Thursday, February 25, 2010

Kathy Robison: 7 Keys to Innovation - European Style

Posted below is a wonderful piece by Kathy Robison that we'd like to share with you. Kathy discusses the recent conference, Front End of Innovation Europe 2010. To learn more about FEI 2010, please click here.


7 Keys to Innovation - European Style
by Kathy Robison

Two weeks ago, I attended the Front End Innovation Europe Conference (FEI Europe) held in Amsterdam. One of the highlights was seeing the car in the picture above in person. Yes, they drove it into a large conference room inside the Hilton Hotel. It is the 2010 BMW Vision EfficientDynamics Concept car, and it is even more cool in person than in the photo. It's BMW's answer to the green car revolution. Though perhaps a little late to the game, I suspect it will eventually prove to be a huge success as they continue to do engineering with more style than most other car makers. In addition to seeing the car, we got to hear directly from Adrian van Hooydonk, the Director of Design of BMW Group and mastermind behind the group that developed the car. They clearly rose to the challenge of eloquently working Future Sustainability into their brand of the Joy of Mobility in a record amount of time.

We also received a lesson from Josephine Green, a well-known leader in trends and strategy from Philips Design, on Engaging with the Future Differently. It was a real eye opener for many. We also heard fantastic examples of innovation in conjunction with universities from Sigvald Harryson with Copenhagen Business School that left us all realizing the vastness of the untapped resources lurking around our universities. The event concluded with a superb presentation from the World Business Council for Sustainable Development and an interactive session that literally no one wanted to leave. All in all... a huge success! If you missed FEI Europe, don't miss FEI USA 2010 in Boston this coming May (see editor's note for 20% off). I suspect it to be equally as tantalizing.

I've written previously about the Pitfalls of Innovation, and I still believe that far more talk about innovation occurs than actual innovation because true innovation comes from doing not talking. Just go to any third world country where people are forced to live with minimal resources and you will see what true innovation is all about. It comes more from unmet needs and a gap in resources than heavily padded budgets purposed toward the never-ending replacement of old gadgets with new gadgets. None-the-less, well done conferences such as FEI, are well worth it.

Below are the 7 Keys to an Innovative Business. Some are my standard favorites, and others I picked up at the FEI Europe Conference.

Click here to ready Kathy's 7 Keys to Innovation.

Tuesday, February 23, 2010

Changing the Way You're Judged: an Olympic Lesson

C. Engdahl
The Big E of Big E Toys

Many people reading this will not likely relate. Some of the contents are arguably a bit obscure. It doesn’t help that it took place 16 years ago. Nor does it help that it’s primarily about competitive ice dancing. There is a lesson of innovation inherent in the story though that pertains quite well to some current happenings. But that doesn’t make it any less obscure or any less about ice dancing.

There was a time when I actually enjoyed watching ice dancing during the Olympics. I’m not embarrassed (at least not overly embarrassed) to admit such a thing. But as far as I’m concerned, ice dancing stopped being a “sport” back in 1994. That’s the year Torvill and Dean (of Great Britain) were robbed of an Olympic gold medal.

I was however watching the Olympic ice dancing finals last night. My wife still enjoys it. She wouldn’t let me change the channel to watch some Olympic curling matches. Go figure. As I watched a few of the final couples, including eventual gold medal winners Virtue and Moir of Canada and silver medalists Davis and White of the United States, I began to notice a few things that I thought weren’t quite right. Various couples in the competition seemed to be performing lifts for which I thought they would be penalized. And at other times, there seemed to be more separation between ice dancers than I thought was acceptable under the rules. Then it occurred to me that my understanding of the rules is still based on 1994 standards. I admittedly haven’t paid as much attention in recent years to the world of ice dancing and apparently no longer know my stuff. Judging and point systems have changed in recent years, partially because of judging scandals, but also in no small part to the skill and innovative style of skaters such as Torvill and Dean. Back in 1994 some judges couldn’t even comprehend the innovative stylings set forth by this duo.

Without delving into the historical minutia of competitive ice dancing, let me simply say Jayne Torvill and Christopher Dean set the standard by which all ice dancing was and will be measured. They are akin to former NBA great Michael Jordan. In the early ‘80s as amateurs, Torvill and Dean won multiple European and World ice dancing championships. And in 1984 they took home the gold medal from the Sarajevo Winter Olympic Games. It was at this competition that the pair became the highest scoring figure skaters of all time (for a single program) receiving twelve perfect 6.0s and six 5.9's which included artistic impression scores of 6.0 from every judge. After the ’84 games, they began touring professionally.

Adjustments to competitive rules for the Olympics in the early ‘90s pertaining to amateur status allowed the duo to compete again for an Olympic title in 1994. They performed exquisitely yet only took home the bronze medal from Lillehammer. I suspect some of the ice dancing judges at the time probably didn’t like the fact that Torvill and Dean came out of professional retirement to compete once more as amateurs. They may have received lower scores because of it. I’m of the opinion that they simply skated such an innovative program (without flaw mind you), that the judges simply couldn’t comprehend what they were looking at.

For anyone that thinks Nancy Kerrigan got robbed in the same ’94 Olympics when she finished second to Russia’s Oksana Baiul in the ladies’ singles competition, don’t bother talking with me about it. Although Kerrigan may also have had an argument for winning the gold, her situation in my estimation pales in comparison to the travesty bestowed on Torvill and Dean. Torvill and Dean got truly robbed.

If you’ve come to the conclusion by this point that I know way too much about figure skating to be taken seriously as a writer of anything related to innovation¸ then by all means stop reading now. I won’t begrudge you in the least. I completely understand. I do have a point to make though.

Competitive ice dancing rules have changed in no small part because of the innovative stylings of Torvill and Dean. The standards by which they were judged in ’94 had yet to catch up to their abilities.

Sometimes it takes an extraordinary performance to change the way something is judged.

I’ve been seeing a variety of television ads during the last week concerning Toyota’s commitment to customer safety and product quality, many ironically that have been playing during Olympic coverage. Unless you’ve been holed up somewhere for the last six to eight weeks, you must have at least some appreciation for the world of hurt Toyota is in because of its cars’ safety issues and the manner in which the company has handled its recalls. The ads I’ve been seeing are meant, I imagine, to reassure customers and recapture lost trust. Recently revealed internal Toyota memos indicating the company had achieved “favorable safety outcomes” and “secured safety rulemaking favorable to Toyota” which led to company savings involving upwards of $100 million, has not I’m sure instilled warm fuzzy feelings in its customers or Washington lawmakers. Doesn’t really seem as though Toyota has been looking out for its customers as recent television ads purport.

Toyota needs an extraordinary performance to change the way it is judged. And right now they’re doing everything everybody expects a large, multi-billion dollar corporation would do in this situation. There’s nothing really extraordinary about their efforts. They’re saying they’re sorry. They’re committing to change. And they’re running some polished PR campaigns. Wow, I’m blown away by their renewed resolve and customer commitment. Can you feel my excitement?

Why not provide some sort of compensation to affected customers? Simply fixing problems doesn’t eliminate the inconvenience Toyota’s product problems and manipulations have caused customers. Why not take the $100 million in savings you once garnered because of political maneuvering and apply it to some sort of customer bonus program rather than an expensive advertising and public relations campaign. Get creative. Get innovative. Do something at least mildly unexpected.

This lesson doesn’t simply apply to Toyota. It’s for any organization, whether in good times or bad. If you want to be judged differently, if you want to change the way people view your organization or the products and services you offer, then do something extraordinary.

Being extraordinary in the moment didn’t actually help Torvill and Dean win a gold medal in ’94. It certainly changed our impression of them though. And it changed the way they’ll be remembered.

Friday, February 19, 2010

The Push/Pull Struggle of Innovation

In a recent article written by Cheryl Perkins at postcresent.com, she looks at how identifying the push/pull in a market can help innovation be successful. For innovators, being able to truly understand what the market needs, what they are pulling for, instead of pushing a great idea out quickly, can benefit a company. Once it is understood what the market is pulling for, then push the ideas that align with that into the market place.

The article uses the iPad as an example of meeting a the market's needs. Do you agree with this? What other items have you seen pulled by the market that have resulted in market adaption?

Thursday, February 18, 2010

Archived Web Seminar: The Evolution of Global Prepaid Through Innovation

For those of you who missed the chance to view the live web seminar yesterday here's your chance to view it at your own leisure. The web seminar was brought to us by a sister event, Prepaid Expo Europe. Enjoy the hour long seminar!

