Competing through Innovation in Services Engineering. M. T. Correia de Barros October 26, 2015
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1 Competing through Innovation in Services Engineering October 26,
2 Innovation A critical ingredient in today s Economy The trouble with our times is that the future is not what it used to be Paul Valery 2
3 Innovation A critical ingredient in today s Economy It drives GROWTH, BRAND and VALUE 3
4 Innovation A critical ingredient in today s Economy 4
5 Innovation Just that? 5
6 6
7 Innovation Value creation Market Revenue 7
8 Innovation Preemption Barriers to entry 8
9 Alignment of Strategy and Innovation Innovation must deliver the value on the efforts you put in Innovation Funnel Innovation Management 9
10 Strategy Blue Ocean Strategy How to Create Uncontested Market Space and Make the Competition Irrelevant W. Chan Kim and Renée Mauborgne, INSEAD First published 2005 New edition 2015 Translated into 43 languages and has sold over 3.5 million copies 10
11 Blue Ocean Strategy 1. The first part presents key concepts of blue ocean strategy, including Value Innovation the simultaneous pursuit of differentiation and low cost and key analytical tools and frameworks such as the strategy canvas, the four actions framework and the eliminate-reduce-raise-create grid. 11
12 Blue Ocean Strategy Value Innovation 12
13 Blue Ocean Strategy 2. The second part describes the four principles of blue ocean strategy formulation : how to create uncontested market space by reconstructing market boundaries, focusing on the big picture, reaching beyond existing demand and getting the strategic sequence right. 13
14 Blue Ocean Strategy 3. The third and final part describes the two key implementation principles of blue ocean strategy including tipping point leadership and fair process. These implementation principles are essential for leaders to overcome the four key organizational hurdles that can prevent even the best strategies from being executed. The four key hurdles comprise the cognitive, resource, motivational and political hurdles that prevent people involved in strategy execution from understanding the need to break from status quo, finding the resources to implement the new strategic shift, keeping your people committed to implementing the new strategy, and from overcoming the powerful vested interests that may block the change. 14
15 Blue Ocean Strategy 15
16 Blue Ocean Strategy Blue Ocean Strategy requires Differentiation Differentiation requires Innovation 16
17 Differentiation through Innovation Incremental Substantial Radical 17
18 Innovation 18
19 Innovation basic requirements Think out of the box Focus Colliding Concepts? 19
20 Innovation requires Focus Strategically focused Innovation Corporate strategy Be firm, be flexible 20
21 Innovation requires HR excellence Skills and Motivation Team Work and Motivation Innovation and Corporate Culture 21
22 Corporate Culture 22
23 Innovation and Corporate Culture 23
24 Innovation and Corporate Culture 24
25 Innovation and Corporate Culture 25
26 Blue Ocean Strategy in Services Engineering How to Differentiate Competing through Innovation in Services Engineering 26
27 Blue Ocean Strategy in Services Engineering Differentiation requires continuous change Change requires knowledge about Business Company Technology 27
28 Competing through Innovation in Services Engineering Scientific collaboration Science and industry linkages Knowledge clusters Knowledge creation nowledge management Knowledge increases by sharing it 28
29 Innovation clusters 29
30 Think tanks inside and outside the company 30
31 Innovation requires learning The rate at which individuals and organizations learn may become the only sustainable competitive advantage Ray Stata Organizational Learning The key to Management Innovation 31
32 Learning organization David A. Garvin, Harvard Business School A learning organization is an organization skilled at: - creating, acquiring, interpreting, transferring, and retaining knowledge - purposely modifying its behavior to reflect new knowledge and insights. 32
33 Learning organization David A. Garvin, Harvard Business School A learning organization tries to do six things: 1. Collect intelligence about the environment. 2. Learn from the best practices of other companies. 3. Learn from its own experiences and past history. 4. Experiment new approaches. 5. Encourage systematic problem solving. 6. Transfer knowledge throughout the organization. 33
34 Learning organization David A. Garvin, Harvard Business School Intelligence Gathering 1. Intelligence gathering takes three forms: - Search - Inquiry - Oservation 2. Successful intelligence gathering requires: - collecting data from diverse sources - cross-checking findings to ensure validity - avoid biased, slanted questions - keeping an open mind - probing for interpretations and implications 3. The process can M. be T. Correia continuous de Barros or periodic 34
35 Learning organization David A. Garvin, Harvard Business School Learning from other companies Benchmarking can be applied to all facets of a business: the basic products and services the processes and the methods that support getting those products and services effectively to customers and meeting their needs In the formal sense, benchmarking is an ongoing investigation that ensures that best industry practices are uncovered, analyzed, adopted, and implemented In Benchmarking: The Search for Best Practices that Lead to Superior Performance Robert C. Camp 35
36 Learning organization David A. Garvin, Harvard Business School Learning from Past Experiences Few companies take the time to review their own past experience, assess it systematically, and record it in a form that is useful and accessible to other parts of the organization Critical elements approach (U.S. Army) 36
37 Learning organization David A. Garvin, Harvard Business School Success and failures At the core of effective organizational learning is a mind set that enables companies to recognize the value of productive failure as contrasted with unproductive success A productive failure is one that leads to insight, Understanding, and thus an addition to the commonly held wisdom of the organization. An unproductive success occurs when something goes well, but nobody knows how or why David Nadler Even Failures Can Be Productive 37
38 Learning organization David A. Garvin, Harvard Business School Experimentation 1. Experimentation takes two forms: - exploration - hypothesis testing 2. Successful experimentation requires: - a continual flow of new ideas - an incentive system that favors risk taking - short feedback cycles and repeated revisions - techniques for discriminating among alternative explanations and approaches (e.g. using controls, altering one variable at a time) - a comprehensive measurement package 3. The process can be carried out in real or simulated settings 38
39 Learning organization David A. Garvin, Harvard Business School Transferring Knowledge New learnings can be transferred in several ways: 1. Written, oral, and visual reports - summaries of findings - check list of do s and don t s 2. Site visits and tours: - ad hoc tours - preplanned, customized tours 3. Personnel rotation programs 4. Education and training programs 5. Knowledge management programs - best practice databases - Yellow pages and directories 39
40 Competing through Innovation in Services Engineering Know-How versus Know-Why 40
41 Competing through Innovation in Services Engineering Big Vision Small Steps 41
42 Competing through Innovation in Services Engineering Small Steps Systematic Problem Solving Requires data, not assumptions Requires scientific method, not guesswork Requires repeatable results 42
43 Competing through Innovation in Services Engineering Successful and NON-Successful Steps Innovation Risks - Difficult selecting the right ideas - Not enough customer insight - Lengthy development times - Lack of financial availability - Not enough planning and results measurement - Ineffective marketing and communication 43
44 Competing through Innovation in Services Engineering Successful and NON-Successful Steps Innovation Risks (cont.) - Lack of qualified personnel - Lack of coordination within the company - Risk averse culture - Insufficient support from leadership and compensation not tied to innovation results - Inability to adequately measure performance 44
45 Competing through Innovation in Services Engineering Big Vision Small Steps 45
46 Competing through Innovation in Services Engineering To learn one must be humble. But life is the great teacher. James Joyce, Ulysses Learning is a life time task 46
47 Competing through Innovation in Services Engineering Thank you for your attention The floor is yours 47
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