Innovation for Associations: Opportunity!Professor Danny Samson
1. Innovation definition and scope
2. The various levels of innovation management, from strategy, to project portfolio, to people3. Innovation project tests4. ‘Systematic innovation capability’: elements
Leading Innovation
Definition: Innovation can be the implementation of a new or significantly improved product
(good or service), process, organisational method,
technology, marketing method, or business model
Leadership in organisations is about influencing
people: (to do value creating activities)
Innovation is done by people, not machines
(yet).
When innovation is well led, there is no limit, whereas cost
reduction and quality improvement
are finite
Our research background
2010: DIST sponsored tencase studies of highly innovativeCompanies: best practices
2012: survey of 2000+ managers(partnered with AIM)
2014: INNOV-EX creation (diagnostic innovation audit)
2016: 18 more case studies, new book
2017/8: specific industry studies on digitalisation (revolution!)
Mainstream(of primary production of goods/ services)
Goal: manage for stability, business as usual, SOP, manage ‘abnormalities’, reduce waste, improve quality, productivity, safety…. Eg factory, hospital, bank operations, defence operationsCulture : Do it by the book, ‘same old, same old’ : BAU, daily operations
Newstream(Innovation), Lead the portfolio of projects and the pipeline
of developments…
Culture : progress (every day), change!
$ Ideas
Newstream versus mainstream management
LEADERSHIP!
Innovation for Associations...
• New Services
• Enhanced or New Processes (internal and member interfacing)
• New Business model (eg think Uber, AirBnb, rent instead of sell, change pricing basis, etc)
Example: NEW short-courses• Upgrading knowledge and capability for members• What courses will our members/ industry find of value?• From short, online to face-to face, to half day to 4 day...• Skill deepening topics.... Related to the specific skill
group• Some generic topics (real examples) that are popular:
• Business/ Organisation Strategy• Decision making / analysis• Project management• Innovation• Leadership• Operations Excellence• Service management• Marketing
Some fundamental questions..
• How important is it for your organisation to be innovative? 1..2..3..4..5..6..7..8..9..10
(1 means very low, 10 means very high)
• What is your organisation’s innovation capability: 1..2..3..4..5..6..7..8..9..10
• What is your importance minus capability?
Innovation
Innovation = Invention + Exploitation
Is inventing the light bulb enough?No : it must pass the eight tests of a new
innovation
8 Tests of New Products/ Services• Function test:
Does the new product /service /technology perform the function?
• Marketing Test:Will it sell ?
• Operations test:Can it be mass produced?.
• Management and key personnel: Do we have the people to make this work successfully?
• Financial Test:Will it provide a return on investment?
• IP Control Test :Do you have control over the intellectual property
• Strategic coherence test?Does this new initiative fit our strategy?
• Is there a new 8th test?Sustainable development!
8 Tests of New Products/Services
Build Innovation Excellence capability
innovationmeasures
innovation benefits
Outcomes
leadership of innovation
innovation strategy
Drivers
customer focus
radical and incremental innovation
resourcing innovation
sustainable development
innovation process
collaborative ‘open’
innovation
innovation behaviour and
culture
risk appetite and
entrepreneurial approach
Design
STRATEGY• Positioning INNOVATION in a market, fit INNOVATION with business environment and INNOVATIONcapabilities
OPERATING PRACTICES• Production and various support activities DRIVE AND RESOURCE INNOVATION
MEASURES OFPERFORMANCE• E.g. operating and business performance, PARTICULARLY INNOVATIONREWARDS &
RECOGNITION• Pay, promotion, recognition BASED ON INNOVATION
BEHAVIOURAND CULTURE• Performance oriented for the business :PEOPLE THINKINGAND WORKING ON INNOVATION
High Level Summary High Level Summary
Level of consideration Measurement Factor
Role and contribution of Innovation inthe organisation’s overall strategy andgoals
Innovation focus and priorities:Shape of the ‘new-stream’ (product,process, business models, technology,radical versus incremental etc)
Portfolio of projects: which projects, fit,dynamic, proactive management of stagegates
People and individual projects: creativity,project disciplines, activity!
Four levels of Innovation to manage (and measure)
Horizon 1Extend and defend core businesses (Today’s businesses)
Horizon 2Build emerging businesses (Tomorrow’s businesses)
Horizon 3Create viable future options (Options for growth)
Now
The Three Horizons
In business: Don’t be Kodak, Blockbuster, Borders etc. Do be Apple! Balance incremental innovation (Horizon 2) with radical innovation (Horizon 3), eg in military terms, consider what the innovation and introduction of tanks, machine guns, atom bomb did in terms of outcomes.
Invest in research and innovation, science and technology of AI, Space, Robotics. Cyber etc...... Or get ready for a ‘Kodak Moment’
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Systematic Innovation Capability
1.What is it?
2. Where is your organisation, on this curve?
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The Efficient Firm
The Quality Firm
The Flexible Firm
The Innovative Firm
Innovation• What are the challenges of innovation?
• Time lags and value creation (discounted cash flow)
• Risk/ Uncertainty• Newstream versus mainstream management• Product lifecycles
•We are interested in SYSTEMATIC INNOVATION, not the occasional lucky break
Innovation• What are the benefits of innovation?
• First, new revenue/ growth
• Second being a ‘first mover’ gives a margin premium
• Third it gives a reputation advantage in the market (grow and deepen
customer relationships)
• Stimulates creativity for staff, and employee satisfaction
Examples• Apple• Dell• Sony• 3M• Proctor and Gamble• Google• Nokia • Samsung• BP• Others?
Dimensions of innovative space
Product Service Process BusinessModel
What is changed
Perceived extent of change
low
high
New to the world products/services
New to the market products/services
New product/service line in a country
Additions to product service lines
Product improvements/revisions
New applications for existing products/services
Repositioning of existing products/services
Cost reductions for existing products/services
A range of options: innovativeness as it applies to products and services
Survey of Executives, “Most Innovative Companies”
Source BCG Study , survey of 1000 executives (global)
BCG STUDY of LEADING GLOBAL INNOVATORS
Outline concept Detailed design Testing Launch
The New Product Development Funnel: Is it an interesting place to work?
All this: While constantly striving to make the innovation pass the ‘seven tests’