Innovation Bootcamp

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WELCOME!!
THE INNOVATION BOOTCAMP

February - 2009
Brought to you by:
Creativity And Innovation
Driving Business
www.InnovationMain.com
What do you See?
What do you See?
Obvious: Zero, Circle, Dot

Less Obvious: Wheel, Plate, Dish
Even Less Obvious: New Moon, Solar
Eclipse, Mole, Seed
Hidden: Top of a Nail, Sphere, Cylinder
Answer: Top of a Head
What do you See?
INNOVATIONMAIN COM
What do you See?
www.InnovationMain.com www.scientificpsychic.com
What do you See?
Today’s Agenda
• Introduction
• Schedule of the Innovation Bootcamp
• Benchmarking and Leading with Innovation
The Current State of Business Innovation
The Disruptive Innovation Gap
The Innovation Index
Measuring Business Innovation Success
Innovations for Web 2.0 Business Models
Bootcamp Schedule
• Six Engaging Online Sessions
• 1. Benchmarking & Leading with Innovation
• 2. Unblocking Creativity and Innovation
• 3. Unleashing Team Innovation
• 4. and 5. Innovators Case Studies
• 6. Building an Innovation Factory
Sanjay Dalal
Chief Innovator
Sanjay Dalal
• Innovator, Entrepreneur and Investor
• Author of Faculty eBook on Creativity & Innovation in Business
• Founder of the Innovation Index (December 2006)
• Past President & Managing Director, Innovation Index Group
• Fifteen years leadership experience at High Tech companies
• Joint U.S. Patent, First Position Putnam Math Competition
• B.S.E.E., UT, Austin; Cornell University; Arizona State University
• Member, Dean’s Leadership Circle, UC Irvine Business School
• Basketball Coach, Art Master, Student Site Council
• Active Rotarian and philanthropist
The Pyramid of Innovation
SUCCESS
Building an
Innovation Factory
© www.InnovationMain.com
Today’s Agenda
• Introduction
• Your Name
• What do you do?
• Something interesting…
• What do you wish to accomplish?
Creativity And Innovation Driving Business

INNOVATION SERVICES, STRATEGY & CONSULTING
http://www.InnovationMain.com
• No-nonsense insights, strategy and solutions with

proven processes that drive Creativity and
Innovation at your business, create real market
growth and success for your products and services,
and achieve market leadership
Creativity And Innovation Driving Business
• BLOG – http://CreativityandInnovation.blogspot.com
• “Collective experiences, best practices and
insights on Creativity and Innovation in Business at
top 50 innovative companies. Ideas, process and case
studies on Innovators creating new and disruptive
innovations.”
Innovation eBook
Faculty eBook is a 185-

page collection of over 45
best practices, case studies,
and insights on the current
state of Innovation in
Business at top Innovators.
Benchmarking and Leading with Innovation

• The Current State of Business Innovation
• The Disruptive Innovation Gap
• The Innovation Index - Correlating Stock,
Business, Innovation Performance
• Measuring Business Innovation Success
• Web 2.0 Business Models
Current State of Innovation
• Defining Innovation and Creativity

• Timeless Wisdom from our Innovators
Defining Innovation
• Creativity is the generation of new ideas

or new combinations of existing ideas -
E. PAUL TORRANCE
• Innovation is taking what exists and
making it better – ROBERT ALAN BLACK
Who is an Innovator?
• A business
• A person – employee or partner?
• Do businesses create innovators?
• Do innovators create businesses?
• Is there a difference: Innovator vs.
Entrepreneur?
Wisdom from Innovators

• "Failure is our most important product."
R W Johnson, Jr., Former CEO, Johnson &
Johnson
Never Lost Money
Wisdom from Innovators

• "Our company has, indeed, stumbled
onto some of its new products. But
never forget that you can only stumble
if you're moving." Richard P. Carlton,
Former CEO, 3M Corporation
• Considered as perhaps most innovative
company of last century – Scotch, Post-it
Leadership and Innovation

• Sam Walton, founder of Wal-Mart:
“I have always been driven to buck
the system, to innovate, to take
things beyond where they've
been.”
Thomas Alva Edison – An Innovator

unlike any other
• "Genius is one per cent inspiration and
ninety-nine per cent perspiration.
Accordingly, a 'genius' is often merely a
talented person who has done all of his
or her homework.”
• The three things that are most essential to
achievement are common sense, hard
work and stick-to-it-iv-ness...
Thomas Alva Edison – Innovations
• Prolific - Over 1,000 Patents

