INDIVIDUAL FINAL REFLECTION
INTRODUCTION
Innovation has fashioned human society and everyday life in each age. Its energy is such that historians and archeologists these days define extensive periods of human history in terms of the improvements that have outstanding them: the Stone Age, the Bronze Age, the Iron Age, the economic Age, the Atomic Age, the digital Age, and so on. While every of these labels refer to a technology, innovation is plenty broader than generation. Indeed, the impact of innovation can be visible over the centuries in such numerous areas of human undertakings religion, social employer, structure, army tactics, medication, agriculture, and the arts.
SECTION A
This was my proud privilege to interview Mr. Ballard, a renowned Reporter and analyst who have a broad knowledge on various fields.
The summary of my interview with Mr. Ballard is as follows-
The Role of Innovation in Enterprise
Innovation is the marketplace values have long been recognized as a creator and sustainer of enterprise. Every time Intel’s engineers produce a new generation of computer chips that customer’s value, its fortunes are reed. Whenever a pharmaceutical company introduces a drug that restores the health of millions around the globe, it too gains a new lease on life. When a PC service firm thinks of a way to fix a customer’s computer software over the Internet, that company opens up a new channel for growth.
Product improvements in assembled products—iPods, industrial robots, solar strength–generating ar- rays—are the sort that most often come to mind. HoIver innovation is established in:
Era: The ultimate several waves of monetary increase had been inspired via technological improvements in unique fields: silicon- ductors (the computer revolution), biotechnology (based on new scientific information), the internet (the made of a government application), and telecommunications. Innovation in energy generation can be the subsequent huge wave.
Services: Services now constitute roughly half of the economy and are fertile ground for innovation. Individuals and pension funds, for example, have invested billions in a dazzlingly varied mutual fund industry that barely existed thirty years ago. That service industry oIs much of its success to financial concepts of portfolio management developed at leading schools of business and economics.
Processes: The low manufacturing costs of paints, chemicals, petroleum-based fuels, glass, and countless other non-assembled products and services are the result of continuous process innovation over many years. Assembled goods have likewise benefited from process innovations that have reduced assembly steps and labor costs and improved reliability.
Marketing and distribution: Viral marketing (a technique that uses existing social networks to increase brand awareness), overnight delivery service (FedEx is the notable pioneer), and direct distribution via the mail are all based on innovations in marketing and logistics.
- Business models: Apple’s approach to generating revenue from iTunes
Downloads of music files, films, and audiobooks rivals Dell’s innovative business model in the field of computers and peripherals. Likewise, Amazon’s e-book venture, Kindle, represents a new model for generating revenues from text content.
- Supply chains: Wal-Mart eclipsed its retail competitors by doing many things right. One of those things was the development of a superefficient supply chain that forged fast and efficient connections between the production facilities of key suppliers with the loading docks of Walmart stores. This Justin-time supply system assures that goods are on the shelf when people want them and eliminates costly stockroom inventories.
INSIGHTS
Frankly speaking I interviewed Mr. Ballard because he is an enthusiastic reporter and freelancer who expertise in almost every section and have good knowledge of present market scenario. He had written several articles for famous newspapers regarding innovational techniques.
I interviewed him in Person on 17-07-2017; luckily he accepted my proposal for this.
After interviewing him I clearly understood the concept that while innovation creates, it can also destroy. More than a half-century ago, economist Joseph Schumpeter described the economic, sociological, and organizational impacts of innovation and its “winds of creative destruction.” Those winds sIep away both old ways of doing things and the enterprises and institutions that cling to them. During the nineteenth century, innovations in mass production doomed local shoemakers, dressmakers, and many other artisans. I see that pattern repeated today as “superstores”—a retail innovation—devastate the ranks of small local hardware stores, independent electronic/appliance stores, and office-supply shops. Likewise, innovations in electronics, pharmaceuticals, and other fields—including services—continually undermine established products and services. Enterprises that fail to keep pace with these innovations are quickly sIpt from the field.
As I learn that Innovation is a Two-Faceted Process
Once an opportunity is recognized, other process steps follow. The innovative concept must be fleshed out in detail, problems must be solved, and a workable prototype must be developed and tested to the point where it can be evaluated by potential customers. Each of these steps must be enlightened by market/customer and technical understandings.
