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Rainmaker Index

Rainmaker Index. “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh , GE. “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh , GE. History/Background.

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Rainmaker Index

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  1. Rainmaker Index ______________Smart Moves, LLC

  2. “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh , GE “If we get the right people in the right jobs, we’ve won the game.” - Jack Welsh , GE ______________Smart Moves, LLC

  3. History/Background • Staged processes, management reviews for NPD have been in existence for 50+ years • Benchmarking studies for 50+ years focused on success factors associated with industrial NPD • Top success factors are product advantage and high quality NPD process • But in spite of all the changes and improvements in NPD systems, commercial launch remains unchanged. • 60% of NP launches succeed - true globally stat! ______________Smart Moves, LLC

  4. Where to Apply the Effort • Studies: - Most significant difference between successful and unsuccessful products lie in the quality of execution of the first few stages of NPD, aka ‘Fuzzy Front End’ “The First Few Plays in the Game determines the Outcome” ______________Smart Moves, LLC

  5. BUT……. - NPD and Market Research in the early stages requires high risk tolerance, creativity, openness to the ‘irrational process’ of NPD, however, studies find that industry fills these positions with people that are risk adverse, patient and persistent. ______________Smart Moves, LLC

  6. Despite the improvements in NPD systems, some underlying factor remains unchanged…….? Despite the improvements in NPD systems, some underlying factor remains unchanged…….? ______________Smart Moves, LLC

  7. Overlooking the Human FactorRainmaker Index – What is it? Rainmaker uses several Orientation instruments in determining an Index score: • Myers-Briggs • Myers-Briggs Creativity Index, • Keirsey’s Four Temperaments • KAI ______________Smart Moves, LLC

  8. Orientation Instruments ______________Smart Moves, LLC

  9. Orientation Instruments ______________Smart Moves, LLC

  10. Findings When Rainmaker Index was Applied to NPD • Did more projects • Branched the projects more frequently – redirected or significantly ‘morphed’ them – Key to high success rate • Identified concepts that, when later commercialized, made far greater profits: $197.5MM vs. $15.2 MM • People selected to operate the NPD are as important as the process itself. • Success rates improved from 11% to 97% when compared on the Universal Success Curve. • Scores in the top third of the Rainmaker Index earned 95 times (9,500 percent!) more profit than those in the bottom third. • Top 20% RI produced 80% of the profits ( “80-20 rule”) ______________Smart Moves, LLC

  11. Rainmakers • Rainmakers are typically difficult to manage and undisciplined in their thinking. • The top performing Rainmakers in the organization were actually the least well-thought-of employees • When staff reductions occurred (in the companies undergoing study), the results showed a loss of over half of the top third of the RI employees (the profit makers in the company) and none in the lowest third ______________Smart Moves, LLC

  12. Rainmaker Index First time an orientation instrument fixed an economic value to style ______________Smart Moves, LLC

  13. AMI Study of Corporate Innovation Programs and their Champions • Center of Creative Leadership sponsored study • CCL established group in 1981, grew to 70 members by 1998 - AMI, leaders of innovation within corporations • By 1998, saw that about 1/3 of members were gone - consulting, downsized or early retirements. Decided to study phenomenon • Questionnaire- individual, programs, budgeting, why program ended • Findings: ______________Smart Moves, LLC

  14. What worked • All programs generated new ideas and significant new business ($50-100MM) • Higher level of interaction between Marketing, R&D, and customers • Stimulated the integration of other departments: Emerging Technology, CI/BI efforts, Venture, etc… in other words, the company adopted an “outside-in” perspective, became more comfortable with “being in the lead” and risk, and growth occurred • ….so why were these programs terminated????? ______________Smart Moves, LLC

  15. Two Different Worlds ______________Smart Moves, LLC

  16. What didn’t work • Continuously questioned the level of and number of successes vs. expectations…but expectations were never defined, just the ‘need to innovate’, ‘do something different’ • Didn’t recognize that the culture needed to change in whole or at least in part • Exclusive focus on the R&D function with some Marketing assistance • Funded at the expense of existing Technology budgets or spreading innovation funding amongst SBU and almost no involvement with the Commercial or Marketing functions except as a service to them. • Subtle forms of sabotaging if SBU believed Innovation funding and time is inhibiting their ability to accomplish short-term objectives • Financial and staffing requirements were significantly underestimated • Sponsorship was too narrow. Leadership base of only one of two senior executives who frequently were near retirement age. Too shallow to have staying power ______________Smart Moves, LLC

