The Future Of Innovation: Making it real & personal. Bill Fischer. February 24, 2016

Transcription

1 The Future Of Innovation: Making it real & personal Bill Fischer February 24, 2016

2 Who is presenting today? Bill Fischer is Professor of Innovation Management at IMD. He cofounded and co-directs the IMD program on Driving Strategic Innovation, in cooperation with the Sloan School of Management at MIT and also authors a regular column for Forbes.com entitled The Ideas Business, Steve Denning is a board member of Scrum Alliance. He led the Learning Consortium in He writes for Forbes.com and is the author of eight books, including The Leader s Guide To Radical Management (2010) and The Leader s Guide To Storytelling (2010). 2

3 Innovation, Agile and Scrum Software development is inherently about innovation Software is eating the world. Marc Andreessen All organizations are now software organizations Innovation is the key to the future of all organizations 3

4 Poll The organization I work for is very innovative. Yes No Not relevant/not sure 4

5 The Future of Innovation IMD International Institute for Management Development. Not to be used or reproduced without permission.

6 The Future of innovation As seen in the IMD-MIT/Sloan Driving Strategic Innovation program: Innovative organizations deserve innovative leaders Is not about so much about new products nor new processes It s more about business models & organization & Leadership!!

7 The Last Innovation Frontier Leadership behavior!! If we can t create organizations where innovation is part of what everyone regards as their responsibility we will miss significant opportunities!

8 We need to think differently about moving into the future:

9 Innovation as a verb, not a noun! & everyone involved!

10 Here are my beliefs on what the Leadership of Innovation in the Future will look like: v Customer Experience is the beginning for every conversation! v Anticipatory rather than Reactive v Continuous not Episodic v More involved with the Unknown than the Uncertain exploring: lots of small bets! v Open & Inclusive rather than protective & solitary v Digital (not analog) leadership behaviors

11 Let me show you a traditional company in an old-economy, commodity industry that is practicing these very behaviors They believe that their ultimate advantage is not lower costs, but the knowledge that they have if only they can release it! so, this is about creating a smarter firm!

12 Haier v One of China s big 3 global brands v Has reinvented itself 3x in 3 decades v 80,000 people v & comes out of Confucian/former centrally planned emerging market

13 They recognize that external change is continuous Innovation is marked by successive generations of new ideas which disrupt the old ideas Industry Customer Evolution Desires

14 & that message is shared with everyone so that everyone realizes that change never ceases Ri Xin, Refrigerator Products Department Jin Xing, Equipment Parts Department IMD 2016

15 Where should we start? Innovation is More Than Technology & Products Innovation can start anywhere. we can all be innovators! Copyright Alexander Osterwalder& Yv es Pigneur, Business Model Generation

16 Customer-centricity & business model innovation are key for driving change at Haier 1984: to build better products and gain brand recognition as a result Copyright Alexander Osterwalder & Yves Pigneur, Business Model Generation

17 ( ): Brand Building through Focusing On Quality & Manufacturing Excellence

18 The Star Model: what managerial choices are you making to affect behavior? Vision Strategy Market Direction Competitive Advantage Skills & Talent Staffing and Selection Performance Feedback Learning and Development How We Organize Power and Authority Reporting Relationships Organizational Roles Values, Measures & Rewards Goals, Scorecards and Metrics Values and Behaviors Compensation/Rewards How We Work Networks, Processes,Teams, Integrative Roles, Matrix Structures IDEA Knowledge Flow Source: Jay R. Galbraith, Designing Organizations: An Executive Briefing on Strategy, Structure, and Process (San Francisco: Jossey-Bass, 1995), adapted by Bill Fischer

19 Business Model Innovation Must be Reinforced by Organizational Culture Started with an inherited workforce, with no work ethic Visionary Value Proposition Quality à Brand Strong top-down leadership Everyone is in the reporting process start to attack hierarchy Tied wages directly to the performance measurement process Daily measurements to daily account for Performance & quality

20 Along the way (1998) Haier chose to Become a Service Company

21 Market Chains the power of pull Another Visionary Value Proposition Moving from Products to Service Responsiveness Same workforce but now with confidence in ZRM Abolition of functional hierarchical reporting emphasis on market linkages Rewards based on Market linkages & individual performance Performance measurement processes built upon OEC with some slight modifications

22 Then, in 2005, they chose to create an organization that moved from responsiveness to intimacy Zero-distance with the customer!

