Collaborative Innovation Reference Framework
Choice of the Innovation Types
Nine different approaches to Innovation
Examination of the Innovation Types
This third presentation, Examination of Innovation Types, uses
the innovation framework established above to examine a range
of innovation “types” within the context of the innovation
framework defined in the Core Innovation Framework deck.
We have broken these up into two decks for absorbing the
significant detail provided within each type to ‘value’ the often
subtle differences in applying the different type to your
organization.
Using the framework we can establish which focus areas are
critical for innovation success in the different innovation types.
For example, we can see that Needs-based innovation relies on
Trajectories, Discovery and Insight for success because of the
importance placed on customer needs. Investigating the
innovation “types” within the framework provides more detailed
and careful examination of the actual work involved when
innovating using that “type” or approach.
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Our intention behind these different models of Innovation
We are interested in explaining the many facets that make up a successful innovation endeavour. It can
be extremely tough to capture and explain the complexity of innovation. We would like to see an
emerging reference model for innovation from this starting point. The end result is to create a common
innovation model or framework that accelerates acceptance, reduces mystery, constant rework and
simplifies innovation efforts. Innovation is dynamic. Opening this set of models allows for it to be
constantly improved for all to benefit - this is our stated aim in publishing these models.
We submit these suggested models as a starting point to deconstruct how innovation works and to
encourage a “common” innovation model across all geographies, industries and markets. Developing a
common innovation model and approach reduces confusion and simplifies innovation work. We believe
we can remove a lot of the mystique around innovation and help accelerate its adoption and
implementation by firms everywhere if we can agree on basic models and principles.
We would encourage you to feel free to send commentary, corrections, additions or changes to the
models or types to Paul Hobcraft or Jeffrey Phillips. We in turn will re-publish the model as necessary
under a Creative Commons License, so that anyone who cares can use it and adopt the innovation
model. We want this to be open and a transparent process but we will retain copyright while allowing
others to copy, distribute, and make some uses of their work as long as we are credited for the original
creation.
These are collaborative work-in-progress to achieve a common position for understanding innovation
► Go to the Wiki on http://cirf.pbworks.com
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Deeper examination of innovation types
•
We’ll examine the key differences between the NINE different innovation types or
strategies that can be explored, recognizing that the innovation processes and
many of the ‘core’ innovation capabilities DO remain the same regardless of
innovation approach.
•
The constantly shifting boundaries of innovation matter and understanding the
multiple options available becomes increasingly important to master.
•
Why do changing innovation boundaries matter so much? Because, at its most
extreme, failure to detect, acknowledge, and respond to these changing
boundaries can make the difference between organisational success and failure.
•
Each type of innovation described here requires some distinct attributes to be
successfully deployed- these “differentiation points” define the type of
innovation you want to do and how to go about it
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Approach Type – Innovation Models
•
Innovators need to choose specific innovation strategies, models or types:
–
–
–
–
–
–
–
–
–
Management Innovation
Open Innovation
Design led Innovation
R&D led innovation
Service/Experience Innovation
Business Model Innovation
Technology Innovation
Needs-based Innovation
Operational innovation
What approaches to innovation should we choose? What is appropriate to our position?
Different approaches are appropriate to different innovation goals
N.B. These choices aren’t dependent or mutually exclusive – a firm can conduct “open”
innovation and design-led innovation simultaneously, for example
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Innovation Strategies- Decision Path
• The choice of the strategy approach is determined by what your firm
wants to achieve and equally what you have available to you.
• Any gaps need to be recognized and you need to gain the knowledge
and experience to build those into your approach and time
expectations to achieve the result you would ideally like.
• Choosing a specific innovation strategic approach has consequences on
the people, skills, organizational structure and many other facets of the
innovation model. These need to be equally addressed.
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Exploring and selecting innovation
types, models & philosophies
Design
Led
Innovation
Service /
Experience
innovation
Business
Model
Innovation
Needs
Based
Innovation
Approach Type Summary –
Nine Strategic ‘Types’ of Innovation
Models
Open
Innovation
R&D
Innovation
Management
Innovation
Operational
Innovation
Technology
Led
Innovation
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Innovation Management Universal Need Environment
Stage
Key Sub Anchor Capabilities & Competences (triggers)
Consideration Factors
Front stage
& back
stage needs
Unchallenged
Orthodoxies/
Beliefs
Underappreciated
Trends
Management
innovation
Co-create &
Co-design
designer attitude
& philosophy
Design
Led
Innovation
Context,
visualizing and
framing
Designing in novelty,
function &
aesthetics
Integrated design in
all considerations
Structured
Discovery Process
Search for
Unarticulated
Needs
Needs
Based
Innovation
Needs first
approach NOT
ideas
Opportunity Landscape
& Uncontested Market
Space
Problem
Definition
IP Aware &
Sharing
Open
Innovation
Trust &
Relationships
Seeing beyond
incremental to
evolutionary
Collaborative &
Cross Functional
Key Resources &
Activity Clarity
VP: Customer
Segments &
New Channels
Unarticulated
Needs of
Customers
Underleveraged
Competencies
Wisdom of
Many
Turning
Services into
Tangibles
Relevant &
Valuable to
Client Lives
Service /
Experience
innovation
Business
Model
Innovation
Clear Revenue
Streams & Cost
Structures
Strategies/ Design Essentials of
the Types of Innovation Approach
‘Step’ change in
performance
Identify Key
Partnerships &
Relationships
Understand
‘points of pain’
Operational
Innovation
Engage hearts &
minds, sense of
urgency
Correlation &
Convergence
Point
Disruptive
Potential
Unlock the
Business Value
Superior or
Evolutionary
Technology
Led
Innovation
R&D
Innovation
Clarity of
Purpose &
Potential Need
New ways to work
& behaviours
Champion &
Advocate for
Change
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Investigating “Types” using this framework
Align Market &
Customer
Environment
Strategies, Strategic Intent
Resources and funding
1. Strategic Context
Strategic Alignment
to Vision & MOST
(Mission,
Objectives,
Strategies & Tactics)
Desire & Motivation to Innovation
Existing Capabilities & Skills
Scouting
Voice of Customer
2. Trajectories,
Discovery,
Insight
Product Development
Launch
.
