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Transcript of paperJam Workshop on Strategic Innovation
The Who, What, How of Strategic Innovation
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
$ 1.600.000,-
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
FreeDownload
© Marc Sniukas - Doujak Corporate Development
Strategic Innovation
© Marc Sniukas - Doujak Corporate Development
AGENDAWhat are we going
to do today?
© Marc Sniukas - Doujak Corporate Development
Why does Strategic Innovation matter?
What is Strategic Innovation?
How to get started?
The Process
© Marc Sniukas - Doujak Corporate Development
AGENDA
Why Strategic Innovation?
© Marc Sniukas - Doujak Corporate Development
Content• Too much focus on best practices, operational effectiveness and incremental improvements in cost
and quality• Too much imitation of competitors‘ moves• Too much holding on to one strategic position• Operational effectiveness is NOT strategy• „Herding“, clustering of companys around the most successful oneProcess• Strategy as incremental adaptation of last year‘s plan (no search for new opportunities,
differentiation, and new growth.• Planning being too formal and analytical• No creativity• The assumption of linearity of the processTools• Tools being too analytical• Focus on control• Tools were developed for a different purpose (analysis, planning and control)• Conventional tools provide a snapshot of conventional wisdom• „No battle plan survives contact with the enemy.“ General Collin Powell
It all started with criticism of strategic management.
© Marc Sniukas - Doujak Corporate Development
“Business model innovation matters and it is a top priority of CEOs.”
© Marc Sniukas - Doujak Corporate Development
„Innovation is front and center on the corporate agenda, according to a global survey. Executives are adding more breakthrough innovations and business model changes to their portfolio to fuel the growth engine.“
Business Week, November 16, 2009
© Marc Sniukas - Doujak Corporate Development
AGENDA
What is Strategic Innovation?
© Marc Sniukas - Doujak Corporate Development
• What is „strategic innovation“ to you?
• How do you define „business model innovation“?
• What about things like „Blue Ocean Strategy“, „disruptive innovation“,...?
Please discuss with your neighbours (groups of 3)
© Marc Sniukas - Doujak Corporate Development
10 minutes
AGENDA
What is Strategic Innovation?
© Marc Sniukas - Doujak Corporate Development
4 Types of Innovation
Internal
External
DiscontinuousContinuous
Management Innovation
Operational Innovation
Product & Service Innovation
Strategic Innovation
© Marc Sniukas - Doujak Corporate Development
Strategic Innovation is about growth
Growth
Organic growth
Within the boundaries of the current business
Same or increased market share in
growing markets
Increased market share in mature
markets
Strategic Innovation
Mergers & Acquisitions
© Doujak Corporate Development
„There„s no good just being better,
...you got to be different.“
Charles Handy
“Hey! They‟re lighting their arrows!Can they do that?”
© Marc Sniukas - Doujak Corporate Development
New Markets New Value New Business Models
Whois your customer? Which
customer segments do you serve?
Whatdo you offer your customers?Products, services, solutions,
experiences.What problem do you solve for
them?
Howdo you create your value proposition? How do you
reach the customer? How do you make money?
Market Innovation Value Innovation Business Model Innovation
Achieving growth and/or differentiation through...
© Marc Sniukas - Doujak Corporate Development
Superior Financial Performance
© Marc Sniukas - Doujak Corporate Development
It„s all about...
Inventing a New Business
Reinventing Your Business
Changing The Game
New Growth
Differentiation
Superior Financial
Performance
© Marc Sniukas - Doujak Corporate Development
Who is your
customer?
Which customer segments do you serve?
What is your value
proposition?
Value proposition from the customer‘s point of view.What problem do you solve for the customer?What is the job you help the customer getting done?
How are you
creating and delivering your offer?
How are you delivering your value to the customer? Which channels do you use? Fullfillment and support. Customer relationships.
How do you create your value proposition? What are your strategic assets, core competencies, key activities and processes? Who are your main suppliers, partners, alliances?
Please describe your business by answering these 3 questions.
