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The Executive MindXchange Chronicles

New Product Development & Marketing:9th Annual

A FROST & SULL IVAN EXECUTIVE MINDXCHANGE

January 12-14, 2015 Hilton San Diego Resort and SpaSan Diego, CA

www.frost.com/pds

#FrostInnovate

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9th Annual New Product Development & Marketing:

A Frost & Sullivan Executive MindXchange January 12-14, 2015 / Hilton San Diego Resort and Spa, San Diego, CA

Dear Colleague, At the 9th Annual New Product Development & Marketing: A Frost & Sullivan Executive MindXchange, we brought together top thinkers in new product development to talk about their strategies for raising the bar on innovation, marketing and customer-centric product development. In the following pages, we present the Frost & Sullivan Executive MindXchange Chronicles, a collection of all the valuable take-aways and best practices discussed at the event that will help today’s marketers and product development executives tackle their most pressing business issues and prepare their organizations to meet the challenges of innovation. Key summaries include Steve Palijeg discussing a Kimberly-Clark/Huggies campaign that highlights how true customer/company partnerships can bring about ground-breaking innovation; Phil Swisher, Senior Vice President of Brown Brothers Harriman explaining the importance of execution in innovation and sharing guidelines on how to foster innovation internally; and a Mindshare on the importance of user-centered design featuring panelists from Microsoft, Emerson, Keurig Green Mountain, Intuit and other notable organizations. With these summaries, you’ll discover valuable insights shared at the 9th Annual New Product Development & Marketing: A Frost & Sullivan Executive MindXchange, and benefit from key strategies to implement at your own company. Thank you for your participation in Frost & Sullivan’s events. I look forward to our continued partnership and welcome any feedback you might have on the Executive MindXchange Chronicles. Sincerely,

Brian Fitzpatrick Partner Frost & Sullivan

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9th Annual New Product Development and Marketing:

A Frost & Sullivan Executive MindXchange January 12- 14, 2015 I Hilton San Diego Resort and Spa, San Diego CA

Table of Contents TUESDAY, JANUARY 13, 2015

KEYNOTE IOE Innovation: Designing Positive Customer Outcomes: Lessons Learned, Strategies and Tools That You Can Take Back to the Office for Execution -- page 5 SUCCESS STORY Reach Beyond VOC: Becoming Customer Centric as a Catalyst for Growth -- page 8 EXECUTIVE BULLETIN TechVision: A Systematic Innovation Serendipity Engine -- page 10 INTERACTIVE WORKSHOP TechVision: Exploring the Vortex of Innovation Driving New Concepts, Products, Services -- page 14 ASK THE EXPERTS! PANEL DISCUSSION Are Your Patents Worth the Trouble? -- page 16 THINK TANKS Track 1: Mining Big Data for New Opportunities and Insight -- page 18

Track 2: Be Nimble, Be Quick! Applying Lean Methodologies for Rapid and Responsive Product

Development -- page 20

Track 3: Compete Globally, Act Locally -- page 22

MINDSHARE Track 1: The A–Z of Executive Buy-In: Building a Business Case for Multiple Stakeholders -- page 24 Track 2: Developing World Class Global Innovation Teams -- page 27 Track 3: Eye on the Customer: Lessons Learned From User-Centered Design -- page 30 EXECUTIVE FORUM The Innovator’s Spotlight -- page 32

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WEDNESDAY, JANUARY 14, 2015 SUCCESS STORY Execution is 95% of What Matters: Delivering Great New Product Outcomes -- page 35 EXECUTIVE INSIGHT Overcoming the Fear Factor: Breaking Down Customer-Facing Organizational Silos for Product Strategy Excellence -- page 37 ROUNDTABLES Track 1: Anticipating Market & Customer Shifts for Successful Product Launches -- page 40 Track 2: Are You Innovating in the Dark? Aligning Strategy with Project Prioritization to Drive Revenue -- page 42 Track 3: Unlocking New Opportunities from Unmet Customer Needs -- page 47 VISIONARY INSIGHT Raising the Bar on Innovation Partnerships -- page 49 NEW PERSPECTIVES Inspiring Curiosity: The Foundation of Genius Innovation -- page 51 PEER COUNCILS Track 1: The Ethics of Innovation -- page 53 Track 2: Disruptive Business Model Innovation -- page 55 INTERACTIVE Inspiration to Implementation: Developing Your Day to Day Business Action Plan -- page 58

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__________________________________________________________________________________

KEYNOTE IOE Innovation: Designing Positive Customer Outcomes: Lessons Learned, Strategies and Tools that You Can Take Back to Your Office for Execution PRESENTER Rachael McBrearty, Chief Creative, Cisco Consulting Services TIME Tuesday, January 13, 2015, 8:40 am ______________________________________________________________________________ SESSION ABSTRACT IOE stands for the internet of everything. Keynote speaker Rachael McBrearty discussed how IOE is having a tremendous impact on businesses and services and how Cisco is utilizing IOE for competitive advantage. The IOE presents an opportunity for true innovators to tap into the next wave of the internet. McBrearty explained how our future is, in fact, reliant on tapping into this next wave as she outlined the evolution of the internet. First came connectivity to access information. This evolved into a networked economy of business processes, immersive experiences, and social and business interactions. Today, we have IOE, where technology is getting smaller, faster, cheaper, and the entire world is becoming connected. TAKE-AWAY Innovative technologies are coming to the most mundane experiences and will be data-driven. The IOE will have a particular impact on the retail industry and labor. Smart organizations will transform their team in order to meet the needs of the customer while still generating innovation, as Cisco has done. BEST PRACTICE(S) We can access data from objects and people in order to have experiences like those on the web. EXAMPLES:

1. Smart shopping carts in stores. With brick-and-mortar stores competing with online retail convenience, there is a high demand for enhanced in-store shopping experiences. Utilizing IOE, data will come from shelves, carts and people via smart phone. The shopping carts will have the ability to talk to management and checkout.

2. Another example is automotive companies going after a mix of data, such as the features customers like and when the car will need maintenance.

ACTION ITEM(S) TO IMPLEMENT To benefit from analytics, retailers must first win customer trust to obtain basic information, access purchase history, foster loyalty programs, and understand likes and dislikes.

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TAKE-AWAY(S) Retail hasn't changed in years, however, IOE has the power to transform labor through implementation of digital services, connected expertise, connected marketing and advertisements. BEST PRACTICE(S) Utilizing IOE, companies can offer and create additional services and conveniences for their products that will benefit the customer. EXAMPLE 1: Black and Decker tools have sensors that can talk to your phone. Black and Decker wants to keep those tools up and running with a lifetime warranty. The company also has a vision to connect tools to projects for the customer. EXAMPLE 2: Starbucks wants its customers to be connected to coffee machines. This way, customers can use their smartphones to send out alerts when more coffee needs to be brewed! EXAMPLE 3: Hertz is already using a virtual expert at their kiosks in airports with live video support. It helps with line fluctuations and the expert is available at various locations and online, providing more utilization than live person. ACTION ITEM(S) TO IMPLEMENT The challenge all businesses have is to keep up with IOE, implement innovation and make changes on the organizational side when necessary. TAKE-AWAY(S) Cisco Consulting Services is now working with a different business strategy. Previously, Cisco would only show customers the art of the possible. Today, the company works to solve customers' business problems. BEST PRACTICE(S) Cisco implemented transformational pilots where design thinking and agile invention leads to robust pilot execution. Four new tools were added to achieve this goal: 1. Simulate the process: create a blueprint of the operating model 2. Business case model: this digitizes the business and discovers where customers are falling out and where the costs are. 3. Simulation and illustrative outputs: the target operating model and blueprint of methodology reduces complexity for customers. 4. Innovation capability: Looks at metrics, leadership, and give a sense of where the customer is. Also includes the Innovation academy with tools the customer needs to move along.

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ACTION ITEM(S) TO IMPLEMENT The strategy and process above is meant to get everyone thinking in the same mindset. It also provides a comprehensive operating model and it is all implemented at scale. FINAL THOUGHT Three final takeaways: focus on brand relevant areas, go to the edge for inspiration and don't just inspire change—make it happen.

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______________________________________________________________________________ SUCCESS STORY Reach Beyond VOC: Becoming Customer Centric as a Catalyst for Growth PRESENTER Steve Paljieg, Senior Director, Corporate Growth & Innovation, Kimberly-Clark TIME Tuesday, January 13, 2015 at 9:45 am ______________________________________________________________________________ SESSION ABSTRACT Today, product innovation and brand building involve the customer more than ever before. There has been a transition from a transactional relationship where the company creates a new product and the consumer buys that new product to a co-creation relationship where the customer becomes involved with the innovation process of the new products. Huggies' Mom-Inspired campaign highlights the idea that companies should seek expertise wherever it exists--and not necessarily rely on closed product innovation. Dedication to product innovation often means looking at customer-focused, customer-centered and customer-driven categories. Other key factors are central entity, degree of customer involvement, role of the organization, degree of customer control and idea richness. All will help to answer the important question, how can we profit together?

TAKE-AWAY(S) Determine if crowd empowerment can help you address your innovation challenges. In the past, Huggies/Kimberly-Clark relied on a closed system for product innovation, meaning expertise was internal and there was a regulated system. This model met an ultimate downfall as it didn't allow transfer into the system or transfer out into the environment. BEST PRACTICE(S) Consider shifting to an open system, and seeking the expertise wherever it exists. Benefits include flexible control, high interaction, sharing lots of ideas and the mentality that “we innovate together.” Unlike a closed system, this allows continuous interaction with the environment or surroundings. ACTION ITEM(S) TO IMPLEMENT When it comes to product innovation, we need to change the way we think and the way we act in our organization. Part of this open mentality is starting to work with people in the trenches. It helps you think differently about solving problems. For example, Kimberly-Clark is encouraging non-innovation professionals to join the innovation process. There's also a focus on heuristic processing, or the reduction of complex problems by answering a simpler question.

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ASK THE FOLLOWING KEY QUESTIONS: Do I have perfect knowledge of my consumer and/or customer’s needs? Can I see the future of my markets without ambiguity or uncertainty? Do all the best ideas occur within the walls of my business? Do I have too many resources to work on the things that really matter? Can I pick out the best innovations before anyone else can?