3. Systematic
Innovation Process
Trend Spotting
Scenario Planning
4.Go-tomarket
Execution
execution
Common Environment, Networking & CollaborationBuilding Tools
Existing
Product/Service
Portfolio and
Capabilities
5. Enabling and Scalable
Infrastructure
Software Infrastructure
Organizational
Readiness
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Strategic Types of Innovation
Short Explanations
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Management Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
Unchallenged
Orthodoxies
Underappreciated
Trends
Management
Innovation
Underleveraged
Competencies
Unarticulated
Needs
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Management Innovation Description
Management innovation is the invention and implementation of a new management practice, process
or structure that represents a significant and novel departure from generally accepted or standard
management practices, and intended to further organisational goals. (Birkinshaw, Hamel & Mol, 2005)
Gary Hamel, in his book The Future of Management, focuses on the historic lack of management
innovation, demonstrating that hierarchical organization structures haven’t changed in over 100 years.
In its broadest sense then, management innovation can be defined as a difference in the form, quality
or state over time of the management activities in an organization, where the change is a novel or
unprecedented departure from the past
Management Innovation’s goal is in generating positive outcomes for the innovating firm as a whole to
further the organization’s goals, which include both traditional aspects of performance (e.g. financial
goals) as well as softer aspects (e.g. employee satisfaction).
Management innovation is often not easy to copy as it goes to the heart of how firms operate. Even
where firms do not invent new-to-the-world management innovations but instead adopt and
implement existing ones, there is adaptation involved to fit these innovations to the particular firm.
Management innovation, in other words, is hard to reverse engineer and can therefore be a
sustainable source of competitive advantage.
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Management Innovation
Obviously, you can’t teach someone to be an innovator unless you know where game-changing ideas come
from. In other words, you need a theory of innovation – like Ben Hogan’s theory of the golf swing.
There is still a big gap between the rhetoric of innovation and the reality- addressing this fully requires a
strong, clear conviction of what innovation can provide as the end result.
How can we game-change? By paying close attention to four things that usually go unnoticed:
• 1. Unchallenged orthodoxies – the widely held industry beliefs that blind incumbents to new
opportunities.
• 2. Underleveraged competencies – the “invisible” assets and competencies, locked up in moribund
businesses, that can be repurposed as new growth platforms
• 3. Underappreciated trends – the nascent discontinuities that can be harnessed to reinvigorate old
business models and create new ones.
• 4. Unarticulated needs – the frustrations and inconveniences that customers take for granted, and
industry stalwarts have thus far failed to address.
•
The first and most important step for any company intent on building a capacity for continuous, gamechanging, innovation is to teach its people how see what’s around them with fresh eyes. Until your
company steps up to this challenge, it will be filled with innovation hackers whose ideas rarely find the
fairway.”Source: Gary Hamel
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Management Innovation
Strategic Context
Trajectories,
Discovery and
Insight
Strategic Considerations: we’re really serious about innovation. In terms of the
future of management, we’re at the beginning of what will be a fairly long journey
where innovation lies at the very core, we are treating this as a radical departure
from the existing ‘norms’
Resource Considerations: We need people who can
Culture & Climate: We need to change the orthodoxies
manage in very different organization structures and
that bound our thinking—the habits, dogmas, and
teams
conceits we have never taken the trouble to challenge
Go To Market
Capability & Competency issues: Change what managers do by changing the processes that
govern their work that will allow organisations to reach new performance thresholds
Insights: org structure is a
present barrier to innovation
Discovery: The value that “management”
adds is more dynamic and changing
Systematic Innovation Process
Trends: Must make decisions and take action
closer to the customer, and more quickly
Critical Insight: New management thinking
process, skills and capabilities are require:
•Peer based decisions
•Ideas compete on equal footing
•Power is a function of competence rather
than position
•Agenda setting, idea linking approach
•Opening up and exploring with fresh eyes
•Achieving a more ‘sharper relief’ for
opportunities
Principles and processes that
ultimately changes the practice of
what managers do, and how they
do it
Testing and deploying new management structures
and practices that innovate the practice of management
Changing roles and
responsibilities
novel or unprecedented
departure from the past to
further the organization’s
future innovation goals
New Training, new hiring
Explore, Trial and Adapt Development Program
Revolutionizing the management hierarchy
Problem Driven Search/ Contextualizing/ Refining/ Reflective
Experimentation with new
team structures
Initial management changes and experiments are validated and expanded
A more reflective practitioner
Roles, compensation and evaluation changes are deployed throughout the organization
to reinforce new management innovation practices
Innovation education and training made mandatory for all managers and executives
Constructing a safe harbor to explore with C-Level commitment to experiment
Enabling and Scalable
Infrastructure
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Management Innovation Pros/Cons
Management Innovation is evolutionary
• Positives:
–
–
–
–
–
–
–
It retrains managerial minds
It unleashes further human imagination
Dramatically reduces the pull of the past
Retools management for a more open world
Reduces fear and increases trust
It redefines the work of leadership for innovation
Positions the firm for future growth and success
• Cons:
–
–
–
–
Requires new insights, perspectives and skills from the management team
Requires the development of holistic performance measures
Stretches executives time frames and perspectives
Requires significant change
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Open Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
Intellectual
Property
Problem
Definition
Open
Innovation
Wisdom of
Many
Building
Trusted
Relationships
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Open Innovation
•
Open Innovation seeks and leverages ideas from partners, customers and
individuals external to the organization. This assumes that many great ideas
exist outside of the corporate boundaries. Open Innovation was first defined
by Henry Chesbrough in his book Open Innovation.
