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The Innovation ProcessApril 18, 2012www.utep.edu/creie

Gary Williams – DirectorJeni Clark – Associate Director

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Innovation

Webster Definition of Innovation:The process of introducing new methods, devices, etc.A new method, customer, device, etc.

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Innovation Process

This workshop addresses 3 different aspects of the innovation process including:

Ideation: “Winning at New Products” by Robert G. Cooper, Addison-Wesley Publishing Company 1993.

Achieving Superior Differentiation, Speed to Market, and Increased Profitability: “Fast Innovation” by Michael George, James Works, Kimberly Watson-Hemphill, McGraw-Hill, 2005.

Fast Cycle Time Concepts: “Fast Cycle Time” by Christopher Meyer, The Free Press, NY,NY 1993.

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Approaches to Innovation

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R&D defines the technical solution

Manufacturing Sales Market Need?

Marketing defines the

needsR&D Fit? Manufacturing Sales

Marketing & R&D defines the

needs, fit, and solutions

R&D Manufacturing Sales

A. Technology - Push

B. Market-Pull

C. Product/Markets (Hybrid of A&B)

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The Innovation Process

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Idea Generation1. Individual2. Group Brainstorming—generally will generate more

ideas and more diversity of ideas.

Need to be sure that you are always asking the question:“What am I going to make or sell?”

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The Innovation Process

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Idea Generation—some useful techniques

1. Establish a focal point—a person to stimulate and handle ideas.

2. Survey your customers.3. Observe customers as they use (or misuse) your

product.4. Examine the patent files regularly.

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The Innovation Process

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Idea Generation—some useful techniques, continued

5. Routinely survey your competition. Analyze their products, strategies and business successes.

6. Run a new product idea contest.7. Organize creativity sessions involving sales,

manufacturing and technical people in the same session.

8. Set up a user panel to discuss unmet needs, wants, and problems that might lead to new product ideas.

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The Innovation Process

Creation Phase —What do you do with the idea?1. Proof-of-concept should be done as early as possible.

2. Protect the Intellectual Property (IP) a. Invention disclosure b. Provisional patent—in place for one year c. Non-provisional or Utility patent

3. Use non-disclosure agreement with customer and other 3rd parties a. Protects the IP and reserves right to file new patent ideas

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The Innovation Process

Creation Phase —What do you do with the

idea?4. Market Research—single biggest reason new products fail is lack of sufficient understanding of the market.5. Market needs have to be recognized. In a study of 567 successful products innovations, most were market-pull projects; only 21% were technology push.6. When a technological success does not meet a specific market need, the product should be adapted to suit an identified need—hybrid of technology-push and market-pull.

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The Innovation Process Innovation Imperative

“Fast Innovation is the process of creating new products, services, processes, business models and markets with sufficient differentiation and speed such that the Company maintains above-average shareholder returns for decades.”

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The Innovation Process BUSINESS MODELS

• There are 9 basic business model building blocks (Osterwalder, Alexander & Pigneur, Yves . Business Model Generation: John Wiley & Sons, Inc. 2010)

• What are you going to make and sell or service?? 1) Value Propositions 2) Key Activities 3) Key Resources 4) Key Partners 5) Customer segments 6) Channels—sales and distribution 7) Customer Relationships 8) Cost Structure 9) Revenue Streams

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The Innovation ProcessSustaining Innovations--Incremental

Improvements

1. Likely offer only modest improvements2. Have a low risk of failure3. Can be quickly copied and commoditized.4. Create growth in revenue without destroying

potential of incumbent offerings.

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The Innovation Process Disruptive Innovations

1. Innovations that obsolete current offerings, processes and business models will catch the competition flat-footed and may provide great propulsive power to growth.

2. The impact of differentiated products is significant and positively impacts the success rate.

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The Innovation ProcessDisruptive Innovations, continued

3. May require new technologies or core competencies

4. May require completely different sales channels5. May compete with and cannibalize existing

offerings.

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Impact of Differentiated Products

Me-Too Moderate Advantage Highly Differentiated0%

10%20%30%40%50%60%70%80%90%

18%

42%

82%

Success Rate

Prob

abili

ty o

f Pro

duct

Suc

cess

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Fast Cycle Time Principles

What is Fast Cycle Time?

Fast cycle time is the ongoing ability to identify, satisfy, and be paid for meeting customer needs faster than anyone else.

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Fast Cycle Time Principles

Key elements include:

1. Create a New Products Strategy2. Identify Customer Problems3. Communicate Effectively4. Practice Good Planning and Project Management5. Process Simultaneously6. Utilize Cross-Functional Teaming7. Involve Customers on an Ongoing Basis8. Prioritize and Make Decisions as Fast as Practical9. Motivate organization and Measure key activities

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Fast Cycle Time Principles

New product strategy should include:

1. List of products to be developed2. Market sectors each will serve3. Unmet need that will be addressed4. Priority listing of development5. Channel of distribution that will be utilized

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Innovation Process

SUMMARY1. Innovation is the most important aspect of the

business process.

2. Differentiation, satisfying unmet needs, protecting your intellectual property, getting to the market as quickly as possible and involving the customer every step of the way are important keys to success.

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The Innovation ProcessApril 18, 2012www.utep.edu/creie

Gary Williams – DirectorJeni Clark – Associate Director