Questions for Ideas for Innovation - New Patterns of Innovation

Tested ways of framing the search for ideas exist.

One is competency based: It asks, How can we build on the capabilities and assets that already make us distinctive to enter new businesses and markets?

Another is customer focused: What does a close study of customers' behavior tell us about their tacit, unmet needs?

A third addresses changes in the business environment: If we follow "megatrends" or other shifts to their logical conclusion, what future business opportunities will become clear?

We'd like to propose a fourth approach. It complements the existing frameworks but focuses on opportunities generated by the explosion in digital information and tools. Simply put, our approach poses this question: How can we create value for customers using data and analytic tools we own or could have access to? Over the past five years, we've explored that question with a broad range of IBM clients. In the course of that work, we've seen advances in IT facilitate the hunt for new business value in five distinct -- but often overlapping -- patterns.... We believe that by examining them methodically, managers in most industries can conceive solid ideas for new businesses.

In
The New Patterns of Innovation. By: Parmar, Rashik, Mackenzie, Ian, Cohn, David, Gann, David, Harvard Business Review, 00178012, Jan/Feb2014, Vol. 92, Issue 1/2

LET INNOVATORS COLLECT IDEAS

Innovators squirrel away things they don't know how to use. Designers and sculptors collect photos and keep warehouses or cabinets full of things they can't use (yet). Painters and product developers keep sketchbooks. Innovators of all stripes keep "junk," as one designer called it, against the day when, leafing through a notebook or tidying a shelf, they have an "Aha!" moment.

Managers should support those tendencies—both by providing space for the collections and by endorsing the practice, instead of making it seem peripheral to "real" work.

Managers also shouldn't interfere by insisting on, say, an efficient storage system. Finding things too easily could mean missing an accidentally valuable idea.

From

INNOVATION
Oops!
Accidents lead to innovations. So, how do you create more accidents?

By Robert D. Austin, Lee Devin and Erin Sullivan

Dr. Austin is professor, managing creativity and innovation, at the Copenhagen Business School and an associate professor of technology and operations at Harvard Business School. Dr. Devin is a professor emeritus of theater and a senior research scholar at Swarthmore College. Dr. Sullivan is a senior research associate at the Harvard School of Public Health's Global Health Delivery Project.

http://sloanreview.mit.edu/wsj/insight/innovation/2008/07/07/?display=print

Printed in Campaign, Mint, India dated 21 July 2008

Innovation steps

Finding a Higher Gear.
By: Stewart, Thomas A., Raman, Anand P.,
Harvard Business Review,
Jul-Aug 2008, Vol. 86, Issue 7/8

The HBR Interview with Anand G. Mahindra

The CEO of India's Mahindra & Mahindra is transforming the group from national champion to global corporation in an unconventional way



What are the key success factors for fostering innovation at M&M?


[HBS professor] Stefan Thomke helped us get a head start.

At the last Blue Chip conference, in Kuala Lumpur, we came up with five elements that would foster innovation in the group.

One, innovation has to start with insights about the customer. Without identifying a need, you can't come up with new products or processes.

Two, great products today have great designs. Look at Apple's iPhone, for instance, which is my favorite product.

Three, you have to encourage experimentation. You must hire people who don't listen to you, which I always seem to do! You have to create a sandbox where people can play -- and fail, often and early. The organization must celebrate failure.

Four, unlike Xerox PARC's inventions, innovations must add value to the company's bottom line.

Five, you need to have a sales plan. No innovation sells itself; companies have to find ways of packaging and marketing it.

So you need insight, design, experimentation, added value, and sales plans for innovation, and -- I love using acronyms -- the first letters of those elements spell IDEAS. That captures the essence of what M&M will do to create a culture of innovation.

Management Mistakes that Stifle Innovators

Innovation: The Classic Traps.
By: Kanter, Rosabeth Moss,
Harvard Business Review,
Nov 2006, Vol. 84, Issue 11

Innovation Hurdles

Strategy Mistakes: Hurdles Too High, Scope Too Narrow

Process Mistakes: Controls Too Tight

Structure Mistakes: Connections Too Loose, Separations Too Sharp

Skills Mistakes: Leadership Too Weak, Communication Too Poor


Innovation Remedies

Strategy remedy: Widen the search, broaden the scope.

Process remedy: Add flexibility to planning and control systems.

