manual of the innovation management game

Innovation Management Game 1/30/2015

Innovative Dutch ‐Manual 1

Innovation Management GameInnovative Dutch

A warm welcome to everybody!

This explanatory presentation will guide you through the presentation of Innovative Dutch about innovation management on the one hand and will provide you with an explanation of the Innovation Management game on the other hand. The presentation about innovation management is oriented at young professionals who are willing to increase their innovation potential rather today then tomorrow. Not only will it explain some basics about innovation and innovation management, it will also give you arange of tools with which you can start implementing it into your startup, company or project team tomorrow.

Playing the game will provide you with an excellent way of ‘learning by doing’. Some of the participants who have played the gamebefore have said: • “We learned about how and under what conditions to apply theory into practice.”• “The key learnings from the game for us were especially the multidimensionality of the innovation process inside a company andthe idea that companies can influence their innovation success in many different ways.”

• “Throughout the course and mainly by playing the Innovation Management game, we have learnt to make decisions as a group, being able to overcome our personal differences and beliefs.”

Enjoy the presentation!

Jan SpruijtCEO of Innovative Dutch



Innovative DutchWe create serious gamesfor serious professionals.

Our games are educational strategy simulation games for universities and business.

We deliver quality through personal feedback, expertise and realistic dynamic simulations.

• Founded in 2012

• Served almost 10000 players over 4 continents.

• Based in Brainport, Netherlands

Innovative Dutch

We are Innovative Dutch, a small Dutch‐based company founded in 2012. With a background in higher education, we started to develop our first game out of frustration of the fact that there were no alternative strategic simulation games, often called ‘long games’, on the market that were focusing on innovation‐related themes as such. In 2013 we launched our first product, the Innovation Management Game. By 2015 we organized games at a wide number of universities, knowledge institutes, governmental organizations and larger corporations. Over 10.000 participants have played our games.

We are successful because we provide turn‐key solutions without any hassle or interception needed by the client. We provide individual feedback for the players to increase the learning results. And we offer highly customizable games that suit every situation.

Innovative Dutch is based in the Brainport Region in southern Netherlands, awarded with the World’s Most Intelligent Community Award and a hotspot for innovation with companies such as Philips and ASML.



Content• There is much more to ‘innovation’ than just a superior product

• Part 1: an introduction to innovation

• Part 2: Ten Types of Innovation

• It will show you how easy it is to embed innovation in your daily routine• Part 3: How to innovate

• Want to start practice?• Part 4: Innovation Management Game

Why this presentation?

• Part 1 will give you an introduction to the world of innovation. There will be a few definitions, a short history and a few examplesIt will provide you with the necessary information to understand how innovation works and why it is relevant for your company(in case you had any doubts). It will also provide you with some information that is needed to understand the Innovation Management Game.

• Part 2 will explain the Ten Types of Innovation in more depth. The Ten Types, introduced by Keeley, a senior consultant of Doblin,US, provides an excellent opportunity to explore innovation with greater detail. It shows us that innovation is not only about product performance (although that will always be our first thought when we think about innovation).

• Part 3 will explain you how to innovate. It will show us the different stages of an innovation process and how this process could be managed. It will give you a wide range of tools to start innovating right away.

• Part 4 will guide you through the Innovation Management Game. It will explain why you should participate and how you can playto get the most out of it.



Part 1: an introduction to innovationInnovation matters… Largest companies Most valuable brands

An introduction to innovation

Does innovation matter? Of course it does.

There is a whole bunch of theory that will prove us why it matters, but it can easily be seen when looking at the graphs above. On the left hand side, you’ll see a list of the largest companies in the world. You can find the full list here: http://www.forbes.com/global2000/. Because they are ranked by (a.o.) assets and market value, we will mostly see banks and oil companies among the top listed companies. They are the world today.

It is much more interesting to look at lists that show us the world of tomorrow, such as a list with the most valuable brands of this moment: http://www.forbes.com/powerful‐brands/ (figure on the right) or http://www.forbes.com/innovative‐companies/. We cansee clearly that the technology sector is the sector of the future, with brands like Apple, Microsoft, Google, IBM and Samsung forming the top 10.

Technology drives innovation, and innovation builds our future.



An introduction to innovationStartups disrupt the market

Startups

And that is why startups shape the world of tomorrow: they see opportunities, they address the world’s challenges and they buildtechnologies that no other company can build. They are not afraid of status quo or stakeholders.

That’s why it is interesting to follow the startup world. It’s not only about the startups themselves but also about angel investors, venture capitalists, incubators and accelerators: all of them pave the way for succesful startups. In the graph above we can see the world’s most promising startups (ranked by valuation). This ranking is lead by Xiaomi, a company that was founded in 2011 and isnow the world’s number 3 smartphone distributor, closely followed by Uber, the company that is disrupting the public transportation industry.

