Organization for Rapid Innovation

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Seeking

organization for rapid innovation Nicolas Bry Innovation blog : nbry.wordpress.com HEC / Master MUST Academic defense > Tuesday March 1st, 2011

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Agenda Q4312 > Foreword and introduction > Rapid innovation, why ? > Rapid innovation, how?

Q Analysis framework Q Proposition of a model Q Implementation timeline > Rapid innovation, what results? > Perspectives for rapid innovation

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Foreword by Didier Lombard, Orange CEO 2005-2011

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Foreword by Patrick Le QuĂŠment, Head of Renault Design, 1987-2009

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Introduction of Jean-Louis Constanza, Orange VallĂŠe CEO Innovation is a combat sport.

For a company, innovating is always synonymous with self-denial.

The associate or the department of a big company that is dedicated to innovation always runs against resistance on three levels.

The first level of resistance is linked to strategy.

The second level of resistance is linked to organization.

The third level of resistance is linked to the outside world: clients and competitors.

Practically speaking, the value of innovation work is limited as long as big companies don’t know how to organize themselves in order to transform an abstract strategy into concrete products.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Introduction of Jean-Louis Constanza, Orange Vallée CEO This is the whole value of Nicolas’ work. He is capable of clearly drawing models for innovative organization that seem to me adaptable to all industries, from big equipment goods to mass products.

The French information technologies industry is potentially powerful. In practice, it should take inspiration from works such as Nicolas’ to learn how to organize itself and transform this potential power into global products.

Orange Vallée, which Nicolas describes, is a skunk works. It’s the whole of the company that has to become innovative, is what Nicolas explains.

I also agree with him on the importance of small coherent teams.

For those who know Apple, Jobs “genius” wasn’t to invent products, but mostly to create a perfectly efficient organization on these two contradictory aspects, which are: existing business and innovation.

A truly excellent organization has to perfectly manage the priority of these two businesses. This way, it can devote its collective intelligence to the things that will really make a difference with its competitors : tastes, original ideas, culture or vista.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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A rapid innovation, why?

Q4312 > In a globalized market, competitors from the other end of the world and from other industries, with shorter product development cycles, are close to you : you have to react fast. > Reversely, speed is a way to new market, providing you with competitive advantage over industry’s incumbents. > It’s difficult to secure consumer loyalty : innovation is key to seduce them and it has to be done fast because it quickly becomes obsolete. > Rapid innovation is also necessary since the second version is often the right one! > Development speed increases the qualities of the forecasts that can be made and has often much higher impact on profitability than cost of development. > Based on business cases conducted at IBM, Xerox, Honeywell, Black & Decker, Hewlett-Packard, Honda, and Motorola, Smith and Reinertsen have assessed a 50 % ratio for speeding innovation: " Developing products in half the time ".

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Analysis framework Q4312

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Academic sources

Implementation timeline

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Corporate cases

Key points for rapid innovation

Rapid innovation model

The evolution of innovation Q4312 > From a linear model to an interactive model.

time

> The necessity of sharing knowledge. > The emergence of an innovation market. > A cyclic model is born from exchanges between communities. > New Product Development : streamlining the process

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

From linear model to interactions model Q4312

Science and technology improvements

Idea

> R&D > Manufacturing > Marketing >

Technology PUSH

Product

Market pull Consumer needs, market trends

Source : Model adapted by P. Trott de B. Rothwell et W. Zegveld (1985), Reindustrialisation and Technology, Longman, London Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Q4312 Open innovation and apparition

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of an innovation market

> collecting from outside and bringing external ideas into a company’s own innovation process.

Open Innovation at P&G

R&D

> developing new business out of collaboration involving companies making their unused ideas and technologies available to others. > creating new business models arising from opening up the process, opening the doors to cocreation, and customer communities driving a business.