TAKE-AWAY(S) Explore a complementary approach to traditional market research and internal innovation. BEST PRACTICE(S) Try to develop a complementary source of innovation Advance innovations that align with your organization’s Global Architecture and provide intuitive solutions ACTION ITEM(S) TO IMPLEMENT Offer resources and rewards to external innovation partners, as Huggies did with its Mom-Inspired campaign.

TAKE-AWAY(S) Be challenged by a new approach to brand building, it's more than simply selling stuff to consumers. BEST PRACTICE(S) The program brought new partners, new growing brands, investment, stewardship and of course innovations. It's a new approach to brand building with the consumers, not just for them. The moms who talked about the campaign also brought a better approach to marketing than the average advertising and marketing for Huggies. ACTION ITEM(S) TO IMPLEMENT The new vision for brand-building involves innovations, revenue, equity and corporate responsibility. FINAL THOUGHT Ideas come from more people living and working in more environments, thinking and acting in ways we never dreamed possible. The challenge is not to harness this explosion but to find a way to use it.

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______________________________________________________________________________ EXECUTIVE BULLETIN TechVision: A Systematic Innovation Serendipity Engine PRESENTER Rajiv Kumar, Senior Partner, Technical Insights, Frost & Sullivan TIME Tuesday, January 13, 2015, at 10:45 am ______________________________________________________________________________ SESSION ABSTRACT Technical analysts are constantly researching different technologies and innovations from around the world that are considered “game-changing” and “cutting edge” to drive the development of new products. They're categorized by different technology clusters. Within these categories, Frost & Sullivan started scanning the world for the top 50 multi-billion dollar technologies and innovations shaping our world with a program called Tech Vision. It looks for potential technologies that will bring ground-breaking products to the marketplace. It's very clear that CEOs and executive teams are focused on innovation. Most technologies today are quite collaborative and often come together at certain points of convergence. In this session, the guest speaker reviewed the process it takes to narrow down so many technologies into Tech Vision's Top 50.

TAKE-AWAY(S) Tech Vision chooses their Top 50 Technologies and Innovations each year through a wide variety of research followed by ratings and parameters. The list is condensed to 50 technologies and innovations believed to have the maximum potential for mass commercialization and wide-scale impact. BEST PRACTICE(S) Tech Vision analysts collect intelligence on several emerging and disruptive technologies and innovations from around the globe. Interviews are conducted with innovators and technology developers, funding sources and others involved in the technology ecosystem. Respondents are spread across public and private sectors, the academic world and R&D-focused government agencies. BENEFITS OF TECH VISION INCLUDE:

Product development and commercialization

Evaluate strategic decision-making

Collaborate and co-create value

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ACTION ITEM(S) TO IMPLEMENT Keep abreast of technology and innovate and collaborate across every level both inside and outside the organization TAKE-AWAY(S) Technology Cluster definition: an independent domain demonstrating excellence in global R&D and innovation. All clusters are virtually interlocked. The current and future applications of these technologies are interdependent and overlapping. These technologies are rapidly evolving and form a vortex of innovation driving new concepts, products and services. Innovation is almost always driven by emerging technologies. It's out of control in a good way we take for granted. We have this reality of a fast-moving world. BEST PRACTICE(S) One example is going driverless with Google. It is actually an older concept than people might think. By 2025, there will be a quarter of a million driverless cars on the road. Other examples include 3D printing, because imagination can run wild with this concept. In healthcare, innovations in medical devices are leading to artificial organs. ACTION ITEM(S) TO IMPLEMENT It's all about collaborative consumption. Tech Vision uses a model called the “Innovation-Serendipity-Kaleidoscope” to take a look at these collaborations. The model takes a look at four different variables: the technology clusters, mega trends, markets and innovation ecosystem drivers. The guest speaker explains while each variable is independent, they move on top of each other to show they can all collaborate. A closer look at the Innovation-Serendipity-Kaleidoscope layers. Technology Clusters:

Health & Wellness Sustainable Energy Clean & Green Environment Information & Communications Technology Advanced Manufacturing & Automation Materials & Coatings Medical Device & Imaging Technology Microelectronics Sensors & Controls

Mega Trends: Innovating to Zero New Business Models: Value for Many Beyond BRIC: The Next Game Changers

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Health, Wellness and Well-being Future Infrastructure Developer Future of Mobility Urbanization: City as a Consumer “Smart” is the New Green Social Trends Connectivity and Convergence Bricks and Clicks Markets:

Healthcare

Industrial Automation and Process Control

Metals and Minerals

Measurement and Instrumentation

Aerospace and Defense

Automotive and Transportation

Chemicals, Materials and Food

Energy and Environment

Electronics and Security Innovation Ecosystem Drivers:

Customers and End-users

Investment Community

Academic Labs

Research Labs

Standards and Regulatory IP Bodies

Government Bodies

Evangelists/NGOs

Corporate Sector

Futurists and Consultants TAKE-AWAY(S) Tech Vision analysts look for possible convergence scenarios where two or more of the Top 50 are likely to come together and disrupt, collapse and transform the status quo. BEST PRACTICE(S) The guest speaker explained that these Top 50 Technologies and Innovations are like “50 stars in the universe” with their own ecosystems. He pointed out what is more fascinating is the whitespace in between, showing where there is room for more innovation growth, or where the convergences are so close together.

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ACTION ITEM(S) TO IMPLEMENT It started with over 500 different technologies across nine clusters. The second step was the selection assessment criteria. Weights were assigned to each criteria based on relative importance. Each of these technologies were mapped in grids looking at a market attractiveness, technology as a game changer, or market-driven strategic foresight, attractiveness, funding and augmented reality. EXAMPLES OF CONVERGENCE:

3D printing, sensor fusion and carbon fibers could come together with predictive data analysis

Innovating the next generation of connected care for healthcare through patient monitoring, context aware computing, quantified self, cloud storage and predictive data analysis

Augmented reality of plant monitoring, enables higher efficiency and productivity within their industry

Self healing infrastructure: the prevention of rusting pipelines and pipe repairs with platelet

Enhanced user experience: virtual systems for consumer defense, education and gaming

Augmented reality: wearable electronics, lightweight materials and energy harvesting FINAL THOUGHT It depends upon collaborative minds to come together to invent something great. They must also leverage points of convergence.

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______________________________________________________________________________ INTERACTIVE WORKSHOP TechVision: Exploring the Vortex of Innovation Driving New Concepts, Products, and Services PRESENTER Ankit Shukla, Practice Director, Europe, Technical Insights, Frost & Sullivan TIME Tuesday, January 13, 2015 at 11:05 am ____________________________________________________________________________ SESSION ABSTRACT In this interactive session, members of the audience participated in a workshop utilizing technology convergence. Everyone worked in teams to familiarize themselves with the technologies from nine clusters: Health &Wellness, Sustainable Energy, Clean & Green Environment, Information & Communication Technology, Advanced Manufacturing & Automation, Materials & Coatings, Medical Device & Imaging Technology, Microelectronics and Sensors & Controls. Participants were asked to make connections among the Top 50 Technologies and Innovations and identify two disruptive convergence scenarios. They were asked to create two different possibilities within 140 characters—Twitter style. Later, each team created a poster sharing their ideas and showcasing a billion dollar opportunity. BEST PRACTICE(S) The grid template contained the Top 50 Technologies and Innovations. Through the exercise, participants deciphered where two or more of the Top 50 technologies might be able to come together to form a convergence. ACTION ITEM(S) TO IMPLEMENT Once the teams were able to define convergences on the grids, they brainstormed coming up with a billion dollar innovation based on the technologies/innovations they grouped together. Convergences from the same template included 3D printing, predictive data analysis and sensor fusion. Other groupings included augmented reality, predictive data analysis, sensor fusion and M2M communication. TAKE AWAY Taking their convergence discoveries to the next step, participants had to come up with potential scenarios in 140 characters. ACTION ITEM(S) TO IMPLEMENT Each scenario needed an attention-catching title and a brief explanation of the idea using the technologies coming together in the convergence. Examples included “Self Healing Artificial Organs” --Custom prosthetics/sports bandages developed using 3D printing and novel materials such as

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polymer chameleons and carbon fibers. Another scenario was “Energy Aware Mobility” --Tapping into consumer behavior to give rewards based on geo-localization and their “energy generation. TAKE AWAY In the last task, participants were asked to take their technology convergences a step further into an outlook three years from today. Participants had to think about the implications of their new development, what would get disrupted and how much as a result of their convergence idea. Examples of scenarios the participants envisioned included:

1. A drone away keeps the doctor away: A 3D printable medicine that is delivered to your house via drone.

2. Virgin Virtual: experienced creators and seekers wearing system to feel others' experiences.

3. Drought: desalination, lithium ion batteries, big wind power, grow crops anywhere.

FINAL THOUGHT Participants and others can take the process discussed above back to their own businesses to help leverage innovative ideas.

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______________________________________________________________________________ SESSION Ask the Experts! Panel Discussion – Are Your Patents Worth the Trouble? MODERATOR Michael Waldman, Director of Growth Implementation Solutions, Frost & Sullivan PANELISTS Scott Brierley, Project Engineer, Winovation Program, Parker Hannifin Traci Libby, Director, Licensing and Innovation, Thermo Fisher Scientific Stephen Postle, Executive Director, Intellectual Property Assets, Sun Chemical Ross Vincenti, President and Managing Director, Sisvel, U.S., Inc. Stu Williams, Director, Bioficial Organs Program, University of Louisville TIME Tuesday, January 13, 2015 at 12:05 pm ______________________________________________________________________________ SESSION ABSTRACT Five panelists conduct a question and answer session with audience members addressing some of the overlooked complexities and concerns of intellectual property. Challenges in the corporate world and the academic realm were discussed as well as what will happen to future innovation inside American academia. Panelists discussed why there has been friction between industry and university partnerships and further elaborated on the incentives for IP and trade secrets. Obtaining patents for a start-up company, the process for applying for a patent and ways to recognize if an innovation is patent-worthy was also discussed. TAKE-AWAY(S) There is a challenge for industry and academia to work together to generate innovation. For Williams, the innovations, inventions and intellectual property at American universities come from a very small percentage of the faculty and there needs to be a reinvigoration of this innovative mindset in order to keep these very few faculty members. From the academic perspective of Williams, American innovation has been driven by American universities in the past, but we are on the cusp of losing that entirely. He believes that American Universities will not be the same five years from now. There's the notion that most of the corporate world will be getting most of their academic intellectual property from outside the American universities and instead they will be coming from parts of Asia. According to Vincenti, what drives a successful IP program for an organization large or small is setting a goal objective and having a framework before you develop an IP portfolio.

