 Module: SILA SILA

 Module: SILA R ELATED R EADINGS Booz & Company. (2011). Why culture is key: The 2011 global innovation Retrieved from what_we_think/innovation_1000_2011 Beckhard, R. & Harris, R. T. (1987). Organizational transitions: Managing complex change (2nd ed.). Reading, MA: Addison-Wesley (p. 98). Hofstede, G. & Hofstede, G. J. (2004). Cultures and organizations: Software of the mind. New York, NY: McGraw-Hill. Kotler, P. (2011). Marketing management. New York, NY: Prentice Hall. Patterson, K., Grenny, J., Maxfield, D., McMillan, R., & Switzler, A. (2008). Influencer: The power to change anything. New York, NY: McGraw-Hill. Senge, P. (1990). The fifth discipline: The art and practice of the learning organization. Random House.

 Module: SILA SILA: S TRATEGIC I NNOVATION L EVERAGE AND A LIGNMENT 1.Strategic: Comprehensive, purposeful, essential 2.Innovation: Focused on product innovation to achieve objectives 3.Leverage: Power to act effectively and wisely 4.Alignment: Harmonizing organizational mission, culture, and resources (AIPMM)

 Module: SILA SILA: S TRATEGIC I NNOVATION L EVERAGE AND A LIGNMENT Concerned with how the pieces of the organization fit together How the pieces support each other Are we staged for success? Corporate Strategy Mission Vision Values Culture Objectives Systems Thinking NPD Strategy NPD Process Organizational Structure Allocation of Funds Organizational Capabilities … (AIPMM)

 Module: SILA W HY SILA? Only about half of the most innovative companies have: –A corporate culture that supports their innovation strategy –Alignment between the innovation strategy and the corporate strategy Nearly 20% do not have a well-defined innovation strategy “…companies with unsupportive cultures and poor strategic alignment significantly underperform their competitors.” (Booz, 2011, p. 1) (Booz, 2011)

 Module: SILA K EY E LEMENTS OF AN I NNOVATIVE C OMPANY Focused innovation strategy Winning business / corporate strategy Deep customer insight Great talent Proper set of capabilities Supportive culture (Booz, 2011) SILA An expression of the thread necessary between these elements

 Module: SILA E XAMPLE : 3 M “Companies whose strategic goals are clear, and whose cultures strongly support those goals, possess a huge advantage. Palensky [CTO] articulates his company’s innovation strategy clearly: ‘We call it customer-inspired innovation. Connect with the customer, find out their articulated and unarticulated needs, and then determine the capability at 3M that can be developed across the company that could solve that customer’s problem in a unique, proprietary, and sustainable way.’” (Booz, 2011, p. 4) (Booz, 2011) Strategic Goals + Supportive Culture

 Module: SILA I NPUTS (AIPMM) Mission, Vision, Values Innovation Strategy Corporate Strategy Culture SILA

 Module: SILA I NPUT : M ISSION, V ISION, AND V ALUES Mission & Purpose VisionValues (Latham, 1995) Today Identifies customer(s) Identifies critical systems or core competencies States level of performance Tomorrow Inspirational Clear decision-making criteria Timeless What is honored What is avoided What is not tolerated “I didn’t believe this ‘vision thing’ made any impact on organizational performance..... My (research) data showed just the opposite ---- I found that a clearly articulated vision, fully implemented across an organization, in fact makes a profoundly positive difference.” (Lipton, p. 83)

 Module: SILA I NPUT : C ORPORATE S TRATEGY The plan that is driven by an organization’s mission, vision, and values. A company's game plan for achieving its long term objectives in light of its industry position, opportunities, and resources (Kotler, 2011) Strategy = Plan + Objectives

 Module: SILA I NPUT : C ORPORATE S TRATEGY P ROCESS 1.Decide what your business is 2.Decide who your customers are and what you want to offer them 3.Decide how you will play the game 4.Identify strategic assets and capabilities 5.Create the right organizational environment (Markides, 2000)

 Module: SILA I NPUT : I NNOVATION S TRATEGY Need Seekers: Actively engaging current and potential customers to shape products. They are the first to market. Examples: Apple, 3M, GE Market Readers: Incremental innovations based on closely monitoring customers and competitors. They are the fast followers. Example: Visteon Corporation Technology Drivers: Breakthrough and incremental innovation based on their technological capabilities. They are R&D / engineering driven. Examples: Google, HP (Booz, 2011) Source: Booz & Company

 Module: SILA I NPUT : I NNOVATION S TRATEGY G OALS (Booz, 2011) Source: Booz & Company. The 2011 Global Innovation 1000 Report

