Institute of Product Leadership in association with Adaptive Marketing organises monthly series of Product Professionals networking event .Our theme for this event was about How do you build an innovation culture in your team? – An 8-Step Guide that every Product Professionals should know. Speaker for this event was Prof. Rishikesha T Krishnan IIMB .

1. How do you Build an Innovation
Culture in your Team?
An 8-Step Guide
3 Improve
Batting Avg
1
Build a
pipeline
2 Improve idea velocity
Rishikesha T. Krishnan
Nov. 24, 2012 Professor & Area Chair, Corporate Strategy & Policy, IIM Bangalore

2. THE IDEAS IN THIS
PRESENTATION WILL BE
ELABORATED IN A
FORTHCOMING BOOK
BY VINAY DABHOLKAR &
RISHIKESHA T. KRISHNAN
PUBLISHED BY
HARPERCOLLINS

3. 3
WHAT IS INNOVATION?

4. What is Innovation?
4
Problem + Idea + Execution + Benefit
Novelty Utility
Application of new ideas to
solve problems resulting in
benefits to users

5. 8 Steps to Innovation Excellence:
3 Improve
Batting Avg
1
Build a
pipeline
2 Improve idea velocity

6. Build a Pipeline
6
1. Lay the Foundation
2. Create a Challenge Book
3. Build Participation

7. Improve the Idea Velocity
7
4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model

8. Increase the Batting Average
8
7. Build an Innovation Sandbox
8. Create a Margin of Safety

9. 8 Steps to Innovation Excellence
9 STEP 1
LAY THE FOUNDATION

10. Build a Pipeline
10
1. Lay the Foundation
 Create Innovation Program
 E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
 Idea Management
 Buzz Creation
 Training & Development

11. 3 Key Processes
in an Innovation Program
Idea Buzz Training &
Management Creation Development
(who submits? (campaigns, (prototyping,
who selects? communication, TRIZ,
who funds?) rewards, design thinking,
innovation day) idea communication,
leadership development)

12. Idea Management
source scope stages
technology selection funding
Idea Box

13. 13
 Source: Where will ideas come from? (Any
employee, Only certain employees (shop floor
workers), Employees and customers, Employees,
customers and partners, Anyone on the internet)
 Scope: What is the scope of ideas? (Process
improvement, product improvement, new product,
customer experience, business models, any of these).
 Stages: How many stages will an idea go through
before it is either implemented or parked? In M&M,
a new product idea would go through six stages.

14. 14
 Technology: In what form will ideas be gathered,
stored, searched, and presented? Will it be a
physical suggestion box, a bulletin board or an
Intranet web-site where people submit ideas?
 Selection: How will ideas be selected for further
development? Will it be through a committee or
through open voting or through some other
mechanism? What is the criterion for selection?
 Sponsorship: How and what kind of resources will
be allocated to the selected ideas? Will the
sponsorship be in the form of time-off from the
existing project or mentoring.

15. 40 years, 20 million ideas
Year No of Suggestions Participation Adoption
suggestions per person Rate(%) Rate(%)
1951 789 0.1 8 23
1971 88,607 2.2 67 72
1986 2.6million 48 95 96

16. The Power of Small Ideas
16
“There is no genius in our company. We
just do whatever we believe is right, trying
every day to improve every little bit and
piece. But when 70 years of very small
improvements accumulate, they become a
revolution”
From Interview with Katsuaki Watanabe
in HBR, July-Aug 2007

17. Build a Pipeline
17
 Lay the Foundation
 Create Innovation Program
 E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
 Idea Management
 Buzz Creation
 Training & Development

18. Buzz Creation (creative campaigns)
18

20. Indian Railways in 2004
 Market share 2004 (1951):
 Freight:
40% (90%)
 Passenger: 20% (70%)
 Budgetary support went down 25%
 Fund balance: Rs. 350 crore
 Dr. Rakesh Mohan committee
declared “Terminal debt trap”
 Recommendation: Downsizing

21. Sudhir Kumar’s study
 Sudhir Kumar studies Rakesh Mohan report
 Finds a curious contradiction
 With increase in freight rates:
 Market share of steel, cement declined
 Iron ore, coal and other minerals stayed same
What could be the reason?