• Most famous innovation came from
Perseverance – over 1,000 tries for light
bulb
• Ingenious - Understood where Ideas
come from!
Leonardo Da Vinci – An age-old

Innovator
• “There are three classes of people:

Those who see. Those who see
when they are shown. Those who do
not see.”
•Innovators foresee – Art,
Science & Experience
Steve Jobs – Today’s Innovator
• “Innovation distinguishes between a

leader and a follower.”
• “Innovation has nothing to do with
how many R&D dollars you have…It’s
about the people you have, how
you’re led and how much you get it.”
Steve Jobs – Today’s Innovator
• Leadership – Leader & Follower

• People – Culture – Co-creators
• Processes – How you’re led
• Comprehension – How much you get
it
Get it, Got it, Good!
Sanjay Dalal
• Creativity generates Ideas.
• Ideas generate Innovations.
• Innovations generate New Products.
• New Products create New Business.
• Creativity and Innovation drive
Business.
Three Takeaways
• Innovators see beyond the ordinary,
and yet have real common sense
• Innovations necessitate lots of failed
experiments & hard work to uncover the
latent customer need
• Innovations require processes to think
creatively, ideate and experiment
• Clayton Christensen
• Author of "Innovator's Dilemma: When New
Technologies Cause Great Firms to Fall“
• Sustaining Innovation:
• Innovation derived from evolving the current
product, serving profitable customers'
needs, and focusing on investments driven
by profit margins
• Disruptive Innovation:
• Derived from creating simple, easy to
use products that appeal to the low-
end of the market, or a new, untapped
market
• Hypothesis:
• Companies that become attached to
"Sustaining Innovation" eventually disappear or
lose their market leadership position
• "Sustaining Innovation" companies are driven
up-market in a response to the low-end
"Disrupting Innovation" players thus relegating
them to a smaller segment of the market.
• Disruptive Innovators:
Create new markets with opportunistic and
creative Innovation, seize market shares
from existing players of "Sustaining
Innovation", and eventually become market
share leaders
• WATCH OUT FROM BELOW
• CHANGING MARKET NEED:
As market need evolves from early market
to market maturity, the performance
requirement associated with use and
adoption of products by the broader market
changes
• E.g. Cars and High Gas Prices. Fuel-efficiency
and Green.
• CHANGING MARKET NEED:
• "Sustaining Innovators" do not react to this change.
• Busy serving the needs of their current customers and
happy with profits
• Current customers are no longer representative of the
changing and expanding market.
• Know about this change in customer habits and needs
• No position to re-define themselves to embrace this
changing market environment
• Car industry, Cell phones, Movies, Web 2.0
• Disruptive Innovators:
• Observe and Embrace Change
• Understand the broader Markets
• Not concerned about Profits
• Create innovative products for the low-end
market
• Achieve economies of scale
• Outcompete and Dominate eventually
• e.g. Car industry, Cell phones, Movie Rentals, Web
2.0
• DOUBLE WHAMMY for Sustainers
• Disruption and Commoditization happen

in parallel
• Lose market to Disruption
• Lose profits to Commoditization
Change
• Disruptive Innovation Process
• New Process driven by:
• Creativity, unconventional and out-of-the-
box thought, and with no anticipation
• Process design does not begin with
addressing the needs of current customers
• Target what's underneath the need…
• What drives customers to do what they do?
Uncover Unanticipated Need

• Founded in December 2006
• Weighted Index of the Top Innovative
Companies
• The Innovation Index is a performance
index of the Top 20 Innovators in North
America
• Correlates stock, business and innovation
performance
Top 20 Innovators - 2008

3M Company Google
Amazon.com Hewlett-Packard
America Movil Intel
Apple IBM
AT&T Merck
Best Buy McDonald's
Cisco Systems Microsoft
Costco NIKE
eBay Research In Motion
General Electric Proctor & Gamble
Top Global Innovators

• Business Models – Netflix News Corp Reliance HP
eBay Vodafone Apple Dell Web 2.0
• Products – Apple Sony Nintendo Microsoft Nokia TATA
RIM Honda 3M GM Audi Boeing Intel Samsung Daimler
Cisco Siemens Verizon
• Customer Experience – Google BMW Disney Virgin
McDonald’s Southwest Air Amazon Nike Costco
Singapore Air Facebook AT&T Target Starbucks
• Processes – Toyota GE HP P&G IBM Wal-mart Exxon
Mobil BP
www.InnovationMain.com Source: BusinessWeek
Excludes Financials