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BEST PRACTICE(S) The panel recommends the following to start-up companies filing patents: Per Vincenti, it's important to have a patent attorney when applying for one, but before going that route, consider other resources such as the patent experts in the industry who can mentor you through the process of whether or not you should consider a patent in the first place. Postle added that if the IP is in software, there are tools and services in-house one can use. He advised never to feel daunted in mapping the technology landscape. In the end, a patent is only as good as the lack of litigation against it. ACTION ITEM(S) TO IMPLEMENT You need to look at your landscape to determine whether you need a patent and also to mitigate the risk of inadvertently infringing on third-party IP. You need to determine whether something is a trade secret or is something that's going to be so obvious that anyone can do it? Brierley suggested that for easily-copied IP, prosecuting a patent application is preferred assuming that at least a cursory search of prior art has been completed. However, noting that all issued patents are published and, therefore, become public knowledge, IP that is not easily copied, such as source code, should be retained as a trade secret. Lastly, patenting something simply for the sake of obtaining a patent is not recommended. The patent needs to represent value. Another consideration is that patents create infringement risks, so proceed judiciously. BEST PRACTICE(S) The panel explored the reward system companies have in place for product innovation. Ideally it is everyone across the board who receives recognition for the innovation. Even those behind the scenes should be recognized and more companies are beginning to acknowledge this. More companies are also recognizing those in charge of developing trade secrets. Trade secrets are often grossly underestimated in terms of their value and they shouldn't be. ACTION ITEM(S) TO IMPLEMENT There needs to be a holistic approach to the IP program rewards system because IP is so critical to businesses today. It needs to be something you think about as a major part of your asset base. Whether you have five patents or 5,000, it has the potential to be a major part of your organization’s asset structure. However, IP all depends upon how you generate and encourage people in the company. FINAL THOUGHT On the academic side, Williams concluded that the reward system has been fantastic, however they don't guarantee tenure or promotions to faculty members.

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______________________________________________________________________________ THINKTANK Track 1: Mining Big Data for New Opportunities and Insight FACILITATOR Jason Voiovich, Vice President, Marketing, Analytics & Research Services, LogicPD TIME Tuesday, January 13, 2015 at 2:00 pm ______________________________________________________________________________ SESSION ABSTRACT Big data is a lot of talk but not a lot of action, which isn't good. We have a lot of data and a lot of silos. It's a different way of thinking about the research question or the research problem and yet big data has been defined along the lines of, “anything that won't fit into Excel.” Once we have the data into a tool, the challenge is getting to the point of defining the problem. There's the question, how can I get that data in a form that my data scientists can do something with to help me? This session helped to answer that question with a group activity that walked through a problem statement, research question, stakeholder identification, key actions and data formatting issues. TAKE-AWAY(S) Each group was assigned a top 100 brand with a problem that was “ripped from the headlines.” The objective was to use the provided mapping tools to solve the problem. The guest speaker focused on having participants worry less about perfectly solving the problem then getting a feel for using the tools provided to take back to their companies to use.

BEST PRACTICE(S) A problem might look like a marketing or product problem, but you need to think about it differently to solve it. Look at the key insights to the problem: Are they cross-industry, quality, or cultural differences? Also keep in mind that stakeholders are both internal and external when you list them out. ACTION ITEM(S) TO IMPLEMENT An important step in this process is taking the problem you find and writing a research question identifying stakeholders and what actions to take. TAKE-AWAY(S) With the research question and stakeholders defined, participants looked at different data sources they thought they could use to help them solve the problem. BEST PRACTICE(S) Evaluate the best data resources based upon your problem insight. For example, is it stakeholder-based, a matter of perception vs. reality, murky/hidden issues or predictability?

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ACTION ITEM(S) TO IMPLEMENT Use big data in a meaningful way. You can't be data-rich but information-poor because you don't become user-focused. If you make sure you're building the right data to begin with, you can use the process opportunistically. BEST PRACTICE(S) It's best to get these concerns about the big data you're using out on the table so you can truly utilize it to help you solve the problem. Think about technical issues as well. Are they impacting customer perception? ACTION ITEM(S) TO IMPLEMENT Give others at your company the chance to run through the process as well. If you were to have your company engineers map out the same problem, would they use the tools the same way and be on the same page with the big data resources used? FINAL THOUGHT Using this process, any company can learn to resolve its problems using big data and it can learn to use it in an efficient way.

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__________________________________________________________________________________ THINK TANK Track 2: Be Nimble, Be Quick! Applying Lean Methodologies for Rapid and Responsive Product Development FACILITATOR Sean MacLeod, President, Stratos TIME Tuesday, January 13, at 2:00 pm __________________________________________________________________________________

SESSION ABSTRACT Developing the right product at the right time can be seemingly impossible. Compound that with the complexities presented by a global marketplace, and you’ve got a real product development challenge! Success requires obtaining and incorporating voice of the customer data, but expediency to an ever-shifting market is equally critical. This interactive session identified lean innovation practices and strategic methods for developing the minimum viable product. Once you have identified the minimum viable product, you can quickly identify where the opportunity is for your organization (core technologies, key capabilities, brand) – take a product to the market to test, experiment, modify, pivot and co-opt with consumers to land quickly on the product with best potential for development and success. To bring the right product to the market, you will need to combine technologies and capabilities with market demand to develop a strategic solution – the result should be a product with unique capabilities that give you an advantageous position in the market. TAKE-AWAY If you have a new technology, getting to the market rapidly is essential. Quickly identify use cases for new technologies, consider different groupings for development -- then delve deeper into the ideas with the greatest potential. BEST PRACTICE(S) There are two unique phases for product development:

1) Creativity - creation of unique ideas 2) Innovation – translating the ideas into something of value

ACTION ITEM(S) Replace traditional innovation practices with leaner, more modern methods: - Brainstorm ideas for the application of technology - Identify the top possibilities - Evaluate them according to criteria that make sense for your organization

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- Look for common features and also unique features so you are well prepared to develop the minimum viable products

- Incorporate the Voice of Customer (VOC) early - Respond to market feedback and pivot when necessary.

TAKE-AWAY When developing a product from new technology, there will be multiple potential markets that may have different users and economic models, so focus on developing a platform or group of platforms. In developing your MVP, market experimentation is crucial - it’s important to get your second MVP iteration to market quickly — so you must develop a lean process that keeps up with these schedule needs. BEST PRACTICE(S) Start with use cases – stay in creative, theoretical space when you are identifying the product. With multiple use cases, you will begin to find adjacencies and uses may emerge that are natural fit for your organization. Now you can get ideas to the market quickly to test, but you are prepared to adjust the strategy. Identify the minimum viable product, but also the other use cases that could be built on the MVP. These may require a unique feature sets, but create options to turn to as a result of market experimentation. ACTION ITEM(S) TO IMPLEMENT The breakout groups in this session generated a variety of ideas based on a hypothetical technology, including vitamin performance analysis, pediatric health monitoring, fertility applications, and pet care and animal health. With several different ideas, markets, and levels of regulation, there are several roads to take during your process. Look for the options that best suit your organization’s strengths and strategies. Understand why it’s the best option and get it to market for testing and further refinement. FINAL THOUGHT When attempting lean innovation, there is no “right” answer. Each organization is different and will have different competencies, goals, risk tolerance and time – develop your product according to the tool set that makes the most sense for your company.

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_________________________________________________________________________________

THINK TANK Track 3: Compete Globally, Act Locally

FACILITATORS Jeff Hayes, Chief Executive Officer, CPP Sheila Mello, Managing Partner, Product Development Consulting (PDC) Wayne Mackey, Principal, Product Development Consulting (PDC) TIME Tuesday, January 13, 2015 at 2:00 pm __________________________________________________________________________________ SESSION ABSTRACT To act locally, remember that understanding how to communicate in another culture is an essential first step to localization. Cultural differences invariably impact products and their effectiveness in local markets. CPP’s experience clearly illustrates this. In Japan, for example, an assessment like Meyers-Briggs is actually counter-cultural. In a collectivist society, giving an assessment that celebrates differences is a disconnect from the prevailing culture. CPP needed to completely rethink how it would help Japanese citizens and companies benefit from the richness of an assessment that seemed on its face to be undermining deeply held cultural values. CPP was able to work with its partner in Japan to understand the elements of the assessment experience that would translate and those that would need to change. To complete globally remember that before you can think about globalizing your products, you have to think about globalizing your company. GE is an example of a company that has done this well. They set some core principles, organize themselves around customer needs, and then allow a lot of global autonomy. The key, though, is to keep customer needs front and center. ACTION ITEM(S) TO IMPLEMENT

Pay attention to the multiple levels of globalization, from strategy all the way down to product support and marketing

Invest in full immersion-based research to understand customer needs (live in the customers world)

If possible, develop global products concurrently with U.S.-based, rather than trying to adapt existing U.S. offering

BEST PRACTICE(S)

Use local offices and distributors as partners in the quest to understand the end consumer

Ensure cross-functional alignment between VOC and product development locally, regionally, and globally

ACTION ITEM(S) TO IMPLEMENT

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Segment strategically before undertaking VOC

Use both qualitative and quantitative research to establish VOC

Learn about your industry as a whole—not specifically your product or your competitors—as a strategic starting point

Broaden your view of the customer to include users, distributors, others involved

Recognize that users may be different than customers and you need to understand both

Decide what qualities represent the essence of your brand (those you are not willing to compromise on no matter what the international market wants)

Make sure you are able to capture the nuances of communication, not just the translation

Continue validating internal/external stakeholder needs through quantitative research as you hone your messages

Adopt local insights from the field TAKE-AWAY(S) The two most critical elements to have in place before undertaking globalization are:

1) A worldwide corporate global strategy 2) A plan for gathering voice-of-the-customer data in all the relevant markets.