•
Open Innovation is perhaps the innovation “type” attracting the most
attention in the media.
•
OI supplements but does not substitute conventional practices
•
There are four components that are uniquely different and applicable to open
innovation:
–
–
–
–
Intellectual Property Thinking
Crowdsourcing/Wisdom of Crowds
Problem definition
Building trusted broader open relationships
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Open Innovation
Culture & Climate: Establishing the value of an open
collaborative model and its more different social practices
Trajectories,
Discovery and
Insight
Communications: Establishing the need for open
innovation, creating channels and messages to third
parties, clearly identifying innovation needs, conceptual
thinking, clarifying value and need
OI Readiness
Strategic Development: Developing a partnering strategy
and identifying the best possible innovation partners, concern
for constant fit and relevance of propositions
Business Development/Partnering
External Network & Collaborative
Management & Protocols
Scouting
Networking
Crowd sourcing
Social Media
Application
Legal: Establishing a rapid vetting process for the
provenance of new ideas, reflecting on the sharing of
IP, shared meaning & solutions.
Resource Considerations: Finding the best partners,
engaging the partners and customers, vetting ideas and
intellectual property, abilities to make clear connections,
networking emphasis.
Shared market analysis
and trend spotting/
evaluation
Contests
Outward facing collaboration &
contribution positions
Market & Customer
Related Research
Go To Market
Systematic Innovation Process
Co-branding/Co-marketing
Fast concept work
A clarity within the value proposition
but flexible to explore alternatives
IP Transfer
Strategic Context
The growing role of the
customer within the open
collaboration process
How ideas are GENERATED changes: Crowdsourcing, etc
but how ideas are managed remains the same
Incorporate partner goals in evaluation and selection of ideas
Distributed ‘Co-creation ‘in a web of networks
to explore outside the boundaries of the Org.
The consistent flow of knowledge to explore breaking opportunities
Managing more on platforms and through ecosystems
“We use people to find content,
we find content to find people”
The management of internal and collaborative tensions
Rigorous Business Case: factors for projected value captured, risks highlighted, licensing costs
outlined, opportunity costs of use of key resources, likely impacts, need for ‘hard’ evidence
Interactive Value Creation : Degree of Connectivity x Degree of Interactivity x Degree of Sharing
Incorporate legal and IP into the innovation team
Software / Information Networks
Absorptive Capacity.
Relationship Capacity &
Multiplication Capacity
Enabling and Scalable
Infrastructure
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Open Innovation Model Maturity
•
•
Managing open, distributed, modular innovation means managing conflicting criteria and rationales,
including conflicts between innovation and dependability, flexibility and efficiency, and flexibility and
reliability
As the use of Open Innovation progresses within a firm, the model will mature through these three
phases:
Externally aware – receiving
Partner
ideas from third parties
Integrated – exchanging ideas
Firm
Partner
with customers and partners
Institute or
University
Firm
Supplier
Orchestrated Marketplace –
All participants in a value
chain involved in innovation
Partner
Firm
Competing
Firm
Customers
& Clients
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Open Innovation Pros/Cons
Open Innovation presents powerful incentives and
some significant challenges
• Positives:
– Many ideas from a wide variety of sources provide enhanced
perspective
– The “voice of the customer” has more weight
– More minds applied to the problem
• Cons:
– Intellectual Property concerns based on idea origin
– Expose strategic direction to outside parties
– Identifying the “right” people to address a problem
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R&D Led Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
Collaborative
and
Cross-Functional
Research and
Methodologies
R& D Led
Innovation
Deep Technical
Capabilities
Unlock Business
Value
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R&D Led Innovation
• The most “typical” product driven innovation strategy, led by
internal research and development teams
• Mostly focused on discovering new products for new and existing
needs across multiple time frames
• Unique factors include
– Highly collaborative & cross functional coordination, a converging point of
knowledge.
– Deep technical capabilities for ‘seeing beyond’ balancing incremental with
evolutionary research
– Strong research focus and methodologies- the convergence point and
highly structured.
– Different product life cycles to ‘unlock’ the business value
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Research &Development Innovation
Strategic intent: Leadership in creating “new to the world “technology
that create defensible intellectual property, and unlock value
Trajectories,
Discovery and
Insight
Road mapping
Communications: clear internal
Culture & Climate: Focus on investigation and research into
communications about targeted market
critical problems. Careful to avoid “blockbuster” mentality.
opportunities. More restricted and limited
Reward mentality for orientation, project delivery emphasis and
external communication.
resolving roadblocks
Capability & Competency: Creative thoughts, experimentation, selection, testing, market appraisal, resolution of scientific
and technical uncertainty, to ‘see beyond’ for potential discovery
Linkage to Growth
strategy and business
platforms
“Blue sky” &
“White spaces”
Scouting
Networking
Trend Spotting
Intellectual Property Mining
Go To Market
Resource Considerations: Increase the stock of knowledge, broad & narrow ‘in-house’
expertise, responsiveness, commercially aware, experimental learning, profit-sharing view
Systematic Innovation Process
High Knowledge Acquisition
Granting ‘degrees’ of freedom to
researchers
Partnering with universities, independent
research institutes, government labs, open
market
Strategic Context
Tight linkages with product
Development and commercialization
Carefully planned market launch
Innovation internally driven by R&D
Established levels of internal collaboration
Regular Innovation Development Program is Established
Synthesize, theorize, explore, hypotheses, clarify, investigate,
design, develop, test, implement and improve
‘Controlled ‘risk taking
Seeing beyond Science
& Technology shift
End result orientation to market
Metrics & ROI must be well
articulated constantly for
investments made
“Recognition return “of
positive results from
enhanced R&D work
Well-documented
research methodologies
Common Environment, Networking & Collaboration-Building Environment
Lifecycle Recognition Management- central and distributed timeline differences
Business Case: justify, validate, emerging metrics & measurement of returns
Scalable, repeatable, end-to-end need, relationship focused
Enabling and Scalable
Infrastructure
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R&D Innovation Model Maturity
As the model matures, R & D innovation becomes increasingly
more difficult
• As a result the R&D led innovation effort must identify new technology or
breakthrough developments to solve and grow the business (extend
capabilities, explore adjacent markets for expertise)
• Alternatively the R&D led innovation effort can apply its methodologies to
research service, experience and business model innovations (apply existing
capabilities to new problems)
• Seek collaboration or extend internal knowledge through institutions,
universities or its existing partners (Open Innovation)
• Reflect on how to move beyond traditional boundaries.
