building the innovation machine inside your...
TRANSCRIPT
Building the Innovation MachineInside Your OrganizationWhat, Why, How and Where to start
Mohammed Alomairy, MBA. PMP. CLSSBB. Sterling (Baldrige) Senior Examiner & Mentor Founder and principal consultant at Innowex
Twitter : @Malomairy
@malomairy , ASQIC15 1
Objectives• What is innovation?
– Innovation introduction– Innovation is not improvement– Innovation is not creativity– Innovation is not invention
• Why do you need to innovate?– External pressure is greater than ever
• How to be innovative?– Two layers of capabilities
• Where to start?– Excellence with Baldrige– Innovation with Lean startup
What
How
Where
Why
@malomairy , ASQIC15 2
What is Innovation
• 1934, J. Schumpeter “A phenomenon that includes the introduction of any of the following: – good– method of production– Opening market– A organization structure – source of supply for raw material
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New New
New
new new
What is Innovation
• “Innovation is the generation, acceptance and of new ideas, processes, products or
services” – (Thompson, 1965)
• “Innovation is the degree to which changes are intentionally that is new to the organization”
– (Mohr, 1969)
• “The generation, , and adaptation of novel ideas on the part of the firm”
– (F. Damanpour, 1991)@malomairy , ASQIC15 4
implementation
implemented
implementation
• Making meaningful change to products /services, processes or organizational effectiveness to create new “Baldrige”
• The successful conversion of new concepts and knowledge into new products, services, or processes that deliver new customer in the marketplace. ”ASQ”
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What is Innovation
value
value
Innovation
New - Implementation - Value
What is Innovation
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It is not improvement
• Improvement: making things better in terms of Speed, weight, look, efficiency, etc..
• Continuous improvement: Continue making things work better.
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Improvement-Innovation
New
Value
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Improvement-Innovation
$ Invest $ Sustain
Core Business
New Business Model
Continuous improvement
Disruptive Innovation
LeadershipStrategySystem
AlignmentCapabilities
@malomairy , ASQIC15 9
Improvement-Innovation
“The light bulb wasn’t invented by continuously improving the candle…”
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It’s not Invention• Invention convert a new idea into a workable
product/process
Invention = Creative Idea + executionInnovation = Invention + commercialization
• Invention requires technical knowledge in the domain• Innovation requires the rest of the skills
• Innovations add value• Inventions might not add value
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Invention not Innovation
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• Over 500K patent application filed in 2010
Invention Innovation
1800 1880invention innovationLight
Bulb
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• Innovation does not require invention.
• invention can contribute to innovation.
It’s not creativity
• Creativity is the process of coming up with novel ideas
• Creativity is the first step in innovation
Innovation = Idea X Execution X Commercialization
@malomairy , ASQIC15 14
Creativity - InnovationEx
ecut
ion
+ Co
mm
.
Frustration
Innovation
Creativity
Low
High
Low High
Lacking
Improvement
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Innovation Summary
• Creativity generates novel ideas
• Invention make them tangible
• Innovation make them valuable $$$
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Why to Innovate
• Empowered customers
• Globalization
• It’s easier to start a business
• Hundred of startup workshops & incubators
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Ave. lifespan of S&P 500
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S&P 500 churn
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Unicorn new membersSource: WSJ
US Europe
Asia Others
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How
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Missing Pieces!
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Building Capabilities
Vs.
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Building Capabilities
Excellence• Efficiency• Make things right• Sustainability• Build stamina• Stable short-term revenue• Predictable and quantifiable
Innovation• Effectiveness• Make the right things• Disruption• Build Agility• Promised long-term payoff• Uncertainty and Assumptions
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Startup vs. Established
Innovation
Excellence
Establish Organization
80 %
20 %
Innovation80%
20% Excellence
Startup
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Balancing capabilities
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Innovation
Excellence
Management must learn how to manage & balance these two contradictory forces
80 %
20 %
Disruption Stability
Where to start
Fit UnFit
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Excellence with Baldrige
Holistic Integrated management system@malomairy , ASQIC15 28
Full Alignment
29
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Building the Foundation
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Excellence80 %
15%
Excellence foundation
SustainingInnovation
Disruptive Innovation 5%
Continuous improvement
Innovation
Innovation in Baldrige
• Innovation: making meaningful change to products/services, processes or organizational effectiveness to create new value
• Intelligent Risk: opportunities for which potential gain outweighs potential harm or loss
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Innovation in the criteria
• Leadership: – Create an environment for innovation & intelligent
risk-taking and enable innovation. – Focus on action to achieve innovation
• Strategic Planning: – How do you incorporate innovation in your strategy,
how do you prioritize intelligent risks. What are your key strategic opportunity.
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Innovation in the criteria
• Measurement, Analysis & Knowledge Management: – How do you use performance findings to identify
opportunities/ priorities innovation. How to manage organizational knowledge for use in innovation
• Workforce Focus: – How does your workforce performance
management and learning systems reinforce intelligent risk-taking and innovation
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Innovation in the criteria
• Operations Focus: – Manage innovation, pursue the strategic
opportunities that you determine are intelligent risks, make the financial and other resources available to implement these opportunities, discontinue others to support higher-priority opportunities?
• Results: – What are your current levels and trends in key
measure such as innovation.
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Building the Foundation
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Excellence80 %
15%
Excellence foundation
Sustained Innovation
Disruptive Innovation 5%
Continuous improvement
Innovation
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.”
Aristotle@malomairy , ASQIC15 36
Disruptive innovation
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5%
Lean startup
Startup: A human institution designed to create something new under conditions of Extreme uncertainty
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Customer development“The vast majority of startups fail NOT because they could not build a great product or technology, but because no one wanted the product!”
— Steve Blank
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Lean startup thinking
• Every customer has a problem and every problem has a solution.
• But not every solution solves a problem that is related to a customer.
1 2 3Customer - Problem - Solution
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Business Model Canvas
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Alexander Osterwalder
Validation board
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Trevor Owens
Lean startup principles
1. Minimum viable product– Landing page + Video (Dropbox)– Concierge (one customer)– Wizard of Oz (Zappos)
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Lean startup principles
2. Pivots or persevere
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Lean startup principles
3. Early adopters
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Who’s doing Lean startup
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1 2 3
1 Begin using Lean startup
$50M in new product Revenue
1800 concurrent experiments
2
3
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General Electric
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Excellence Innovation
Embracing Lean startup
1. New thinking; Training2. Workshops for customer/problems discovery3. Small teams (2-3) 4. Dedicated & independent team5. Small funds6. Link to Organization (top management)
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Building the innovation machineinside your organization
Act like a startupThink like a fortune 500
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