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Innovate to succeed. Introduction to Foundations of Business Innovation September 8, 2011. Innovate to fail. It’s about balancing the risk of innovating against the risk of not innovating. Why are we here?. Philosophical reasons:

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Innovate to


Introduction to Foundations of Business Innovation September 8, 2011

Innovate to fail

It’s about balancing the risk of innovating against the risk of not innovating

why are we here
Why are we here?
  • Philosophical reasons:

Take the course SCS 1724 Essential Western Philosophers

  • Meta-physical reasons:

Read Stephen Hawking’s book “The Grand Design”

  • To identify ways we can increase the likelihood of innovation success in our organizations

Take SCS 2539 Foundations of Business Innovation

  • Today we will provide an overview of the Business Innovation course by identifying:

“The top ten causes of failure to innovate”

ten key causes of failure
Ten key causes of failure:

Confuse the role of innovation

Fail to clarify innovation goals

Don’t recognize innovation barriers

Fail to engage entire organization

Lack of recognition of importance of communication

Underestimate need for innovation resources

Unclear process for selecting innovation projects

Recognize the importance of change management

Failure to create an innovation culture

Recognize innovation is a journey not a destination

1 confuse the role of innovation
1. Confuse the role of innovation

Innovation is:

Introduction of a new good, or a new quality of a good

Introduction of a new method of production (need not need include new technologies)

The opening of a new market

The securing of a new source of supply

The creation of a new organization

Joseph Schumpeter

Internal drivers

Unexpected event


Change of work process

Change in industry structure

Identify Innovation Drivers

External Drivers

  • Socio-economic changes
  • Political changes
  • Technology changes




Innovation not just technology development

  • Innovation includes:
  • Product Innovation
  • Process Innovation
  • Service Innovation
  • Business model Innovation………..
  • Greatest opportunities seen in business model innovation.
  • Can be applied to both private and public organizations
  • If your organization doesn’t innovate, someone else will..
understanding process innovation
Understanding Process Innovation
  • A change in the way a product or service is manufactured, created, or distributed
  • Process innovation involves implementation ofnew or improved production or delivery method.
  • Process innovations can be intended to decrease unit costs of production or delivery, to increase quality, or to produce or deliver new or significantly improved products.
Majority of individuals in Canada (and US) work in service industry

Even where people work in manufacturing, many of these individuals providesupport services

Service innovation isbiggest opportunity to increase competitiveness

Improvements in service innovation can be measured in terms of increases productivity and value added

Understanding Service Innovation


Opportunities for Service Innovation

  • Contributes to competitive advantage
  • Requires specific social and technical skills
  • Involves development and new technology application
  • Costly to develop needed specialist and generalist skills
  • Requires integrated thinking and agile environment
  • Can be implemented in all service areas
  • Most significant possibilities in financial and medical services
understanding b usiness model innovation
Understanding Business Model Innovation
  • New ways of doing business can also increase competitiveness and productivity by:
    • Creating enhanced utility for the customer
    • Enabling a different pricing strategy
    • Providing alternate purchasing options
  • To truly disrupt a market a technology innovationrequires a business model innovation
2 fail to clarify innovation goals
2. Fail to clarify innovation goals
  • Improve top line(revenues/market share)
  • Improve bottom line (profit/cost effectiveness)
  • Strengthen brand/reputation
  • Improve shareholder/stakeholder perceived value

"Would you tell me, please, which way I ought to go from here?""That depends a good deal on where you want to get to," said the Cat."I don’t much care where--" said Alice."Then it doesn’t matter which way you go," said the Cat."--so long as I get SOMEWHERE," Alice added as an explanation."Oh, you’re sure to do that," said the Cat, "if you only walk long enough." Lewis Carroll

recognize different types of innovation





Renewal Innovation

Recognize different types of innovation

Line Extension













& Exit





Value Engineering






Value Migration


Geoffrey Moore Dealing with Darwin

3 fail to recognize innovation barriers
3. Fail to recognize innovation barriers

Over time successful organizations develop

  • Processes and procedures
  • Management and leadership styles
  • Organizational structures and charts
  • Customer relationships and partners
  • Compensation and recruitment policies

“Organizations, by their very nature are designed to promote order and routine. They are inhospitable environments for innovation” Ted Levitt


Is your organization innovative?

  • Embraces and learns from failure
  • Fosters high energy activities
  • Create a “Can do” environment
  • Develop support & trust
  • Is a fun place to work
  • Focuses on financials & timelines
  • Has strict guidelines & control
  • Has a hierarchical structure
  • Has multiple bosses & “dotted lines”
  • Fosters attitude of “Everyone is for himself”

Your organization’s innovation readiness?