Don’t forget the quantitative piece of data gathering, which helps you validate the findings of your qualitative research. Remember, too, that in some markets—particularly emerging markets—you may need to alter your pace. You’ll need to understand market maturity. Maybe a market doesn’t need different products, but rather needs to have the product introduced more slowly or in a different way. An emerging market may need more support, or more white papers, or other materials to help educate users. The key is the research, it gives you the information to know. Can you take the same product and simply market it differently? Do you need a different product? Can you create something that is customizable by country? FINAL THOUGHT You must accept that global branding involves the right messaging, and the right messaging is not one size fits all. You likely will need to develop completely different marketing materials for different regions to account for cultural differences. But it all goes back to the information you have gathered about what matters to the people you’re trying to reach in that region—what are their challenges and what kinds of experiences do they want to have?

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______________________________________________________________________________ MINDSHARE Track 1: The A-Z of Executive Buy-In: Building a Business Case for Multiple Stakeholders MODERATOR: David Matheson, President and Chief Executive Officer, SmartOrg Inc. PANELISTS Jodi Russell, Senior Director, Research & Development, Clorox Megan Britt, Director, Investment Management, DuPont Pioneer Patrick Curtin, Director, Product Marketing & Technology, FulFlex Arpit Dwivedi, Global Innovation Strategy Manager, 3M Giorgio Vanzini, Senior Vice President, Product Development & Integration, DIRECTV Julia Wang, Organizational Change & Innovation Leader, Toyota Motor Sales TIME Tuesday, January 13, 2015 at 4:00 pm SESSION ABSTRACT Thirty-seven executives led by David Matheson, moderator and assisted by thought-leader panelists from DuPont Pioneer, FulFlex, 3M, DIRECTV and Toyota participated in an interactive session to identify ways in which innovators, finance and strategists can effectively work together to achieve buy-in by recognizing and overcoming real or perceived barriers to effective cooperation. One of the most difficult challenges faced by many, if not most, companies is the need to think about uncertainty. Companies tend to make broad assumptions about the size of a new market, the sales that can be made within a year or so of introduction and other factors that are impossible to forecast with any degree of accuracy. It has been said that “there are no facts about the future,” which is another way of saying that it is important to recognize that vague, often misguided assumptions can lead one into making optimistic projections driven by political or management-imposed numbers. This is one reason a high proportion of new products fail. Better to clearly recognize what one does not know and develop a range of values that indicate downside risk and upside potential. The executives in this session reviewed their perceptions of finance, executive management, R&D/technical, marketing and project management, both within and across functions. After identifying counterproductive behavior, participants addressed reasons for counter-productive behavior, finding that a great deal of this behavior derived from fear. Finance people were concerned that they were not highly valued; they were thought of as gatekeepers; they were the front-line of bad news; and were afraid of being fired. Managers were concerned with being held accountable for things they could not control; becoming obsolete; over-running budgets and dealing with the consequences. R&D was afraid of rejection; scope creep; having to perform with lack of resources; changing priorities and lack of recognition. Marketing was afraid of missing targets; pricing too high or too low; of rejection (“losing out if you don’t say YES”) and failure (of all types).

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TAKE-AWAY(S) Avoid unfavorable consequences by understanding and dealing with misperceptions among finance, executives, project management, marketing and R&D. BEST PRACTICE(S)

Identify counter-productive impact on innovation within each function

Build communication and trust across functions

Build a partnership based on openness.

Focus on the difficult conversations around key decisions ACTION ITEMS(S) TO IMPLEMENT

Align the incentive structure to reward risk-taking.

Avoid burdening innovative projects with need to justify ROI too early TAKE-AWAY(S) The world of innovation and product development is fraught with uncertainty and therefore sales, profitability and other financial measures cannot be reliably forecast without dealing explicitly with uncertainty. BEST PRACTICE(S)

Teach everyone how to deal with uncertainty around projections about future sales, growth, profitability, etc.,

Provide analytic tools to evaluate business model factors when there is uncertainty around such areas as market size, price, market penetration, time and cost.

ACTION ITEMS(S) TO IMPLEMENT

Provide training in ways to evaluate and deal with uncertainty

Develop business plans that include ranges around factors that cannot be forecast with certainty, for instance the size of a new market where the company has little or no experience and marketing research is inadequate or not available.

TAKE AWAY Decisions are more often than not driven by fear. It is important to recognize that these fears exist and do everything possible to address and minimize the impact of these within each function. BEST PRACTICE(S)

Recognize that many, if not most, managers and executives (despite their titles) have fears around their performance. And the consequence of their decisions.

Recognize your own fears and how they may impact the decisions you make.

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ACTION ITEMS(S) TO IMPLEMENT

Get to know about the work of other functions, for instance if you are in marketing get to know your counterparts in finance or R&D and their challenges, pressures and fears.

Develop relationships across the functions that involve your work, either through approval levels or technical support.

FINAL THOUGHT Innovation in new product development and marketing is a risky business for many of the reasons cited above. The job can be threatening, depressing and full of fear given the uncertainty around producing top- and bottom-line results, making forecasts when the future is extremely uncertain but management is pushing to meet performance goals. Obtaining the green light for new, risky projects is difficult. Unless a company fosters an environment where the risks of innovation are recognized, failure is tolerated and manages a portfolio of innovation to balance risk and reward there will probably be disappointing results. One executive team pointed to a single word that pretty much says it all: Trust!

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______________________________________________________________________________ MINDSHARE Track 2: Developing World Class Global Innovation Teams MODERATOR Carrie Nauyalis, NPD Solutions Evangelist, Planview PANELISTS Anthony DeLio, Senior Vice President & Chief Innovation Officer, Ingredion Albert DiRienzo, President and Professor of Forensic Science, RedSky Jodi Russell, Senior Director, Research & Development, Clorox Company Calvin Smith, Principal Manager, Global Innovation, EMC Soma Velayutham, Head of Innovation Commercialization, Nokia TIME Tuesday, January 13, 2015 at 4:00 pm ______________________________________________________________________________ SESSION ABSTRACT Strong teams and resources are at the core of every company and without them, a company cannot deliver. To carry out innovation, you need both, otherwise, an idea remains just an idea. Five expert panelists on innovation team building gave advice on how to avoid pitfalls when building global teams, shared lessons in global team building and best practices. The session also explored company culture and how it affects innovation and shared ideas for acquiring new talent. TAKE-AWAY(S) Moderator Carrie Nauyalis asked the panel for one word that signifies the most common pitfall they see when building a global innovation team and received the following responses: Smith: Myopia-- when you're building a team that's completely like-minded, you might not get that innovation you're looking for. Russell: Inconsistency--if you see it in expectations or goals you need to have things in your arsenal to eliminate that inconsistency. It needs to be deliberate. DiRienzo: Culture-- it sets the tone for the global innovation. Culture is how you keep and track the talent and company culture makes sure everyone has the same strategy. DeLio: Accountability- making sure the common definition is shared and make sure there is accountability for delivering results, without it nothing every gets done. Velayutham: Diversity- the panelist works with people from eight countries, also gender diversity is important. It's powerful in product innovation. BEST PRACTICE(S) Many of the panelists headed companies that operated in many parts of the world and cultivated access to fast global solutions. Essentially, teams of experts connect from all over the world and are

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focused around business segments. They are practitioners solving problems. They are able to share and store their data and findings and the teams are able to get together to identify and solve global technology problems. DiRienzo's company, RedSky focuses on keeping a pipeline of innovation to the parent company. There are over 1,500 collaborators around the world that leadership can cull ideas from. Everything is accomplished through portals for different projects or is under configuration control where one thing updates and everyone is informed simultaneously. ACTION ITEM(S) TO IMPLEMENT For DeLio, creating an international community of experts and technologists has been very effective. The end result: game-changing innovations are consistently developed. TAKE-AWAY(S) The moderator asks the panel for their expertise on company culture and how it makes innovation thrive. For Velayutham, genuinely developing innovation means bridging gaps on the organizational side of his company. Smith added that innovation thrives when the company finds the right balance in where it's investing and gets back to the core culture. DiRienzo explained that, everything in his company's culture is about innovation. Employees get to pick what their reward is. Russell suggested looking for fear within the company culture. If it exists, you won't be innovative. The leader is at the bottom and must support and enable the team to be successful. Accountability sometimes comes too soon, empowerment needs to come first. DeLio explained that we are in such a metric-driven culture and thinks you have to question the value of the metric. It creates a lot of work to measure it. ACTION ITEM(S) TO IMPLEMENT The moderator asked members of the panel what they do in order to build their innovation teams and acquire new talent and where they go to collaborate with other experts. For DiRienzo, it's about relying on his own collaboration network for generating new talent. The majority of people in the network are already top experts in their field. Velayutham meets with a group from the San Diego bay area called Corporate Venture Capitalists and feels they are high quality people to talk to. DeLio's company has six focus areas and a ten year vision built on consumer trends. His company is constantly looking for ideas. It gets regional input and brings in outside subject matter experts.

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Smith meets with the International Society of Innovation Practitioners, which includes academia as well. TAKE-AWAY(S) For Smith, looking for certain skill sets is important with recruiting new talent. They must be highly technical, have knowledge of big data, marketing and overall program management skills. Recruiting can be a six-month planning process that involves re-evaluating and identifying critical roles. FINAL THOUGHT When Velayutham leads a team, he divides members into thirds: his top one-third, middle one-third and bottom-one third. He grooms the top one-third to take over leadership roles.

