Innovation Final Exam Review

4 Levels of Innovation

1. New Features on Existing Products
2. Advancement of Existing Products
3. Evolutionary Products
4. Revolutionary Products

Innovation requires...?

An honest self-assessment of a company's capabilities

All Great Innovations have...?

A vision at their core

Vision occurs at the intersection of these 3 circles

Passion (something the innovator truly cares about)
Excellence (Where the innovator and team can feel they can become best) and resources (time/$/people)

Innovative Individual

Many ideas are born in the brains of creative individuals

Innovative Team

most serious innovative work in developing ideas is done in small and large groups

Innovative Organization

innovation cannot flower if the soil (i.e. culture) within which it is planted is acidic and hostile

Two approaches to fostering innovating within a large organization

Skunk works approach and intrapreneurship

Skunk Works

an isolated 'island' of entrepreneurial, innovative culture...a kind of playground, populated by eccentric, individualistic, creative people...give them tools, time and isolation form daily corporate pressures

Intrapreneurship

the entire organization is structured to foster and support maverick entrepreneurs who spring up and work within the system as an integral part of it

5 Steps of "Experience Economy product Ladder"

Commodities, Goods, Services, Experiences, and Transformations

Experiences and Transformations create...

an emotional bond with customers

Lovemarks

Products that arouse deep, emotional ties

Lovemarks transcend brands

they reach your heart as well as your mind, creating an intimate, emotional connection that you just can't live without. They are a relationship, not just a transaction

Products command...

neither respect nor love

Fads attract...

love but not respect

Brands attract...

Respect, but not love

Lovemarks command respect and love through

mystery, sensuality, and/or intimacy

Where should innovators search for new opportunities and ideas?

•Aging Population
•Technology-translating new technologies into innovative businesses
•Generational Changes
•Tastes and Preferences
•Economic Downturns
•Legislation
•Contracting, Declining Industries

Deadly Sin: Pride

trying to continue to make things better in your own mind even if it is not what the customer really wants or need. 'overshooting'

How to combat pride

Do the research. Make sure you are grounded in what the market wants, not what you want.

The individual innovation constraint

for successful innovation to take place, there must be an individual with a good idea (acting alone or in groups)—being able and willing to generate and recognize a new and relevant idea.

The power to be creative relies on three core components

Perception, Intellection, Expression

Overcoming Perception Constraints

Broaden sources of data, Use practiced empathy, Change your perspective, Enrich the input

Overcoming Intellection Constraints

Examine your assumptions, Generate a wide variety of possible problems, Don't set limits trying to find the best idea, Set an ideation goal, Explore the Solution Space

Overcoming expression constraints

Stay mindful of your favorite ways of talking, Drawing/visual techniques, Sell your ideas

Embrace Uncertainty through Futurecasting

identify the most plausible futures that create threat and opportunity. This vision of the future then establishes the context for determining what growth options to seek.

Innovate with Purpose

the pandemic forced organizations to pick concrete innovation goals. Adapting fast to survive in the near term meant focusing on business models and customer engagement. And concentrate on the most important customers.

Think Beyond your Product

innovation doesn't have to be (and should not just be) about new products. Organizations reconsidered, experimented, and redesigned.

Experiment and Scale Fast

the pandemic taught organizations to move faster. A process of disciplined experimentation enables rapid, purposeful learning. The need to scale will inform what you test.

Spread the Competencies through Learning-by-doing

give people the means to innovate, then push them to move forward. Embed into your projects periodic checkpoints to discuss methods used, not just project progress. Individuals involved will gain confidence in their innovation abilities, have their learning persist, and spread their knowledge to others in the organization.

Constraints to Innovation often emerge in

Strategy, Process, Resources

Psychological Safety

an atmosphere in which people feel accepted and comfortable sharing concerns and mistakes without fear of embarrassment or retribution. Creates social cohesion.