22. Door-to-door vs station-to-station
 Door-to-door created more value
 However, pricing didn’t differentiate
 Why not focus on these customers?
 Provide more freight per train
 charge more
 Increase number of trains
Heavier, faster and longer

23. Axle load Garib Rath
(Heavier & longer)

24. Build a Pipeline
24
 Lay the Foundation
 Create Innovation Program
 E.g. Jeff Immelt “Imagination Breakthroughs” - $1B potential
3 Key Processes
 Idea Management
 Buzz Creation
 Training & Development

25. Training & Development
25
 Titan Innovation School of Management
 “Everybody an innovator by 2015”
Focus area Techniques
Design thinking Immersive research, rapid
prototyping, brainstorming
Systems thinking TRIZ
Systems archetypes
Theory of constraints (TOC)
Lateral thinking Edward de Bono’s six thinking
hats

26. 8 Steps to Innovation Excellence
26 STEP 2
CREATE A CHALLENGE BOOK

27. Build a Pipeline
27
2. Create a Challenge Book
U & I Portal at HCL
 Petition Box at Tihar Jail
 Feel the Pain
 Sense the Wave
 See the Waste

28. Build a Pipeline
28

29. The Bajaj Pulsar exploited a discontinuity..
29

30. 30
7 Themes
 Digital consumers
 Emerging economies
 Sustainable tomorrow
 Smarter organizations
 New commerce
 Pervasive computing
 Healthcare economy
http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html

31. 8 Steps to Innovation Excellence
31 STEP 3
BUILD PARTICIPATION

32. Build a Pipeline
32
3. Build Participation
 Role model: People who inspire and then others
feel, “If he can do it, why can’t I?”
 Community of practice: Places where
practitioners “hang out”, learn from each other
and together help others outside this community
 Innovation catalyst: People who encourage idea
authors and offer constructive inputs
 Rewards & recognition: Mechanisms through
which idea authors get appreciated

33. Build Participation
33

34. Managerial Practices &
Intrinsic Motivation
Match people’s expertise & skills
Challenge in creative thinking with their jobs
Set goals, communicate them clearly,
Freedom but give autonomy regarding the means
Just right – too little dampens
Resources creativity
No fake deadlines
34

35. Managerial Practices &
Intrinsic Motivation
Work-group Mutually-supportive groups of
people from diverse backgrounds
Features
Freely & generously recognise
Supervisory creative work; avoid long delays;
don’t over-do critiques; tolerate
Encouragement honest failure
Organizational Facilitate information sharing
Don’t allow political problems to fester
Support
35

36. Improve the Idea Velocity
36
4. Experiment with Low Cost at High Speed
5. Go Fast from Prototyping to Incubation
6. Iterate on the Business Model

37. 8 Steps to Innovation Excellence
37 STEP 4
EXPERIMENT WITH LOW COST
AT HIGH SPEED

38. Improve the Idea Velocity
38
4. Experiment with Low Cost at High Speed

39. Feb 2004
Sep Nov Apr 2004
2003 2003
impact
demo
idea
itch
Feasibility Loop Viability Loop
2 months 3 months 2 months

40. Creating a Climate for Experimentation
40
 Failure plays a critical role in innovation
 Post-It Notes & failed adhesives
 Nylon: a lab experiment that went wrong
 TVS Spectra failed, but Victor succeeded
 Time-to-market is important…but don’t forget the role
of earlier innovations
 Separate intelligent failure from unnecessary failure -
in language and managerial response
 Create infrastructure, give resources for expts
 Have a high trial rate: fail fast, learn fast
 Can you do the “last” experiment first?

41. Avoid the “Failure Fallacy”
41

42. 8 Steps to Innovation Excellence
42 STEP 5
GO FAST FROM PROTOTYPE
TO INCUBATION

43. Improve the Idea Velocity
43
5. Go Fast from Prototyping to Incubation

44. Improve the Idea Velocity
44
5. Go Fast from Prototyping to Incubation

45. Make the story sticky
45

46. Make Ideas Sticky
46
Characteristic of Technique of improvement
a sticky idea
Prototype (Rajappa, Phalke),
Concrete “Before and after” scenarios,
Stories (Salt march)
Curiosity Curiosity flow (Steve Jobs iPod
launch)
Find a champion (Bose and
Credible Einstein),
Testable credentials (idea per
person per year)