Startups disrupt the market. Disruptive innovation can be described as followed: "When the technology that has the potential for revolutionizing an industry emerges, established companies typically see it as unattractive: it’s not something their mainstream customers want, and its projected profit margins aren’t sufficient to cover big‐company cost structure. As a result, the new technology tends to get ignored in favor of what’s currently popular with the best customers. But then another company steps in to bring the innovation to a new market. Once the disruptive technology becomes established there, smaller‐scale innovation rapidly raise the technology’s performance on attributes that mainstream customers’ value.” (Joseph Bower in 2002)



An introduction to innovationSuperior product performance

Xiaomi vs Huawei

Innovation is not only about superior product performance

An example

In this example two highly competitive companies are compared to each other and we’re answering the question: why is Xiaomi seen as the “Chinese Apple” and isn’t Huawei? The answer lies in the fact that there is much more to successful innovation than just a superior product. Both phones are superior, but Xiaomi and Huawei have different strategies. Xiaomi seems to winning the battle: "If Huawei wants to survive, we have to win in developed markets like Europe, a high‐end market," Yu (Huawei) said in http://www.microscope.co.uk/news/2240237611/Battle‐between‐Huawei‐and‐Xiaomi‐is‐too‐close‐to‐call. However “Xiaomi, whichlast month raised over $1 billion in its latest round of funding to become the world’s most valuable tech startup, sells its smartphones through online channels while its marketing relies mainly on social media. Xiaomi keeps the prices of its handsets lowand tries to make extra money by charging for software and services for its users. Huawei’s answer to Xiaomi is a line of smartphones sold under a separate brand called Honor. Honor‐branded smartphones are sold through e‐commerce channels, and its marketing, like Xiaomi, focuses on social media.”

This battle is not about superior products, but about channel innovation and branding (amongst others).



An introduction to innovationDefinition: innovation1 is the creation of a viable2 new3 offering4 (Keeley et al, 2013)

1. Innovation ≠ invention

2. Innovation must be able:

• To sustain itself

• To return its weighted cost of capital

3. Innovation doesn’t have be to new to the world – only to a market, industry or organization.

4. Offering ≠ product: Ten Types of Innovation

Definition:

“Innovation is the creation of a viable new offering.” (Keeley, 2013). Of course, there are many other definitions. For instance the fairly narrowly defined definition of Schilling: “Innovation is the act of introducing a new device, method or material for applicationto commercial or practical objectives” (M.A. Schilling, 2005). Crossan & Apaydin recently published a literature review on innovation literature, stating: “An unrestricted search of academic publications using the keyword innovation produces tens of thousands of articles, yet reviews and meta‐analyses are rare and narrowly focused, either around the level of analysis (individual, group, firm, industry, consumer group, region, and nation) or the type of innovation (product, process, and business model)” (Crossan & Apaydin, 2009).

To be specific, a current search on the keyword “innovation” results in 2.5 million articles on Google Scholar and thousands ofarticles using the keyword combination “definition of innovation”. Clearly, there isn’t a specific definition that is correct and many perspectives should be taken into account when defining innovation.



A short history of innovation

History of Innovation

The history has seen roughly five clearly defined ‘waves of innovation’:‐ The wave of the Industrial Revolution, mainly resulting in new technologies around (water) power.‐ The wave of Steam Power: the beginning of the era of Railways, the Steel Industry and Heavy Engineering.‐ The wave of Electricity and Oil: the start of a technologically revolutionary era of automobile development and mass production.‐ The wave of Advanced Electronics, such aviation and space technology.‐ The wave of Information and Telecommunication: the rise of computing, the internet and mobile communications.

People argue there is already a sixth wave starting: the wave of sustainability, with many new technologies around sustainable energy. People expect energy to be almost free at the end of this wave.



A short history of innovation

Gartner Hype Cycle 2014

Actual Cycle

When we zoom in into one specific year, looking a micro cycle (or Hype Cycle), we’ll see the current wave. Technologies that are farahead have the highest expectations, such as the internet of things, neurobusiness and smart robots, but the graph also showstechnologies that are much closer within reach, such as 3D Scanners and Speech Recognition. Much more detailed versions of these ‘hype cycles’ can be downloaded at the website of Gartner.



A short history of innovation management

1950 1980 2010

1st Generation: Technology Push

2nd Generation: Market Pull

3rd/4th Generation: Integrated Processes

5th Generation: Open Innovation

Rothwell (1994)

History of Innovation Management

The art of cyclic innovation – innovation as a process and the continuous management of innovation – is called innovation management. It is defined as the acceleration of the generation of innovative ideas by using effective mechanisms of managementand organization and taking into account the fact that it has to be implemented successfully (M.A. Schilling, 2005). Innovation management, or new business development, aims to enhance the chance of technical and commercial success (Melissa A Schilling & Hill, 1998).

Similar like organizations growth models, the area of innovation management has been undergoing several improvements over theyears. Rothwell has stated that market changes have contributed to these improvements and he distinguishes five different generations of innovation:• 1st generation: technology push.• 2nd generation: market pull• 3rd generation: coupled innovation• 4th generation: integrated innovation• 5th generation: open innovation



Part 2: Ten Types of Innovation

10Tyoes

Ten Types of Innovation

As said before, there is more to innovation than just a superior product. The next part of the presentation is about the Ten Types ofInnovation (Keeley, 2013). As Keeley states it:

“So here’s a question: “Which are more innovative: big companies or little companies?” Bet your instinct was little companies, right? Our faith in brilliant entrepreneurs is noble, but that answer is simply wrong and it is important to know why. For one, it is a trick question. For every large company (say, Fortune 500 scale) there are about 64,000 little ones. Of course out of that huge pack we never hear much about the dry cleaner on the corner or tiny painting contractor, we only hear about the handful that grow up and become, uh, Instagram. Now, hey, there is nothing wrong with wanting to be the next Instagram or Tumblr. Indeed, that bigambition is what often makes business fun, and I’m a lifelong entrepreneur too. Yet as an innovation scientist I can now confidentlyassert that we live in one of the most amazing times in history to build, foster, and accelerate effective innovation. In that spirit, here are three vital innovation ideas that every entrepreneur should know.” (Keeley, http://upstart.bizjournals.com/resources/author/2013/05/23/larry‐kelley‐on‐10‐types‐of‐innovation.html?page=all)

Continu to find out everything about the Ten Types and how to use them.



