ARC's Dick Slansky Culture of Innovation Presentation @ ARC Industry Forum 2010 in Orlando, FL. The Culture of Innovation: Strategies for Survival in the Post-Recession Economy Innovation Will Be the Differentiator. For Companies to Survive and The Largest Pool of New Prosper in a Slow to Moderate Growth Reset Economy, Innovation Cost Reduction and Process Optimization Remain Important and Ultimately Enable Profitability, but Companies Must First Capture the Market Through Innovative Products and Services

1. The Culture of Innovation: Strategies for
Survival in the Post-Recession Economy
The Culture of Innovation: Strategies for
Survival in the Post-Recession EconomySurvival in the Post Recession EconomySurvival in the Post Recession Economy
Dick Slansky
Senior Analysty
ARC Advisory Group
dslansky@arcweb.com

2. Innovation Will Define the Competition
 Innovation Will Be the Differentiator.
For Companies to Survive and The Largest Pool of New
Prosper in a Slow to Moderate
Growth Reset Economy, Innovation
Is the Key
 The Best Time to Prepare for
g
Ideas, Concepts, and
Technology Breakthroughs
are Outside the Walls of the
Enterprise The Best Time to Prepare for
Expansion is During a Recession. Not
Only are Assets cheap, but Talent is
Plentiful

Enterprise
 Innovation Can Create New Markets
and Sustain Presence in Existing
Markets
 Cost Reduction and Process Cost Reduction and Process
Optimization Remain Important and
Ultimately Enable Profitability, but
Companies Must First Capture the
Market Through Innovative Products
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Market Through Innovative Products
and Services

3. Business Drivers & Challenges Mandate New
Innovation Strategies
 Companies Rank Innovation, Risk,
Cost, and Collaboration as Their
Primary Business Strategy Initiatives
Outlook For Business in a
Recovering Global Economy:Primary Business Strategy Initiatives
 Innovation is Regarded as the Most
Important Factor in New Growth
 Companies are Driving Innovation
The Most Innovative Products,
Processes, and Business
Models Will Win Companies are Driving Innovation
Beyond Product Development, to
Business Processes and Manufacturing
 Focus on R&D and the Innovation
P ill b C iti l i th C t
Models Will Win
Process will be Critical in the Current
Economic Climate: Companies with
Innovative Products and Process will
be in Best Position for the Economic
RRecovery
 Managing and Protecting Intellectual
Property
 Ad ti f S t i bl (G )
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 Adoption of Sustainable (Green)
Product Design & Mfg Processes

4. Which Companies are the Most Innovative
Today?*
Apple – Products & Business Model
Google Customer ExperienceGoogle – Customer Experience
Toyota – Processes
Microsoft ProcessesMicrosoft – Processes
Procter & Gamble – Products & Processes
3M P d t & P3M – Products & Processes
Tata Group – Products & Services
S th t Ai li C t E iSouthwest Airlines – Customer Experience
Amazon.com – Customer Experience & Service
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* Business Week Top 50 Most Innovative Companies for 2009

5. What Do These Companies Have in Common that
Makes Them Innovative?
Actively Seek and Recruit Creative People
Provide an Environment that Fosters Creativity andProvide an Environment that Fosters Creativity and
Innovation: Personal Freedom, Time, and Trust
Willing to Take Risks, Make Mistakes, and Celebrateg , ,
Failure (within limits)
Provide a Collaborative Environment for Idea Sharing,
E l ti d I l t tiEvaluation, and Implementation
Have Established an Innovation Management Process
R i d R d C ti it d I ti WhRecognize and Reward Creativity and Innovation When
Their People Deliver
Understand that Innovation is a Highly Social and Cultural
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Understand that Innovation is a Highly Social and Cultural
Process: Foster Social Innovation

