innovation leadership through business design

BUSINESS INNOVATION BY DESIGN BID - SKETCHIN1

INNOVATION LEADERSHIP THROUGH BUSINESS DESIGN

JEFFREY TJENDRA

Design Executive Officer (DEO)



VUCA


VUCA

VOLATILITY

COMPLEXITY

UNCERTAINTYAMBIGUITY


CHANGING SOCIAL VALUES


TECHNOLOGYDISRUPTION


HYPER-COMPETITIVE

ECONOMY


DEGRADINGENVIRONMENT


POLITICALROADBLOCKS




HYPER-COMPETITIVE

ECONOMY


POLITICALROADBLOCKS

WICKED PROBLEMS




HYPER-COMPETITIVE

ECONOMY


POLITICALROADBLOCKS

CLARITY TO NAVIGATE CHANGE


DESIGN


NOUN VERB





DESIGNERS BUSINESSPEOPLE

Create Choices Make ChoicesEvaluate Choices

ABDUCTIVE INDUCTIVE DEDUCTIVE

CONVERGENTDIVERGENT


DESIGNERS BUSINESSPEOPLE

MYSTERY HEURISTIC ALGORITHM

Understand Synthesize Systemize


BUSINESS THINKING

DESIGN THINKING

FUTURES THINKING



INNOVATION IS SOMETHING NEW AND DIFFERENT THAT CREATES IMPACT.



OLD SAME STATUS QUO



OLD SAME STATUS QUO


COMPETITIVE ADVANTAGE IS FALSELY BELIEVED TO BE SUSTAINABLE.

Film Camera

DigitalCamera


COMPETITIVE ADVANTAGE IS TRANSIENT.

DigitalCamera

Film Camera

Smartphone


BUSINESS MODEL CAN BE SUSTAINABLE WITHIN A TRANSIENT COMPETITIVE ADVANTAGE.


Businesses that compete with similar competitive advantage compete through pricing causing products and services to be commoditized.


There will be only one low-cost winner in every commoditized market.


The rest of them can only win through differentiation and niche.



DESIGN-LED INNOVATION ENABLES BUSINESSES TO GAIN NEW COMPETITIVE ADVANTAGE CONTINUOUSLY.

iPhone

iPod


MANAGE INNOVATION LIKE MANAGING A FARM.

iPhone

iPod

iPad


CONTINOUS GROWTH IS ACHIEVED THROUGH CONTINOUS INNOVATION.


DESIGN-DRIVEN COMPANIES OUTPERFORM THE S&P 500 BY 228%

Source: Design Management Institute (http://www.dmi.org/?DesignValue)


MAKE MEANINGS AND BUILD CUSTOMER RELATIONSHIP THROUGH BRANDING.


CAPTURE AND SYNTHESIZE DATA TO EXTRACT CUSTOMER INSIGHTS THROUGH BIG DATA.


EMPATHIZE WITH USERS AND PROTOTYPING TO CREATE DESIGN-LED INNOVATION THROUGH DESIGN THINKING.


ANTICIPATE TRENDS AND FUTURE-PROOFING THROUGH STRATEGIC FORESIGHT.


IMPLEMENT IDEAS AND MANAGE INNOVATION PIPELINE THROUGH INNOVATION MANAGEMENT.


IDENTIFY SUSTAINABLE BUSINESS MODELS THROUGH BUSINESS MODEL INNOVATION.


VALIDATE ASSUMPTIONS AND PROTOTYPE NEW VENTURE THROUGH LEAN STARTUP.


PLANNING FOR GROWTH THROUGH BUSINESS PLANNING.



MANY BUSINESSES ARE STILL UNAWARE OF THE EXISTENCE OF SOME OF THESE DISCPLINES.


EVEN IF THEY ARE AWARE, THEY ARE ONLY IMPLEMENTING A FEW OF THESE DISCIPLINES.


IMPLEMENTING ONE OR TWO DISCIPLINES ARE NOT ENOUGH FOR BUSINESS TO GAIN COMPETITIVE ADVANTAGE AND GROW.


SOME DISCIPLINE SPECIALISTS CLAIM THAT THEIR DISCIPLINE IS THE ONLY DISCIPLINE THAT IS NEEDED FOR GROWTH.


EVERY DISCIPLINE PROVIDES SPECIFIC VALUE TO PARTS OF A BUSINESS AT DIFFERENT STAGES AND TIME FRAME, BUT NOT ALL.


SOME DISCIPLINES ARE IMPLEMENTED IN A RIGOROUS STEP-BY-STEP PROCESS CAUSING THEM TO LOSE EFFECTIVENESS.


DISCIPLINE SPECIALISTS ARE NOT ABLE TO MAKE-SENSE OF HOW ONE DISCIPLINE IS CONNECTED WITH THE OTHERS.