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______________________________________________________________________________ MINDSHARE Track 3: Eye on the Customer: Lessons Learned from User-Centered Design MODERATOR: Ben Blank, Innovation Catalyst, Intuit PANELISTS Ashley Carneal, Senior Product Manager, Innovation, Keurig Green Mountain Michael Newman, Director, Human Centered Design, Emerson Wesley Slavin, Manager, Marketing, Peterbilt Motors Chris Surowiec, Head of Business Development, Global Partners, Microsoft Tuesday, January 13, 2015 at 4:00 pm __________________________________________________________________________ SESSION ABSTRACT It is essential to design products based on the fundamental needs of the users. Interact with people and understand the need you are trying to satisfy and then go through a refined process to satisfy that need. That is where the real value proposition comes in. Start with your end user and try to define and profile that person. A key issue that came up was: What do you do when what people want is inarticulate? You need to address this through direct observation. Go out in the field and just watch people interact. Use a camera. Take pictures. Use film. Bring back the environment so that the team can pick up on clues. Lavin stated: “Product ideas are hard to articulate.” You need to look at the data. The moderator, Aaron Eden believes that existing behavior that you can observe can be a great predictor of the outcome someone is trying to achieve. If you’re not observing your customer, you’re not going to get the results you are seeking. Ashley Carneal discussed finding creative ways to tell the story. Create that equity video. Create 30 seconds of emotional experience. TAKE-AWAY(S) When it comes to user-centered design:

Take it one step further and take it beyond the product. Take it to the experience. (Ashley)

Construct the product to the human desire, however you fulfill that. (Surowiec)

Place the “persona” where all the employees and engineers can see them. Pick three images

that customers find appealing on a cluster. Pick three images on the spectrum that internal

employees find appealing. (Newman)

A light bulb seems to switch over once you get internal individuals out with the customers,

interacting and finding out about the product and the people that use it. Recognize the space

you need to play in. Facilitate feedback situations with real customers. (Wesley)

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ACTION ITEMS(S) TO IMPLEMENT Bring user data into your environment. Generate it. Nurture and grow it. Win at something and people will want more of it. Design your product not only to sell, but to also be able to be installed, if need be. And remember: What gets measured gets done. Internally especially, lead by example. Allow people to explore, be creative, have vision, be receptive, even if it is not the right answer at that time. Fostering connections will show employees it is ok to be creative and to have a vision. If people are disengaged they won’t share their ideas. BEST PRACTICE(S) Know your consumer, so you can contextualize and personalize, so you know how to design for them. Know the patterns of the consumer to better fit the product into their lives. Behaviors that get rewarded will get repeated. Creative organizations that understand users internally will have different ways to reward people/teams. Through whatever it is they need, the behaviors will replicate and broaden out. TAKE-AWAY(S) Consider celebrating failures in innovation! Failing first can be how you finally get to the idea or product =that works. Presidents need to get out of their chair, walk around and show people they know that they are trying. FINAL THOUGHT Know how to understand your customer, and mine social media. Use a specific social media team. Explore Facebook, Twitter, websites. But be wary of anything that is hearsay. You will (probably) not be as good at social media as a third party company that specializes in it.

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______________________________________________________________________________ EXECUTIVE FORUM The Innovator’s Spotlight MODERATOR Chris Surowiec, Microsoft THE 2015 INNOVATORS Victor Cho, Chief Executive Officer, Evite Denise Fletcher, Chief Innovation Officer, Payer and Pharma, Xerox John Hoskins, Business Development Manager, Amazon Jan Langelius, Project Engineer, Peterbilt Motors Wesley Slavin, Marketing Manager, Peterbilt Motors TIME Tuesday, January 13, 2015 at 5:00 pm ___________________________________________________________________________ SESSION ABSTRACT Moderator Chris Surowiec of Microsoft opened with an anecdote about how amazing it is that children use imagination all the time to transform their environment. He also referenced the innate creativity, curiosity and questioning nature that most children possess. Those two qualities—creativity and the ability to transform your environment-- are often key ingredients in innovation. Also discussed was the idea that innovation is not an outcome which helps your business succeed, but more of a mentality that can help inspire game-changing innovations. Additionally, innovation is much more powerful when applied to a strong overall business plan. Just because a company is innovative doesn’t mean it will succeed. Panelist Victor Cho used Kodak as an example of an innovative company that failed. A lot of people think Kodak lost the race to the digital camera when in fact it invented the digital camera and the sensors behind it. But, as Cho pointed out, innovation just wasn't enough to sustain the company. Alternatively, McDonald's was referred to as a company that's “not so innovative.” Yet in the last five years McDonald’s has added $40 to $50 billion in market capitalization value to its business. It did this without a lot of product innovation, but instead accomplished this out of shear operational rigor. TAKE-AWAY Some executives chase innovation as an end goal but that’s not always the solution. Innovation needs to be coupled with a strong, agile business model.

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BEST PRACTICE(S) Cho thinks about innovation as it is applied to a framework. He applies this theory via a math formula: World class execution team + game changing customer experience and value + enduring competitive advantage = shareholder success The framework for a game changing customer experience and value: Business model + unexpected wow + moments of truth + impossible speed The panelists discussed the following concepts and the companies that are applying these formulas to their business models:

Create a business model that enables game-changing value and customer experience (Lending Club)

Continually strive to create unexpected customer delight (Amazon) Understand the defining customer experience points and over-deliver (Evite) Provide lightning fast response across the entire end-to-end experience (Picasa)

TAKE-AWAY(S) From an efficiency and execution standpoint, silos are not a bad thing but behavior silos can hinder innovation. The panelists from Peterbilt explained the blue lobster analogy. A blue lobster is something hard to find. Fisherman don't deliberately go out and try to catch them. Applying this analogy to innovation, innovative ideas occur at random moments of the day. If you try to be deliberately innovative, chances are, you're not coming up with the ideas you want. ACTION ITEM(S) TO IMPLEMENT Panelists Langelius and Slavin challenge everyone to take an exploratory mode when managing innovation. Their company developed an innovation training community. Occasionally, they will find someone with a real capability to be the blue lobster. BEST PRACTICES Denise Fletcher of Xerox described how the cloud labor model has implemented crowdsourcing, an innovation helping the healthcare world. Crowdsourcing enlists a critical mass of people via the internet to complete a task. It's cheaper, provides global talent and work can be completed more efficiently. Because healthcare happens in a sporadic manner, you can't hire labor and train them overnight. Fletcher's company, Xerox, created a solution to take that claim and break down that data and push that data out to the crowd. It figured out the optimization of the minimally skilled worker, and the security and privacy of patients are protected through micro-tasking. John Hoskins of Amazon talked about the reason for Mechanical Turk. It was due to the fact that when Amazon added third party sellers to its catalog, Heuristics couldn't handle it, so the company came up with the idea of Mechanical Turk, building a marketplace where you put in questions and offers and employees come in and pick and choose what to answer. Mechanical Turk is about the work and not the worker. Essentially, the cloud is an enabler.

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FINAL THOUGHT The moderator asked one question of all the panelists: How does innovation reflect the word “vulnerability?” Answers included: Cho: You're going to make mistakes but that's how you run a business, you have to be vulnerable. Slavin: You need emotions and relationships and to drive with innovation you have to have that connection with your customer. If it feels uncomfortable you are probably in the right place. Langelius: It has to do with organizations with problem solvers and experts. One of the most powerful things they can do is let go of that and get deep into the mindset and get into the users' mindset and start with an open mind. Hoskins: One of the things I've come to learn is that it is okay to fail but you have to carry the learning out of it. We think long-term. Can we apply a measurable difference to the world and own it? Fletcher: These are uncharted waters. It's about taking that vulnerability out of the project but learning from it and facing it head on.

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______________________________________________________________________________ SUCCESS STORY Execution is 95% of What Matters: Delivering Great New Product Outcomes PRESENTER Phil Swisher, Senior Vice President & Head of Innovation, Brown Brothers Harriman TIME Wednesday, January 14, 2015 at 8:30 am ______________________________________________________________________________ SESSION ABSTRACT Guest speaker Phil Swisher shared his company's approach to innovation as he elaborated on two of the company's long-term goals: generating meaningful revenue from new businesses and building a stronger culture of innovation. BBH's approach to innovation is a strategy of what you do and do not do. An innovation does something different than the core business. The same mindset and processes of the core business will not lead to different outcomes. He also articulated some things his company will not do when it comes to innovation, which included ROI analysis, creating detailed business cases, allocating costs to other business units, and attending boring corporate meetings. BEST PRACTICE(S) Six primary activities practiced by BBH involving solution building and infrastructure building:

Pursue ideas using team and firm resources for direct idea advancement

Utilize an internal venture capital fund for funding the commercial ideas of others

Seeks external wisdom, engages with the rest of the world for insight

Innovation, used as a catalyst

Innovation, used inside the firm

Metrics and advocacy ACTION ITEM(S) TO IMPLEMENT Use a different measurement methodology to determine how innovative your new product or service really is. It can be best described as a cumulative test asking questions such as, “Who else currently offers this product or service?” Points are awarded based on the multiple choice answer picked. The higher the score the better. TAKE-AWAY When building innovative new products, alignment across four populations is critical: the innovation team, business unit management team, IT department and one of BBH's 38 owners. Approval is required only from the partner who oversees innovation and the partner who oversees the business unit in which Innovation is investing.

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ACTION ITEM(S) TO IMPLEMENT Swisher suggests that management ask the following questions of top performing management teams in order to make innovation a strategic priority:

What commercial projects is your team working on, where outcomes are uncertain?

How are you building innovation into the lives of your team members?

For each member of the management team:

How are you participating directly in the creative process?

In the past month, how many clients have you spoken with, excluding sales situations and

service problems?

Who has made the most significant positive impact on your innovation efforts?

BEST PRACTICE(S) Deployment Values for best practices:

The standalone revenue generated by Innovation’s new product

The revenue benefit of the new product retaining clients of the core who would otherwise have left

The revenue benefit of the new product helping the core business win new clients, or new business from existing clients

The technologies, people and methods used by Innovation set new benchmarks and precedents, which increases the knowledge, permitted toolkit, and capabilities of the core, and creates productivity improvements and cost savings in the core

Portions of Innovation’s work, both product development work and product’s code, can be re-used or adapted for projects in the core, which increases speed and quality while reducing costs

FINAL THOUGHT(S) Career advice from Mr. Swisher: The world is small, life is cumulative, always look for ways to

help others. Optimize for great mentors and maximum learning, especially earlier in your career.

Be passionate about the major areas where you invest your time.

