Fast Innovation: Achieving Superior Differentiation, Speed to Market, and Increased Profitability Achieving Superior Differentiation, Speed to Market, and Increased Profitability

by George, Michael; Works, James; Watson-Hemphill, Kimberly; Christensen, Clayton

• ISBN13: 9780071457897
• ISBN10: 0071457895
• Edition: 1st
• Format: Hardcover
• Copyright: 2005-07-15
• Publisher: McGraw-Hill Education

Summary

Surveys by the Economist and many others show that the top of mind issue for most CEO and managers has shifted from cost reduction to revenue growth. As the world economy shifts from one of contraction to expansion, companies know that revenue growth is strictly dependent on their innovation process.For the majority of companies, more than 25% of this year's revenue are for products and services that did not exist 3 years ago. Moreover, the life-cycle of offerings is growing ever shorter. Sixty percent of companies report that their growth is hampered because the lead time of their innovation process takes too long and costs too much.Companies understand the causes of long lead time and high cost in manufacturing, and its remedy using the Lean methodology. However, the causes of long lead time and high cost in innovation are not understood, nor is their remedy. This book, for the first time, explains the causes of long lead time and ineffective innovation, and provides a proven solution.Conquering the Growth Challenge explains why it takes so long for innovations to reach the market and why they so often fail; and provides solutions for how to reduce time-to market and increase the success rate. It provides the complete foundation for reducing time-to-market of successful innovative offerings, applicable to any business, and is the first to provide quantitative links such that a thoughtful CEO or manager who implements the Fast Innovation process featured in this book can launch a new innovation, confident that it will meet its required delivery date. The solutions discussed in this book have already been applied in varying degrees by firms such as GE, 3M, Toyota and Microsoft.In short, what you'll get in this book is an answer to the challenge every company faces: how can we increase differentiation and competitive advantage while shortening time-to-market? At first glance, that sounds like an impossible goal because increased differentiation was historically accompanied by increased organisational and offering complexity-which often served to clog development pipelines. George provides the necessary implementation infrastructure and tools to achieve:bull; Significantly faster and controllable time-to-marketbull; A highly differentiated product, service or experiencebull; Low cost of complexity and low cost operationsbull; Fast operational lead times

Author Biography

Michael George is an executive advisor and a leading expert at helping Fortune 500 companies connect strategy to execution. He is author the bestselling Lean Six Sigma for Service and co-author, Conquering Complexity in your Business. Mike is Chairman and CEO of George Group.

James Works advises senior executive teams in the areas of Innovation, Business Strategy, Operations Improvement and organizational change. He is President and Chief Operating Officer of George Group.

Kimberly Watson-Hemphill has built a reputation over the last 12 years as a leading expert in the field of Innovation and Design across many different product, service and business model applications.