Ten Types of Innovation

10Tyoes

How to use them:

• Understand all ten types

• Shift across categories

• Understand what your users really need

• Use at least 5 types to build breakthrough innovation

How to use the Ten Types of Innovation

The book indicates that there are six principles that you should understand before using the Ten Types. One of them: use at least 5 types to generate breakthrough innovation. The book also indicates you should analyze your own product portfolio, you should analyze your industry, you should decide weather to focus on one category or shift away from it (based on your competitors decisions), that you can choose between and combine tens of different tactics – proven models – within each type and that certaincombinations of those tactics are called ‘gameplans’, that highly innovative companies can quickly use when certain situations arise

To truly use them, practice a lot.



Profit Model

ProfitModel

The way in which you make money:

• Ad‐supported

• Bundled pricing

• Cost leadership

• Freemium

• Licensing

• Membership

• Subscription

Innovation of the Profit Model

This type is about the way in which your company is making money. For instance through a bundled pricing system, a cost‐leadership strategy focusing on mass production and reducing prices or a freemium model that lets users use your product for freeuntil a certain limit.

Gilette makes an interesting example, as it flipped its business model when it was still a young company. In the beginning it sold its razor for a high prices and its blades for a low price. At time, where many men sharpened their blades themselves, this used to be the normal business model. However, Gillette introduced the “razor and blades business model”, where the razors were sold at a very cheap price and the complementary products (the blades) sold at a premium prices. We still find this business model everywhere around us, for instance in the printer industry (where inkjets are sold at a premium price) or the games industry.



Network

Network

Connections with others to create value:

• Alliances

• Collaboration

• Coopetition

• Franchising

• Merger/acquisition

• Open Innovation

• Supply chain integration

Innovation of the Network

This type of innovation is about having connections with others to create value for your organization. For instance building strategicalliances or collaborating with other companies. Another example would be Open Innovation: “Combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies.” (Chesbrough, 2006).

The example shown above is about GSK (GlaxoSmithKline) who started an Open Innovation platform where both researchers, scientists, medical professionals and users started to co‐think about new solutions. There are many more examples, such as Samsung with its Samsung Accelerator, Samsung’s Open Innovation Center and Samsung Semiconductor Open Innovation Page. Other examples include Wayra by Telefonica, Entrepreneurs in Residence Program, Shell’s GameChanger program and Google’s Startup program.



Structure

Structure

Alignment of talents and assets:

• Competency Center

• Corporate University

• Decentralized Management

• Incentive Systems

• IT integration

• Knowledge Management

• Organizational Design

• Outsourcing

Innovation of the Structure

This type is about innovating the structure of your organization. In the broadest definition. It is about building an organization that is scalable and flexible – think about the Rockefeller Habits – and bout aligning talents and assets within that structure. Quite oftenit comes down to a ‘culture of innovation’. Examples are: a competency center, a corporate university, talent development programand knowledge management. Thinking about physical structure, it could mean decentralizing your management, rethinking your incentive structure and redesigning organizational processes or even outsourcing.

A specific article that we would often like to refer to, is that of Quinn & Cameron about organizational cultures. It splits organizations in 4 different cultural types:• Adhocracy cultures• Clan cultures • Hierarchy cultures • Market cultures



Process

Process

Superior methods to do your work

• Crowdsourcing

• Intellectual Property

• Lean Production

• Logistic Systems

• On‐Demand Production

• Process Automation

• Process Standardization

• User‐Generated

Innovation of the process

This type of innovation is about creating superior methods to do your work (more effectively and more efficiently). Examples of process innovation are ‘lean production’ and ‘on‐demand production’. In the example depicted we are seeing the case of Uber versus the traditional taxi industry. Uber basically reinvented the process of getting a cab. It is very lean and very automated and therefore highly effective.

The need for clarity around problem solving, collaboration, and communication leads to formal operational processes which canreduce ambiguity and create more predictable results. Operational processes that are too formal, however, can erect barriers to creativity, create bureaucracy, and lead to less coordination across the organization (Roca, 2013).



Product Performance

ProductPerformance

Distinguishing features and functionality

• Added Functionality

• Customization

• Environmental Sensitivity

• Feature aggregation

• Focus

• Performance Simplification

• Safety

• Styling

• Exceptional Quality

Innovation of the performance of the product or service

This type is about developing distinguishing features for your product or service. This is the most ‘well‐known’ form of innovation because it includes styling, exceptional quality, new technology and safety aspects of the product or service. In the example we’ll see a product that is superior in technology and design from Dyson.