Have a runway – you can’t negotiate unless you can walk away.

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____________________________________________________________________________ EXECUTIVE INSIGHT Overcoming the Fear Factor: Breaking Down Customer-Facing Organizational Silos for Product Strategy Excellence PRESENTERS Jennifer Draklellis, Senior Director, Innovation, UnitedHealth Group Marla Hertzel, Director, Innovation, AARP TIME Wednesday, January 14, 2015 at 9:30 am ______________________________________________________________________________ SESSION ABSTRACT The guest speakers hosted a duel-presentation covering the collaborative innovation initiative between United HealthGroup and AARP. They shared some of their experiences around learning how to identify and recruit potential “landing zones” or business owners for their innovation ideas, building evidence to reduce risk and learning best practices for preparing others to promote ideas. Their organizations were both seeking growth through innovation. When they started working on the initiative together, they realized it was having little to no market impact. The question that arose was, why aren't we better at innovation? So they began to develop an innovation capability and discovered that it was not easy. The first step they took to was to put some definition around their work. The guest speakers clarified why they were working together and created a care-capabilities perspective. Next they put forward an actionable-shared purpose, which touched upon points such as impact, achieving growth and retention. Finally they developed a vision for the initiative.

TAKE-AWAY The two organizations are learning how to be innovative. They decided to service both the “student and the teacher” and having this perspective helped them manage the many challenges they had with innovation. BEST PRACTICE(S) To innovate effectively, organizations need to shift from the operator mindset to the innovator mindset. The operator is uncomfortable with uncertainty, makes data-driven and analytical decisions, works hard to be accurate and precise and works to avoid errors to zero. The Innovator mindset is just the opposite because it is comfortable with uncertainty. ACTION ITEM(S) TO IMPLEMENT You need to hold people accountable differently. There are three types of accountability:

Results: Did you deliver the predicted outcome? Execution: Did you execute the plan well? Learning: Did you follow a rigorous learning agenda?

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Other accountability factors: Are you taking the planning process seriously? Are your predictions improving? Is the team facing the facts? Is there evidence of learning? Is there a clear hypothesis?

TAKE-AWAY Another challenge to overcoming organizational silos is the inherent performance tension involved especially when a company puts forward an innovation agenda. That is because there is more to innovation than just ideas—they are only the beginning. BEST PRACTICE(S) Innovation = ideas + execution. The problem you need to recognize is that companies are built for efficiency, not for innovation. They're managed by the operator mindset and this is appropriate because if they weren't, they wouldn't make the money needed to survive. ACTION ITEM(S) TO IMPLEMENT You address this challenge by creating a smooth transition from innovation team to market. Look to the business owner to shepherd the following concepts into the organization for complete execution. Think about folding your concept into the operational side of the organization. Seven hints for selling ideas:

1. Seek many inputs, listening actively about the concept you are pursuing. 2. Do your homework, gathering a lot of data and facts to talk about the concept intelligently and

tie it into the company. 3. Make the rounds, meeting with people one-on-one, give people the opportunity to get used to

your idea. 4. See critics in private and hear them out, good for a lot of push-back. Also prevents people from

ganging up on you. 5. Make the benefits clear, arm your supporters to go out and sell your idea. 6. Be specific, relates to your executives and the right time to approach them. You need to test

your big notions about the concept. 7. Show that you can deliver, people want to back winners and want that promise and success

within the business. Build that reputation and credibility. TAKE-AWAY(S) Putting some of the seven tips and ideas into practice, Draklellis and Hertzel asked their steering committee to become champions of their work. The committee members were given a specific request to go out and evangelize their concept to their constituents in two to three meetings in a specific time frame.

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BEST PRACTICE(S) This evangelization helps to show senior leadership support even if the executives were not on board completely with the idea. Just hearing the team talk about it increased credibility to their constituents and started to plant the seed in the organization so that as these ideas are starting to scale, the organization is already prepared to take them on. ACTION ITEM(S) TO IMPLEMENT To collect the feedback, there is a specific technique called the Rose, Thorn, Bud Experiment that the steering committee used.

Rose: What are the positive or bright spots?

Thorn: What concerns do you have?

Bud: What opportunities does this present and how does it fit into your business? FINAL THOUGHT This initiative still continues to be a learning process for both of the guest speakers.

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______________________________________________________________________________ ROUNDTABLE Track 1: Anticipating Market & Customer Shifts for Successful Product Launches FACILITATOR Chip Brewer, Vice President, Business Development, The Smart Cube TIME Wednesday, January 14, 2015 at 10:45 am ______________________________________________________________________________ SESSION ABSTRACT This roundtable session gave product developers the opportunity to voice their questions and concerns and to ideally learn from each other. Brewer started off the session with the story of Zeno's Paradox. Zeno was an ancient Greek philosopher who came up with a number of paradoxes. In one of those paradoxes Achilles, the fastest, fiercest warrior in Greece tried to cross a bridge where he met a tortoise blocking his path. The tortoise said Achilles could not cross until he won a race against the animal. The tortoise ultimately used logic--with a clever twist--to beat Achilles at the race and the warrior needed to take another path to by-pass the river. According to Brewer the paradox is famous because it shows the impossibility of motion, so we can never get to where we want to go. The guest speaker brings up the story because when it comes to innovation, you see that paradox. We're always trying to catch up, we are Achilles and we're trying to catch the customer, or the tortoise. While it seems difficult at times to catch the customer, it's possible. Enlarging on the theme of “catching the customer,” participants voiced their experiences on tracking customer shifts in the organization, balancing research and separating fads from trends. TAKE-AWAY Brewer asked who is in charge of tracking customer shifts at the participants' organizations involving behaviors, needs and attitudes. Taking a poll, answers ranged from all over the place to having a centralized team. BEST PRACTICE(S) Just because a business chooses a centralized or decentralized model doesn't mean it's what is working best. Shared services need to be cautious, because trends tend to be in silos in different areas and if you're not paying attention and connecting the dots, you can miss a really important trend. ACTION ITEM(S) TO IMPLEMENT In one participant's company, there's a list of macro-trends from the enterprise level that everyone will always follow. The list is added to from different markets. Macro-trends are slow-moving and gradually changing overtime. Another participant pointed out that her trends are with their strategic research division and corporate strategy, that way the trends can be properly leveraged.

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TAKE-AWAY(S) A lot of participants agreed there was no cohesive process at all for data mining or tracking trends. BEST PRACTICE(S) Big data is only as useful as the question the person asks. One participant voiced that in healthcare, the challenge is processing data on behalf of the customer. It's difficult because the states own so much of the data. Ways have been found to incentivize the states especially with FWA (fraud, waste and abuse) but now they need to get more organized about sharing different kinds of data. ACTION ITEM(S) TO IMPLEMENT The presenters emphasized that you need to get out in the field and get face-to-face with the customer. You need to observe the customer, otherwise product development can be led the wrong way. BEST PRACTICE(S) Separating fads from trends: participants were asked how they would define them. Fads are focused on certain demographics, but trends spread across businesses. While fads won't change the marketplace because they come and go, trends will evolve the marketplace. However, trends are difficult to deal with if product innovation is long-term. In terms of timeliness, a trend is symbolically like the “Big Bang.” Fads come into the process early. ACTION ITEM(S) TO IMPLEMENT When it comes to product innovation there's a timing question involved. When do you start, decided to pull the trigger and end? How early in the stage gate process are you going out and talking to customers? Regulatory and legalities often kill innovation. Allow for failure and provide platform. Is there an alternative to stage gate if it kills your product innovation? FINAL THOUGHT When it comes to product failures, commercialization destroys the product innovation.

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______________________________________________________________________________ ROUNDTABLE Track 2: Are You Innovating in the Dark? Aligning Strategy with Project Prioritization to Drive Revenue FACILITATOR Carrie Nauyalis, New Product Development Solution Evangelist, Planview Inc. TIME Wednesday, January 14, 2015 at 10:45 am ______________________________________________________________________________ SESSION ABSTRACT Product innovation is nothing new. Companies have been doing it for years. What is new is the breakneck pace and intensity, as well as the metrics to measure it. There are lots of companies who are doing what they call “innovation,” but with very little measurable output. Can you really call something innovative if it never makes it to market? If the product doesn’t achieve its revenue targets, can it be considered a success? Are you innovating in the dark? Per Carrie Nauyalis, “Innovation is rewarded. Execution is worshipped.”“I wrote a sassy article really calling folks to the carpet about their innovation program. It’s called: Are You Really Innovating? Five Signs You Might Be Faking It. http://www.innovationmanagement.se/2013/07/22/are-you-really-innovatingfive-signs-you-might-be-faking-it/) While no one in THIS group would ever be faking it, it got a lot of positive feedback. The five signs you might be faking it are:

1. Your Product Pipeline is Filled to the Brim with . . . Safe Bets 2. Your Company Says “Innovation Is Everyone’s Job” 3. Your Company Believes Innovation is Free 4. Your Company is More “Big Hat, No Cattle” 5. Your Company Submits Ideas via the Dreaded Employee Suggestion Box in the Lobby”

Embracing innovation that is executed is a real key to success TAKE-AWAYS

Insight into what other PD companies consider to be non-negotiable best practices

A framework to better understand project prioritization criteria and analysis around which ones are critical for your organization to achieve business value

Self-assessment questions to determine areas of opportunity for streamlining the product commercialization process and next steps on how to implement

BEST PRACTICES

Newell Rubbermaid Growth Plan Handout: (http://www.newellrubbermaid.com/OurCompany/Pages/OurGrowthGamePlan.aspx)

This is what drives their annual report

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It is public

It is defined in common language that is absorbed into the company – this is how they talk

It is colorful like their brands

Newell strategy has bled into the company’s DNA

Posted throughout their building

Touch screen in elevator of top 50 projects and their status Q: Who reads their annual report?

If you haven’t, you should. TAKE-AWAYS Activity/Brainstorm: Take a moment to jot down:

What are the strengths of your own company’s strategy?

Where can you see room for improvements?