SECTION B
Reflection:
I have found these vital points to lay emphasis
Does the company have the technical know-how to make it work and the business competencies to make it successful?
Does the idea represent value for customers?
Does the idea fit within the framework of company strategy?
Does it make economic sense for the company?
Will this innovative project open the door to others or to new markets?
Ideas that produce affirmative answers to these questions and that obtain organizational support are moved further along the road toward market launch. Some make it to the end of that road; most do not. Commercial launch is the final test for innovative ideas. Here, customers make the final evaluation.
Creativity plays a role in the innovation process, though one that is difficult to measure. Creativity sparks the innovative idea and it helps to improve facets of the idea as it moves forward. Creativity is needed on both the technical and market sides of the process. It helps the technologist to see new ways of addressing known customer needs even as it helps customer-facing people find new ways of applying or adapting existing technologies to those needs.
The Challenge to Business Leaders
Unfortunately, top managers seldom play a creative role in the as innovation process. Most are too removed from day-to-day customer interactions to be the first to recognize an innovative market opportunity. And, excepting R&D executives, their technical skills may trail behind the cutting edge. Nevertheless, by virtue of their authority to make decisions and to allocate re- sources, senior leaders are duty-bound to participate in the innovation process. They must stay abreast of technological currents, market insights, and the ideas being debated by their subordinates. Equally important, they must create an organizational climate that encourages experimentation, accepts some level of failure, discourages complacency, and accommodates inventive people who for one reason or another don’t quite fit in. Doing all this while tending to day-to-day affairs of the enterprise may be the ultimate challenge of business leadership.
Early-stage innovations contain elements of risk and potential return. If you’re an investor, you probably understand these concepts already. Risk and return are bound together. If you invest in stocks, you probably know enough to diversify—that is, to create a balanced portfolio of many stock issues, some with high-risk/high return characteristics, and others with low-risk/low return characteristics. Leaders of large enterprises will wisely do the same with their innovation projects.
So many companies don’t have a front-end process because the steps and activities, as I said a moment ago, aren’t linear or stage-gated. Since these organizations are used to processes having very defined steps and tollgates and metrics, they either have a front-end process that is too systematic or they don’t have a process at all. Remember Iridium’s attempt to bring a satellite phone to market? With a $5 billion budget, the company gathered inputs from 200,000 potential customers in 42 countries, secured about 1,000 patents, and spent more than 10 years perfecting the system and product. About as fast as the product was launched, it failed, and the company into bankrupt. Anyone interested in this famous case study can find gobs of articles discussing what into wrong. Didn’t anticipate the build out of digital cellular networks. Target market of traveling executives was too small. Price way too high ($3,000 for handset and $3 to $8 per minute). Phones didn’t work in moving vehicles or inside buildings. And in the end, company executives Ire highly reluctant to bail on the business since so much was already invested. I can break it down in terms of our two-faceted innovation model.
Iridium focused all of its efforts on the right side of the innovation equation, on the exploitation aspects rather than the front-end aspects. In the words of Iridium’s Interim CEO John A. Richardson: “I’ve a classic MBA case in how not to introduce a product. First I created a marvelous technological achievement. Then I asked how to make money on it.” Iridium should have been asking far to the left, and making sound calculations, about the feasibility of making money on its grand vision.
If you don’t worry about how to make money on an innovation until you’re into full design and production mode—especially a big, complex, marvelous innovation—it could bankrupt your company (and for Iridium, it did). It’s better to spend focused time and effort on innovation’s front end where you can fail fast and cheap. So what about the opposite problem I said other companies have? What about an overemphasis on the creative front end of innovation to the exclusion of the more mechanical actions needed on the back end to exploit and commercialize? This happens, too, although less commonly, and it can also destroy value. In its past, Microsoft was rightly known for using the market as its testing ground. It developed and launched an operating system in accordance with a good grasp of customer Jobs to be done (Technique 1) and a focus on certain Outcome Expectations (Technique 3), like speed and reliability. But it didn’t perfect its designs before releasing them into the market. As a result, users had to endure frequent crashes of the operating system and several rounds of bug fixes. In this sense, Microsoft did a decent job with the front end but not so Ill with the back end.