Another form of product performance is customization. A classic example of customization would be Mars with its M&M’s that are fully customizable with personal logos and messages. Another example would be Nike, which gives users the opportunity to designits own shoes.

An example of a technology with a radically improved quality is Corning Gorilla Glass, a very thin scratch‐resistant glass especially developed for smartphones. It is currently used in over a billion devices worldwide for over 33 brands.



Product System

ProductSystem

Complementary Products and Services

• Complements

• Extensions

• Plug‐ins

• Integrated Offering

• Modular Systems

• Product Bundling

• Service Platforms

Innovation of the product system

This type of innovation is about creating value from complementary products and services. For instance, complements, extensions,plug‐ins and modular services.

IKEA, while also accelerating in process innovation, also reinvented the world of complements (or bundled products) by letting users select certain bundles of products and adding extensions, colors and other materials individually. It was a radically different view in the furniture industry.



Service

Service

Supporting and amplifying the value of offerings

• Added Value

• Guarantee

• Lease or Loan

• Loyalty Programs

• Self‐Service

• Try Before You Buy

• User Communities

Innovation of the service

This type of innovation is about supporting and amplifying the value of offerings. Examples include guarantee, lease, loans, loyalty programs, the opportunity for self‐service and try before you buy.

Some companies focus only on creating add value through services for other companies. One of them is the Dutch‐based companyBrandLoyalty which helps other companies creating loyalty campaigns as a service for the most important customers. They say: “BrandLoyalty’s unique value lies in our ‘full service’ approach. We take away all the potential worries and complexities of executina programme that a retailer could face. These include: ∙ Providing initial strategic advice∙ Developing a tailor‐made programme∙ Implementing the programme, or series of programmes∙ Managing and then evaluating each programme∙ Logistics∙ Analysis”



Channel

Channel

How your offerings are delivered to customers

• Cross‐Selling

• Diversification

• Experience Center

• Flagship Store

• Go Direct

• Indirect Distribution

• Pop‐up Store

Innovation of the Channel

Distribution has always been one of the most expensive elements of the production process. And because of that companies are always looking for more efficient ways to bring products or services to the customers. The internet has changed distribution channels radically, but also physical distribution channels take new forms every year.

One popular example of a new channel is a so‐called pop‐up store. These pop‐up stores, especially combined with ‘go direct’, means that producers can skip several players in the chain of production and create temporary stores within larger stores to sell their products and create brand value. This form of channel innovation is recently adopted by many department stores.



Brand

Brand

Representation of your offerings and business

• Brand Extension

• Brand Leverage

• Certification

• Co‐Branding

• Component Branding

• Private Label

• Transparency

Innovation of the brand

This type of innovation is about the representation of your offerings and business. A strong brand creates extra value for your product or service. An example of that would be Virgin. There are many aspects that make Virgin a great brand, but the personalization of the brand in the form of Richard Branson is probably the best one. Richard Branson is well known for using sociamedia and blogging. He’s synonymous with Virgin brands to the extent that the first link on the Virgin.com menu is simply ‘Richard’And of course we all know who Richard is. He’s the biggest Virgin advocate and ambassador and that’s a great lesson for any business leader. His persona is very public and allows him to tell stories in many media. The Virgin website itself has a timeline, telling the story of Richard’s business interests that quickly become the sprawling Virgin brand. This timeline is beautifully illustrated and replete with nostalgia. (eConsultancy.com)



Customer Engagement

CustomerEngagement

How you engage with your customers

• Community

• Identity

• Experience Automation

• Experience Simplification

• Mastery

• Personalization

• Status and Recognition

Innovation of the Customer Engagement process

This type is about creating an excellent experience for your customers. Simply said: marketing and communication. In 1999, JosephPine and James Gilmore first introduced the concept of an Experience Economy. The concept is that goods and services are no longer enough for consumers – that businesses must create memorable events and experiences that capture their audience and create experiences that transforms their brand’s value proposition (Forbes, 2014). Total experience marketing is a 360‐degree platform. Marketing is everywhere. It’s digital, mobile, experiential, social and word of mouth. A brand conversation that begins ona TV campaign must continue digitally. It should become a two‐way conversation and ultimately a customer springboard that the brand is curating and amplifying on social platforms. (Forbes, 2014)



Breakthrough InnovationsMore is mightier: great innovations go beyond products.

Many companies are know for their product performance:

• Google: perfect search engine

• Microsoft: computer software

• McDonald’s: fast food

But the real story behind their success is much more complex…

Breakthrough Innovations

Keeley suggests in his book that a company needs to address at least 5 types at the same time in order to create breakthroughinnovations. While that may not always be true, it is definitely a good choice go beyond product performance or to make a shift towards types that your company is not yet addressing. For instance: ‘top innovators’, as ranked by Forbes, BusinessWeek and othejournals, on average use 3.6 types, while ‘average innovators’ only use 1.8 types. They also analyzes stock price change over the lasfew years and while the S&P‐index in general declined with about ‐10%, companies that used 1‐2 innovation types grew with 40% and companies with 5+ types grew with more than 100%. Conclusion: more is mightier.



