+ All Categories
Home > Business > 2015 navigate innovation in uncertain times

2015 navigate innovation in uncertain times

Date post: 11-Aug-2015
Category:
Upload: john-gregg
View: 45 times
Download: 0 times
Share this document with a friend
Popular Tags:
18
Innovating in Turbulent Times John Gregg Navigate Consulting jUNE, 2015
Transcript
Page 1: 2015 navigate innovation in uncertain times

Innovating in Turbulent Times

John GreggNavigate Consulting

jUNE, 2015

Page 2: 2015 navigate innovation in uncertain times

Focus on the right innovations .... ........And do innovation right

INNOVATE in these uncertain times??

If your company is typical, in these times you will get risk averse and focus on defendingyour core business, aiming to survive the slowdown rather than lead out of it

. . . and you too could become one of 50% of all companies whose competitive positionwill weaken as a result.

Instead you should go on the offensive and look to innovate…just do so differently• Focus efforts on the most critical projects and shut down the rest—make a few

big bets and put the rest of the good stuff on ‘slow burn’• Find new ways to serve recession-minded consumers—use different types of

innovation, informed by new consumer insights• Take advantage of low cost innovation resources— move quickly to get new ideas

into the market• Share your secrets— invite others to innovate with you to share cost and risk

Page 3: 2015 navigate innovation in uncertain times

3

What does that mean?

Use open innovation to tap into new resources

Follow these steps and you will drive higher returns, leap-frog thecompetition and inspire your employees, partners and suppliers

Focus on the right innovations ....

Re-think your innovation goals andstrategyUse different metrics and criteria toprioritize projectsTake fast (often dramatic) action torealign resources

........And do innovation right

Uncover new insights into cautious consumers

Think beyond the products to create value forCustomersSpeed time to market through quick andinexpensiveconcept testing

Page 4: 2015 navigate innovation in uncertain times

INN

OV

ATIO

N

Ma

rkets

/Cu

sto

me

rs

4

TRANSFORMATIONALBreakthrough Innovation

ADJACENTExpansion

via Platforms

Core productsand existingassets

Create marketsand audiences

Enter new

marketsandaudiences

Servedmarketsand audiences

Product New businessesextensions, and structuresenhancements

Offers and Assets

1. CORERetention

Increased/ new usage

Increased/ new usersNew pricing

New channels

Copyright©2009 MonitorCompanyGroup, L.P. — Confidential

OrganicGrowth fromthe CORE

2. ADJACENT

Scale upGeographic expansion

Value chain movesDiversification

Technology orcapability acquisition

Cross-Bu opportunities

3. TRANSFORMATIONALNew needs/

existingcapabilitiesExistingneeds/new capabilities

New needs/new capabilities

Focusing on the “right” innovationsRe-think your innovation goals and strategy

Create a revised innovation portfolio that focuses on the core business while selectively

pursuing a critical few adjacent and transformational growth opportunities

Page 5: 2015 navigate innovation in uncertain times

INN

OV

ATIO

N

Time tomarket

Cash cost andcost cadence

5

Degreeof risk

Time tofirst dollar

Partnershipsenabled

Optionscreated

Capabilitiesbuilt

Focusing on the “right” innovationsUse different project metrics and criteria

Refine existing metrics and criteriato align to the need for greater speed,lower short-term spend, and more near-term market impact…but also buildcapabilities and partnerships to createfuture options.

Measure different things to drivedifferent behaviours

Budgets are real and need to be

respected . . . it’s OK to go a bit sloweror to defer some functionality until later; itis NOT OK to quit innovatingEstablish metrics which achieve short-termgoals and create options for thefuture…and then ruthlessly measureyour projects against these objectives

“Will this help us create momentumcoming out of the slow growth cycle?”

