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Systematically Increasing Innovation-Based Growth
Roy Luebke
Mobile: 276-732-8372
rluebke@genedge.org
May 29, 2013
• We are the Manufacturing Extension Program of Virginia
• A unit of the Commonwealth of Virginia
• Part of the Department of Commerce / NIST network of Centers across the country (60 centers, 1500 staff nationally)
• 20 years of success supporting Virginia businesses
• Since 2000, the #1 Bottom-Line and Top-Line Impact Producer in the system – nearly $3 Billion reported
• Over 8,400 industrial Jobs created / retained
• 32 staff including two sub-recipient partners, The Manufacturing Technology Center in SW VA and Old Dominion University in Hampton Roads
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Systematic Approach to Innovation
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Momentum
GROWTH
Growing Profit
Margins
COST CUTTING
Declining Profit
Margins
Decline
Highest Profitability PESSIMISTIC
About Company’s Long
Term Future
OPTIMISTIC
About Company’s
Long Term Future
No place left to cut costs and you need to grow your business……
Where Are You On The Growth Curve ?
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Profit Growth? This is the KEY Issue
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$ Profit
Time
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- Too many companies have been burned by meaningless
brainstorming sessions
- Great ideas that never move forward
- Or worse, they invest in the wrong ideas
TOO RISKY TAKES TOO
LONG FEAR
Growth – What’s in the Way?
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The CEO Conundrum
“We have people that can build anything..….
The problem is we don’t know what we SHOULD be building”
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Innovation Engineering Management System
Decrease Innovation
Risk
Increase Innovation
Speed
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What’s The Situation: Why Innovation?
Decades of cost cutting Inward focus
China and India
Green Debt Outsourcing
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First – What Is Innovation?
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Innovation is the creation of anything new that generates economic value: - Products and Services - Business models - Processes - Alliances and partnerships - Brands - Channels - Your Customer’s Experiences
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Common Innovation Definition
• Creating something new that delivers Economic Value
• It is a combination of research, creativity and invention that is taken to the market and creates Customer Value
Incremental ……………….. Transformational
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Strategy and Innovation……
Two sides of the same coin
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Innovation - Driven By Strategy
Goal: PROFIT GROWTH
Positioning
Making choices
Establishing barriers to imitation
Create value
Product value erodes over time
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Strategy – Where Are You going? Balancing The Factors
Strategy Framing Costs
Customers
Channels
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Using Advanced Tools, Methods, and Coaching: Identify Commercially Valid New Concepts
That Are Ready To Move Into Development
With High Probability of Commercial Success
A Structured Approach To Generating Profit Growth
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By using a structured approach you can:
1. Identify growth opportunities NOW
2. AND build your company’s internal capabilities for long-term profit growth
“Concepts To Cash”
Define
Clarity on Raw Concept
Discover
Fail FAST Fail CHEAP on
Key DEATH Threats
Develop
Make it REAL
Deliver
Go to Market Generate Profit
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Innovation Engineering Clarifies Ideas AND Drives Business Growth QUICKLY and SCIENTIFICALLY
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Focus on “Fuzzy Front End…”
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Define
Clarity on Raw Concept
Discover
Fail FAST Fail CHEAP on
Key DEATH Threats
…To Find Your Opportunities
TECH Mining
FUTURE Mining
MARKET Mining
INSIGHT Mining
It is irresponsible NOT to know SPECIFICALLY AND NUMERICALLY
where you stand versus the competition,
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Opportunities From Deeper Thinking
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Research Is Critical
• Know your users
• Know the context
• Understand Purpose
– Test A Hypothesis
–Discovery
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Analyze Context: Five Human Factors
1. Physical
2. Cognitive
3. Social
4. Cultural
5. Emotional
How things are easy to hold, lift, manipulate, operate
because of the way they accommodate the human body
Making things easier to understand
Make things easier to adapt to a group of users
Making things cool, hot, and valued by people in a
culture
Desire for a deep, personal interaction/engagement
Source: Institute of Design
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Qualitative Research “Observe and Learn”
• Disposable Camera Studies • Ethnographic Interview with
video and digital photos • Extreme user studies • Participatory design • Scenarios and personas • User experience journeys • Value web diagrams
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TECH Mining
FUTURE Mining MARKET
Mining
INSIGHT Mining
Find New Connections: Open Innovation
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Buying Requests
Innovation Requests
Capabilities Registry
Innovation Concepts
Innovation Network
National Innovation Marketplace
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CREATE Session
Rapid Generation of
Innovative Product / Service
Ideas
Disciplined Teamwork
Cycles of Learning
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When our minds consider different elements or constructs, we can synthesize to create new ideas
POLYURETHANE PIPE
Reduces industrial corrosion and abrasion by up to 50% !