Bonus: How could you communicate these recommended changes to management? Activity/Feedback: Working well: Pivoting from being a payer to Wellness company

A lot better in the long run if we keep you healthy

New CEO…..Focus on 10 things vs 100

DIR (Directly Responsible Individual ) attachment – for each one of the ten things an executive is tied to

Focused on consumer Need improvement: Very aligned at the executive level and they speak in exactly the same language

Next level down – no clue

Long term focus – measured in short term ways

Not effectively communicated is our intranet – time consuming – is this correct?

As we our building out our new innovation strategy we can ensure we do not make these mistakes

Recently split into 11 different business units to allow them to grow – exposure to leadership team

Aligned around:

Efficiency

Reliability

Sustainability

Since a lot of the customers are the same across units we need to look at how to pull this strategy across business units for consistency

Try to influence strategy where you can

When everyone is bought into strategy it gives you an opportunity to run faster

What problems are we trying to solve and let’s ideate around that

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ACTION ITEMS TO IMPLEMENT Activity/Brainstorm with your table criteria to use to prioritize your product portfolio

No financial criteria – too easy; we all know those

It doesn’t matter whether it’s a breakthrough innovation or incremental Activity/ Feedback Table 1

Brand alignment

Technical feasibility / time to market

Scalability

Adjacent to core business or net new

Employee health and safety

Real need v. perceived need

Customer group priorities

Competitive advantage –copying following or leading

Alignment to the strategy

Do we have internal champion Activity /Feedback Table 2

Portfolio roles – defending your core / growing your core / expanding your core

Balance in your portfolio

Clearly articulated right to win

Executive sponsorship

Driver of initiative – not executive, but someone lower in organization that will drive it through

Activity Feedback Table 3

Balance – near / mid / long term priority or effort

Balanced portfolio based on above

Strategic priorities – scalability

Risk Mitigation Activity Feedback Table 4

Strategic fit / growth platform

Competitive advantage uniqueness

Do we have the resources

Urgency – regulatory / mandates (audience interjection) / compliance (audience interjection)

Matrix evaluations – current channel

Lead time to concept – to – lead time to – scale commercialization

Size of prioritized customer pool

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Standalone invention or something to span other products

Skills in house or does it build skills ACTION ITEMS TO IMPLEMENT Per the facilitator– Resources is how stuff gets done….people!

FIRST TIME RESOURCES HAVE BEEN MENTIONED!

Benchmark study - #1 pain point – too much work for their resources

Capacity and resource ability is commonly overlooked

If you don’t have the resources you can’t execute

Then you have a tunnel NOT a funnel

Example from Panel Session: Anthony DeLio (example of resource / talent review) o Build a bullpen of talent o Build a chart of individuals (talent, tenure, potential needs) and prioritize areas for today /

tomorrow o Budgets and resources mapped to pipeline and strategy

It doesn’t have to hard be to forecast resources (I need 2 people / I need 10)

Don’t need a WBS (work break-down structure)

Get refinement through each stage (stage-gate)

Perspective and forward looking to execute correctly (right staff and skills) Activity/ Feedback Table 5

Social impact

Protectable (IP)

Does it refresh a line or product

Does it support multiple sides of the business

Does it have upside The facilitator adds:

Environmental impact

Sustainability – Packaging

Drivers of brand choice BEST PRACTICE(S)

Execution is like a three legged stool (people / processes / tools)

Framework document

Benchmark study – how to manage innovation

Focus on where you can have the biggest impact and move up in maturity.

While it can be challenging, most organization see the greatest ROI by focusing on prioritization: When you pick well….the company does better – effectively drive execution

BEST PRACTICE(S) Case Study: Flowserve

Consciously slowed the organization down

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Concentrate on doing fewer of the right things better

It takes $25 million to bring a product to market – if you chose poorly you are already sunk!

Hear from the via a Frost & Sullivan webcast at: www.frost.com/more Facilitator Commentary:

Fewer / Bigger / Better: Prioritization married with strategy

Being able to pivot is huge Session Attendee Question: Are there case studies that showed how organizations moved up in maturity? Case Study: CSM Bakery

o Customer (grocery stores) collaborating with CSM o CSM Sales Reps cannot enter orders until order is final o Took product life-cycle from 135 days down to 45 days

Case Study: Under Armour

o Originally stated there is no room for software o “We are too innovative and running too fast” - software will slow us down o Implemented tool and now they are running even faster

FINAL THOUGHT Make you own Maturity Matrix

Powerful exercise on how it relates to execution

Do we want to “level up?” Portfolio Type: Breakthrough innovation criteria

Incremental

Regulatory / Customer requirement

Strategy + Prioritization + Execution = $$$$

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SESSION Track 3: Unlocking New Opportunities from Unmet Customer Needs CO-FACILITATORS Jerry Haselmeyer, Chief Executive Officer, Seek and Justin Masterson, Global Director, Accounts, Seek TIME Wednesday, January 14, 2015 at 10:45 am SESSION ABSTRACT Led by Jerry Haselmayer and Justin Masterson, evangelists in innovating through empathic connection, participants explored how to better understand the barriers to and create strategies for uncovering and solving directly for deep customer needs. Key barriers to this brand-to-human connection included organizational resistance to personal involvement in customers, organizational “arrogance” of believing the brand already knows the customer thoroughly, and regional/trans-cultural translation complications. Key strategies focused on creating an organizational bias for human-centric innovation, creating multi-functional teams that engage in immersions for customer empathy, and learning how to tell customer stories that engage all the way up through top management. TAKE-AWAY(S) Putting customer experience at the center of your innovation practice requires getting all functions, including senior leadership, to immerse in the human story behind the numbers. BEST PRACTICE(S) Take stock of the most productive, most powerful insights your brand has ever worked against, and hero the role of the human story in those insights that drove change. Push for a story-centric culture that demands true insight to drive product and commercial innovation. Build multifunctional innovation teams and allocate the time and resources early to connect with your customer in their real-world category context, then let that investment guide the remainder of your innovation process. Get top management engaged early in the customer story, invite executives into the field and look for areas of passionate response; building alignment as you innovate versus “selling in” later in the innovation process. Test-market ideas early and with minimum viable prototypes to bench-test concepts before full development.

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Push for radical collaboration between functions and regions. Build a “Franken-team” of key stakeholders who will get to know the customer together, and then rally the team around the human story as it is uncovered. With multi-regional and multi-cultural initiatives, create a minimum set of boundaries for the innovation (brand specs, product imperatives, etc.), and let regions and cultures adapt to the needs of their own areas. ACTION ITEM(S) TO IMPLEMENT Although changing old routines is difficult and people are resistant to change, you need to push

forward in creating a culture of connection between brand and customer. You cannot do this sitting

in your office; get out in the field, and bring your key stakeholders. It will change the way you

innovate.

Build design briefs and initiative briefs around fundamental human need. Every purchase decision

involves both functional need and emotional tension.

When you have success, advertise internally, and turn it into your own story so you can replicate this with the customer or product line. Utilize a video of a compelling customer story to draw in leadership when pitching a new innovation. FINAL THOUGHT Customers are people too, as are your senior executives. Get observational and immersive to understand the rich human story, and get your execs involved. Become proficient at finding and telling human stories both up and down the chain.

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_____________________________________________________________________________ VISIONARY INSIGHT Raising the Bar on Innovation Partnerships* PRESENTER Andrew Douglass, Director, Open Innovation Networks, Clorox Company TIME Wednesday January 14, 2015 at 1:20 pm ____________________________________________________________________________ SESSION ABSTRACT *Due to circumstances beyond our control, these session notes are currently unavailable. Please see below for continued Chronicle session notes.

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______________________________________________________________________________ NEW PERSPECTIVES Inspiring Curiosity: The Foundation of Genius Innovation PRESENTER Brian Kessler, President, Maui Toys TIME Wednesday, January 14, 2015 at 1:50 pm ______________________________________________________________________________ SESSION ABSTRACT Guest speaker Brian Kessler filed for his first patent as a teenager and to date has designed and developed over 2,600 toys. His company, Maui Toys, is the third largest in the world. He also owns six other companies in other industries. Kessler explained that when he first started Maui Toys, it was all about finding a way to bring new creativity and innovation to a category that had become very stale and dry. His father taught him to look at the world differently. Today, the guest speaker does this organically. He asks questions his father might, such as how could I improve this? He noted that sometimes the creative piece gets too lost in structure. The innovative component can be critical to getting something to market, as in the case of the Skyball. Kessler wanted to put glitter inside a ball like a snow globe and through trial and error and experimentation with a new material he ultimately created a ball that bounces 75 feet into the air. He used social media to help market it via an interactive video featuring kids and adults playing with it. Sales were sealed when the video went viral. TAKE- AWAY Focus on creation, application and execution. Not just one, but all three. BEST PRACTICE(S) Kesler started Maui Toys to bring back fresh and exciting toys. His basic theory about Maui is utilizing style, design and function to create innovation and a unique and fresh image in the outdoor summer toy category. ACTION ITEM(S) TO IMPLEMENT Focus on understanding customer and market trends in the face of technology shifts across all industries. BEST PRACTICE(S) Ask: Does someone want it? Is there a need? Kessler suggests, when you design, always think about all the steps—marketing, merchandising—along the way.

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TAKE-AWAY(S) Maui takes the innovation it does and brings it to market share. One example was taking Skyball concepts to other outdoor toys that haven't changed in a while, like a frisbee. After working with several different prototypes, the company came up with “Skybouncer.” It bounces, it flies and it is also a best-selling toy. BEST PRACTICE(S) Kessler also asks: What's next? At the end of the day you can only invent what you can profit from. At the same time, you need to be that person who can look at making the world a better place. FINAL THOUGHT Kessler's other projects include a new application of blimp technology for cargo, and marijuana growing and dosing structures. He saw an opportunity for safe-regulated use of the substance.

