10 years of business engineering

INNOVATION STRATEGY TO EXECUTION

Aprile point of view and approach

May 2013

Sustained innovation is key for prosperity

TIME FROM NOW (YEARS, MONTHS)

1 3 4 5 6 7 82 9

The right mix balances initiatives for effectiveness.

In ideation

In development or

introductionIn operation

The Right Mix

10

VALUE

Innovation strategy to execution requires an holistic approach

Programs Execute with the right practices,

teams and tools

Products Generate and pursue

the right ideas

PortfolioBuild and select the

right initiatives

• Develop scenarios and roadmaps • Set and execute ideation and concept challenges• Develop inter-functional, collaborative and open networks

• Adopt clear and manageable process, with timely business decisions based on effective criteria • Allow visibility and link to portfolio objectives• Allow continuous feedback to be incorporated into

decisions

• Adopt leading practices for managing scope, uncertainties and other relevant dimensions• Develop leadership, culture and high

performance teams • Exploit the power of state-of-the-art tools

Innovation culture matters

Culture is what allows successful strategy to be created and executed.

Alignment

Aligning innovation with the organization vision, mission and goals.

Spirit

Shaping mindset, risk taking attitude and behavior. Leave no room for “not invented here” syndrome.

Motivation

Building dedication, passion and courage.Rewarding success and fast learning from failures.

Connections

Searching and exploiting teamwork and diversity.

In innovation “culture doesn’t eat strategy for lunch”. They go together.

Information technology tools are emerging as key enablers

Product Lifecycle Management Comprehensive Capabilities for Process, Data and Team Collaboration

Strategic RoadmappingMarket, Product , Regulatory and Technology Roadmapping

Social Product InnovationWeb 2.0 and Enterprise 2.0

Ideation & CrowdsourcingIdeation Challenge Lifecycle Management

Phase Gate OptimizationInnovation Process Model

Four interconnected aspects are what makes difficult to become a world-class leader

People & Culture

Processes, Practices

& Methods Tools

Data

A capability framework can serve as reference to engineer the change

Innovation Process, Practices & Methods

Culture, People & Organization

Innovation Portfolio

Product Lifecycle Data & Technology

Innovation Metrics & Intelligence

Technology

InsightsNew Product Development & Introduction

LaunchManagementBrands

Results Analysis

Integrated roadmapping explores scenarios for gap & opportunity analysis

Critical Market 1

Critical Market 2

Product 1

Product 2

Product 3

Technology 1

Technology 2

Upgrade

Full Launch

Development

Stabilize

2013 2014 2015 20162012

Begins Decline, X% annual

Growing X %

Full Launch

Development Full Launch

Retire

Development Available

Available Upgrade

Development

Typical questions asked during Market, Product, Regulatory & Technology roadmapping:

Will reallocating resources on Technology 1 increase the probability of releasing Product 1 sooner before the value of the market drops?

Can the release of Product 1 allow for an earlier retirement of Product 3?

How can the release of Product 2 be moved ahead of schedule to capture growing Market 2?

What Product is planned to be used with Technology 2 since it impacts a strong, growing market?

Which consequences the new incoming Regulations 1 will have on Technology 2 and Product 1?

Open innovation allows collaboration among partners in an ecosystem

Source: M. Docherty, Venture2 Inc. (with concepts adapted from the book by Henry Chesbrough, Open Innovation: The New Imperative for Creating and Profiting from Technology, Harvard Business School Press, 2003)

Valuable ideas can come from inside or outside the company (industry) and can go to market from inside or outside the company (industry).

Ideas and concepts are pursued and aligned with the portfolio

“CreatingInsights”

“CreatingReasons”

Approval:Director Innovation

Director IdeationPortfolio Leader

Approval:CTO

Director R&D

“CreatingOpportunities”

Idea GenerationEnrichment

& Aggregation

Opportunity Evaluation

Opportunity Selection

Concept Selection

• Define and launch challenges and what- if scenarios

• Conduct ideation workshops and collaboration exchange

• Capture ideas and build repository

• Adopt skunk works

• Allow idea shaping and stretching

• Disseminate ideas and build-up

• Assess strategic fit and qualify broadly

• Work with lead users

• Conduct ideation events and promote VoC sessions for customer immersion

• Manage idea submission

• Score and prioritize opportunities

• Select concepts

• Align portfolio & strategic fit

• Investigate technology readiness and technical solutions

• Describe and qualify market opportunity

• Develop opportunity case

• Triage of opportunities for further evaluation

• Align portfolio & strategic fit

Portfolio allows visibility, alignment with business strategy and selection of options