Google

ProfitModel

Structure Process ProductPerformance

ProductSystem

Service Channel Brand

• Product performance: perfect search engine – PageRank – Ads

• Product system: AdSense

• Profit model: AdWords: do‐it‐yourself ads

• Structure: Googles 20%‐rule, extraordinary employee facilities, scientists & engineers

• Process: PageRank as an automated search engine creation algorithm

• Service: integrated AdWords services and supporting staff

• Channel: Location‐specific search results

• Brand: clean and spare homepage, Google Doodles program



Microsoft

ProfitModel

Process ProductPerformance

ProductSystem

Channel

• Product performance: computer software

• Product system: Microsoft Office

• Profit model: bundled prices of applications

• Process: Microsoft User Research Studios

• Channel: web‐compatible (90’s), automated upgrades, cloud apps



McDonald’s

ProfitModel

Network Structure Process ProductPerformance

Brand

• Product performance: fast food

• Profit model: franchise model

• Network: strategic alliances (Coca Cola, Golden State Foods)

• Structure: Hamburger University, 80.000 graduates

• Process: franchisee innovation process

• Brand: branding as an integral strategy



Part 3: How to innovateThe innovation funnel

Problem Finding Ideation Concepting Implementation

Part 3: How to Innovate

Many scholars have tried to identify phases or stages of innovation processes, resulting in the following stages of innovation: market research, idea generation, conceptual and technological development and commercialization (Gopalakrishnan & Damanpour, 1997; Ortigueira, 2008; Verhaeghe & Kfir, 2002). At InnovativeDutch we use the process developed by Avans University(Spruijt, Demouge & Koert, 2012):• Problem finding• Ideation• Concepting• Implementation

The fact this the different stages are drawn like diamonds has a reason: every stage contains a diverging, often vague, phase inwhich creative and diverging processes are or seem to be generally chaotic and where next to the generation of ideas innovation seems to be rather arbitrary and a converging, disciplined, phase in which creative ideas are critically addressed, edited and selected and further developed into commercial business cases and successful innovations.



How to innovate Problem Finding:

Analyze trends, markets and your business to gain valuable insights for innovation.

To‐do’s:

• Integrate Grand Challenges into your mission

• User Research

• Foresight Cards

• http://www.sustainable‐everyday‐project.net/innovation‐futures

• http://www.thefutureofinnovation.org

• http://technologytrendsindex.kpmg.nl

• http://ascentlookout.atos.net

Problem Finding

On the last page the stages were shows as linear process in the innovation funnel. However, from a management perspective it would be better to look at innovation from a cyclic perspective.

Problem finding is about investigating every aspect of the past, present and future (innovative) issues or problems, directly orindirectly relating to the environment and defining insights, opportunities and/or consequences with the aid of analysis.

Intersting links to start problem finding today:http://singularityu.org/impact/http://www.sustainable‐everyday‐project.net/innovation‐futureshttp://www.thefutureofinnovation.orghttp://technologytrendsindex.kpmg.nlhttp://ascentlookout.atos.net



How to innovate Ideation:

Generate a lot of ideas, within and without the context of the initial problem and choose a few.

To‐do’s:

• SCAMPER

• TRIZ Contradication Analysis

• Six Thinking Hats

• Brainstorming, ‐mapping, ‐drawing, ‐writing

• Storyboarding

• Attribute Listing

• Delphi Method

Ideation

Ideation is about generating an abundance of ideas both from within and outside the context of the problem and selecting from a given number of likely ideas.



How to innovate Concepting:

Build a few concepts and business cases, test them and select the most likeable.

To‐do’s:

• Business Model Canvas

• Customer Journey Mapping

• Minimum Viable Product (Lean Startup)

• Value Network Mapping

• Stakeholder Mapping

• Persona Creation

Concepting

Concepting is about developing a number of concepts and/or business cases, based on the selected ideas aimed at solving the problem and selecting one or more ideas which can lead to innovation.

Interesting links to start concepting today:http://www.businessmodelgeneration.com/canvas/bmchttp://www.designthinkersacademy.com/freedownload_customerjourneycanvas/http://theleanstartup.com/principleshttp://www.valuenetworksandcollaboration.com/mapping/networkmappingbasics.htmlhttp://www.innovativedutch.com/ten‐faces‐of‐innovation‐by‐kelley‐infographic/http://www.innovativedutch.com/ten‐types‐of‐innovation‐by‐keeley‐infographic/



How to innovate Implementation:

Developing plans to implement your offering and realizing them.

To‐do’s:

• Creating Business Plans

• Create Golden Circle Pitches

• Building a team: product visionaries and tech rock stars.

• Building Scenarios

• Organize for scalability (Rockefeller Habits)

• Using Metrics

• Building a Marketing & Communication plan

Implementation

This stage is about realising the concepts by determining which activities are necessary in the context of the problem and implementing the developed plans to create innovative business.



Part 4: Innovation Management Game

Part 4: Innovation Management Game

The Innovation Management Game is an educative and challenging tool for students in Business Education with personalized feedback for students and neglectible time investment for instructors. The Innovation Management Game provides companies the knowledge and expertise to be able to create a balance between short‐term operations and long‐term strategies.

In this manual the principles of the game will be explained.



