Frank Dethier

Frank Dethier –

HOW TO INNOVATE?

ONE HOLISTIC FRAMEWORK

Integrate Strategy, Process, Organization, People

& Culture in one holistic approach this will

seriously improve your chances of success

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Strategy

Process

Organization

Resources

Culture

Frank Dethier –

HOW TO INNOVATE?

INNOVATION STRATEGY?

3

Innova-

tion

Strategy

1. What’s your goal?

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2. A) How much investment? From where?

B) When?

C) Who?

3. Define & select your opportunities

(strategic innovation area’s)

Frank Dethier –

New &

Existing

MarketsTrends

• Technology

• Need

• Business

• LegalInnovation

challenges

Dev

Projects to obtain

understanding of

• Technology

• Customer Need

• Business

Internal &

External Ideas

INNOVATION PROCESS S

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Strategy

Idea

selection

Frank Dethier

Session 4: Innovative

Organizations

Frank Dethier –

HOW TO INNOVATE?

ONE HOLISTIC FRAMEWORK

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Strategy

Process

Organization

Resources

Culture

Frank Dethier –

HOW TO INNOVATE?

ORGANIZATION

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Explore Exploit

AmbidextrousEmployee Innovation

NetworksOpen Innovation

Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS

Organizational structure keeps current business

alive

But often hampers Innovation

Example

Focus on current results

Short term goals and metrics

Little communication between people/departments

unless for current Operations

Very clear agreements on roles and responsibilities

Only top-down communication

…

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS

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Exploration Exploitation

Only this

Costs of experimentation

without benefits

Only this

Can’t adapt to changing

circumstances

Long-term, risky,

uncertain

Short-term, immediate,

certain benefits

Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS ORGANIZATION

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Incremental

Innovation

Radical

Innovation

Sustaining

Innovation

Disruptive

Innovation

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More discussions needed

about ‘separation’

Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS ORGANIZATION

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS ORGANIZATION

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Loose

coupling

Structural

Google X-

labsGoogle

Exploration Every individual

20% Exploration

80% ExploitationContextual

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Management

Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS – HOW?

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Ambidextrous in organization

or project

Loose

coupling

Solution 1

Focus on

exploration

Individuals or units

Focus on

exploitation

Ambidextrous in time

Focus on

exploration

Complete organization

Solution 2

Focus on

exploitation

Later in time

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS – HOW?

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Ambidextrous in organization

or project

Loose

coupling

Solution 1

Focus on

exploration

Individuals or units

Focus on

exploitation

Ambidextrous in time

Focus on

exploration

Complete organization

Solution 2

Focus on

exploitation

Later in time

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More used in ‘heavy’

R&D companies

More used in

dynamic service

companies

Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS – HOW?

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Ambidextrous in organization

Loose

coupling

Solution 1a: Structural

Focus on

exploration

Units

Focus on

exploitation

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Ambidextrous in project

Solution 1b: Contextual

Focus on

exploration

Every individual

Focus on

exploitation

Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS OVERVIEW

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Solution 1a

Focus on exploration

Focus on exploitation

Solution 1b

Focus on exploration

Focus on exploitation

(Contextual,

agreed % of time)

Structural

Solution 2

Focus on exploration (time N)

Focus on exploitation (time N+1)

Time based

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS OVERVIEW

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Solution 1a

Exploration

Exploitation

Solution 1b

Exploration

Exploitation

Solution 2

Exploration

Exploitation

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

CORPORATE VENTURING

Rather extreme example is setting up corporate

venturing unit inside large organization

To stimulate entrepreneurial activity within an

existing business

Based on methods used in VC industry

Reward people for value created

Invest in many projects to overcome uncertainty

Fixed process to help with assessing projects (lean start-up)

Care in formation of management team

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

CORPORATE VENTURING

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Dutch engineer Barend Pek is part of a team helping turn the

revolutionary idea of cooling natural gas to liquid at sea into reality –

boosted by early funding from the Shell GameChanger program

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• Executive level support

• Dedicated funds

• Dedicated people

• Autonomous authority

• Open but limited scope –

Anything outside current

practices but within the ‘strategic

intent’ of the firm as an energy

company.

• Open to any idea from anyone

anytime

Frank Dethier –

INNOVATIVE ORGANIZATIONS

CONCLUSION AMBIDEXTROUS

Choose a model that fits with your organization

& Innovation Strategy

Another way of looking at it: The art is in finding

ways to optimize these apparent opposites

simultaneously: introducing standard operational

work wherever possible, while continuing to get

better and better at delivering customer solutions

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

AMBIDEXTROUS ORGANIZATION

Management Team needs to take full responsibility for

Growth as well as Earnings

Spend 20% to 40% of your time as CEO on Growth/Innovation

Ask right questions

What serious customer problems can we solve?

