Innovation in Times of Economic Crisis

James ChampyChairman Emeritus, Consulting, Dell Services

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Culture

• The shared values and beliefs of an enterprise – usually manifested in the behaviors of people.

• Can an organization change its culture and/or behaviors?

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Processes

• A group of activities that uses one or more kinds of input to create an output a customer values

• Do you change how people think and then change what they do, or change what people do and then change what they think?

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• VISION OUTSMART!Where ideas come from

• CUSTOMER INSPIRE!Why customers come back

• EXECUTION DELIVER!The importance of the every day

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Business Models Are Changing

The Flaws in Business Models That Created the Crisis:

• Too much tolerance for risk

• Inefficient supply chains

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The Environment

We are in a condition of overcapacity in many industries

Technology has enabled enterprises to become dramatically more efficient

The economy has required enterprises to drive for even further efficiency

In some economies, new jobs will only be created when new businesses are created and begin hiring

Customers will continue to demand and expect more for less

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Business Models Are Changing

Characteristics of New Business Models:

• Technology enabled

• Lean

• Scalable

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Counterintuitive (or Forgotten) Principles

• You can find ideas in many places. Innovation is as much about process as about products.

• Most new business models require a combination of high-tech and high-touch.

• Engaging customers is about aligning with their values – authenticity is required.

• Resources are available for innovation – even in difficult times – but hard decisions must be made.

• Efficiency can drive quality.

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Outsmart! Case Study

WHAT IT DOES:

Provides access to a global community of over120,000 performers.

WHAT IT SAW:

A global love for music, but an inability to globally access performers; a “cottage” industry that could be transformed.

HOW IT OPERATES:• Performers register with

their portfolios• Customers subscribe to the

service• Services are booked over the

Internet

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Questions

• What are the unmet needs of the communities / customers you serve?

• What processes or services can you offer to meet those needs?

• Do you serve a market that needs to be organized? Create “communities”?

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WHAT IT DOES:

Provides non-critical, clinical care from a facility.

WHAT IT SAW:

Most healthcare providers have focused on diagnosis and treatment. Minute Clinic’s founders saw the opportunity to change how healthcare is delivered.

HOW IT OPERATES:• A retailer mentality• Staffed by nurse practitioners• Enabled by information

technology• Open 7 days a week• Patients are seen in ten to

fifteen minutes• Complements the healthcare

system

Outsmart! Case Study

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Questions

• Are there assumptions about how you operate that prevent your delivering the services the market requires?

• Can a change in a “frame of reference” help you think differently about the services that you offer?

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WHAT IT DOES:

Provides customized, pre-packaged supplements and medications for horses.

WHAT IT SAW:

Most barn operations fail to manage the complexity of providing a horse with multiple supplements and medications on a daily basis. The potency of supplements and medications were also being reduced.

HOW IT OPERATES:• Delivers a 30-day supply of

supplements and medications customized for each horse

• Substances are contained in a single plastic container for each day, clearly marked with the horse’s name

• Works with suppliers to achieve efficiencies and bulk discounts

• Provides a high-level of customer service

Outsmart! Case Study

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Questions

• What are the confounding challenges that your constituencies encounter?

• Can you provide “solutions” to these challenges?

• What services can be better enabled by “high-tech, and what service still require “high-touch”?

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Convenient Simple

GreenFun

Smart

Inspire! Case Study

Vision to provide reliable and convenient access to on-demand transportation

Offering a new model of automobile for transportation

Elegantly combines the promise of the Internet with wireless communications and online communities

Example of how innovative businesses can harmonize business goals with the values of their customers and their communities

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Questions

• What processes can you move to your constituencies to help serve them better?

• Do your processes and business model align with the values of your constituencies?

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Inspire! Case Study

Member-centered approach to health benefits

Strives to be an advocate in prescription care

Focused on renewing the relationships patients have with their trusted physicians and pharmacists through increased face-to-face communication

Providing exceptional customer service to the more than 1.2 million members

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Questions

• What are your channels to market?

• Who are your channel partners?

• Do your partners enhance or detract from the value you deliver?

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Deliver! Case Study

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Deliver! Case Study

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Questions

• Are you making hard choices that enable innovation?

• What management style best serves your enterprise?

• Do you have an approach for managing change – process and behavior?

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Deliver! Case Study

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Questions

• How efficient and effective are your operations?

• How do you measure quality – “customer” experience?

• What processes can be reengineered to deliver both efficiency and quality?

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Deliver! Case Study

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Questions

• How will technology change the way you operate?

• Do your processes align the interests of everyone engaged in the system of your work?

• Do you express an elevated sense of purpose?

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OUTSMART!INSPIRE!DELIVER!

• Ambition matters• Intuition reigns• Focus prevails• Customers rule• Risk is tolerated• Innovation lives• Culture drives• Everyone plays• People are held accountable• Attention to process• Focus on quality• Model for change• Authenticity

HOW SMART COMPANIES BEHAVE