Innovation Part 1 Skills of Innovation By Tom

Innovation Part 1: Skills of Innovation By: Tom Gorman 1. Innovation = Problem Solving 2. People and Products They Love 3. The Corporate Way 4. The Hollywood Model

"No man ever yet became great by imitation. “ Samuel Johnson

1 Innovation = Problem Solving l l INNOVATION (noun) the act of starting something for the first time; laying the foundation; beginning, institution; origination; creation. INNOVATION is introducing something “new” into the organization. An innovation is a new product, service, process or approach to problem INNOVATION is a new way of thinking about something

1. Innovation = Problem Solving THEMES IN THE BOOK • Technology Drives Innovation • Innovation spreads quickly • “Scramble Competitors” complicate things • Marketing Always Matters

1 Innovation = Problem Solving Three Innovators: 1. Ralph Lauren 2. Apple. Computer 3. Federal Express

Fed. Ex l l Hub and Spoke http: //news. van. fedex. com/node/3689 Operations: http: //www. youtube. com/watch? v=i. Yz. Q 7 JSBI GU&feature=related

Top 10 Innovators America’s Most Admired Companies for Innovation 2008/10 Fortune Magazine Company 2008 Rank Company 2010 Rank 1 Nike 2 Medco Health Solutions 3 Procter & Gamble 4 Herman Miller 5 Disney 6 Fortune Brands 7 Burlington No. Santa Fe 8 Mc. Donald's 9 Pro. Logis 10 http: //money. cnn. com/galleries/2008/fortune/0803/gallery. i nnovation. fortune/4. html Apple 1 Google 2 Nike Apple 3 Amazon. com 4 Goldman Sachs Group 5 Procter & Gamble 6 Mc. Donald's 7 Intel 8 UPS 9 FPL Group 10 http: //money. cnn. com/magazines/fortune/mostadmired/20 10/best_worst/best 1. html

1 Innovation = Problem Solving INNOVATION BASIC PRINCIPLES 1. IMPROVE LIFE FOR THE CUSTOMER; SOLVE THEIR PROBLEMS, DO THINGS EASIER 2. DELIVER A COMPLETE SOLUTION; DON’T DELIVER UNINSTALLED COMPONENTS OR INCOMPLETE PRODUCTS 3. NEVER SAY – “IF WE MAKE IT, THEY WILL BUY” BEWARE THE PHRASE, “WE’LL HAVE TO EDUCATE THE MARKET. ” 4. CONSIDER PRODUCTION AND SALES CHALLENGES FROM THE START 5. DON’T PUT GOOD RESOUCES INTO A BAD PRODUCT IDEA. DON’T LET POLITICS GET IN THE WAY.

1 Innovation = Problem Solving PROBLEM-SOLVING 101 1. IDENTIFY THE PROBLEM 2. GATHER INFORMATION 3. DEVELOP ALTERNATIVE SOLUTIONS 4. IMPLEMENT THE BEST SOLUTION

2 People and Products They Love 2 l Product Life Cycle Geoffrey Moore's Innovation Life Cycle

2 People and Products They Love 2 l l l Innovators interact with other innovators, are venturesome & daring, and are willing to try new ideas at some risk. Early Adopters are guided by respect for innovators. They are opinion leaders and adopt new ideas early but carefully. Early Majority are deliberate. They adopt new ideas before the average person although they rarely are leaders. Late Majority are skeptical. They adopt innovation only after a majority of people has tried it. Laggards are suspicious of changes, mix with other tradition-bound people, adopt only when it has now taken on a measure of tradition itself.

2 People and Products They Love 2 l The Technology Adoption curve bears out the idea that people operates according to “HERD MENTALITY”

2 People and Products They Love 2 NICHE MARKET l Just Desserts – A Market for a specialty product l Rice to Riches – a store that serves only rice pudding

2 People and Products They Love 2 NICHE MARKET l Niche markets, unlike mass markets, include enthusiasts (innovators and early adopters) only. l Niche markets don’t fit the technology adoption curve. l Niche markets can expand unexpectedly given changing events and new information (organic products, green energy).

2 People and Products They Love 2 Key Points: Product Life Cycle Introduction, Growth, Maturity, Decline, Withdrawal l l While products vary, over time, they will go through these stages. The length of each phase varies by product. You can guage the stage ofa product by its relative sales figures. Change sales and marketing tactics as product moves through cycle (you are selling to different customers) Cycles have speeded up over the past 20 years as information and environments change faster.

2 People and Products They Love 2 Strategies & the Product Life Cycle Introduction, Growth, Maturity, Decline, Withdrawal l l INTRODUCTION = requires IMPACT GROWTH = manage AGRESSIVELY MATURITY = MILK IT !! DECLINE = DEAL with it WITHDRAWAL = WALK AWAY

3 INNOVATION: The Corporate Way l Fortune Magazine AMERICA'S MOST ADMIRED COMPANIES 2008 -- 10 Most Admired for innovation Company Innovation Rank in Industry Apple 1 Computers: 1 Nike 2 Apparel: 1 Medco Health Solutions 3 Health Care: 1 Procter & Gamble 4 Soaps and Cosmetics: 1 Herman Miller 5 Furniture: 1 Disney 6 Entertainment: 1 Fortune Brands 7 Household Products: 1 Burlington No. Santa Fe 8 Railroads: 1 Mc. Donald's 9 Food Services: 1 Pro. Logis 10 Real Estate: 1

3 INNOVATION: The Corporate Way l l l New Product Development (NPD) is the complete process of bringing a new product or service to market NPD is the act of conceiving, designing, testing, building and launching new products & services NPD the discipline is focused on developing systematic methods for guiding all the processes involved in getting a new product to market.

3 INNOVATION: The Corporate Way 1. Idea Generation 2. Concept Testing 3. Prototype Design 4. Product Testing 5. Market Testing 6. Product Launch

3 INNOVATION: The Corporate Way Product Testing Test for the Following l l l Design Instructions Performance Usage Quality & Durability

3 INNOVATION: The Corporate Way l l l A test for a product prior to commercial release. Beta testing is the last stage of testing, and normally can involve sending the product to beta test sites outside the company for real-world exposure Software companies often offer their product as a free trial download over the Internet.

4 The Hollywood Model l Applies to less tangible, less traditional products such as l l l films, entertainment, event planning, retail merchandising, and advertising.

4 The Hollywood Model l Key factor is outsourcing talent. l An INDEPENDENT PRODUCER l l l finds and develops ideas, brings together a team finds financing, develops a marketing package, and stands and falls on the merits of the project and profitability.

4 The Hollywood Model PROJECT MANAGEMENT Project l l A unique and temporary venture with a beginning and an end, undertaken by people on deadline to meet established goals within defined constraints of time, resources, cost, and quality.

4 The Hollywood Model 4 steps in the model l l Development Pre-production Post Production