Table of Contents

Foreword	ix
Preface	x
PART I: AN EXECUTIVE'S GUIDE TO FAST INNOVATION
Chapter 1 Using Fast Innovation to Drive Organic Growth	3	(12)
Innovation's Contribution to Organic Growth and Value Creation	5	(2)
The Challenges of Sustained Growth	7	(2)
The Fast Innovation Value Proposition	9	(4)
Conclusion	13	(2)
CHAPTER 2 The Three Innovation Imperatives: Differentiated, Fast, Disruptive	15	(20)
Imperative #1: Differentiation	16	(2)
Imperative #2: Fast Time-to-Market	18	(5)
Imperative #3: Disruption	23	(8)
The Power of Disruptive Innovation	27	(1)
The Most Important Disruptive Innovation of the 20th Century	28	(3)
Joining the Winning 10%: Being disruptive (even if based on sustaining innovations)	31	(2)
Conclusion	33	(2)
SPOTLIGHT ON Customers and Differentiation	35	(14)
Understanding the Heart of the Customer	38	(8)
Strategy #1: Develop strong links to both the core and fringes of your market	38	(3)
Strategy #2: Use ethnography to understand customer needs better than anyone else	41	(5)
What's Really Different?	46	(1)
A Look Ahead	47	(2)
CHAPTER 3 How to Become Fast	49	(24)
Prerequisite 1: Attacking the biggest drivers of innovation lead time	51	(13)
The Law of Lead Time	51	(3)
The Astounding Impact of Variation	54	(2)
The Sources of Project Delays	56	(2)
Meeting Project Schedules Despite Task-Time Variation	58	(6)
Pre-requisite 2: Rapid Cycles of Learning Creates Differentiation	64	(7)
A. Ethnography	64	(1)
B. Rapid Prototyping	65	(3)
C. The Innovation Blitz	68	(2)
D. Flexible Performance Target Design	70	(1)
Conclusion	71	(2)
CHAPTER 4 The Value of Thinking in Three Dimensions	73	(20)
Dimension 1: New Product/Service Innovation	74	(1)
Dimension 2: Market Definition Innovation	75	(3)
Dimension 3: Process/Business Model Innovation	78	(5)
The Strong Advantage of Multidimensional Innovation	83	(6)
Conclusion	89	(4)
CHAPTER 5 Open Innovation: Applying the Intellect of the Planet	93	(20)
A Quick Look at the Closed Innovation Model	94	(4)
Open Innovation Model	98	(1)
Open Innovation Case #1: Eli Lilly's web-based InnoCentive	99	(5)
Open Innovation Case #2: Procter & Gamble	104	(2)
Open Innovation Case #3: Intel's problem that required thousands of innovators	106	(3)
The Future of "R" in Corporate R&D?	109	(2)
Conclusion	111	(2)
CHAPTER 6 The Religion of Re-use	113	(18)
Why Re-use?: To become faster and more differentiated	114	(2)
Platforms and Operating Cost Efficiency: An organizing principle for re-use	116	(4)
Overcoming Resistance to Re-use: A case study	120	(4)
Using "External" Platforms to Capture Customers	124	(2)
Conclusion	126	(5)
SPOTLIGHT ON Leading Innovation	131	(10)
Disruptive Innovations Where CEO Presence Was Necessary	133	(3)
Characteristics of an Innovation-Enabling Executive	136	(2)
Defining the Burning Platform	138	(3)
RECAP of Fast Innovation	141	(6)
PART II: BUILDING CORPORATE INNOVATION CAPACITY
Introduction to Part II	147	(2)
CHAPTER 7 Foundations of an Innovation Factory	149	(16)
Foundation #1: Leadership courage and engagement	150	(6)
Building Leadership Engagement	153	(1)
How to get there: The executive retreat	154	(2)
Foundation #2: Business units capable of meeting the demands of Fast Innovation	156	(5)
1. Design/development groups (R&D)	156	(2)
2. Marketing/Strategy	158	(1)
3. Sales/Service	158	(1)
4. Operations	159	(2)
5. Finance	161	(1)
Foundation #3: Superior execution capability to deliver innovations	161	(3)
Conclusion	164	(1)
SPOTLIGHT ON Conquering the Cost of Complexity	165	(12)
The (Often Hidden) Impact of Complexity	168	(3)
Conquering Complexity Accelerates Innovation	171	(2)
Attacking Complexity	173	(4)
CHAPTER 8 The Executive Engine of Fast Innovation: Using a Chief Innovation Officer to Drive Results	177	(16)
The Responsibilities of the Chief Innovation Officer	178	(4)
Defining Innovation Goals and Metrics	182	(4)
Funding Disruptive Innovation: Real Options Theory	186	(2)
Real Options Theory	188	(3)
Conclusion	191	(2)
CHAPTER 9 Becoming Customer Driven	193	(22)
Using Customer Knowledge Throughout the Design Process	194	(3)
A Case Study in VOC	197	(5)
VOC Translation Tools (Design for Lean Six Sigma)	202	(10)
Increasing Trust in Your VOC	212	(1)
Conclusion	213	(2)
SPOTLIGHT ON Creating an Idea-Rich Environment	215	(4)
1. Raise awareness of innovation opportunities	215	(1)
2. Create an Idea Forum	216	(3)
CHAPTER 10 Fast and Flexible: The New Corporate Mantra for Design Work	219	(16)
Flexible Performance Targets: How to be creative without sacrificing lead time	221	(1)
Designing to Flexible Performance Targets	222	(11)
Conclusion	233	(2)
CHAPTER 11 Institutionalizing Re-use	235	(11)
The Many Faces of Re-use	235	(5)
Re-use and Innovation by Analogy	236	(1)
Re-use and Best Practices	237	(1)
Re-use and Channels	238	(1)
Re-use and Intangible Products	238	(2)
Re-use Resistance (and How to Overcome It)	240	(4)
Argument #1: Developing re-usable designs is too expensive	241	(1)
Argument #2: "I'm a creator, not a re-user"	242	(1)
Other Ways to Facilitate Re-use	243	(1)
Conclusion	244	(2)
Part II Conclusion	246	(2)
PART III DEPLOYING FAST INNOVATION PROJECTS
Introduction to Part III	248	(1)
CHAPTER 12 Project Screening and Selection	249	(12)
Identifying Opportunities	250	(1)
Managing Sustaining vs. Disruptive Evaluation Processes	251	(2)
Screening Ideas at the Business Unit Level	253	(6)
Screen #1: Rough "go/no-go" filter	253	(1)
Screen #2: Composite scores on attractiveness and effort	254	(3)
Screen #3: Business case development and project selection	257	(2)
Hold Off on That Launch!	259	(2)
CHAPTER 13 Increasing Innovation Capacity Without Adding Resources	261	(16)
Gathering the Necessary Data	264	(3)
Step 1: Categorize your developers' activities	264	(1)
Step 2: Gather time data	265	(2)
Optimizing Utilization: A case study	267	(4)
Multi-Tasking Harms Creativity	271	(4)
Attacking the Causes of Multi-tasking	272	(3)
Conclusion	275	(2)
SPOTLIGHT ON The Innovation Blitz	277	(6)
Traditional vs. Blitz Model: Trench warfare vs. a lightning attack?	278	(1)
Using the Blitz approach	279	(4)
CHAPTER 14 The FastGate Method: How to Control Innovation Lead Time	283	(14)
FastGate, Feedback and Critical Resources	284	(3)
The FastGate Method for Innovation Project Management	287	(4)
Making the Initial Adjustments	288	(2)
Ongoing Use of FastGate Reviews	290	(1)
Tracking Project Performance	291	(4)
Oregon Productivity Matrix	293	(2)
Conclusion	295	(2)
CHAPTER 15 Creating Innovation Incubators: How to Catalyze Creativity on Your Teams	297	(12)
Becoming a Catalyst for Creativity	299	(9)
1. Immerse team members in customer knowledge and other background	300	(1)
2. Make the problem difficult and specific	300	(2)
3. Push the boundaries in brainstorming	302	(1)
4. Help (or even force) people to think in new ways	303	(4)
5. Look at the whole value stream; keep their minds open to all steps	307	(1)
6. Allow space for thinking/ruminating	307	(1)
Conclusion	308	(1)
Recap of Part III	309	(2)
APPENDIX 1 The Impact of Task Variation and Utilization on Lead Time	311	(10)
APPENDIX 2 Time Buffers and Feedback Systems	321	(5)
APPENDIX 3 Innovation and Information Creation	326	(2)
INDEX	328