23 Zero-distance with the customer

24 Zero- Distance Inverted Pyramid ZZJYT

25 ( ): Zero Distance To Customer From Responsiveness to Intimacy Increased reliance on external experts Partnering with other appliance makers via Gooday Logistics Zero-Distance to Customers ZZJYTs B2B companies with downstream partners Entrepreneurial workers Internet skills Personalized offerings in real time at affordable price Create Pull Mechanisms In Channels Creation of Immediate Gooday downstream Logistics presence via B2B companies additional revenues a s retail service p rovider Reduced Inventory Costs IMD 2016 Reduced Administrative costs via ZZJYTs Additional Revenues from New Brands Real Market Segmentation based on more knowledge additional revenues from customized service

26 Zero Distance To the Customer Another Visionary Value Proposition Moving beyond Responsiveness to intimacy Begin to hire for new skills & people looking for freedom Creating of self-organizing Competitive work units Everything is performance based Everything is up for bids & is competitive

27 Do you see: v Openness? v Restlessness? v Coherence?

28 Poll: Which of these do you see in your own organizations? v Openness? Check all that apply! v Restlessness? v Coherence?

29 Results 2014

30 5 Lessons of Haier s Innovativeness 1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary

31 5 Lessons of Haier s Reinvention 1. Successful reinvention has a higher probability of success if it occurs before the time that it is necessary 2. Revolution through accretion building on the familiar

32 Haier never jumped into the unknown New Leverage Transform Markets Protect & Extend Build Existing Existing New Source: Chakravarthy & Lorange Distinctive Competencies

33 5 Lessons of Haier s Reinvention 1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary 2. Revolution through accretion 3. When it comes to creating a culture of widespread innovation, fewer ideas are better Customer centricity The principle asset of the firm is its talent

34 5 Lessons of Haier s Reinvention 1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary 2. Revolution through accretion 3. When it comes to creating a culture of widespread innovation, fewer ideas are better 4. Successful innovation = dreams + details

35 5 Lessons of Big- Bang Reinvention 1. Successful transformational innovation has a higher probability of success if it occurs before the time that it is necessary 2. Revolution through accretion 3. When it comes to creating a culture of widespread innovation, fewer ideas are better 4. Successful innovation = dreams + details 5. Visionary leadership is key to all of this

36 What s Next in Haier s Reinvention Journey An organization without boundaries (a platform) Zhang Ruimin argues that there are at least four big changes today occurring outside of Haier, that Haier must adjust to: Asset access > Ownership What you know > What you make We are all living our private lives in internet time, but not our organizational lives We live in a world of endless & abundant interconnectivity As a result, organizations should pursue: Speed Openness Boundarylessness Value-ecosystem opportunity

37 One way to achieve this is organizational innovation To move from the traditional way of thinking about an organization (which Haier had abandoned some time ago) & to think of an organization that would be fast, open, without boundaries & which would create opportunities for its eco-system partners

38 This, once again, involves building new business model for Haier New Partners Fisher & Paykell Sharp GE Appliances Boundaryless DeHaierization Entrepreneurial Workers ZZJYTs Leverage what you have to seek new opportunities & not be hostage to legacy Openness & Speed Best Logistics system New Customers In Many New markets Cost Reduction Revenue Growth & new revenue sources Copyright Alexander Osterwalder & Yves Pigneur, Business Model Generation

39 Think About How Haier is Living Each of These: v Customer Experience is the beginning for everything! v Anticipatory rather than Reactive v Continuous not Episodic v More involved with the Unknown than the Uncertain exploring: lots of small bets! v Open & Inclusive rather than protective & solitary v Digital (not analog) leadership behaviors

40 Poll: Which of these characterizes your organization? Customer Experience is beginning for everything! Anticipatory rather than Reactive Continuous not Episodic More involved with the Unknown than the Uncertain exploring: lots of small bets! Open & Inclusive rather than protective & solitary Digital (not analog) leadership behaviors

41 Incidentally, This Reminds Me of Three Things That They Never Teach You About Change Leadership Be immodest Be impolite Be unreasonable

42 Questions? Questions? 42

43 43 Thank You For Your Interest The conversation is continued

44 Next month Wednesday March 16, at 11am ET Joel Semeniuk What is a Culture of Innovation and How Do You Get It? 44

45 The Future Of Innovation Bill Fischer February 24, 2016 Thank you!