A Sustainable Innovation Culture that Increases Innovation SPEED (up to 6x) & Decreases RISK (by 30/80%)
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1 NIST MEP A Management System that helps create A Sustainable Innovation Culture that Increases Innovation SPEED (up to 6x) & Decreases RISK (by 30/80%)
2 What is Innovation?
3 What is Innovation? Creativity Different Invention Technical Creativity Innovation Creativity or Invention with Meaningful Value
4 How we define Innovation... Innovation is MEANINGFUL UNIQUENESS
5 At the 99% Confidence Level. Meaningfully Unique Offerings Increase Customer Trial Increase $ Bought per Customer Increase Repeat Purchase Rate Increase # times bought / year Increase Word of Mouth Awareness Other than that, it doesn t matter
6 Pull Out Your Business Card Circle the Statement that explains to customers your meaningful uniqueness
7 is not a strategy for success
8 Why is Innovation Important?
9 Innovation is the #1 Profit Building Strategy % Profit Margin (Return on Sales) Self Reported Company Strategy n=738 - Georgia Tech
10 Innovation drives 80% of GDP Growth Robert Solow Nobel Prize Winner In Economic Sciences
11 Microprocessors LCDs Brokerages Wireless Services VCRs Over Time Airlines Cable Boxes Crushed Stone Cars Mobile Service Milk Bottles Personal Computers Plastics DVD Players Color TVs prices DECLINE - 25% with each doubling of experience
12 USA Small Company Report That Their #1 Need is Growth, Product Development & Innovation % MEP Clients listing as one of their Top 3 Challenges NIST/MEP Quarterly Survey Jan/March 2009 n = 2,579 MEP Customers
13 If you re not Unique you better be Cheap
14 Confront Reality Where is your company on the curve GROWTH Highest Profitability Smaller Changes Start Up Growing Profitability Big Changes MATURITY Declining Profitability Cost Cutting DECLINE Declining Sales Panic Business Life Cycle
15 With Innovation You Reboot & Restart 61 Innovations in 61 Years Bottom Line Innovation is why Tide still makes a premium profit margin selling an old product detergent even in Wal-Mart! Bottom Line Every Year They Discontinue The #1 Selling MP3 Player Innovation is why Apple makes a premium profit margin in consumer electronics one of the most price driven marketplaces on earth.
16 SALES Growth over past 3 Years % 84% 4% Companies on LEFT Side of Curve Companies on RIGHT Side of Curve Proactive Reactive NIST/MEP Network Partnering for Manufacturing Innovation and Growth
17 PROFIT MARGIN Growth over past 3 Years % 96% 13% Companies on LEFT Side of Curve Companies on RIGHT Side of Curve Proactive Reactive NIST/MEP Network Partnering for Manufacturing Innovation and Growth
18 EMPLOYEE Growth over past 3 Years % 63% 1% Companies on LEFT Side of Curve Companies on RIGHT Side of Curve Proactive Reactive NIST/MEP Network Partnering for Manufacturing Innovation and Growth
19 INNOVATION Means EMPLOYEESMake More Money $ Innovation Driven Companies create better PAYING JOBS Strategy = Innovation $53,000 Average Employee Wage Strategy = Low Price $33,000 Georgia Tech 2010
20 PROACTIVE companies ADAPT QUICKLY to changes in the Global Economy Proactive Reactive 37% 19% 43% 23% % of Company Sales in New Products/Services that they didn t have 3 years ago % of Sales to New Customers Domestic & Export that they didn t have 3 years ago
