tie delhi workshop - systematic innovations & innovation management

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 1

Systematic Innovation

Aditya Bhallaaditya.bhalla@qaiglobal.comInnovation Practice Head, QAI Global Services

7 Core Skills of InnovatorEntrepreneurs

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 2

Agenda

A. What is Systematic Innovation

B. Successful Entrepreneurs are innovative problem solvers

C. What prevents us from generating innovative ideas?

D. Paradoxes faced by Entrepreneurs

E. The need for Systematic Innovation

F. Q&A

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 3

A. What is Systematic Innovation

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 4

What do we mean by Innovation?

• Innovation is about finding better ways of deliveringvalue to the customer – Mind to Market.

• Business innovation is about satisfaction and value, notnew gadgetry.

• “Innovation is not invention. It is a term of economicsrather than of technology.” Peter Drucker

• "An innovation is something original, new, and important—in whatever field — that breaks into (or obtains afoothold in) a market or society". Frankelius, P.

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 5

Does structure limit Creativity?

• Most Western music usethe seven-note majorscale.

– Does that limit thecreativity of thesingers/musicians?

• A waterbrush artist haslimited material optionsto play with.

– Does that make the outputless creative?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 6

Seven (7) Core Skills of Innovative Thinking

InnovativeOpportunity

Thinking

Identify keystakeholders

in currentsituation and

proposedsolution

Identifypotentialzones ofconflict in

stakeholderrequirements

Generatefailure

scenariosusing theresourcesat disposal

Articulate theessence of a

given situationin simple

language freeof complexityand jargons

Apply ideasand solutions

fromunrelated

domains withsimilar

situations

Leverageavailable,latent andderived

resourceswithin the

givenconstraints of

a situation

Ability toidentify

innovativeopportunitiesfor creating &

deliveringvalue to

customers

Envisionthe state ofperfection

& theroadmap toachieve it

Identify thesystem and

thefunctional &time basedrelationshipwith others

ContradictionThinking

FailureAnalysisThinking

Abstractionand Analogy

Thinking

Resources&

ConstraintsThinking

IdealScenarioThinking

SystemsThinking

Generatewin-win

solutions toconflictingdemands

Envisionthe cause-and-effectlinkages toidentify the

root -conflicts

Prioritize toresolve the

failurescenariosfor robust

design

Review theproposedsolutionsfrom anIdeality

Perspective

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 7

What is Systematic Innovation(SI)?

• Systematic Innovation1. methodical in procedure or plan <a systematic approach>

2. marked by thoroughness and regularity <systematic efforts>

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 8

Levels of Systematic Innovation

Value Proposition

• BusinessModelInnovation

• Product /ServiceInnovation

Creation of Value

• Production orManufacturingProcessInnovation

Delivery of Value

• Supply ChainManagementProcessInnovation

What we sell? How it is Created? How it is Delivered?

Technology as an Enabler

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 9

Five Application areas of Systematic Innovation

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 10

B. Successful Entrepreneurs are InnovativeProblem Solvers…

…with a high risk appetite

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 11

Successful Entrepreneurs are innovative problem solvers!

Customerproblems

Businessproblems

Partnerproblems

Employeeproblems

And they have ahigh appetite for

risk -in exploring new

solution directions!

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 12

Not every entrepreneur is equally skilled in this ability

It’s not only about risk taking appetite!

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 13

B. What prevents anyone from generatinginnovative ideas?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 14

Reason # 1: Creativity and Age of an Individual

10-12 years old

Peak of Creativity

Age

Creativity

The French psychologist, Antoine Ribot studiedthe effect of age on creativity in the early 1900’s.

He found the age at which the average personpeaks to be 14.

A few years ago MIT’s Sloan School ofManagement repeated the study.

They found that the peak age of creativity hadshifted down to 12.

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 15

Reason # 2: Our Mind is the Battlefield!

Psychological Inertia Types

• Image

• Function

• Functioning or principle of operation

• Manner of usage

• Typical Characteristic

• Typical Orientation

• Dimension of object

• Terminology or Jargon

• Traditional conditions

• Traditional values

• Superfluous Information

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 16

• A lot of emphasis has been laid on technicalskills and soft skills…

• However, one skill remains largelyunaddressed…

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 17

High I.Q. and E.Q.

≠

High Thinking Skills

Thinking Skills is a different category…

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 18

B. Paradoxes confronting Entrepreneurs& 7-core skills of innovators

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 19

Paradox # 1: Where are the customers?

• The product went through the product development lifecycle and looked good in the pilot stage.

• I even have patents to protect my invention.

• Why then, are the customers not flocking to buy?

OR

• Why do prospects limit themselves to “windowshopping”?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 20

Key Skill # 1

• Key skill of innovative entrepreneurs: Ability toidentify the pain point of value to the customer

• Successful entrepreneurs know that customersbuy on Benefits linked to the specific pain pointof high importance.

