INNOVATION PROCESSES Example of Stamypor
Let’s review the what, why and how… Innovation process
FROM IDEAS TO PROJECTS I have a great idea!
Best practice (Theory) DSM NBD (Design) Stamypor (Practice)
Stage Gate System What will it look like? Who will care? Winner? Loser? √ X What will it cost? Who will pay? √ X How will we build it? Where? √ X Here is a prototype Do they like it? √ X We made X They bought Y
Things to consider: • Accountability: what is the cost of doing, not doing, doing wrong? • Tracking: how many in, how long there, how many out, how many successful? • Where did the ideas come from: congregated in R&D or spread throughout? • What kinds of innovation: all along the keyboard or just one key? • What prompted them: competition, new employees, partnerships, customers? • Who benefits: existing customers, new customers, internal people? • What did we learn? Are we getting better?
Contextual Innovation The way you structure innovating activities depends on industry, organization, competitive environment, business model, organization culture, resources available, sense of urgency, etc.
Stamypor Case Questions • Type of innovation? • Why separate NBD unit? • Nieland’s recommendation to NBD board? • Usefulness of stage-gate process? • Lessons learned?
Type? Do something new Exploration Change basis of competition • Stamypor: • Radical innovation • Long-term development Improve what exists Exploitation Safe, cheap, less risk, low impact, quick returns
BALANCING RISK AND INVESTMENT RISK Accumulated investments progressively increase Failure risk progressively decreases due to stage gate process TIME
What are the risks? • Potential application area is new to DSM • Technological challenges in development of product and production technologies • While lead customers are not new, markets and applications are new • Relationships with lead customers based on trust
What is the commercial value? • Value generated when porosity is translated into advantage for customers • Value creation depends on customer application – DSM’s customers’ customers • Price depends on value to customer • Sales volume depends on value added over time • Product cost/quality depends on volume and process technology • Different customer groups mean different value considerations and competitor responses
Application of stage gate process • New Business Creation – investigating 35 new ideas/year for feasibility; 2-3 proceed to 2nd phase. • Stamypor? • Business Evaluation Project – project manager & team develop against criteria. • Stamypor? • Start-up Company – if satisfy criteria become small start-up companies.
Lessons • Stage gate process • Team composition • Technical problems • Market problems • Financial issues