Watch the archive

Tuesday, February 16, 2010

The Loss Leaders of Innovation

C. Engdahl
The Big E of Big E Toys

Let him think I am more man than I am and I will be so.”
from The Old Man and the Sea by Ernest Hemingway

By this point the 2010 Consumer Electronics Show held last month in Vegas is likely a distant memory for most. Everybody’s already looking ahead. That being said, the hoopla surrounding one particular category of products prompts me to take a quick look back.

Of all the gadgets, gizmos, and techie apparatus on display at the CES, the most intriguing if not simply most visually appealing products were the new 3D televisions. LG, Panasonic, Sony, and Toshiba all unveiled their version of these flatscreen dynamos. To think we can enjoy Avatar-like wonderment in the comfort of our own living rooms is very exciting to say the least. The fact that little to virtually no content for the 3D platform really exists at this point coupled with the fact that most consumers aren’t likely real excited about wearing funky glasses to watch television, makes me wonder exactly how to characterize this particular innovation.

Arguably the market for 3D television doesn’t even exist yet. Although Opinion Research Corp. as part of a recent study suggests awareness levels are at “60 percent for a technology that has yet to be advertised and distributed to the mass market,” only five percent of consumers “have plans to buy a 3D TV within the next two years.” Clearly the news of 2D TV’s death has been greatly exaggerated.

Did I mention earlier my family drinks a lot of milk?

It seems I’m stopping to buy milk all the time. Not that you care. But any particular moment during the week I can probably tell you with some precision the relative price points for milk at Cub Foods, Rainbow Foods, Target, Sam’s Club, and the Qwik Trip gas station near my house. I buy milk everywhere. And it’s the cost of milk that has become the basic standard by which I gauge the relative pricey-ness of each store’s other offerings. Although in truth I’m a more sophisticated grocery shopper than my seeming reliance on milk prices may suggest, the actual price of milk – particularly if I don’t have a lot of time to shop - may prompt me or discourage me from looking around for other items. I may have come in for milk, but I could potentially leave with a whole bunch of other stuff too.

To me, innovation is often as much about branding and public relations as it is about profits. Innovation is as much a perception to be maintained as it is a reality. Innovation, like milk, can be a loss leader. Sometimes it doesn’t really matter whether you make money on one particular product (or even category of products). Sometimes it’s simply important to be in a product category discussion. Like so many other technologies, acceptance of the 3D TV platform and subsequent consumables may be slow. But to not put forth a 3D TV product offering (or whatever product is the topic of hot discussion in your industry at the moment) may suggest to the market that you’re not on the cutting edge. If you don’t have a 3D TV, perhaps your offerings in other categories aren’t that innovative either. Why should consumers bother looking around for other items if your company doesn’t even sell milk?

Wednesday, February 10, 2010

Balancing four portfolio elements produces successful product launch

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA

LIVE Front End of Innovation Europe 2010

Topic: Portfolio Planning Dos and Don’t: How to Launch a Successful Product

Speaker: Anthony Reese: Former Director, Mobile & Entertainment Portfolio Planning, PLANTRONICS

Launching a successful product depends on the way you structure your portfolio. Anthony Reese managed Plantronics with a framework and applied it to the development of Blue Tooth.

There are four portfolio elements:

1.) Customer Needs
2.) Organizational capabilities
3.) Channel and market cadence
4.) Organizational capacity

You add value by balancing each of these against the other. The way to choose to launch a product or not is by balancing these four elements.

Think about your customer needs:

1.) The core problem to see.
a. What the customer wants
b. Future needs
c. The 2 – 4 X factor list size
d. Mix of excites us or the WOW factor
2.) Identify and focus on the top priority.

Organizational Capabilities include:

• Strategize the vision
• Brand history
• Organizational structure
• Special knowledge and skills
-Core competencies vs. Differentiated competencies

Know your market channel and cadence.

• Identify the major players
• Number of channels
• Reset /Planning Windows
• Competitive presence and movement
• Breadth of offering

Here is an example. Every two years is the renewal term of phone plans in the U.S. Bluetooth headsets are replaced every year because customers lose them. This determines when to enter the market with a new product.

What is the cadence for Apple? Each year new products are unveiled at MAC world. This sets the timing for the portfolio.

Breadth of offering means that their distribution channels only want to limit the number of headsets that they offer to their customers.

For organizational capacity, these are the areas to keep in mind:

• Development Methodology
• Development Capacity
• Development Cycle Time
• Functional Equivalence

You need to build alignments between the company and the customer. Sort the problems you want to solve. Find efficient solutions; look for the 80/20.

Synch the pace both in the development area and in the market area. Evaluate customer and channel cycles, development cycles, and their established cadence between capacity and the market. Ask yourself, “At what speed do we need to be running?”

Your must strike a balance between all four portfolio elements.

Anthony then presented us with a case study for the Voyager Pro headset. First they had to figure out the core problem to solve. What does the customer want now? They could only do 2 or 3 programs, but the roadmap showed too much and they needed to resize their portfolio. How do they select the 2 or 3 that they can only do?

They asked themselves, “What makes headsets successful?” One product sells lots of units. Perhaps they could suggest improvements to the best seller? Do they need to throw everything out and start from scratch?

They made their decision based on organizational capacity. A premium high performance headset makes sense. They bought the precursor. Now who are the heavy users of headsets? Heavy users are truck drivers, taxi drivers, and professionals who are on the phone over three hours per day.

In terms of market and channel cadence, it is a challenge to be in a consumer space with competitors such as: AT&T, Best Buy, Target, Wal-Mart, and Sprint.

AT&T almost killed the headset, said they did not like it. However, Plantronics still moved forward with the headset because they had alignment. AT&T said they would not buy the headset. Plantronics had to ask themselves, should we do this, even without AT&T? There was a 50:50 chance they would change their minds.

However, some carriers asked, “Can you deliver these three months earlier? Their reasoning was so it would fit their reset cycle/planning window

Now it is time to evaluate their organizational capacity. They can only do 2 or 3 development projects. They considered how well it fit and the balancing requirements among all four portfolio elements:

1.) Customer Needs
2.) Organizational capabilities
3.) Channel and market cadence
4.) Organizational capacity

The project stayed in the portfolio. There are lots of ways to fail, but they used these four elements for alignment and balancing. You must strike a balance.

Success was achieved and they received many awards.

Here is an IDEA! Inspire, Discover, Evaluate, and Act to drive innovation!

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA

LIVE Front End of Innovation Europe 2010

Topic:
Idea: A Framework for Driving Innovation Throughout Your Organization

Speaker:
Daryl Dunbar: SVP of Innovation, REED ELSEVIER

Daryl Dunbar built out an innovation team and created an IDEA methodology. His background includes experiences at British Telecom.

IDEA means: Inspire, Discover, Evaluate, and Act.

We need a common language. Innovation is about ideas that result in value creation. Value may not always be about economics. Value occurs at the intersection of capability, viability, and desirability.

Innovation can be of different types:

1.) Products/services
2.) Process
3.) Business models
4.) Management practices

Innovation comes in degrees:

1.) Sustain and grow.
2.) Build new revenue streams.
3.) Build new business.
4.) Creating strategic alternatives.

IDEA Framework was developed, not as a process, not as a procedure nor as a workshop. It is a loose framework.

There are 4 modules:

1.) From infinite possibilities to finite action.
2.) Need to frame the challenge.
3.) Pick your leaping off point
4.) Set boundaries, set goals.

Think about what you are trying to achieve. Assemble many different types of stimulus such as stakeholder interviews. In a cross-functional sharing session, you can ask “What are we doing now?”

Obtain agreement on the type of stimulus to be used. How can you inspire people to innovate, to think differently, and to engage the world in a different way.

For example he used IDEA to develop these customer propositions.

• Inspire: uncover themes, pain points, what people doing, follow customers around, themes generate trends, then pull out insights.
• Discover: divergent thinking wide leads to convergent thinking, develop blue print and road map, and see what execution could looks like.
• Evaluate: engage customers, get compelling business case, understanding of where it fits and how use it.
• Act: Launch a pilot. Oftentimes what happens in organizations is that there are plenty of ideation sessions, and then the ideas are cataloged, rolled up, and stuck in a cabinet and forgotten. You need to act on it.

Target 100 logged ideas. Combine ideas and stretch them, look at trends and themes and build things out to draw out large opportunities.

When you evaluate, build compelling propositions and business cases. It is very important to engage with customers and potential partners at this time.