47. 47

48. 8 Steps to Innovation Excellence
48 STEP 6
ITERATE ON THE
BUSINESS MODEL

49. Improve the Idea Velocity
49
6. Iterate on the Business Model

50. Inimitability/Complementary Assets Framework
Holder of
complementary
High Difficult to
resources makes
make money
Money
Ease of Imitation (EMI, Coke)
Party with
Low
Inventor Innov .+ Compl.
makes resources makes
money Money
(Pixar vs Disney)
Freely available Tightly held
or unimportant and important
Source: Afuah, 2004
Complementary Assets

51. Increase the Batting Average
51
7. Build an Innovation Sandbox
8. Create a Margin of Safety

52. 8 Steps to Innovation Excellence
52 STEP 7
BUILD AN
INNOVATION SANDBOX

53. Increase the Batting Average
53
8. Build an Innovation Sandbox

54. 54
AT
LOW
COST…
“A near fanatical focus on cost reduction”

55. German Companies’ Role in Tata Nano Auto
55
 Bosch “The Tata Nano engine lies in the heart
of the Bosch Engine Management System,
 Fuelinjection which meets Bharat Stage III and future
Euro IV emission norms. For the first time,
 Braking systems Bosch developed the two-cylinder
 Car electronics Common Rail Direct Injection (CRDi)
system with an enhanced Electronic
 Continental Control Unit (ECU). A new Starter Motor
was conceived, and the super efficient
 BASF Generator developed has optimized size
and innovative design that meet
target specifications and cost.”
Source:
http://www.boschindia.com/content/language1/html/715_13769.htm

56. Biocon’s Platform-based
Innovation Strategy Potential
56 blockbuster
Source: Krishnan & Jha, 2011 Novel cancer
treatment 2G Oral
Insulin
Monoclonal
Antibodies
Biosimilars with
Cuban Inst.
Novel process
Generic drugs for
R-insulin
Production
of statins,
immuno-
suppressants
Expertise in Fermentation Technology Built through Enzyme Business

57. 57
7 Themes Platform Offering
 Digital consumers
 Emerging economies
 Sustainable tomorrow
 Smarter organizations
 New commerce WalletEdge
 Pervasive computing
 Healthcare economy
http://jugaadtoinnovation.blogspot.in/2012/04/infosys-innovation-to-build-tomorrows.html

58. Open Innovation
58
 Procter & Gamble has radically
altered the way it comes up with
new ideas & products. It now
works with universities, suppliers
and outside inventors. It offers
them a share in the rewards. In
less than a decade, half of
P&G’s new-product ideas
originate outside of the firm
 Thus P&G has been able to grow
at 6% a year between 2001
and 2006, tripling annual profits
to $8.6 billion. The company now
has a market capitalisation of
over $200 billion.
 Check out The Game Changer by
Lafley & Ram Charan

59. 8 Steps to Innovation Excellence
59 STEP 8
CREATE A
MARGIN OF SAFETY

60. Increase the Batting Average
60
9. Create a Margin of Safety

61. Measurement (Metrics)
61
 Pipeline
 Idea Velocity
 Batting Average
 Participation

62. No Parameter Lead indicator Lag indicator
1 Pipeline Number of challenges in the Number of ideas in the
challenge-book pipeline, Number of ideas per
person per year.
2 Idea velocity Average time to give idea Number of experiments in
relevant feedback to the exploring new types of
idea author, customers, defining new
Number of experiments / offerings / products, exploring
prototypes, new partnerships and new
feasibility studies, pricing models,
invention disclosures, Average time from formal
white papers in a year, approval to cash / saving /
Average time for an idea to impact
reach the first experiment /
prototype, Frequency of
innovation review,
Average time to get support
from a champion
3 Batting average Number of innovation Percentage of revenue from
sandboxes, number of innovations in the last 5 years
innovation platforms
4 Participation Number of people giving Number of active
ideas / comments / votes, Communities of practice
Mentors / catalysts / (CoPs), Role models,
62 champions customers engaged

63. 63
rishi@iimb.ernet.in
http://jugaadtoinnovation.blogspot.in
THANK YOU