managing strategic innovations

Managing Strategic Innovations

Dr. Pavan Soni

Innovation Evangelist and Founder

Inflexion Point Consulting

[email protected]

www.InflexionPoint.net

mailto:[email protected]

http://www.inflexionpoint.net/

About Dr. Pavan Soni• PhD from IIM Bangalore (Corporate Strategy & Policy)

• Former Innovation Evangelist at Wipro (6 years)

• Only Indian to be shortlisted for the Financial Times and McKinsey Business

Book of the Year Award- 2016

• Bachelor of Engineering- MBM Engineering College Jodhpur (Branch Topper)

and PGDIE- NITIE Mumbai

• Recipient of ‘On-the-Job Achiever Award’- Lakshya- CII Mumbai in 2007 for

the work on Innovation

• Associated with ASSOCHEM, CII, NASSCOM, Bangalore Chamber of

Industry and Commerce, and Karnataka Knowledge Commission

• Columnist at YourStory, and People Matters

• Speaker at TEDx BITS Goa, SIBM Pune and HewlettPackardBangalore

• Coach at NSRCEL of IIM Bangalore and Founder Institute

• Mentor at UpGrad, Institute of Product Leadership, NumberNagar, and Budli

• Advisory Board member at Utilis Capital

READING | WRITING | TEACHING | COACHING

www.PavanSoni.com

linkedin.com/in/pavansoni

facebook.com/drpavansoni

@Pavan_Soni

youtube.com/user/innov6

www.PavanSoni.com 2

http://www.pavansoni.com/

https://in.linkedin.com/in/pavansoni

https://www.facebook.com/pa1soni

https://twitter.com/Pavan_Soni

https://www.youtube.com/user/innov6

Session objective

• Vocabulary of Innovation

• Type of Innovations

• The Innovation Process

• Practices of the world’s most innovative companies

• Creating a Blue Ocean

• Tools and techniques of creativity

• From creativity to innovation

The innovation vocabulary

Invention ≠ Innovation

5

Most Innovative Firms- 2016

Highest R&D spent- 2016

Most patents granted-2016

VolkswagenSamsungAmazonGoogle

IntelMicrosoft

RocheNovartis

J&J Toyota

AppleGoogle

Tesla MotorsMicrosoftAmazonNetflix

SamsungToyota

FacebookIBM

IBMSamsung

CanonIntel

GoogleQualcomm

General ElectricMicrosoft

LG Electronics TSMC

10/10/2017 Pavan Soni | www.PavanSoni.com |

Source: BCG, Booz & Co., USPTO

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R&D doesn’t impact performance


Source: Strategy&

The vocabulary

10

Creativity Novelty Utility +=

Level of operation= Individual or Teams

Innovation New concept Commercialization +=

Level of operation= Organization

Inventors are not always innovators


Incumbent Missed innovation Innovator Real loss in incumbent's market cap

% drop in incumbent's market cap

Est. gain in innovator's market cap

Time period

Yahoo! PageRank search Google $27 billion 60% $98 billion 2005-2012

HP Touch-screen tablets

Apple $43 billion 47% $258 billion 2010-2012

Nokia Touch-screen smartphones


RIM Touch-screen smartphones


Sony LCD screens Samsung $6 billion 23% $144 billion 1996-2006


Source: BCG

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Innovation types

Types of innovations


Innovation Matrix


Measuring innovation

3M

• 35 percent of sales come from products introduced in the previous four years.

• The equivalent of two daily coffee breaks plus lunch time gave inventors “15 percent time” for their own projects.