• Innovation Index Performance (2006-07)
• Average of 67 innovations per Innovator
• 805 new and enhanced products
• 411 strategic collaborations & partnerships
• 95 new acquisitions
• Combined market cap grew by 11% to $2.23
trillion from $2.01 trillion in 2006, an average
increase of $11 billion per Innovator
Co-relationship between Stock Performance and Innovations
Co-relationship between Stock Performance and Innovations
Top 20 Innovators - 2008
Top-Down Bottom-Up
Innovations Innovations
Source of ideas Management / Customers and
Your Organization users Partners
Drivers Internal resources, Deep
Innate
product, understanding of
positioning customer needs need
Interaction Structured and Spontaneous and
managed non-linear Open
Strategy Go to the customer Invite customer to
participate
Co-creation
Processes Linear and strictly Emergent and Ordered

defined serendipitous Chaos
Methods Market research, Communities,
surveys, focus crowdsourcing, Web 2.0
groups peer-production,
social media
www.InnovationMain.com Source: dicole.com

Three Takeaways
• Top Innovators grow their business
even in tough economic times
• Top Innovators innovate through
new products, collaborations,
partnerships, and acquisitions
• Top Innovators increasingly learn
and leverage Bottom-Up approach
for new innovations
Business Innovation Success
• Question:
• Universal yardstick for the measurement
of the success of a Business Innovation.
• How does one measure business
innovation success?
• Qualitative measure
• Emotional and psychological impact the
innovation produces on the users (the "Aaa
Haa" moments)
• Quantitative measure
• Total population of end users using the new
innovation (and even helping co-create it)
• Financial measure
• Net new revenue generated for the company
that can be attributed to the new innovation
• Define Success
• If the product or service is able to find and
attract new customers who adopt and adapt
to it, live by it, talk about it, and refer others
to it.
•The innovation must result in
substantial new business for the
company.
• Establish a Baseline:
• An Innovator must have revenue of at least $500 million
or at least be five years old
• Revenue it generates must be based on products or
services that the innovator has created itself
• Consistent annual growth in total revenue and net
earnings for the previous three years
• Deliver at least 15% of the total revenue from products
or services introduced within the past five years
• An Innovation that produces at least 5% of
company's total revenue (up to equal
margins) within three years after
commercial launch, and grows to at least
15% of company's total revenue (with
equal or better margins) within eight years
of commercial launch is 100% successful.
Company A At least $500 million annual revenue or
5 years in business
Innovation ABC Launch
Time Within 3 years from Launch

Innovation Revenue At least 5% of company annual revenue
Innovation Margins Close to equal margins
FIRST MILESTONE Innovation ABC 50% Successful
REACHED
CONTINUE / EXPAND Innovation ABC Funding
Time Within 8 years from Launch
Innovation Revenue At least 15% of company annual
revenue
Innovation Margins Equal or better margins
SECOND MILESTONE Innovation ABC 100% Successful
REACHED
FUND NEW INITIATIVES
Apple iPhone
Launched June 2007

Over 5 million sold in 1 year
Over 10 million ’08 estimates
At $499 an iPhone 
$2.5 Billion to $5 Billion in annual
Business
Liftoff: 0 to $2.5 Billion in 1 year
Killer Innovation
Successful Innovation
Apple iPhone
Disruptive Innovation
Apple iPod
Three Takeaways
• Create metrics to benchmark
business innovation
• Measure the success of your new
innovations (don’t be mislead by PR)
• Create institutional memories to
repeat success and avoid same
mistakes
Web 2.0
• Question:
• What is Web 2.0?
Business Model Innovation

• New Web 2.0 framework,
and the new Web 2.0
Business Models
1.0 2.0
Web 2.0
• Strategic Shift – One way Interaction between
people and computers (websites), to Multi-way
Interactions between people and people, and
people and machines where people become
co-creators.
• People and networks share and co-create all
types of content, and provide context to business
processes. Biggest successes: Myspace,
Youtube, Facebook, Blogger, Wikipedia
Web 2.0 business models

■ Create a large/focused niche user community (many)
■ Sell API access (Google)
■ Sell services to a large group of SMEs (Salesforce.com,
Citrix, NetSuite, Sugar CRM)
■ Sell data to partners (Facebook? :))
■ Get a revenue share from transactions (eBay)
■ Sell advertisements (MySpace, Google, Yahoo)
■ Sell value-added platform (Amazon Web Services)
■ Freemium - Sell premium memberships (Livejournal)
■ Sell your company (Youtube)

