The Role Of Innovation

This is a recording of a live speech at Sprint on the topic of the Role of Innovation.

Why Innovation?

Innovation yeilds a 30% return versus 8 to 10% for capital investments

Value From Innovation (source: Harvard Business Review, October 2004)

• 14% of the total R&D spend is the investment in creating new offerings/markets
• That 14% generates 38% of the revenue
• That 14% generates 61% of the margin

The importance of Innovation

• 92% of executives believe the importance of innovation has increased in the last 10 years
• 73% of executives believe innovation plays an important role in their company value
• 35% of executives have confidence in their ability to manage and measure innovation impact

The challenge of Innovation

• How do you maintain effeciency while fostering innovation?
• How to stress bottom-line results without restricting innovation?
• Being able adapt to changing markets and environments while mantaining stability

Corporate Maturity Model

• Level 1 – Focus on existing core activities and business (Steel industry)
• Level 2 – Improvement of core business through tools such as BRP, TQM (GE)
• Level 3 – Innovation of Improvement – Focus on improving the way a company improves itself (Google)

Level 3: Structured Innovation

• Scenario/Strategy Methodology
• Ideation Methodology
• Execution Methodology

What’s wrong with current approaches

• Innovations are either incremental or totally unrealstic
• No confidence that there aren’t better ideas to be had
• Lack of executive/organizational support

Killer Innovation Approach

• Focus the innovation search
• Ask the right set of questions
• Prioritze the ideas
• Quick execution

Areas of Innovation Focus

• Moving into new competitive arenas
• Expansion into new geographies
• Improvements in industry structure
• Innovation in the value delivery systems
• Improvements in products or services
• New or existing customers

Better Questions = Killer Ideas

How to generate killer ideas

• Purpose: The yield of high quality ideas is significanly higher with a clear business purpose and a supportive executive sponsor
• Timeliness: The difference between good ideas and great ones is the timing.  Is the market ready?  Is the technology ready?  If no, don’t be afraid to put it on the shelf and wait for the right timing
• Diversity: The pool of contributors needs to broad, much broader than you would normally think
• Perspective Change: The very best ideas come through individuals looking at things in a different way
• Collaborative Development: Environments where people can comment and build on ideas thereby signficantly increasing overall yield of high impact ideas.

Execution = Stage Gate Management

The top 81% of “innovative companies” use some form of a milestone/Stage Gate process to introduce new products and service