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Systematic Innovation
Aditya Bhallaaditya.bhalla@qaiglobal.comInnovation Practice Head, QAI Global Services
7 Core Skills of InnovatorEntrepreneurs
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Agenda
A. What is Systematic Innovation
B. Successful Entrepreneurs are innovative problem solvers
C. What prevents us from generating innovative ideas?
D. Paradoxes faced by Entrepreneurs
E. The need for Systematic Innovation
F. Q&A
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A. What is Systematic Innovation
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What do we mean by Innovation?
• Innovation is about finding better ways of deliveringvalue to the customer – Mind to Market.
• Business innovation is about satisfaction and value, notnew gadgetry.
• “Innovation is not invention. It is a term of economicsrather than of technology.” Peter Drucker
• "An innovation is something original, new, and important—in whatever field — that breaks into (or obtains afoothold in) a market or society". Frankelius, P.
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Does structure limit Creativity?
• Most Western music usethe seven-note majorscale.
– Does that limit thecreativity of thesingers/musicians?
• A waterbrush artist haslimited material optionsto play with.
– Does that make the outputless creative?
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Seven (7) Core Skills of Innovative Thinking
InnovativeOpportunity
Thinking
Identify keystakeholders
in currentsituation and
proposedsolution
Identifypotentialzones ofconflict in
stakeholderrequirements
Generatefailure
scenariosusing theresourcesat disposal
Articulate theessence of a
given situationin simple
language freeof complexityand jargons
Apply ideasand solutions
fromunrelated
domains withsimilar
situations
Leverageavailable,latent andderived
resourceswithin the
givenconstraints of
a situation
Ability toidentify
innovativeopportunitiesfor creating &
deliveringvalue to
customers
Envisionthe state ofperfection
& theroadmap toachieve it
Identify thesystem and
thefunctional &time basedrelationshipwith others
ContradictionThinking
FailureAnalysisThinking
Abstractionand Analogy
Thinking
Resources&
ConstraintsThinking
IdealScenarioThinking
SystemsThinking
Generatewin-win
solutions toconflictingdemands
Envisionthe cause-and-effectlinkages toidentify the
root -conflicts
Prioritize toresolve the
failurescenariosfor robust
design
Review theproposedsolutionsfrom anIdeality
Perspective
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What is Systematic Innovation(SI)?
• Systematic Innovation1. methodical in procedure or plan <a systematic approach>
2. marked by thoroughness and regularity <systematic efforts>
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Levels of Systematic Innovation
Value Proposition
• BusinessModelInnovation
• Product /ServiceInnovation
Creation of Value
• Production orManufacturingProcessInnovation
Delivery of Value
• Supply ChainManagementProcessInnovation
What we sell? How it is Created? How it is Delivered?
Technology as an Enabler
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Five Application areas of Systematic Innovation
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B. Successful Entrepreneurs are InnovativeProblem Solvers…
…with a high risk appetite
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Successful Entrepreneurs are innovative problem solvers!
Customerproblems
Businessproblems
Partnerproblems
Employeeproblems
And they have ahigh appetite for
risk -in exploring new
solution directions!
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Not every entrepreneur is equally skilled in this ability
It’s not only about risk taking appetite!
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B. What prevents anyone from generatinginnovative ideas?
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Reason # 1: Creativity and Age of an Individual
10-12 years old
Peak of Creativity
Age
Creativity
The French psychologist, Antoine Ribot studiedthe effect of age on creativity in the early 1900’s.
He found the age at which the average personpeaks to be 14.
A few years ago MIT’s Sloan School ofManagement repeated the study.
They found that the peak age of creativity hadshifted down to 12.
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Reason # 2: Our Mind is the Battlefield!
Psychological Inertia Types
• Image
• Function
• Functioning or principle of operation
• Manner of usage
• Typical Characteristic
• Typical Orientation
• Dimension of object
• Terminology or Jargon
• Traditional conditions
• Traditional values
• Superfluous Information
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• A lot of emphasis has been laid on technicalskills and soft skills…
• However, one skill remains largelyunaddressed…
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High I.Q. and E.Q.
≠
High Thinking Skills
Thinking Skills is a different category…
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B. Paradoxes confronting Entrepreneurs& 7-core skills of innovators
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Paradox # 1: Where are the customers?
• The product went through the product development lifecycle and looked good in the pilot stage.
• I even have patents to protect my invention.
• Why then, are the customers not flocking to buy?
OR
• Why do prospects limit themselves to “windowshopping”?
