Innovation is all the rage today for companies from small to large, and rightfully so. Evidence of this pressure to constantly reinvent and innovate:

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1 HOW TO INNOVATE.

2 Innovation is all the rage today for companies from small to large, and rightfully so. Evidence of this pressure to constantly reinvent and innovate: In a study published in 2012, Yale University predicted that more than three quarters of the Fortune 500 in the year 2020 will be companies we have not heard of yet1. The 2014 DMI Design Value index reported that companies who focus on design as an integrative resource to innovate more efficiently and successfully have maintained significant stock market advantage, outperforming the S&P by an extraordinary 228% over a decade2.

3 STRATEGIC INNOVATION Those firms that are innovating successfully and winning are those that take a strategic approach to innovation and align it with their business strategy. HBR reported in their June 2015 issue 3 that despite massive investments of management time and money, innovation remains a frustrating pursuit in many companies. Innovation initiatives frequently fail, and successful innovators have a hard time sustaining their performance as Polaroid, Nokia, Sun Microsystems, Yahoo, Hewlett-Packard, and countless others have found. Why is it so hard to build and maintain the capacity to innovate? The reasons go much deeper than the commonly cited cause: a failure to execute. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy. Innovation Point, a consultancy, reported in their whitepaper A Framework for Strategic Innovation that: Strategic Innovation takes the road less traveled it challenges an organization to look beyond its established business boundaries and mental models to participate in an open-minded, creative exploration of the realm of possibilities. Some organizations may feel that seeking breakthrough innovation is too grandiose a goal, and would be content in simply growing the business. Experience shows, however, that simply focusing on the short-term yields short-term results while teams aspiring to seek significant breakthroughs will both identify big ideas and also generate closer in incremental ideas. Strategic Innovation is not characterized by mundane, incremental product extensions, the me-too models of close followers, or band-aids for inefficient processes. It does not consist of simple facilitated creativity sessions or brainstorming new ideas. Instead, it spans a journey of inquiry and activity from creative inspiration at the ambiguous fuzzy front end through the detailed requirements of successful execution that lead to business impact 4.

4 PROCESS The strategic innovation process, as Innovation Point asserts, calls for a holistic approach that operates on multiple levels. First, it blends non-traditional and traditional approaches to business strategy, deploying the practices of Industry Foresight, Consumer/Customer Insight and Strategic Alignment as a foundation, and supplementing them with more conventional approaches and models. Second, it combines two seemingly paradoxical mindsets: expansive, visionary thinking that imaginatively explores long-term possibilities; and pragmatic, down-to-earth implementation activities that lead to short-term, measurable business impact. And that s the challenge. It requires different mindsets and different skillsets. Many people who are creative problem solvers and innovators don t actually realize or even admit that they have a process. The perception is that the ideas flow from intuition. This intuition though is taught over time. It s learned by following a process, developing skills and practicing that process over and over until that process becomes intuition. How does a firefighter know to leave a building before it collapses? Intuition. But that firefighter wouldn t have known that his or her first week on the job. The intuition is gained by learning new skills, being in similar situations and following a process many times over. Once the experienced is gained, the process doesn t feel like a process it feels like intuition. 1. Scoping & Planning Framing, Brief Writing, Developing Hypothesis 2. Consumer Insight Listening, Field Observation, Trendspotting, Empathy & Exploration 3. Industry Foresight Researching, Trendspotting, Listening, Exploration 4. Opportunity Identification Synthesizing, Pattern-Recognition, Sense-making, Prioritizing 5. Business & Product Design Concepting, Experimenting, Testing 6. Consumer Validation Listening, Incremental Experimentation, Evaluating 7. Implementation Execution Adapted from Innovation Point LLC: A Framework for Strategic Innovation.