Then Act to pilot, refine, and launch successful propositions. Be careful with measurement systems because you will get the behavior you incent. Stay away from ROI, it kills innovation. A payback in 12 months is unrealistic. Do a pain-gain matrix and consider the value of the opportunity to the degree of difficulty to execute. Create an opportunity map with timeframes labeled 3-5 years in the future.

HILTI passionately creates enthusiastic customers to build a better future!

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA

LIVE Front End of Innovation Europe 2010

Speaker: Dr. Andreas Bong, Senior Vice President, HILTI

Topic: Customer Orientation Throughout the Innovation Process

The focus is on the front end of innovation.

Agenda:

• HILTI
• Innovation management
• Customer integration
o Fuzzy front end
o Development

You cannot duplicate what they have done at HILTI. They use a direct sales model with only 30 people selling to their customers. HILTI is about cultural diversity and this fosters creativity and the outcome of innovation. Their employees include more than 50 nationalities.

HILTI has a worldwide presence for construction professionals worldwide, they increase productivity, and provide the benefits from innovation to generate significant added value. They are known for system solutions for professionals.

Sales development doubled the company in the last ten years. They invest 4% in R&D, 10% is done in applied research.

In the HILTI business model they have a common purpose and values. HILTI passionately creates enthusiastic customers to build a better future! The foundation of their culture is integrity, courage, teamwork and commitment. They put people first.

Business improvement, customer competence concentration, customer needs versus requirements, innovative and value adding solutions, management and support creates higher customer satisfaction and better bottom line results.

Innovation management at HILTI is integrated with a holistic view. They have normative innovation management, strategic innovation management, and operational innovation management.

The focus is on outside-in innovation. This is a contradiction as innovation. Horizon 2020 is the identification of future key technologies. They look in the crystal ball to determine global trends and predict construction trends. They generate various scenarios using “Construction 2020” to forecast HILTI relevant applications in 2020, and to create a HILTI relevant global technology roadmap.

They are driven by sustainability. HILTI identified trends by interviewing customers to come up with scenarios. This led to the creation of roadmaps. They learn to survive in each scenario, so they are prepared regardless of which trends or applications occur.

It is important to understand applications and customer needs. What is their value chain? What is their application chain? How do they operate?

HILTI uses science methodologies, work methods, work flow and task durations. There is cooperation and communication to review problems, errors, and identify opportunities for improvement.

By observing their customers at work, HILTI learns what their customers really need. They do this by using video. The customers who are observed forget they are being videotaped. They then behave normally in a brief amount of time. Think about this, 10% of total construction costs are caused by job site injuries. Return on sales of the average construction company is only 2-3%.

Dr. Bong then shows us several examples of innovation at HILTI. One involves the installation of cable trays. It is a solution that is low tech, with low competition, and with a high improvement potential that saves 15-20% of the total time needed. Another example is to replace a yardstick with a laser measurement.

Once you have an idea and a business plan, then go out to customers and ask for their acceptance of that solution.

Enthusiasm creates innovation! Innovation creates enthusiasm!

Key Points are:

1.) Employee satisfaction is the key driver for customer satisfaction.
2.) Understand your customer’s needs.
3.) Idea of scenarios, learn to survive in each scenario.
4.) Creating enthusiastic users is a very steep one.

Developing Vision 2050, Front End of Innovation Forms Innovation Think Tank

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA

LIVE Front End of Innovation Europe 2010

Topic:
Part 2: Innovation Think Tank – Develop a Vision for the year 2050

Led by: Per Sandberg, Managing Director, WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT

After listening to Part 1: Using WBCSD’s Vision2050 of a Sustainable World to Drive Corporate Innovation, attendees at the Front End of Innovation 2010 conference were invited to generate ideas for Vision 2050.

These are their ideas:

• With open innovation you lose control.
• The biggest challenges are the names: the toothbrush example, protecting the market brand and existing business structure. It is hard to create partnerships.
• The big companies and brands have resources and money.
• How can we convince them to abandon existing business challenges?
• Here is a different opinion. How could the future look like? Make it transparent; current business models are an inhibitor. Business models are preventing new types of partnerships.
• Low hanging fruit represents a large win referring to the McKinsey chart in Vision 2050.
• Recognize that in IT and the building industry, the way you purchase influences things.
• There is a lot of stuff you can do now; it does not take fancy things.
• In large organizations, there is a lot of inertia.
• Different viewpoint is that scale increases consumption in oil energy, 1% change. They used the same data set from McKinsey.
• Trying to stimulate grassroots for sustainability, the way forward is to do public-private funding.
• Needs to be focused and fast.
• Large corporations think long term very well. P&G began with candles.
• How do we finance, if the speed is too slow?
• It is unrealistic to rely on big corporations.
• Must have the politics of public-private partnerships.
• The average person will not be making the decisions.
• Create fast change by industry solutions.
• The internal organization is not conducive to innovation. Usually innovation occurs in R&D, or specialized departments.
• Innovation leads to financial performance.
• In bakeries the unsold buns are thrown away. This is not public knowledge. Public image was the driver that led to these results:

1.) Reduce by half in 10 years.
2.) Increase the value of the bread left.
3.) New products developed in 2 month, is multiplier by 100.
4.) Use bread as fuel.
5.) Lot of packaging is needed, use in biochemical or bio plastics.

• Smaller scale needed for innovation, important to parcel out the problem to small issues that can be solved. It is better to work in small teams.
• Megatrends: Intra entrepreneurship will play a big role.
• Can be accelerated, entrepreneurs can be glue for systemic change to occur. We need to incentivize entrepreneurs. Embrace entrepreneurs from all angles. They are driving change.
• We not want to waste bread but want to make money.
• Companies should not pretend to be something and do something else.
• FEI conference focuses on sustainable innovation with cases, etc.
• With a background in a chemical company, the challenge in the fashion or cosmetic industry is that as a supplier we have difficulties communicating with R&D, marketing, and not being able to talk to the right people. We need to remove the walls between different organizations.
• From organizational development, if you do not have a leader like Richard Branson, then your organization needs urgency. She had a prior experience in Shell. They had to work on composition on their oil. You can create a sense of urgency from the outside.
• In the U.S. nothing was learned from the banking crisis.
• Need a burning platform; this is needed to drive change. Ask yourself, what if tomorrow there is no more water? As a company we must question ourselves, and then we will innovate. What as a person what would you do?
• In the brewery industry, cans are recycled. They learned:

1.) Be on consumer top of mind. You need meaningful communication with the consumer.
2. ) Renovation reuses the bottle. Now label bottle, “Hello this is the 4th, 5th time you have seen me.” This changed the consumer mindset.

• Will not get big companies to agree at high altitude. Small companies are good at speed and entrepreneurial. Bring together small companies with funding provided by large companies. Use the leverage of both small and big companies.
• Lots of large companies have huge foundations, like the United Nation’s foundation. Address them and can make big changes occur.

• Summary of key points :

1.) Create sense of urgency
2.) Small bits of a problem
3.) Tools
4.) Project oriented approach, small teams
5.) Create Partnerships

In Vision 2050, sustainability is the key driver for innovation

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA

LIVE Front End of Innovation Europe 2010

Topic:
Part 1: Using WBCSD’s Vision2050 of a Sustainable World to Drive Corporate Innovation

Speaker:
Per Sandberg: Managing Director, WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT

Per Sandberg posed this question, “What innovation does the world need?” Vision 2025 was just launched in India.

Agenda:
• Argue that sustainability is the key driver for innovation.
• Describe what sustainable innovation needed to deliver.
• Dialogue how best to do sustainable innovation.

Based on the vision 2050 platform, gaps are identified to develop a pathway and identify areas of action. The idea is to clarify the business perspective, quantify market potential, and then agree on action points and next steps. Vision 2050 was run by 29 companies within 20 months.

They evaluated the sustainability status to see how are we doing? We plotted the quality of life and the ecological footprint. This identifies a sustainable quadrant for different nations. Countries such as Africa and the South American countries are using fewer resources than available but with a lower quality of life.

We only know one way of developing. How can we keep the quality of life with fewer resources, without overusing the resources? The status is that we are not doing well.

We are borrowing from the future. Over the next 40 years, we will see fantastic growth, more people, and more wealth. Growth means wealth and spending power. The global middle class is expanding. There is growth in the emerging markets. Global economic power is shifting. The top ten economies will change.

