Evaluating Your Innovation

Practice Using Future ScenariosA WEBINAR BY INNOVATION 360

PRESENTER: KAMAL HASSAN

Why Innovate?

Yesterday: Innovation strengthened competitive advantage,

impacted strategy, and stimulated growth.

Today: Innovation defines competitive advantage, drives

strategy, and is a fundamental prerequisite for growth.

Tomorrow: Innovation will be the ONLY practical source of

competitive advantage, will dictate strategy, and will

determine whether an organization will grow or die.

Some definitions

A Trend:

The direction is which a relevant condition, output, process

or general tendency is emerging or changing. This could

be markets, behaviors, technologies or capabilities

A Scenario:

A scenario is a STORY that describes a possible future.

Scenarios are based on emerging trends, their relevance

and impact

Characteristics of Each Scenario

It should result from a mixture of different perspectives

It reflects both qualitative and quantitative aspects of a trend or

group of trends

They are different from forecasts as they do not require 100%

agreement from everyone but should be conceivable based on

trends analyses

Trends framework and grouping

All Trends

Drivers

Mega Forces

Changing Stakeholder

Needs

Solutions

Emerging Substitutes

Emerging Capabilities

Economic, Political, Social, Cultural

Customer Influencers and expectations,

Channels to customer, Supplier and partner

needs

New Offerings

Technology, Skills, Competencies

Drivers and Solutions

Drivers

These are the concepts, challenges,

behaviors, technologies that are likely

to call for new set of metrics to solve

or are likely to affect the demand in

the near or far future

Solutions

These are the new and emerging

trends that are being developed to

tackle the challenges presented by

the drivers

Drivers

• Mega forces: In the next 10 years, global political, social and economic issues will affect the financial services sector and importantly, retail banking.

• Changing stakeholder needs: Customers are demanding a different kind of experience from banks. Shareholders and other interested parties are becoming increasingly uncertain about the future of their assets

Solutions

• Changing Capabilities: Example: The dynamic growth of technology in banking is affecting the nature of retail banking channels and the corresponding skills needed to effectively deploy banking services

• Substitutes: Disruptive innovations are creating new alternatives to banking. Most of these alternatives are simpler, faster or cheaper to use.

Grouping: Drivers and Solutions

Impact

Ce

rta

inty

High

High

Timeline

Already Happening

Near Future FarFuture

Imp

ac

t-C

ert

ain

ty F

ac

tor

High

Developing the Scenarios

Trends are grouped as shown below

Drivers

Mega Forces

Changing Stakeholde

r Needs

Solutions

Emerging Substitutes

Emerging Capabilitie

s

TRENDS AND KEY QUESTIONS

• Trends span across both types and categories (Drivers and Solutions)

• Forming the scenarios require understanding how the trend will evolve (already happening. near future, far future)

• Asking Key Questions are necessary elements for forming each of the Scenarios [judging by these trends, what will a typical consumer expect?]

• By combining similar and different trends, illustrative answers to the key questions are generated which are necessary for formulating the Scenarios.

Scenario Testing Factors

Occurrence Factor

Differentiating Factor

Decision-Making Utility

Developing the Scenarios

We will take a brief look at a

retail banking as a case study

Trends and Scenarios built used here are not exhaustive as they are

only used to illustrate a methodology

Analytics get real time and mobility becomes priority

Demand for online banking is set to grow considerably over time

Consumers are seeking greater customization,

faster automated transactions

Alternative currencies will emerge the landscape

Customers will gravitate towards simplicity

There will be a growing dominance of the

generation Y consumer demographic

Transparent corporate governance and risk management

issues will be key focus areas

Impact

Ce

rta

inty

High

High

Timeline

Already Happening

Near Future FarFuture

Imp

ac

t-C

ert

ain

ty

Fa

cto

r

High

Banking Example

Key questions

Judging by these trends, what will a typical consumer expect? [ This

question tends towards changing stakeholder needs]

In which other ways would consumers bank? [This question tends

towards changing capabilities and emerging substitutes]

Scenario 1: Context Banking

Scenario Outline (Simplified)

The consumers’ ‘know-me’ expectation will be stronger. Banks will

therefore be embedded into the lives of the customers. customer

relations will be less transactional but will seek to “peep” into the lives

of the customers through inferences, recommend services or solutions.

Real time information will be available per time/or per transaction on

mobile devices and customers will demand further convenience.

Smartcards will be replaced by digital mobile devices. There will be a

near-extinction of physical bank branches. Examples of solutions at this

stage will be personalized budgeting and budget control, expense

control, expense analytics and tracking and probably also loan

recommendations based on income levels or automated advisory.

Scenario 2: Deregulated Banking

Scenario Outline (Simplified)

There will be an introduction of alternative currencies and platforms.

Money as we know it will change in definition and people will have the

power to trade in totally digitized currencies which may not have any

physical representation. Conventional trade and payments will be

made by these currencies beyond the reach of national governments

and regulatory institutions. Banks will stand the risk of losing their value

as this currency will be cheaper to trade in than the conventional

currencies. Tensions will be created between banks, governments and

the providers of this currency. Banks may need to reinvent themselves.

Scenario Quality

Scenario Occurrence

Factor

Differentiation

Factor

Decision-Making utility

Context Banking

Deregulated Banking

Occurrence Factor

Check if the scenario can conceivably happen

Differentiation Factor

Check if the scenario is not fundamentally the same with any other stated scenario

Decision-Making Utility

Check if the scenario can help the decision makers to make informed decisions

Scenarios can be used for…

Studying and analyzing the

implications of future events

to your organization

Assessing the effectiveness

of your current innovation

processes in tackling the

challenges of the futureInternal strategy: Innovation, Pricing, Market Entry, Suppliers etc.

