meaningful innovation

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  • 1. Meaningful Innovation Nathan ShedroffProgram Chair, MBA in Design StrategyCalifornia College of the Arts, San Francisco

2. Why innovate? 3. Paths to Growth: Operational efcienciesSell-offs of assets Mergers and AcquisitionsIPOs Rebranding InnovationEveryone knows all of these now. Every MBA student learns these techniques. Theyre the cost of doing business.Rebranding to increase prot margin (often only temporary). Only the last two are differentiable and only Innovation createslasting, organic growth. 4. Validation: The MFA is the new MBADan Pink, 2004 Harvard Business Review Tomorrows B-School?It Might Be A D-SchoolSpecial Report, 2005, BusinessWeekCEOs Must Be Designers, Not Just Hire Them Bruce Nussbaum, 2007, BusinessWeek 5. What is innovation?To create better products, services,and events (offerings, experiences) 6. What is innovation?To create better solutions 7. What is innovation?To create better solutionsTo create better processes 8. What is innovation? To create better solutions To create better processes To create better organizations To create a better worldorganizations > not only companies. 9. What is innovation?The most successful innovation is not merely novel... 10. What is innovation?The most successful innovation is not merely is sustainable and meaningful 11. Why cant most organizationsinnovate effectively? 12. Why cant most organizationsinnovate effectively?They dont have the context 13. Why cant most organizationsinnovate effectively?They dont have the context market research vs. market insightdemographic vs. ethnographic 14. Why cant most organizations innovate effectively?They dont have the contextmarketing is not PR & advertising!Most marketing departments and efforts are ineffective for innovation. 15. Why cant most organizations innovate effectively?They dont have the context marketing is the inhalePR & advertising is the exhaleMarketing is actually taught in our program as a studio course, not a lecture/survey course. 16. Why cant most organizationsinnovate effectively?They dont have the contextnot just customers but all stakeholders 17. Potential Stakeholders:customers, clients, employees, distributors,wholesalers, retailers, suppliers, partners,creditors, stockholders (shareholders),communities, government courts anddepartments (city, state, federal, andinternational), banks, media, institutionalinvestors and fund managers, Labor Unions,Insurers and re-insurers, NGOs, media,business groups, trade associations,competitors, the general public, and theenvironment (local, regional, and global) Source: sustainabilitydictionary.comDifferent stakeholders can exercise different types of power, including: voting, legal, economic, political, and social, and canform coalitions with others. Sustainable organizations should identify stakeholders and maintain dialog with them in order tobetter understand how to help address stakeholder concerns, operate more effectively, and make better strategic and tacticaldecisions. 18. Why cant most organizationsinnovate effectively?They dont have the culture 19. Why cant most organizationsinnovate effectively?They dont have the culture Structured Innovators (18%) Creative Innovators (26%)Dynamic Innovators (39%) Ad Hoc Innovators (10%) Innovation Outsourcers (8%) 20. Innovation cultures:Structured Innovators (18%): Dynamic Innovators (39%): Formal process Strategy guides process Led from the middle Led from top Low collaboration Cross functional teams Analytic evaluations Collaborative Iterative Creative environment Risks minimized Rational inspiration Risk-taking is acceptedCreative Innovators (26%): Big Ideas inspireAd Hoc Innovators (10%): Led from the top Accidental innovation Often haphazard process Innovation not valued Focus on creativity Creativity not valued Risk-taking is accepted Haphazard process Innovation Outsourcers (8%): Relies on consultants Acquires innovation Source: Cheskin 2005 Focus on marketing/PR 21. Why cant most organizations innovate effectively? They dont have the creativity?Creativity isnt what people assume it is. The most creative person in my old company was the CFO. All people are creativeeven those with MBAs. : ) 22. Why cant most organizations innovate effectively?They dont have the courageInnovation isnt easy and its often messy. It may feel like things arent going forward, at times, and its most successfultechniques are unfamiliar for business leaders. However, despite all of this, it can be exhilarating and rewarding, and it mustbe done in order to succeed. Conditions often require wholesale change in an organizations strategy, including theabandonment of old approaches, understandings, and offerings. Innovation can enable this kind of change but it takescourage to follow this road. 23. Why cant most organizations innovate effectively? They dont understand sustainabilityWhy must be think about sustainability? Because we no longer have the luxury of ignoring it. Besides being a businessimperative, its a source of tremendous opportunity. 