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COMPANY CONFIDENTIAL
Innovation to Drive Results
Singapore, August 14th 2013
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
For centuries, innovation has been a key flag raised by
global leaders and thinkers
2
How would you define Innovation?
Is Innovation important? Why?
Are you and your organization good innovators?
3
4
Doing
something
different
For our customers,
our enterprise, and
our society
Which is
different than
invention
Innovation is the creation of new
value for the world
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
Study on Innovation in
Singapore
5
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Companies with CEOs Interviews
In a study, conducted by Monitor Deloitte and IPS, we asked
similar questions to local and MNC’s based in Singapore
Sample of Companies Surveyed
6
Source: IPS – Monitor Innovation Study
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Results suggested CEOs consider Innovation important ...
How Important is Innovation for
Achieving Your Company’s Goals and
Ambitions?
0%
10%
24%
26%
40%
Important
Very
Important
Essential
Somewhat
Important
Not Important
Who is Directly Responsible for
Innovation in Your Organization?
18%
3%
23%
28%
28%
No One Explicitly
R&D Director
Team of Directors
Senior Executive
or a Member of the
Board
CEO or Director
for Innovation
90%
56%
7
Source: IPS – Monitor Innovation Study
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Do You Have Sufficient Innovation
Assets (e.g. Labs, Equipment, Tools,
etc.)?
Do You Have the Human Resources
to Implement Innovation?
… and have effectively invested in the process, systems and
people to drive innovation
48%
33%
5%
15%
Lackingneeded skills
Having skillsand critical
size
Top-notchskills and
size
37%
47%
3%
13%
LackingMany Assets
LackingSome
HavingMost
World-ClassFacilities Needed
skills but not
sufficient size
87% 85%
8
Source: IPS – Monitor Innovation Study
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Corporations are moving towards a more innovation-
friendly culture
9
49%
82%
45%
15%
6% 3%
0%
25%
50%
75%
100%
Today Desired In 3 Years
Empowered
Innovative
but
Command
& Control
Command &
Control
Quotes from Interviews
“We see ourselves as an ‘innovator company.’
That’s something we strive for. So driving
innovation is a constant part of the culture
around here.”
“People’s minds are clear that this company is
about innovation. And so they are clear as to
what they should be doing and what they
should be rewarded for.”
“Innovation is almost a culture in our
company.”
“Yes, people can try and fail in our
organization, but only once”
“ How can I innovation in a company that
makes billion-dollar projects”
“I need to fix my daily problem, after that I can
innovate”
What is the culture of your organization
towards innovation?
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Percentage of Respondents Citing Element Innovation is ...
59%
49%
13%
10%
Channels, Business
Models, Partnerships
Businesses / Growth Engines
However, most of the focus is still given to a traditional
and limited definition of innovation
Process, Materials, Methods
Products, Services
Traditional
Innovation
Broader
definition of
innovation
10
Source: IPS – Monitor Innovation Study
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Additionally, even though leadership owns Innovation, it is
often delegated to managers
11
18%
3%
23%
28%
28%
No One
Explicitly
R&D
Director
Team of
Directors
Senior Executive
or a Member of
the Board
CEO or Director
for Innovation
56% Managers: Dept. Managers
Temporary Staffing
Other Initiatives: Quality Circle
Six Sigma
Who owns Innovation in your
organization?
Results
Source: IPS – Monitor Innovation Study
Focus on Tactical Innovation
Delegation of
Responsibility
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Innovation is largely limited defined and tactical rather
than broad and strategic
Cost Reduction,
Efficiency,
Quality
Short Term and
Incremental
Operational
levels
Growth
Long Term and
Breakthrough
Top leadership
Focus of Innovation Limited and Tactical Broad and Strategic
Fo
cu
s o
f th
e c
om
pan
ies s
tud
ied
New and better
Products
and Services
New business
model, new ways
of working, new
partnerships
12
Source: IPS – Monitor Innovation Study
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
Lessons from Successful
Innovators
13
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Successful innovators apply a number of core principles
to innovate reliably and repeatedly
14
1. Set a clear ambition and focus for innovation
2. Think about innovation as a portfolio
3. Use multiple types of innovation
4. Be intensely curious about customers (and non-customers)
5. Continuously challenge orthodoxies to reframe opportunities
6. Look outside company for insights, ideas and opportunities
7. Take a disciplined approach to innovation — and to building
innovation capabilities — to ensure ongoing success
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Thinking broadly about innovation
15
Network Connections with others to create value
Process Signature or superior methods for doing your work
Product System Complementary products and services
Channel How your offerings are delivered to customers and users