6. Defining Our Terms
• Culture: Shared, Learned, Symbolic System of Values,
Beliefs and Attitudes that Shapes and Influences
Perception and BehaviorPerception and Behavior
• Innovation: A new way of doing something. Can be
incremental, evolutionary, radical, and even revolutionaryincremental, evolutionary, radical, and even revolutionary
changes in thinking, products, processes, organizations,
or entire business models. Ultimately, the goal of
innovation is to effect Positive change that leads to betterinnovation is to effect Positive change that leads to better
products, more satisfied consumers, and increased
productivity, all of which are the fundamental source of
economic growtheconomic growth
• Creativity: A mental and social process involving the
Discovery of new Ideas or Concepts, or new associations
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y p ,
of the Creative mind between existing ideas or concepts

7. Invention and Innovation: Two Sides of
the Same Coin
 Ideation and the Inventions that result from
the Creative process is only the Initial, albeit
Essential Stage of the Larger and MoreEssential, Stage of the Larger and More
Comprehensive Innovation process
 Yo M st Ha e C eati e People to E en You Must Have Creative People to Even
Begin the Innovation Process
 Fostering a Culture of Innovation Means
Providing an Environment for Creative
People to be Generate New Ideas
 Innovation is not just about invention;
it’s about driving new ways of doing
things, bringing new ideas into the
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g , g g
marketplace

8. How To Establish a Culture of Innovation
 Establish a Center for Innovation &
Core Competency
 Make Idea Generation Open to All
within the Company, not Confined
Only to R&D
 Designate Subject Matter Experts
as Ideation Mentors
 Discover What Isn’t There: Give
People the Freedom and Time to
Think about New Things and Better
Ways
 Multiply Ideation by Sharing it:
Social Innovation
 Cultivate Ideation and Innovation
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Through Rewards and Recognition

9. Why Managing Innovation is Important
 “Managing Innovation”: The Term
Appears to be Counter Intuitive, but
the Reality is that Great Ideas Don’t
Become Innovative Products &
Processes by Accident
 h C The Most Innovative Companies Are
Successful Because They Have a
Process to Manage Ideation &
InnovationInnovation
 Managed Innovation Means
Stainable Innovation that
Continuously Churns out Newy
Products, Processes, and Services
Targeted to both Existing and
Emerging Market Segments.
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10. PLM Solutions Accelerate the Innovation Process
 Provide a Collaborative Environment
Necessary to Foster the Innovation
Process
 Platform for Design Collaboration
 Collaborative PLM Platforms Enable & Collaborative PLM Platforms Enable &
Expose Global Product & Process
Development Across the Enterprise
 Provides Portfolio Management and Provides Portfolio Management and
NPDI Solutions
 Social Innovation: Establishing
Knowledge CommunitiesKnowledge Communities
 Provides a Platform to Manage the
Innovation Process
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11. Today’s PLM Enables Innovation : From
Concept to Consumer
3. Consumers
(Experience)
Social InnovationSocial Innovation
Communities
2.Collaborators &
Stakeholders
(Share)( )
Virtual Collaboration
Shared Workplace
1. Creators:
Designers/Engineers
(Imagine)
Any product
d P
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and Process

12. PLM Maturity Curve: Collaboration & Social
Innovation Emerge
Enterprise PLM
Enterprise PLM:
Next Generation PLM:
• Social Innovation –
Open PLM
• SOA based PLM
i
Expanded Scope of
Lifecycle: From Design
Engineering to Multiple Enterprise PLM:
PLM Integrated with
rest of enterprise
architecture – ERP,
CRM, SCM
Enterprise
Services
• Knowledge
Communities
• Integrated Product
and Processes
PLM: Multi-
Engineering to Multiple
Stakeholders Across all
Domains
Product Data
Product Data
M
Engineering
design
Compliance and
Quality Systems
enterprise
collaboration.
Lifecycle Domain
Integration. Web
based project
/program mgmt
Mgmt:
Single Repository
for Engineering
Design. BOM
management in a
centralized system
design
systems:
/p g g
Engineering
Design Systems:
Design repositories
in each engineering
organization and
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o ga a o a d
system. Change
Mgmt & Version
Control

13. Thank You.Thank You.
For more information, contact the author at
dslansky@arcweb.com or visit our web pages at
www arcweb com
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www.arcweb.com