Innovation

Strategy
A PRESENTATION
 First step in innovation process is
knowing which direction you want to
go.
 What innovation strategy is
and why it matters?
Innovation strategy is a central
integrated and externally
oriented gameplay that
dictates how to generate,
capture, and deliver value.
 More simply put an innovation strategy
answers questions such as:

Where to How to
invest your protect your
resources? innovations?

Which organizational structures and

processes you need to set up?
 Why does an
innovation strategy
matter?

No infinite resources

Continuous hange in
business landscapes
Organizations need clear Smart resource Competitive
strategic directions investments
Three sets of needs

• Basic needs: These needs are often assumed and not

expressed.
• Performance needs: These needs are often explicitly
expressed when we ask customers what they need. To
illustrate, the less a car consumes gasoline, the more
consumers become satisfied.
• Excitement needs: These are what the CEO of Phillips
called the unmet needs because customers are not aware
of these needs before somebody serves them.
These analyses tell us three
things:
• First, consumers have different needs and there is a generous
reward for those firms that address consumers' excitement
needs.
• Second, consumers don't always voice their needs. Instead of
directly asking about what they want, we should observe what
problems they are trying to solve. Innovation then means coming
up with normal and valuable ways to have consumers solve
those problems.
• Third, we must realize that consumer needs shift. Consider
Motorola, which delighted the masses when it introduced a
mobile phone for the first time. But now, mobile communication
has turned out to be a basic need. Therefore, to stay competitive,
firms must continuously search for and address consumers'
unmet excitement needs.
 Different types of technological changes and their affects
that may occur.

·Modular change
A product or service is composed of several components with
different technologies in each component. If the technology of a
particular or component changes, we call this change at modular
change.

·An architectural change

It refers to how different components are linked to each other.
Hence, changes to those linkages are coined as architectural
changes.
Technology Life Cycle
Analysis Point
1
First, S curves are aggregates and rely more on the
manager's perception than hard facts.

2
Second, technology maturity is firm-specific. Each firm's technology
can be or is perceived to be at a different phase of the life cycle.

Briefly elaborate on what

you want to discuss.
Do regulatory restrictions and
changes hamper or foster
innovation?
Early research answered this question negatively. Instead of investing
into innovation activities according to that research, firms spend their
time and money to comply with regulations instead. However, recently
scholars have shown that regulatory changes force firms to think of new
ways of doing business. That is, regulatory changes can make firms be
more innovative. Of course, such claims depend on the firm, government
and market level contingencies. Nevertheless, regulatory changes are
another factor that firms need to consider while crafting their innovation
strategies.
How can firms compete in such an
ever-changing business
environment?
Nobody has a crystal ball. However, we have a simple tool that can let us
envision different future scenarios. Here is an example from the
automotive industry. Here, we consider two scenarios based on future oil
prices ranging from low to high and customer preferences ranging from
status quo to environmentally more conscious preferences. A firm can
assign probabilities for each scenario to become a reality. It can then
make sure that it invests in relevant innovation activities.
Different Sources
of innovation
Demographic
Changes
·Demographic changes or trends could include an
ageing population something which is occurring
in many Western countries. Changes such as this
are likely to cause a shift in consumer demand.
Innovations will stem from this to assist people
with worsening eyesight, hearing, mobility or to
provide leisure activities geared more towards an
older generation.
 Changes in
Perception
Innovations can arise as a result of peoples changes in
perception. One example of this would be the general public’s
perception of tobacco which has changed significantly over
the last fifty years or so. New innovations to help people stop
the habit are occurring all the time as a result. From special
nicotine-releasing gum and patches, right through to
electronic cigarettes (an electronic inhaler that vaporizes a
liquid solution into an aerosol mist, simulating the act of
tobacco smoking). Another example would be how we keep
changing our perceptions of a particular food product. Butter
was seen as too fatty and therefore a number of low -fat
spread alternatives came on the market and more recently we
are now hearing that the body is better able to cope with
processing butter than low fat spreads and so there is a shift
back to butter based products that have been designed to
spread more easily.
Knowledge
New Knowledge. This, in my opinion, is a
very strong producer of innovation.
Advancements in science, for example, are
the formation of new knowledge. Such
advancements are used constantly to create
new, innovative products for us to use. Think
of flat screen technology, electric-powered
vehicles, solar energy, wind energy,
hydrogen fuel cells, etc,
Unexpected
Occurrences
·Unexpected occurrences can be
sources of innovation. There are a
number of good examples of how this
can lead to new innovations from 3M.
Post-it notes stemmed from a glue that
wasn’t quite sticky enough and
Scotchgard happened as a result of
accidental spillage of a chemical on a
3M employee’s tennis shoes.
Incongruities
·Drucker described an incongruity as a discrepancy or a difference
between what something already is and what something should be.
There can be incongruities between perceived expectations and
actual customer expectations, between the reality of something or
industry and the assumptions about that thing or industry.
An example of an incongruity between perceived expectations and
actual customer expectations could be when many companies were
trying to create smaller MP3 players with more functionality and
more storage. People were not necessarily after the increased
specification of MP3 player product though. Apple realized that the
actual customer expectation was a means for them to be able to
legally purchase, collect and organise their music and play on a
device that was simple to use. So they revolutionized the industry
with iTunes and the iPod.
Process Needs
·Incongruities in a process. Process incongruity would look
for something that is missing within a process.
Here we can think of any manual aspects of a process as
examples. Ovens are used daily and then they need cleaning.
Cleaning is a manual process and then came along self -
cleaning ovens.
Watches need winding up, or batteries replacing and they
also need the time to be adjusted every once in a while in
order to remain accurate and then came along solar
powered watches and watches that are radio controlled to
automatically set to the correct time.
Industry And Market
Changes
·Industry and market changes are sources of
innovation. Such changes often result as people
change their preferences, tastes, and values.

