Explain the relationship between change and innovation. Explain the relationship between change and innovation

Explain the relationship between change and innovation.

• Explain the relationship between change and innovation.

• In his change management method, Kotter talks about creating a sense of urgency. Explain what this means.

• List a number of traits of excellent organizations.

• Explain some of the main traits of innovation culture.

• List a number of barriers to innovation.

• What is the fifth-generation innovation model?

• Explain the dangers of having too much routine.

[Discussion of selected student ‘Activities’ from previous chapter]

• [Discussion of selected student ‘Activities’ from previous chapter]

Show the main reasons why organizations invest in innovation

• Show the main reasons why organizations invest in innovation

• Understand some of the reasons why innovation fails

• Discuss the key stages in the innovation process

• Understand the importance of opportunity recognition in the innovation process

• Explain the innovation funnel

• Apply an innovation method to building an innovation plan

Organizations invest an average of 4% of turnover on Innovation

• Organizations invest an average of 4% of turnover on Innovation

• Budget typically spent across various functions e.g.

• Computer Services
• Product Design
• Process Improvements
• Training etc.

Innovation Expenditure as % Turnover in Western Europe

• Innovation Expenditure as % Turnover in Western Europe

• Manufacturing 3.7%

• Services 2.8%

1. Improved quality

• 1. Improved quality

• 2. Creation of new markets

• 3. Extension of the product range

• 4. Reduced labor costs

• 5. Improved production processes

• 6. Reduced materials

• 7. Reduced environmental damage

• 8. Replacement of products or services

• 9. Reduced energy consumption

• 10. Conformance to regulations

Improve Quality 65% of organisations surveyed

• Improve Quality 65% of organisations surveyed

• Create New Markets 50%

• Extend Product Range 46%

• Reduce Labour Costs 40%

• Improve Production 35%

• Reduce Materials 25%

• Reduce Environ. Damage 23%

• Replace Products/Services 21%

• Reduce Energy Consumption 18%

• Conform to Regulations 18%

Between 50-70% of all Innovation fails to impact on organisational goals

• Between 50-70% of all Innovation fails to impact on organisational goals

• Implications …

• Wasted resources – time, people and money
• Loss of morale
• Higher resistance
• *Various. See: Paul Strebel in Harvard Business Review on Change 139-157
• (Harvard Business Review, Boston, 1999)

Various reasons

• Various reasons

• Common reasons across all organizations:

• Poor goal definition
• Poor alignment of actions to goals
• Poor participation in teams
• Poor monitoring of results
• Poor communication and sense of community

Three possible outcomes for you ideas:

• Three possible outcomes for you ideas:

• You continue with idea (25% chance of success)
• You stop idea but start a new idea (Increase chances of success!)
• You stop the idea and so save time and money

Survey of 13,000 new products

• Survey of 13,000 new products

• 14% made it to market
• 65% of these succeeded
• i.e. 91% new products failed representing almost 50% of investment
• Success factors
• Fit with market needs
• Fit with company strengths
• Technical superiority

Survey of 200 Failed Products

• Survey of 200 Failed Products

• Better ‘mousetraps’ 28%
• ‘Me too’ products 24%
• Technical ‘dogs’ 15%
• Competitive pricing 13%
• Too expensive 13%
• Ignorance 7%

Metric available since 17th Century

• Metric available since 17th Century

• Customers reluctant to adopt

• Mars Climate Orbiter Disaster (1998)

• NASA reveals some calculations were ‘Imperial’!

• Yes, these were ‘rocket scientists’

• U.S. Aerospace Industry prefers ‘Imperial’

• Where else has ‘Imperial’ remained?

Fatal disease on voyages

• Fatal disease on voyages

• Half of all sailors died on long voyages!

• Simple and cheap cure found in 1601: Citrus Fruits

• In 1795 Navy finally adopted cure

• Not adopted in merchant fleet for another 70 years

Greatest innovation in history

• Greatest innovation in history

• Saves millions of lives!

• 40% of current world population lack sanitation!

• Half Million children die in Asia each year (2008)

• MRSA in Irish Hospitals

Poor definition of goals

• Poor definition of goals

• Poor alignment of actions to goals

• Poor participation by employees in teams

• Poor monitoring of results

• Poor communication and participation in communities

Better definition of goals

• Better definition of goals

• Better alignment of actions to goals

• Greater participation of individuals in teams

• Better monitoring of results

• Greater communications and building of communities

“Objective of an Effort”

• “Objective of an Effort”

• Examples:

• Vision Statements, Stakeholder Requirements, Conformance Standards, Development Strategies, and Indicators of Performance

“Expenditure of Effort”

• “Expenditure of Effort”

• Examples:

• Solving Problems, Generating Ideas, Developing Proposals, Managing Projects

“Resources of Effort”

• “Resources of Effort”

• Examples:

• Leaders, teams, pay reviews, …

“Outcome of an effort”

• “Outcome of an effort”

• Examples:

• Status of Goals, Actions and Teams
• Relationships between
• goals and actions
• goals and teams, etc…
• Exceptions, Reports

communities refers to all people who share a common purpose of supporting innovation in the organization

• communities refers to all people who share a common purpose of supporting innovation in the organization

• organization and leadership,
• communications, and
• knowledge management.

Tom McCabe, M.D., Boston Scientific

• Tom McCabe, M.D., Boston Scientific

• Setting Goals

• Michael Welch, M.D. Fidelity Investments

• Managing Portfolios

• Lionel Alexander, M.D. Hewlett Packard

• People and Teams

• Frank O’Connor, M.D., Ingersoll-Rand

• Monitoring Results (Scorecard)

Show the main reasons why organizations invest in innovation

• Show the main reasons why organizations invest in innovation

• Understand some of the reasons why innovation fails

• Discuss the key stages in the innovation process

• Understand the importance of opportunity recognition in the innovation process

• Explain the innovation funnel

• Apply an innovation method to building an innovation plan

http://www.youtube.com

• http://www.youtube.com

• Henry Chesbrough on Open Innovation
• Michael Porter on Strategy
• Innovation at Google
• Tom Peters: Innovation is Actually Easy!
• Sun's 25 years of innovation