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R&D Innovation Pros/Cons
Relying on R&D alone for innovation presents a number
of opportunities and challenges
• Positives:
– Clear provenance for intellectual property
– Focused innovation efforts
• Cons:
– Innovation centered in only one portion of the business
– Typically tied to product innovation ignoring opportunities in
services, business models
– Limited inputs and discussions with outside entities
– Too focused on protection of ideas
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Service/Experience Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
New, different
Research and
insights req’d
Based on Customer
Needs/Experiences
Service/
Experience
Innovation
Turning services
into tangibles
Co-create and
Co-design
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Service/Experience Innovation
• Increasingly many firms are focusing on service and customer experience
innovation to provide a more comprehensive set of solutions to its clients.
These innovations create differentiated services or experiences for
customers. The work of firms like Doblin and IDEO is instructive here.
• These innovations are more difficult to create, often more intangible but
more sustainable when appropriate.
• Unique factors include
– Based on customer experiences that they regard as valuable and
relevant
– Not product oriented but
– Requires differentiated experiences
– New research and insights are needed
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Service/Experience Innovation
Strategic Understanding of Service Systems- language, taxonomy, value propositions,
transition points to service value, the differences between product & service needs.
Trajectories,
Discovery and
Insight
Roadmap of enquiry
Capability & Competency: High levels of ‘contact’ intensity and
interactivity, empathic, discovering latent needs, invest in wider
sources of knowledge for skilled, creative, open minded people
The ‘art’ of bundling to
find the value points
Customer Experience Journey
Empathy
Resource Considerations: service and/or experience innovation demands an increased focus on
internal, capable resources who delight customers. Rapid assembly of diverse views in teams
Communications: education on policies, knowledge,
resolution, compliance, expectations of consumer.
Understanding customer needs and expectations
Touchpoint mapping
expertise of interaction
points
Diversity of expertise for inputs
Experience Design capabilities
Go To Market
The promises you make
need to be delivered
Systematic Innovation Process
Interactions & Engagement by Customers
provide the experience and feedback of value
Analytical &
Interpretation skills
Voice of Customer / Ethnography
Strategic Context
Culture & Climate is consistently on people issues:
behaviors, service culture, deep insight methods, skill
retention, thinking and service mindsets
High knowledge intensive process
Changes the “outcome” of innovation from product to
experience but doesn’t change how to create or manage ideas
Entire Lifecycle management- ruthless Exnovation
Issue path: nature of problem, function
to resolve & structure to deliver solution
Dramatic changes to service levels and
customer experiences
Accountability and decision making as close
to the customer as possible
Aware of Customer Interface Focal Points
Delivering experiences not products
Customer focus groups
High use of data mining
Common Environment, Networking & Collaboration-Building Environment
People Trained in new interaction skills
Business Case: justify, validate, emerging metrics & measurement of returns
Scalable, repeatable, end-to-end need, relationship focused
Systems that manage customer interaction in all channels equally
Time scale recognition & scalable considerations
Enabling and Scalable
Infrastructure
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Service/Experience Model Maturity
Service models rapidly alter, expectations rise and service gives
way to ‘experience’ innovation that builds value to all
involved
• Firm progresses from meeting customer expectations to exceeding
expectations, going beyond the norm.
• From satisfying customers in all touch points to delighting customers
in all touch points with rapid and anticipatory responses that
‘delight’ and are appreciated.
• Moving from reacting to existing needs to anticipating new needs
and surfacing unarticulated needs
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Service/ Experience Innovation Pros/Cons
Service and experience innovation is valuable but
difficult to achieve
• Positives:
– Most distinctive form of innovation
– Most difficult to copy or reproduce
• Cons:
– Often requires a change in corporate culture
– Hard to sustain without significant investment in people and
training
– Difficult for firms with a product mentality to make the switch to
services or experiences
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Needs-Based Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
Search for
Unarticulated
Needs
Structured
Discovery
Process
Needs-Based
Innovation
Needs-first
approach, not
ideas-first
Opportunity
Landscape
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Needs Based Innovation
• Needs based innovation is an approach that involves understanding
the “jobs to be done,” that a consumer is seeking to complete that a
product or service can resolve. Developed from Christensen’s work
and documented in Anthony Ulwick’s book What Customers Want.
• These insights are derived from a close attention to the consumers
needs
• Unique factors include
–
–
–
–
Needs first- they lead, not ideas or technology first
Jobs (wanting)to be done, unarticulated needs
Structured and disciplined search process for unarticulated needs
Search for uncontested market space through opportunity landscaping
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Needs Based Innovation
Strategic Need: A rigorous controlled approach to collecting
needs, formulating growth strategies and generating and
validating breakthrough ideas.
Resource Considerations: resources for turning job outcomes into insight, insight into products that resolve needs
Trajectories,
Discovery and
Insight
Culture & Climate requires intense focus on customer needs
and jobs to be done.
