MANAGING INNOVATION ACTIONS

Action Pathway

Sources of Ideas

Global Multi Products Chile Key Accounts

Best BuyDiscovery

Phase

Global Multi Products Chile

Integrated Solutions

Harvard University

Wyss Institute

Innovation CommunitiesP&G’s InnovationNet

IBM’s AlphaWorksGoogle Labs

Controlled versus Open Learning

Organizations choose between make, co-create or buy strategies of innovation.

What are the pros and cons of creating innovations in-house versus through an open peer development system?

Innovation Communities: Connecting your company with people outside the organization “whose passions match your problems” (Gary Hamel).

Larry Huston, former VP for Innovation and Knowledge at P&G

“You can’t possess all the science and brilliant minds … In our R&D organization we have 7,500 people in 150 science areas, but there are 1.5 million high-quality people outside P&G. It doesn’t take a genius to figure out that if you can engage the brains of your 7,500, plus the key ones from that 1.5 million, you can build better products.”

The Lone Wizard or the MassesWhat is the contribution of Open Source?

On May 22, 1997, a little-known software programmer from Pennsylvania named Eric Raymond presented a paper at a technology conference in Würzburg, Germany. Titled “The Cathedral and the Bazaar.”

Traditionally, sophisticated programs had always been “built like cathedrals, carefully crafted by individual wizards or small bands of mages working in splendid isolation.”

An open source project, in contrast, was the product of a large and informal community

of volunteers who in aggregate “seemed to resemble a great

babbling bazaar of differing agendas and approaches.”

Raymond coins Linus’s Law, after Linus Torvalds, Linux’s founder and presiding genius.

“Given enough eyeballs, all bugs are shallow.”

The Ignorance of Crowds by Nicholas G. Carr 05/31/07, enews Strategy+Business.

Effective use of peer development systems

EXPERT TEAM

Torvalds’ hierarchy of talented software programmers to help manage the contributions.

IDEA GENERATION

Linus Torvald, founder and presiding genius of Linux

PEER DEVELOPMENT

Public contributions to the refinement of Linux

Sources of Ideas

Global Multi Products Chile Key Accounts

Best BuyDiscovery

Phase

Global Multi Products Chile

Integrated Solutions

Harvard University

Wyss Institute

Innovation CommunitiesP&G’s InnovationNet

IBM’s AlphaWorksGoogle Labs

IDEO

DESIGN INNOVATION

How to design breakthrough inventions: IDEO’s David Kelley

What is the design process?

FROM DESIGN TO VALUE-ADDED INNOVATION

How many ideas? How often? What to do with them?

“Long Tail” of innovation

L. Fleming (2007) “Breakthroughs and the “Long Tail” of Innovation. MIT Sloan Management Review.

Making the tough choices:

“On May 1, HP’s new labs director, Prith Banerjee, plans to unveil a list of 20 to 30 major projects HP Labs will pursue, a dramatic cut from the 150 or so currently on its docket.

Ideas with little hope of payoff will be cut – others will be consolidated.

BW April 28, 2008

Product Life CycleId

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PremarketPhase

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IdeaMortalityRate

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R & D

MICHELIN’S INNOVATION TIME LINE

Projects and Portfolios Project Management

Managing an individual project Managing project resources Achieving project goals

Portfolio Management Managing a group of projects Managing organisational resources Achieving organisational goals

Types of Projects

New CoreProcess

Next GenerationProcess

SingleDept.Upgrade

Tuning& IncrementalUpgrades

NoChange

New CoreProduct

Next GenerationProduct

Addition toFamily

Add-ons andEnhancements

ComponentChanges

No Change

PROCESS

PRODUCT

Next GenerationDevelopmentProjects

Radical

Incremental

(Source: Wheelwright and Clark, 1992)

How many innovation projects does Michelin engage in?

Stage Gate Process

Project Planning A project can represent a large

investment of time, money, and resources

Planning a project effectively can: Maximize contribution to goals Fundamental to the financial

considerations Crucial to scheduling of resources and

the control of progress and costs

Project Scheduling

A schedule is the conversion of a project action plan into an operating timetable

Scheduling of people, equipment, information and their interrelationship

Fundamental basis for Understanding project complexity Monitoring and controlling project activity

and budget Tool for the management of projects.

Project Control

Once operational, control of the project is necessary to: Measure progress Identify deviations Take corrective action (when needed)

Continuous cycles of planning, implementation, and reviewing take place throughout the project lifecycle

Payback

Capital Recurrent Costs Recurrent Revenues

Additional Revenues Cost Avoidance Cost Savings

Payback=(Capital-Costs)/Revenues

Qualitative techniques Fit with organizational goals and objectives Fit with competitive necessity for

sustainability Fit with existing product or service range Fit with available resources Fit with existing competencies Fit with desired future competencies Fit relative to competitor direction Fit relative to risk quotient Fit with other innovation projects, ongoing

or planned

Commercializing New Products Compliance with industry standards Compatibility with existing products Production costs Distribution capability After-sales service Production Plan Market Launch Plan

Feasibility Studies

Marketing Screen Operations Screen Finance Screen Competitor Analysis Price-performance Screening Financial Analysis

Adoption of New Products

Innovation at Procter & Gamble

Jun 23, 2008 An interview with A.G. Lafley,

Chairman and CEO, Procter & Gamble. Innovation is at the core of P&G's business strategy. See how P&G makes innovation an everyday practice in their organization.