Types of Business Models

• Brokerage • Affiliate
• Advertising • Community
• Infomediary • Subscription
• Merchant • Utility
• Manufacturer
(Direct)
www.InnovationMain.com Source: Michael Rappa

Three Takeaways
• Web 2.0 is for real (just like eBusiness)
• Business must redefine itself to
embrace Web 2.0 for new innovations
• Processes to “open up” & “extend out”
to partners and build the network –
co-creation, participation, openness,
standards, decentralization, users
Today’s Agenda
• Introduction
• Schedule of the Innovation Bootcamp
• Benchmarking and Leading with Innovation
The Current State of Business Innovation
Measuring Business Innovation Success
Innovations for Web 2.0 Business Models
Questions?
• Creativity begins with asking questions…
• Innovation happens when you find answers…
• No questions, no answer
• More questions, better answer
• “The important thing is never to stop
questioning.” - Albert Einstein
Bootcamp Schedule
Contact Us
• MAIN: 1-877-904-6660
• FAX: 1-949-861-9320
• info@innovationmain.com
• www.InnovationMain.com
WELCOME!!

February - 2009
Brought to you by:
Driving Business
Sanjay Dalal
Chief Innovator
Bootcamp Schedule
• 1. Benchmarking & Leading with innovation
• 6. Driving Creativity and Innovation
Today’s Agenda
• Unblocking Creativity And Innovation
• Blocking Creativity and Innovation
• Failures Driving Innovation
• Developing Organizational Creativity
• Six Ways to Find Innovation
• Cycles of Innovation
Blocking Creativity & Innovation

• Many Blockers all around the organization
• #1 Systems and Processes
• Go lean, be efficient, operations, profits, priorities
• Identify creative teams and let them loose
• #2 Reward and Recognition Systems
• No recognition, no rewards, ad-hoc, favoritism
• Create an objective reward mechanism. Recognize
key innovators frequently and loudly.
Blocking Creativity
• Many Blockers all around the organization
• #3 Company Culture
• What stories do you hear everyday? Mundane?
• Create a culture that tells stories about innovation
and stirs excitement about creativity. Publish key
achievements in news and journals
• #4 Operational Balance
• Operational excellence versus creativity
• Make a business case for creativity
Nine Processes to Unblock

Creativity and Innovation
 Process #1
Open communication within and between
departments, and across all management
layers.
www.InnovationMain.com Reference: eCornell

Nine Processes
 Process #2
 Hiring of people with diverse backgrounds
and experience, and avoiding "cloning."
Nine Processes
 Process #3
 Encouraging employees to find new ways to
do their daily work, and empowering them to
make decisions.
Nine Processes
 Process #4
 Creating an organization that extends out to
customers, suppliers, partners, and
environment.
Nine Processes
 Process #5
 Stimulating research activities and providing
employees some free time to experiment.
Nine Processes
 Process #6
 Allowing employees to take measured risks
(with small costs), and seizing opportunities.
Nine Processes
 Process #7
 Creating processes to evaluate any idea on
merit, regardless of where it is coming from.
Nine Processes
 Process #8
 Identifying and separating the creative from
operational functions in the organization.
Nine Processes
 Process #9
 Using group creativity techniques frequently to
promote team building and generate new
ideas.
Failures Driving Innovation

• Jim Collins and Jerry I. Porras (authors)
• Built to Last (over 1 million copies sold)
• ―Some of their (visionary companies) best moves
were not by detailed strategic planning, but rather
by experimentation, trial and error, opportunism,
and--quite literally—accidents‖
• No ordinary accidents..―Purposeful accidents"

• Progress by visionary companies is
"evolutionary progress".
• Evolutionary progress is unplanned progress,
beginning with "small incremental steps or
mutations, often in the form of quickly seizing
unexpected opportunities that eventually grow
into major--and often unanticipated--strategic
shifts."

• Visionary and Innovative Companies
• A plan in place that stimulates these
experiments and variations, and
ultimately creates the meaningful
inventions
• e.g. Johnson & Johnson and 3M

• Johnson & Johnson – best known for Band-Aid
• Never posted a loss in more than 110 years
• Many failed ventures ->
• Kola stimulants, colored casts for children,
heart valves, kidney dialysis, pain relievers
• The failed bets, or the experimentation, are an
essential price to pay for successful Innovations
and Long-term growth.