Structure remedy: Facilitate close connections between innovators and mainstream businesses.

Skills remedy: Select for leadership and interpersonal skills, and surround innovators with a supportive culture of collaboration.

Author

Rosabeth Moss Kanter is the Ernest L. Arbuckle Professor of Business Administration at Harvard Business School in Boston. She is a frequent contributor to HBR and was the editor from 1989 to 1992.

Innovation and Invention

Innovation refers to a process that begins with a novel idea and concludes
with market introduction. Invention by itself is not an innovation.


John Freeman
Jerome S. Engel
Models of Innovation: Startups and Mature Corporations
UNIVERSITY OF CALIFORNIA, BERKELEY VOL. 50,NO. 1 FALL 2007

Innovation and Creativity HBR 2006

Innovation and Creativity

Connect and Develop: Inside Procter & Gamble's New Model for Innovation
Larry Huston and Nabil Sakkab
March
Reprint R0603C ♦ OnPoint 351X;
OnPoint collection "Innovating
from the Outside In" 3560

Connecting Maverick Minds
A conversation with Geoffrey West
Gardiner Morse
Forethought, March
Reprint F0603D

Creating New Growth Platforms
Donald L. Laurie, Yves L. Doz,
and Claude P. Sheer
May
Reprint R0605D

Innovating Through Design
Roberto Verganti
December
Reprint R0612G

Innovation: The Classic Traps
Rosabeth Moss Kanter
November
Reprint R0611C ♦ OnPoint 1497

Manage Customer-Centric Innovation-Systematically
Larry Selden and
Ian C. MacMillan
April
Reprint R0604G

Mapping Your Innovation Strategy
Scott D. Anthony, Matt Eyring,
and Lib Gibson
May
Reprint R0605F ♦ OnPoint 4281;
OnPoint collection "Winning the
Innovation Game" 4389

Match Your Innovation Strategy to Your Innovation Ecosystem
Ron Adner
April
Reprint R0604F ♦ OnPoint 4087

Pants on Fire
Marc Abrahams
Forethought, November
Reprint F0611B

Sparking Creativity at Ferrari
A conversation with Mario Almondo
Gardiner Morse
Forethought, April
Reprint F0604F

What Are Conferences For?
A conversation with
Richard Saul Wurman
Bronwyn Fryer
Forethought, June
Reprint F0606F

Innovating Through DESIGN. By: Verganti, Roberto, Harvard Business Review, 00178012, Dec2006, Vol. 84, Issue 12

A group of cutting-edge manufacturers in northern Italy interpret items for the home, like lamps and teakettles, in ways that initially confound consumers and then convert them. The result is high growth rates and long product lives.


Roberto Verganti (roberto.verganti@polimi.it) is a professor of management of innovation at Politecnico di Milano in Italy, where he teaches in the school of management and the school of design. This article is based on research he conducted that won the Compasso d'Oro, Italy's most prestigious design award.

Catalytic Innovation

Disruptive Innovation for Social Change.
By: Christensen, Clayton M., Baumann, Heiner, Ruggles, Rudy, Sadtler, Thomas M., Harvard Business Review,
Dec 2006, Vol. 84, Issue 12

To understand the argument in this article, it's useful to review the disruptive-innovation model first put forward in Christensen and Joseph L. Bower's HBR article "Disruptive Technologies: Catching the Wave" (January–February 1995).

The authors divide innovations into two categories: sustaining and disruptive.

Most product and service innovations are sustaining. They provide better quality or additional functionality for an organization's most demanding customers. Some sustaining innovations are incremental improvements; others are breakthrough or leapfrog products or services.

By contrast, disruptive innovations may lack certain features or capabilities of the established goods. However, they are typically simpler, more convenient, and less expensive, so they appeal to new or less-demanding customers.

Disruptive innovations have had a major impact on industry structures, from travel to computer retailing to communications, and have often given rise to social change in the process. But the social changes caused by disruptive innovations are largely unintended; they are simply the by-products of pursuing a business opportunity. With catalytic innovations, however, social change is the primary
objective.


Catalytic innovations are disruptive innovations with social change as the primary
objective.

It will bring new benefits to a large section of people.