Customer Engagement Distinctive interactions you foster
Profit Model The way in which you make money
Structure Alignment of your talent and assets
Product Performance Distinguishing features and functionality
Service Support and enhancements that surround your offerings
Brand Representation of your offerings and business
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
10 Types of Innovation
16
80% of the
Innovation
Efforts
80% of
Innovation
Returns
Building an Innovation Engine involves four critical building
blocks
APPROACH Clear definitions for
the work to be done
in creating
innovations—the
phases, activities,
deliverables, and
decision rights
ORGANIZATION The units that house the
innovation competency –
teams, divisions,
leadership—along with
the interfaces that
connect it to the broader
enterprise and the world
RESOURCES & COMPETENCIES The individuals who
perform the work of
innovation; the skills,
tools, and training they
need to do it capably, as
well as the funding and
time to fuel it
METRICS & INCENTIVES The targets to guide
performance; the
measures to evaluate
progress and the
incentives (monetary and
otherwise)
to drive supporting
behaviors
“Innovation should be not only a function but also a discipline”
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
Case Examples
18
Examples of 10 Types of Innovation
© 2 0 1 2 M o n i t o r C o m p a n y G r o u p L P —
C o n f i d e n t i a l
20
SIMPLE RADICAL
TRANSFORMATIONAL ADJACENT CORE
1-3 types
of innovation 4-5 types
of innovation 6+ types
of innovation
in FMCG
in other industries
Services
Recycling
Centers
Sense and
Learn
NEXT
Restaurant
Smart City
Starbucks: Innovation Strategy
“A Third Place Between Work and Home”
7 TYPES:
© 2013. For information, contact Deloitte Touche Tohmatsu Limited. 22
Providing safety for less
6 Types:
DuPont: Armura
Affordable safety
Kingfisher: Innovation Strategy
Premium Brand and Performance Across Categories
5 Types:
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
P&G: Open Innovation Platform
24
6 Types:
© 2013. For information, contact Deloitte Touche Tohmatsu Limited. 25
Cemex is a top 3 global cement manufacturer
The company faced big challenges in its ready-mix concrete business
– Relatively low profitability, compared to cement
– Traffic, weather and other urban conditions pose a major problem to an efficient delivery of ready-mix
– Several “recipes” customized for each project and client
– Very erratic demand and when needed, ready-mix delivery is always very urgent
Source: Cemex website, Cemex Annual and Quarter Reports, Clippings
Solution
Deliver ready-mix concrete using the same model and efficiency of Houston 911 Emergency Centre
Cemex created GINCO - Gestión Integral del Negocio del Concreto (Spanish) or Integrated Management of the Ready-mix Concrete Business
The target is to deliver the right ready-mix concrete within 15min
“Cemex delivers faster than Domino’s Pizza” – Los Angeles Times
Context
CEMEX: GINCO
Reliable Ready-mix Concrete Delivery
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
CEMEX: GINCO
Reliable Ready-mix Concrete Delivery
26
Overview of the Elements of GINCO System
How Ginco Works Client calls Cemex call centre hotline (1-800CEMEX) and
inputs order Based on pre-orders and demand analysis, Cemex ready-mix
trucks loaded, equipped with GPS, are strategically positioned near the main potential clients
The GINCO selects the most appropriate truck to deliver the order using the most efficient route, supported by the GPS
Implemented in Mexico City, Houston, and Bogota, 40 ready-mix plants, 330 ready-mix trucks, ~ 6,700 trips/wk
More than 90% deliveries within a 15-minute window, from previous 34%
Total delivery costs were reduced in around 35% It also significantly reduced the rate of wrong deliveries
and product waste
Results
“Cemex treats its trucks like taxicabs”– Book: Building Your Business
with Customer-focused Solutions
6 Types:
GINCO IT Platform
GPS
Mobile Phone
Microwave Antenna
Automated Ready-mix Plants
Demand Analysis / Pre-orders
Call Centre
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
How to enhance Innovation in your organization; four
important next steps
27
1. Learn Where are you innovating today? Will your
portfolio achieve your overall objectives?
2. Declare What is the right level of innovation ambition
for you? Declare … and communicate it
clearly
3. Enable Use different resources (people, tools,
money, time) for different levels of innovation
ambition
4. Lead Lead, and manage, your innovation portfolio
as a total system
© 2013. For information, contact Deloitte Touche Tohmatsu Limited.
Backup Slides
28
© 2 0 1 2 M o n i t o r C o m p a n y G r o u p L P —
C o n f i d e n t i a l
29
make money
align your talent and
assets
connect with others to
create value
use signature or superior
methods to do your work
create complementary
products and services
employ distinguishing
features and functionality
support and enhance
the value of your offerings
represent your
offerings and business
deliver your offerings to
customers and users
foster distinctive interactions
How you… Such as…
© 2013. For information contact, Deloitte Touche Tohmatsu Limited.
Acknowledgements of Companies and
Government Agencies that Supported the Study
Government Agencies Companies
Organization Committee