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Formal innovation processes - iSites

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									What have we learned so far?
 Innovation is important for competitive
  advantage.
 Innovation is a complex process leading to
  innovative outcomes that benefit the
  company and the consumer.
 Innovations can be categorized in many
  ways, internally and externally.
 Innovation involves solving problems and
  creating value.
 Innovation can be radical (blue ocean) or
  incremental (red ocean).
 A company needs to define it’s innovation
  strategy.
 We have looked at examples of creating a
  culture of innovation (Best Buy), of business
  model innovation (experience-wine), and
  considered the importance of learning.
Tonight…

 Discussion of processes for innovating, and
  an example.
 Stamypor: applying a formal stage gate
  process to both radical and incremental
  innovations.
FORMAL INNOVATION
PROCESSES
                      Formal innovation
Identify a problem > find a solution
                       Stage Gate System




How to move a new-product project from idea to launch.
http://www.prod-dev.com/stage-gate.shtml
Balancing Risk with Investment
                          Accumulated investments
                          progressively increase
   Level of Risk




                              Failure risk progressively
                              decreases due to stage-
                              gate process




                   Time
INFORMAL INNOVATION
PROCESSES
        Informal Innovation Processes
      Experiment with solutions > find a problem

                 Example: Think Tanks
Community of experts, intellectuals, scientists, or other
    appropriate individuals brought together for the
purpose of “thinking” about prescribed topics. A think
  tank's purpose is to raise awareness about certain
 topics and "gather" communal thoughts toward that
                          topic.
            Research Laboratories (Labs)
             http://www.zurich.ibm.com/
COLLABORATIVE
INNOVATION
    Collaboration:
   … is a purposeful, strategic way of working that
    leverages the resources of each party for the benefit
    of all by coordinating activities and communicating
    information within an environment of trust and
    transparency.
   … opens up the possibility of accessing the
    resources, knowledge, and relationships the other
    party has and using both parties’ resources for
    mutual benefit. It also raises the specter of counting
    on someone who has no stake in your success.
               Collaborative Network Management: An emerging role for alliance management. Volume 6 in White
               Paper Series, Collaborative Business by Jeffrey Shuman and Janice Twombly, The Rhythm of
Collaboration Innovation

 Is prevalent.
 Requires:
     Trust
     Communication
     Connections
Innovation Communities

   Connecting your company with people
    outside the organization “whose passions
    match your problems” (Gary Hamel).
Larry Huston, former vice president for
innovation and knowledge at P&G

   “You can’t possess all the science and
    brilliant minds … In our R&D organization
    we have 7,500 people in 150 science areas,
    but there are 1.5 million high-quality people
    outside P&G. It doesn’t take a genius to
    figure out that if you can engage the brains
    of your 7,500, plus the key ones from that
    1.5 million, you can build better products.”
Examples of Innovation
Communities
 P&G’s InnovationNet
 Scientific networks such as InnoCentive,
  NineSigma, UTEK’s U2B
 Google Labs where services like Google
  Maps, Google Desktop, Google News Alerts
  and Google Video first started
 IBM’s AlphaWorks
What company is this?

   Contribute
 to progress in
    mobility
 "We have one profession and one
  mission: contribute to long-term
  progress in the field of mobility."
MAKING IT HAPPEN:
MICHELIN CORPORATION
 Sells over 200 million tires per year in 170
  countries
 17.2% of World Tire Market
 2007 Net Sales = 16,867 million euro
 2007 Net Income = 774 million euro
 2007 Operating Income = 1,645 million euro
 2007 Operating Margin = 9.8%
MISSION

   To make a sustainable contribution to
    progress in the mobility of goods and
    people by constantly enhancing freedom
    of movement, safety, efficiency and
    pleasure when on the move.
STRATEGY

To achieve its objectives in an ever
demanding environment, Michelin focuses on
three levers:
1.   Keep delivering ever higher-performing products and
     services to optimize professional customers’ value and
     bottom line through customization and innovation;
2.   Accelerate expansion in the higher-growth markets;
3.   Improve competitive position.
 INNOVATION STRATEGY

 LEADERSHIP THROUGH INNOVATION
   Ever since Michelin was first set up, the dynamics
    of innovation and the search for new
    technologies for the customer's benefit have
    been at the core of Michelin's strategy and
    success.

        INNOVATE in order to…
Leverage differentiation, Accelerate growth,
       Strengthen competitiveness
INNOVATION
How do innovations like this come about
  in a large, structured organization?
 Formal Processes (Ladoux Technology
  Center)http://www.michelin.com/ladoux/index.html?lang=en


 Informal Processes (Think Tank)
 Partnerships
MICHELIN’S INNOVATION
TIME LINE
STAMYPOR

 What type of innovation is Stamypor?
 Why have a separate NBD unit?
 What should Rein Nieland report to the NBD
  board?
Stamypor Progress Against
Criteria
1.   Stamypor could not be framed within the
     charter of one of the BGs.
2.   Technology fits the company culture,
     strategy and competencies.
3.   Synergy in raw materials, technology and
     market.
4.   Fits within the NBD portfolio.
5.   No high upfront costs.
Financial criteria?

6.   Potential turnover 3-5 years; €1 – 3 million?
7.   Potential turnover > 5 years, €10 million?
8.   Gross margin > 50%
9.   IRR (10 years); >20%
Lessons

 Stage gate process
 Team composition
 Technical problems
 Market problems
 Financial issues

								
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