It's fairly easy to grasp the disruptive-innovation model when it's applied to commercial products and services. But how, exactly, does the model work in the social sector? Catalytic innovators share five qualities:

1. They create systemic social change through scaling and replication.
2. They meet a need that is either overserved (because the existing solution is more complex than many people require) or not served at all.
3. They offer products and services that are simpler and less costly than existing alternatives and may be perceived as having a lower level of performance, but users consider them to be good enough.
4. They generate resources, such as donations, grants, volunteer manpower, or intellectual capital, in ways that are initially unattractive to incumbent competitors.
5. They are often ignored, disparaged, or even encouraged by existing players for whom the business model is unprofitable or otherwise unattractive and who therefore avoid or retreat from the market segment.


Authors

Clayton M. Christensen (cchristensen@hbs.edu) is the Robert and Jane Cizik Professor of Business Administration at Harvard Business School in Boston.

Heiner Baumann (heiner_baumann@newprofit.com) is the chief knowledge officer and a partner at New Profit, a Cambridge, Massachusetts–based venture philanthropy fund that provides financial and strategic support for social entrepreneurs.

Rudy Ruggles (rudy.ruggles@comcast.net) is the president of Weston, Massachusetts–based Collaborative Innovation Services, a consulting firm that works with organizations to create solutions to social and environmental challenges.

Thomas M. Sadtler (tom.sadtler@post.harvard.edu) is the vice president of professional services marketing at CA, a management software company based in Islandia, New York, and a New Profit thought partner.

Innovation Value Chain

The Innovation Value Chain.
By: Hansen, Morten T., Birkinshaw, Julian,
Harvard Business Review,
June 2007, Vol. 85, Issue 6

The innovation value chain is derived from the findings of five large research projects on innovation that we undertook over the past decade. We interviewed more than 130 executives from over 30 multinationals in North America and Europe. We also surveyed 4,000 nonexecutive employees in 15 multinationals, and we analyzed innovation effectiveness in 120 new-product development projects and 100 corporate venturing units.

The innovation value chain view presents innovation as a sequential, three-phase process that involves idea generation, idea development, and the diffusion of developed concepts. Across all the phases, managers must perform six critical tasks -- internal sourcing, cross-unit sourcing, external sourcing, selection, development, and companywide spread of the idea. Each is a link in the chain.

External networks for innovation: There are two fundamentally different approaches to building external networks, each of which fulfills different objectives. The first approach is to develop a solution network, geared toward finding answers to specific problems. This is what A.G. Lafley mainly has built at P&G. In-house product developers translate customer needs into technology briefs that include descriptions of the problems to be solved. The technology briefs traverse the company's external network -- which comprises technology scouts, suppliers, research labs, and retailers worldwide -- to see whether someone, somewhere can offer solutions to the problems posted.

(For more details about P&G's external solution network, see Larry Huston and Nabil Sakkab's "Connect and Develop: Inside Procter & Gamble's New Model for Innovation," HBR March 2006.)

Likewise, the pharmaceutical company Eli-Lilly has spearheaded InnoCentive (www.innocentive.com), a solution-seeking Web site that Lilly, P&G, and other companies use to find answers to specific technical or scientific problems. The companies post questions -- for instance, "How can we protect fatty acids from oxidation?" -- that any of the more than 10,000 engineers, chemists, and other scientists registered at the site can tackle. The individual or group offering the best acceptable solution gets a financial reward; the winner of the fatty acids challenge received $20,000.

Build internal cross-unit networks.- P&G has developed 30 communities of practice.

Recommended Reading




Idea Generation
In-house idea generation



Jamming: The Art and Discipline of Business Creativity, by John
Kao (HarperBusiness, 1996)



Crosspollination

"Collaboration Rules," by Philip Evans and Bob Wolf (HBR July-
August 2005)

"Coevolving: At Last, a Way to Make Synergies Work," by Kathleen
M. Eisenhardt and D. Charles Galunic (HBR January--February 2000)



External sourcing

Democratizing Innovation, by Eric von Hippel (MIT Press, 2005)
Blue Ocean Strategy, by W. Chan Kim and Renée Mauborgne
(Harvard Business School Press, 2004)

Open Innovation: The New Imperative for Creating and Profiting
from Technology, by Henry Chesbrough (Harvard Business School
Press, 2003)




Conversion
Selection

"Bringing Silicon Valley Inside," by Gary Hamel (HBR September-
October 1999)

Corporate Venturing: Creating New Businesses Within the Firm, by
Zenas Block and Ian C. MacMillan (Harvard Business School Press,
1993)