We are experiencing inertia with an accompanying inadequate policy response. There is degradation of water and degradation of resources such as oil.

To summarize, we will consume 2.3 Earths in 2050!

In Vision 2050, nine billion people will live well, and within the limits of the planet. Vision 2050 proposes using one planet.

This means that business as usual is not an option. Neither is policy as usual, financing as usual, nor consuming as usual. Innovation as usual is not an option either! We must build an attractive path.

Please read HBR: Why Sustainability Is Now the Key Driver of Innovation

“…sustainability is now the key driver for innovation. In the future only companies that make sustainability a goal will achieve competitive advantage”

How do we close the gap?

1.) Resources and carbon: halving CO2 emissions while doubling agricultural output.
2.) Costs: internalize cost of carbon, water and other ecosystem services.
3.) Consumption: change consumption patterns in favor of more sustainable lifestyles.
4.) Areas of activity: people’s values, human development, economy, agriculture, forests, energy and power, building, mobility, materials, etc.

What does it mean? It is all about resource efficiency around labor, productivity, and financial. We have a rising cost of capital with fluctuating prices. There is availability of raw materials, increasing complexity of risk, changing consumer behaviors, and evolving framework conditions. This creates significant business opportunities.

Key insights are:

1.) Global challenges will become key strategic drivers for business and innovation.
2.) There will be tremendous change.
3.) Opportunities abound for those who turn sustainability into strategy.
4.) Business must work closer with government and society worldwide to transform markets, prices and competition.

The needed radical resource efficiency improvement will require sustainable innovation by all means. Sustainable innovation is waiting to happen. We can begin by harvesting the low-hanging carbon fruit.

It takes 30 years for new energy technology to have market penetration. It is very possible to triple Africa’s agricultural yield. We can make IT work for sustainability. Systemic, integrated innovation is needed and attractive. We can form complex coalitions, do co-innovation with customers and competitive, suppliers. We can forge public-private partnerships.

How do we make it happen? How can we make systemic, integrated “sustainable innovation by all means” happen at a radical scale, with speed and performance?

Per Sandberg then invited the Front End of Innovation attendees to form an Innovation Think Tank to generate additional ideas for Vision 2050. Please go to blog post, Part 2: Innovation Think Tank to see the results.

Power Your Way to Innovation With an Electric Toothbrush!

By Connie Harryman, Applied Concepts Creativity
Guest Blogger
Organizer IIR
LIVE Front End of Innovation Europe 2010

Topic: The Invention Environment and its Difficulties

Speaker: Peter Hilfinger: Inventor of the Powered Toothbrush & former R&D Director, BRAUN/ORAL B

Peter Hilfinger invented the electric toothbrush; he was the leader of the team. He outlined the conditions for innovation as exemplified by the development of a revolutionary electric toothbrush. Braun/Oral B will now be a part of Procter and Gamble.

They were searching for a new product to fit into their portfolio. There was a big potential in the worldwide market, but there was an existing electric toothbrush that had not done well. It had no special benefits and the price was very high. It was a conventional electric toothbrush that had the same thing as a manual toothbrush.

There was a need to offer benefits that the manual toothbrush did not offer. Therefore, they tried to find out why people did not like existing electric toothbrushes. There were few consumers who are willing to pay for same benefits as a manual toothbrush.

Recommended time for brushing of 3 minutes was perceived as 3 minutes. Consumers use their toothbrush less than one minute; this is still true today.

Desired Benefits:
1. Is more convenient to use and creates pleasant sensation when being used: leaves you with a good mouth feel.
2. Does a better job at cleaning, compared with common manual cleaning practices.
3. Does it in less time than the recommended three minutes.
4. A brush head motion which was seen as not reproducible manually. So everybody understands that an electric device is necessary.

You cannot innovate by asking people what they want. This is useless and not productive. If you use nonfunctioning mockups, consumers do not understand the concept. This is due to psychology.

Consumers like mirror images of themselves versus pictures of themselves. They have strong preferences to old established ways. You have to make the decisions. Recommend strongly, otherwise remain in the mainstream. They were not committed to a final business plan. They only had a rough idea of what they wanted to do.

If a final business plan is approved then any new idea is reviewed against the business plan.

The electric toothbrush was considered as the most unneeded product. One of the features of the new electric tooth brush is that the brush head is circular.

Conditions for innovation include:

1. Top management understands and supports that final project plan has to be flexible while in progress.
2. R&D management has the freedom to set interim targets.

Each team member is aware of the entire project, including the financial targets and the desired contribution to the success of the company. The R&D team agrees with the project targets set up by the management! Meanwhile the team develops a sense of responsibility for the whole project Team members enjoy periods of creative rest.

Their initial tries resulted in bleeding gums. Eventually a working sample was built. The prototype outperformed the manual toothbrush with a better interdental plaque index, it was more convenient, it had a better feel of clean, and the teeth felt more polished.

They had some difficulties with production of the product. They were given more time to fix these issues and resolved them by using different materials to produce the bevel gears. Top management decided to go into the market.

Peter Hilfinger summarizes by saying that innovation needs freedom and creative rest, do not press innovation work into timeframes and financial constraints too early, and rely on your own strength.

MP3 Changes the World of Music


By Connie Harryman, Applied Concepts Creativity
Guest Blogger
Organizer IIR

LIVE Front End of Innovation Europe 2010

Topic: Inventor’s Forum
The MP3 Story: From Basic Research to Changing the World of Music

Speaker:
Prof Karlheinz Brandenburg: Inventor, MP3 Format, Director, Franhofer Institute for Digital Media Technology

The MP3 story involves basic research standardization. Internet marketing works. Lessons learned are to try to do the impossible.

Today there is decoding functionality on every PC. There is playback on mobile phones, DVD players, and alarm clocks. Name a device category such as MP3 players. This stands for the move from physical media to the internet economy. It earns money.

Prof Brandenburg took us on a historical journey:

It began with only some dreams in 1982. We should use ISDN to transmit music. There was coding of pictures, video, and speech. However it was not of high quality audio signals. Digital audio broadcasts needed high quality with a low bit rate audio.

Work started at Erlangen University and Frauhofer IIS and other places at the same time. What they wanted was the transmission of music at 1/10th data rate. The basic idea was perceptual coding. The signal sink was to be our ears.

1983: The philosophy is we have CD; so who needs this anyway?

1986: Now they are saying that this will never work well enough for the “golden ears” in the industry.

1988: MPEG starts soliciting proposals for video.

1989-1991: Fierce competition emerges.

1992: MPEG-1 audio gets three modes
1. DCC
2. DAB,DVB, CD-I
3. Feeding audio over ISDN

Conquering the market means understanding what do with it? They used the internet as a marketing tool due to a lack of funds. They used shareware as a tool to get their coder to people. Everybody should have access to good software. The first plans were to do PC based decoding.

1994: There are nearly no licensees for their technology.

1995: World space decides to use MP3; this is the first CE application.

1995: Ricky Adar wants to start the internet music distribution business, he asks us, “Do you know that you will destroy the music industry?”

1995: Harald Popp and Dagfinn Bach visit the offices of a major record label in Munich.

1995: First software is running on Windows.

1996: Students write other decoders.
First license issued to Microsoft.

1997: MP3 encoder is stolen and now the technology can be found widely.
Mp3.com starts. This is freeware. This helped because it gave many people the ability to use the technology. This leads to Internet pirates in the music industry.

The first MP3 websites began at the end of 1996 / early 1997.

Summer 1997: Legal actions are taken and are documented in USA Today. This publicity leads to more pirates.

Music is the first to get away from physical media. You must ask yourself why? Innovation is driven by inventions. Inventions are driven by curiosity. Children are curious; we need to stay that way.

The key factors for success are vision, overtime effort, and stubbornness. You also need luck. Ideas from many people helped MP3 to become the best system by its time. There is no single inventor of the MP3. One of the strengths in Europe is the ability to build teams and work together. They set the joint success over the individual. Listen to the market and do not give up.

The age of digital media has just arrived.

Here's a short clip from his presentation below:

Customer-centric Innovation Drives a Superior Customer Experience


By Connie Harryman, Applied Concepts Creativity
Guest Blogger
Organizer IIR
LIVE Front End of Innovation Europe 2010

Topic: Delivering a Superior and More Profitable Experience

Speaker:
Ian Forrest: Chief Marketing & Strategy Officer, GE MONEY

This is a story about the GE Money Bank in the Czech Republic and about delivering a superior and more profitable customer experience through customer-centric innovation.