Planning:
I discovered that the vast majority of the many innovations in the Dreamliner had already been ideated, developed, tested, and proven—either at Boeing or elsewhere which Advances in composite materials, Innovations in air quality, humidity, and cabin pressure systems, Low-noise engines. These are a few innovations that Boeing incorporated into its designs. So why has the company struggled so badly to meet its obligations to customers? All I have to do is look to the far right of our model. Most of the delays in delivering Dream liners have been due to manufacturing and assembly problems (due in large part to outsourcing issues)—not problems with the air- plane’s core technologies of innovation together for competitive advantage. Apple’s doing it. Under Armour has achieved great success. Nike’s done very Ill at bringing countless new products to market. (Its innovation production facility is the third largest footwear manufacturer in the world by volume.) You don’t have to look so far, like Fast Company’s 50 most innovative companies in the world, to find stories and examples of those that have properly managed the different cultures needed for achieving Greenfield innovation (the left) and success in the marketplace.
Simply stated, when moving through the phases of innovation’s front end, people and teams move from divergent thinking and action toward convergent thinking and action; I start by generating all kinds of ideas—sane, crazy, whatever—then use the techniques to hone in on the ideas that really do carry the promise of success. On the other side, I generally move from convergent to divergent thinking and action; I bring our feasible solution to market, and then keep improving it, expanding it, creating more options and customers (think iPod, followed by all the new features upon new releases, and any associated products like iTunes and iPad). But within any phase of any part of the model, innovators both diverge and converge, and it’s vitally important to keep this discipline.
While our innovation model is presented and generally followedd in a progressive manner, Ill over half of the techniques in this book have many lives; they are robust in nature and can be applied by smart innovators, optimizers, waste reducers, and facilitators at any point in the larger innovation process—from the very left to the extreme right of the model. They are really, in the end, simply problem-solving tools.
For context I should mention that it entails creating the proper organizational climate and culture for innovation, and directing the organization toward its Ill-intentioned vision. This entails harnessing human talent, implementing and managing innovation projects, installing an infrastructure for rapid and successful innovation deployment, and otherwise governing and leading the charge for tomorrow.
Other examples of process innovation include Wal-Mart’s everyday low prices, which is really a conglomeration of behind-the-scenes business process innovations, as is Amazon’s Buy now with 1-click feature. At the same time, such process innovations provide great value to businesses in the form of higher productivity, lower lead times, improved employee morale, and increased profitability. An example of a business-model innovation is when Dell began selling computers directly to customers (innovating the distribution channels), avoiding the retail link in the chain. With minimal inventories to manage (core process innovation), cash up-front from customers, and delayed payment terms to suppliers, Dell redefined working capital management (revenue stream and cost structure innovation). In addition, Dell enabled customers to customize their solution and receive the computer within a few days (customer experience innovation). eBay also changed the business-model landscape when it enabled buyers and sellers to come together outside the inefficient confines of former person-to- per-son venues. As Dell did, eBay changed the rules of an industry (buying and selling used goods) by implementing a host of innovations from among the list of what constitutes a business model innovation at large. Companies can rewrite the rules of their industry by innovating around many of these 11 components: customer segment, customer experience, distribution channels, brand strategy, revenue streams, core offering, complementary offering, core processes and resources, enabling processes and resources, value creation partners, and cost structure. I can take a more recent example of business model innovation from high-end, poIr-toolmaker Hilti Group, based in the very small country of Liechtenstein in central Europe, According to a Harvard Business Review article.
Section C
Exhibit I.1 shows what the innovation process should look like in any company or organization. But I create a misnomer when I say process, singular— because the key to successful innovation is that it is really two separate processes, not one. This is where most companies fall down: They either focus on the left (front-end innovation) or the right (back-end exploitation), but not on both.
Exhibit I.1 A Tale of Two Cultures.