What do we need to learn to be effective in this new terrain?

What capabilities must we assemble?

What business model will capture value?

Instead of

What revenue can we expect in 18 months?

What does the P&L look like?

How fast is the market growing?

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Frank Dethier –

HOW TO INNOVATE?

ORGANIZATION

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Explore Exploit

AmbidextrousEmployee Innovation

NetworksOpen Innovation

Frank Dethier –

INNOVATIVE ORGANIZATIONS

EMPLOYEE INNOVATION NETWORKS

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S

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Discussions @ lunch

Light agenda & involve

people other departments

Rapid prototype of idea

2nd and 3rd team created

All in a Lean Startup approach and

compliments official innovation program

Frank Dethier –

INNOVATIVE ORGANIZATIONS

EMPLOYEE INNOVATION NETWORKS

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Autonomy: e.g. own agenda

Mastery: e.g. improve your skills like brain-

storming

Purpose: e.g. company acknowledging

discussions and resourcing their ideas

Informal networks rely on intrapreneurs, who are filled with energy,

can engage others and have a willingness to push for change.

Identifying, directing and engaging these individuals are key.

Frank Dethier –

HOW TO INNOVATE?

ORGANIZATION

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S

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Explore Exploit

AmbidextrousEmployee Innovation

NetworksOpen Innovation

Frank Dethier –

INNOVATIVE ORGANIZATIONS

OPEN INNOVATION

What?

Prof H. Chesbrough “Open innovation is a paradigm

that assumes that firms can and should use external

ideas as well as internal ideas, and internal and

external paths to market, as the firms look to advance

their technology”. Alternatively, it is "innovating with

partners by sharing risk and sharing reward.”

Why?

Probably, others can help you

1. Customers

2. Suppliers

3. ‘Outsiders’

4. Specialists

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

OPEN INNOVATION

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

OPEN INNOVATION

Be careful when actively pursuing OI

It cannot be a remedy for your own Innovation ills

(ideas, development, go-to-market, …)

Able to set-up strong relationships

Have IP policy

Not-invented-here syndrome

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S

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

OPEN INNOVATION

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S

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Control & Leveraging

What do you want?

Frank Dethier –

INNOVATIVE ORGANIZATIONS

OPEN INNOVATION

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Need in business area’s

Frank Dethier –

INNOVATIVE ORGANIZATIONS

OPEN INNOVATION

Why pursuing OI?

Speed up TTM, reduce/share investment costs, get

more creative/innovative ideas, …

But define first your

Goal & scope

Investments

IP

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S

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

OI & SME

Small firms lack the required internal financial

resources and technical capabilities

They therefore must collaborate with external

partners to innovate successfully and especially

open innovation creates new business

opportunities for SMEs because they can develop

business model innovations without having the

required technologies in-house

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

OI EXAMPLE IN 1 SME

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Curana: OEM for bike accessories

Mid-1990’s: brands buy internationally huge price pressure

Challenges

• How to create products with premium value?

• No in-house design expertise

Strategic ambition: create unique products for every brand

Frank Dethier –

INNOVATIVE ORGANIZATIONS

OI EXAMPLE IN 1 SME

Long learning process

1. Plastic mudguards no premium look

2. Garden chair industry top segment uses

combination of plastics & alu

3. Strategic cooperation with such partner unique

technology & product

Today, Curana creates new concepts and uses

new materials without waiting for explicit

request of bike brands

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Frank Dethier –

INNOVATIVE ORGANIZATIONS

OPEN INNOVATIONS

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How far can you go?

Co-Creation

Micro-factoriesOpen Source

Community

Design

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Frank Dethier –

DESIGN V0.1 OF YOUR

INNOVATIVE ORGANIZATION

How will you design a more innovative

organization?

Ambidextrous organization

Innovative networks/networking

Open Innovation

Discuss within your team

Time foreseen: 30 min

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Frank Dethier –

How will you design your organization to become

ambidextrous?

How will you employ more networks/networking?

Do you see opportunities for OI? Why (not)?

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Frank Dethier

Session 5: Resources

Frank Dethier –

HOW TO INNOVATE?

RESOURCES

Strategy, Process & Organization are important,

but eventually, your People will innovate!

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Frank Dethier –

HOW TO INNOVATE?

RESOURCES

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Right person,

Right job

Individuals Project Teams

Diversity

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Frank Dethier –

HOW TO INNOVATE?

INDIVIDUALS

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Who are your best Innovators?

Most companies have a lot of experience identifying their best performers,

but not their best Innovators

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Frank Dethier –

HOW TO INNOVATE?

INDIVIDUALS

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Frank Dethier –

HOW TO INNOVATE?

YOU

Run 2 exercises and get a good idea

1. http://www.humanmetrics.com/cgi-win/JTypes2.asp

2. http://www.standaard.be/innovatietest

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