Key facts include:

• 4th largest bank by branches
• 1 M+ customers
• 4000 employees

Their bank branches are located on back streets. They have been around for 10 years. They are mainly a consumer finance company then they became a full service retail bank. Previously branches were built based on cost and were quite spartan in decor. They were designed for the staff to use. The customer was not considered. The branch is a critical aspect of the banking relationship. Currently they have 218banks.

GE has a strong history of innovation and it is important to think about innovation structurally and consider the investment, time, and resources.

Ian Forrest outlines some basic principles:

1. Start outside in, not inside out.

GE Money Bank looked at analogous experiences. They used an “outside- in” approach. Ask yourself, “How much of time does your marketing team devote outside of your industry?” They explored comparable experiences aligned with their brand fit.

2. Examines tails not averages for insight.

To “Examine the Tails” they found that impactful innovation will not originate through understanding of averages. Their big insights include an emphasis on making things easy, clear and more rewarding. They identified two types of user journeys and four behavioral segments. They recognized that financial literacy is an opportunity for growth. They focused on customers who aspire to personal consultation. They remove the “Q” stress, and deliver a proper send-off with a handshake.

3. Design for behaviors and use.

They design for behaviors and focus on the behavioral segments that use the branch the most and they design for how the customer wants to use the branch.

4. Creates value through understanding key moments.

They invest in moments that matter most by aligning and placing an emphasis with customer needs and expectations. They have low-tech innovations around moments that matter to manage expectations and “tune” branch traffic. The branches have mapped traffic flows. The goal is to enable families to focus on their consultation versus distractions.

5. Test to fail and learn faster.

They have a process for rapid testing and learning. When they make mistakes, they want to do it at “no” cost fast. The idea is to fail fast, fail cheap. They have a learning library.

One of their “little” mistakes involved the type of people they hire. New models require new processes and sometimes different people to execute. Their new branch was staffed with a branch manager and associates. They tried to use this existing staff but it did not work. They had to hire completely new staff with completely different skill sets. They hire from hospitality, travel agencies, and hotels. This has improved their business and brand performance.

6. Customer centric innovation starts with the customer or the customer’s specific problem.

Now their branches are brightly lighted, with a beautiful décor, and clean. Customers encounter a warm greeting, and have privacy for consultations in a circular meeting place that emphasizes “we.” This creates an environment to allow the banker to work closely with the client.

GE Money has been able to drive customer satisfaction from 6th place in 2008 to the #1 ranking in customer satisfaction for banking in the Czech Republic in 2009. They drive operational performance to create the branch of the future. They see encouraging trends in performance.

GE Money targets customers who have money versus customers who need money. The breakeven point is 9 months.

6 things summarized:
1.) Start from the outside in and explore analogous experiences for a broader frame of reference.
2.) Examine the tails—more insight can be gained from the advocates and the disgusted.
3.) Design for behavior and usage—avoiding traditional segmentation factors.
4.) Focus on moments that matter most through prioritizing.
5.) Test to fail and learn faster.
6.) Measure, and modify constantly.

What are we innovating and why are two questions we do not ask often enough.

Here's a short clip from his presentation below:

Tuesday, February 9, 2010

A Key Driver of Innovation is When Time:Matters!

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010

Topic:
Service Innovation and New Markets …Key Elements of Time: Matters’ Growth Strategy
Speaker: Franz-Joseph Miller: CEO TIME-MATTERS-A LUFTHANSA SUBSIDIARY

You will get innovation from the view of a mid-size company. They provide special speed solutions for the “planned emergency.”

He then gave several examples where speed of delivery is essential. This includes a Formula 1 race, where there was an engine failure but the needed spare parts were stored in Cologne. There are only 36 hours until the race begins.

Another example is when a bone marrow transplant is in Jacksonville, the donor is in Cologne and there are only a few hours to change and or save lives.

Building trust is the key. He hires “freaks” who can figure out the logistics to transport emergency parts for nuclear power plants while minimizing the risk, yet keeping cool while managing the logistical complexity. They have a solution focus and take on the responsibility to deliver when time matters. The company culture encourages and supports them to be fast, flexible, excellent, obsessed, fearless, unconventional, extreme, rule breakers, passionate, and unique.

They serve a market for “When tomorrow is too late …” or standard not enough! They are asset free. They can deliver in hours worldwide. The business is rather complex and the industry is fragmented, especially on an international scope.

Standard delivery is based on price. Special speed solutions are based on value and trust. There are many competitors in the local market but there are few competitors internationally. The projections for special speed solutions are between 10-20%.

Growth is driven by global trends. The key industries are: automotive, aviation and aerospace, machines and tools, oil and gas, life sciences, and medical.
Time:Matters works by coordinating the market, customer, operations, customer service, as well as the processes and or networks.

In 2005 they embarked on a growth strategy focusing on service expansion and internationalization through buy and build. Strategic targets included: internationalization, target market expansion, network and service expansion.

Their strategy was matched to the market trends. Drivers of growth included these factors: global, reduce complexity, risk management/contingency, outsourcing, standardization, warehouse centralization, cost/service pressure, niche markets, emerging markets, lean production, JIT, and after sales service.

Every solution can be a service expansion. Their challenge is to transform ad hoc solutions created under high pressure into a standard. They turn tailor made solutions into a modular product tool-box. They develop a collaborative and learning organization with long term planning and a daily exchange. There is regional flexibility with central steering.

With service and network expansion and internationalization Time:Matters has realized a greater than 140% growth since 2005.

Key learning’s:
1. Innovation process = project management
2. Expectation management…upfront target and results planning, clear and reasonable milestone and timelines
3. Quick results …feasibility test and motivation booster
4. One leader..clear responsibility for results with one person
5. Ensure support…engagement of all teams (include Young potentials).
6. Incentives…new services development results as part of corporate target setting.
7. Learn and adapt…team member’s work on innovation parallel to a minimum of tasks.
8. Prototype before launching.. pilot phases with real customers
9. Discipline! realize when it’s time to pull the trigger …and pull it
10. And avoid consultants…why would they be better than your own people?

Innovation Culture as a Team Sport

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010

Topic: Innovation Culture—Making Innovation a Team Sport

Speaker:
Urs Limacher: Senior Director Emerging Technologies, ZIMMER

Zimmer is a leading orthopedic supplier to orthopedic surgeons. The industry is 50 years old. They will be replaced by biological products. Their products do not heal.

Innovation culture involves a willingness for risk taking, curiosity, a willingness to change, openness for new things, and using one’s own initiative.
Urs Limacher handed out a graphical map illustrating seven success factors for innovation.

Success Factor #1: Provide clarity and guidance and build a strong case for change.

There are four basic growth strategies: strategic diversification, market development, products / service development, and market penetration. Whenever there is a gap then plan further activities according to the growth strategies listed above.

Success Factor #2: Collect and allow for every single idea.

They have 8000 people worldwide. They are not centralized and have virtual organizations at different sites. They do not report into R&D, marketing, or brand management. They are looking for ideas for process improvements and product improvements. Sources are both external and internal (focused here). They use ambassadors to bring ideas in from external sources. This way they get higher quality ideas. The time frame for an idea to be accepted or rejected is limited to 90 days.

Success Factor #3: Establish distinct roles and demands.

The not invented here syndrome will kill all radical ideas at the first level.

They have identified “Innovation Champions” with these attributes:

1. Able to identify customer needs, fields of opportunities and their innovations.
2. Form a pool of innovation champions—as trained tool specialists, they are able to hand on their knowledge to other employees –they push new ideas.
3. Serve as accelerator for innovations in order to inspire the 8000 Zimmer employees to be innovative – encourage and challenge the employees – assure management support.
4. Promote innovation and innovation management.

Success Factor #4: Break up silos and organizes virtually across existing structures.

By using the Innovation Champions, they enhance collaboration and team work across organizational boundaries. Supporting informal networks is important.

Success Factor #5: Nominate only the best volunteers. Look for both knowledge and expertise.

Be sure to review your selection over and over again. During the interview make sure people are really interested in learning about innovation.

Success Factor #6: Engage in “Give and take” – it is ongoing and you must do it in a systematic manner.

Success Factor #7: Promote your innovation system. You must communicate within the receiver’s Language.

