CROSS BORDER INNOVATION Defining and categorizing Dr. Iris Berdrow
What is your definition of innovation? • With 3 or 4 people around you, share your definitions. • Pick out the main components. • Discuss the similarities and differences.
CONVERGENCE? • What are the common elements of these definitions? • Are there still elements missing?
Comprehensive Definition of Innovation “The design, invention, development and/or implantation of new or altered products, services, processes, systems, organizational structures, or business models for the purpose of creating new value for customers and financial returns for the firm.” (January 2008 report of The Advisory Committee on Measuring Innovation in the 21st Century Economy, Innovation Measurement: Tracking the State of Innovation in the American Economy). Action – design, invention, development… Outcome – product, process, system … Purpose – customer value and financial return
MORE SIMPLY… • An Innovation is the conversion of a new idea into revenues and profits. • Jeffrey Immelt, CEO of GE
What counts and where does it happen? INNOVATION TYPOLOGY
Google’s Revenue Machine Google’s revenue, which is almost entirely from ads, has grown significantly every quarter since 1993.
MAYBACH & FULDA • The idea: the tire + the car = • The Exelero project The 700-hp two-seater with a V-12 biturbo engine is a unique custom model produced for Fulda Reifenwerke, which is using the MaybachExelero as a reference vehicle for a newly developed generation of wide tyres. http://www.exelerocar.com/project.html Cooperation with the best - Fulda Carat Exelero & Maybach
Consumer goods company Sara Lee realized that its core competencies were in consumer insight, brand management, marketing and distribution. Thus it divested itself of a majority of its mfg. operations and formed alliances with mfg. and supply chain partners.
The Starbucks Total Pay package is called “Your Special Blend” because it’s just for you. • Your Special Blend might include: • Competitive pay • Insurance: medical, prescription drug, dental, vision, life, disability • Bonuses • Paid time off • Retirement savings plan • Equity in the form of Starbucks stock and discounted stock purchase plan • Adoption assistance • Domestic partner benefits • Emergency financial aid • Referral and support resources for child and eldercare • A free pound of coffee each week
Volkswagen Phaeton Inside Volkswagen's cutting-edge Transparent Factory in Dresden
FLEXIBLE PRODUCTION LINES Mercedes-Benz SLS Mercedes-Benz C-Class Mercedes-Benz plant Bremen: Flexible production producing three models (C-Class Saloon, C-Class Estate and GLK) on a single assembly line. The vehicles are able to pass along the assembly line in any conceivable order precisely as customer orders require, irrespective of model, variant (right- or left-hand drive, all-wheel or rear-wheel drive) and equipment. From 2011 the Bremen plant will be integrating a fourth model into the production process.
The Profits and Perils of Supplying to Wal-Mart The world's biggest retailer works with thousands of small suppliers on a regular basis. But landing a contract comes with downsides worth considering before applying. Bloomberg Business Week Getting Started July 14, 2009 Emily Schmitt http://www.businessweek.com/smallbiz/content/jul2009/sb20090714_270767.htm Wal-Mart continues to grow profitably through core process innovations such as real-time inventory management systems, aggressive volume/ pricing/delivery contracts with merchandise providers, and systems that give store managers the ability to identify changing buyer behaviors in and respond quickly with new pricing and merchandising configurations.
Jonathan Ive joined Apple in 1992 and was put in charge of the company's design in 1997. In 2012 Apple’s design guru Jonathan Ive, received a knighthood for creating products such as the iPad.
DELIVERYBrand: How you communicate your offering Publicizing the Canadian cult film FUBAR II at the 2010 Toronto International Film Festival (TIFF) Internet-based, social and mobile media have made the one-way marketing of the previous 100 years obsolete. “We’re now in a culture of participation. Corporate communication used to be a monologue directed at a target. Now the target can and will talk back: the deer have rifles!” (Scott Griffith, VP Energy BBDO) Jeff Greenspoon, Ivey HBA ‘07 CEO, SPOKE Toronto-based advertising agency Source: Ivey InTouch Magazine, Spring 2012, p.23
INNOVATION TYPOLOGYFROM Doblin Group, Chicago What is missing?
Whirlpool’s Opportunity • Unmet Customer Need: Household appliances designed for single people • Orthodoxy: • Dishwashers are big boxes that sit under the kitchen work surface neat the sink. • Why shouldn’t a dishwasher be more like a microwave oven – very small, very compact, very fast? • Core Competence: designing, producing, and marketing low-cost, high-quality appliances.
Whirlpool’s Response • Briva: a mini, high-speed dishwasher that could be integrated on one side of a double-tub sink, saving a lot of space in the kitchen. • Specifically designed for small loads. • Completes a cycle in about 15 minutes. • Top-loading so its lid comes down and doubles as a drainer or a chopping-board surface. • When not in use, the whole wash mechanism can even be lifted out to provide a fully functional second sink.
LANGUAGE OF INNOVATION INNOVATING LEARNING INNOVATION *Tushman & Anderson, 1986 ** Teece 1996
Innovation for what purpose? • Meet unsatisfied customer need by providing: • Same product/service, new features • Neil Young uses JavaOne to create a chronological archive of his music • New product/service, same features • iPhone • New product/service, new features • 1st telephones • Same product/service, same features, new market/use • Wii Fit • Same product/service/market, new price/cost/internal components, etc. • WALMART Strategies: • “opening price point items” • Bar codes • “Retail link” software • “Customized business plans” • http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secrets/pricing.html
CREATIVITY VERSUS INNOVATIONhttp://www.youtube.com/watch?v=a7Ny5BYc-Fs CREATIVITY There is no specific outcome desired Creative endeavors may or may not result in practical outcomes INNOVATION Creative solutions to a problem The intent is for innovation to lead to a practical outcomes, although perhaps not immediately.
Who are the stakeholders of innovation? I.e. who can impact or is impacted by organizational innovation?
Innovation Complexities Effective innovations start small. They are not grandiose. They try to do one specific thing. It may be to enable a moving vehicle to draw electric power while it runs along rails – the innovation that makes possible the electric streetcar. Or it may be as elementary as putting the same number of matches into a matchbox (it used to be fifty), which made possible the automatic filling of matchboxes and gave the Swedish originators of the idea a world monopoly on matches for almost half a century. Grandiose ideas, plans that aim at revolutionizing an industry, are unlikely to work. Peter Drucker • Is there such a thing as a completely new idea? A completely new innovation? • Tucker (and others) argues that all organizations must innovate and innovation must be everyone’s responsibility within the organization. Do you agree? Are there situations in which being innovative is in fact detrimental? Or at least, would not enhance business performance?