SELECTING IDEAS TO DEFINE
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Very Important Problems And Opportunities
CURRENT Customers
NEW Customers
Project Value Project Value
New Service for Current Customers
$12 MM Targeted New
Customer Offering $10 MM
Next Generation UPGRADE
$2.5 MM Leverage Unused Asset $1.6 MM
Services
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Profitable Growth Via Innovation
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Products Processes Business
Models
Channels/
Brands
Customer
Experience
Finding Very Important Problems and Opportunities
• Improving customer “wow”
• New benefits/features to offer
• Leap-frogging competition
• Increasing repeat purchases
• Improving value perception
• Ways to bundle offerings
• Next generation product/service platforms
• Attracting new customers or new markets
• Accelerate future technologies
• Leverage future trends
• Enable new business models
• Leverage intellectual property or other assets GENEDGE ALLIANCE 33
Concept Selection
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IDEA STARTERS
IDEAS WITH PASSION
RAW CONCEPTS
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Benefit, Effort, Risk, Reward
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NEW - NEW START - UP
IMPROVE Continuously
CURRENT Customers
& Markets
CURRENT Capabilities
LEAD Ideally a WOW!
NEW Products & Services
ADAPT Services & Products
for Mutual Profits
NEW Customers & Markets
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Balancing Risk and Uncertainty
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Create portfolios of options
Focus and maximize investments Chose among strategic alternatives Senior leader’s tolerance for pushing the envelope
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Portfolio Management
Maximize total value of all projects
Achieve balance of risk, long term vs. short term
Gain strategic alignment
Helps in allocating resources effectively
Common decision criteria
Build Growth Platforms
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Structured Innovation Process – “Define” Cycle Of Learning
Define
Clarity on Raw Concept
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“Define” Cycle:
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Solve a customer PROBLEM and meet a need
State an overt benefit with a PROMISE
Provide PROOF Meaningfully Unique
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Favorite Al Quotes
"Anyone who has never made a mistake has never tried anything new."
"We can't solve problems by using the same kind of thinking we used when we created them."
“If I had an hour to save the world I would spend 59 minutes defining the problem and one minute finding solutions.”
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Problem Framing – Address the correct issue
Source: Institute of Design
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Structured Innovation Process - “Discover” Cycle Of Learning
Discover
Fail FAST Fail CHEAP on
Key DEATH Threats
Customer
Concept
Math Game
Plan
Learning Plan
DEFINE
All ideas that
someone has
PASSION for
Document ALL
Existing
ideas to
Address DEATH Threats
Product
Service
PROOF
Benefit
PROMISE
MATH
Game Plan
Customer
PROBLEM
Define
Clarity onRaw Concept
Discover
Fail FASTFail CHEAP onKey DEATH Threats
Develop
Make it REAL
Deliver
Go to Market
“Discover” Cycle:
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Prototyping and Iteration:
Fail early, fail often,
……fail inside
Learn from and build upon failures and synthesis
Link solutions to research insights
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Use Rapid Learning Cycles…..
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Decision Analysis: Force Field charts ADRI Analysis Equivalents 3D Graphs Waterfall charts Decision Trees Sensitivity Analysis
Decision Making Tools: Examples
1. We cannot prove
the future
2. There are always
unknowns
3. It’s about balancing
risk and uncertainty
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INDEPENDENT VALIDATION - MERWYN RESEARCH
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Two Validation Choices
Merwyn Business
Simulation
Merwyn Concept
Test
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Based on Real Business Data
Modeling developed in conjunction with the Kaufmann Foundation
• 20,000 ideas tested • Over 2,000 Academic Journal Articles Reviewed
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Objective: Select Concepts to DEVELOP
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Prepare for Market Faster: Develop
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Lean Product Development Efficient and Effective Preparation for Launch Tech / Supplier Scouting For High-quality Suppliers Prototyping TDMI Technology Driven Market Intelligence For High Probability Markets Certifications Reputable third party PROOF of Promise
Develop
Make it REAL
Prepare for Market Faster: Develop
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Lean Product Development Visual Workflow Resource Capacity Management Event Driven Market Requirements Project Planning Risk Mitigation Design Review Process Review Production Readiness
Develop
Make it REAL
Get To Market Faster: Deliver
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Market Planning Commercialization Vehicle Value Chain Launch Plan Customer – Distribution – Sales – Production - Sourcing Infrastructure Campaign – Collateral – Social Media - Cash
Deliver
Go to Market Generate Profit
Summary: What Are You Trying to Accomplish?
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Create Communicate Commercialize
New Customers New Markets New Offerings New Models New Processes New Experiences
Value Benefits
Take To The Market
Source: Eureka! Ranch and GENEDGE ALLIANCE
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IEMS Innovation Engineering Management System
Building your long-term capabilities for systemic innovation
Jump Start Rapid Idea Generation
Education IE 101
Innovation
College
CREATE Ideation Clarity Selection Definition Discovery Validation Ready To Develop, Commercialize Commercialize
Market planning & execution
Services
Develop Lean Product Development Certifications Tech Scouting
TDMI Technology Driven Market Intelligence Find High Probability Markets/Segments For Your Technology
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Select Innovation Customers
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Roy Luebke GENEDGE ALLIANCE
Thank You
Phone: 276-732-8372
Email: rluebke@genedge.org
Web: www.genedge.org
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