Urs Limacher concluded with this quote:
“Don’t change culture – use it!” ~ Peter Drucker

Reinventing wind power using technology

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010

Topic: Reinventing an Older Product Segment by Implementing State-of-the-Art Technologies

Speaker: Carsten Dickmann, Head of Marketing and Product Management, POWER WIND

Carsten addressed the question, “What is the difference of development between a product and a service?” The answer is there is no difference because both bring solutions to clients to enable them to solve their problems. It is not enough to develop innovation; you need both hardware and software.

Consider this product segment that has been reinvented. This is the agenda.

1. Wind energy market’s development
2. PowerWind56: reinvention of the sub-MW Segment
3. Comparable approaches; food for thought
4. PowerWind56’s Market success

Wind Energy has had an impressive development into a global business. There has been commercial use of wind turbines for 20 years. There is a continuous race for more power output and yield. On the political landscape there is increasing support for wind energy due to climate change, energy independence, and the satisfaction of growing energy needs.

There are emerging new markets worldwide beyond traditional wind energy countries. There are exceptional growth rates and development is expected to continue. The installed capacity of wind energy is greater than nuclear power plants in Germany.

Over the years wind turbines have evolved from the experimental stage to having power plant characteristics. Systems today differ significantly from earlier concepts. To fulfill all of today’s requirements, turbines have to keep up with technical developments. One key factor is grid integration.

Usually, technological progress is implemented in the next bigger generation. Thus, main development direction has been toward bigger, higher, and more rated output. Within 20 years the wind turbines’ yield was increased by a factor of 100. 5 MW turbines will increase yields by another factor of 5.

Here are some comparable approaches.

Option 1: Make it bigger and create differentiation by being the first player beyond the existing power range. The plus side of this approach is clear; you are easily distinguished as a pioneer. The minus side means you are facing lots of challenges and an unknown terrain. There are high tech risks with high loads and weights. There is a need for parallel R&D with suppliers and for new components. Missing is the supporting infrastructure with logistics and cranes. There is an unclear situation regarding site permissions involving a complex certification process. The technology clearly is not proven. Project financing is complicated.

Option 2: Make it smaller by reinventing an older product segment by implanting state-of-the-art technologies. The minus side includes facing existing competitors and products. On the other hand the plus side is the transfer of known and proven technologies into an unattended segment. Risk is reduced with lower loads and weights. The supply chain is secure. There is less development time and associated costs. You can leverage the implicit benefits such as easy logistics. This is a situation where they are facing obsolete competitive products with the competitor‘s R&D focused on the race for size.

Power Wind selected Option 2 and did a reinvention. They transferred state-of-the-art technologies from the latest multi-MW turbines back to the older sub-MW segment: the PowerWind 56 approach. Benefits included: higher yields, increased component and machine lifetime, lower Q&M costs, high reliability due to the combination of technically proven components, compatibility with a majority of the grid requirements enabling additional grid services beyond a simple energy supply. PowerWind 56 expands the application range by enabling access to emerging wind markets. Their most important market is Italy.

These comparable approaches are food for thought. Consider the car market where the technological trend is for bigger, faster, and for better energy efficiency. It is a race for size with new technologies applied in the next bigger class.

Now contrast this to mobile phones where the technological trend is for smaller, more functions, better network integration, and longer standby-time.

Features do pay off.

FEI Europe Track Session: Being Relevant to Youth to Create new Platforms for Growth

Presenters:
Jacques Matthhiew, Senior Director Consumer Insight, Oriflame Cosmetics, AB
Bill Alberti, VP Business Strategy, Communispace

Here's some footage we caught of the interactive discussion between attendees and the presenters. Enjoy!

FEI Europe Track Session: Location, Location, Location – Optimizing Your R&D Empire


Presenters: Arend Jan van Bochoven, Senior Consultant, Innovation Management Group, Cambridge Consultants

Some organizations have become like walruses, they have excess fat that it does not need.

- Need to determine which “excess R&D fat” to cut out requires clear objectivity
- Retaining sufficient RD for mature products while creating space for new initiatives
- Downsizing RD can cause unrest, impacting project delivery
- Assessing which location regime gives the best return on R&D investment

Organizations must be careful when cutting fat because:

- Cutting R&D further may irreparably impair it
- Morale may already be low and staff stretched to the limit.
- R&D may not have a good image among new potential recruits
- The self image of R&D may actually be perceived as technical world class externally

How to optimize your R&D location?

Sensitivity
1. Keep your key stakeholders involved throughout
2. Bring the key stakeholders together to decide what is important, before you start
3. Then, work with stakeholders to determine the practical R&D structures

Here's a short clip from his presentation below:

The Trend Radar – Managing Trends and Innovations

By Connie Harryman, Applied Concepts Creativity
Guest Blogger
Organizer IIR
LIVE Front End of Innovation Europe 2010

Topic: The Trend Radar – Managing Trends and Innovations Through Corporate Foresight

Speaker: Dominik Tappert: Head of Innovations, Kaefer Aerospace

Dominik Tappert began by posing this question, “Why do we need innovation and early trend detection?” The answer is to be prepared for that special moment.

Kaefer Aerospace is a worldwide leading integrator of insulation and interior solutions within the aerospace business. Our mission is to support our customer’s success by supplying comprehensive and innovation insulation systems and interior solutions. They are active in 3 countries and 7 locations.

One of the most significant trends in business is digitalization. The Internet totally changed the terms in different industries. You must recognize that the cost structure, the value chain and the hierarchy within those industries are now drastically changed.

The big traditional players did not anticipate these trends. Consequently companies outside the industry used their opportunities successfully.

Kaefer Aerospace does trend analysis and then turns these trends into business. A net of sensors build up the radar team which includes background, employee, radar-team, radar-head, and GEC.

Trend radar in the company leads to the innovation development process. This includes: exploration, project proposal, project execution, and result/know-how transfer. This is the process of creation. Then an innovation assessment is done with these categories: nominate, select, quality, research, and analyze.

In the next stage we look at these factors: trend proposal, trend candidate, trend draft, trend, and focus trend. The radar screen is systematic. It is divided into several sectors in terms of relevancy for our customers in terms of percentage.

Sector 1 (1-3 years) established trend
Sector 2 mid-term trend (1-3 years)
Sector 3 long term trends (greater than 3 years)

This is influencing the company by using radar methodology. We identify drivers, topics and trends evaluated, if our own platform supports collaboration, review of trends quarterly, and then make recommendations to the executive board for further decisions.

Kaefer Aerospace uses communication fact sheets with various descriptions of trends. This is given to different groups and departments. This dialog inspires development of the overall service offering and leads to concrete projects

For advancement in internationalization, the process is that each subsidiary in each country is appointed for the radar team. They utilize this methodology for the review of published trends for the identification of new trends. Small radars are arising which will result in a total radar.

For advancement with peer-review, the process is to warrant an independent estimation of trends. Internal experts estimate the relevance and degree of maturity of the trends. This results in an integrated second opinion. Then on the basis of collective discussions, the trend will be approved or rejected. Peer-Review is an instrument, and no longer the focus.

If you have questions, Dominik Tappert said that you are welcome to contact him.

Leadership and Innovation Strategy

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010

Topic: Corporate Leadership Forum on Innovation Strategy – A Two Part Presentation

Speakers: Krijn Rietveld, Senior Vice President of the Nutrition Innovation Group, Royal DSM N.V. & Patrick O’Riordan: Global Director, Insights & Innovation, Anheuser-Busch InBev

DSM has existed over 100 years. It began as a coal mining company and is now in fertilizers, petrochemicals, performance materials, etc. Global trends drive DSM’s innovation strategy. These include climate and energy, health and wellness, functionality and performance, and emerging economies.

DSM has a strategic commitment to (open) innovation and they have a top 50 project list. Their innovation scope includes fitness, wellness, obesity, diabetes, novel pharma process, eco-friendly materials, safety and protection, next generation plastics, biomedical materials, specialty packaging, etc.

Their new business development includes: biomedical, incubators, personalized nutrition, sports, specialty packaging, venturing, white biotechnology, and licensing.

They have an incubator for radical innovation to focus on new business models, etc. They are steering the innovation pipeline and have open innovation throughout the pipeline. Acquisitions boost innovation speed. They exit businesses which do not fit their strategy.

They are advocates of “proudly found elsewhere” strategy and have a regular sanity check of innovation projects.

Their key focus areas include:

1.) Boost commercialization and launch skills with a dedicated product launch support team.
2.) They have a toolkit for commercialization.
3.) They identify and spread best practices.
4.) They recruit and hire individuals from other industries to speed up commercialization.
5.) They stimulate employees to innovate by providing high level jobs and career paths in innovation. They train people and virtual teams around innovation at multiple levels and functions. This includes a business plan competition for top potentials. The teams are cross discipline, cross business entities, as well as cross countries.