Competitor Responses and Analysis

Challenges To The Industry

Consumer Responses and Analysis

Yo

ur

Bu

sin

ess

Current Innovation

Win

nin

g in

th

e

Fu

ture Optimum

Innovation

Strategy, Enablers, Leadership,

Execution

Strategy: The overall combination of plans, processes and activities that increases

the possibilities of achieving the desired innovation goal(s) at a specific period and

under specific conditions

Enablers: The tools and technology needed to the desired results stated in the

strategic plan

Leadership: The methods and frameworks needed to achieve and build the human

resources and talent that make the needed innovation culture possible

Execution: The process of implementing the needed strategic plan and all other

factors necessary to launch the new systems, products, operations or business

models

Scenarios

Every Scenario has its Optimum Strategy which dictates what the Enablers,

Leadership and Execution frameworks should be

Optimum: Describes the best, most suitable and most effective option for a given condition

Optimum Innovation

Strategy

Enablers

Leadership

Execution

Evaluating your current Innovation

Strategy

Your Current Innovation Strategy

Does your current innovation strategy ....

Encourage experimentation by having limited fixed-cost

infrastructure?

Business model is adaptable and poised to test for

assumptions?

Adaptable to an emergent strategy rather than fixed on

a deliberate strategy?

Learns and adapt rather that assume and insist

Hires and emphasizes skills that deal with handling

uncertainties and spotting signals

Current Innovation (along the 4

dimensions)

Optimum Innovation Strategy

(along the 4 dimensions)

Benchmarks you against practices

needed for winning, preventing

disruption and crossing sector boundaries

in a future scenario

Analyzes where you are currently

Current and Optimum(future)

Understanding the gaps

Encourage experimentation by having limited fixed-cost

infrastructure

Business model is adaptable and poised to test for assumptions

Adaptable to an emergent strategy rather than fixed on a deliberate strategy

Learns and adapt rather that assume and insist

Hires and emphasizes skills that deal with handling uncertainties and spotting market signals

Readiness and enablement of infrastructure for rapid experimenting

and prototyping

Business Model Adaptability to the elements of the scenario

Overall strategy can be adapted to an emergent strategy suitable for

competing in the scenario

Organization culture and processes

People learning and development

OPTIMUM INNOVATION STRATEGYYOUR CURRENT INNOVATION STRATEGY

??

??

??

??

??

GAPS

Examples of Optimum Innovation

Strategy options for Scenario:

Deregulated Banking

Innovation Governance system (function-based)

Creating an autonomous business unit to compete with potential entrants into digitized currency spaces

Allowing knowledge transfer from existing business to a new and autonomous(separate) business unit

Constant evaluation of ‘digital’ spaces to innovate in (adaptation)

Strategic Partnerships with regulators and governments

Strategic partnerships with digital e-payment platforms

Decisions on vertical integration vs modular service delivery: which of our products do we deliver by covering the whole value chain needed in delivering it and which ones can we outsource some of the units in the value chain? (remove unnecessary rigidity)

Make constant and incremental changes towards further digitized representations of conventional currencies

Q and A

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Who we are

Innovation 360 Institute works with companies and government entities throughout the world to bridge the gap between strategy and execution by employing transformational innovation methods and leadership development. Whether you want to implement a strategy for breakthrough innovation, develop new products and services, explore new business models, create operational value, or increase the innovation and leadership competencies of your people, we can help you reach your goals.

Our ValuesAt Innovation 360 Institute, we are committed to Innovation, the key to profitability and sustainability. This commitment Inspires our clients to new heights of creativity and excellence, giving them Insight to their organization’s true potential and capability.

We positively Impact our clients’ innovation success rate by helping them devise a results-oriented yet realistic innovation strategy, one that creates new value through innovative products and services. We also give their people the knowledge, skills and leadership abilities to execute this strategy, as well as to creatively solve complex business issues.

Throughout this process, Innovation 360 maintains our Integrity by exceeding our clients’ expectations and actively transferring our capability and knowledge.

How we help

Innovation 360 helps you develop a customized strategy for innovation, growth and transformation. We guide your organization through each stage of a carefully designed 5-Step framework, help you bring your ideas to market, and improve your innovation leadership competencies.

ForesightForesight is aimed at helping your organization assess the current state of your innovation portfolio, as well as your readiness for future scenarios. This comprehensive evaluation also covers relevant FUTURE SCENARIOS and their implication to your future success. We provide a comprehensive

recommendation based on this. To learn more: http://i360institute.com/foresight

IdeaFusionIdeaFusion helps you generate Ideas from a dedicated community either ad hoc or around a specific challenge. Using an updated approach to soliciting ideas, as well as proven ideation tools and methods, IdeaFusion enables collaborative creativity for empowering innovation in your

organization. To learn more: http://i360institute.com/ideafusion

InPulseInPulse, our benchmarking solution gives you the competitive edge to see and rank your company against your industry peers and very innovative global businesses. Be it in innovation, new product development, sales or marketing, it covers all major functional areas. Our solution includes pre- and post-visit workshops and onsite visits, providing you with an exclusive opportunity to learn from award-winning organizations.

To learn more: http://i360institute.com/inpulse

Our 5-Step Innovation Framework

Innovation Leadership WorkshopsWe help you build your organization’s human capital and innovation capabilities through our advanced, hands-on workshops and seminars including:• Innovation 101 Training• Innovation Management Training• Executive Innovation Seminars• Open Enrollment Workshops• Lego Serious Play® Methodology