IntroductionI. What you’ll (hopefully) learn

II. Organization of the game

III. Gameplay

IV. Process and planning



I. Learning objectives• Deeper understanding of innovation sciences & tools

• Holistic understanding of strategic thinking

• Experience based learning

• Social dynamics

Learning Objectives

The learning objectives follow four main learning effects of serious games in teaching innovation sciences as proposed by Bogers &Sproedt (2012) in their article “Playful Collaboration (or Not): Using a Game to Grasp the Social Dynamics of Open Innovation in Innovation and Business Education”:1. Enable critical reflection on social dynamics and experience‐based learning – applying the learning of reflections and experience

through iteration.Teams have to show their ability on this aspect by a continuous approach on playing the game and a growing amount of awareness of the gameplay and progress based on results and reflections.

2. The game enables to students to create a more holistic understanding of complex social dynamics when dealing with novelty. Teams have to show their ability on this aspect by preferring a long‐term oriented focus and a strategic perspective on runningan innovative organization over a short‐term oriented focus with a focus on operational results.

3. A deeper understanding of innovation sciences.Teams have to show their ability on this aspect by taking “wise” decisions in the game. Wise decisions match criteria such as: effectiveness within the changing context of the simulation, efficiency based on the return on investment (in time, quality andmoney), coherency between different decisions taken and coherence over the years.

4. Creating a shared experience of social dynamics and the paradox of co‐opetition for the students.Teams have to show their ability on this aspect by an indication of strategic focus over the years and a certain amount of logiccorrelation between the decisions taken in different years. Effective teams collaborate in order to take well‐thought decisions.Less effective teams often don’t talk about long‐term strategies and don’t support each other on taking smart decisions. This will be reflected by a lack of strategic focus in the game.



II. Organization of the game• Behaviour and attitude

• Target groups

• Group sizes

• Time frame

• Location

• Game managers

Organization of the game

Behaviour and attitude“Minds are like parachutes: they work best when open.” Thomas Dewar. This game is a learning game. A learning game always follows the rule that there should be a balance between the amount of information that is given to understand the basics and theamount of information that stays under the surface in order to be learned. Feedback plays an important role in learning. This gameprovides the players with just enough information to start playing. This means that many concepts, relations, effects and conclusions are still fuzzy at the beginning of the game. It is your job, through asking around, talking with each other, playing, experiencing and learning to find the best way of working. An open and inquisitive attitude is a necessity to get the most out of thisgame.

Target groupsThis game is oriented at students in higher education preferably with one or two years background in business or relevant courses. We assume the basics of organizational science are known to the players (through school or experience). This game is also orientedat business professionals in training: people that would like to become better innovation professionals.



Group sizes:The group size is 3‐5 players, however it can be played with every possible number of group members, 1‐many. Within one game a maximum number of 11 teams can compete against each other.

Time frame:Each round takes about 1 hour to complete. Usually, we set deadlines beforehand and your team has to deliver the results before the deadline of the next round. The rounds can be played over a longer time span, for instance once a week, or a shorter time spanfor instance 5 rounds in one day.

Location:The longer games, with intervals of at least 1 day, can be played online, worldwide. It is advisable to form teams that know and seeeach other in real life to make discussions about the strategy more liveable. Shorter games, such as a pressure cooker workshop, needs physical attendance of the game manager and all the players in order to work efficiently.

Materials:The game is played on a computer or tablet, so every team needs to have access to at least one device with internet access.

Game managers:Every game has a game manager: an innovation expert that will provide feedback to every team after every round and that is available for questions during the game. The game manager cannot interrupt in the game algorithm, but is able to adjust or resetmistakes. In physical sessions, he/she will walk around to ask questions, give feedback and enhance the game experience.



III. Gameplay ‐ 1• Scenario: business‐to‐consumer high‐tech Robotics sector

• Theoretical dilemma’s:• Ten Types of Innovation• Innovation Funnel• Radical vs. Incremental

• Scope of the game: closed market with medium‐sized enterprises

• Level of abstraction: innovation management vs. innovation.

Organization of the game

Behaviour and attitude“Minds are like parachutes: they work best when open.” Thomas Dewar. This game is a learning game. A learning game always follows the rule that there should be a balance between the amount of information that is given to understand the basics and theamount of information that stays under the surface in order to be learned. Feedback plays an important role in learning. This gameprovides the players with just enough information to start playing. This means that many concepts, relations, effects and conclusions are still fuzzy at the beginning of the game. It is your job, through asking around, talking with each other, playing, experiencing and learning to find the best way of working. An open and inquisitive attitude is a necessity to get the most out of thisgame.

Target groupsThis game is oriented at students in higher education preferably with one or two years background in business or relevant courses. We assume the basics of organizational science are known to the players (through school or experience). This game is also orientedat business professionals in training: people that would like to become better innovation professionals.

Group sizes:The group size is 3‐5 players, however it can be played with every possible number of group members, 1‐many. Within one game a maximum number of 11 teams can compete against each other.

Time frame:Each round takes about 1 hour to complete. Usually, we set deadlines beforehand and your team has to deliver the results before the deadline of the next round. The rounds can be played over a longer time span, for instance once a week, or a shorter time spanfor instance 5 rounds in one day.



Location:The longer games, with intervals of at least 1 day, can be played online, worldwide. It is advisable to form teams that know and seeeach other in real life to make discussions about the strategy more liveable. Shorter games, such as a pressure cooker workshop, needs physical attendance of the game manager and all the players in order to work efficiently.