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______________________________________________________________________________ INTERACTIVE PEER COUNCIL Track 1: The Ethics of Innovation MODERATOR Stu Williams, Director, Bioficial Organs Program, University of Louisville TIME Wednesday, January 14, 2015 at 3:00 pm ______________________________________________________________________________ SESSION ABSTRACT This session focused on creating a conversation between participants on the ethics of innovation. Williams spends a lot of time in operating rooms, taking medical terms and translating them into plain and simple terms for consumers. For Williams, innovation means interacting with the community and putting it to work. He also believes there is something about our species where ethical activity is passed down through teaching. In this session, the moderator and participants discuss where ethics come into play in the innovation process, where they come up in work discussion and where companies fail in ethics training. TAKE-AWAY(S) Ethics usually come after innovation. One participant felt there was a problem addressing ethics because people are uncomfortable talking about them. Many times they don't come into play until there is an abuse or a problem. BEST PRACTICE(S) It's important that leadership create an ethical climate. We need to start thinking early about the consequences of what we're inventing. ACTION ITEM(S) TO IMPLEMENT Think about how you can further help the customer understand the value of big data. We do it to make our customer's life better. It's also the right thing to do for the product. It's important to disclose that you're using big data of the client in a responsible and purposeful way. TAKEAWAY(S) Williams believes that there is an ethical altruism in human nature. He explained that leadership is important in all of our work and that we need to set a standard for ethics. If you do things that create an ethical culture it is something people are watching and listening to. BEST PRACTICE(S) Some companies require compliance with their ethical principles. One participant shared that they receive emails approximately once a month on various ethical issues. A lot of the topics are

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transactional and financial, such as not giving or taking bribes. The downside is, these emails don't always touch on what R&D does. An example of a company taking an ethical initiative is Xerox. It built into their copiers the ability to recognize when currencies are being printed and will print “void” across the paper to prevent counterfeiting. TAKE-AWAY(S) At this juncture in history, consumers are becoming enlightened and there's often a compromise of personal information. A compelling question was posed: are we going to put ethical standards in for IT or are we going to wait on the federal government? While some people feel that we should wait on the federal government to hand down decisions on ethics in certain areas, some companies are already taking steps to outline their ethics. FINAL THOUGHT Williams shared the story of how his university took its own ethical stand when social media came out. They realized the potential for use and abuse and created an ethical guidance document that teased out many different possibilities. He said he was pleased they took that step forward.

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______________________________________________________________________________ SESSION Track 2: Disruptive Business Model Innovation PRESENTER Bran Moelich, Business Designer, Customer Experience, Citrix TIME January 14, 2015 at 3:00 pm ______________________________________________________________________________ SESSION ABSTRACT Innovation is about being design driven. Inspiration comes from different places and innovative business models form by taking existing expertise and combining it with new inspiration. Also, evidence based testing is imperative, because evidence is always right and intuition alone is often wrong. Great ideas are assumptions that need to be tested for further evidence. Strategy is about making choices about what to pursue and focus on, as well as, what not to; constantly be aware of your choices and trade-offs. Successful innovation in an enterprise is about placing small bets. Have the willingness to fund smaller risky ideas and not just surefire big wins. Presenter Brian Moelich, uses a mix of Design Thinking, Lean Startup Principles and Business Strategy to tackle innovation projects and mentor teams in the Citrix Startup Accelerator and Innovator’s Program. This session gives readers and participants a small overview of one his boot camps and provides a road map for applying the process in your own organization.

TAKE-AWAY (S) Mr. Moelich started by showing the Business Model Canvas, developed by Alex Osterwalder, as a tool to use for developing innovative business models. Participants were given a customer persona; millennials who are often over-burdened with technology and need a way to organize their technology filled lives. Participants were then given following problem: help today’s millennial generation, often over-burdened with technology, to better organize their lives. After being given 5 minutes to discuss this in small groups, the following solutions were suggested:

Kayak for your life: A personal concierge service that finds the best path of least resistance

Cloud hosted virtual machine: Your device becomes a cloud allowing you to access everything in one place.

Centralized board in your home: allows you to connect your handheld device, with the board and have it learn your daily routines. The board would then allow you to leave

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messages for others in your home, help you become better organized in your daily life, and have more routine.

After solutions were presented, a “Problem Solution Fit” was assessed. In other words, “Does the customer’s problem actually fit your solution?” Groups were told to look at the pain relievers, gain creators and products & services of their value proposition and see if it matched the pains, gains and jobs to be done of their customer. If it does not match, think about the trade-offs for pursuing the matches v. what didn’t. The following were the results from value-thinking sessions:

Kayak for your life: We need to move really fast and have something early, while still being able to make changes.

Cloud hosted virtual machine: instead of having just an application that is a cloud, have something like Google Glass that has all of the information follow you via the application.

Centralized board: No change, although that is a bad thing. We need new blood, or new people, to help us come up with a new idea because those who come up with the original are stagnant.

After you have your problem solution fit and have thought through the elements of your solution that is producing value for the customer versus just a “nice to have,” fill in the Business Model Canvas. Now, recognize that everything written down is a risky assumption that needs to be tested. Normally, Mr. Moelich would have the participants go out into the real world and test their models on the surrounding population. However, due to the time constraints of this presentation, participants talked through the different ways the their assumptions could be tested. The riskiest assumptions typically rest in the customer segments and value propositions.

Mr. Moelich presented the group with a chart to further assist in prioritizing their assumptions. It looks as follows:

To best use this chart, draw the lines on a piece of copy paper and put the four words on sticky notes and place them on the coordinating axis. Place the values on sticky notes of a different color than the labeled words and place them in their coordinating sectors. Once participants were shown that the

56

riskiest assumptions lie in the top right corner, they were instructed to remove the labels and replace them with new labels as follows: Unknown now becomes Urgent; Dangerous now becomes Low Cost; Known becomes Not Urgent; and Safe becomes High Cost. It looks as follows:

Now remove all sticky notes other than those in the top right corner and then place the remaining sticky notes from the top right corner into a corresponding quadrant based on the new matrix. Mr. Moelich then suggested to test the urgent and low cost items first. You can easily test these items using cheap prototypes, inexpensive web landing pages using just your value proposition and logo, by putting together a wire frame, having someone act the problem out, and get feedback on any testing. If your new business model is for an existing organization, make sure it fits within your organization. Look at the elements of your new business model and compare those to your organizations current business model. What are the strengths of your organization? Which of those strengths and capabilities can you take advantage of? What needs to capabilities need to be built to support the new business model? In thinking about your competition’s business model in relation to yours, think about what are the elements that differentiate you? How does your value proposition differ from theirs? Are you targeting the same customer? What capabilities do you have that your customer does not have and cannot easily replicate? Think about the items that make you disruptive compared to your competitors. Think of the following Uber example in relation to using the Business Model Canvas.

o Who are the customers? The customer segment is twofold because it is a platform: the drivers and the people needing rides.

o Value Proposition is twofold because it has to satisfy two customers: Uber provides low-cost transportation for riders and provides a way for the drivers to make an extra buck.

o Channel: Riders and drivers can be found through the internet and smart-phone

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application. o Revenue stream: A margin on each ride given o Key Resources: The platform and the developers o Key Activities: Providing a marketplace for riders to match themselves to a rider

Uber provides efficiency and significant cost savings, in comparison to traditional taxi companies, (i.e. Uber doesn’t require no dispatcher and no need for someone to coordinate the rides), which is why they are a disruptive business model

FINAL THOUGHT Innovation happens at the intersection of desirability, feasibility, and viability. Is your solution desirable to your customer segment? Can you or your organization feasibly deliver your solution? Is this viable in relation to your competition and your organizations current position? If you don’t have evidence to answer these questions then you may be foolishly spending resources.

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______________________________________________________________________________ INTERACTIVE Inspiration to Implementation: Developing Your Day to Day Business Action Plan PRESENTER Michael Waldman, Director of Growth Implementation Solutions, Frost & Sullivan TIME Wednesday January 14, 2015 at 3:50 pm ______________________________________________________________________________ SESSION ABSTRACT Frost & Sullivan's core mission is focused on helping clients grow their businesses. It does this through rigorous research on markets, competitors, customers and potential partners--all with the goal of helping pinpoint the greatest work opportunities. Growth Implementation Solutions helps take the insights that come from that analysis and turn them into actual growth strategies, for example, product development, new business models, mergers, acquisitions, geographic extensions, etc. The division also helps clients implement those strategies. Mr. Waldman, who has been planning and implementing large, complex global initiatives for a few decades now, shared key insights. Additionally, this session was designed to help the participants flesh out their ideas for implementation and then take them back to their offices. BEST PRACTICE(S) Implementation planning is critical, moreover, there needs to be a way to measure success and mitigate risks. From an implementation planning perspective, it's about having a solid project plan and identifying who is doing what and when. What are the deliverables and the dependencies? There needs to be a very clear action plan. ACTION ITEM(S) TO IMPLEMENT The product development team, the engineering team, marketing, sales, HR, IT, legal and more should be involved in writing your business action plan. You will probably have 10 to 12 different work plans. What are the odds that all of those are going to line up including the time frames and the resources? There is a very slim chance. It becomes about integrating it into an overall program plan. BEST PRACTICE(S) There are a lot of ways you can measure success. The common ones people think about are timeframe, where you have a baseline plan and you measure against it to see how you're doing and you re-baseline if necessary. Similarly for cost, you have a baseline cost and you measure against that. ACTION ITEM(S) TO IMPLEMENT There are some measures of success people don't think about such as requirements. For example, what were the requirements when you set out on a product initiative, or on this new innovation?

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How are we tracking against those requirements? Who were the people we intended to have working on this? Are they dedicated? Are they committed? Are they overloaded with their day job so they're not focused on this? What about the right types of resources? Are they available for this project or do we need to hire? TAKE-AWAY(S) Be sure you have processes and procedures in place to support new innovations. Does the company support your plans? Do the teams know what to do? Do they know how to do it? Do they know it's coming? Evaluate communication channels. Internally there may be executive communication, but there's also mass communication. Does the broader organization know what is coming? There's also external communication such as regulatory bodies and public relations. Are they all on track? BEST PRACTICES As you build your business plan consider: Is there a return on investment? Is there some type of expected value from this project? How are we progressing? A year later, was any money made on this initiative? How are we progressing against this initiative? TAKE AWAY(S) Risks are things that could potentially impact projects. You need to have a clear plan to mitigate risks before setting out with an initiative. What are the potential risks that could impact the program? FINAL THOUGHT Key takeaway: Waldman believes that implementation planning is the single most critical factor for your organization.

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