5 FOCUS HBR in their June 2015 issue 3 asserts that an innovation strategy should answer these questions: How will innovation create value for potential customers? How will the company capture a share of the value that its innovations generate? What types of innovations will allow the company to create and capture value, and what resources should each type receive? The answers to these questions posed by author Gary P. Pisano, help align business strategy with innovation strategy. Once innovation strategy is aligned, it s time to execute. Many organizations have a disciplined approach or method or even utilize multiple approaches. Others execute without a disciplined process. No matter where your organization falls on this spectrum, there are four common approaches to innovation that companies utilize.

6 APPROACHES Many of the most innovative organizations are deploying a combination of methods in order to solve challenges in various ways. The combination of these approaches is a powerful way to maximize the benefits of each. In order to help think about when and how to take advantage of a specific method, we ve outlined the four broad innovation approaches in use today: Lean Startup, Design-Driven, Open Innovation and Crowdsourced Idea Management.

7 LEAN STARTUP DEFINITION An agile process of searching for an innovation that can be economically viable and technically feasible. By incorporating user feedback and experimentation early in the process, the methodology embraces failing early to succeed sooner. USE WHEN? Need to test & validate core assumptions early in the process Limited resources, specifically time Competitive environment is dynamic Threat of disruption of product, service, model BENEFITS Cultivates a fast-moving, learning culture that can quickly adapt Provides nimbleness & speed towards minimum viable product Encourages action & responsiveness while limiting risk (agile development & pivoting) Encourages greater sense of urgency to ship Elimination of wasted time & resources CULTURE IMPACT Agile mindset Values customer feedback over intuition Failing fast mentality WHO S GREAT AT THIS? 3M Coca-Cola (Founders Program) Unilever TOOLS Batterii Launchpad Central Strategyzer LIMITATIONS/CHALLENGES Setbacks can kill projects too early Ability to implement in cultures where planning or black & white decision making is emphasized Challenging to implement ideas at scale due to embedded infrastructure of organization Could pose risk when testing market with current customers More qualitative than quantative in market research/ feedback Build-measure-lean aligns with tech better than other product development workflows

8 DESIGN-DRIVEN DEFINITION Design-Driven is a mindset, method, approach and set of tools applied in order to achieve human-centered innovation, which will add sustainable and meaningful value. USE WHEN? The need or problem is unknown or ambiguous; the question might not even be clear Need for product, service & business model transformation Need to develop a consumer or customer-centric mindset Working to understand need vs. finding a market for a solution that has been created Making sense of information BENEFITS Provides experience & deep knowledge by being close to the consumer/customer Encourages action while limiting risk: prototyping & iteration loops Celebrates inspiration as a catalyst for innovation Provides insights to make critical business & strategic choices CULTURE IMPACT Cultivates a creative and human-centered company culture Creates interdisciplinary collaborators: thinkers & doers across business units Promotes open-mindedness and curiosity Celebrates inspiration as a catalyst for innovation Purpose-driven challenges/problems WHO S GREAT AT THIS? Dyson Frog Design Herman Miller IDEO Intuit TOOLS? Batterii Concept Board Murally LIMITATIONS/CHALLENGES Mindset shift for many cultures and employees, therefore initial execution cycle to instill in teams is long and process is hard until practice becomes habit

9 OPEN INNOVATION DEFINITION Innovating with partners outside the organization to share risk & reward to solve a specific problem. Typically sourced within a specific community of interest and often used for R&D. USE WHEN? To solve a specific problem with a prescribed solution Lack expertise in-house Speed-to-market is critical and solution involves extensive research and possibly trials To solve part of an innovation vs. development of a product, service or model BENEFITS Enables sharing of risk & resources with potential partners Provides ability to leverage proven solutions Expands resources & capabilities in areas lacking expertise May reduce cost of development CULTURE IMPACT Provides diversity of expertise, viewpoints & ideas Encourages sharing of knowledge Promotes open-mindednessdedness Connectionn & engagement with stakeholders & customers WHO S GREAT AT THIS? GE Netflix Prize Panasonic P&G (Connect & Develop) TOOLS? Innocentive Nine Sigma QMarkets LIMITATIONS/CHALLENGES Requires strength in identifying, connecting, & partnering effectively Potential exposure to strategies & plans to market Requires transition & integration process with external stakeholders Potential for IP contamination