Source : Henry Chesbrough

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

open network

ideas focus brief innovation network screening engagement integration

Q4312 Cyclic innovation model :

knowledge circulation as a cornerstone

Technological Research Technologie Portfolio – Thinking

Disciplinary Science Knowledge Creation – Intuition

Right

Product Development Rational Goal – Sensing, Seeing

Service Provision Human Relations – Feeling & Emotions, related to societal needs

Source : CIM (Cyclic Innovation Model), Berkhout, 2000, “The dynamic role of knowledge innovation”.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

9 tips for accelerating Q4312 product development ≥ Adapt the processes. ≥ Buy time. ≥ Master the complexity with an incremental approach.

Prototype early and often ≥ Professionalize the pre-development stage. ≥ Staff projects to drive them faster. ≥ Work with open-minded experts. ≥ Let the team manage itself. ≥ Constantly work on reducing risks. ≥ Be mindful, learn from the experience !

Source : “Developing products in half the time” (1992) by P Smith and D Reinertsen Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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The new product development game : Q4312 “the rugby approach” > Built-in instability : freedom + challenging goals = “creative tension”. > Self-organization project teams

moving from chaos to order

let the team lead the team

tension drives attention > Overlapping development phases

share knowledge

T-shaped people > Multilearning

multilevel learning (individual, group, and corporate)

multifunctional learning > Subtle control

“natural leadership” > Organization transfer of learning

learnings for new product development projects or to other divisions

blended team Source : Ikujiro Nonaka, 1986,“The new product development game“ + Innovation, the “rugby approach” : thoughts for thoughts from 24 years ago (nbry.wordpress.com) Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

2 innovation models Q4312

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Thriving innovation model

Dedicated entity model

A model of internal and external interactions in a global innovation culture

An autonomous unity pursuing new and uncertain activity lines

3M, Procter & Gamble, Cisco, Open Source, Sanofi, Renault

Oticon, Decathlon, Gore, Jeux vidĂŠo, Google, Apple

Lockheed, Saturn, Ideo, EDF Business Innovation

Innovation from everyone, everywhere

Ambidextrous organization with 2 DNA

Skunk works, corporate venture, spin-off

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Q4312 3M, internal entrepreneurship > Small autonomous units. > Commitment to R&D. > Technology propagation. > “Lab to market” channel. > Project management. > Reward adapted to innovation. > “Bootleg rule” : 15% free time to personal innovation. > Recruitment focus. > Innovation, a “game of numbers”. > A solution to solve a problem, the post-it story. > Learning from the past.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Q4312 Procter & Gamble,

opening innovation to the world

> Open innovation, connected and collaborative. > A structured way to cooperate with the outside. > A cultural change to value what comes from the outside. > Dedicated resources to open innovation : “technology entrepreneurs”. > Futureworks entity focused on new markets > “ Our best innovations comefrom crossing ideas ”.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Decathlon, decentralized R&D units Q4312 next to marketing and branding > Innovation process fostering mixed project teams. > Innovation culture combining openness and rational. > Fundamental R&D and operational R&D. > R&D open to the outside world. > Understand and observe human behaviors, integrate professional feedbacks. > “An innovation spirit at each floor�.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

EDF, the missing link Q4312 > Linking R&D and market, leveraging on Corporate Venture approach. > Focusing on recognizing innovations from outside, unknown from the R&D. > Setting-up innovation networks in the Valley, and internal networks with EDF decision makers. > Streamlining decision, and fostering to dare.

Source : Jumel (2004, p.128)

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Q4312 Ideo, innovation experts > Culture driven by creativity : recrutiting, stimulating. > Small entities, flat hierarchy. > Crossfuntionality as creativity catalysis. > Fast prototyping and iteration : try it, fix it, try it again. > Innovation framework constantly improved. > “We’re not good at innovating because of our flawless intellects, but because we’ve done 2000 products, and we’ve been mindful”.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Q4312 Proposed model for rapid innovation Creative tension

Mixed entity outside and inside 

Fast innovation Aligned innovation strategy

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Rapid innovation model : Q4312 3 principles further detailed 1. Creating a dedicated entity : agile, risk-taking, open to new opportunities picked out from the innovation market, new co will be mixed, both “inside and outside” the group, building its own DNA and being able to bring back the innovation value to the core co.

