The Innovator’s DNA

S U M M A R I Z E D B Y:

C A M I A G AV I N

K A B E E R M A L H OT R A

B I L L S TA N TO N

M I L L I E Z H A OD E C E M B E R 2 , 2 0 1 3

W R I T T E N B Y:

J E F F D Y E R

H A L G R E G E R S E N

C L AY TO N M . C H R I S T E N S E N

Part One:Disruptive Innovation Starts with You

Who Is Classified as an Innovator?

I. Start-up Entrepreneurs

II. Corporate Entrepreneurs

III. Product Innovators

IV. Process Innovators

Innovative Companies are almost always lead by innovative leaders.

Reality Check

•Engaging in discovery skills does not ensure financial success

•Failure often results in from not being vigilant in engaging all discovery skills

•Not all innovators in the book should not be held up as an example on how to be innovative

Discovery Skills: The Courage to Innovate

The Five Discovery Skills of Innovation

I. Associating

II. Questioning

III. Observing

IV. Networking

V. Experimenting

Discovery Skill #1: Associating

Associating is the ability to make surprising connections across areas of knowledge, industries, even geographies. • Connecting wildly different ideas, objects, services, technologies and disciplines to dish

up new and unusual innovations

• Innovators intentionally maneuver themselves into the intersection where diverse experiences flourish and foster discovery of new insights.

• When the brain is actively absorbing new knowledge, it is more likely to trigger connections between ideas as it toils to synthesize novel outputs.

• Lego thinking and getting lots of ideas from different sources creates the best of all innovation worlds.

Discovery Skill #2: Questioning

Questions hold the potential to cultivate creative insights.

A way of life for innovators, not a trendy intellectual exercise.

Asking Disruptive Questions by treating the world as a question mark.

Be willing to look Stupid!

Dilemmas for Senior Leaders

Discovery Skill #3: Observing

Most Innovators are intense observers

Look for the “job” and a better way to do it

Understanding the Job to be done

Actively watch customers and look for workarounds

Ten Questions to ask while observing

Change the environment

Develop observation skills “All of us are watchers – of television, of time clocks, of traffic on the freeway – but few are observers. Everyone is looking, not many are seeing”

-Peter Leschak

Framework for Observing

Look for the “job” and find a better way of doing it

OpenTable.com

•Find cuisine of choice

•Make reservation at convenient time

•Have access to discounted meals

•Essentially a personal restaurant concierge

Look for surprises

•Traditional thinking can tell us to steer away from anomalies

•Think like a scientific researcher and seek out anomalies

•Cory Wride and Media Mouth Inc.

Change the Environment

From foreign countries to zoos…

A new environment can help provide a fresh way to look at the same problem

Discovery Skill #4: NetworkingIdea Networking VS Resource Networking

Discovery-Driven Executives

Why they network:-New surprising ideas-Fresh perspectives-Test ideas

Target-People with different traits-Experts/Nonexperts in others fields

Delivery-Driven Executives

Why they network:-Access to resources-Sell themselves/company-Further careers

Target:-Similar people-People with resources & power

How to Idea Network

•Tap people outside of the field for creative inspiration

•Attending Networking Events

•Form a Personal Networking Group

Discovery Skill #5: Experimenting

Try Out New Experiences

•Diversity of experience fosters divergent thinking

•Provides larger set of ideas when associating

Take Apart Processes and Ideas

•Deconstruction followed by reconstruction

•Michael Dell literally and figuratively took apart manufacturing of PC’s

Test New Ideas Through Pilots and Prototypes

•PayPal began when Michael Levchin wanted to transfer money from one Palm Pilot to another

Part Two:The DNA of Disruptive Organizations & Teams

Successful Innovation = Profits

“An innovation is the conversion of a new idea into revenues and profits . . . In fact, there is no correlation between the number of corporate patents earned and

financial success. A gee-whiz product that does not deliver value to the customer and provide financial benefit to the company is not an innovation. Innovation is not complete

until it shows up in the financial results.”

- A.G. Lafley (Chairman of Board, President & CEO of P&G)

World’s Most Innovative CompaniesInnovative Premium: Market Value that cannot be accounted from current business • Market Value > Cash Flows = growth & innovation• Expectations of NEW and PROFITS

World’s Top Innovative CompaniesSalesforce.com (founder: Marc Benioff)• First to offer online/on-demand CRM/Salesforce

automaton software

• Cloud computing

• App Exchange: applications for businesses

• Chatter “Facebook + Twitter” for business

Intuitive Surgical:

• Robotic assisted surgery

• 3D visualization and robotic arms to ensure accuracy = smaller incisions, fewer mistakes, etc.

• Future goal: Long distance surgery

Key DNA Qualities: 3P

• Excel at discovery

• Management should spearhead innovation

• Monitor, maintain & hire high discovery-quotient people in every levelPeople:

• Encourage employees to associate, question, observe, network, and experiment

• Processes are designed to hire, train, reward, and promote discovery driven people

Process:

• Innovation is everyone’s job

• Disruption is part of the innovation portfolio

• Deploy small, properly organized innovation project teams

• Take smart risks in pursuit of innovation

Philosophies:

People

Build a team with complementary skills

Lead by setting an example

• Innovative leaders make a difference

• Executives’ actions are signal to a organization

• Create a balanced team: Understand your strengths & weaknesses

Discovery-driven

Delivery-driven

Associating

Questioning

Observing

Idea networking

Experimenting

Analyzing

Planning

Detail-oriented

Execution

Innovative TeamsBig Idea Group (BIG):Intermediate company between innovators and distribution channels

•“Idea Generation”

• Look for innovative ideas through its networks

•“Winnowing”

• Panels of strong discovery skill individuals to evaluate

•“Refinement”

• Evaluate potential value & size of the marketplace

• Strong delivery skills needed

• Some discovery skills to assess innovation adaptations

•“Capture Value”

• Product launch in market

http://www.bigideagroup.net/

IDEO: Design firm that takes a human-centered & design-based approach to helping organizations innovate and grow

•T-Shape teams

• Deep expertise in a specific area & shallow expertise in multiple areas

•“human factors” determine desirability of an idea

•“technical factors” assess feasibility of an idea

•“business factors” evaluate business viability

Processes

DNA of Innovative Companies

DNA of Innovative Individuals

The DNA of innovative companies reflects the DNA of innovative individuals. Their approach changes the way the organization leads and does business

Discovery Processes

QuestioningFive-Whys

ObservingManufacturingEmployees

Idea NetworkingInternalExternal

ExperimentingRapid Trial & Error

Systematizing the Processes

Questioning

Experimenting

Networking

Observing

Philosophies

“Innovation is deeply ingrained in all of the nooks and crannies of our culture”

-Jeff Bezos

Philosophy #1

Innovation is everyone’s job (not just R&D)

Philosophy #2

Disruptive Innovation is part of our innovation

portfolio

Philosophy #3

Deploy Small, Properly

Organized Project Teams

Philosophy #4

Take Smart Risks in Pursuit of Innovation

“If you’re not prepared to be

wrong, you’ll never come up with

anything original”

Group Conclusions & Takeaways

Conclusion

5 Skills of Disruptive Innovation:

Associating

ExperimentingNetworkingObservingQuestioning

ConclusionDNA of Innovative Companies:

Philosophies:

Innovation needs to be thought of daily, by the entire company

Processes:

Use of the 5 skills of innovation

People:

Discovery-oriented executives over delivery-oriented

Key Takeaways•Innovation is more nurture than nature

•Anyone can train to become more innovative

•Innovative companies are led by discovery-oriented leaders

•Innovation is an investment in yourself

Thank you