• Unsuccessful entrepreneurs sell their products onFeatures!

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 21

Paradox # 2: Why are customers not loyal?

• I have a high adoption rate for my product.

• But why don’t the customers stick around for too long?

OR

• Why do the profits not keep pace with the adoption rate?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 22

Functions remain constant

Solutions keep on changing/evolving

We are mostly arguing about solutions while…

…Customers are loyal to the Function and not the specific solution

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 23

Key Skill # 2

• Key skill of innovative entrepreneurs: Ability toidentify the Useful Function of the product orservice and look for better solutions that retainthe useful function.

• Functions remain constant but the solutionskeep on evolving!

• Customers are loyal to the Useful function of aproduct and not the product.

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 24

Paradox # 3: Will success be a flash in thepan?

• How do we ensure our offering stays relevant to themarketplace after the initial launch and excitement?

OR

• How is competition able to latch on to the new customertrends much before I do?

OR

• The marketplace is flooded with competing solutions.Imitations abound. How to differentiate?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 25

Key Skill # 3

• Key skill of innovative entrepreneurs: Ability tomap the industry and product evolution toobjective laws of evolution.

• Customers and technical systems have knownpatterns of evolution.

• Successful entrepreneurs make use of thesepatterns to generate future road map of productsand services.

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 26

Paradox # 4: Is there hope for my failed product?

• My product bombed in the marketplace.

• Can I hope to revive?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 27

Key Skill # 4

• Key skill of innovative entrepreneurs: Ability tofind the resources to generate solutions.

• Innovators have the trained mind tosystematically locate resources that areoverlooked by others.

• These resources are preferably free, easy toaccess and abundant supply.

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 28

Paradox # 5: Life is full of contradictory demands!

• I will get seed money once I prove my business model, butI need money to prove my business model works

• I want good quality staff to make my company successfulbut they will join only when the company is successful(and can pay!)

• Customers are willing to try my product for free but I needmoney to run my company profitably!

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 29

Key Skill # 5

• Key skill of innovative entrepreneurs: Ability toresolve contradictions to generate win-winsolutions for key stakeholders.

• The heart of innovative thinking is the ability toresolve contradictory demands.

• Seemingly intractable problems withcontradictory demands can yield innovative ideas.

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 30

Paradox # 6: How can someone from anunrelated industry tell me what to do?

• I have spent years learning how to do myjob.

• Suddenly someone NOT from my industrystarts telling me how I can innovate.

• How can that be?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 31

Key Skill # 6

• Key skill of innovativeentrepreneurs:1. Abstraction thinking which

is the ability to express agiven situation withoutusing technical jargons.

2. Analogy thinking which isthe ability to identifysituations with similarproblems that appeardifferent because they usedifferent technical jargons.

1. SpecificProblem

3. GenericSolution

4. SpecificSolution

2. GenericProblem

The essence of a problem remains similar

The way we express a problem makes it look different

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 32

Paradox # 7: Who am I competing against?

• Can someone from an unexpected industrycome and make my offering irrelevant?

OR

• Who is my competition?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 33

Key Skill # 7

• Key skill of innovative entrepreneurs:

1. The ability to envision the ideal system to create theevolutionary roadmap

2. The ability to identify the innovative directions basedon the five categories of innovation

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 34

Paradox # 8: Employees and creativity

• My employees deal with customers all the time.

• Why do they not generate innovative ideas for addingvalue to my customers?

OR

• Why does everyone expect me to have all the innovativeideas?

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 35

B. The need for Systematic Innovation

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 36

1. Growth is not Constant…

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 37

2. The Luxury of Time is no longer there…

Technology Invention Production Development Time

Fluorescent lighting 1852 1934 82 years

Radar 1887 1933 46 years

Ballpoint pen 1888 1938 50 years

Zipper 1891 1923 32 years

Diesel locomotive 1895 1934 39 years

Cellophane 1900 1926 26 years

Power steering 1900 1930 30 years

Rockets 1903 1935 32 years

Helicopter 1904 1936 32 years

Television 1907 1936 29 years

Kodachrome 1910 1935 25 years

Transistor 1940 1950 10 years

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 38

Conventional Trial-and-Error Approach is Inefficient

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 39

• Humans have evolved to “understand” problems veryquickly – we “naturally recognize” and apply knownsolutions.

Problem analysis ~ 1 second

Solution generation/execution(trial and error):

Until it works (Darwinian)!

3. Known solutions may not work out all the time…

Entire Course Material © QAI Global. Do Not Copy/Transmit/Store without explicit written permission from QAIPg 40

Aditya Bhalla

aditya.bhalla@qaiglobal.com

AnyQuestions?