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Key Skill # 1
• Key skill of innovative entrepreneurs: Ability toidentify the pain point of value to the customer
• Successful entrepreneurs know that customersbuy on Benefits linked to the specific pain pointof high importance.
• Unsuccessful entrepreneurs sell their products onFeatures!
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Paradox # 2: Why are customers not loyal?
• I have a high adoption rate for my product.
• But why don’t the customers stick around for too long?
OR
• Why do the profits not keep pace with the adoption rate?
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Functions remain constant
Solutions keep on changing/evolving
We are mostly arguing about solutions while…
…Customers are loyal to the Function and not the specific solution
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Key Skill # 2
• Key skill of innovative entrepreneurs: Ability toidentify the Useful Function of the product orservice and look for better solutions that retainthe useful function.
• Functions remain constant but the solutionskeep on evolving!
• Customers are loyal to the Useful function of aproduct and not the product.
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Paradox # 3: Will success be a flash in thepan?
• How do we ensure our offering stays relevant to themarketplace after the initial launch and excitement?
OR
• How is competition able to latch on to the new customertrends much before I do?
OR
• The marketplace is flooded with competing solutions.Imitations abound. How to differentiate?
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Key Skill # 3
• Key skill of innovative entrepreneurs: Ability tomap the industry and product evolution toobjective laws of evolution.
• Customers and technical systems have knownpatterns of evolution.
• Successful entrepreneurs make use of thesepatterns to generate future road map of productsand services.
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Paradox # 4: Is there hope for my failed product?
• My product bombed in the marketplace.
• Can I hope to revive?
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Key Skill # 4
• Key skill of innovative entrepreneurs: Ability tofind the resources to generate solutions.
• Innovators have the trained mind tosystematically locate resources that areoverlooked by others.
• These resources are preferably free, easy toaccess and abundant supply.
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Paradox # 5: Life is full of contradictory demands!
• I will get seed money once I prove my business model, butI need money to prove my business model works
• I want good quality staff to make my company successfulbut they will join only when the company is successful(and can pay!)
• Customers are willing to try my product for free but I needmoney to run my company profitably!
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Key Skill # 5
• Key skill of innovative entrepreneurs: Ability toresolve contradictions to generate win-winsolutions for key stakeholders.
• The heart of innovative thinking is the ability toresolve contradictory demands.
• Seemingly intractable problems withcontradictory demands can yield innovative ideas.
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Paradox # 6: How can someone from anunrelated industry tell me what to do?
• I have spent years learning how to do myjob.
• Suddenly someone NOT from my industrystarts telling me how I can innovate.
• How can that be?
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Key Skill # 6
• Key skill of innovativeentrepreneurs:1. Abstraction thinking which
is the ability to express agiven situation withoutusing technical jargons.
2. Analogy thinking which isthe ability to identifysituations with similarproblems that appeardifferent because they usedifferent technical jargons.
1. SpecificProblem
3. GenericSolution
4. SpecificSolution
2. GenericProblem
The essence of a problem remains similar
The way we express a problem makes it look different
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Paradox # 7: Who am I competing against?
• Can someone from an unexpected industrycome and make my offering irrelevant?
OR
• Who is my competition?
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Key Skill # 7
• Key skill of innovative entrepreneurs:
1. The ability to envision the ideal system to create theevolutionary roadmap
2. The ability to identify the innovative directions basedon the five categories of innovation
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Paradox # 8: Employees and creativity
• My employees deal with customers all the time.
• Why do they not generate innovative ideas for addingvalue to my customers?
OR
• Why does everyone expect me to have all the innovativeideas?
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B. The need for Systematic Innovation
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1. Growth is not Constant…
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2. The Luxury of Time is no longer there…
Technology Invention Production Development Time
Fluorescent lighting 1852 1934 82 years
Radar 1887 1933 46 years
Ballpoint pen 1888 1938 50 years
Zipper 1891 1923 32 years
Diesel locomotive 1895 1934 39 years
Cellophane 1900 1926 26 years
Power steering 1900 1930 30 years
Rockets 1903 1935 32 years
Helicopter 1904 1936 32 years
Television 1907 1936 29 years
Kodachrome 1910 1935 25 years
Transistor 1940 1950 10 years
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Conventional Trial-and-Error Approach is Inefficient
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• Humans have evolved to “understand” problems veryquickly – we “naturally recognize” and apply knownsolutions.
Problem analysis ~ 1 second
Solution generation/execution(trial and error):
Until it works (Darwinian)!
3. Known solutions may not work out all the time…
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Aditya Bhalla
aditya.bhalla@qaiglobal.com
AnyQuestions?