Innovation Engineering Predictable Growth for your Business Ryan Ramsdale Innovation and Strategy Coach October 16, 2019 Presented by: THREE QUICK QUESTIONS WHAT is WHY do you HOW do you innovation? innovate? innovate? THE PROBLEM • 66% of leaders worry about the relevance of their organizations 3 years from now.* • 62% of leaders are worried about disruption in their industry.** • 70% of business leaders are concerned about their ability to respond to change in their industry**. Sources: *2015 KPMG CEO Outlook **PWC 18th Annual Global CEO Survey WHY INNOVATION FAILS 1. Not having a formal innovation management framework and system. 2. Not tying initiatives to overall company strategy (management support). 3. Not allocating cross-disciplinary resources. 4. Not getting buy-in and ownership from cross- functional teams. 5. Not deploying measurement criteria and metrics. BTM Institute 2013 INNOVATION & GROWTH FRAMEWORK Do STRATEGY & GREAT EXECUTION Things INNOVATION SYSTEMS ALIGNED LEADERSHIP A simple definition of innovation: NEW IDEAS THAT CREATE VALUE Another definition: DOING COOL $#!% THAT MATTERS TWOTwo FORMS forms OF of INNOVATION Innovations VIO VISVIS VeVeryry Im Importantportant OpportunitiesOpportunities Very ImVerypo rImportanttant Systems Systems New or improved products or services for Systems for improving how we work > New or Improved Products or Services for Systems for Improving How We Work new or current customers or markets manage > create > produce > distribute NEW or CURRENT Customers or Markets Manage - Create - Produce - Distribute TYPES OF INNOVATION IE LEAP Innovations Creating our future IE CORE Innovations Keeping us competitive LEAP VS CORE INNOVATION A balanced 85% CORE projects portfolio { 15% LEAP projects *50% of growth will be LEAP LET’S WARM UP • You are a team member of an airline and you have been asked for your help and participation in a project • A recent customer satisfaction survey indicates... …that your service sucks YOUR MISSION: Come up with ideas to improve the customer experience. INNOVATION STARTS WITH YOUR STRATEGY INNOVATION STRATEGY STEPS STEP Determine your organization’s 1 purpose. STEP Remove death threats to plan 4 execution. STEP Confronting Reality… assess 2 current state. STEP Set and follow a rhythm of 5 accountability. STEP Create clear goals and actions (Use 3 the Law of 3s) Q. WHERE IS YOUR ORGANIZATION ON THE BUSINESS LIFE CYCLE CURVE? Highest profits Rapid growth Cost cutting and and building progression efficiencies Q. HOW QUICKLY IS THE ENVIRONMENT AROUND YOU CHANGING? HOW FAST CAN YOUR ORGANIZATION RESPOND TO CHANGE? Our goal is to increase your internal capability to be able to respond to or even disrupt the external environment. Rate your organization and external environment on a scale of 1 (slow) to 10 (fast). LAW OF 3sTM PLAN DESIGN BIG GOALS (3-Years) STEP GOALS (1-2 Years) ACTIONS (1 Year) The BLUE CARD – Your Simple tool to bring your strategy to life… 1.Can be used to clarify our strategic goals 2.Can be used to set the scope of for an innovation project 3.Can be used by anyone wanting to communicate the scope of what they want ideas for INNOVATION & GROWTH FRAMEWORK Do STRATEGY & GREAT EXECUTION Things INNOVATION SYSTEMS ALIGNED LEADERSHIP SET UP YOUR INNOVATION SYSTEM DO YOU HAVE SYSTEMS FOR… • Sales • HR • Finance • Operations • Continuous Improvement • Customer Service WHY USE A SYSTEM FOR INNOVATION? Why is it important to know that IE is a system? 94% of failures are due to the system “ (or lack of a reliable system) 6% are due to the worker - Dr. W. Edwards” Deming WHY USE A SYSTEM FOR INNOVATION? 1. Increase speed to implementation 6x FASTER 2. Reduce risk 3. Increase confidence 4. Establish 80% repeatability LESS RISK 5. Build reliability ENABLE YOUR INNOVATION SYSTEM Innovation Engineering increases the speed up to 6X and decreases the risk of innovation by up to 80% to turn big ideas into reality to create value.* This proven innovation system Take advantage of business opportunities includes education, software, tools, and solve your biggest challenges by and coaching components, helping creating a culture of innovation that organizations create a common empowers and engages your employees. language for innovation. THE INNOVATION ENGINEERING SYSTEM INNOVATION = MEANINGFULLY UNIQUE ✓ Meaningful – solves a problem and creates value ✓ Unique – no one else is doing it If you’re not MEANINGFULLY UNIQUE you’d better be HOW TO CREATE MEANINGFULLY UNIQUE IDEAS LEVERAGE DIVERSITY EXPLORE STIMULUS CREATE MEANINGFULLY = UNIQUE IDEAS DRIVE OUT FEAR COMMUNICATE COMMERCIALIZE IT ALL STARTS HERE 1. Typically filled out by Senior Leadership team in a “Blue Card Session” 2. Provides the focus areas and parameters for the Project Team (“What” and “Why”) 3. Can be for: • Very Important Opportunity (VIO) externally • Very Important System (VIS) internally BLUE & YELLOW CARDS LEADERSHIP LEADS Those close to the work define and discover innovative solutions WHAT we need HOW to solve WHY we need it CAPTURE YOUR IDEA ON A YELLOW CARD 1. CUSTOMER 2. Customer PROBLEM 3. PROMISE 4. PROOF LET’S TRY IT AGAIN Come up with ideas to improve the customer experience. THE BLUE CARD MISSION Narrative: The customer service survey tells us that we are failing our customers, and it is showing up in our financials, employee morale and reputation in the media. Our turnover rate is higher than ever, and our sales are lower than ever before, and the trend indicates it isn’t getting better. Recent publicity on the leaked survey results has hurt sales, and if we don’t make a change soon it will continue to trend negatively. We don’t have time to wait, we need to address this. If we don’t turn this around in the next 12 months, we’ll have to shut down. We need to make a change. Our employees deserve better, and our customers deserve better. THE BLUE CARD MISSION Exclusions: • Not interested in additional flight paths or planes • Not interested in one-time solutions • Copying the competition Constraints: • Budget: $500K • Must meet safety/flight regulations • Can’t add additional staff Exploration Areas: ✓ Service add-ons/enhancements ✓ Technology ✓ People interaction YOUR 2-PART FORMULA FOR CREATING BIG IDEAS 1. Stimulus – information, data, images to make your brain think in new ways 2. Diversity – leverage different experience, viewpoint, knowledge and skills to challenge our ‘normal’ thought process STIMULUS – Meet your new owners… Your airline has just been acquired by… STIMULUS – Meet your new owners… As a team, Mind Map everything you think of when you think of your experience at Starbucks 5 Minutes THE BLUE CARD MISSION Exclusions: Your Mission: • Not interested in additional flight paths or planes Come up with ideas to improve • Not interested in one-time solutions the customer experience. • Copying the competition Constraints: • Budget: $500K • Must meet safety/flight regulations • Can’t add additional staff Exploration Areas: ✓ Service add-ons/enhancements ✓ Technology ✓ People interaction IDEA GENERATION IS ONLY THE START OF INNOVATION NOT NOW GO DEFINE DISCOVER DEVELOP DELIVER ▪ Customer 1. PLAN CORE ▪ Learning ▪ Death threat ▪ Standard milestones lab ▪ Problem ▪ Learning plan ▪ Promise ▪ Promise 2. DO LEAP ▪ Waved expansion ▪ Proof ▪ Learn ▪ Alpha (30%) ▪ Beta (60%) ▪ Full release ▪ Math 3. STUDY ▪ First release (90%) ▪ Learn ▪ Death threats 4. ACT ▪ Apply ▪ Revise ▪ Stop Add these stages to make better decisions Math is the Gas Pedal for Innovation – Start with Fermi Math Fermi estimates will wrong but they will be useful…. ✓ Getting an estimate within a reasonable enough range to make a decision ✓ Fermi estimates can save you a lot of time, especially as you gain more practice at making them ✓ Get attention and buy-in for your idea REMOVE BARRIERS TO INNOVATION OR KILL IDEA FAST Focus FIRST on Big Death Threats of your innovation NOT SMALL SMALL SMALL HERE PROBLEM PROBLEM PROBLEM We don’t want to waste 6 Months HERE REDUCING RISK OLD WORLD NEW WORLD “Proper and mature” Fail FAST Fail CHEAP Expensive and slow Dissolves risks with small steps Rapid prototyping to test ideas…… Fail FAST Fail CHEAP Cycles of Learning 7-day cycles World class = 1-hour cycles INNOVATION ENGINEERING SYSTEM STRATEGY Blue Cards: Our standardized structure for communicating the clear/motivational STRUCTURE strategic missions that leadership believes are the very important areas to focus innovation resources on. IDEA Yellow Cards: Our standardized structure for defining meaningfully unique STRUCTURE innovation ideas that support each Blue Card from the perspective of the ultimate customer or stakeholder. RISK Project Phases & Check Lists: Clearly defined steps and standards for MANAGEMENT addressing market, technology and organizational risks when we develop PROCESS incremental CORE vs. transformational LEAP innovations. Plan, Do, Study, Act: Our disciplined process is enabled by clear project roles WORK and responsibilities for working smarter and faster when addressing innovation PROCESS project death threats and milestones. Our operating principles for creating innovations and problem solving challenges: OPERATING explore stimulus (6 minings to spark ideas), leverage diversity (internal and PRINCIPLES external collaboration), and drive out fear (through education, alignment, rapid research, patent ROI). INNOVATION & GROWTH FRAMEWORK Do STRATEGY & GREAT EXECUTION Things INNOVATION SYSTEMS ALIGNED LEADERSHIP INNOVATION TAKES LEADERSHIP THE INNOVATION KILLER ORG CHART CHARACTERISTICS OF AN