LET ALONE LETTING BUSINESSES FIGURE OUT HOW TO INTEGRATE VARIOUS DISCIPLINES INTO THEIR BUSINESS.


THEREFORE BUSINESSES FAIL TO MAXIMIZE THE BENEFITS OF EACH DISCIPLINE TO CREATE AND ORCHESTRATE CONTINUOUS GROWTH.


EACH OF THESE DISCIPLINES HAVE OVERLAPPING APPROACHES.


WHAT IF YOU MERGE DIFFERENT DISCIPLINES INTO A UNIFIED MULTIDISCIPLINARY APPROACH?


WHAT IF YOU CAN VISUALIZE THE BIG PICTURE AND GAIN CLARITY OF YOUR BUSINESS?



BUSINESS INNOVATION DESIGN IS A MULTIDISCIPLINARY APPROACH THAT GUIDES BUSINESSES ON WHAT AND HOW TO INNOVATE AND GROW.


Comprehensive in disciplines through integrative approach.

Iterative process through value creation and value orchestration.

Flexible method through modular blocks sequencing.


FLEXIBLE METHODOLOGY TO DESIGN BUSINESS THROUGH BLOCK SEQUENCING.


UNDERSTAND BUSINESS HINDSIGHT, CUSTOMER INSIGHT, AND TRENDS FORESIGHT.


This is an example of how block sequencing could be done.

PHASE 1 - UNDERSTAND THE CONTEXT


CREATE NEW VALUES (PRODUCTS, SERVICES, EXPERIENCES, PROCESSES).



PHASE 2 - DESIGN THE VALUE


DEVELOPING BUSINESS MODELS, CAPABILITIES, AND MANAGEMENT SYSTEMS TO ACCELERATE GROWTH.


PHASE 3 - ORCHESTRATE FOR GROWTH



1 CYCLE, 3 PHASES


WORK IN ITERATIVE CYCLE FROM SMALL SCALE GROWTH.


ITERATE OUTWARDS TO LARGE SCALE GROWTH.



Turnover in CHF

Cups per minute

Global hub community

Global boutique network

Nespresso Employees70% in direct contact with Nespresso customers

210 mm

868

600,000

1

331

2000

2.77 bn

10,000

8 million

191

4,500

2009



CASE STUDY


UNDERSTAND BUSINESS HINDSIGHT, CUSTOMER INSIGHT, AND TRENDS FORESIGHT.


ANALYZE THE CURRENT STATE OF FINANCIAL HEALTH.


S$200,000 ANNUAL LOSSES OVER 5 YEARS. CASHFLOW FROM MOTHER COMPANY.


ARTICULATE WINNING ASPIRATIONS WITH FUTURE VISIONS.


Vision

TO REALIZE THE IDEAL ENVIRONMENT.

WE DO THIS BY TAKING CARE OF YOUR PROBLEMS, MAINTAIN, ENHANCE YOUR ENVIRONMENT BY ADDING VALUE-ADDED EXPERIENCES IN YOUR LIFETIME.


IDENTIFY STRATEGIC DIRECTIONS TO ACCELERATE GROWTH.



DEFINE INNOVATION STRATEGY TO EXECUTE SELECTED GROWTH STRATEGY.



ANTICIPATE TRENDS AFFECTING THE INDUSTRY.



CONDUCT ETHNOGRAPHY RESEARCH WITH TARGET CUSTOMERS TO IDENTIFY.



MAKE SENSE OF INSIGHTS TO IDENTIFY UNMET NEEDS AND LATENT DESIRES.


Key Insight #1

HOME OWNERS/RENTERS WHO ARE PROFESSIONALS DO NOT HAVE THE TIME TO IMPROVE AND REPAIR THEIR HOMES.

Key Insight #2

HOME OWNERS/RENTERS CALL FOR HELP ONLY WHEN THERE IS AN IMMEDIATE AND IMPORTANT FIXING NEEDED.

Key Insight #3

DUE TO BUSY LIFESTYLE, PROFESSIONALS NEGLECT OTHER PARTS OF HOME THAT ARE NOT OBVIOUS, BUT NEEDED IMPROVEMENT AND REPAIR.


CREATE NEW VALUES (PRODUCTS, SERVICES, EXPERIENCES, PROCESSES).


CREATE NEW CONCEPTS THAT SOLVE CUSTOMERS’ NEEDS AND DESIRES.




EVALUATE WHICH IDEAS TO EXECUTE BASED ON SELECTED CRITERIA.



PROTOTYPE EVALUATED IDEAS TO VALIDATE ASSUMPTIONS.





SALES INCREASED BY 950% FROM INITIAL $178 TO $1,692

ADDITIONAL 16 PRODUCTS AND 4 SERVICES CROSS-SOLDFROM AN INITIAL 2 SERVICES REQUESTED.