10 CROWDSOURCED IDEA MANAGEMENT DEFINITION An open-call for needed ideas or input from large groups of people, typically online communities of customers, employees or suppliers. It often takes the form of a broad-based competition that rewards participants for the production of ideas or leverages the collective intelligence to pick the best ideas. USE WHEN? Engagement and connection with stakeholders/ public collaborators is seen as an opportunity to gather a more diverse set of perspectives When internal teams are stale and want an infusion of ideas from outside A large volume of ideas are needed Can be used to validate ideas during the innovation lifecycle BENEFITS Can generate a large quantity of ideas typically with low cost and with speed Easy to execute relative to other innovation approaches Easy to engage many people with diverse skills, expertise & experiences Viewed positively by customers/market when invited to participate An initiative can lead to awareness building and positive perceptions of the brand CULTURE IMPACT Breeds a culture of ideation & idea sharing Generates excitement and energy LIMITATIONS/CHALLENGES Stresses quantity over quality of ideas Ideas generated are typically incremental vs. breakthrough innovation Difficult to assess & qualify ideas Ideas are not always based on true needs, problems or opportunities Doesn t encourage development of innovation skills or mindsets Crowd quickly becomes fatigued with process & limited participation ensues WHO S GREAT AT THIS? Cisco iprize Dell IdeaStorm IBM Jams MyStarbucks Idea TOOLS? Bright Idea Hype Imaginatik MindJet

11 CONTEXT Top innovators know that to problem-solve and continuously reinvent within any given ecosystem, there is no one size fits all approach or methodology. A combination of the approaches discussed in this paper, may yield the best results. Using the Strategic Innovation Process discussed earlier, the diagram to the right demonstrates when the approaches are best utilized at each step in the process. APPROACHES: LEAN START-UP DESIGN DRIVEN OPEN INNOVATION CROWDSOURCED IDEA MANAGMENT Adapted from Innovation Point LLC: A Framework for Strategic Innovation.

12 TOOL Just as the approaches to innovation cannot be one size fits all the tools that support those approaches cannot be either. Tools that were built and intended for crowdsourced idea management will struggle to be useful for Design-Driven approaches and methodologies and vice versa. Tools for Open Innovation and Crowdsourced Idea Management are well known and have been deployed by most innovation teams. The desire for organizations to utilize Lean and Design-driven approaches to scale innovation is becoming more prevalent, but legacy tools are often still being utilized: paper, markers, post-it notes and whiteboards to name a few. Given the imperatives for success and the implementation of these newer approaches, teams need a tool that support those approaches. Tools that allow the diverse thinking and ability to unleash the creative mindset, while structuring and organizing information in a way that enables collaboration and develops a repository of great ideas. Batterii is that tool. It is the only innovation SaaS platform that was built on Design-Driven principles. As a result, Batterii is a key driver in transforming the way the organization thinks, works and innovates. Use Batterii to support your innovation and creative problem-solving processes, whether it s research, trend spotting, business model development, product and service design, and concept development. powering your next big idea. To learn more visit or contact Shaun Chokreff at schokreff@batterii.com

13 REFERENCES 1. Gittleson, Kim. Can a Company Live Forever? BBC News. bbc.com, 19 Jan Web. 1 Sept Rae, Jeneanne, and Michael Westcott. Design-Driven Companies Outperform S&P by 228% Over Ten Years - The DMI Design Value Index - Design Management Institute. Design Management Institute & Motiv, 10 Mar Web. 1 Sept Pisano, Gary P. You Need an Innovation Strategy. Innovation. Harvard Business Review, 1 June Web. 1 Sept Palmer, Derrick, and Soren Kaplan. A Framework for Strategic Innovation. InnovationPoint LLC. Innovation-Point.com. Web. 1 Sept

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