Development

10 Rules for Strategic Innovators: From Idea to Execution, by
Vijay Govindarajan and Chris Trimble (Harvard Business School
Press, 2005)

The Innovator's Solution: Creating and Sustaining Successful
Growth, by Clayton M. Christensen and Michael E. Raynor (Harvard
Business School Press, 2003)




Diffusion

Spread of the idea

Payback: Reaping the Rewards of Innovation, by Harold L. Sirkin,
James P. Andrew, and John Butman (Harvard Business School Press,
2007)

"Tipping Point Leadership," by W. Chan Kim and Renée
Mauborgne (HBR April 2003)

Morten T. Hansen (morten.hansen@insead.edu) is a professor of entrepreneurship and the André and Rosalie Hoffmann Chaired Professor of Family Enterprise at Insead, in Fontainebleau, France. Julian Birkinshaw (jbirkinshaw@london.edu) is a professor of strategic and international management at London Business School and a senior fellow at the Advanced Institute of Management Research in London.

Innovation Sourcing Alternatives in Innovation Bazaar

A Buyer's Guide to the Innovation Bazaar.
By: Nambisan, Satish, Sawhney, Mohanbir,
Harvard Business Review,
June 2007, Vol. 85, Issue 6


Alternatives in Innovation Bazaar

Raw Ideas: Invention Capitalist

Market-Ready Ideas: Innovation Capitalist

Market-Ready Products: Venture Capitalist, Business Incubator




Satish Nambisan (nambis@rpi.edu) is an associate professor of technology management and strategy at Rensselaer Polytechnic Institute's Lally School of Management and Technology, in Troy, New York. Mohanbir Sawhney (mohans@kellogg.northwestern.edu) is the McCormick Tribune Professor of Technology and the director of the Center for Research in Technology and Innovation at Northwestern University's Kellogg School of Management, in Evanston, Illinois. They are the authors of a book on network-centric innovation (coming in October from Wharton School Publishing).

Managing Risk and Reward in an Innovation Portfolio

Is It Real? Can We Win? Is It Worth Doing?
By: Day, George S.,
Harvard Business Review,
Dec 2007, Vol. 85, Issue 12

From 1990 to 2004 the percentage of major innovations in development portfolios dropped from 20.4 to 11.5 - even as the number of growth initiatives rose.

The aversion to Big I projects stems from a belief that they are too risky and their rewards (if any) will accrue too far in the future. Certainly the probability of failure rises sharply when a company ventures beyond incremental initiatives within familiar markets. But avoiding risky projects altogether can strangle growth. The solution is to pursue a disciplined, systematic process that will distribute your innovations more evenly across the spectrum of risk.

Two tools, used in tandem, can help companies do this. The first, the risk matrix, will graphically reveal risk exposure across an entire innovation portfolio. The second, the R-W-W ("real, win, worth it") screen, sometimes known as the Schrello screen, can be used to evaluate individual projects. Versions of the screen have been circulating since the 1980s, and since then a growing roster of companies, including General Electric, Honeywell, Novartis, Millipore, and 3M, have used them to assess business potential and risk exposure in their innovation portfolios; 3M has used R-W-W for more than 1,500 projects. I have expanded the screen and used it to evaluate dozens of projects at four global companies, and I have taught executives and Wharton students how to use it as well.


George S. Day (dayg@wharton.upenn.edu) is the Geoffrey T. Boisi Professor, a professor of marketing, and a co-director of the Mack Center for Technological Innovation at the University of Pennsylvania's Wharton School in Philadelphia. His most recent article for HBR, "Scanning the Periphery" (written with Paul J.H. Schoemaker), was published in November 2005.

Breakthrough Thinking from Inside the Box

Breakthrough Thinking from Inside the Box.
By: Coyne, Kevin P., Clifford, Patricia Gorman, Dye, Renée,
Harvard Business Review,
Dec 2007, Vol. 85, Issue 12

Most managers and professionals are quite capable of thinking effectively inside a box. They live with constraints all the time and automatically explore alternatives, combinations, and permutations within their confined space. We have found that if you systematically constrain the scope of their thinking (but not too much), people are adept at fully exploring the possibilities, and they can regularly generate lots of good ideas - and occasionally some great ones. Setting the right constraints is a matter of asking the right kinds of questions: ones that create boxes that are useful, but different, from the boxes your people currently think in.

