Characteristics of Leading Innovators (1)
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Transcript of Characteristics of Leading Innovators (1)
INNO-Views Policy Workshop “Innovation Culture”Eindhoven, December 13th, 2007
Kristina Wagner
Characteristics of Leading Innovators
2A.T. Kearney 29/03.2007/12482b
The „European Best Innovator" contest raises awareness for innovation management and condenses Best Practi ces
Participating Industries
• Engineering• Automotive • Financial institutions• Construction • Chemicals • Electrics/High tech• Consumer goods• Health care
Participating Countries
Participating Countries
• Pharmaceutical• Process industries• Software • Telecommunication • Tourism • Transportation• Insurances • Utilities
Winners (selection)
• BarclayCard• BMW• BoschSiemens
Appliances• Brembo• Credit Suisse• Clariant• Danone• ENEL• Ferrari• France Telekom
• Faurecia• Henkel• Kühne & Nagel• Pirelli• Phonak• SEB• Siemens Medical• Smith&Nephew
Wound Mgmt.• TAGHeuer• Volkswagen
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� More profitable growth of revenue compared to competition
� Large share of turnover by new products
The innovation management capability assessment is structured along the A.T. Kearney House of Innovati on
Enabler, et al. HR Mgmt., Controlling and IT (supporting factors)
Innovation Life Cycle Management(Processes)
IdeaGeneration
Launch/ Cont. Improvement
Inno-vation Strategy
Innovation Organizationand an Innovative Culture
Product/ Processdevelopment
1
2
4
3
Innovation success5
House of Innovation
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Innovation leaders base their strategy innovation p rocess on profound analysis
Remark: Extrapolation and Retropolation are complementary tools
Extrapolation
Short-term Medium-term Long-termToday
StrategyOngoing business activity Initiative II
Initiative I
Initiative III
Food
Cleaning & Maintenance
Clothing &Hygiene
Health, Leisure, Wellness
Warehousing & Logistics
Technology
Micro-technology Sensors
Automation and Robotic
Newmaterials
HomeNetworks
...
Robotic
Beauty/Well-being ...
Serve@home
Shaping Factors
Application Fields
Product marketsegments
SearchFields Society
Politics
Economy
Environment
Technology
Customer
Competition
Retropolation
Example Consumer Goods
Source: Best Innovator 2007 Competition
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Innovation leaders implement a communication-driven innovation culture in their corporations
• Innovation is reflected in the vision and embedded in the company
• Communication is systematic and takes place company-wide
• Financial resources are available for innovations
• Successes are celebrated, failures are worked out
• Employees have time for innovative activities
• Innovators are provided with career opportunities systematically
The best companies "live" innovation
Innovation environment and culture
Features of an innovation-driving
environment
Competence of innovation management
Values and norms
Motivation
Creativity
Inno
vatio
nre
adin
ess
Inno
vatio
nca
pabi
lity
2-31-20-1 3-4 4-5
DegreeBad Very good
Leading companies within the dimension Average of all participants
Source: Best Innovator 2007 Competition
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Tag Heuer incorporated the drive for exploration in its culture
� Cooperation with other companies and with design universities are sought pro-actively
� Lead user suggestions (e.g. sport professionals as Tiger Woods) serve as research missions for Tag Heuer
� The drive to constantly explore new technology spheres is a key element of the company culture
Source: Tag Heuer, A.T. Kearney
Innovative luxury watches for special
applications
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Innovation leaders systematically optimize their ti me-to-market
Duration of time-to-marketTime-to-market in relation to average
life cycle duration
10%
30%
Innovation Leaders
Average of all participants
Reduction of time-to-marketbetween 2003 and 2005
20%
10%
Source: Best Innovator 2007
Innovation Leaders
Average of all participants
Significant levers to reduce time-to-market• Product strategies that stimulate the consistent application of platforms/modules• Application of virtual technologies in product development (avoiding prototypes) and the development of
production and assembly processes
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• Fewer late changes thanks to more effective customer involvement
• Better project management tools
• More realistic objectives
• Culture of permitting red lights, more open communication and more constructive problem-solving
Innovation leadersharness benefits from:
Innovation leaders have an excellent project manage ment
% of projects deviating from the original target
13%
16%
27%
2%
7%
8%
0% 10% 20% 30%
Deviation from quality targets
Deviation from cost targets
Deviation fromlaunch dates
Leading companiesAverage of all participants
Source: Best Innovator 2007 Competition
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Controlling is build around key drivers to effectiv ely and efficiently manage the lifecycle of innovations
Key success parameters
Source: Best Innovator 2007 competition
• …Define revenue with new products as a strategic key figure
• …Realize shares of revenue with new products that are almost twice as high in the first year as the average
• …Understand innovation as a task of the whole organization that is proactively spurred and requested by top management
Innovation leaders…
Ideageneration
and selection
Idea
Idea
Idea
Idea
Idea
Idea
Idea
Idea
Idea
Idea
Idea
Revenue
CumulatedProfit
TLaunch
Product lineextension
T0
TimeTProfit
EfficiencyEffectiveness
TEnd of Life
Time-to-Market
Time-to-Profit
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Summarizing, companies with successful Innovation Management grow faster and more profitable
Source: A.T. Kearney’s European Best Innovator Competition database with more than 500 companies
Commonalities among Innovation Leaders
Success of Innovation Leaders
EBIT as % of revenue
AveragePerformers Leaders
Significantly higher growthrate than peercompetition
� Long term innovation strategy as an integral part of the business strategy based on deep "Customer Intelligence"
� Responsibility for entire product lifecycle process (or at least until "time-to-profit")
� Efficient use of internal & external innovation networks
� Systematic generation of ideas and realization of a high transfer rate from development projects into successful products
� Applying most recent IT-technologies as enablers for "speed" and "quality"
+24%
37%
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For SMEs the IMP³rove platform was designed to enhan ce the Innovation Management performance
Approach
Bench-marking Consulting Follow-up
IMP³rove Consulting Process
Inno-vation
strategy
Innovation organization and culture
Product/ process
development
Enabler, e.g. Human Resource Management, Knowledge Management, Project and Program
Management, Controlling and IT
Ideamanage-
ment
Launch/continuous
improve-ment
Innovation lifecycle management
IMC listing and ranking
Benchmark database
Online self-assessment
Library
Toolbox
Trainings
Case studies
KPIs
Financial actors
Intermediariesand Consultancies
Policy makers
SMEs
SME= Small and medium sized enterprise; IMC= Innovation Management Consultancy; KPI= Key performance indicatorSource: IMP³rove Core Team 2006
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“Innovation distinguishes between leader and follower”¹
1) Steve Jobs, Apple
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Thank you very much for your kind attention!
Kristina Wagner
Tel: +49 (0)30 2066 3418Fax: +49 (0)175 13 2659 [email protected]
www.atkearney.com