Hewlett-Packard

• ‘Medal of Defiance’- in recognition of extraordinary contempt and defiance beyond the normal call of engineering duty


Nature of disruptive innovation


Disrupting the market

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Warry of disruptors


Towards minimalism


Three-horizon model of innovation @ GE


The process view of innovation

The process view of ‘Innovation’

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27

Every innovation starts with a discovery

Symptoms

Problems

"Try this. Don't you think a stereo cassette player that you can listen to while walking around is a good idea?“- Masaru Ibuka to Akio Morita (Sony)

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Sensemaking of what’s possible

Opportunity Capability

Innovation

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Then comes ideas…Quantity over quality

Ground rules of ideation:✓ Defer judgement✓ Encourage wild ideas✓ Build on the ideas of others✓ Stay focused on topic✓ One conversation at a time✓ Be visual

The Medici Effect

Tools and Techniques of Ideation

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Fail faster to succeed sooner Getting to a winning idea

31

Mindful diffusion Open Innovation

Discovery

• Empathy mapping

• Pain-Gain analysis

• Appreciative inquiry

• Day in Life scenario

• Buyer personas

Empathy Mapping


Pain Gain Analysis


Appreciative Inquiry

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Pavan Soni | www.PavanSoni.com | 36

Day in life scenarios

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Source: https://www.iprogrammer.com/how-a-mobile-wallet-can-be-used-a-full-day-example/

https://www.iprogrammer.com/how-a-mobile-wallet-can-be-used-a-full-day-example/

Buyer personas


Practice of world’s most innovative companies

Setting impossible goals


“Now it is time to build a car that isbetter than the best in the world.”- Eiji Toyoda, 1983

The birth of Lexus LS400

Impossible challenges ▪ Top speed of 155 mph▪ Fuel efficiency of over 22.5 mpg▪ A drag of .29▪ Noise level of 58 dB at 60 mph▪ A curb weight of 3800 pounds

Not to match, but to beat Mercedes and BMW!

The outcome ▪ 5 decibels quieter▪ 120 pounds lighter▪ 17 miles per hour faster▪ 4 more miles per gallon▪ $30,000 less than BMW 735i

6 years, 1400 designers, 3700 engineers, 900 engine prototypes, 450 test models

Creating a stretch

“Developing capital-intensive premium products through disruptively

innovative process engineering that could deliver affordable pricing and

make a difference to global healthcare.”

- Kiran Mazumdar-Shaw, Founder and CMD, Biocon Ltd.

1978- Enzymes (solid substrate fermentation)

1996- Statins using

fermentation

2007- Enters Biosimilars

Exits enzymes biz.

2003- Insulin (Pichia expression system)

2004- INSUGEN®(rh-insulin)2006- BIOMAb-EGFR™(Nimotuzumab), India’s first anti-cancer drug 2009- BASALOG®(Glargine)2013- ALZUMAb™(Itolizumab), a 'first in class' anti-CD6 monoclonal antibody

2014- CANMAb™ (Trastuzumab)


2006- Launches Biocon

Biopharmaceuticals

2009- Tie-up with Mylan for

Biosimilars

World-leading research on Oral Insulin

Sensing/ seizing opportunities


✓ Look for lose-bricks✓ Protect and Attack (capture market share, then improve

margins)✓ Pick-up distress assets and turn-around

1984- Distributors for AST, Toshiba,

IBM

1986- Chinese language

motherboard

2004- Acquires IBM PC (3x size)

2014- Acquires IBM x86 Servers

2014- Acquires Motorola Mobility

Retain 98% of IBM employees!

IBM PC CEO Steve Ward succeeded by

Bill Amelio from Dell

Born as Legend in 1984

State of perpetual crisis


“We want to beat Sony by 2005!”- Eric Kim, Head of Marketing,Samsung (2001)

“Change everything, except your wife andkids.”- Lee Kun-hee, Chairman, Samsung

Public burning of over 100,000 cordless phones at Samsung

Gumi factory on March 9, 1995

Paradoxes that drive Samsung:✓ Size and speed ✓ Diversified but specialized ✓ Japanese and American management styles combined

Innovation through✓ Bold investments ✓ Being the fast

follower✓ Co-opetition✓ Owner-led

transformation

Enabling improvisation


Systemic and systematic technology incubation

Operational Freedom + Financial Accountability

Centers of Excellence (1996)