  • Strategy
  • Product Leadership
  • Customer Intimacy
  • Operational Excellence
  • Disruptive Offerings
  • Resources
  • Financial
  • Technology
  • People
  • External
  • Leadership
  • Incentives
  • Communications
  • Risk Tolerance
  • Culture
  • Business Information
  • Quality Management
  • Project Management
  • Decision Support
  • Processes
4 fail to engage entire organization
4. Fail to engage entire organization


  • Current
  • Potential
  • Unknown


  • Sales
  • Operations
  • Support

Internal Technology

  • Product innovations
  • Process innovations
  • Platform innovations


  • Direct
  • Indirect
  • Alliance

External Technology

  • Embeddable technologies
  • Process technologies
  • Value added technologies

Supply Chain

  • Suppliers
  • Distributors
  • Integrators
5 recognise the importance of communication
5. Recognise the importance of communication
  • Communicate vision and innovation imperative
  • Stimulate creativity and idea generation
  • Develop decision-making process that communicates how:
      • Decisions are made
      • Resources are allocated
  • Create a feedback loop that updates status of innovation projects and encourages accountability

“The greatest barrier to communication is believing that it has occurred” Oscar Wilde

6 lack of commitment to innovation resources
6. Lack of commitment to innovation resources
  • Greatest single barrier to stimulating innovation ideas, is the lack of action around previous innovation suggestions
  • Many ideas are not implemented without clarity or feedback as to why not
  • Implemented ideas are not successful because of:
    • Insufficient clarity of outcomes and expectations
    • Lack of required resource commitment (money, people, time)
    • Assumption that resources appropriate for one activity can be used in another
7 unclear innovation process
7. Unclear innovation process
  • Innovation is a management process the requires specific tools, techniques and discipline
  • Innovation involves thedevelopment of organizational processes and procedures for generating, considering and acting on innovative ideas
  • Without an innovation process, the likelihood of innovative projects being pursued is minimal

Implementing The Innovation Process

  • Identify innovation imperative and establish objectives
  • Create innovation framework
  • Assess current resources (Business Analysis)
  • Analyze current environment and external trends
  • Source and capture innovative ideas
  • Create an innovation decision system
  • Compare each opportunity to agreed criteria
  • Implement pilot project
  • Measure performance
  • Scale up or cancel


  • Evaluation
  • Realization

Implement process in organization’s context

Innovation Outputs





Product Innovation

Service Innovation

Process Innovation

Business Model Innovation


Suppliers & Partners





Creating the environment and processes to support innovation

8 recognize the importance of change management
8. Recognize the importance of change management
  • Change through Leadership
  • Create a Shared Need
  • Shape a Vision
  • Mobilize Commitment
  • Make Change Last
  • Monitor Progress
  • Change Systems and Structures
  • Change Culture from Control to Trust
  • Communicate
  • Incentivize
  • ”If you always do what you always did, you will always get what you always got” Albert Einstein
9 create an innovation culture
9. Create an innovation culture
  • Use mentoring / coaching approach to management
  • Lead by example
  • Learn from failure
  • Make resources for innovation available
  • Encourage / incent team rather than individual performance
  • Build trust rather than controls, and accountability rather than monitoring
innovative organizations
Innovative organizations:
  • Embraces a culture of risk, reward success and learn from failure
  • Develop a project and portfolio managementapproach to innovation
  • Create open decision-making processes and focus on timely implementation
  • Develop cross functional teams to embrace innovation across organization
  • Focus on communications and engagement
common causes of innovation failure
Common Causes of Innovation Failure

Organizational Causes

Process Causes

Poor goal definition

Poor alignments of goals and actions

Poor team effort

Poor monitoring of results

Poor communication and access to information

Inappropriate decision making

  • Poor leadership
  • Poor organization
  • Poor communication
  • Lack of empowerment of stakeholders
  • Poor knowledge management
  • Resource limitations
10 i nnovation is a journey not a destination
10. Innovation is a journey not a destination
  • Re-evaluate corporate strategy to examine innovation opportunities
  • Monitor innovation projects and review perfromance
  • Review innovation process and identify opportunities for improvement
  • Use projects and process to build awareness
  • Review and reduce innovation constraints
  • Learn from failures
innovation for success
Innovation for success

Three choices:

Innovate your organization,

Partner with an innovative organization or

Wait for innovation to happen………..

“In this road to the future, there are drivers, passengers or road kill”

Competing for the future: Hamel & Prahalad, 1994

see you in scs 2539 foundations of business innovation
See You in SCS 2539 Foundations of Business Innovation

Starts Monday 19th in Mississauga and Tuesday 20th in Toronto

“Well, in our country," said Alice, still panting a little, "you'd generally get to somewhere else — if you run very fast for a long time, as we've been doing.” “A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” Lewis Carroll