Align portfolio with strategy

Create scenarios and options

Drive consistency in initiatives evaluation

Enable advanced valuation techniques

Communicate portfolio decisions

Pre-configure charts and reports for reviews

Manage and smooth out resource loads

Market Portfolio

Ideation Portfolio

Project Portfolio

Phase-gate makes the innovation process manageable and effective

Phase 0Concept

Phase 1Feasibility &

Planning

Phase 2Design

Phase 4Launch

Phase 3Test

No-Go

Rescope

Go

Keep a history of decisions, rationales and owners

Facilitate “closed-loop” assessments

Make informed gate go/no go and resource decisions

Monitor phase activity progress and project status

Introduce flexibility in innovation model with scalable phase-gate approach

PLM roadmap helps building a vision and implement pragmatically

• Integration of all product-related information systems, “individually searchable”

• Program for reuse of existing products, formulas, and other intellectual property

• Detailed, automated workflows to accelerate completion of tasks on the critical path

• Use of systems for regulatory and compliance

• Powerful “one-stop” search capability to find and retrieve information from multiple sources

• Product data is unified, reliable, and readily accessible

• Program and metrics for optimization of company’s experience, skills and existing work

• Advanced value and “what-if” analysis of new development projects

• Internal collaboration capability

• Multiple independent and non-scalable systems

• No search and information retrieval capability (paper-based)

• Extensive manual processing of data

• Knowledge leaks/loss

Characteristics

Value Drivers

• Partial integration of systems (portals)

• Some internal cross-functional collaboration

• Automated and manual data processing

• Information silos• Basic Stage/Gate process

but not globally deployed nor system-enabled

4

Advanced

3

Formal

2

Basic

1

Developing

Level 5World Class

• Product development driven by market needs

• Development strategies leverage product platforms and core competencies

• Advanced resource planning

• Seamless integration of information for design and production planning

• “Virtual” collaboration with key customers and suppliers

• Product development projects linked to portfolio management

• Gain market share• Acting as global company• Leverage commonality of

technology/products

• Time-to-market• Efficiency focus (limit re-

work)• Document management

• Regulatory and compliance

• Ability to act as separate business units

• Site-focus

• Enhanced margin• Advanced regulatory and

compliance• Internal collaboration

network

• Solution selling• Actions dictated by vision

(roadmapping)• Internal and external

collaboration network

Change leadership addresses people’s adoption

Approach goes above and beyond role/responsibility definition, communication and training.

Coach Change Leaders — Teaching project managers and executive sponsors to proactively engage, inspire and lead employees to willingly adopt and advocate

Resistance Management — Addressing resistance openly and early by engaging employees to embrace new perspectives and possibilities for how innovation and PLM initiatives can multiply their contribution to success

Leadership Alignment & Advocacy — Establishing active, skillful executive championing by recruiting advocates, planning their activities, preparing their messaging and guiding them to be effective

Innovation Process, Practices & Methods

Culture, People & Organization

Innovation Portfolio

Product Lifecycle Data & Technology

Innovation Metrics & Intelligence

Technology

InsightsNew Product Development & Introduction

LaunchManagementBrands

Results Analysis

Examples of transformation initiatives

Build-up a better visibility of the entire portfolio of projects

Define lean and effective new product development process , with focus on timing and resource

Control data and workflows through

integrated PLM

Initiate ideation contests

Typical next step focus on engineering the change

• Get stakeholders support•Maintain alignment between vision, goals and approach

• Assess current innovation results, culture, approach and practices • Set desired change focus

• Communicate consistently throughout the organization• Start mobilization and on boarding• Respond to stakeholder fears regarding changes

• Detail and evaluate the proposed initiatives• Get approval and resources

AlignExecutive

Set Scope

Plan Initiatives

InitiateChange

Summary messages

Sustained innovation requires an holistic view and a comprehensive set of business and technology capabilities.

The change journey starts with alignment, assessment and detailed definition of initiatives.

A framework sets a reference that can support innovation strategy-to-execution approach and capability.

Build a vision for innovation but execute the change pragmatically, incrementally and rapidly