Materials:The game is played on a computer or tablet, so every team needs to have access to at least one device with internet access.

Game managers:Every game has a game manager: an innovation expert that will provide feedback to every team after every round and that is available for questions during the game. The game manager cannot interrupt in the game algorithm, but is able to adjust or resetmistakes. In physical sessions, he/she will walk around to ask questions, give feedback and enhance the game experience.



Gameplay ‐ 2• Format: number of rounds

• Rules: be on time & do not overspend

• Policy: what happens when you don’t follow the rules?

• Teams and roles

• Indicators & winner• Sales• Innovation score• Creativity score• Business Valuation (final winner)

Gameplay

Format:The game is played over several rounds that are similar to each other. Each round spans one year in the game. Because this is a strategy game, and iusually takes 3‐5 years to implement a strategy, we suggest everybody to play around 6 rounds.

Rules:• Deliver your results before the deadline. Results delivered after the deadline will not be taken into account.• Play the correct year – which means: don’t open an url from an older email.• Do not spend more than your innovation budget indicates you can spend.

Policy:If you don’t follow the rules, you will get a fine. If you don’t obey the rules for the second time you will get bankrupt and won’t be able to continue playing. You’ll have to talk to your company spokesperson or university teacher in order to get that fixed.

Teams and roles:We do currently not support different roles within teams.

IndicatorsThere are many different indicators in the game, but the three most important are:• Sales: the total amount of sales you got over the last year. This indicator is directly related to market share.• Innovation score: this score is indicating your company’s ability to create radically new technologies and bring them to market.• Creativity score: this score is indicating your company’s ability to create new products in the funnel.

Winner:The former three variables can be combined to create a ‘business valuation’. At the end of the game, all companies get an exit to be publically traded. The company with the highest business valuation will win the game. The business valuation is only visible for your own team during the game.



Gameplay – the learning loop

Implementation

ObserveAssess

Design

OADI, Kofman (1992)

1st round: scroll around

1st round: create a strategy All rounds: take decisions

All rounds: read and analyze the results(annual report)

2nd round: evaluate yourstrategy, goals & competition

2nd round: adjust your strategy

Gameplay

This game follows a learning loop. • Assess (results of your teams strategy in the report)• Design (a new strategy)• Implement (take decisions)• Observe (the new annual report)

This repeats itself for a number of rounds. Because of the learning loop, this game is specifically oriented for higher education and very well received in master programs and business trainings.



Gameplay – in more detailBefore the first round…

• Open the email




• Open the email

• Click your teams URL

Open the e‐mail, read the comments and scroll down to your team’s unique url. Do not share your url with another team!




• Open the email

• Click your teams URL

• You’ll arrive in your company’s inbox



1. Study the theory• Open the email

• Scroll down to view

• Study the theory• Information

• Extra links• Impact on gamevariables(more later)

Knowledge Management System

The theory in the knowledge management system gets updated every year in accordance to the decisions that you can take. They are directly linked to these decisions.

• Information: it will give you a general explanation of the topic.• Links: it will give you direct links to Google, Google Scholar, Twitter News and Google News• Star rating for each stage of the funnel: this indicates how much effect this decision has on the amount of new projects in thatstage of the innovation funnel (with a maximum of 5 stars).

• Primary/secondary type of innovation: this shows that some decisions do not only effect the innovation type it is listed under, but also another type. Therefore, this can have an (un)wanted effect on your agenda.

• Radical innovation: the effect that this decision has on the number of radical projects in your innovation funnel.• Investment costs: the costs of this decision.



2. Read the news alert• Open the email


• Unexpected events

News alert

Unexpected events are integral part of this game and make the game more fun. They are written in order to be fair, for instance by giving extra results in case of special combinations of decisions. In this game there are no unforeseen disruptor that will change themarket rapidly, such as newcomers or volcano explosions that don’t make sense.



3. Annual report• Open the email


• Study the report in detail



3. Annual report



3. Annual report• Competitors (ranked by annual sales/market share)



3. Annual report• Fact sheet about your organization



3. Annual report• Two other rankings: innovation excellence and creativity



3. Annual report• Business valuation: final ranking

• How is it calculated?• Sales (in €) + (Innovation Score + Creativity Score)*Sales• Example: Sales 100M, Innovation Score: 80%, Creativity Score: 50%Business valuation: 100M + (80%+50%)100M = 100M + 130M = 230M



3. Annual report• Strategic agenda: what types did you invest in over the last 5 rounds?

• 100% = most invested in

• 0 % = least invested in• In comparison with competitors!



3. Annual report• Tactical agenda: what types did you invest in last round?



3. Annual report• Strategic/tactical fit: to what extent did competitors make the same decisions?



3. Annual report• Your innovation performance: the funnel

• Number of projects

• Radical vs Incremental

• Balance• Throughput• Impact of types

• 1 phase/round

Innovation Funnel

This is probably the most important aspect of the report: your innovation performance.

At the bottom, you will see all your current projects. The blue boxes indicate that the projects are costing money, the red box shows the projects that have been introduced to the market and are generating sales. It takes approximately 1 year to bring one single project to the next phase. The more you invest in that stage, the higher the chance that you’ll bring a project into the next stage. You will also see the number of radical and incremental projects: an indicator of your technological performance.