Page 6: 2015 navigate innovation in uncertain times

the pipeline by disproportionatelyinvesting in the great bets andcreating options to keep the “good”bets alive . . . kill everything else

Do more with less by pruning

andfocusing

Too often companies cut the wrong

projects because of their uncertainty,while also letting incremental but “safer”projects die a slow deathFocus resources to provide thenecessary near- to mid-term impactduring a downturn, while keepinginitiatives that will create momentum outof a recession

Innovation Pipeline

Increase investment toquickly bring concept tomarket; find ways to build aglobal platform

Launch

Keep in pipeline,and bring in newexternal partners

to manage risk

Stop resourcingdue to length of

development andpoor fit with current

customer needs

License toexternal partner

Illustrative

Focusing on the “right” innovationsTake fast (often dramatic) action to realign resources

Raise the bar for performance in

Page 7: 2015 navigate innovation in uncertain times

are required to quickly generate theuser insights that traditional marketresearch techniques overlook

Gain Insights into Broader Customer Context

Understand what consumers…

say do use

Leverage new insights toStay relevant

Needs, priorities and trade-offsshift for customers (often movingto themes of “saving” and “value”and “more for less”), changing theequation for success

New types of insights are neededto re-focus offering and business models;traditional market research missesimportant nuances and isn’t timelyenough

Using different techniques…

ask observe make

Doing innovation “right”Uncover insights into cautious customers

The “two-speed” Australian economy has changed

the customer equation—new methods

Page 8: 2015 navigate innovation in uncertain times

Rapid market validationTo predict offering success, quickly testconcepts to de-risk investment and uncertainty

Early conceptvisualizationThe process of creating concept visualizations helpsrefine concepts and the finished product helpscommunicate with teams and partners

Doing innovation “right”Speed time to market through rapid concept testing

Accelerate the leap to implementationby adopting visualization and early prototyping, helping projectteams sell the concept internally, cheaply testing it with prospective customers/partners, and ramping upthe implementationteam

Page 9: 2015 navigate innovation in uncertain times

resources, design an approachto creating porous boundaries to buildnew leverage and share risk and cost

Build the options, flexibility, andleverageto innovate in an uncertainworld

BENEFITS TO OPEN INNOVATION

More Efficient Operations

Avoid riskier go-it alone strategies in favorof partnering to co-develop morechallenging capabilities. Look throughoutoperations of the organization to discoverways to collaborate with business partners:suppliers, contract operations, technology providers,channels, customers . . . even competitors

GreaterCustomerValue

BetterIdeas

Lower Risk

Doing innovation “right”Use open innovation to tap into new resources

In a world of increasingly scarce

Page 10: 2015 navigate innovation in uncertain times

INN

OV

ATIO

N

11Copyright© 2009 Monitor Company Group, L.P. — Confidential

So what should you do?

••

Map all of your innovation investmentsConstruct a strategy to innovate through the “slow down”

Define project metrics and criteria

Strategically rebalance innovation resources

••

Uncover insights into the cautious customerThink beyond products to quickly connect with customers

Create quick and inexpensive concept visualizations

Leverage“open innovation” to tap into new resources

Focusing on the “right” innovationsRealigning your innovation portfolio

Doing innovation “right”Streamlining your execution of innovation

Page 11: 2015 navigate innovation in uncertain times

We can help5 ways Navigate can help

Protect the GoodHelp you audit your portfolio, prioritise your initiatives in order of those that are mostlikely to make a solid contribution to your business in the short, medium and long term.

Free up CashIdentify and capture budget to invest in smart innovations by killing or mothballing lowvalue initiatives

Invent new sources of businessDevelop breakthrough, big bet innovations geared to success in the current slowdown

Accelerate the likelihood of successOptimise remaining innovation initiativesby adjusting nature of the offer, time tomarket, management of risk, and capabilities.

Spread the risk to maximise returnTarget highest-value areas for 'open innovation' and build partnerships to share risk andcost of whole portfolio

1

2

3

4

5

Page 12: 2015 navigate innovation in uncertain times

• For priority projects, quickly generate new user discoveries,• Synthesize discoveries into compelling business concepts• Rapidly prototype and test using concept illustrations

Copyright© 2009 Monitor Company Group, L.P. — Confidential

1

2

3

4

We can helpOur approach

Launch and extend(~ 6 weeks)

• Diagnose patterns of innovation in your company and industry• Map current innovation activity to identify where and how much

you are investing• Define metrics to prioritize current and potential projects

• Refine your innovation strategy, including opportunity

areas and level of ambition• Prioritize a portfolio of projects aligned with that strategy

• Define launch plans for priority concepts• Identify partners to enhance value of concept, speed time to

market and share launch costs

Develop concepts(~ 4 weeks)

Define the Strategy(~ 2 weeks)

Diagnose the Situation(~ 2 weeks)

