Thursday, February 13, 2014

Front End Innovation @Munich Day 2 (Morning Take-Aways)

The first day was quite impressive. Either Future Trends Summit or the Innovation Excellence Summit took the sharing of expertise very high. 
The keynotes were also compelling. David Percival, revealed some research conclusions that would motivate the most innovation-sceptics CEOs, and at the very end, Rowan Gibson, challenged our natural tendency to myopia revealing his Four Lenses of Innovation framework and sustaining it on dozens of great examples.

So, Day 2 was promising. Everybody was excited and happy. A single coffee and Navi's first five minutes on stage were enough to engage the audience.

Keynote "Frugal Innovation: Creating Greater Value in a Age of Austerity"
Navi Radjou (Co-Author of Jugaad Innovation)

In a Nutshell: 
Navi set  the stage empathising with the common disappointment around R&D spending. It is a hard fact to realize that there is really no correlation amongst spending and being innovative. Even worse, the processes that made part of some big companies success - and in which these companies are still sustained - seem to be menacing innovation.

On the other hand, austerity in Europe predictably will last for 10 more years so, seems pretty straightforward to accept that our customers will expect more value for less money.
Adding to this equation the expected growth of emerging markets and their specific characteristics, Frugal innovation turns out to be really a foresight concept alerting companies on how to do business and how to develop products for these new markets.

Frugal Innovation, as a concept, recognises the competence of the emergent markets on launching disruptive innovations. So, a fancy scientist on a resourceful state-of-the-art lab doesn't hold the dominance anymore. Either India or Brazil, for instance, have surprised everybody when it comes to ingenious product launch. Ingenuity is really pushing it forward delivering cost-effectively and quickly under severe resource constraints. Frugal Innovation is about accepting the triggering power of adversity as a mother of invention without value delivery compromise.

Most likely, all of us have already stood still watching a video on Youtube showing the magical ingenuity that drove a child to develop his own solar energy system in the middle of Africa or a fridge that needed no electricity in India. Could we have done it?

Example: Navi explored how Dacia became Renault's cash cow and many other inventions that came out from India.

Lessons Learned:  
- Adversity as the mother of invention. "In nature nothing is created, nothing is lost, everything changes" quoting Antoine Lavoisier.

- Embrace the Trends: demographics; austerity & consumer behaviour changes; circular economy; maker & DIY movement, globalisation. 

- "Emerging markets are emergent sources of innovation" quoting Frank Riboud, CEO of Danone

- Jugaad Innovation is about embracing ingenuity, being flexible, making an advantage out of the lack of resources, improvise and solve someone's problem (deliver value).

It may be wise to include in your To Do List a way to assemble a Global Innovation Network, that can create hardwired synergies integrating the singularity of people thinking from different sides of the world.

Radjou's talk really left no doubt on why he was 2013 Thinkers 50 winner.

Keynote "The Attack of the Unexpected  - When Future begins"
Magnus Lindkvist (Trendspotter, Futurologist and Author)  

Being a trendspotter and a futurologist talk, what the audience could have been waiting was straight and simple answers and a prescription list of tasks. Instead, Magnus delivered honesty.  Magnus wasn't holding a crystal ball on his hands, but he sure showed us why, most of the times, a good question is better than an answer.

In a Nutshell:  
Rule of Thumb about future trends: "There's a huge gap between expectations and reality. We expected flying cars and reality brought us gangnam style. ...And there's a "gangnam style" [phenomenom] in every industry".

Things are changing and this is not new. In fact, somehow surprisingly, Magnus recommends the study of History when searching for inspiration about the future.
Even though Business is living on a fast pace, many organisations are being striked by a dramatic organisational drift. Please take a look at the recent fall of some giants like Kodak, Nokia or Blackberry: things were changing in their businesses, somehow so slowly that none of their bright executives could see it. It was a slow organisational drift and not a failure event the responsible for the crash.

Are you just another competitor ripping off and duplicating, and, at some extent, bringing sameness to business? Or, perhaps  do you want to go magical and Create to compete on creating bigger value?
Lindkvist urges us to create our own space even though it might create some "enemies" at a first glance,  but quoting Frank Zappa "without deviation from the norm, progress is not possible".
Being a leader often means to dance alone, in an intrepid way, but persistence will lead to results.

Example: Bitcoin, when it comes to send a powerful message about micro-currencies for communities disrupting commerce and exchanges.

Lessons Learned:
- Organizational drift warning alert is needed.

- Ikeafication: enlightening analogy on a business opportunity to make technology simple and accessible enough.

- Horizontal growth (selling the same product in different markets) VS Vertical Growth (Invest in magical and creative innovation).

- A very profitable company may be very often out of ideas.

- Nurture Experimentation, Failure recycling (study failures in the past and grow from that learning) and Be patient and persistent. Make enemies, Defy the Norm. 

- Compete on delivering bigger Value to your customers.

Mastering End to End Business Model Innovation Challenge 
Markus Heinen (EY) & Lutz Mehlhorn (Henkel)

This talk was a great illustration on how a consulting company may help a Big Company on the innovation process.
Markus and Lutz brought us a case of innovation based on business model development and how they’ve explored new jobs and pains/gains in a specific customer segment hoping to deliver new value and to implement and test new business concepts that may hold the future of Henkel’s revenue.