The left side, front-end innovation, is a fluid, playful, nonlinear pursuit of new products, processes, and business models—new solutions as I call them throughout this book. The right side, back-end exploitation, is more of a stage-gated, linear, systematic approach for commercializing new designs that have already been proven viable by the activities on the left. If you mix the left with the right, confuse one for the other, have a process for innovation but not exploitation, or have the same people dominating both sides—failure will be your friend. I mentioned Under Armor, but I didn’t mention the innovation lab it established in 2011. Adjacent to its headquarters building in Baltimore, the lab exists to “build the world’s best product with no restrictions,” according to what the company’s senior vice president of sports marketing Kevin Haley told the Baltimore Business Journal (“Under Armor Debuts ‘Innovation Lab’ at Tide Point,” February 15, 2011).
This is one of the keys to innovation’s front end: If you’re going to fail, fail fast and fail cheap (before what you’re doing becomes a financial disaster). But you can only do this if you have the proper culture, people, mind-set, and tools. And you’ll only do this if you have the right organization in place and a team of innovators who march to a different beat than their operational counterparts.
If you don’t worry about how to make money on an innovation until you’re into full design and production mode—especially a big, complex, marvelous innovation—it could bankrupt your company (and for Iridium, it did). It’s better to spend focused time and effort on innovation’s front end where you can fail fast and cheap.
Innovation’s Front Edge—the D⁴ Model
Many articles, books, and texts have been written—and many consultants can tell you—about how to engage in design excellence. This is where, for example, Design for Lean Six Sigma fits into overall business excellence—the right side of the model (develops, commercialize, and improve new solutions). Lean Six Sigma also obviously fits into this part of the model, as solutions are brought to market and improved over time.
After this, when I want to narrow our set of innovation problems down to a finite few, I look to Value Quotient (Technique 4), Project Charter (Technique 12), and others to help with such convergence. Some techniques in this part can be used to either help when in divergence or convergence mode— like Job Mapping (Technique 2), and Outcome Expectations (Technique 3). In the Discover the Ideas phase (Part II), the task is to first divergently explore as many ideas for solving the innovation problem as possible—using HIT Matrix (Technique 18), Concept Tree (Technique 22), and other techniques. Some techniques can push the innovator to new creative heights within the paradigm of the business, industry, and current solution—like Brain writing 6-3-5 (Technique 20); others, like Forced Association (Technique 25) and Structured Abstraction (Technique 26), force the innovator outside the current paradigm into unknown industries and realms. Then, after this, the objective is to narrow down the many options/ideas to the one(s) that are the most attractive in terms of their predicted feasibility. Will customers buy? Is the new product cheap enough to make? Does the new solution forcefully fill a large outcome expectation gap? See Value Quotient (Technique 4), KJ method (Technique 30), Six Thinking Modes (Technique 32), and Paired Comparison (Technique 39) to achieve this narrowing job. During the Develop the Design (Part III) phase, I take our core idea and ask ourselves how I can build the solution by focusing on the key functions the design must perform. By this, I don’t mean to place emphasis on building it for reliability, usability, maintainability, and other such functional requirements that come into play on the right side of the innovation model—although I do keep these dimensions somewhat in mind as I develop design ideas. For example, an innovator in the food industry might ask how to conveniently heat a beverage, soup, or a meal. There would be many ways to explore multiple design concepts using Axiomatic Design (Technique 34), Function Structure (Technique 35), TILMAG (Technique 37), and other techniques.
In our example, the innovator might converge on a design idea for creating self-heating packages or containers: compress a designated spot on the container to cause an internal exothermic reaction that heats the food. Last on the front-end frontier is to demonstrate the Innovation (Part IV) of the final planned design, which is also achieved by both diverging and converging. This is the stage at which the innovator’s assumption-to-knowledge ratio should dramatically improve (meaning more knowledge, fair assumptions) — enabling the innovator to better predicts market success or failure. To do this, I use Innovation Financial Management (Technique 13), Proto-typing (Technique 48), Piloting (Technique 49), Conjoint Analysis (Technique 54), and other techniques used in a way that explores different ways of testing, making, delivering, or otherwise commercializing the new solution design. Then other techniques are used to converge on the final design that is carried forward into the innovation portfolio—such as Process Behavior Charts (Technique 55), Cause & Effect Diagram (Technique 56), and Control Plan (Technique 58). Having laid out the land in this manner, I, of course, recognize that many of the techniques in the Develop and Demonstrate phases of D⁴ are also heavily used when further developing, commercializing, and improving innovative solutions (exploiting solutions on the back end). Lean Six Sigma and operational excellence practitioners even use, at times, various front-end techniques from the Define and Discover phases as they engage in back-end activities. While our innovation model is presented and generally followed in a progressive manner, Ill over half of the techniques in this book have many lives; they are robust in nature and can be applied by smart innovators, optimizers, waste reducers, and facilitators at any point in the larger innovation process—from the very left to the extreme right of the model. They are really, in the end, simply problem-solving tools.
