2. Agenda
Explain who we are
Get to know you
Provide an outline of the course
Provide an introduction to innovation concepts
Deal with any administration issues
Text - Managing Creativity and Innovation – Harvard Business Press
Web site – U of T portal and CIC
Downtown course
Expectations and registration
Class 6 – 9 pm Mondays at IB 270
3. Who are we:
Andrew Maxwell
• Director Business Partnerships CIC
• Professional engineer and MBA
• 15 years with tech. multinationals
• Cofounded several technology businesses
• Created U of T’s technology incubator
• Teaches technology entrepreneurship
• Completing Ph.D. in innovation and new
venture creation at University of Waterloo
• Industry advisor CBC Dragons’ Den.
5. The Economic Conception of Innovation
Joseph Schumpeter
Innovation is:
• Introduction of a new good, or a new quality of a good
• Introduction of a new method of production (need not
need include new technologies)
• The opening of a new market
• The securing of a new source of supply
• The creation of a new organization
6. Canada lags at innovation & gets worse
Canadian Council Of Academies
8. 2. Importance of Firm-Level Innovation
In a knowledge based economy, organizations that
are able to do more with less, outperform
competitors
In the private sector, higher productivity makes you
the acquirer, rather then the acquiree
In the public sector, exceeding benchmarks is
encouraged, while falling behind has negative
repercussions
“In the road to the future, there are drivers,
passengers and roadkill” Gary Hamel
9. 3. Recognize different types of innovation
Innovation is often confused with invention and
specifically research and development leading to new
technologies. In fact innovation includes:
a. Product Innovation
b. Process Innovation
c. Supply chain Innovation
d. Service Innovation
e. Business model Innovation
……….. And can be applied to all areas of an organization
11. b) Process innovation
A change in the way a product or service is
manufactured, created, or distributed
Process innovation involves implementation of new or
improved production or delivery method.
Process innovations can be intended to decrease unit
costs of production or delivery, to increase quality, or
to produce or deliver new or significantly improved
products.
12. c) Supply Chain Innovation
What product/service will be delivered to customers
What components or services will be acquired
externally
How you will add value internally
This involves consideration of:
Core competencies necessary for long term success
Availability of partners in supply chain
Strategic risk management of relationship
13. Supply Chain Innovation Opportunities
• New raw materials
• Alternate suppliers
• Outsource manufacturing
• Third party distribution
• Sales agents or on-line sales
Consider:
Risk management
Financial implications
Market issues
14. d) Service Innovation
Majority of individuals in Canada (and US) work in
service industry
Even where people work in manufacturing, many
of these individuals provide support services
Service innovation is biggest opportunity to
increase competitiveness
Improvements in service innovation can be
measured in terms of increases productivity and
value added
15. Opportunities for Service Innovation
Contributes to competitive advantage
Requires specific social and technical skills
Involves development and new technology application
Costly to develop needed specialist and generalist skills
Requires integrated thinking and agile environment
Can be implemented in all service areas
Most significant possibilities in financial and medical
services
16. Can you change your product into a
service?