Communications : Consistency in focus to find
out the jobs customers are trying to get done
Strategic Context
Go To Market
Capability & Competency to manage projects from discovery to delivery based on rulesbased disciplines, turning job outcomes into fresh insight, emphasis on market research
Universal Job Map
Opportunity landscape modeling
Exploring for uncontested market space
Successful outcome measure:
when it gets the job done to the
satisfaction of the customer
Systematic Innovation Process
Opportunity-based segmentation
Co-design with people’s needs
Idea Quadrant ranking-different paths
Identifying Jobs-to-be-done
Ideas generated based on “jobs to be done” methodology
Traditional
commercialization
and launch issues
Ranking, evaluation, selection processes unchanged
Ethnography
Voice of Customer
Needs first not ideas first
Opportunity identification, data collection, pattern recognition,
conceptualization, prototyping, testing, implementing
Immersive research emphasis
When outcomes meets needs!
Setting desired outcome options
Underserved/
Overserved
Lifecycle Management of Need: purpose, structure, content & syntax
Business Case: value of ideas can be quantified when all needs are known
Scalable, repeatable, need based on the structure of the Desired Outcome Statement as the
contextual clarifier and direction of improvement intent
Features & platforms, core jobs or related jobs, over served/ under served
Time scale recognition & scalable considerations
Enabling and Scalable
Infrastructure
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Needs Based Model Maturity
– As the model matures, needs based innovation becomes a
fully integrated part of the innovation culture regardless of
method or type of innovation practice.
• Perspectives shift from internal Brand Premise to understanding
more of the customer expectations
• New solutions combine internal skills and external capabilities
built around consistent customer experiences and how best can
the jobs to be done that give value and more uncontested market
space opportunities
• Culture shifts from “what we do best” to delivering Brand Reality
that meets customers needs to do the jobs they want too achieve.
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Needs Based Innovation Pros/Cons
Needs based innovation improves outcomes by
reducing innovation “misses”
• Positives:
– Ensures ideas are in line with customer needs and expectations
• Cons:
– Requires very clear understanding of customer requirements
– Insights may run counter to company strengths or investments
– Insights may be difficult to acquire in firms with a technologyled or R&D innovation focus
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Design-led Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
Designer
attitude and
Philosophy
Designing function
and
aesthetics
Design-Led
Innovation
Context, visualizing
and framing
Integrating
Design
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Design Led Innovation
• Design led innovation examines the concept of new product,
process, service or experiences that connect with customers on a
broader appeal of function and novelty through intentional design.
• Design provides the visual appeal, greater connection and
identification for more value extraction.
• Unique factors include
– Design considerations become integral to development
– Implementing a design philosophy and in-built designer attitude.
– Translating context, visualizing and framing concepts delivers new
dimensions of insight and discovery for ‘greater’ innovation potential
– The aesthetic and symbolic to add novelty to any functional value
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Design Led Innovation
Design thinking drives Strategy: visualize the future, create new markets, new offerings,
different business models with new applications, new ways to connect with customers and
in different collaborations
Resource Considerations: design treats innovation as holistic, synthesis, integrative, generative and
optimistic in nature, it is visual and interactive
Culture & Climate- Design considerations are paramount
Trajectories,
Discovery and
Insight
Context mapping
Strategic Context
Go To Market
Capability & Competency: understanding contexts, framing problems, exploring alternatives, envisioning
solutions, listening, interpretation and addressing problems or concepts
Reframing problems
Creative sessions/ workshops
Systematic Innovation Process
Design principle definitions
Touch Points to explore
Design of Customer Journey Maps
Aesthetic, stylistic emphasis
rather than functional change
Shaping Human Behavior
Usability Engineers
Visual Interface techniques
Information Architects
Co-design and Co-create
sessions with end users
Design considerations become the key criteria
for idea generation and evaluation
Outcome: New dimensions
of innovation come through
design involvement
Impacts on commercialization and
marketing
for firms with little prior
design focus or experience
Assessing quality
of interactions
Use of deep workable core customer insights
Interactive design stimulus, cutting edge
exploration
Customer insights, concept designs, prototyping & testing,
design implementation
Result:“design is where problems
are defined in new ways with
design solutions generated.
High levels of customer input
Integrating into the Common Innovation Environment, Networking &
Collaboration-Building Environment
Lifecycle Management: foresight, insight and alignment
Business Case: justify, validate, and contribution of design into the process
Scalable, repeatable, end-to-end need, relationship focused
Designers role in a team- getting design ‘attitude’ into the long term mix
Enabling and Scalable
Infrastructure
Time scale recognition & scalable considerations
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Design Led Model Maturity
– Many of the products and services we offer aren’t the
result of an intentional, design led process
• “Design-led” innovation often starts with the design of physical
products or spaces
• Design thinking then enters into customer service, process and
customer experience
• As the firm matures, all new innovations are considered from a
design perspective and with design tools and thinking paramount
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Design Led Innovation Pros/Cons
Design thinking adds a unique approach but can lead to
significant changes and costs
• Positives:
– Design thinking creates holistic products and services
– Products and services are innately attuned to customer needs
and expectations
• Cons:
– Requires a very different perspective and approach than exists in many
companies
– More beneficial for services or experiences than products
– Requires far more research and investigation into needs and design
than many firms will invest
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Business Model Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
New Value
Proposition,
Constant Reiteration
Key resources
and
Activity Clarity
Business Model
Innovation
Changing revenue
streams and cost
structures
Key Partnerships
and
Relationships
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Business Model Innovation
• Business model innovation reinvents the “model” of the business –
changing the revenue streams or cost structures of the business.
Drawn from Business Model Generation by Alex Osterwalder.
• Unique factors include
– The value has to be well articulated so its ‘disruptive’ aspects are seen
and evaluated against existing models
– The level of resources and the activities need to be well stated
– The key understanding of different partnerships and relationships
needs identifying to provide difference.
– Identifying revenue streams and likely cost structures provide the ROI
and impact evaluation.
