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Rapid Innovation Process
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Innovation is Often Divided into Five Types:
Types of Innovation Innovation is Often Divided into Five Types: Marketing Innovation - development of new marketing methods with improvement in product design or packaging, product promotion or pricing. Organizational Innovation - the creation of new organizations, business practices, ways of running organizations or new organizational behavior. Product Innovation - introduction of a new good or service that is substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension. Process Innovation - implementation of a new or significantly improved production or delivery method. Business Model Innovation involves changing the way business is done in terms of capturing value Innovative Thinking: Six Simple Secrets by Padi Selwyn, M.A
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Common Struggles with Innovation
Innovation efforts often not aligned with long term business strategy Most Innovation efforts are reactionary Driven by a change in the market (regulations) Inside out approach (single customer or sales driven) Technology driven Efforts often yield incremental improvement, not breakthroughs or game changers High failure rate or inability to scale Is the Innovation solving a widespread problem for which value can be associated Underestimate the impact of corporate culture
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What Drives You Innovation Expand Customer Request
Market Needs Driven (Outcome Based) Market Driven, Critical to our growth… Strategic & Proactive Innovation Technology Push Changes in Regulation Innovation This is cool… We have to …. Will it Satisfy a Need? Can I Differentiate? Expand Customer Request Does the Market Need It? Others can use this…….
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Traditional Processes Most Often Result in Innovation Around the Core
Create new markets, target new customer needs Enter adjacent markets, serve adjacent customers Serve existing markets and customers Use existing products & assets Add incremental products & assets Develop new products & assets Where to Play How to Win Developing breakthroughs and inventions for markets that do not yet exist Optimize existing products for existing customers Expand from existing business into “new to company” business CORE ADJACENT TRANSFORMATIONAL Source: Straligence, adopted from Monitor, in Harvard Business Review, May 2012
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PMG’s Outcome Driven Innovation Process
Outside Inside Outside - In Approach Develop Innovation Strategy Prototype Solutions Size Market & Revenue Potential Align Team to Strategy Develop Solution Concepts Narrow to Top 3 Opportunities Identify Markets to Assess Narrow - Fit & Attractiveness Matrix Create Marketing Plan Uncover Unmet Needs/Outcomes Hand Off to Business Dev. Evaluate & Group Unmet Needs
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Traditional Innovation Funnel
Idea Generation is Often Internally Focused…. and Commercial Success is Typically Low . Regulations New Technology Customer Need Internally generated product ideas are vetted based on ????
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Outcome Driven Innovation Funnel
Needs are Generated from Customers…. Products and Services are Created and Vetted Based on the Amount of Value Delivered in Solving Customer Problems Identify Solution Develop Solution Implement Solution Needs Assessment Potential Solutions Topic Selection Segmentation
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Outcome Driven Innovation Funnel
Needs are Generated from Customers…. Products and Services are Created and Vetted Based on the Amount of Value Delivered in Solving Customer Problems Identify Solution Develop Solution Implement Solution Needs Assessment Potential Solutions Topic Selection Segmentation
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PMG’s Process can be Used in All Areas of Innovation
Create new markets, target new customer needs Enter adjacent markets, serve adjacent customers Serve existing markets and customers Use existing products & assets Add incremental products & assets Develop new products & assets Where to Play How to Win Developing breakthroughs and inventions for markets that do not yet exist Optimize existing products for existing customers Expand from existing business into “new to company” business CORE ADJACENT TRANSFORMATIONAL Source: Straligence, adopted from Monitor, in Harvard Business Review, May 2012
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Implementing Innovation
Hand Off to Business Dev. Implementing Innovation New to the company Adjacent to current offerings Same as current offerings Same as present Adjacent to Company Product/Technology Intended Market Increased Risk of Failure When Moving From the Core is Not Driven by Inability to Innovate, but by Underestimating Difficulties of Implementation Divisional Skunk-works Nothing to leverage Long learning curve New technology Must have long term view Few relationships Limited market knowledge Longer sales cycle - not in budget Limited sales resources Little internal buy-in
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Success Requires a Culture of Innovation
Innovation Culture Well defined innovation strategy Know where you are going Understand implications Market Orientation for Innovation Innovation Strategy Innovation Implementation Plan Infrastructure for Innovation Plan beyond the innovation Who will sell R& D support Align to monetize Align organization to support innovation Executive support Operational support R&D support Innovation process aligned with strategy Outside - in Well defined deliverables Strict timetable
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