Innovation Part 1: Skills of Innovation

By: Tom Gorman

1. Innovation = Problem Solving2. People and Products They Love

3. The Corporate Way4. The Hollywood Model

"No man ever yet became great by imitation.“

Samuel Johnson

11 Innovation = Problem Solving

INNOVATION (noun)the act of starting something for the first time; laying the foundation; beginning, institution; origination; creation.

INNOVATION is introducing something “new” into the organization.

An innovation is a new product, service, process or approach to problem

INNOVATION is a new way of thinking about something

1. Innovation = Problem Solving

THEMES IN THE BOOK

• Technology Drives Innovation

• Innovation spreads quickly

• “Scramble Competitors” complicate things

• Marketing Always Matters

1 Innovation = Problem Solving

Three Innovators:

1.Ralph Lauren

2.AppleComputer

3.Federal Express

FedEx Hub and Spoke http://news.van.fedex.com/no

de/3689

Operations: http://www.youtube.com/watch?v=iYzQ7JSBIGU&feature=related

Top 10 InnovatorsAmerica’s Most Admired Companies for Innovation 2008/10 Fortune Magazine

Company 2008 Rank

Apple 1

Nike 2

Medco Health Solutions 3

Procter & Gamble 4

Herman Miller 5

Disney 6

Fortune Brands 7

Burlington No. Santa Fe 8

McDonald's 9

ProLogis 10http://money.cnn.com/galleries/2008/fortune/0803/gallery.innovation.fortune/4.html

•Most admired •Least admired • 

Company 2010Rank

Apple 1

Google 2

Nike 3

Amazon.com 4

Goldman Sachs Group 5

Procter & Gamble 6

McDonald's 7

Intel 8

UPS 9

FPL Group 10

http://money.cnn.com/magazines/fortune/mostadmired/2010/best_worst/best1.html

11 Innovation = Problem Solving

1. IMPROVE LIFE FOR THE CUSTOMER; SOLVE THEIR PROBLEMS, DO THINGS EASIER

2. DELIVER A COMPLETE SOLUTION; DON’T DELIVER UNINSTALLED COMPONENTS OR INCOMPLETE PRODUCTS

3. NEVER SAY – “IF WE MAKE IT, THEY WILL BUY” BEWARE THE PHRASE, “WE’LL HAVE TO EDUCATE THE MARKET.”

4. CONSIDER PRODUCTION AND SALES CHALLENGES FROM THE START

5. DON’T PUT GOOD RESOUCES INTO A BAD PRODUCT IDEA. DON’T LET POLITICS GET IN THE WAY.

INNOVATION BASIC PRINCIPLES

11 Innovation = Problem Solving

PROBLEM-SOLVING 101

1.IDENTIFY THE PROBLEM2.GATHER INFORMATION3.DEVELOP ALTERNATIVE SOLUTIONS4.IMPLEMENT THE BEST SOLUTION

2 2 People and Products They Love Product Life Cycle

Geoffrey Moore's Innovation Life Cycle

2 2 People and Products They Love

InnovatorsInnovators interact with other innovators, are venturesome & daring, and are willing to try new ideas at some risk.

Early AdoptersEarly Adopters are guided by respect for innovators. They are opinion leaders and adopt new ideas early but carefully.

Early MajorityEarly Majority are deliberate. They adopt new ideas before the average person although they rarely are leaders.

Late MajorityLate Majority are skeptical.  They adopt innovation only after a majority of people has tried it.  

LaggardsLaggards are suspicious of changes, mix with other tradition-bound people, adopt only when it has now taken on a measure of tradition itself.

2 2 People and Products They Love

The Technology Adoption curve bears out the idea that people operates according to “HERD MENTALITY”

2 2 People and Products They Love

Just Desserts – A Market for a specialty product

Rice to Riches – a store that serves only rice pudding

NICHE MARKET

2 2 People and Products They Love

Niche markets, unlike mass markets, include enthusiasts (innovators and early adopters) only.

Niche markets don’t fit the technology adoption curve.

Niche markets can expand unexpectedly given changing events and new information (organic products, green energy).

NICHE MARKET

2 2 People and Products They Love

While products vary, over time, they will go through these stages.

The length of each phase varies by product. You can guage the stage ofa product by its relative sales

figures. Change sales and marketing tactics as product moves

through cycle (you are selling to different customers) Cycles have speeded up over the past 20 years as

information and environments change faster.

Key Points: Product Life Cycle Introduction, Growth, Maturity, Decline, Withdrawal

2 2 People and Products They Love

INTRODUCTION = requires IMPACT GROWTH = manage AGRESSIVELY MATURITY = MILK IT !! DECLINE = DEAL with it WITHDRAWAL = WALK AWAY

Strategies & the Product Life Cycle Introduction, Growth, Maturity, Decline, Withdrawal

33 INNOVATION:INNOVATION:

The Corporate WayThe Corporate Way

Fortune Magazine AMERICA'S MOST ADMIRED COMPANIES 2008 -- 10 Most Admired for innovation

CompanyInnovation

Rank Rank in IndustryApple 1 Computers: 1

Nike 2 Apparel: 1

Medco Health Solutions 3 Health Care:  1

Procter & Gamble 4 Soaps and Cosmetics: 1

Herman Miller 5 Furniture: 1

Disney 6 Entertainment: 1

Fortune Brands 7 Household Products: 1

Burlington No. Santa Fe 8 Railroads: 1

McDonald's 9 Food Services: 1

ProLogis 10 Real Estate: 1

33 INNOVATION:INNOVATION: The Corporate Way The Corporate Way

New Product Development (NPD) is the complete process of bringing a new product or service to market

NPD is the act of conceiving, designing, testing, building and launching new products & services

NPD the discipline is focused on developing systematic methods for guiding all the processes involved in getting a new product to market.

33 INNOVATION:INNOVATION: The Corporate Way The Corporate Way

1. Idea Generation 2. Concept Testing3. Prototype Design4. Product Testing5. Market Testing6. Product Launch

33 INNOVATION:INNOVATION: The Corporate Way The Corporate Way

Product Testing

Test for the Following Design Instructions Performance Usage Quality & Durability

33 INNOVATION:INNOVATION: The Corporate Way The Corporate Way

A test for a product prior to commercial release. Beta testing is the last stage of testing, and

normally can involve sending the product to beta test sites outside the company for real-world exposure

Software companies often offer their product as a free trial download over the Internet.

44 The Hollywood Model

Applies to less tangible, less traditional products such as films, entertainment, event planning, retail merchandising, and advertising.

44 The Hollywood Model

Key factor is outsourcing talent.

An INDEPENDENT PRODUCER finds and develops ideas, brings together a team finds financing, develops a marketing package,

and stands and falls on the merits of the project and

profitability.

44 The Hollywood Model

Project A unique and temporary venture with a beginning and an end, undertaken by people on deadline to meet established goals within defined

constraints of time, resources, cost, and quality.

PROJECT MANAGEMENT

44 The Hollywood Model

Development Pre-production Production Post Production

4 steps in the model