– Articulating the VP through different customer segments and channel
identification targets.
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Business Model Innovation
Strategic Considerations: Business model innovation impacts the
strategic framework of the business, changing how the firm delivers value
and how it gains revenue. initiatives. Clear philosophy in intent and concept
Resource Considerations: Knowledge of business resources available/ needed, supporting processes that can
be different, the target groups and channels to focus upon. Strategic development , communications and
broad negotiation experience.
Capability & Competency issues: process
Culture & Climate: Alignment to existing
tensions, content issues and context
practices or degree of separation and the
paradoxes, system design understandings
impact
Trajectories,
Discovery and
Insight
Context, design
drivers & constraints
Exploring the full linkage of any BM in
evaluation
Systematic Innovation Process
Launch & Measure Impact- is it
disruptive, designed to do as
intended, can it be copied easily
The ability to ‘pivot’ through testing
Synthesizing skills
Opportunity recognition & positioning skills
White Space
Exploration
Go To Market
Primary Focus
Work flow and job design
Defining new value proposition
Scouting
Trend Spotting
Scenario Planning
Strategic Context
Discovery,
Clarification
Clarity of
Competitive
positions
Difficult idea generation as new business models
challenge the status quo
Evaluation and selection difficult as criteria for
business model innovation challenges existing concepts
Synchronize Build Manage Test Monitor Measure
Fresh insights on
potential market and
customer needs not
being delivered today
Execution of ideas may
mean dramatic changes to
existing models and
processes or designing new
‘stand alone’ ones
Providing consistent, early
warning, fast feedback to
fine-tune and adapt to
knowledge learnt
Lifecycle Management
Business Case: high level justification for risk assessment, validate, cost sided & value sided
considerations, articulating the exact proposition, recognition this can undergo a number of
iterations
Scalability issue as business model innovation is infrequent/rare
High initial levels of adaptability & flexibility
Enabling and Scalable
Infrastructure
Time scale recognition & scalable considerations
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Business Model Innovation Maturity
– As the model matures, Business Model innovation focuses
on increasingly exploring :
• Unarticulated market needs
• White space opportunities
• Entirely new business models, that explore different channels,
products or services not seen before.
• Improve, disrupt or transform existing BM into new better models
that meet changing market needs
• Disrupting existing practices, networks or relationships
• Breaking the existing BM into different parts to extract more value
• Bringing new technologies that require different approaches.
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Business Model Innovation Pros/Cons
Business model innovation is dramatic but can change market
dynamics
• Positives:
– Create entirely revenue streams or cost models
– Change the structure of the market or industry
– Force competitors to react
• Cons:
– Requires a change to an embedded business model
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Operational Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
Step Change in
Performance as Goal
Current Sources of
Inertia
Operational
Innovation
Knowing Your
Pain Points
New Ways of
Working& New
Behaviours
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Operational Innovation
• Operational innovation is when breakthroughs in existing performance have to
be made, a ‘step’ change not an incremental one to extract cost or improve just
efficiency .
• At this operational level, we can identify management practices, management
processes, management techniques and organizational structures as those
potentially requiring significant change to the rules and routines by which work
gets done inside organizations
• A high competence of change-ready needs to be present
• Unique factors include:
– This requires a ‘step change’ on performance caused by changing events and
shifts that need responding too
– Having a clear understanding of the different (multiple) pain points that
need reflecting upon and changing
– The need is to engage the hearts and minds of all involved in the evaluation
promoting a strong sense of urgency, overcoming inertia
– Ending up with new ways of working and different behaviors.
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Operational innovation
Strategic Intent: redesign of operational processes to achieve
internal breakthroughs in innovation performance
Resource Considerations: This is not TQM/ Six Sigma, Incremental, it is thinking through a ‘step-change
‘and needs a high competency of change readiness, industry awareness, shared accountability,
objectivity,, risk management
Capability & Competency Build Elements: taking a more holistic
Culture & Climate ‘must’ alter the ‘status quo, realign and
approach to redesigning for breakthrough results as markets mature
commit fresh resources, HR reinforces new behaviors, watch and change, products and processes shift and the result in
for systemic inertia as trigger for change
performance diminishes. Strong positioning skills & business
development process
Trajectories,
Discovery and
Insight
Process expertise
Areas of Operational Innovation
opportunity :
-Customer Loyalty
-Cycle time reduction
-Development process
-Time to service initiation
-Outsourcing
-Shared Services
-Integrated Global Delivery
- Cost Drivers
- Pain points for customers
Primary Focus
Systematic Innovation Process
For operational innovation to succeed,
the process must be persistent, constantly
considering new ideas with clearly defined
evaluation criteria
‘The invention and deployment
of new ways of doing work’
Rapid testing and deployment of new
operational processes
Quick, accurate measurement of
benefits and ROI impact
Regular Innovation Development Program is Established
and Separate from these more breakthrough initiatives
Clear Investigation &
Validation methods
Degree of change and
strategic need
Go To Market
Communications need to articulate the problems and be disciplined
Engineering & Design Skills
Exploring upstream and downstream
potential & implication assessments
Strategic Context
Change measurement criteria
1) cost drivers of the business,
2) competitive differentiation points,
3) problem areas for satisfaction points
for customers.
Lifecycle Management approach
Ongoing targets: Achieve scale, breakthrough in efficiency , flexibility, effectiveness and agility
Business Case: justify, validate, emerging metrics & measurement of returns
Scalable, repeatable, well integrated end-to-end need.
Time scale recognition & scalable considerations
Enabling and Scalable
Infrastructure
Early warning systems awareness
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Operational Innovation Maturity
As the model matures the key to operational innovation needs to
centered around certain criteria:
–
–
–
–
Processes that influence (perception of) value
Processes that influence strength of (changing) relationships
Processes that influence (perception of) adding greater service
Processes that when combined with other parties accelerates and reduces
costs.