Their focus is on opportunities at the intersection of life sciences and materials sciences. They are the winner of 2009 OCI Award and have had continued innovation growth despite the recession.

Core elements include: a strong strategic commitment, a tailored organizational structure, a focus on building relationships with external partners, a continuous drive to improve from good to great and creating sustainable growth for all stakeholders.

Part Two:
Speaker: Patrick O-Riordan, Global Director, Insights & Innovation, Anheuser-Busch InBev


Anheuser-Busch InBev is the leading global brewer with a ranking of the #1 or #2 positions in over 20 markets. They are a consumer-centric, sales-driven organization with 320 brands.

Every second 16’912 glasses of beer are drunk; this is 169 times the volume of the Empire State building. However the industry and world is changing. Before the majority of their consumers were in the westernized market. In the next 5-10 years there will be a consumption shift to developing nations such as Brazil, India, and China.

The most difficult and important part is to understand the consumer. They connect the brand experience in a meaningful way, while providing a balance of heritage and innovation. This is done in a responsible way.

This leads to the concepts of Renovation and Innovation. This is a modernization of a product or tactical launch of short lived products to defend share. The innovation, package can include a significant modification of the liquid delivery or the container. It could be the creation of a new liquid within the beer segment and or across categories.

The philosophy is that for brands to have maximum effect they need renovate and innovate to fulfill their promise. For R&I to have maximum effect, it needs the brand to consider provision, focus and direction.

Key learning’s are:

1.) To build the story of the brand
2.) Pathways of timed introductions
3.) Connected pipeline – collective potential of initiatives
4.) Complementary short-, mid- & long-term focus
5.) Have a framework for innovation; they have done most of their work at the front end of innovation.
6.) R&I process (WCCP). This is the where, what, and how.

Their common strategy and process is:
1.) Secure and protect the core.
2.) Drive share & volume.
3.) Expand category share at expense of SOT. They are now in ten global markets.

FEI Europe Local Inventions: The SOUP-SERVER™ & 365SOUP™

We were able to catch up with one of the local inventors from Amsterdam at the FEI Europe expo hall and he was able to tell us a little bit about his unique offering the The SOUP-SERVER™. The SOUP-SERVER™ is an intelligent and well designed, remotely managed soup vending machine. Take a look at the clip below for a walk-through of the invention.

Ten Ways to get Fired While Innovating


By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA

LIVE Front End of Innovation Europe 2010

Speaker: Scott Anthony: Author, The Silver Lining An Innovation Playbook for Uncertain Times
Topic: Seizing the Silver Lining

In telecommunications it is about that last mile for success. The same is true for innovation in looking at that first mile.

Here are ten reasons that will get you fired.

1.) When the discount rate turns to infinity. Innovation needs some short term returns.
2.) When you have the thousand monkey problem. If you give them all typewriters will you get War and Peace or defecation and broken keys?
3.) You must recognize, that if this is new to me but known to world then you must tap into that knowledge. Do not do strategy and then allocate resources. If you look at slack then you can tell a company’s strategy. The best innovation teams are small and focused.
4.) You get swarmed by zombie projects. You wish could innovate more but you do not have the money or the bodies. People are working on the wrong things. Your company is fractionalized and working on dead projects. Your capacity gets strained.
5.) You engage in the Raider’s of the Lost Ark problem. Inside a lot of companies, if a project fails, it is put in box or closet and never spoken of again. It may fail through no fault of our own. It requires deep cultural change to learn from failure.
6.) You have the curse of abundance. During the early stage of an idea, the questions begin about competitors, market demand, etc. This results in gathering more data, doing more analysis, and more tests, before the project goes forward. Abundance is an inhibitor of innovation.
7.) You are in the Land of Misfit Toys. You empower a leader to go build new teams. They need people and get the people who are not busy and whom no one else wants. Think carefully about the team you assemble.
8.) You get hung upon Fitzgerald failures. Senior leaders must think about operational excellence. Leaders must hold opposed ideas in their mind at the same time. Senior leaders use their old mind set and do not make good decisions.
9.) Educate leaders to ask right questions and borrow selectively from the core business. He gave the example of Microsoft, which had the ability to do Google type service, but was concerned about product cannibalism.
10.) Be careful of the wolf in sheep’s clothing -- friends can be your enemies.

Scott Anthony summarized with these recommendations:

1. Be relentless in looking outside where you will find new ideas and capabilities. Collaborate and involve people from outside your market.
2. Allow for an innovation minor league. Draft young people and immediately bring them in to the big leagues. Use them to test ideas.
3. Constrain like crazy.
4. Work on the collective innovation muscles. Read HBR The Innovative DNA.

FEI Europe Keynote Session: Engaging with the Future Differently


Presenter: Josephine Green, Senior Director Trends and Strategy, Philips Design

Josephine Green began her presentation with this quote “we are going through of change of age and I believe that innovation is also changing.” Innovation is taking place all over the complex world at all stages and so is there a front end of innovation? The way we engaged with the future in the 20th century is different from how we will engage the future in the 21st century. She believes that social innovation will be the focus of the 21st century because that is what we need.

In the 20th century we supplied people with all the technology and industrial needs for consumers. It was based on mass production, mass consumption, and higher profits. The 20th century was based on raising profits through mass consumption.

When we journeyed into the 21st century consumers changed their values, beliefs, and lifestyles. New consumers are not passive because they are taking in consideration how different people live across the globe. People have been enabled by technologies to be more innovative and creative than before. In the 20th century natural resources were depleted and used to the maximum, but now conditions have changed and have already changed the way we use our natural resources.

The age has changed from the techno-market area to what Josephine calls the socio-ecological age. The new age is based on complexity and chaos, and this is the world that is not predictable and is not linear.

So the big question seems to be...How do we kick start the future?

Here are some of Josephine’s suggestions:

- Embrace new stories: New ideas that can lead us out into the otherside, towards a new way of acting and thinking in the new world.
- Find a new development model - find to alternatives to the GDP metric such as the Index of social and economic welfare. We need to figure out a new way to measure progress in the modern world.
- New economics (beyond growth) – new production and consumption (beyond big)– new lifestyles (beyond materialism) – new social industries (beyond product)

In the 20th century we centralized innovation, we need to start thinking about distributing innovation because its about community, systems, and people.

We need to develop solutions with communities and stakeholders and not develop solutions for communities.

Check out the footage of her Q&A session below.

Changing from a Pyramid World to a Pancake World

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010

Topic: Engaging with the Future Differently

Speaker: Josephine Green: Senior Director Trends and Strategy, Philips Design

Josephine Green worked at Philips for 15 years and looked at the future by studying people, cultures and society. She asks us to consider a change from technology as a driver to technology as an enabler. What if innovation is a circular process instead of a linear model?

The 21st century will be about social innovation. In the 20th century the economy was based upon mass markets, economies of scale, and mass products to drive growth. It was a techno-market era with a top down command and control structure--a pyramid.

People are now enabled by technology to be creators of their own lives and designers of our own lifestyle. The World Wide Web allows people to move from back end to front end of innovation. It is not about consuming anything. It is about living side by side. It is all about customized personalization in an eco system.

The techno-market era is about people, technology, and the environment. We are a transition group and we are moving to a socio-ecological era. We are going from a model of a pyramid to a pancake (circular). At the bottom of the pyramid are women and children. Men are at the top.

The pancake model is quantum soup. Many walk to the center. It is not based on mass anything, it is based upon customized, personalized, context aware solutions. It does not have lines of command and control. The pancake model has systems thinking, it is connected.

We must embrace new stories with new metrics to measure the new economics that goes beyond growth. One idea is ISEW instead of GDP.

GDP) Gross Domestic Product versus (ISEW) Index of Social and economic welfare.
1. New production and consumption, beyond big.
2. New lifestyles, beyond materialism.
3. Move away from concepts of ownership to sharing.
4. New social industries, driven by social need, beyond product.

20th century, has the pyramid model with centralizing innovation, market innovation, R&D and technology, consumer needs/insights, and experts/professionals.

21st Century, will go towards a pancake model with social and sustainable innovation, people, communities/systems, stakeholder needs/insights, partners and value networks.