Innovation Programmes (2000)

Technology diffusion to business (2008)

▪ Centre for Advanced Technologies (‘96)

▪ CoEs for competence building, locally funded (‘99)

▪ Practice framework (CoE to Practice of BU) (‘03)

▪ Point Solutions, headcount by CTO (‘03)

▪ Innovation Programme with Stage Gate, R&D focused (‘00)

▪ Quantum Innovation with business focus (‘05)

▪ Technology themes (‘07)▪ Applied Research Group

(‘08)▪ Wipro Ventures (‘14)

▪ Chief Technologists for BUs (‘08)

▪ Setting up US outpost (‘08)

▪ Idea campaigns and hackathons (‘12)

▪ Technovation Centre (‘12)

▪ Billable headcount at CTO Office (‘13)

Building learning systems


1993- R&D for productivity/ competence

1995- Technology Advancement Unit

1999- Software Engineering and Technology Labs

(SETLabs)

BANGS 2000, In2000, PorteNT, IntERPryz ,

2002-05- Creation of CoEs on Emerging Tech

Infosys Innovation Co-

Creation Platform

University Alliances

2006- Co-Creation with extant clients

2008-10- IP Commercialization

(Microsoft Catalytic)

2012- Client Innovation Labs (Live Labs)

Creating a Blue Ocean

Retro innovations


Maruti Suzuki maintaining leadership


Maruti Suzuki value chain


End to end customer engagement

Moment of Truth Analysis


Pre-purchase Purchase Usage Repurchase

Value for money

Risk reduction

Convenience

Amazon’s Innovations for India


• Seller Flex, allows a seller to make their location available for Amazon to store inventory

• BLINK Fashion Imaging studio for sellers

• Launching Lab126 in Mumbai

Exploring new market segments


Designing for the extremes


Extreme environments/ requirements

55

Making it intuitive


Making it big- Indigo


Differentiation on the margins


HDFC Bank and ICICI

Bank competing

with SBI


Mass adoption of AI/ Automation


✓ 200 business processes

✓ 60% reduction in

response time

✓ 100% increase in

accuracy

September 2016

Listening to customer intently – Social and OnChat


Tracks 15,000 mentions per day & over 4.5 mentions lac per monthEva has addressed over 2.7 million customer queries in the six months

August 2017 January 2017

Setting up Innovation Labs

Bangalore | June 2016

✓ First in the industry ✓ 3 months incubation with Zone Startups✓ Focus on block-chain, artificial intelligence,

mobility and cloud✓ Funding and incubation assistance

In August 2016, Kotak Bank starts Innovation Lab in

Bangalore

Indian OEMs bouncing back

Insights from making of Mahindra SUV500

Global vision/ ambition

Deep customer insight

Focus on customer experience

Analogy of a ‘cheetah’

Mantra of ‘power’

Young team, driven by ‘passion’

Challenging the design/ manufacturing philosophies

Impeccable precision


Securing the market share – Hero MotoCorp


Gearing up for the electric mobility revolution


Hero MotoCorp had invested Rs 205 crore in Ather Energy in October 2016.

Development at the Centre of Innovation and Technology (CIT) in Jaipur

Hero’s R&D facility (Mar’ 2016) –Jaipur


• 247-acres • A world-class test tracks

that are 16km long and have 45 different surfaces

• 500 automotive experts with global and regional expertise

• Splendor iSmart 110, the first product developed end-to-end at CIT

Broke away from Honda in 2011, after 26 years.

India’s largest hospitality company in terms of network presence and inventory. Started in 2012

✓ Refurbishing residential properties

✓ 95% demand through direct channels

✓ 250 point checklist for property to be listed

Key takeaways

• Creativity is not same as innovation or invention

• Innovation calls for commercialization

• Focus on breakthrough alongside incremental innovations

• Innovation calls for a leadership commitment and a conducive culture

• Innovation is a process

• Breakthrough calls for creating a Blue Ocean