MANAGING 4

IINNNNOOVVAATTIIOONNGreg Fisher

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What is innovation?

Innovation is the process of turning opportunityopportunity into new ideasnew ideas and putting those into widely used practicewidely used practice – Tidd, Bessant & Pravitt – Managing Innovation (2001)

Innovation is the means by which entrepreneurs exploit changeexploit change as an opportunityopportunity for a different businessbusiness or serviceservice – Peter Druker – Innovation and Entrepreneurship (1985)

Innovation is the successful exploitationexploitation of new ideasnew ideas – UK DTI Innovation Unit

What is innovation?

Opportunity Idea Exploitation = Innovation+ +

Product Innovation

Improving the features of a product or creating new products

Process Innovation

Improving or changing the process by which a product or service is produced or delivered

Business Concept Innovation

Radically reconceiving products and services, not just developing new products / services

Redefining market space

Redrawing industry boundaries

WWHHYY??

Encyclopaedia Britannica’s 225 year track record of success was destroyed in:

• 24 months

• 5 years

• 10 years

• 25 years

Encyclopaedia Britannica’s 225 year track record of success was destroyed in:

• 24 months

• 5 years

• 10 years

• 25 years

What has more computing power?

• Dell 400 Mhz Pentium III desktop PC

• Apollo 11 mission control computer

• Sony Playstation

What has more computing power?

• Dell 400 Mhz Pentium III desktop PC

• Apollo 11 mission control computer

• Sony Playstation

It took the telephone 40 years to penetrate 10 million homes. How long did it take the

Netscape browser?

• 18 months• 5 years• 10 years

It took the telephone 40 years to penetrate 10 million homes. How long did it take the

Netscape browser?

• 18 months• 5 years• 10 years

How many people use the internet in China?

• 50 million

• 200 million

• 300 million

How many people use the internet in China?

• 50 million

• 200 million

• 300 million

Value of Yahoo!’s offer to buy Facebook.com from the 22 year old

founder, Mark Zuckerberg

• $100 million

• $1 billion

• $500 million

Value of Yahoo!’s offer to buy Facebook.com from the 22 year old

founder, Mark Zuckerberg

• $100 million

• $1 billion

• $500 million

3 billion people live in Asia. What proportion of the population is < 25

years old?

• 20%

• 35%

• 50%

3 billion people live in Asia. What proportion of the population is < 25

years old?

• 20%

• 35%

• 50%

The cost of hiring an English speaking PhD chemist in India is:

• R65,000 pa

• R150,000 pa

• R350,000 pa

The cost of hiring an English speaking PhD chemist in India is:

• R65,000 pa

• R150,000 pa

• R350,000 pa

The average consumer in the developed world is hit with how many marketing

messages every day?

• 500

• 2500

• 4500

The average consumer in the developed world is hit with how many marketing

messages every day?

• 500

• 2500

• 4500

General Motors makes more money from?

• Selling cars• Selling technology• Lending customers money to buy its

cars

General Motors makes more money from?

• Selling cars• Selling technology• Lending customers money to buy its

cars

Number of Apple iPods sold to date?

• 10 million

• 35 million

• 100 million

Number of Apple iPods sold to date?

• 10 million

• 35 million

• 100 million

Google’s value at IPO, 6 years after the business was founded?

• 32 billion

• 20 billion

• 12 billion

Google’s value at IPO, 6 years after the business was founded?

• 32 billion

• 20 billion

• 12 billion

HHOOWW??

4 businesses

4 case studies

4 management philosophies

4 innovation models

Methodical Innovation

Observe Brainstorm ImplementPrototype

ObserveIDEO’s cognitive psychologists,

anthropologists, and sociologists team up with corporate clients to understand the

consumer experience

Ideo

BrainstormAn intense, idea-generating session

analyzing data gathered by observing people. Each lasts no more than an hour. Rules of brainstorming are strict and are

stenciled on the walls.

Ideo

PrototypeMocking up working models helps

everyone visualize possible solutions and speeds up decision-making and

innovation.

Ideo

ImplementBring IDEO’s strong engineering, design,

and social-science capabilities to bear when actually creating a product or

service.

Methodical Innovation

• Process to drive innovation• Fun environment• Diverse teams• Encourage failure

Application

Facts about P&G

• 167-year-old business

• $50 billion in sales

• 300 brands

• 160 Countries

• 13 brands in excess of $1 billion

P&G History of Innovations

How do they keep this going?

P&G Response = R&D

But still not getting the innovation they want?

• R&D Spend – $1.6 billion

• 7,200-strong R&D staff

• Over 1000 PhD’s

Open Innovation R&D

C&D [Connect & Develop]

[Research & Development]

Source: P&G Connect and Develop Booklet: http://pg.t2h.yet2.com/t2h/page/homepage

Connection network

Source: P&G Connect and Develop Booklet: http://pg.t2h.yet2.com/t2h/page/homepage

Our vision is simple. We want P&G to be known

as the company that collaborates - inside and

out - better than any other company in the

world.

I want us to be the absolute best at spotting,

developing and leveraging relationships

with best-in-class partners in every part of

our business. In fact, I want P&G to be a magnet

for the best-in-class.

I have a ready-to-go product or technology to offer P&G

I want to acquire a technology from P&G.

Ready-To-Go ProductsBy acquiring the newly introduced SpinBrush,

P&G was able to bring a superior oral care brand to

market quickly, without undertaking the time and

expense of developing an entirely new product.

Ready-To-Go PackagingConsumer-preferred pump dispensers were originally developed by a European packaging products company. P&G led a collaborative improvement process to make the original pumps more effective prior to their launch in Olay’s North American markets.

Open Innovation

Ready-To-Go TechnologiesP&G introduced Bounce, the world’s first dryer-added softener, after acquiring the product technology from the independent inventor who developed the innovative fabric-care solution.

Open Innovation

Commercial PartnershipsP&G found the perfect complement to the Swiffer

brand in a hand-held duster developed by a Japanese competitor. After purchasing the product, P&G leveraged elements of existing manufacturing

processes and advertising components to launch Swiffer Duster within 18 months.

Open Innovation

Application

• Know where to look

• Leverage networks

• Distribute and screen ideas

• Promote openness to external ideas

MSA

Vitality

Discovery Life

Discovery CardDestiny Health

Discovery World

1994 2006

Innovation History

Driven Innovation

"We don't innovate for innovation's sake, but without a deadline that fine line between a great product and a mediocre product is seldom bridged.”

Adrian Gore – CEO Discovery

• Set a deadline• Short planning cycles:

18 months to 3 years• Link product and

process innovation• Combine intellect &

emotion

Pet Project Innovation

“We call all of these projects Googlettes. Basically, they're baby Googles, startups within the startups. We really like the concept because it helps us keep that innovative startup feel and launch projects quickly.”

Marissa Mayer - Director Consumer Web products at Google

Pet Project Innovation

• Free time• Access to upper managers• Top 100 priorities list• Small teams

Application

Where will Google go next?

Open Innovation

Driven Innovation

Pet Project Innovation

Methodical Innovation

Consistent Themes?

Consistent Themes

• Leadership• Teamwork• Values • Stimulation • Recruitment

Open Innovation

Driven Innovation

Pet Project Innovation

Methodical Innovation

MANAGING 4

IINNNNOOVVAATTIIOONN

Greg Fisherwww.fisherg.blogspot.com

gregcfisher@gmail.com