• 3M – best known for Scotch tape and Post-It
• Accidents to Innovation Machine
• Although the invention of the Post-it note might
have been somewhat accidental, the creation
of the 3M environment that allowed it was
anything but an accident .
• In early 1990, 3M had over 60,000 products and
over forty separate product divisions
3M “Innovative” Phrases
• ―Listen to anyone with an original idea, no
matter how absurd it might sound at first.‖
• ―Encourage; don’t nitpick. Let people run with an
idea.‖
• ―Hire good people, and leave them alone.‖
• ―If you put fences around people, you get sheep.
Give people the room they need.‖
• ―Encourage experimental doodling.‖
3M Idea Generation Process

• Key Criteria for evaluating and selecting ideas:
• 1. For an idea to be selected, it had to be basically
new; 3M only wanted to select innovative ideas.
• 2. It had to meet a demonstrable human need – to
solve a real problem.
• Innovation that didn’t ―turn into products and processes that
someone somewhere will find useful‖ would be of no
interest to 3M.
3M Idea Generation Process

• Two-fisted process for generating and testing
ideas:
• Every idea evolved should have a chance to
prove its worth
• 1. If it is good, we want it
• 2. If it is not good, we will have purchased our
insurance, and peace of mind when we have
proved it impractical (build memories).
3M Mechanisms to drive Innovation

• "15 percent rule" - Technical people
spend up to 15 percent of their time on
projects of their own choosing or initiative
• Stimulate unplanned experimentation and
variation resulting into successful,
unexpected innovations

• "25 percent rule" - each division should
produce 25 percent of annual sales from
new products and services introduced in
the previous five years (increased to 30%
and shortened to four years)
• Stimulate continuous new product
development!

• "Golden Step" award - given to those creating
successful new business ventures originated
within 3M
• Stimulate internal entrepreneurship and risk
taking! And testing of new ideas (below)
• “Genesis Grants” – internal VC fund providing
up to $50K for researchers to develop
prototypes and market tests.

• ―Technology Sharing Awards‖ – Those who
develop a new technology and share it
successfully with other divisions
• Stimulate internal knowledge sharing of
technology and ideas
• ―Carlton Society‖ – Technical Honor Society
• Development of new technologies and
innovation

• ―Own Business Opportunities‖ – Successfully
introduce a new product and run it as project,
department or business unit
• ―Dual Ladder‖ – Career track allows technical
and professional people to move up without
sacrificing research / professional aspirations
• New product forums – Sharing latest products
• Technical forums – Technical papers / Ideas
3M Innovation Mechanisms
• ―Problem-solving missions‖- SWAT teams for customer
problems
• ―High impact programs‖ – 1 to 3 top priority products for
rapid Go-to-market
• Provide profit sharing – Individual investment
• Creating small autonomous business units and product
divisions for entrepreneurship
• 35 business units, 32 international companies, 35
laboratories, six businesses, thousands of products

• Norton – The exact opposite
• Centralized, bureaucratic and stagnant
• Explicit policies discouraging entrepreneurship
• No incentives for creativity
• Not looking outside for new opportunities
• Too much planning from the top down, and
made it a way of life
• Norton – 10 times 3M size - acquired

• Five Takeaways Stimulating Innovation
•#1
•"Give it a try--and
quick!"

•#2
•"Accept that mistakes

will be made."

•#3
•"Take small steps."

•#4
•"Give people the room

they need."