“An automobile is actually art, entertainment and
mobile sculpture, which, coincidently, also happens to
provide transportation.” Robert Lutz, Chairman, GM
“Product,
“Make sure I service or
don’t run out experience”
of cash”
“The customer rarely
buys what the
company thinks it is
selling him”
- Peter Drucker
17. e) Business Model Innovation
The goal of innovation is to increase competitiveness
New ways of doing business can also increase
competitiveness and productivity by:
Creating enhanced utility for the customer
Enabling a different pricing strategy
Providing alternate purchasing options
Sometimes a technology innovation requires a business
model innovation to achieve commercial success
18. Some Innovative Revenue Models
Xerox
Developed photocopying technology
Initial capital costs of machines perceived as
excessive
Introduced pay per copy business model
Google
Automated search-engine technology
Provided free to end users
Revenues generated by advertising
19. 4. Need to identify what innovation
success looks like
Improve top line, bottom line or market share
Strengthen balance sheet
Strengthen brand/reputation
Increase workforce retention (incent stakeholders)
Enhance community engagement
Improve environmental performance
Attract investors/acquirers
20. Establish specific innovation goals
Improve quality of Reduce use of raw
processes, products and materials
services Reduce environmental
Create of new markets damage
Extend product range Reduce energy
Reduce labour costs consumption
Improve production Conform to regulations
processes If you don’t have specific goals, your
chance of reaching them are small
21. 5. Need to find a way to create and
capture innovation opportunities
Communicate vision and innovation imperative
Stimulate creativity and idea generation
Develop innovation decision-making process that:
Captures ideas
Makes decisions
Activate resources
Implements projects and encourages accountability
22. Yes ……I know we are meant to be more
innovative … can you give me some guidelines
23. Identify sources of innovation
Internal drivers Internal sources
1. Unexpected event 1. Research
2. Contradiction 2. Shop floor
3. Change of work process 3. Sales/service
4. Change in industry structure 4. Customer service
External Drivers External Sources
5. Socio-economic changes 5. Customers
6. Political changes 6. Suppliers
7. Technology changes 7. Competitors
Drucker‘s Innovation
Framework
24. 6. Recognize that innovation is a process
Innovation is a management process the requires
specific tools, techniques and discipline
Innovation involves the development of
organizational processes and procedures for
generating, considering and acting on innovative ideas
Innovation research focussed on technology; but real
challenge is to understand innovation process and the
cognitions and behaviours of people in that process
Innovation failures due to lack of understanding people
26. Implementing The Innovation Process
Identify innovation imperative and establish objectives
Create innovation framework
Assess current resources (Business Analysis)
Analyze current environment and external trends
Source and capture innovative ideas
Create an innovation decision system
Compare each opportunity to agreed criteria
Implement pilot project
Measure performance
Scale up or cancel
28. 8. Understand innovation constraints
Successful innovation usually involves:
Changing current processes and procedures
Modifying management style and communications
Developing new organizational structures
Abandoning existing customers and finding new ones
Modifying incentives, compensation and recruitment
Change company culture and attitude to risk
Important to raise questions and ask how far you will go
29. Is your organization innovative?
Embraces and learns Focuses on financials &
from failure timelines
Fosters high energy Has strict guidelines & control
activities Had a hierarchical structure
Create a “Can do” Has multiple bosses & “dotted
environment lines”
Develop support & trust Fosters attitude of “Everyone
Is a fun place to work is for himself”
30. Change management approach can help
an organization become innovative
1. Change through Leadership
2. Create a Shared Need
3. Shape a Vision
4. Mobilize Commitment
5. Make Change Last
6. Monitor Progress
7. Change Systems and Structures
8. Change Culture from Control to Trust
9. Communicate
10.Incentivize
31. Focus on the people issues
What works:
Mentoring and coaching
Skills & experience development
Free information exchange (networking)
Resource availability
What doesn’t:
Strict personal objectives
Individual performance over team performance
The “right” way of doing things
32. Architect an innovative environment
• Company leaders • Collaborative & open
and organization culture.
aligned to achieve a • Incentives that
vision reward challenging
Leadership Culture the status quo
and and
Organization Values
• Disciplined
approach to People Process
building and • Process & tools that
and
innovation Skills support idea
Tools generation &
• Desire to do
experimentation
things better
33. Creating an Innovation Capability
The
High morale and
organization’s
retention of
reputation for
creative people
innovation
Motivates people
Attraction of
within the organization
creative people
and reduces frustration
Organizational
A willingness within
encouragement of
the organization to
creativity &
accept new ideas
innovation
Development
of innovative
products
34. Develop an Innovation Culture
Create an innovation-friendly organization, that embraces
a culture of “risk” and “rewards failure” (and success)
Develop a “ project and portfolio management” approach
to innovation around decision-making and implementation
Develop a cross functional “matrix organization” to
embrace innovation across organization
Focus on “communications” and “engagement”
Design “incentives” to support innovation
35. Common Causes of Innovation Failure
Organizational Causes Process Causes
1. Poor leadership 1. Poor goal definition
2. Poor organization 2. Poor alignments of goals
3. Poor communication and actions
4. Lack of empowerment of 3. Poor team effort
stakeholders 4. Poor monitoring of results
5. Poor knowledge 5. Poor communication and
management access to information
6. Resource limitations 6. Inappropriate decision
making
36. Meeting Topic Meeting Topic
1 Introduction and Innovation Management: Basic Concepts 7 The Innovative Organization: Structures and Systems
· What is innovation? · What Makes an Organization Innovative
· Balanced Scorecard
· Innovation Myths and Mantras · People Leadership
· Innovation Vocabulary · Team dynamics / structures
· Models of Innovation · Communication strategies
· Centers of innovation (Ex: Universities) Intellectual Property Management
8 Leadership in Innovation
2 The Social and Economic Dimensions of Innovation
· Common Myths About Leadership
· International Innovation Indices · Characteristics of a Leader
· Innovation, Productivity and Economic Competitiveness · Motivation, Performance, Reward Systems
· Productivity vs. Competitiveness · Voice of the Customer
3 Innovation in Business Models 9 Managing Change
· “Traditional” vs. Emerging Business Models · Innovation and Change
· Examples for Innovative Business Models · Why Change? What is Change Management?
