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Six Keys to enabling an Innovation Culture
Delivered at the Industrial Research Institute Mtg October 14, 2014 by Richard (“Dick”) K. Lee, CEO Value Innovations, Inc. +1-720-201-0758 [email protected]
Setting the Stage
What is Innovation? What are the metrics you use to measure
innovation? Who is accountable? What are the roles & responsibilities?
2
E. Wolf, CTCT, 20May2014
Innovation Need Capability
Delivery
Technology
Development
Integration
Adaptation
Invention Discovery
Creation
Opportunity
Market Influencer
Consumer
Purchaser
Offering
Product
Service
Channel
Commercialization
Brand
Message
Price Performance
Promotion
Quality Lifecycle
Features
Desire
Maintainer
Financier Application
Solution
3
Setting the Stage
What is Culture?
4
E. Wolf, CTCT, 3Sept2014
Culture
Rules
Boundaries
Ethics Values
Beliefs
Rewards Penalties
Promotion
Bonus
Recognition
Incentives
Roles
Accountability
Ownership
Responsibilities
Demotion
Termination
Communication
Leadership
Newsletter
Vision & Goals
Raise
Conflict Resolution
Short Term
Long Term
Traditions
Org Structure
Metrics Webcast
Site visits
Decision Making
Conflict Resolution
Risk Appetite
Stories
Folklore
Rituals
5
Setting the Stage
Conclusion: Leadership, Innovation and Culture are inextricably linked
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1. Clear definition of Innovation 2. “C” level champion 3. Buy-In across “C” Level Suite 4. Clearly defined Innovation Process 5. Innovation Process training 6. Innovation Process manager
The Six Keys
We’ll explore each one… First some history
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1. Define the Value Innovation Process, through
Interviews
Survey of the literature
Team discussions
2. Develop an instrument that would allow a company to determine its ability and capacity to value innovate
Value IQ Tool
RoR 99-7: Original Goals
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1. Reps from >40 IRI member companies developed Vi Process (1999-2002)
2. Reps from >50 IRI member companies test drove Value IQ Instrument
Companies Involved
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Delivering exceptional value to the most important customer in the value chain
What is Value Innovation?
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The ability of a company to value innovate is a function of:
Processes/tools
Culture/Environment
Stakeholder Behavior
Original Value Innovation Process
Published in RTM, March-April, 2005 11
Browser-based
Nine Factors
33 Items (questions)
5 Pt Likert Scale
Takes <10 minutes to complete
Psychometrically analyzed
Validated
Value Innovation Process Assessment Tool
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Meaningful Work
Risk-Taking Culture
Customer Orientation
Agile Decision-Making
Business Intelligence
Open Communication
Empowerment
Business Planning
Learning Organization
The Nine Factors
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Participating Companies
Air Products Electronic Gases
Alcan Pharmaceutical Packaging
Boeing
Solvay Advanced Polymers
Milliken Chemical
Value Innovation Process Assessment Tool
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Captured answers to the “open ended question” and grouped them by the Nine Factors
Value Innovation Process Assessment Tool
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0%
5%
10%
15%
20%
25%
30%
35%
40%
Meanin
gful W
ork
Custom
er Orie
ntatio
n
Empowerm
ent
Learn
ing O
rganiz
ation
Busine
ss In
tellig
ence
Risk-Ta
king C
ulture
Busine
ss P
lannin
g
Agile D
ecisio
n-Mak
ing
Open C
ommun
icatio
n
Survey Dimensions
% T
otal
Com
men
ts (e
xcl.
"Oth
er") Company 1
Company 2Company3Company 4
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Factors receiving the most attention based on answers to the "open ended" question:
1. Open Communication 2. Empowerment 3. Risk Taking Culture
Value Innovation Process Assessment Tool
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Tools are OK to establish where you are
…but what you do to move the needle to enable innovation? We haven’t seen a great appetite to dig into culture directly
You focus on Six Keys
Conclusions
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1. Clear definition of Innovation 2. “C” level champion 3. Buy-In across “C” Level Suite 4. Clearly defined Innovation
Process 5. Innovation Process training 6. Innovation Process manager
The Six Keys
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Questions: What is your definition of innovation? How do others in your organization
define innovation? When you go back to the office: Ask people in your organization to
define innovation
Clear definition of Innovation
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Clear definition of Innovation
Delivering exceptional value to the Most Important (MIC)in the Value Chain, all the time, every time
Our Experience Most B2B companies believe their direct customer is their MIC – Wrong!