•#5
•"Mechanisms - build
that ticking clock!"
DEVELOPING ORGANIZATIONAL
CREATIVITY
SCAMPER
Alex Osborn introduced a
list of action verbs that
lead to the generation of
ideas to change
something. Robert Eberle
organized these action
verbs into the acronym
―SCAMPER‖
Reference: eCornell
SCAMPER examples
• Business Process Outsourcing – Substitute
SCAMPER examples
• Business Process Outsourcing – Substitute
• When companies began leveraging overseas partners
to help them with part or all of their business processes
such as back office, accounting, email, IT, service and
more, they essentially substituted their operations with
help and support from overseas.
• Later, many companies created their own offshore
operations to help them with their business processes.
• Initially, cost savings was a driver; eventually,
companies ran tighter and grew their business.
SCAMPER examples
• Apple iPhone - Combine
SCAMPER examples
• Apple iPhone - Combine
• iPhone is a combination of iPod (music player), Internet
browser, Video player (YouTube) and mobile phone.
• Apple upped the ante for iPhone 3G by combining GPS,
Corporate email, calendar and contacts, and Applications
(using the App Store) for gaming, entertainment,
healthcare, business, productivity, movies and more.
• By creatively combining these products and features,
Apple produced an innovative compact yet intuitive
smartphone that became a hit with consumers.
SCAMPER examples
• Digg - Adapt
SCAMPER examples
• Digg - Adapt
• With the ubiquity of the Internet, many Internet users
began reading their news online. Many stopped
subscribing to their paper newspaper altogether
(eliminate). However, Internet created new problems.
The sheer magnitude and frequency of news and
information and how to keep up with everything. Internet
provided opportunities for people to connect and network
• Digg saw this trend early on and adapted its platform
wherein community of readers rate (digg) online news.
SCAMPER examples
• MP3 Technology and Players – Minimize
SCAMPER examples
• MP3 Technology and Players – Minimize
• With the number of genre and artists growing each year,
the consumer is burdened by the ever growing CD
collection that began decking the living rooms. How can
a consumer easily organize all his music and choose
whatever music he wants to listen at any given time?
The CD players had become bulky with multi-disc
changers, and juke boxes that could hold hundreds of
CDs. Enter the new MP3 Players with MP3 software. A
small hand-held holds thousands of songs, organized
nicely with ability to playback any song.
SCAMPER examples
• Grocery Store Check Out Receipt – Put to other uses
SCAMPER examples
• Grocery Store Check Out Receipt – Put to other uses
• In order to reward loyal customers, generate additional
business through coupon marketing, and have
customers come back to buy more groceries, grocery
stores began printing coupons on the back of the
checkout receipts. Since a customer typically buys ten
or more items, the grocery receipt was long to begin
with. Hence, there was enough available space on the
back of the grocery checkout receipt to print something
useful. Enter coupons for merchandise and specials.
SCAMPER examples
• Microsoft Office Home and Student Trial – Eliminate
SCAMPER examples
• Microsoft Office Student or Standard – Eliminate
• Microsoft began offering light versions of its Office
software without the ―bells and whistles‖ for those
consumers who do not need the extra functionality
• The Student or Standard Office software is offered at a
reduced price and also comes in ―Trial‖ versions
• Microsoft also installs a light version of its software on
the computers from major manufacturers as a free trial
• Microsoft is able to increase its Office customer base,
raise the awareness, and make it affordable!
SCAMPER examples
• Clothing Stores – Rearrange
SCAMPER examples
• Clothing Stores – Rearrange
• Department Stores rearrange their store fronts based on
the seasons, events, holidays, and trends.
• For example, for the winter season, the store fronts and
windows will have jackets, woolens, scarf and coats.
• For holidays such as Christmas, the stores are decorated
with ornaments, ribbons and sell holiday gifts.
• For summer, the store fronts change the appearance into
shorts, skirts, half-sleeves and tank tops.
• Stores rearrange to maximize business.
SCAMPER
• iTunes Store announced new model
of 69 cents, 99 cents, $1.29 for songs
• What could have Apple done
differently?
• Substitute, Combine, Adapt,
Minimize, Magnify, Put to other Uses,
Eliminate, Reverse, Rearrange
Most important Creativity

Tool: Ask Questions
• One technique:
• Change the question being asked!

Tool: Ask Questions
• E.g:
• ―How can we make more money this
quarter?‖
• Technique:
• Question Breakdown Reference: eCornell

Tool: Question
•Technique: Question Breakdown
•Each word of the question is
analyzed and possible alterations
are considered.
Reference: eCornell