© Marc Sniukas - Doujak Corporate Development
10 minutes
© Marc Sniukas - Doujak Corporate Development
ContextConditions Surrounding Strategic Innovation Activities
The Dimensions
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Organizational PurposeInput to Strategic
Innovation Activities
ContentResult ofStrategic
Innovation Activities
ProcessFlow of Strategic Innovation Activities
Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
Walking Gallery
© Marc Sniukas - Doujak Corporate Development
Until 11:00
„…the real barrier to strategic innovation is more than denial – it„s a matrix of deeply held beliefs about inherent superiority of a business model; beliefs that have been valitated by millions of customers; beliefs that have been enshrined in physical infrastructure and operating handbooks; beliefs that have hardened into religious convictions; beliefs that are held so strongly, that nonconforming ideas seldom get considered, and when they do, rarely get more than grudging support.“
Gary Hamel, The Future of Management
„The organizational designs that support innovation are very different from those that support delivery of current performance.“
John Roberts, Professor
Stanford Graduate School of Business
© Marc Sniukas
ContextCharacteristics of
Strategic Innovators
Leadership
Structure
Culture
Systems
People
Processes
• Questioning attitude
• Rewards success and failure, punishes inaction
• Tolerates mistakes
• Slack is welcomed
• Supports risk taking and change
• Supports teamwork and collaboration
• Set the context
• Guide the process in a participative and fair way
• Clearly communicate reasons, and expectations
• Educate employees
• Shield creative teams from distractions and pressure
• Appreciate distinctiveness in people and their thinking
• Welcome change
• Ask itself what it does to promote or inhibit innovation and how to get rid of these obstacles.
• Fast and flat
• Small units
• Encourages collaboration
• Autonomous teams at the front line
• Fast and unbureaucratic
• Decentralized decision making
• Support idea generation, experimentation and execution
• Variety (internal and external)
• Collaboration
• Educated in regard to the strategy and skills needed
• Support the process of strategic innovation
• Enable collaboration
• Enable the use and creation of knowledge
• Reward risk taking and action
• Used to create relationships with customers
• Metrics & rewards support innovation
AssetsCapabilities
Needs Existing
Suppliers
Customers1st Tier
Within the industry
Trends
Competitors
StrategicGroups
Non-Customers2nd Tier
Outside Industry Boundaries
OtherCountries
OtherIndustries
Non-Customers3rd Tier
OtherRegions
Trends
OtherTypes ofOrganizations
© Marc Sniukas
Value Innovation
© Marc Sniukas
Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
The Six Stages of the Buyer Experience Cycle
Purchase Delivery Use Supplements Maintenance Disposal
The
Six
Uti
lity
Leve
rs
Customer Productivity: In which stage are the biggest blocks to customer productivity?
Simplicity: In which stage are the biggest blocks to simplicity?
Convenience: In which stage are the biggest blocks to convenience?
Risk: In which stage are the biggest blocks reducing risk?
Fun and image: In which stage are the biggest blocks fun and image?
Environmental friendliness:In which stage are the biggest blocks to environmental friendliness?
The Strategic Innovation Profile
© Marc Sniukas
1
2
3
4
5Assets
Customers
Profitability
Satisfaction
Segmentation
Buyer
Circumstances
Total SolutionAppeal
Function
Features
Customer Interface
Revenue Streams
Cost
Activity System
Company 1 Company 2 Company 3 Company 4
existing noncustomers (2nd and 3rd tier)
most profitable less profitable
most satisfied less satisfied (1st tier)
specific buyer chain of buyers
focus on differences focus on commonalities
focus on finer segmentation focus on de-segmentation
focus on attributes(of customers and products)
focus on circumstances(needs and the job done)
Market Innovation
© Marc Sniukas
conventional customer interface (co-creating) experienceseasy to do business with
conventional pricing(either to cover cost or benchmarked against
competitors)
strategic pricing of the masses(benchmarked against substitutes and alternative industries)
cost-plus thinking price-minus thinking; target costs
integrate activities network (with customers, suppliers, partners, alliances)
low fit of activities(internally and externally)
high fit of activities(internally and externally)
Business Model Innovation
© Marc Sniukas
focus on existing assets start anew, or use existing assets in a new way
single product or service total solution, bundling
functional appeal emotional appeal and experiences
focus on product focus on function fulfilled and the job-to-be-done
build new features raise, reduced, create, eliminate selectively
Value Innovation
© Marc Sniukas
The Empathy Map
© Marc Sniukas
© Alex Osterwalder
What does heSEE?
EnvironmentOthers
What does the market offer?
...
What does heDO?
BehaviorsAttitudes
Appearance...
What does heHEAR?
What others sayInfluencersCompanies
...
What does heTHINK and FEEL?
Fears, worries, aspirations, wants,
needs, frustrations,....