In a Nutshell: Big companies are realizing that designing a ten years strategy and executing it exclusively isn’t neither enough or wise. Agility and innovation driven focus has to be part of big companies everyday culture and dynamics. Even more, the innovation pipeline needs to be fully integrated in your business model.
What happens to business when business model design is completely accepted as the management theory of 21st century? 
In the case of Henkel what happened was Wash & Coffee, a place in Munich’s center that explores the future of laundry service. Guess what, young people don’t enjoy having to deal with laundry - not sure if anybody does - but taking this together with some major trends like the servitisation, mega-cities growth, aging or some other lifestyle indicators Henkel and EY came up with this super trendy and urban Wash & Coffee. The point here is simple: Henkel won’t be promoting a Wash & Coffee franchising, but won’t also simply be delivering products to shelves in supermarkets. What Wash & Coffee really means is that Henkel’s future will be focused on developing solutions for their different customer segments. 
From product focus to delivering true value to your customers is a major shift, but that’s the way Henkel’s preparing its Future.

Example: Wash & Coffee, a place where you experience innovation.

Lessons Learned:
- Exploring new Business Models can’t hurt Brand equity, so when implementing innovations you have to make sure that the quality of service is very high.

- The success of new Business Models relies on its implementation. Creating something is important but scaling it up is what matters.

- Finding the right partner is the best way to bring to life your innovation project

Economics of Attention: Living in the age of distraction
Paul Jeremaes (HP) 

Nowadays, we also are both competing on attention but also struggling to focus our attention on the right place, subject, task…
Facebook and social networking, email, phones ringing, open space offices and many other distraction sources became a major challenge. How do we know we’re focusing our attention on the right thing?

In a Nutshell:
Since the "information overload generates the best and the worst of times” (quoting Charles Dickens) managing such a scarce resource really became a matter of economics.
Looking further and trying to foresee how the human being is going to adapt to the progressive immersive technology presence, considering the fact that it is expected that in the near future we will no longer question the presence of technology in our lives, in the same way we don’t question the presence of electricity embedded everywhere we are.
Consider the Google self-driving car. Notice how the idea of a self-driving car tickles your brain and defies the status quo of what we know about driving. It is common to listen some uncomfortable reactions to the idea of a self-driving car, but no one pays specific attention to nowadays common self-parking cars. What will happen when the chocolate bar you’re so eager to eat tells you that you can do it disputing your attention from apples in the shelf trying to deliver you a healthy food option?

Example:Charles Ramsey is a good example to illustrate the world where we’re living in. Charles Ramsey is a Cleveland hero that took action to rescue three abducted girls. Nonetheless, he became worldwide famous because of his interview. Ramsey is an authentic, hilarious, sociological portrait and what really made him an instant celebrity was a tune mashing up his words and and the meme-fication of his expressions. Suddenly, Ramsey was an hero but no one’s attention was focused on the heroic rescue but on the viral jokes that went popular on the internet. 

Lessons Learned:
- Little is known on how to manage our attention span or even how to focus our attention in what really matters.

- Gamifying tasks, jobs, goals, etc, is, at this time, the best lead we’ve got.

- Fighting for end-user engagement is already a reality but still a major business and research opportunity.

- "The real act of discovery consists not in finding new lands but seeing with new eyes” quoting Marcel Proust.

Finding the needle in the haystack
Thomas Andrae (3M)

Finding the needle in the haystack is one of the smartest things big companies could be doing. Thomas Andrae did really a great job revealing the why and how to do it.

In a Nutshell:
3M is driving  a new business model working with syndicated partners not only creating ecosystems but also deciding 3M's role on other’s developmental ecosystems. Consider Google’s latest acquisition of Nest: Google has the knowledge to enter our homes and manage our heating and air conditioning systems and 3M is the leader of air filter building for home air conditioner systems. Finding business opportunities in the common ground between your company portfolio and third parties development is the true meaning of finding the needle in the haystack. 
Andrae’s work is about identifying champions that will help 3M develop their businesses.
How to find the needle in the haystack? Scout, know your peers, network, evaluate, invest and help them grow. Seem’s easy right?

Example: Andrae was kind enough to reveal a few investments 3M did in the last years. Results were pretty impressive: for instance, 3M’s investment on Vocal Zoom, a Israel based startup, was about 2.5M$ and today’s Vocal Zoom valuation is 150 times more the initial value. So, besides, holding Vocal Zoom’s technology looking to the numbers turns out to be really compelling.

Lessons Learned:
 - Even though 3M has 10 000 engineers working on innovation on a daily basis, the company realized  that the world was a flat platform for continuous opportunity spotting 

 - Finding these “needles” turned out to be not only strategic but also a great business.

- Don’t read too many business books, read beyond that, that’s where you’ll find leads for opportunities.

1 comment:

José António Baldaia said...

Thanks Alexandre for bringing to us these lines full of content and meaning.
In each every article we can withdraw for reflection a part of a whole that you got here to become greater than the sum of those parts.

It's good to remember not only the role of adversity in solving problems but also to remember that we can get the solution so often with scarce resources.
It's good to reflect on the importance of moments of implementation of the models (and by the way of business processes as well) and how all this can be done as it was a big game.

Thank you for bringing comfort to our work

José Baldaia

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