Tool: Ask Question
•Remember the question:
• ―How can we make more money this
quarter?‖
• Roger Schank, author of Creative
Attitude, is an expert on creativity.
Reference: eCornell
Question Breakdown
• HOW:
• Before we ask ―how,‖ perhaps we should ask ―Why‖—
Why do we want to make more money? Are we
looking for a ―how‖ that will pay off immediately or at
the end of the quarter? What does it mean to make
more money? What will be the cost of making more
money? Do we know how to make money? Have we
already made some money, and how did we do it?
Can we just more effort or resources? Can we print
money? Who do we ask on how they make more
money?
Question Breakdown
• CAN
• Can we make any money? What if we don’t make any
money? Can we charge our employees? Can we charge
our partners? Can we charge our landlord? Can we
organize a money collection day or event? Can we
increase the price of our products? Can we make more
money or is that impossible? If I collected the five-cent
deposit on every can of soda that our organization
drinks, would that make enough money for us? Can we
offer food and make money on the food we sell?
Question Breakdown
• WE
• Who should be making money? Is ―we‖ our department, our
team, or you and I? Or is ―we‖ the whole company? Maybe
―we‖ aren’t the ones who should be making the money;
maybe another part of the organization should be
responsible. Who is ―we‖. Is it just the management or is it
everyone? Do we all want to make more money or is it just
some of us? Who is the most eager to make more money? Is
there a change we can make in who ―we‖ are that would help
us make more money? Whose money will we be acquiring?
Do we work together?
Question Breakdown
• MAKE
• Can we make money? What does it take to make
money? Who knows how to make money? What are the
different ways of making money? Should we just make it
and keep it or should we invest it or spend it?
• MORE
• How much more money? Is more better than less? Could
we make the same amount of money and then use it
more efficiently? Who else can help us on this?
Question Breakdown
• MONEY
• Is money what we want more of? Maybe we really want
more fame, more love, more time, more customers?
What kind of money—dollars, pounds, lire, yen? What is
likely to happen in the financial world this quarter that
might affect our attempt to get more money?
• THIS
• Why not last or next quarter? Is it really this quarter that
we should try to make more money? Maybe it would be
wiser to wait and make the money in the future?
Question Breakdown
• QUARTER
• Is a quarter a realistic time frame? What about next six
months or a year? Have we made more money last
quarter? Maybe we should plan to make more money
this decade. How many quarters we need to make more
money? What if we put all our quarters and bought
lottery tickets? Instead of using our quarters for lunch,
what if we gave it to the company? Can we make more
money in quarters by installing video games and slot
machines?
More Questions
• Ask Broader or Narrower Questions
• Clear definition of problem is essential
• Change the scope of a question
• Broader versions of: ―How can we make more
money this quarter?‖
• What would make us successful?
• Can we make more money this year?
• How can our entire industry prosper?
More Questions
• Narrower versions of: ―How can we make more
money this quarter?‖
• How do we increase profits and cut costs?
• How do we sell more?
• How can we make money over the weekend?
• How can we sell to someone all around the
world 24/7?
Metaphorically Speaking...
• Ask the Question of a Metaphor
• Is there a metaphorical relationship between making
more money and getting more customers? Or
recruiting more sales reps? Or doing more
partnerships?
• If yes, then the question becomes: How do we get
more customers, more sales reps or more partners?
• Do more marketing to customers, recruit sales reps
through HR, establish more partners through
business development
Opposites and Inside-Out...

• Ask Opposite and Inside-Out Questions
• ―How can we make less money this quarter?‖
• What causes us to deliver less results?
• What if we do not take care of customers?
• What if we do not answer their calls?
• ―How can money help us grow?‖
• ―How can more of us make more money?‖
• ―How can few of us make more money?‖
• ―How can money make more of us?‖
Precedence & Consequence

• Ask Precedence Questions
• What events or situations happened before?
• What led our company into this situation?
• What caused our management to ask this?
• Why are we asking for more money?
• Why are we asking ―we‖ this question?
• Why ―more money‖ this quarter?
• What is the origin of money and desire?
• Is it our economy that is causing this?
Precedence & Consequence

• Ask Consequence Questions
• What are the consequences of our decision?
• What events will take place after?
• What situations will arise afterwards?
• What if we don’t make more money?
• What if we make more money?
• What happens to us if we make more?
• What happens to our company?
• What happens to employee morale if we cut salaries and
make more money?
• What happens to customers if we increase prices?
Six Ways to Find Innovation

• Can you find innovation blind-folded
or using the same lens?
• Innovation coupled in some ways to
imagination where every time you
see something, you open your eyes
to endless possibilities.

• Chuck Palus and David Horth
• The Leader's Edge: Six Creative
Competencies for Navigating
Complex Challenges

• ―See with new eyes‖ in order to find innovation
• Habit of looking at things around us with the
same eyes, analyzing with same logic and
creating same perceptions
• Most managers ―act on what they expect to
see‖, take shortcuts, do not spend enough time
analyzing information and making a sound
judgment.