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Ideally the CEO (Refer to the Culture Mind/Word Map) OK?: CTO, CInO or CMO
“C” level champion
23
E. Wolf, CTCT, 3Sept2014
Culture
Rules
Boundaries
Ethics Values
Beliefs
Rewards Penalties
Promotion
Bonus
Recognition
Incentives
Roles
Accountability
Ownership
Responsibilities
Demotion
Termination
Communication
Leadership
Newsletter
Vision & Goals
Raise
Conflict Resolution
Short Term
Long Term
Traditions
Org Structure
Metrics Webcast
Site visits
Decision Making
Conflict Resolution
Risk Appetite
Stories
Folklore
Rituals
24
Ideally the CEO
Eric Wintemute, AmVac
http://amvac-chemical.com/Corporate-Video/Value-Innovation
Mark Forrest, VP/GM CTCT Pierre Saelen, Managing Director, Pharma Diagnostics
“C” level champion
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Challenges: Seat changes are killers Need support across
the “C” Suite
“C” level champion
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The Value Innovation Process®
10-Steps 10-12 Weeks to complete
Companies have modified this: Chevron, Ingersoll Rand
Clearly defined Innovation Process
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ALL functional areas (AmVac) & Board members Vendors Consultants (Pharma Diagnostics)
Have them read Value Innovation Works ( (give them 2 books)
Innovation Process Training
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Job Overview: About 10% of his/her time
Keeps track of: Those trained Those requiring training
Answers questions
Addresses roadblocks
Tracks portfolio
Innovation Process Manager
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American Vanguard (Johann Venter, CTO) Pharma Diagnostics (Pierre Saelen, MD) Caterpillar Trimble Control Technologies (Ed Wolf, VIP Manager)
3 Company Examples
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It’s as simple & complex as ABC (inputs from >20 projects):
A. Always learn more about your customer
B. Breakdown the Barriers & Perceptions C. Obtaining support from the C-suite
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AmVac
A. Always learn more about your
customer: Our understanding of the Value
Proposition was wrong every time Customers overwhelming response that
they are tickled pink that their supplier would take the time to ask them what they thought
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AmVac
A. Always learn more about your
customer:
We uncovered at least one unanticipated opportunity on every project Several, very high profile projects were killed
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AmVac
B. Breakdown the Barriers &
Perceptions
One of the biggest barriers: “Innovation is the responsibility of R&D” You must Train ALL functional areas
It takes discipline and effort:
“Doing Value Innovation is difficult” is a barrier that must be broken down
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AmVac
C. Obtaining support from the C-
suite
Implementing a Value Innovation Process is a tremendous cultural enabler But you must be prepared to: Challenge the existing paradigm Chastise the Nay Sayers and Celebrate the successes
36
AmVac
C. Obtaining support from the C-
suite
Exercise care to stay close to your core
Value Innovation will uncover opportunities no question – some of these will be potentially game changing and the possibilities can become intoxicating but…
Even with Open Innovation you may not be able to execute
37
AmVac
"Introducing and implementing the VIP in your company has interesting side effects:
You'll notice the Strengths,
Weaknesses (you’ll see them all), Opportunities and Threats in/of your company's organization to its innovation culture, while
Enabling true innovators to stand up and be noticed."
Pharma Diagnostics
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Investors better understand the
business’s potential through “As Is” and “To Be” Value Curves & listening to Most Important Customers recorded quotes is powerful
The VIP's Contextual Interviews are
the best door opener to new customers one can imagine"
Pharma Diagnostics
39
During the three rounds of
contextual interviews with 12 MICs, you’ll be able to classify them as innovators, early adopters, early majority and late majority
The Value Propositions (Value
Curves) for all four are different”
Pharma Diagnostics
40
Ed Wolf – Value Innovation Process Manager
Answers questions from the project teams regarding usage of the VI tools
Encourages project teams to follow the
process steps as defined and RESIST the temptation to deviate from the formal process
Contacts VI subject matter experts for
support when necessary
CTCT
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Some VI activities will stretch the members of
the organization beyond their customary job functions
Acts in a supporting role to guide others in their
skills development As a Process Scribe, captures the learnings of
the teams as they complete the project steps, and compile information into a guideline for the next project .
CTCT
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Factors influencing Culture & Stakeholder Behavior:
Opportunity to bring together individuals from various functions and have a focused discussion on roles and responsibilities and
How we bring value to the various parts of
our distribution channel & ultimately our product end users.
CTCT
43
Factors influencing Culture & Stakeholder Behavior:
Multiple latent organizational issues were uncovered during these discussions & resolving these issues has led to greater alignment to common goals, and has allowed us to address areas of overlap in a few instances.
CTCT
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1. Clear definition of Innovation
2. “C” level champion 3. Buy-In across “C” Level Suite
4. Clearly defined Innovation Process
5. Innovation Process training
6. Innovation Process manager
Six Keys to enabling an Innovation Culture
45
Questions
Thank You
46
References
Value Innovation: Passport to Wealth Creation
Tom Dillon, Dick Lee, David Matheson, RTM, Mar-Apr, 2005
Assessing Your Organization’s Potential for Value Innovation
Lynda Aiman-Smith, Nina Goodrich, David Roberts, Jim Scinta, RTM, Mar-Apr, 2005
47
References
Identify Your Innovation Enablers and Inhibitors
Tom Balsano, Nina Goodrich, Dick Lee, Jack Miley, Terri Morse, Dave Roberts, RTM, Nov-Dec, 2008
48
What is Innovation?
“Innovation isn't about finding a novel solution, but in more accurately defining the right problem. Understand the problem, & the solutions become almost obvious.
If you don't accurately define the right problem, the best you can hope for is to solve the wrong problem, very well.” Larry Marine, President, Intuitive Design
49
“So much of what people call innovation is little more than brainstorming on new features without real purpose.
Oftentimes, these design ideas force the company to sell what they build instead of building what customers need.” Larry Marine, President, Intuitive Design
50
What is Innovation?
“Companies typically expend great efforts in time & resources to brand, position, message & spin a product to make it sell.
Solve the right problem, & there is much less marketing required to gain market share.” Larry Marine, President, Intuitive Design
51
What is Innovation?
