the innovation process stem workshop february 4 , 2012 utep.edu/creie

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The Innovation ProcessSTEM WorkshopFebruary 4, 2012UTEP.EDU/CREIE

Gary Williams – Director [GEWILLIAMS@UTEP.EDU; (915) 920-0890]Jeni Clark – Associate Director [JECLARK2@UTEP.EDU; (915) 747-8454]

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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 always ask 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

Innovation Phase—What do you do with the idea?1. Market Research—single biggest reason new products fail is

lack of sufficient understanding of the market.2. Market needs have to be recognized. In a study of 567

successful product innovations, most were market-pull projects; only 21% were technology push.

3. When a technological success does not meet a specific market need, the product should be adapted to suit an identified need.

4. Proof-of-concept should be done as early as possible.

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The Innovation Process

Innovation Phase—What do you do with the idea?

5. Protect the Intellectual Property (IP) a. Invention disclosure b. Provisional patent—for one year c. Non-provisional patent

6. 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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What is Intellectual Property?

A Physical Embodiment of an Idea• Research data• Compounds• Materials (biological, chemical)• Publications• Presentations

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What is Patentable?

• New and useful processes• Machines• New and useful products (objects made by

humans or machines)• New compositions of matter• Any New or Useful Improvement to any of

the above

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What is Patentable (cont’d)?

Patentability Test• Novelty - Clear and complete explanation of

the manner and process of making and using the invention

• Utility – Advantages and Purpose• Non-obviousness – Patent Search

Is it unexpected and desirable?

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Public Disclosure

Public Disclosure is:• Presenting at a Professional Meeting• Presenting to a Class• Publication in Journal, magazine, etc.• Discussions with a non-UTEP “employee”

The Law:• The US and Canada allow one year from the date of public

disclosure to file a patent.• Lose the right to file in foreign countries with public disclosure.• Disclosure will compromise your invention and lose marketability

without foreign patent rights.

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Protection of Patentable Ideas

• Make sure that a non-disclosure agreement (NDA) is executed or a patent is filed PRIOR to public disclosure.

• With an NDA in place, mark all related documents CONFIDENTIAL.

• Safeguard and limit access to all confidential documents.

• When transferring (biological, chemical) materials to a third party, make sure that a material transfer agreement is executed.

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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 ProcessSustaining Innovations--Incremental

Improvements1. Likely offer only modest improvements2. Have a low risk of failure3. Can be quickly copied and commoditized.4. Can be evaluated with conventional financial tools.5. Create growth in revenue without destroying

potential of incumbent offerings.6. Most likely would generate predicable volumes and

profits.

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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 Innovations1. May require new technologies or core

competencies2. May require completely different sales channels3. May compete with and cannibalize existing

offerings.4. Will have unpredictable sales volumes and profits

(at least at first).5. Cannot be evaluated by conventional financial tools

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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%

% Companies Who Succeeded

Prob

abili

ty o

f Pro

duct

Suc

cess

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+12% Market share

+34% Market share

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Fast Cycle Time Principles

What is Fast Cycle Time?

Answer: 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, 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 ProcessSTEM WorkshopFebruary 4, 2012

Gary Williams – DirectorJeni Clark – Associate Director