DEVELOPING BUSINESS MODELS, CAPABILITIES, AND MANAGEMENT SYSTEMS TO ACCELERATE GROWTH.


IDENTIFY PARTNERSHIP REQUIRED TO DEVELOP NEW CAPABILITIES.



CALCULATE EXPENDITURES REQUIRED TO DELIVER NEW VALUE OFFERINGS.


DEFINE REVENUE MODELS FOR NEW VALUE OFFERINGS.


DEVELOP PRICING STRUCTURE OF VALUE OFFERINGS BASED ON REVENUE MODELS.


DEVELOP FINANCIAL MODELS TO ANTICIPATE PROFITABILITY.


Value Proposition Projected Turnover 2013 2014 2015 2016 2017

Handyman Service 28,800 61,600 99,000 140,800 244,800

Premium Membership

Furniture Refurnishing 2,500 5,500 9,000 14,000 20,000

Customized Packages

Air Care 2,000 6,000 20,000 48,000 120,000

Child Proof Safety Home 1,000 4,000 12,000 32,000 75,000

Elderly Care 60,000 154,000 260,000 450,000 1,050,000

Home Decluttering Service 6,000 21,000 42,000 80,000 150,000

Customized Gardening Package 5,000 13,000 30,000 68,000 150,000

Outdoor Storage Cabinet 4,000 12,500 30,000 52,500 80,000

Home Audit

Existing

Phase 1 - Q3

Phase 1 - Q4

Sanitaryware 17,500 40,000 67,500 100,000 150,000

Painting Packages 800,000 1,050,000 1,320,000 1,610,000 2,000,000

Residential 120,000 180,000 292,500 375,000 450,000

Residential - - - - -

Commercial 14,000 28,800 57,600 115,200 230,400

Commercial - - - - -

LED Lighting 12,500 35,000 120,000 225,000 400,000

Home Relocation - - - - -

Air Conditioning Service 13,500 30,000 42,000 67,500 90,000

Cable Management 2,000 4,400 7,200 10,400 14,000

Safety & Security 150,000 300,000 390,000 560,000 750,000

Switches 40,000 66,000 90,000 130,000 175,000

HR - Small 120,000 264,000 423,000 768,000 1,200,000 HR - Medium 240,000 528,000 1,152,000 2,496,000 3,600,000

CP - Small 4,000 12,000 24,000 48,000 96,000

HR - Large 300,000 660,000 1,080,000 1,560,000 2,100,000

CP - Medium 5,000 12,000 24,000 40,000 72,000 CP - Large 4,000 10,000 24,000 42,000 64,000

Floorcare & Polishing 14,000 36,000 74,016 152,000 240,000

Pest Control 6,000 12,800 21,000 32,000 45,000

Subtotal 1,094,300 1,670,800 2,330,716 3,207,700 4,388,800

Subtotal 794,400 1,660,800 3,014,100 5,314,200 7,580,400

Subtotal 93,500 250,000 475,000 874,500 1,877,000

TOTAL 1,982,200 3,581,600 5,819,816 9,396,400 13,846,200

Storage & Org / Customized Carpentry 10,000 35,000 100,000 180,000 280,000

Home Renovation


DEVELOP MARKETING PLAN TO ACHIEVE FINANCIAL PROJECTIONS.


DEVELOP SALES PROCESS TO CLOSE LEADS.



CREATE ACTION PLAN TO IMPLEMENT INNOVATION.


MAY 2012

JUN 2012

Week 1

Week 1

Week 3

Week 3

Week 2

Week 2

Week 4

Week 4

Marketing

CRM prototype ready

Home audit checklist

ready

Premium service membership, home audit (rate card) and

home relocation pric-ing ready

Discuss and pre-sent with contrac-tor about Home

Audit

Home audit pilot

Home renovation pilot

Home relocation pilot

Hired promoter for ID counter at Home Fix stores

Home Fix in-storeroadshow for HIS.

Website redesign discussion

Talk to supplier about ID counter

Build ID counter

Straits Time newspa-per ad published

CRM starts to beimplemented

Sales Ideas


ORCHESTRATE WHAT AND WHEN PRODUCTS / SERVICES WILL BE BROUGHT TO MARKET.



CYCLE 1


CYCLE 2


CYCLE 3 AND ONWARDS


15

10

5

0 Y3 Y4 Y5Y1 Y2

$ in millions

years

Turnover

Expenditures



Good design is good business.“ “Thomas J. Watson Junior

Former President of IBM


HOW WILL YOU DESIGN YOUR BUSINESS?


WHAT IS THE QUESTION IN WHICH YOUR BUSINESS IS THE ANSWER?