One example would be people's particular preference

for a particular style of food. Mexican food becomes
popular so up pops a Mexican fast-food chain such as
Taco Bell. Japanese cuisine has become popular so up
pop restaurants that demonstrate the art of sushi
making, etc.
 “In innovation as in any other endeavor, there is talent,
there is ingenuity, and there is knowledge. But when all
is said and done, what innovation requires is hard,
focussed, purposeful work. If diligence, persistence, and
commitment are lacking, talent, ingenuity, and
knowledge are of no avail.”
 Creative methods
and approaches of
the innovation
process

• Brainstorming
• Six thinking hats
• Mind maps
• Affinity Diagrams
• Role-playing exercises
• Fishbone Diagram
• 5 Whys
BRAINSTORMING MAP TEMPLATE (CLICK ON THE TEMPLATE TO EDIT IT ONLINE)
Six Sigma DMAIC
DMAIC is a method for process innovation. This
methodology helps you identify inefficiencies and
blockers in processes and make improvements. It consists
of a 5 phased process which includes the following steps:

• Define the problem that affects your customer or your

process.
• Measure the extent of the problem.
• Analyze the problem to find its root cause.
• Improve. Brainstorm relevant solutions and implement
them to mitigate the root cause.
Control. Maintain the improvements by constantly
monitoring them

Note: To learn the DMAIC process in more detail refer to the article on The Easy Guide to Solving Problems with Six Sigma DMAIC Method.
 Design Thinking
Design thinking involves a five step
process that takes a systematic
approach to solving problems. It
helps find solutions by focusing on
the needs of the customer.

The design thinking process involves the following steps

• Empathize: gain a deep understanding of the target consumer you are
designing the product or service for
• Define: Synthesize and analyze the user research data to identify the
core problem that you should address with your core solution
• Ideate: Gather your team together to generate ideas for products or
services with the help of your understanding of the consumer and their
problem
• Prototype: Create an inexpensive low-fidelity prototype of the product
to understand the effectiveness of your solution
• Test: Check how effective your solution is by testing it with the end
user. Take their feedback into consideration and make the necessary
changes.
Lean Canvas
The lean canvas, much like the business model canvas, is a one-paged
business plan that is useful for anyone introducing a new product or
service to the market.
It helps quickly brainstorm business models, campaigns and product
launches and share them easily with interested parties. It guides you
from understanding the customer problem and finding a solution to
identifying your unfair advantage.
Consumer Trend Canvas
Consumer trends help generate innovative ideas. Trendwatching.com
has introduced a tool that can help you convert these consumer trends
into ideas for new products or services.
It consists of two sections; analyze and apply. In the analyze section of
the canvas you will identify and understand the trend. In the apply
section, you will identify the opportunities you can get out of these
trends for your business
Six Thinking Hats
Edward de Bono: Six Thinking Hats Provide Strong Stimulus for Ideation

Note: If you haven’t read the book by Edward de Bono: Six Thinking Hats,
or studied his concept about lateral thinking, you should.

Edward de Bono represents one of the rare authors who instructs people
on HOW TO think rather than WHAT TO think. Some recognize him as one
of the 250 people who have contributed most to mankind.
Edward de Bono Six Thinking Hats (Plus One)
• White Hat: Covers listening, questioning, and defining the information
you would like to have, but do not have yet.
• Red Hat: Gives permission to forward hunches without needing to
justify them.
• Yellow Hat: Why you think something will work; the savings, the
benefits, and the advantages; usually forward-thinking.
• Green Hat: Proposals, suggestions, ideas, alternatives, provocations,
and what is interesting in an idea.
• Blue Hat: Looks not at the subject of the thinking but at the thinking
itself and is used for building, managing, and concluding the process,
including using and sequencing use of the other hats.
• Black Hat: The black hat makes us consider the reasons why something
may not work, why it may be illegal, why it may go wrong, or why it’s
not worth doing but the reason must be logical (if it’s emotional, that is
red hat).
• Purple Hat: We added a seventh Purple or Royal hat. The Royal hat
reflects the perspective of the owner who is both committed and
invested in the meeting output and project outcome. May have
difficulty switching perspectives because they own return on the
investment.
NUF (New Useful Feasible) TEST

The NUF marking is a very simple quick check that you can use. It works
because it is easy and intuitive, the criteria are already selected and there
are only three of them. Use the NUF test when you want to quickly check
that an idea that has been selected is likely to be effective and work in
practice. Use it when you want to identify what to work on being more
creative, developing the idea, or getting something that you will be able to
implement.
Steps:
A solution to a problem can be assessed and scored with the simple three-part 'NUF
test'. Just score it from 0 to 10 on each of 'New', 'Useful', and 'Feasible'.

• New: not been tried before - A solution is not creative unless it is new. When we say
'new' here we are not looking to get into philosophical arguments about original
thought, but we do mean something substantially different from those things
which have been tried before.
• Useful: solves the problem - It is good to have a creative new solution--and it is
even better if it solves the problem! The question here is 'How completely does it
solve the problem?' A totally useful solution solves the problem completely--and
does not create any new ones.
• Feasible: can be implemented in practice - If you have a really novel solution that
fully solves the problem, the final question is 'Can it be put into practice?' If it is
really expensive to implement and difficult to use, then it will not be a very feasible
solution. Another good question here is 'Who will I have to persuade?'
Example: An idea for keeping a door open is to use a sucker on the wall that sticks to
the door
What
do you
think?
Your opinion
does matter.
Thank You