 Module: SILA SILA: S TRATEGIC I NNOVATION L EVERAGE AND A LIGNMENT 1.Strategic: Comprehensive, purposeful, essential 2.Innovation: Focused on product innovation to achieve objectives 3.Leverage: Power to act effectively and wisely 4.Alignment: Harmonizing organizational mission, culture, and resources (AIPMM)

 Module: SILA I NPUT : C ULTURE – T HE S ECRET S AUCE Culture matters! Strategy succeeds when the culture supports it. “Innovation should also be understood as developing an innovative culture within the company, which is what will enable it to produce … innovations.” – from “Winning at Innovation: A-to-F Model.” Trias De Bes, F. & Kotler, P. (2011, p. 3) (Booz, 2011)

 Module: SILA I NPUT : C ULTURE The shared beliefs, core values, assumptions, and expectations of people in the organization –Reflects the organization’s values –Observable in customs, rites, ceremonies, stories, heroes, patterns –Infers how work is accomplished –Expresses survivability: What we know to do to survive (Hofstede & Hofstede, 2004)

 Module: SILA I NPUT : S UPPORTIVE C ULTURE E LEMENTS (Booz, 2011) Source: Booz & Company. The 2011 Global Innovation 1000 Report

 Module: SILA T ASKS 1.Mission, Vision & Values: Analyze implications and define/refine as necessary 2.Corporate Strategy & Goals: Understand and define/refine as necessary 3.Innovation Strategy & Goals: Define if it does not exist and analyze alignment 4.Culture: Identify “how things are done” and analyze if supportive of innovation; reflects values 5.Alignment: Conduct an alignment analysis between the above elements 6.Change Plan: Create change plan to make improvements (AIPMM)

 Module: SILA D ELIVERABLES Mission, Vision & Values Corporate Strategy & Goals Innovation Strategy & Goals Change Plan (AIPMM)

 Module: SILA T OOLS Systems Thinking Mission, Vision & Values Evaluation Booz & Company Innovation Strategy Profiler Beckhard Change Formula Quinn’s Sustainable Change Model Hofstede Culture (AIPMM)

 Module: SILA T OOLS : S YSTEMS T HINKING “A way of thinking about, and a language for describing and understanding, the forces and inter-relationships that shape the behavior systems (from Senge’s “The Fifth Discipline”) Ability to see the big picture Recognize how isolated events impact the whole How the puzzle pieces fit (or don’t fit) together (Senge, 1990)

 Module: SILA T OOLS : M ISSION E VALUATION Source: adapted from Campbell, A. (1997). Mission statements. Long Range Planning, 30(6), (Campbell, 1997)

 Module: SILA T OOLS : V ISION E VALUATION Source: adapted from Campbell, A. (1997). Mission statements. Long Range Planning, 30(6), (Campbell, 1997)

 Module: SILA T OOLS : V ALUES E VALUATION Source: adapted from Campbell, A. (1997). Mission statements. Long Range Planning, 30(6), (Campbell, 1997)

 Module: SILA T OOLS : I NNOVATION S TRATEGY P ROFILER -- A LIGNMENT Need SeekersMarket ReadersTechnology Drivers GoalAdvantaged productsProducts customized to local markets and geographies Developing low-cost products CultureOpenness to new ideas from customers, suppliers, competitors, and other industries Collaboration across functions and geographies Reverence and respect for technical talent and knowledge (Booz, 2011) Source: Booz & Company

 Module: SILA T OOLS : I NNOVATION S TRATEGY P ROFILER All three strategies (need seekers, market readers, technology drivers) –Goals Superior product performance Superior product quality –Culture Strong identification with the customer and overall orientation toward the customer experience Passion for and pride in the products and services offered (Booz, 2011)

 Module: SILA Tools: Innovation Strategy Profiler Fast Follower First to Market Technology First Market First Limited R&D Big R&D Available at time of writing at:

 Module: SILA T OOLS : B ECKHARD C HANGE F ORMULA (Beckhard & Harris, 1987) Source: Latham, J. (2011). Causal diagram of Beckhard’s Change formula. Retrieved at time of writing from Used with permission.

 Module: SILA T OOLS : Q UINN ’ S S USTAINABLE C HANGE M ODEL Systems – This component is the easiest to change. While systems may be complex, organizations have the technology and knowledge to redesign and change the systems to improve performance. Unfortunately, experience suggests that performance improvement is often not sustainable because of cultural resistance and individuals who push back on the new ways of doing things. Culture – Norms, traditions, and values are a powerful force in organizations. If the new design is not compatible with these norms and values, the chance of successful implementation is reduced. When organizations say that the people have to change the way they work together, people often think that others will have to change, but not them. Consequently, the third component - the "I" of change - is necessary. Individuals – Individuals are the essence of any sustainable change. Sustainable change requires that the individuals change and grow, which is often the hardest part of the change process. At the core of this change is a typical learning process where the "gray matter gets grayer" and the "grooves get deeper." This process is often unpleasant, but it is necessary, and it all starts at the top. If the leadership team is not learning and experiencing personal change, lasting organizational change is unlikely. “What” of Change “We” of Change “I” of Change The easy part – How the System should change More challenging – Culture change Unexpected or unwanted – Individual change (Quinn, 1996)