· Implementing Business Models · Factors in Change – CAP Model
4 The Essentials of Product Innovation · Creating the Need for Change
· Implementing Change
· Scale of Product Innovation 10 Service Innovation
· Product vs. Process Innovation · What is Service Innovation
· Examples of Disruptive Innovations · Examples of Service Innovations
· New Product Development Framework · Closed vs. Open Innovation
5 The Essentials of Process Innovation Product or Service?
· The Drivers of Process Innovation 11 Innovation in Product Development
· Business Process Management · 50,000 ft view of innovation in product development (Courses 2 and 3)
· Business Process Mapping · Stages of Product Development
· 3P – People, Product, Process
· Management of Change
· Examples
6 Mid-Term Presentation/Exam 12 · Team Presentation and Final Exam
37. Assignments
1. If you haven’t done register for course
learn.utoronto.ca/bps/innt.htm
www.slideshare.net/andrewmaxwell/innovate-or-
die-9190354
2. Find someone else you think might be interested and tell
them to watch the video
http://vimeo.com/29112717
3 Identify a key innovation challenge you are willing to share
38. Thank you
“I don’t mind failure. I’ve always thought that
schoolchildren should be marked by the number of
failures they’ve had.” – James Dyson
39. Thank you
“Innovation comes from saying no to 1,000
things to make sure we don’t get on the wrong
track or try to do too much.” – Steve Jobs
40. Thank you
“If the people running Amazon.com don’t make some significant
mistakes, then we won’t be doing a good job for our shareholders
because we won’t be swinging for the fences.”- Jeff Bezos
41. Thank you
“You have three choices…. Innovate, find a partner
who you can innovate with… or wait to be innovated
by someone else….” – Andrew Maxwell.
Notas do Editor
Identification and targeting of key processes that have considerable impact on the organization’s ability to: Achieve its short, medium and long term Strategic Goals and ObjectivesIf improved, enable the organization to realize a high Return on the Investment (ROI) Identification of target processes for which complaints have been received from customers, trading partners or internal staff and which can result in productivity improvement Achieving initial success with BPM projects in one area of the organization, will create enthusiasm and buy-in from other groups.
Improving Performance: The ultimate reason for a firm to innovate is to improve its performance, for example by increasing demand or reducing costs. Market Advantage: A new product or process can be a source of market advantage for the firm. Productivity Enhancement: The firm gains a cost advantage over its competitors, allowing a higher mark-up at the prevailing market price or, depending on the elasticity of demand, the use of a combination of lower price and higher mark-up than its competitors to gain market share and increase profits. Product Innovation: the firm can gain a competitive advantage by introducing a new product, which allows it to increase demand and mark-ups.Product Differentiation: Firms can also increase demand through product differentiation, by targeting new markets and by influencing demand for existing products.Changes in Organizational Methods: Firms can improve the efficiency and quality of their operations, thereby increasing demand or reducing costs.Improving Production Processes: Innovation can also improve performance by increasing the firm’s ability to innovate. Improving the capabilities of production processes can make it possible to develop a new range of products, and new organisational practices can improve the firm’s ability to gain and create new knowledge that can be used to develop other innovations.
Recreated from Peter Skarzynski and Rowan Gibson,Building A Systemic Innovation Capability , Harvard Business Review, 2008. Fig 11.1