  17. What didn’t work • Time projections for bottom-line impact were seriously underestimated. For shorter development time companies, innovation didn’t have a chance and shut down prematurely. • The 3000 to 1 universal rule was not understood. • The thinking that R&D, R&D management - acting alone, can significantly affect organization’s long term bottom line development • Managers didn’t know what to expect. • Low KAI profile of Innovation champion and leadership • High KAI profile of innovation (champion) verses mid-lower range KAI profile of managers: ...when asked to change or improve something an innovator profile will prefer to replace existing with new and different, whereas managers profile more likely to focus on improving existing • Innovation champions more likely to see threats and opportunities outside the organization, managers more likely to focus on threats and opportunities inside the organization.. Do the right thing vs. do things right ______________Smart Moves, LLC

  18. Future Trends in Corporate Innovation • Look at former Innovation champions: of the number that had not return to AMI, over 60% became consultants, retained by Fortune 500 companies and in many cases their former employers • Traditional physical innovation center format is no longer sufficient to sustain effort • Everyone involved • Divided into Hunting (developing and assessing the New) and Gathering functions (design, manufacturing and marketing) • Intellectual property emphasis with Innovation • Independent funding - TI’s IDEA program, HP Grassroots program, Zenith’s Bull Market • KAI/ Rainmaker placement - Gifted high KAIer’s in front-end of project, gifted low KAIer’s in back-end of project. ( 900% more speed, effectiveness in commercialization rates) ______________Smart Moves, LLC

  19. Future Trends in Corporate Innovation • Fast approvals through few, if any, layers • Empower leaders • Don’t expect the perfect plan or traditional ways of execution with no deviations. Get your hands dirty and learn • Stay the course - abrupt changes makes people turn passive • Understand the 3,000 to 1 ratio* • Incentives for innovation will not fit standard compensation methods *The “universal industrial success curve”, Research and Technology Management, March-April 2003 ______________Smart Moves, LLC

  20. Future Trends in Corporate Innovation • Organization structure that separates the innovative initiative from the main business and protects the new • Leadership that buries the corpse of failed ideas and learn from mistakes • Leadership that understands the psychology of innovation in corporations and remains alert/recognizes to unconscious “bandit actions” • Leadership that strokes the protocol of Innovation: a culture, a way of leading, doing, an awareness…. not an event or training session. ______________Smart Moves, LLC

  21. Invention/ Innovation (160 KAI) Managed Risk Innovator Horizon #4 Horizon #3 Platforms INNOVATION PROCESS + Degree of Difficulty IDEA BANK Culture Entrepreneurial PHASE/GATE INNOVATION PROCESS - PORTFOLIO Incremental Products Horizon #2 MANAGEMENT PROJECT MANAGEMENT & STAGE/GATE PORTFOLIO MANAGEMENT Horizon #1 Adapter (32 KAI) ______________Smart Moves, LLC

  22. Invention/Innovation Tech Center Marketing & Sales (Anthropolgy) Acquisition / Affiliation (160 KAI) Managed Risk Innovator Sales & (Expediting) Marketing Platforms Horizon #3 + Degree of Difficulty IDEA BANK Culture PHASE/GATE - Horizon #2 Incremental Products PORTFOLIO MANAGEMENT PROJECT MANAGEMENT & STAGE/GATE Manufacturing Horizon #1 PORTFOLIO MANAGEMENT Adapter (32 KAI) ______________Smart Moves, LLC

  23. ______________Smart Moves, LLC

  24. Manufacturing ______________Smart Moves, LLC

  25. UPSHOT TO ALL OF THIS………….. • People have KAI • Job titles have KAI • Cultures have KAI • Innovation Process have KAI • ….Match the people to the job to the culture to the process. ______________Smart Moves, LLC

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