 Module: SILA T OOLS : C ULTURE PER H OFSTEDE Symbols: Words, gestures, pictures, objects of meaning by those who share the culture. Examples: Jargon, dress, status symbols Heroes: Persons who possess characteristics that are prized by the culture and serve as models. Example: Customer service rep who works all night to correct a problem Rituals: Collective activities considered as an essential ( but probably not meaningful to reaching the desired ends). Example: How meetings are organized and conducted Values: Broad-based tendencies of preference – this is the core of a culture. Examples: Evil versus good, emotional versus rational, revenue at any cost Practices: The visible aspects of culture – what an outside observer can see, but their meaning is only understood by insiders. (Hofstede & Hofstede, 2005, p. 7) Values Rituals Heroes Symbols Practices

 Module: SILA A CTIVITY – Y OUR I NNOVATION S TRATEGY Need Seekers: Actively engaging current and potential customers to shape products. They are the first to market. Examples: Apple, 3M, GE Market Readers: Incremental innovations based on closely monitoring customers and competitors. They are the fast followers. Example: Visteon Corporation Technology Drivers: Breakthrough and incremental innovation based on their technological capabilities. They are R&D / engineering driven. Example: Google, HP

 Module: SILA A CTIVITY : S TRATEGY P ROFILE Individually complete the Innovation Strategy Profile at: Compile results Discuss differences

 Module: SILA A CTIVITY : M ISSION /V ISION /V ALUES A LIGNMENT Using the Mission/Vision/Values Evaluation tools, assess your organization’s mission, vision, and value statements Divide into three groups and each assess one area

 Module: SILA R EVIEW : W HY SILA? Only about half of the most innovative companies have: –A corporate culture that supports their innovation strategy –Alignment between the innovation strategy and the corporate strategy Nearly 20% do not have a well-defined innovation strategy “…companies with unsupportive cultures and poor strategic alignment significantly underperform their competitors” (Booz, 2011, p. 1) (Booz, 2011)

 Module: SILA R EVIEW : K EY E LEMENTS OF AN I NNOVATIVE C OMPANY Focused innovation strategy Winning business/corporate strategy Deep customer insight Great talent Proper set of capabilities Supportive culture (Booz, 2011) SILA An expression of the thread necessary between these elements

 Module: SILA R EVIEW : C ORPORATE S TRATEGY P ROCESS 1.Decide what your business is 2.Decide who your customers are and what you want to offer them 3.Decide how you will play the game 4.Identify strategic assets and capabilities 5.Create the right organizational environment (Markides, 2000)

 Module: SILA Review: Innovation Strategy Profiler Need SeekersMarket ReadersTechnology Drivers GoalAdvantaged productsProducts customized to local markets and geographies Developing low-cost products CultureOpenness to new ideas from customers, suppliers, competitors, and other industries Collaboration across functions and geographies Reverence and respect for technical talent and knowledge (Booz, 2011) Source: Booz & Company

 Module: SILA T EST Y OUR K NOWLEDGE When we focus on SILA, we make sure that the organization is "aligned" from an innovation focus through? a)A comprehensive, purposeful, essential effort b)Harmonizing organizational mission, culture, and resources c)The power to act effectively and wisely d)An emphasis on product innovation to achieve objectives

 Module: SILA T EST Y OUR K NOWLEDGE Innovation strategy directs how the organization will "play the game" or compete in the market place. There are many well-known innovation strategies. Booz and Company list three innovation strategy types: Need Seekers, Market Readers, and Technology Drivers. Market Readers can be described as? a)Focusing on incremental innovations based on closely monitoring customers and competitors. They are similar to the strategy type known as fast followers. b)Using breakthrough and incremental innovators based on their technological capabilities. They are R&D/engineering driven. c)Actively engaged with current and potential customers to shape new products. They are the first to market. d)Only being interested in innovation if they are in jeopardy of loosing current customers and market share. They are reactionary.

 Module: SILA T EST Y OUR K NOWLEDGE SILA helps ensure the organization is ready to innovate. Only about half of the most innovative companies have a)A viable mission statement b)Required skills and capabilities associated with change. c)A corporate culture that supports their innovation strategy d)Production and launch plans.

 Module: SILA T EST Y OUR K NOWLEDGE Steps in developing / reviewing corporate strategy include: a)Decide what your business is b)Decide who your customers are and what you want to offer them c)Decide how you will play the game d)All answers listed

 Module: SILA Up Next…Project Identification