Ten years ago, as part of a larger project for McKinsey's strategy practice, we led a team of consultants who developed such an approach to brainstorming. It involves posing concrete questions and orchestrating the process for answering those questions.

The most fertile questions focus the mind on a subset of possibilities that differ markedly from those explored before, guiding people to valuable overlooked corners of the universe of possible improvements.

Ideas for better Brainstorming

Ensure that everyone is fully engaged
Focus every discussion using your preselected questions
Do not rely solely on one brainstorming session.
Narrow the list of ideas to the ones you will seriously investigate right away

Kevin P. Coyne (kevin@kevincoynepartners.com) is the founder of Kevin Coyne Partners, an executive-counseling firm in Atlanta, and previously was a director of McKinsey & Company. Patricia Gorman Clifford (trish_clifford@mckinsey.com) is a senior strategy expert in McKinsey's office in Stamford, Connecticut. Renée Dye (renee_dye@mckinsey.com) is a senior consultant in the firm's strategy practice and is based in Atlanta.

Managing Radical Innovation

How to manage radical innovation
Robert Stringer. California Management Review. Berkeley: Summer 2000. Vol. 42, Iss. 4; pg. 70, 19 pgs

Stimulating Innovation in Large Companies

Strategy #1: Make breakthrough innovation a strategic and cultural priority.

Strategy #2: Hire more creative and innovative people.

Strategy #3: Grow informal project laboratories within the traditional organization.

Strategy #4: Create "idea markets" within the organization

Strategy #5: Become an "ambidextrous organization.

Strategy #6: Experiment with acquisitions, JVs, cooperative ventures, and alliances with outside innovative entities.

Strategy #7: Engage in corporate venturing.

Strategy #8: Establish a corporate venture capital fund.

Some Thoughts on Google's Innovation Machine

Reverse Engineering Google's Innovation Machine.
By: Iyer, Bala, Davenport, Thomas H.,
Harvard Business Review,
April, 2008, Vol. 86, Issue 4


Much of what the company does is rooted in its legendary IT infrastructure, but technology and strategy at Google are inseparable and mutually permeable – making it hard to say whether technology is the DNA of its strategy or the other way around.


Google's mission "to organize the world's information and make it universally accessible and useful"

The company's managers are strategically patient.

Google owns a network infrastructure consisting of approximately one million computers;


An accelerated product-development life cycle.

Rules its Own Ecosystem

Exercises Architectural Control

Budgets innovation into job descriptions.

Let the market choose: Google allows markets to choose the applications to developed into commercial ventures.

Supports Inspiration with Data

Has a Cultivated Taste for Failure and Chaos


Bala Iyer (biyer@babson.edu) is an associate professor of technology operations and information management at Babson College in Wellesley, Massachusetts. Thomas H. Davenport (tdavenport@babson.edu) is the President's Distinguished Professor of Information Technology and Management at Babson College. His most recent book, with Jeanne Harris, is Competing on Analytics: The New Science of Winning (Harvard Business School Press, 2007).

Job Mapping to Turn Customer Input into Innovation

The Customer-Centered Innovation Map.
By: Bettencourt, Lance A., Ulwick, Anthony W.,
Harvard Business Review,
May 2008, Vol. 86, Issue 5

Some interesting points

We have developed an efficient yet simple system companies can use to find new ways to innovate.

Our method, which we call "job mapping," breaks down the task the customer wants done into a series of discrete process steps.

By deconstructing a job from beginning to end, a company gains a complete view of all the points at which a customer might desire more help from a product or service - namely, at each step in the job. With a job map in hand, a company can analyze the biggest drawbacks of the products and services customers currently use.

Job mapping also gives companies a comprehensive framework with which to identify the metrics customers themselves use to measure success in executing a task. (For a description of these metrics and a discussion about how to gather and prioritize them, see Anthony W. Ulwick's "Turn Customer Input into Innovation" in HBR's January 2002 issue.)

Job mapping differs substantively from process mapping in that the goal is to identify what customers are trying to get done at every step, not what they are doing currently.

Lance A. Bettencourt (lbettencourt@strategyn.com) is a senior consultant with Strategyn, an innovation management consultancy based in Aspen, Colorado. Anthony W. Ulwick (ulwick@strategyn.com) is the founder and CEO of Strategyn. He is the author of What Customers Want (McGraw-Hill, 2005).