Sustainable Value Creation Through Opportunity

1
Sustainable Value Creation Through Opportunity
Innovation

• Professor Peter Jackson
• Dean of Social Sciences
• University of Leicester

2
Innovation Management

• Innovation top of the corporate growth agenda 
• Top innovations focus on customers
• Critical success factors
• Clarity of purpose
• People with capability
• Challenge
• How to turn new ideas into new value

3
Arthur D. Little Survey

• Successful innovation raises EBIT from an average
  of 15 to 19
• Top performers in an industry have 2.5 times more
  new products compared to low performers
• Top performers return on innovation is 10 times
  higher compared to low performers

4
Percentage Sales Revenue Allocated to R D

• Utilities Logistics very low
• Electronics 50
•  
• Pharmaceuticals Aerospace 10
• Chemicals 5
• (Source Arthur D. Little)

5
Innovation is Off Track

• Too much emphasis on
• Unique product features
• Complex market segmentation
• Clever branding
• Thinking outside the box
• Pursuit of novelty and excitement

6
Customer Focused Innovation

• Emphasis on
• Quality and reliability rather than nice to have
  extras
• Giving customers what they want i.e. products
  that work that meet customer expectations that
  are reliable and fit for purpose
• Concentrate on
• Being better than the competition
• Basics this is more important than unique brand
  differentials
• Prioritising the basics and seeking to improve on
  them
• Unmet needs and badly met needs

7
First Mover Advantage

• It is a myth
• Sustainable advantage
• First mover advantage has two parts to it being
  first and getting it right. There are loads of
  examples where people forgot second bit
• Rush to the market is risky
• Need to create value propositions relevant to
  customers
• Requires attention to the detail of
  implementation
• Focus innovation on improving customer value

8
Lessons Learned

• Stay focused on whether you are creating real
  value for customers
• Understand that your customers expectations
  evolve
• You need to keep improving to keep up with the
  customer
• Stop emphasising thinking outside the box
• not the same as innovation
• often an excuse for sloppy thinking
• quantum leaps are o.k. if in the right directions
• Think outside the box occasionally
• Double loop learning
• Focus on being better not different

9
Creativity, Learning Reflection

• Thinking outside the box challenges
  power/authority
• Sense making
• Misfits
• Give permission to be creative
• Give permission to challenge traditional models
• Give permission to ask lots of questions
• Do it periodically
• Single loop learning
• Experiential Learning
• Classroom learning (challenges received wisdom)
• Reflections
• The Reflective Practitioner
• Double Loop Learning

• think
• plan
• act/do
• review

10
Key Success Factors

• Direct customer contact
• Clear product or service strategy
• Creative employees
• Tight relation between innovation objectives and
  business strategy
• Use of cross functional teams
• Defined core competencies
• Systematic improvement in project management
  skills

11
Conclusions

• Improved understanding and involvement of
  customers
• Systematic technology scouting
• Developing an understanding of customer needs,
  technologies and product features
• Development and use of structured idea generation
• Increasing use of partners (open innovation)
• Globalisation and outsourcing of innovation
• Use of IT to support innovation