A Balanced Innovation Portfolio
A robust portfolio of innovation projects should be balanced along the lines of product, process, and business model innovations—as Ill as innovations that are incremental, substantial, or radical in nature. I use the term process innovation to mean either noncustomer facing processes or customer facing processes, the former of which many call internal processes and latter of which many call services.
Balanced Innovation Portfolio
Examples of product innovation include Sanyo’s introduction of washing machines that don’t use detergent, Apple’s iPhone, and Procter & Gamble’s White strips. Customer-facing process (or service) examples are progressive Insurance’s on-site claim adjustments, self-service check-ins at hotels.
A rounded innovation project portfolio should also be distributed according to degree of import (incremental, substantial, and radical). Obviously, the magnitude of investment, risk, and potential impact on profit increases as you move up the chain from incremental to radical innovation. Some examples of incremental innovation include improving the check-in process at a hotel or airline, or implementing an employee idea-solicitation pro- gram. A substantial innovation might be replacing an electric toothbrush with one that adds sound waves, or allowing consumers to purchase their own plane tickets online. You still need to brush your teeth and get a plane ticket, but the means by which you do so materially changes. Of course, radical innovations generate tremendous value for customers and for the business. The discovery of antibiotics, the printing press, gunpowder, airplanes, portable computers, and the World Wide Web are all examples of radical innovation. Less magnanimous, we could pigeonhole such innovations as handheld mobile television, self-cleaning clothes, and 3D printers as at least.
Class 1—The problem and the solution space are both well-defined, and this dictates mostly exploitation activities within the current paradigm. Defects on a production line are a good example of Class-1 problems, which are usually solved with such process-improvement methods as PDCA (Plan- Do-Check-Act), Six Sigma, Lean, and the like. See mostly the Develop and Demonstrate techniques to solve Class-1 problems.
Class 2—The problem is well-defined but the solution pathway is not so clear or directly discoverable. Therefore, the task is to explore new ideas and realms, searching for better solutions, while also exploiting known knowledge when necessary. For example, the job of illuminating a room in the dark was once accomplished with a candle, but candles have drawbacks, like dripping wax. Some important customer expectations were not met very well by candles, so this opened the door for better solutions. When your customers tell you they are largely satisfied with your product or service, you have a Class-1 problem: Just optimize. If, on the other hand, customers tell you they are unsatisfied with your product or service, you have a Class-2 problem: Discover or invent a better solution that closes the dissatisfaction gap.
Class 3—Class-3 problems are the reverse of Class-2 problems: The solution is clear but the problem is fuzzy. Class-3 problems are intriguing because they force you to consider new applications for existing technologies. For instance, engineer Richard James was working with tension springs in 1943 to develop a meter for monitoring horsepower on naval battleships. One of his springs fell to the ground and offered him a new idea about a different job to be done in a different market. Thus, the Slinky was born. Sometimes, your existing solutions can be put to a different use, thereby solving a problem and opening a new market. In effect, Class-3 problems re- quire you to turn your ideation efforts upward—beyond where your solutions reside into the realm of higher human needs—asking what jobs your solutions could do that they don’t do today? Class-2 and -3 problems are by far the ripest classes on which to focus organic growth efforts, and all 58 techniques in this book were chosen because they primarily solve these types of organic growth problems.
Class 4—these problems are undefined, and their solutions are undefined, as well. There is no particular mandate to solve any problem, and the objective is to simply explore, as both the problem and the solution reside in unknown territory. Medical researchers, for instance, are always looking for new molecules—just for the sake of finding them. Once they’re found, they can always be studied, manipulated, and exploited. Solving Class-4 problems is what you do when you don’t know what you’re doing—basic research, where discoveries are made but the path to commercialization is unclear.