2. Instilling “creative tension”: a framework for creativity will accelerate development of new products and associated leadership platform. It will include following foundations : a culture of diversity, natural leadership, specific goals (“narrowing the scope actually helps the team”), knowledge circulation, using notably “rugby approach”, fast prototyping, iteration & focus, and innovation portfolio.

3. Aligning with corporate innovation strategy : developing coordination with the core company, forging persistent connections between innovators and mainstream operations, benefiting from a sponsor at core co, and endorsing some core co strategic priorities, so as to engage core co following “a line of less resistance“ instead of “fighting against the organization”.

Source: “Rapid innovation, a must-have in globalization time” + “innovation plan” (nbry. wordpress.com), Vijay Govindarajan, 2005, “Forget, Borrow, Learn : Secrets to Building Breakthrough Businesses, Within Established Organizations” Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Q4312 Rapid innovation model : timeline to implement

2. Implement fast Development methodologies 1. Create a framework for rapid innovation Create a new entity - direct report to CEO - tangible innovation objectives for core co - listen to CEO needs, and from other decision makers - new co performance yardstick - a clear sponsor Define your belief & challenges - innovation culture - innovation targets & management, portfolio, mission statement Build an innovation team - t-shaped professionals

Create context - your innovation “intent” - knowledge circulation levers - yardstick into individual objectives Organize creative thinking - pre-development phase - project mantra Start with a handful of projects - some with core co buy-in - staffing - mixed teams

3. Go for Engagement Assess and optimize your innovation: customers often do not want the product itself, but rather the effect that the product produces.

Use your license to kill. “Celebrate failure, don’t stigmatize it. Celebrating a failure encourages risk taking.“ Prepare go-to-market: refine your usp, train to sell your innovation by keeping it simple.

Seek for core co engagement: Identify fears, harness the acceptance seeds you have planted, create necessity for change.

Once core is engaged, plan implementation and scaling of the product.

Be mindful of the future. Reward and celebrate!

Transfer concept in elegant realization - “rugby approach” - fast prototyping - open innovation - KISS Stay alert, and chase innovation killers Initiate innovation cycle Stay connected with core co

1st month

3 months

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

6 to 9 months

Q4312 Innovation, what results? > With “skunk works” Lockheed began a series of revolutionary airplanes that still ensures them the loyalty of the American army to this day. > To explain its continuous growth from the beginning to the end of the 20th century, 3M credits innovation. > According to Procter & Gamble, the fact that its market value doubled from 2000 to 2004 is due to its open innovation policy. > To face the “mountain” of generic products, Sanofi developed a new R&D model. > For Oticon, the only way to react is to outperform its competitors in the innovation department. > When Decathlon structured innovation around its passion brands, its sales figures went up from 2 to 5 Md € en 10 years.

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Rapid innovation, what results?

Q4312 > With his “sashimi” approach, a new product at Fuji-Xerox requires one-half of the original total manpower, and the product development cycle has reduced from 4 years to 24 months. > A new copier took Xerox three years to develop, whereas the company spent more than five years developing a comparable earlier model. > A portable Brother printer was developed in less than two years.

It took the company more than four years to develop an earlier model. > One Apple CEO top priorities was to cut the company’s product development time from 3,5 years down to one year.

Source: Ikujiro Nonaka, 1986, “The new product development game“

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Perspectives Q4312

Toward a rapid innovation entity linking core co to innovation market : new co 2.0

Mixed entity outside and inside

core co 2.0

Creative tension

Aligned innovation strategy

new co 2.0

1

Open innovation

Fast integration

> Innovation without a business model remains an invention > Innovation is firstly human : picking up the team, creating situations that make sense shall be first leader’s concern Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

Innovation market

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Perspectives Q4312

In the medium term, several new co connected to technological & consumer markets ? Rule of satellites for design at Renault.

New co

New co

New co

New co New co

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001

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Q4312 Nicolas Bry HEC / Mastère MUST

Nicolas Bry HEC / Academic thesis rapid innovation, march 1, 2001