The Strategy Canvas
© Marc Sniukas
Price Meals Lounges Seating Class Choice
Hub Connectivity Friendly Service Frequent Point to Point Departures
Low Cost Airline Average Airline Car Transport
low
high
Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
#1 Challenge industry assumptions
VALUE INNOVATION#2 Offer complementary products and services
#3 Offer solutions and experiences
#4 Offer bundles
#5 Switch your appeal: functional versus emotional
#6 Focus on the job to be done
#7 Selectively eliminate, reduce, raise and create
#8 Look at subsitutes
#9 Expand the use of your assets and capabilities
#10 Look at the customer experience
BUSINESS MODEL INNOVATION#18 Reinvent the customer interface (channels)
#19 Reinvent your customer relationships
#20 Invent new revenue streams
#21 Price differently
#22 Reinvent you cost base
#23 Re-assess your key activities
#24 Collaborate with suppliers, partners, the network and ecosystem
#25 Look at completely different industries
MARKET INNOVATION#11 Target non-customers
#12 Target less profitable customers
#13 Target the least satisfied customers
#14 Target the chain of buyers
#15 Segment according to commonalities
#16 Segment according to circumstances
#17 Desegment the customer based
© Marc Sniukas
A Discovery-Driven Approach
© Marc Sniukas
Setting the Stage
• Bringing successful ideas to market
• Financial impact
• Incubation
• Acceleration
• Transition
• Define the purpose, scope and focus of innovation activities
• Mobilize the organization
• Align business and innovation strategies
• Build leadership alignment & commitment
• Build a common language and understanding
• Innovation audit – Assessing need and capabilities
• Definition of goverance structures and processes
• Definition of metrics
• Develop and select ideas
• Develop an idea portfolio
• Idea Generation (In-house, cross-units, external)
• Idea Evaluation
• Idea Selection
• Strategic decision making
• Turn ideas into market ready concepts
• Road-test the idea portfolio with key stakeholders, consumers, internal and external
• Prototyping, Technical feasibility
• Experimentation & learning
• Customer & stakeholder feedback
• Business planning, venturing, secure founding
• Decide of organizational and governance structures
• Evolution & optimization
• Identifying internal and external opportunities
• Sensing, seeking and shaping opportunitiesDescribe the current business model
• Explore and understand consumer and customer needs, motivations, behaviors
• Understand emerging markets, industry and socio-ecological trends
Formal
Informal
RevolutionaryEvolutionary
Inside
Outside
NewCo
CoreCo
Focused
Holistic
Open
Closed
The Innovation Wheel
Innovation tensions
© Marc Sniukas
• Download the poster for free at http://www.businessmodelalchemist.com/tools
© Marc Sniukas - Doujak Corporate Development
Who is your
customer?
What is your value
proposition?
How are you
creating and delivering your offer?
Any new ideas?
© Marc Sniukas - Doujak Corporate Development
• What was new to me?
• What I found most interesting / irritating?
• How could I get started in my organisation?
Please discuss in small groups of 4-5 people
© Marc Sniukas - Doujak Corporate Development
20 minutes
Any Questions?
Meet with your (management) team
• Goal = Setting the stage
• Answer these questions:
- Does your organization understand the need for innovation/change/transformation/renewal?
- Is your organization committed to innovation/change/transformation/renewal?
- Does it have the right capabilities for innovation/change/transformation/renewal?
• Agree on a common view
• Map out the current business model & value proposition
- Downloads: „Reinventing your Business Discussion Guide“ and „Business Model Handbook“.
• Define the purpose of your innovation activities, align business and innovation strategies
• Agree on how to proceed
- Define governance structures, processes and metrics
A leadership agenda
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
© Marc Sniukas - Doujak Corporate Development
www.nin.com
© Marc Sniukas - Doujak Corporate Development
Want more?
www.doujak.eu
www.sniukas.com
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• Dynamic Capabilities (i.e. activities, processes and routines) leading to Business Model Innovation.
• Managerial capabilities for creating, developing and leading these capabilities.
Would you like to participate?
© Marc Sniukas - Doujak Corporate Development
Contact Details
Marc Sniukas
Doujak Corporate DevelopmentLainzer Strasse 80
A-1130 Vienna
Mobile: +43 699 122 [email protected]
© Marc Sniukas - Doujak Corporate Development
“The difficulty lies not in the new ideas,...
…but in escaping from the old ones.”
John Maynard Keynes
© Marc Sniukas - Doujak Corporate Development
• 20.05.2010 Strategy ImplementationHow to engage the Organization.
• 06.07.2010 The Living OrganizationSystems Thinking and Management.
Looking forward to seeing you again...
© Marc Sniukas - Doujak Corporate Development
• Download: Reshaping Strategyhttp://www.sniukas.com/2009/11/reshaping-strategy/
• Download: Discussion Guidehttp://www.sniukas.com/2010/03/discussion-guide-challenging-your-strategy/
• A list with books on amazon.dehttp://www.amazon.de/Innovation-for-paperJam/lm/R3R3Z352PL1O8A/
• Videos on New World of Work, Motivation and Creativityhttp://video.ted.com/talks/podcast/DanielPink_2009G.mp4http://www.ted.com/talks/lang/eng/ken_robinson_says_schools_kill_creativity.html
Further references
© Marc Sniukas - Doujak Corporate Development
Looking forward to seeing you again...
Lainzer Strasse 80A-1130 Vienna
Austria
Tel: +43.1.306 33 66Fax: +43.1.306 33 66 9