the innovation challenge

The innovation challenge.by Patrick Willemarck

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“What you find says a lot about what you’re searching.

I do find and don’t search anymore.” Pablo Picasso

1. How to cope with what’s going wrong ?2. Focus on creating a superior value of use3. New economy, new rules4. A few thoughts about how to innovate5. A few things to keep in mind

1. How to cope with what’s going wrong ?

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Prix

Promotions

Publicité

Choix

nouveautés

fraîcheur

Modernité

Localisation

Plaisir courses

Personnel disponible

Accueil

Suivi des marques

Service clients

Enseigne préférée

CARREFOUR COLRUYT CORA DELHAIZE + AD ALDISUPER GB + PARTNER LIDL

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Théo Janssen, kinetisch beeldhouwer

Ces dix dernières années, le géant pétrolierEXXON a suivi deux routes sur le chemin de l’innovation. Il a créé 19 activités nouvelles en interne.Il a investi, parallèlement dans 18 start-up.Aucun des projets internes n’a abouti.Les start-up ont rapporté un ROI cumulé de 51%.Source: professeur David Molian, Cranfield University

Red Ocean Strategy

Focus on existing customers

Compete in existing market space

Beat the competition

Exploit existing demand

Make the value-cost trade-off

Align the whole system of a firm’s activities with the strategic choice of differentiation or low cost

Blue Ocean Strategy

Focus on non-customer

Create uncontested market space

Make the competition irrelevantCreate and capture new demand

Break the value-cost trade-off

Align the whole system of a firm’s activities in pursuit of differentiation and low cost

ZaraCirque du Soleil en Guy LalibertéEnterprise rent-a-car en Jack TaylorSwatch, Smart en Nicolas HayekOption International en Jan CalewaertApple en Steve JobsIKEA en Ingvar KampradProcter & GambleDelhaize

2. Focus on creating a superior value of use

Superior value of use

resourcesresources Context Context of useof use

ReferencesReferences

The context of use

The three usThe failures of marketing researchDemand is an ecosystem

References in the market

Distribution

Advertising

Media

Product Parity

Competition

Marketing Inconsistencies

The Consumer

The Brand

PromotionalExplosion

Brands and companies are under pressure

What is the objective of Business ?

“To make and keep a customer”

Peter Drucker‘Father of’ Management Consulting

1959

It’s all about relationships

What are the basic reasons for loss of clients?

Change of Address 4%

Contact at another company 5%

The Competition 9%

Disatisfaction with the product 15%

Lack of relevant contact/communication 67%

Building relationships helps fighting against the passive nature of marketing

This leads us to a more updated definition of what we do....

From ‘Unique Selling Proposition’

To ‘Unique Brand Behaviour’

Resources

Resources

Think in terms of platform like iPod and iTunes and iPhone.Follow two strategies at the same time:- the core competency school of strategy: deepen what you’re excellent at.- the leverage capabilities school of strategy : mobilize ressources outside your firm, at the edges. Be ex-centric.

Resources

“There are allways more smart people

outside your company than within it”

Bill Joy, co-founder of Sun Microsystems

“The truth is that we only have one trick - but it is

a very good one. We concentrate in achieving that every ‘experience’ that a customer has with

us is perfect.”Jeff Bezos, Founder Amazon.com

Creation of superior value of use, is going to be the currency of

this economy.

Why ? It favours good profit vs bad profit.

Bad profit are made at the expense of customer relationship Accountants don’t make the difference but time reveals it.Bad profits extract value from customer i/o creating value True growth is hard to findGood profits are earned with customer’s enthusiastic participation and growth come from WOM

Welcome in the « what can I do for you »

economy.

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3. New economy, new rules

An economy imposing a paradigm shift.

Employees are supposed to make customers delighted but- their employers tell them they’re accountable for profit.- Financial results are what companies measure.- Financial results determine their career plans and their bonuses- Accounting procedures cannot distinguish good profits from bad.

The example of Dell

2003: 8 millions customers15% detractors = 1,2 millions X 57$= 68 millions cost to DellConverting half of them would improve the bottom line with 160 millions$: 600 000X267$ improvement per conversion.How a simple math helps putting the right priorities.

Source: Fred Reichheld, The Ultimate Question, Bain&Company.

The challenge is about creating and deliveringSuperior Value of Use in the daily life of users and even stakeholders.