Page 13: 2015 navigate innovation in uncertain times

We can helpWe develop and install open innovation systems for our clients

Broad Reaching andTransactional Focused and Collaborative

ExternalChallenges

Postingchallenges andrewards to abroad audience,directly orthrough a marketmaker

Open PartnerPlatforms

Buildingplatforms thatnaturally attractdiverse partnerswho see value indeveloping on topof your offering

R&D /

Technology

Scanning,for new IP thatcan be licensedto target newopportunities

Consortium /

Incubator

Joining open ortopic specificconsortiums togain technologyand marketinsight and findopportunities forjoint R&D

Value Chain

Network

Forming linkagesacross valuechain membersto collectivelyidentify andtargetopportunities

Partnership /

Alliances / JVs

Creating strategicpartnershipswithin an industryor into adjacentspaces to unlocknew opportunities

Page 14: 2015 navigate innovation in uncertain times

INN

OV

ATIO

N

15Copyright© 2009 Monitor Company Group, L.P. — Confidential

Background: the case for commitment

Innovation is no longer an option…• After countless drives for operational efficiency and cost cutting, innovation is one of the

strongest remaining drivers of shareholder value

Innovation rewards those who fight their base instincts…

• In a strong economy, a commitment to innovation—including financial investment, executivesupport, and organisational alignment—can exist as a matter of course. As the marketsoftens, uncertainty and slashed budgets make small, short-term wins feel more gratifyingand bigger bets more daunting. Suddenly, an innovation agenda seems much riskier…

Innovation cannot be suspended and rehabilitated at will…• Proper innovation is a competence to be nurtured in your organization. Stopping any team

working on hard future challenges often means it will disband and you will lose topinnovators; this will be extremely hard to reverse when growth returns

Here, we outline three principles to help you stay the course on innovation

Page 15: 2015 navigate innovation in uncertain times

A universal instinctive reaction to tough times is to circle thewagons, spend as little as possible, and protect the core . . .If you consciously choose to go the opposite way you cantake advantage of your competitors’weaknesses duringthese periods

• Savvy companies maintain innovation investments

during a downturn, even selectively increase spending,to maximise opportunities to come out of any recessionwith boldness and drama that build growth momentum

• Down-turns are short-term by definition, making

cutbacks risky and short-sighted in the face of abroader corporate strategy

• Pulling long-term strategic investments for short-term

cash flow will ultimately destroy shareholder value

An Australian study of 1,000businesses over 30 years found thatcompanies spending more oninnovation during economicdownturns saw their returns oncapital increase 23.8% during therecovery, vs. 0.6% for those whodecreased spending.

“A difficult economicenvironment argues for theneed to innovate more, notto pull back.”

– Ken Chenault, CEO

AmericanExpressSource: Fortune, March 3, 2008

Principle 1:Downturns are an ideal time to go on OFFENSE

Page 16: 2015 navigate innovation in uncertain times

Even a few bold innovations can send a powerful signal that the vital signs ofyour firm are healthy while your competitors appear catatonic

Principle 2:Innovation is also one of the best forms of DEFENSE

• A down cycle may be a time to weed out efforts that aren’t working, but good innovators

always channel a bit of those savings to invest in bold innovation efforts on longer-termbets

• Opportunistic innovation can make a considerable competitive difference in the face ofother companies’ cuts and amid failing players that were supposed to be small and nimble

• The corollary is true too: blanket cuts will give competitors the room they need toleapfrog ahead of you — forcing you to play defense and catch up when the market turns

Page 17: 2015 navigate innovation in uncertain times

One of the principal reasons to innovate at all is because it is inspiring to employees,partners, and suppliers

• To maintain unambiguous commitment and fight the natural

tendency to waver when times get tough is itself a sign ofextraordinary leadership

• Innovation cannot be suspended and rehabilitated at will —failure to keep expectations high and failure to constantly

demand innovation no matter what conditions prevail signals thatyou’re really not that committed to innovation in the first place,undermining your declared faith in your team and its competence

• Even one or two bold innovation initiatives, launched at the time

of a market turnaround, can do a lot to help internal audiencesfeel like winners… this helps offset the negative effects of anyearlier head count losses or reduced compensation

• When you do succeed with innovation, the internal pride that comes

with a strong rebound will power your forward momentum, therebyattracting new talent and partners

Principle 3:Staying committed to innovation epitomises leadership…

Page 18: 2015 navigate innovation in uncertain times

Thank-you

Feel free to contact us at www.navigateconsulting.com.au


Recommended