21 For those who say they can t THINK ABOUT: A Business That Sells Flour, Water, Yeast & Salt...
22 Growth Model
23 Perpetual Profit Cycle NEW Customers & Markets ipod ADAPT ipad CURRENT Customers IMPROVE LEAD CURRENT Capabilities iphone NEW Products & Services itunes Apps
24 Lead Existing Customers with New Products / Services Adapt Existing Capabilities to reach New Customers / Markets
25 Lead Customers
26 Insight Moment
27 CEO Frustration... You Think - I Think I Have A Choice on Innovation The BARRIER WALLS - for Innovation I the CEO Don t Feel Confident Leading Innovation I Don t Feel Confident My People Can Innovate I Don t Think My Industry Can Handle Innovation I Don t Think My Customer Can Handle Innovation
28 Innovation Problems CEO Survey Problem #1 It can take a LONG TIME to see results Problem #2 It can be very RISKY
29 Regression Modeling finds that to drive Profitability of USA Companies Confidence in Innovation SYSTEM is #1 Driver PROACTIVE vs. Reactive Mindset Importance Standardized Coefficients 3 0 % 7 0 % Confidence in Innovation SYSTEM Importance Standardized Coefficients This is good news - Installing an INNOVATION SYSTEM can give leaders the confidence to become proactive! NIST/MEP Study of 700+ Companies
30 Data & Academic Research Confirm State of Mind
31 Domestic Manufacturing Are of Two Mindsets Reactive Mindset Proactive Mindset We are more customer focused than our competition. We measure customer satisfaction systematically and frequently. We believe our business exists primarily to serve our customers We help customers anticipate developments in their markets We innovate even at the risk of making our own products obsolete We continuously try to discover additional needs of our customers of which they are unaware
32 What is Innovation Engineering?
33 Pedigree System Originated at P&G Optimized Over 26 Years 88% Repeat Rate Researched & Refined Undergraduate & Graduate Degrees & Programs Expanding to 8 Colleges this fall Adapted to work with Small Companies 7,000+ leaders in past 3 years Roger Kilmer NIST/MEP Doug Hall Eureka! Ranch Robert Kennedy U Maine
34 Diversification of Thinking Genrich Altshuller TRIZ Eureka! Idea Engineering Doug Hall Industrial Strength INVENTING Out of the Box INVENTING Edward DeBono George Prince Lateral Thinking (Po) Synectics (Analogy) Stimulating Subconscious Linear CREATIVITY Classic CREATIVITY Andy VanGundy Check Lists Forced Association Alex Osborn Osborn Brainstorming Play (Kitchen Chemistry)
35 NIST MEP Management System Purpose Reigniting American Innovation & Growth Promise A Sustainable Innovation Culture that Increases Innovation SPEED (up to 6x) & Decreases RISK (by 30/80%) Process - Continuous Innovation Pipeline Define 100 s Discover 10 s Develop 3 to 5 Deliver 1 to 2 Product Education & Coaching - Weekly, Monthly, Quarterly Starting with the Leadership Create Communicate Commercialize
36
37 CREATE Creating Ideas Operating System Meaningfully Unique ideas = (Eureka! ideas) Explore Stimulus Drive out Fear Leverage Diversity
38 Where To Go On Vacation?
39 Stimulus: Where To Go On Vacation?
40 COMMUNICATE
41 GOLDEN RULE OF CLARITY Let a customer say NO because what you offer doesn t apply to them. But NEVER let a customer say NO because they don t understand what you re offering.
42 Prove It GOLD SILVER: Tell the truth about how you can accomplish what others can t. Provide secondary proof - Testimonials - Demonstration - Test Results - Guarantee BRONZE: Provide your personal Pedigree / Experience / Resume
43 Demonstration
44 Meaningfully UNIQUE Ideas Require Change
45 Change Sparks FEAR
46 The PROBLEM with Innovations Purchase Intent Meaningfulness New & Different Uniqueness
47
48
49 COMMERCIALIZE Fail Fast Fail Cheap Development SYSTEM Business Model, Sales Forecast & Get Started Action Plan for 2 Ideas
50
51
52
53 Leadership
54 Dissolve Risk with Rapid Cycles of Learning
55 You will work hard!
56 What Makes Innovation Engineering Meaningfully Unique 1. Complete System 2. Data Driven Tools 3. Practical & Proven Tools
57 A SYSTEMATIC APPROACH Drives Meaningful Uniqueness 94% of failures are due to the SYSTEM 6% are due to the worker
58
59 HARD DATA Drives Meaningful Uniqueness Where the art of Innovation becomes a reliable science.
60
61
62 PROCESS Use DEFINE Pitch Packet to Focus - Focus - Focus Thinking Customer Concept Math Game Plan Learning Plan
63 For More Information B. J. Fontaine (817)
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