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Jan Lederman, December, 2014 1
The Board’s Role in Innovation
OTOTYPING
2
Agenda
What is innovation.
Innovation & commercialization.
Innovation as a system.
Role of the Board.
Questions the Board should ask.
Jan Lederman, November 19, 2014
3
The New Economy
Knowledge
Dependent
Global
Entrepreneurial Rooted in IT
Driven by
Innovation
Jan Lederman, November 19, 2014
4
What is “Innovation”?
…the design, development and/or
implementation of new or altered
products, services, processes,
systems, organizational structures
or business models for the
purpose of creating new value for
customers in a way that improves
the financial returns for the firm.
”
“
Innovation is new or better
ways of doing valued things.“”
Game-changers, like
the printing press,
transistors or vaccines
Making things bigger,
faster, better
INCREMENTAL INNOVATION
DISRUPTIVE INNOVATION
Jan Lederman, November 19, 2014
5
Innovation & Commercialization
The process of
capturing the value,
by taking the
innovation to market
COMMERCIALIZATION
New or better ways of
doing valued things
INNOVATION
Jan Lederman, November 19, 2014
6
What is Commercialization?
FROM MIND TO MARKET
…the means by which
an idea or prototype
is transformed into a
market-ready product.
Involves design, engineering, production
planning and related R&D…
… as well as capital investment, market
assessment and sales planning, &
financial and legal analysis.
Jan Lederman, November 19, 2014
7
Innovation may be achieved
at all stages of the
commercialization cycle
Commercialization Cycle
Jan Lederman, November 19, 2014
8
The Role of the Board
Role of the Board
in innovation
governance
Assess innovation opportunities.
Incent management towards innovation systems.
Educate itself on innovation
best practices.
Jan Lederman, November 19, 2014
9
The Role of the Board
The Board approach
will depend on where
the company is on its
business cycle
Incent management towards innovation systems.
Classic Business Cycle
Momentum Growth Cost Cutting Decline
Adapted from Invison Business Edge
Innovation potential
Jan Lederman, November 19, 2014
OTOTYPING
10
AgendaInnovation Systems
Design Thinking, Innovation
EngineeringIDEO, R. Martin
Not a substitute for foundational business
transformation processes, such as LEAN, 6
Sigma & ISO standards.
Best practices for innovation
systems are based on evidence
that 8 of 10 startups / products /
innovation initiatives fail.
The objective is to de-risk innovation.
Jan Lederman, November 19, 2014
OTOTYPING
11
Innovation Systems
Jan Lederman, November 19, 2014
13
Innovation Opportunities
How does the Board assess an innovative
opportunity?
Is there (really) an opportunity?
Can we win?
Is it worth it?
Jan Lederman, November 19, 2014
Compelling market need.
Significant value creation.
Differentiation and sustainable advantage.
Return and profit potential.
Good fit and timing.
14
What are the anchors of a good opportunity?
1
2
3
4
5
Board focus should be on
strategies to
de-risk the plan.
Not all certain at
outset.
Innovation Opportunities
Jan Lederman, November 19, 2014
OTOTYPING
15
Agenda
8 Questions To Identify a Viable Plan
What is the market pain / opportunity?1
2
3
4
5
What is the size of the opportunity?
What is your solution and is it meaningfully unique?
Who is your competition and how are you different?
Who is your target customer and how will you find them?
Jan Lederman, November 19, 2014
OTOTYPING
12/28/2014 16
Agenda
8 Questions To Identify a Viable Plan
How will you make money?6
7
8
Who is on your team?
What is your plan (timelines / milestones / money)?