The Science of Innovation (Facts, Systems, Best practices)

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  • The Science of Innovation (Facts, the need for systems and best practices)

  • Notes to Readers This is a presentation that was given June 30th in Brussels by

    @bryancassady In this presentation you will discover:

    Some facts on what is driving innovation success. Why you need to go step by step to build your innovation capacities How to interpret the results of our innovation readiness assessment. You can

    get your assessment at this link: http://tiny.cc/Slides_innov_ready 10 best practices to build a culture of Innovation

    We will present the results again in Brussels (http://tiny.cc/iscienceBXL) and Gent (http://tiny.cc/isciencegent )

    If youd like to arrange a personalize talk at your company, contact Rabia@fast-bridge.com

    http://tiny.cc/Slides_innov_readyhttp://tiny.cc/iscienceBXLhttp://tiny.cc/isciencegentmailto:Rabia@fast-bridge.com

  • Agenda Why study innovation Our Research Terminologies Key learnings from the research The need for systems Interpreting your results Best practices Q & A / Drinks

  • WHAT IS INNOVATION?

    CREATIVITY is about new ideas

    INNOVATION is the profitable

    implementation of these ideas

  • Why it is important In Fortune 500 companies New products account for 50% of revenues

    And 40% of profits

  • companies value innovation

    are classified as innovative by their

    peers

  • of their customers would agree

    of companies think they had a major innovation in the

    last 6 months.

  • of ideas fail when brought to the market

  • Why Study Innovation (Scientifically) Everyone seems to have an

    opinion about Innovation and there is an enormous amount of (conflicting) information

    A need for facts instead of opinions

    A need for fact based theories to guide action

    In Amazon there are 76.579 books on innovation !

  • How to be meaningfully unique with 17 thousands management consultants Belgium ? Companies are tired of paying for advice, but are willing to pay for business results. The Fast Bridge Solution A focus on new business development The right people. Senior people with different skills The right methods. Fact based, using the best from around the world Whenever possible, results based compensation

    About us

  • World class content from

    Working together with

  • Senior people with grey hair (no hair) with the tools, expertise and

    experience to make innovation happen

  • Our Core Interest ..

    Innovation is hard work, but startups are getting it right

    more often

  • Start-ups are about

    more successful with new business projects than established companies.

    Some experts estimate that over

    of success in innovation is based on systems.

    5x 80%

  • What should large companies change in their

    systems ?

  • Over 200 ! Articles/ Books Research has linked significantly higher levels of innovation and business performance to business philosophies, strategic alignment, business processes and organizational learning Lets check it out

    Innovation Performance

    Firm Performance

    Attitudes Processes

    Learning

    Strategic Alignment

    Theoretical Background

  • Our work so far

    42 one to one company interviews to validate questions and test questions found in over 200 academic articles

    A survey with 71 test companies testing initial questions and validating links to innovation performance.

    April 2015 we updated the full survey to better analyze disruptive and ongoing innovation success.

  • Now we are going to look facts, figures on innovation

    success

  • 3 definitions to start

    1. Sustaining innovations 2. Breakthrough innovations 3. InnoPreneurship:

    Bringing an Entrepreneurial Mindset to established companies

    Sustaining Keep competitive

    Breakthrough Create future

  • Setting up the research

  • Our research database : 3 types of variables

    1. Dependent Variables (Innovation / Business performance)

    2. Independent Variables (company characteristics)

    3. Covariates (company size, country, etc.)

    Independent Var. #1

    Dependent Variables

    Independent Var. # 2

    Covariates

    Company Characteristics Habits

    Market Company size Etc.

    Innovation Business Results

  • A simplified view of the data set

    1 Desire / Hunger2 Philosophies3 Autonomy4 Competitive5 Creativity6 Risk Taking7 Proactivity8 Structure Breakthrough Innovation Results Overall

    Strategy alignment 9 Strategy alignment Innovation Results Business10 People processes Results11 Organizational Design Sustaining12 Customer Focus Innovation 13 Co-creation14 Ecosystem Management15 Speed / Results focus16 Systems to select ideas17 Commitment to Learning18 Knowledge Sharing19 Open Minded

    Dependent Variables

    Learning Orientation

    Entreprenuerial Orientation

    Independent Variables

    Processes

    Attitudes

    Note: All the questions are in the appendix

  • W

    Rich Investments in stocks

    A simple example to show how we measured latent variables

    Attitudes towards saving

    Local alternatives How to measure

    Rich ?

    You cant really ask

  • W

    Rich Vacations Type Car Type House Jewelry

    Using questions to measure a latent variable (Rich)

    Reliability All measuring

    The same thing

    Yes, but Jewelry lowers reliability.

    Other latent factors

    Mea

    Measure: Cronbach alpha 0-1 (>.6 good, >.8 great)

  • W

    Rich Vacations Type Car Type House Jewelry

    Checking with other data Disposable Income

    Validity Measurement

    accurate ?

  • W

    Rich Vacations Type Car Type House

    Investments in stocks

    A final model

    Attitudes towards saving

    Local alternatives

  • Some sample questions

  • OVERALL INNOVATION Rate of growth Rate of new product/service introductions Success rate of product/service introductions Level of product differentiation in terms of unique

    selling points New product cycle time (i.e. inception to rollout) Ability to create new products/services with real

    consumer value Profitability of new product/service introductions Percentage of revenues from new products

    introduced in the last 2 years

  • We like to constantly challenge the way things are done.In my company, there is a sense of urgency regarding the importance of transformation driven by innovation.

    Our innovation projects have helped our organization develop new capabilities that we did not have three years ago.

    We have a burning desire to explore opportunities and to create new things.

    We have committed leaders who are willing to be innovation champions.

    In my company, change is regarded as an opportunity rather than a threat.

    We encourage new ideas even if they seem completely out of our comfort zone and company's scope.

    Our firm rarely introduces products that are radically different from existing products in the industry.

    Our firm lags behind others in introducing products based on radically new technologies.

    We have no difficulty introducing products that are radically different from the existing ones in the industry.

    Desire / Hunger

    Negatively scaled

  • A simplified view of the data set

    1 Desire / Hunger2 Philosophies3 Autonomy4 Competitive5 Creativity6 Risk Taking7 Proactivity8 Structure Breakthrough Innovation Results Overall

    Strategy alignment 9 Strategy alignment Innovation Results Business10 People processes Results11 Organizational Design Sustaining12 Customer Focus Innovation 13 Co-creation14 Ecosystem Management15 Speed / Results focus16 Systems to select ideas17 Commitment to Learning18 Knowledge Sharing19 Open Minded

    Dependent Variables

    Learning Orientation

    Entreprenuerial Orientation

    Independent Variables

    Processes

    Attitudes

    Note: All the questions are in the appendix

  • Validity: Scaled measures / Self

    declared measures had a .8 correlation

    Reliability: The reliability of all scales was greater than .80 most

    higher than .9 (typical cut-off values .6-.7)

    Checking the Data

    .8 38% >.8 Of business

    result variation explained by Innovation

  • Top-line correlation analysis Area

    Sustaining Innovation

    Breakthrough Innovation

    Overall Innovation

    Desire Hunger 0.45 0.48 0.49 Philosophies 0.41 0.45 0.52

    Autonomy (0.52) (0.37) (0.36)Competitive (0.37) (0.31) (0.40)Creative 0.33 0.58 0.54 Risktaking 0.26 0.61 0.58 Proactivity 0.53 0.59 0.59 Structure 0.49 0.45 0.44 All Entrep. Orientations 0.52 0.63 0.70

    Strategic