Intellectual Honesty

a culture in which team members will proactively voice their ideas and disagreements in a rational and constructive way. Can undermine feelings of acceptance and respect.

Anxious Culture

High Intellectual Honesty, Low Psychological Safety

Distressed Culture

Low Psychological Safety, Low Intellectual Honesty

Comfortable Culture

High Psychological Safety and Low Intellectual Honesty

Innovative Culture

High Psychological Safety AND High Intellectual Honesty

Five rules: Balancing Candid discussion with respect for individuals

Focus on a common goal, expect disagreement but require respect, Stick to facts and evidence, Acknowledge biases/priorities/knowledge gaps, Ensure everyone has a voice

Societal Constraints

Innovations that conflict with society's values/laws/political atmosphere have less chance of success

Values and identity

Ideas with the potential to cause harm or that violate society's moral code, or conflicts with society's image of itself.
Inventory values that might present obstacles.
Be sure to involve potential customers in focus groups or beta tests.

Societal Control

Order is maintained through legislation.
Lobby to change laws and regulations.
Participate in industry associations.

History

existing physical infrastructure or legacy technical standards.
Leverage existing infrastructure.
Try to accommodate the current standard.

Deadly Sin: Sloth

It's not really laziness. It's that people often times work on the wrong activities, typically by prioritizing analysis over action. Innovation efforts slow to a crawl.

How to combat sloth

It's easy to fill your day with activities that make it feel as if you are making progress tackling a problem. Remember, your first idea is almost always wrong. And you can't figure out precisely how it is wrong through analysis alone. You have to actually do something.

Deadly Sin: Gluttony

Deep pockets allow companies to spend too many resources following the wrong strategy. They throw bodies against a problem, but everybody knows that small teams typically move faster than large teams.
Abundance can lead to overly slow, overly linear innovation efforts.

How to combat Gluttony

Economic constraints can be good for innovation by forcing companies to embrace selective scarcity—enabling creativity in the early stages of the innovative process.

Deadly Sin: Lust

Getting distracted by pursuing too many 'bright, shiny objects'; Too often leaders get distracted by all the things they could do.

How to combat Lust

Innovators have to prioritize. Lust after too many thing, and you'll find that you end up with nothing. Good innovators carefully choose the opportunities they go after and don't forget their core business(es). Focus your innovation efforts.

Five phase model of design thinking

Empathize, Define, Ideate, Prototype, Test

Design thinking is a process for creative problem at the intersection of...

What is desirable, technologically feasible, and economically viable

Empathize

This involves consulting experts to find out more about the area of concern through observing, engaging and empathizing with people to understand their experiences and motivations, as well as immersing yourself in the physical environment so you can gain a deeper personal understanding of the issues involved.

Define

you put together the information you have created and gathered during the Empathize stage. This is where you will analyze your observations and synthesize them in order to define the core problems that you and your team have identified up to this point.

Ideate

designers are ready to start generating ideas. Your team members can start to "think outside the box" to identify new solutions to the problem and you can start to look for alternative ways of viewing the problem

Industry Constraint: Competition

An inherent conflict: intense competition can depress profits, so firms also have an incentive to reign in constant innovation. Focus on price and efficiency

To overcome Competition...

Consider new ways to compete, i.e. a new novel business model.

Industry Constraint: Suppliers

to innovate new products requires suppliers to be on board. Embrace of the status quo will cause problems when trying to modify a process or product

To overcome Suppliers

Avoid outsourcing the most critical parts of your operation, consider bringing it in-house. Rely on several suppliers—don't rely on just one key supplier.

Industry Constraint: Labor

Could stall innovation

To overcome Labor

Be alert to the possibility of your idea requiring skills that you can't find easily. Be mindful if proposed changes run afoul of union regulations/standards.

To overcome Market (Industry Constraint)

consider innovation from your customers' perspective.