24. Why cant most organizations innovate effectively? They dont understand sustainabilitynancial = nancial capital IP + assets = manufactured capital environmental = natural capitalsocial = human capitalMost business people only truly understand the rst two. They understand the importance of conserving, expanding, andcaring for these forms of capital. One of the problems in the business world is that we only measure success in terms ofmoney. This is often liberating but often leads to irresponsible behavior and results. How many conservatives are interested inconserving anything? As Hunter Lovins likes to say, were managing the planets resources like a re sale. You dont have tobecome an expert at this to start operating with it. 25. Why cant most organizations innovate effectively?They dont understand meaningExperience surrounds all products, services, and events, whether we acknowledge and address it or not. 26. Meaning:Meaning is the most important dimension of the customer experience. It is the mechanism to build the deepest connectionsbetween customers and devices, companies, and other people. 27. Meaning: Meaning (Reality)Status/Identity (Values)Emotions (Lifestyle) Price (Value)Function (Performance)In order to innovate effectively, we must start with meaning and work out to price and features. Working backward (which iswhat most companies do) is in efcient, more expensive, and often precludes any ability to innovate effectively. 28. 15 Core Meanings: Accomplishment HarmonyBeauty Justice Creation Oneness Community Redemption DutySecurityEnlightenment TruthFreedom Validation WonderThese core meanings are universal. ALL of your customers, no matter where they live or work, understanding thesemeanings. The may prioritize and express them differently, but they understand them implicitly. Tis means that meaning-centered innovation can focus on delivering deeply connected solutions universally, requiring only localization for differentmarkets instead of entirely different development efforts.We can talk in more detail about Meaning in the afternoon session. 29. Why cant most organizations innovate effectively? They dont have the processProcesses need to evolve within companies in order to enable innovation. Since innovation hasnt been the focus of mostcompanies, their processes often prevent the possibility of innovation. Also, most business functions, from accounting tooperations and even marketing are focused on optimization and regularization. Innovation is entirely different from these andmost often needs to be shielded from other business processes and measurements within an organization. 30. Why cant most organizations innovate effectively?They dont have the process design-led innovation: user-centered research, prototyping, critique, iteration, embracing constraintsMy program is an experiment to use design-led processes to inform more successful innovation. We mix those with designbackgrounds and business and non-prot professionals without a design background in order to create a more vibrant contextfor innovation around all forms of capital. Designers are taught how to innovate effectively but theyre rarely taught thefundamentals of a corporations workings, goals, or strategies. Business leaders learn these quickly, but have often neverencountered what to do when confronted with a new problem, a new context, or a blank sheet of paper--and no Excelspreadsheet. 31. A meaning-lled innovation process:Developers have an opportunity to play a role not only in the product development realm, but also in the board room, where strategy for thecompany is set (and needs to reect better customer understanding). 32. A meaning-lled innovation process:First, meaning research should be an integrated part of customer research. This is key data that should affect corporate strategy for yourcompanies and clients. 33. A meaning-lled innovation process:Then, corporate strategy can start reecting customer meaning. This is the rst step toward specifying the right offerings (the right business to bein). 34. A meaning-lled innovation process:Then, meaning becomes an integrated, accepted part of the development process and youre already working on the right offering. Now, you canconcentrate on making it as great as possible. 35. Design is the processof meaningful innovation. 36. In summary:Innovation is messy, but criticalIts all about people skills & multiple perspectives(customers, teams & policies)Design-led strategy is probably a better approach 37. The programs goals: MFA Design > leading designersMasters Design Mgmt. > design leaders MBA Design Strategy > business leaders Help create the next generation ofbusiness leaders, not merely design leaders or leading designers.This is more than design and product development leadership, its business leadership. 3