Consistently looking at
–
–
–
–
The cost drivers of the business
The competitive differentiation points
Problem areas for satisfaction points for customers
For example: when the design, production and maintenance of products,
processes and services, are distributed across extended organisational
networks, are they at the same time, innovative and dependable?
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Operational Model Innovation Pros/Cons
Operational Model innovation differs from Lean/Six Sigma
• Positives:
– Focuses on “step change” operation or process needs
– Dramatically improves or eliminates process steps or operations
– Radically reduces costs or improves process or service
• Cons:
– Very easily confused with Six Sigma or Lean processes
– Often focused on very incremental issues
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Technology-led Innovation
We believe these four critical factors are distinctive to
this type to highlight and for you to consider carefully .
Evolutionary or
Superior
to Existing
Disruptive
Potential
Technology-Led
Innovation
Clarity of Purpose
& Potential
Advocate of
Change Leads
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Technology-led Innovation
• Technology-led innovation looks to exploit advances.
• The choice is does technology lead or support concepts,
market ‘pull’ or technology ‘push’ and depends on its potential
to disrupt or enhance to contribute to innovation change.
• Unique factors include
– Technologies ‘disruptive’ potential has to be seen and evaluated against
existing offerings for assessing its value
– Is it evolutionary or superior to what is available
– The clarity of its purpose and potential needs defining, correct arenas,
targets and actions.
– A clear champion & advocate of the change needs to lead.
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Technology-led Innovation
Strategic Position: Addresses the effective identification, selection,
acquisition, development, exploitation and protection of technologies
and their contribution to innovation.
Resource Considerations: Does technology lead or support the application of concepts? Has it the potential for
disruption or promoting/ supporting through technology change ? Is the technology superiority or evolutionary.?
Does it advance a market position & extend business performance based on the innovation strategy to be taken?
Trajectories,
Discovery and
Insight
Capability & Competency Build: Curiosity, building of distinctive competencies,
clarity of purpose., having a strong stable plan of advocacy if technology can ‘disrupt’
New or Unexpected
markets to watch for
External supporting networks
for application of concept
Orientation- needs based
diffusion strategies
Growth platform
validation
Pattern
recognition
Value chain opportunities
Clear Links between engineering,
research and design
Utility or Mechanism
decision for
Competitive Advantage
Go To Market
Culture & Climate: Highly skilled and focused competencies, open
environment to explore and experiment, looking to extend beyond the existing
Systematic Innovation Process
Piloting Prototype & Testing Environment
Market ‘pull’ or technology ‘push’
Scouting
Networking
Trend Spotting
Strategic Context
Focus on cross development and integration skills
Strong linkage to design innovation in synthesis potential, style
and humanity considerations and science and technology
Synchronize Build Manage Monitor Measure
‘’Crossing the technology chasm’’
for adoption success
Execution Management
dependant on solution sought
Adoption/ Diffusion
understanding
Metrics & ROI:
acceptable,
feasible and
enduring in value
to customers
Launch &
Measure Impact
& Effects
Game changing
or Incremental
Providing
Consistent
Feedback for
updates,
modification
Common Environment Needs: Platforms, Networking & CollaborationBuilding Environment
Business Case: justify, validate, disruptive nature or supporting technology clarity/ role
Scalable, repeatable, end-to-end need, relationship focused
Lifecycle Management: links of technology to R&D
Time scale recognition & scalable considerations
Enabling and Scalable
Infrastructure
Synchronization & Visibility
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Technology-Led Innovation Maturity path
Recognize the stages to go through with technology-led innovation
•
Innovation Decision Process theory. Adopters of a technology progress over time go through five stages in the diffusion
process. First, they must learn about the innovation (knowledge); second, they must be persuaded of the value of the
innovation (persuasion); they then must decide to adopt it (decision); the innovation must then be implemented
(implementation); and finally, the decision must be reaffirmed or rejected (confirmation). The focus is on the user or
adopter.
•
Rate of Adoption theory. Diffusion takes place over time with innovations going through a slow, gradual growth period,
followed by dramatic and rapid growth, and then a gradual stabilization and finally into a decline.
•
Perceived Attributes theory. There are five attributes upon which an innovation is judged: that it can be 1) tried out
(trialability), that results can be 2) observed (observability), that it has an advantage over other innovations or the 3)
present circumstance (relative advantage), that it is not 4)overly complex to learn or use (complexity), that it fits in or is
5) compatible with the circumstances into which it will be adopted (compatibility).
•
Need-based Diffusion Strategies
- Need for recognition and process involvement. The chances of successfully "selling"
- Need for vertical support structure to overcome technophobia. Support provided by staff for discipline/content credibility
- Need for well-defined purpose or reason. If the innovation can be demonstrated as an effective, efficient and easily
applied solution to those focused needs, it is more likely to be adopted and integrated.
- Need for ease of use and low risk of failure. Need for ease of use and early success
- Need for institutional/administrative advocacy and commitment. Promote the conditions and activities that can enable
adoption to prevail.
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Strategic statements
Summary
MI
Strategic Considerations: we’re really serious about innovation. In terms of the
future of management, we’re at the beginning of what will be a fairly long
journey where innovation lies at the very core
OI
Strategic Development: Developing a partnering strategy and identifying the best
possible innovation partners, concern for constant fit and relevance of propositions
Capability & Competency statements
Capability & Competency issues: In a company you often can't change what managers
do in any direct way. You can only change it by changing the processes that govern
their work that will allow organisations to reach new performance thresholds
Capability & Competencies based upon ‘Distributed’ Co-creation in a web of
networks of suppliers and independent specialists
Strategic Partner and Preferred Choice Clarity
RDI
SEI
NBI
DI
BMI
OpI
TI
Strategic intent: Leadership in creating new to the world ideas that create
defensible intellectual property, and unlock value
Strategic Understanding of Service Systems- language, taxonomy, value
propositions, transition points to service value, the differences between product &
service needs.