Above the figure you will also find information about the innovation types and at what stages they have the most influence at. For instance: investing a lot in marketing & branding will most likely increase the chance that products that were in the ‘development’ stage are brought to market. In other words: investing in marketing & branding will help increase your sales. However, at the same time that strategy will decrease the number of new projects, resulting in the fact that in 3 years from now, there will be less products to bring to the market. So you’ll also have to think about investing in, for instance, ideation.



3. Annual report• Projects lead to sales:

Stable products (cash cows) and decreasing products (dogs) are market introductions from previous rounds that still generate revenue



3. Annual reportMost importantly: your new budget

Write down this number: you’ll need it when taking decisions. You are allowed to take decisions up to this amount.



3. Annual reportSome other stuff in the report

• Economic overview

• Collaborations

• Appendices

There is some extra information that might or might not be relevant for your strategy.



4. Analyze your innovation performanceCompare your funnel (and other information) with your strategy (and expected results).

Reflection

Compare the results with your (desired) strategy. Build a reflection report:• First round: in the first round the teams have to put down a vision for (let’s say) five years. This vision then leads to a strategy. In the formulation of the strategy the teams can use, for example, a BCG matrix. The teams should then appoint at least three SMART‐formulated objectives for the first round. Use these to form operational decisions (in the game); explain why these decisions are taken. Do this for each topic or specialization.

• Next rounds: the teams should view and analyze the results of the previous round. What goals have are met and which are not? Then decide whether you want to adjust the strategy and if so, set new goals and take according decisions.



5. Check your budgetWe already saw the budget in the report:

Take a look at Appendix 1 for the financial statement.

Important: your budget is not the same as your sales; it the difference in total innovation investment of the previous year and the maximum you may spend this year. It is therefore common that the budget decreases, while the sales are growing. A decreased budget is not a sign of poor performance. Decreased sales are.



6. Create a competitive strategy‐ Think about the dilemma’s:

‐ Ten Types of Innovation

‐ Radical vs. Incremental

‐ Long‐term vs. short‐term orientation

‐ Cost leadership vs focus

‐ Collaboration vs. solo

‐ Don’t change your strategy too much



7. Take decisions‐ Open the email

‐ Scroll down

‐ Take decisions‐ That reflect your strategy

‐ That stay within the budget



8. Collaborate‐ Collaborate with other teams

‐ Rules for collaborations are different for each game. Please ask the game manager.

Collaborations

It is possible to collaborate with other teams. By saying you collaborate with another team the number of new projects in that particular stage of the other team will also be added to your innovation funnel (meaning you don’t have to invest in that part this round). In the current form it is not necessary to inform the other team of the collaboration.

In practice, it is highly recommendable to talk to the other team, because if the other team is ‘losing’ projects, you will also lose projects in that stage. In that case it would have been smarter to invest in another stage or collaborate with another team.

There are different forms of collaborations possible. They are not advised in the first and second round due to a lack of budget.



9. Submit‐ Submit your decisions

‐ You can resubmit until the deadline if you want to change something.

‐ Wait until the results arrive in your inbox (with a new unique url)



IV. Process and planning‐ Long games (4‐10 rounds)

‐ Integrated with university courses

‐ Integrated with business challenges

‐ Short games (3‐6 rounds)‐ Events

Process and planning of the game

We advise instructors or company manager to get in contact with Innovative Dutch to create a specific program that suits yourneeds.

Universities:• Alternative 1: Complete integration of the game into the course: all topics are addressed in the course, and the game is played during the course, for instance 1 round per week during a 7‐10 week during course, or 1 round per two weeks during a 11‐20 week course. The order of the different innovation types/decisions could be rearranged upon request.

• Alternative 2: All topics are relevant for the course, but the program is not suited for full integration. In that case, the game couldbe played in 2‐3 events of 3‐4 hours during which several rounds are played in a row. These events usually take place during thelast couple of weeks of the course. This alternative needs to planned at least one month in advance.

• Alternative 3: Same as alternative 2, but all rounds are played after the course has been completely finished, for instance in 2‐3 events or by playing 1 round per day for 10 days in a row.

Companies:It is also possible to develop a full program around the Innovation Management Game.



• Round 1: Marketing, Branding, Ideation• Market‐ and Desk research• Idea Generation / Concept Development• Target Group Analysis for concept• Positioning of concept• Marketing mix for concept• Idea generation• Theoretical framework• Concept development• Marketing plan

• Round 2: Technology, Co‐creation• Implementation plan for concept.• Business plan for concept.• Full Business Model Canvas for concept• Concept Design• Product Design• Prototyping

• Round 3: Social Innovation• Organization plan for concept or Canvas.• Using the crowd to enhance product design.• Using human capital to enhance product design.

• Round 4: Entrepeneurship, Corporate Venturing• (Corporate) entrepreneurial / investment plan for organization.• New Product Development for organization.• Business plan for product

• Round 5: Open Innovation• Vision/strategy for organization.• Innovation Management plan for organization.• Strategy for product and business. • In‐ and outsourcing plan

• Round 6: Business Model Innovation• New Business Development plan for organization.• Future profit models for organization.• Spin‐off/‐out strategy.• Business Model Canvas.• Profit model plan.



Thank you!

More info: http://www.innovativedutch.com