufacturing and Customer Relationships) Potential for gaining product advantage

Market Opportunity
market attractiveness technological possibilities

Selection
Plot options on strategic map Select preferred options Priorities, scope, project selection
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Innovation Metrics & Measures

Metrics / Measures
Macro
Amount of innovation budget Ratio of innovation projects sponsored by senior management

Volume
Number of innovations made Number of patent applications filed Number of trademarks obtained Number of people involved systematic problem solving Number of systematic innovation projects completed

Speed
Amount of time per innovation Research cycle time Product development cycle time Mean time to solve and implement an innovation solution
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Metric (Contd.)
Financial Performance
% of Sales from New Products % of Profit from New Products % of Sales invested in NPD Sales Potential of Pipeline

Project Performance
Actual Time Performance vs. plan Actual time taken to complete stage Actual Cost Performance vs. budget

Process Performance
Time to Market (by project type) Market Launch Hit Rate Number of New Product Ideas reviewed

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Every act of creation is first of all an act of destruction."

- Pablo Picasso

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Good Luck
http://www.linkedin.com/in/anandsubramaniam

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