Strategic Need: A rigorous controlled approach to collecting needs, to then
formulating growth strategies and generating and validating breakthrough ideas.
Design thinking can drive Strategy: visualize the future, create new markets,
new offerings, different business models with new applications, new ways to
connect with customers and in different collaborations
Strategic Considerations: BM are bound inextricably to the type of philosophy
you want to pursue, it is a design process within its self, the heart of it is the
value to the consumer and how it links to other strategic innovation initiatives. It
is the point of departure where all else flows
Strategic Intent: redesign of operational processes to achieve internal
breakthroughs in innovation performance
Strategic Position: Addresses the effective identification, selection, acquisition,
development, exploitation and protection of technologies and their contribution
to innovation.
Capability & Competency: Creative thoughts, experimentation, selection,
testing, market appraisal, resolution of scientific and technical uncertainty, to
‘see beyond’ for potential discovery
Capability & Competency: High levels of ‘contact’ intensity and interactivity,
empathic, discovering latent needs, invest in wider sources of knowledge for
skilled, creative, open minded people
Capability & Competency to manage projects from discovery to delivery based on
rules-based disciplines, turning job outcomes into fresh insight, emphasis on
market research
Capability & Competency: understanding contexts, framing problems, exploring
alternatives, envisioning solutions, listening, interpretation and addressing problems
or concepts
Capability & Competency issues: process tensions, content issues and
context paradoxes, system design understandings
Capability & Competency Build Elements: taking a more holistic approach to
redesigning for breakthrough results as markets mature and change, products and
processes shift and the result in performance diminishes. Urgency need
Capability & Competency Build: Curiosity, building of distinctive competencies,
clarity of purpose., having a strong stable plan of advocacy if technology can ‘disrupt’
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Climate & Culture statements
MI
Culture & Climate: We need to change our orthodoxies that bound our
thinking—the habits, dogmas, and conceits we have never taken the trouble to
challenge
Resource Considerations statements
Resource Considerations: We need to quickly discover that there is still a big gap
between our rhetoric of innovation and the reality.
Culture & Climate: Establishing the value of an open collaborative model
and its more different social practices
Resource Considerations: Finding the best partners, engaging the partners and
customers, vetting ideas and intellectual property, abilities to make clear
connections, networking emphasis.
RDI
Culture & Climate: Focus on investigation and research into critical problems.
Careful to avoid “blockbuster” mentality. Reward mentality for orientation,
project delivery emphasis and resolving roadblocks
Resource Considerations: Increase the stock of knowledge, broad & narrow ‘inhouse’ expertise, responsiveness, commercially aware, experimental learning,
profit-sharing view
SEI
Culture & Climate is consistently on people issues: behaviors, service culture,
deep insight methods, skill retention, thinking and service mindsets
Resource Considerations: dynamic configurations that rapidly change and need to
respond, that focus on solutions that people see compliment their lives, quick
team assembly, diversity of views
OI
NBI
DI
BMI
OpI
TI
Culture & Climate needs to provide a sequenced and focused idea
generation environment based on customer expertise.
Culture & Climate- people first, business second- the human side of
innovation
Culture & Climate: Alignment to existing practices or degree of separation
and the impact
Culture & Climate ‘must’ alter the ‘status quo, realign and commit fresh
resources, HR reinforces new behaviors, watch for systemic inertia as trigger
for change
Culture & Climate: Highly skilled and focused competencies, open environment
to explore and experiment, looking to extend beyond the existing
Resource Considerations: the structure for turning job outcomes into insight,
insight into products that meet customer needs correctly through a very
collaborative internal process
Resource Considerations: design treats innovation as holistic, synthesis, integrative,
generative and optimistic in nature, it is visual and interactive
Resource Considerations: Knowledge of business resources available/
needed, supporting processes that can be different, the target groups and
channels to focus upon. Strategic development , communications and broad
negotiation experience.
Resource Considerations: This is not TQM/ Six Sigma, Incremental, it is thinking
through a ‘step-change ‘and needs a high competency of change readiness, industry
awareness, shared accountability, objectivity,, risk management, shared reporting,
engaging hearts and minds in the need for change
Resource Considerations: Does technology lead or support the application of
concepts? Has it the potential for disruption or promoting/ supporting through
technology change ? Is the technology superiority or evolutionary.?
Does it advance a market position & extend business performance based on the
innovation strategy to be taken?
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Why does structuring innovation really matter?
Many companies fail to extract the most from their investments in innovation, this can be
attributed to many pitfalls, to name a few:
1. Not having a complete understanding of innovation, all the different options to
achieve a sustaining innovative organization
2. Insufficient insight into what customers really want
3. Failure to make innovation connected and explicit in vision, objectives and part of the
strategy and fabric of the organization
4. Lack of balance between the ‘dynamic’ parts required to be successful
5. Weak links between business strategy and product portfolio
6. Insufficient engagement of the whole organization to pursuit innovation
7. A lack of resources or not placed in the appropriate part that brings value in your high
priority areas.
8. A weak innovation process that places its focus on one part, not appreciating the
whole process needs equal emphasis
9. A missing set of enabling structures within the organization
10. Knowing that different types of innovation require ‘distinctive’ recognition
Nurturing and managing innovation is an intricate process that is demanding.
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Contact Details
Collaborative Innovation Reference Framework
Paul Hobcraft
Jeffrey Philips
• Email :
paul@agilityinnovation.com
• Phone Number
+65 91 751 4350
For Europe, Africa, Middle East & Asia
• Email:
JPhillips@OVOInnovation.com
• Phone Number
+01 919-844-5644
For North & South America
►Go to the Wiki on http://cirf.pbworks.com
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