Josephine Green recommends these websites:
www.socialinnovation.org
http://Urbanecomap.org
http://www.Patientopinion.org.uk/
www.Kiva.org/

New skills and competencies are needed. We will need to develop the non rational skills such as intuition, sensing, and feelings. We will need to work across disciplines and across functions. We must re-think our organizations and culture.

In the Pyramid World the skills required include: management: planning, budgeting, measuring, evaluation, organizing, structuring, and controlling. In the Pancake World the skills required include: innovation, questioning, challenging, dreaming, imagining, experimenting, learning and enterprising. We must reinvent language.

In the pancake world we are distributing complexity which enables people to think and act with agility in the moment, to create, and to innovate. We need transitional leadership with courage to do the following:

1.) Embrace that the future is social
2.) Maximize innovation and mission
3.) Create the space for longer term investment and returns
4.) Decentralize the organization
5.) Let go

Women and generation Y are already in the pancake world. Distributing complexity means distributing power and this leads to a greater democratizing of the future.

Innovation Needs Information

C. Engdahl
The Big E of Big E Toys

Companies are continually faced with decision-making situations. Some choices may be challenging and difficult to make, while others may be quite simple. The actual decisions facing your organization on any given day may range from very trivial like “What should be the theme for this year’s holiday party?” to the strategically important, “On what technological platform should we base our next initiative?” Whether trivial or strategic, every decision is based on information.

Decisions that affect innovation are no different than other decisions. They are based on information. How much information, what kind of information, whether a company chooses to use certain information, and how well a company interprets available information, is the key to decision-making success.

Information isn’t always easy to obtain however, which is probably a good thing actually. Information - having it and not having it - becomes the basis for competitive advantage. You can only hope your information is better than your competitor’s.

Competitive reports, statistical market studies, and other bits and pieces of information do not often magically fall into an organization’s hands – at least such things have never fallen into my hands. Voice of Customer data in particular, the virtual lifeblood of much innovation, can be tedious at best to obtain. Gathering data (not to mention interpreting data) takes time, effort, and more often than not at least a little bit of money. However discouraging, time consuming, and expensive gathering information may ultimately be, organizations must perform this activity in order to be successful. To not gather information would be akin to purposely blindfolding oneself and walking into traffic.

I’ll not attempt to suggest what information is most important for your organization or how you should go about obtaining it. I think information itself is important enough however for me to simply say this - should your organization not be gathering relevant Voice of Customer and competitive information, start now. Your success depends on it.

Day 1 in Pictures

Here's a look at the snapshots we took of our Day 1 coverage of the Front End of Innovation Europe Conference in Amsterdam. Remember if you're taking photos from the event make sure to upload them to our Flickr group pool.

Monday, February 8, 2010

BMW's New Concept Car: The Future Sustainability and the Joy of Mobility!

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010

Featured Keynote:
LIVE! An Exclusive Preview of BMW’s New Concept Car
The Future Sustainability and the Joy of Mobility


Speaker: Adrian van Hookydonk: Director Design, BMW Group

The joy of mobility is deeply ingrained in us. Imagine a dog with his nose in the wind, he enjoys the speed. Kids begin on tricycles. Even Einstein enjoyed speed on a bicycle. People give a personal spin to mobility.

We see extreme sports with motorcycle racing. Automobile racing is not just about moving but it is also about going fast. Speed allows us to experience different things and experience different people. This is the joy of mobility.

BMW is heavily driven by engineering and technology. We watched the movie that is the “Manifesto” for BMW. The message is about shaping the future, with an emphasis on the importance of how you make people feel. Joy is core brand value. The key reason for purchase is emotional.

We dream of blue sky, empty landscape, and a great view. There is a contrast to the reality of crowded highways and grey skies.

What can designers do? This requires a change, not a change back. We will not forget the joy of movement. The profession of car design is a form of art. Beauty and sensuality is associated with our profession as well as sex appeal or timelessness.

They begin with sketches, and then they bring the lines onto a technical drawing. They can shape every millimeter of the vehicle. Now they are trying to create this in 3D by digitizing data. This process takes one year then they select the shape and it takes another two years for the prototype.

Design is the promise. They do not like to do retro design. They want modern designs that take the brand into the future. The car is designed to explain itself with the technology it carries. Weight and aerodynamics will be the key in the future because this extends the driving range. Sustainability is kept in mind with the materials selected.

The differentiating factor will be design. They came up with shapes to signify that the future has come. We can make the change so attractive people cannot resist and will connect to mobility.

He leaves us with this quote: “The most thrilling periods in design history are the ones of the greatest change, when designers interpret shifts in science, technology, behavior and politics for the rest of us.”
The New York Times by Alice Rawsthorn

FEI Europe Kickoff Keynote Presentation: The Future Sustainability and The Joy of Mobility


Presenter: Adrian van Hooydonk, Director Design, BMW Group

Adrian begins his keynote by discussing how BMW's key motive is to drive mobility. Mobility allows people to travel, meet different people, and even dream of going to anyplace that they desire. BMW is heavily geared in engineering, but how does this translate to design and mobility? Why do people have to buy BMWs? There could be plenty of reasons but we can all agree that it is probably an emotional one.

Here's a clip from their Joy advert in which BMW explains how its technologies reduce fuel consumption and emissions while at the same time increasing the driving pleasure.



Here are two things will be key in vehicles in the future according to Adrian:
1). Weight – needs to go down because it will increase your driving range
2). Aerodynamics –needs to improve

Every aspect of the vehicle has to be looked at and you need to see the whole car through. Even the interior matched the lightweight and futuristic design of the exterior. Interior cloths were made of a lightweight sustainable material that BMW’s supplier manufactured. Overall, even though the design was born from the technical layout and wanting to address aerodynamics and lightweight, BMW believes that they have come up with an innovative shape. Design will play a key role in pushing aerodynamics and lowering emissions.

Adrian closes his presentation with this quote from the NY Times:

The most thrilling periods in design history are the ones of the greatest change, when designers interpreted shifts in science, technology, behavior and politics for the rest of us.

And of course, attendees got a chance to view the concept car! Take a look below at the shots.


Here's some footage from Adrian's Q&A session. Enjoy!

Destination Innovation - Hilton Amsterdam

By Connie Harryman, Applied Concepts Creativity
Guest Blogger IIR USA
LIVE Front End of Innovation Europe 2010

Speaker: Roberto Payer: General Manager, HILTON AMSTERDAM

Topic:
Interactive Collaborative Design Workshop: Destination Innovation.
How the Hilton Amsterdam Reinvented Itself


Roberto began with the photo of a gorgeous peacock. He tells us a peacock cannot fly. This is something many people do not know or notice. There is a currently a new socio-economic landscape with 18 different cultures in the country.

Technology cannot do everything. There is the power of the human touch. We now have tribes with followers. How do you provide value when your hotel is losing $3 million per year? What do we need to change? Is it the organization or is it money? Perhaps we need to determine what turns people on?

The Hilton Hotel was built in 1958. It was the first public/private partnership in 1960’s. People come to see philosophy, architecture, green, and water. Structures are changing and there was a need to change the structure.

Emotions both for and against can kill your ideas. This is mindset. He needed the freedom to be “what I want to be.” This is a soft business, and we have to change every nine months. He said that society is very fragmented and they have to be quick to receive their return on investment.

Some of the unique ideas that Roberto Payer brought to the Hilton Amsterdam included bringing in boats when Amsterdam had none. The goal was to be the best downtown. He created green spaces with open windows even when he had no budget. He created an Italian restaurant, called Roberto’s. It was the only Italian restaurant in 1992, again with no budget. The ROI on the restaurant is 15%.

To attract people, they created the Marina, Hilton Yacht Club. Since John Lennon and Yoko Ono had stayed at the Hilton Amsterdam, they made this suite into the most spoken about suite in the world.

Roberto is heavily involved in political and community groups. He also serves as advisor to two schools. In 1993 they did a special dinner especially designed for 1,000 children where children served as the waiters. This is a business hotel but it also has a family orientation. They have also done a children’s Christmas hotel. He got the idea from a trip to Martha’s Vineyard where this was done for the elderly.

Another idea is to connect the hotel through partnerships with museums. He created the Van Gogh room. They had an opening with the Queen in attendance and invited 400 decision makers.

An upcoming project involves the Modern Art Museum. There are 14 million Hilton Honors members. When someone Googles the Modern Art Museum, he wants the Hilton Amsterdam to be the sole partner.

He leaves us with these tips for success:
1.) Look around.
2.) Develop partnerships with other people.
3.) Look for uniqueness that cannot be copied.

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