Another exampleAnother example

The big gap of the“what can I do for you economy”From a recent survey amongst 362 companies we discovered that- 96% of their senior executives said they were focused on the customer.- 80% believed they delivered a superior customer experience-Customers, in another survey were asked to rate the providers of good and services that they bought from: only 8% of the companies got a superior rating.- BRING THE CONSUMER INTO THE BOARD ROOM.

Conclusion:What is really new in this

economy ?

Consumers are taking over the marketing conversation.They’re developping their own messaging about the brand, creative content and media preferences.With increased frequency they launch their own commentaries online.In 2005, 78% of all users of internet were researching a product or service before buying it.Advertising is no longer the great influencerThe passive target of the past is becoming a smarter than you are moving target that talks back and thinks for itself. ME-COMMERCE is not far away.

The youniverse

Conclusion:What is really new in this

economy ?The me-commerce

Conclusion:What is really new in this

economy ?The entry into « reverse

markets »

1.1. Markets where companies will have to focus Markets where companies will have to focus on being more accessible rather than on being more accessible rather than reaching out for people and targetsreaching out for people and targets

2.2. Markets where companies will maximize the Markets where companies will maximize the value customers receive from the purchase value customers receive from the purchase and use of their products and services by and use of their products and services by providing tailor made help in purchasing providing tailor made help in purchasing and using these products and services.and using these products and services.

Source: John Hagel III

Conclusion:What is really new in this

economy ?The entry into « reverse

markets »3. Markets where companies will mobilize third parties and focus on assembling and packaging the resources to meet the needs of each individual.

4. Markets where the key measure will be RETURN ON ATTENTION. In a world where choices and information are unlimited, the only scarce resource is customer attention. They’re stuck with 24h/day.

Source: John Hagel III

4. A few thoughts about how to innovate

4.1. The edisonteam

4.2. Ex-centricity

We’ve seen one aspect of it : consumercentricity. Let’s look at another one inspired by surfers and John Hagel.

First, if you want to push your performance levels, find the relevant edge.

Second, attract motivated groups of people to these edges to work together around challenging performance issues.

Third, recognize that the people who are likely to be attracted to the edge are big risk-takers.

Fourth, recognize that the edge fosters not just risk-taking, but very different cultures that are also "edgy.

Fifth, find ways to appropriate insights from adjacent disciplines and even more remote areas of activity.  »

Sixth, bring users and developers of technology close together.

John Hagel in Business Week, 2008.

4.3. Business Ideal© Ideal communication leadership

Ideal human ressources leadership

Ideal value chain leadership

Ideal marketing leadership

Ideal R&D leadership

Ideal leadership: unleash talent and ideas

Be proactive

Start with the end in mind

1st things 1st

Think win win

Understanding > being understood

Synergize

Sharpen the saw

Find your voice

Aim at being surpetitive

Start with the stakeholders

in mind

1st things 1st

Think SVU

Explore the world

Release stakeholders energy and unleash talent

Sharpen the saw

Find your idea

An organization

The ideal business laws

An individual

The 8 habits of Covey

4.4. Structure and culture 

4.4. Attitude 

Rules to live by : - Resist the usual - Ideas come from everywhere- Everybody can contribute- Open source and trust are critical- Having ideas is more important than owning it- There is no territory for an idea except the Cy- Playing with best players makes you play better- Sustain intrapreneurship (3M, Google)- Innovation never lead to instant perfection: you need a commitment to improve or rejuvenate ideas- Numbers are essential: you need data, it frees people from worries about politics.- Creativity loves constraints- Money follow customers- The interest of the future is about inventing it rather than knowing how it will look.- The future belongs to heretics, not prophets.Inspired by a conference from Marissa Mayer @ Stanford.

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Conclusions

« The more I practice,

the luckier I get. »

Gary Player.

What should you remember ? Without innovation, you’ll die.

Innovation becomes a fashion there where it should be a culture, an attitude.It takes art to innovate and to become sustainably competitive.

Be ex-centric, work on the edges.

Bring the consumer into the boardroom.

Deepen your core competencies and look for differentiating resources outside, at the edges of your business.

Find an idea that federates the troops along your value chain.

Avoid politics by measuring everything, starting by the problem that an innovation should resolve.

Practice, practice, practice, practice, practice, practice, practice, practice...

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