3 Technological Constraints

Physical, Time, Natural Environment

Tech Constraint: Physical

If beyond your technical competence, then mayhap abandon the idea. If you decide to proceed, then hire experts who can assist. Or turn to customers for help—utilize on-line communities for discussion/insight

Tech Constraint: Time

in project planning—factor in time for your organization's 'learning-curve', i.e. the time necessary to acquire the knowledge and competence to address problems as they arise.

Tech Constraint: Natural Environment

Consider the innovation & its proposed environment. Since you can't eliminate large-scale environmental constraints, you must determine how to function within them. Try to choose an environment in which natural conditions and local resources are conducive to your work.

4 Related Behaviors that set successful CEOs apart from less effective leaders

Deciding with speed and conviction in ambiguous situations
Developing a deep understanding of stakeholder needs, getting people aligned for action
Adapting proactively/keeping an eye on the future
Delivering reliably and consistently

Deadly Sin: Envy

Innovators inside an organization proclaim themselves the 'chosen ones'. This can create an us-versus-them relationship between the core and new growth efforts. We need to remember that without the core business there is no corporate innovation.

How to overcome Envy

Actively celebrate both the core business and new growth efforts.

Deadly Sin: Wrath

Punishing risk takers severely. A wrathful leader punishes innovation failures, using lines such as 'Failure is not an option.' But innovation failure is most certainly an option

Overcoming Wrath

Reward behavior, not outcomes. Pay as much attention to the behaviors people follow as to the results they achieve. If you want to encourage innovation, consider what gets rewarded and what gets punished. Both are important.

Deadly Sin: Greed

Impatience for growth; leads to prioritizing low-potential markets. If you look for quick growth, you are forced to look to what exists.

Overcoming Greed

Be patient for growth and impatient for results. The best innovators avoid the temptation to go after large, obvious, immediate markets. They should absolutely be greedy for results that demonstrate that the approach they are following has merits

The first step toward creating a learning organization

teaching organizations to tell the truth and make truth-telling part of the corporate DNA

Single-Loop Learning (Following the Rules)

Thermostat Example: When it detects that the room is too cold, it turns on the furnace. When it detects that the room is too hot, it turns off the furnace. In other words, the system includes one automatic and limited type of reaction - little or no learning occurs and little or no insight is needed. Most organizations operate according to this learning

Double-Loop Learning (Changing the Rules)

members of the organization are able to reflect on whether the "rules" themselves should be changed, not only on whether deviations have occurred and how to correct them. This kind of learning involves more creativity and critical thinking. This learning often helps participants understand why a particular solution works better than others to solve a problem or achieve a goal. Critical to the Success of an organization

Bain's Elements of Value

30 Elements of Value across four categories. Bottom of the pyramid meets fundamental needs and become more personal/emotional at higher levels

The most important of Bain's elements is...

Quality. No other elements can compensate for poor quality.

People who procrastinate moderately tend to...

be more creative than precrastinators and extreme procrastinators alike. There's a sweet spot

Original Thinkers feel...

Doubt and Fear. The doubt they feel is "idea doubt"...self doubt is what paralyzes progress

Originals Thinkers have...

Lots of bad ideas. Those who try the most likely fail the most, but will likely find success eventually.

Difference Between Invention and Innovation

Inventions are just new products/service, innovations bring value - which can come in different forms (it's easier/faster/safer/cheaper...)

Why is innovation hard?

Lack of time and focus, preconceived ideas, Don't understand the issues/requirements, Deeply established ways (we've always done it this way!), too expensive, fear of failure

How to stay focused on the way

Field Research, Innovation Summits, VIP tours, Showing prototypes to customer groups.....ETHNOGRAPHY

10 lessons for Kelly

1. Look for headaches
2. This is a marathon, burnout happens
3. Support from leadership is a must
4. You need to be passionate
5. Find people who think differently than you
6. Be ok with being uncomfortable
7. Failure should happen
8. Get the ugly prototype out early
9. I like it \=/\= I'll buy it
10. Beware of scope creep

The book to study for the final is...

Under New Management: Burkus