• Managers are walking around blind-folded
• World of action
• Rewarded to get things done fast
• Managers spend ninety percent of
their time solving the problem, and
only ten percent thinking about it

• Innovation happens when you begin
slowing down
• When you put the brakes on the way you
normally see and perceive, analyze and
understand
#1
Stand in different
places
#2
Use the lenses of
other domains
#3
Ask powerful
questions
#4
Foster new
knowledge
#5
Create a visual verbal
journal
#6
Change the pace of
attention
Cycles of Innovation
• Thomas A. Stewart, editor of Harvard
Business Review, and Rosabeth Moss
Kanter, professor of Harvard Business
School
• "The Great Wheel of Innovation" and
"Innovation: The Classic Traps."
• Harvard Business Review
• Kanter: ―Innovation gets rediscovered
as a growth enabler every half dozen
years.‖
• What causes the cycle of innovation?
• Erosion of ―institutional memory‖ as one
of the primary drivers of the innovation
cycle!
• Why Erosion of Memory?
• Change in labor markets
• 20% voluntary turnovers
• Intra-company movement of individuals
and associated memories
• Key challenge companies have is
creating processes to preserve
• the memories,
• the knowledge acquired,
• the insights gained
• what worked and did not work
• don’t repeat the mistakes
• The Great Paradox of Innovation
• It's not about creating new
innovations, rather repeatable
processes that define how to create
innovation (and avoiding the same
mistakes)
• Four Innovation Blunders
•#1 - ―A typical strategic blunder is
when managers set their hurdles
too high or limit the scope of
their innovation efforts‖
• #2 - ―When managers strangle
innovation efforts with the same rigid
planning, budgeting, and reviewing
approaches they use in their existing
businesses--thereby discouraging people
from adapting as circumstances warrant‖
•#3 - ―Companies must be careful
how they structure fledgling
entities alongside existing ones
to avoid a clash of cultures and
agendas‖
•#4 - ―Companies commonly undervalue
and under invest in the human side of
innovation--for instance, promoting
individuals out of innovation teams long
before their efforts can pay off.‖
• Google ―allows their brightest minds time to
experiment‖ while keeping a tremendous focus
on ―simplicity and the customer‖
• Proctor and Gamble, whose ―connect and
develop model calls for 50% of products to
come from outside‖ and where ―design and
innovation execs are part of the org chart.‖
Today’s Agenda
• Unblocking Creativity And Innovation
• Blocking Creativity and Innovation
• Failures Driving Innovation
• Developing Organizational Creativity
• Six Ways to Find Innovation
• Cycles of Innovation
Questions?
• ―The important thing is never to stop
questioning.‖ - Albert Einstein
Bootcamp Schedule
• 1. Benchmarking Innovation
Contact Us
• Online: www.InnovationMain.com
• Email: info@InnovationMain.com
• Main: 1-877-904-6660
• Fax: 1-949-861-9320
WELCOME!!

February - 2009
Brought to you by:
Driving Business
Sanjay Dalal
Chief Innovator
Bootcamp Schedule
Today’s Agenda
• Leadership and Innovation – Ten Drivers
• Ten Traits of Creative Leaders
• Seven Characteristics of Innovative Teams
• Examples of Innovative Teams
• Ten Principles to Unleash Team Innovation
• Bales Team Interaction Analysis
• Nominal Group Technique (NGT)
Leadership
“Great leaders create conditions that
get people organized to attack
problems. They help others learn
how to think, how to exercise
judgment and how to take action.” -
A.G. Lafley, CEO of Proctor &
Gamble

• What is the single factor critical to
Innovation?
• How do we lead in a way that generates
Innovation?
• Answers may surprise you…
• Adapted from Knowledge@Wharton

• C. Robert Henrikson, chairman and CEO
of global insurer MetLife
• #1 Driver: Marketing
• All parts of the organization must have a
sense of the customers' business to
anticipate their needs and reach out with
innovative ideas. Get out in front…

• Alex Gorsky, CEO of Novartis North
America
• #2 Driver: Size (or lack thereof)
• The smaller biotech companies or
divisions are causing real innovations…
• Mergers are not always better

• Seth Waugh, CEO of Deutsche Bank
Americas
• #3 Driver: Culture
• You must have people with that hunger to
always learn, who are always open and who
think about things in a different way. You
always have to reinvent yourself tomorrow…

• Connie K. Duckworth, Retired partner and
managing director at Goldman Sachs
• #4 Driver: Technology
• First desktops, and now the new computer
technology allowed companies to analyze the
role of risk and to track risk in financial services,
which changed the dynamics of the business…

• Patricia Danzon, Wharton professor of
health care systems
• #5 Driver: Passion
• So much innovation in the pharmaceutical
industry is coming from the small firms ... and it
seems to come from the passion and the
involvement of being master of your own
destiny…

• Jeffrey Katz, CEO of Sherwood Equities
• #6 Driver: Active Participation
• Business leaders must remain open and
receptive to what comes their way in the
form of new deals in order to capitalize on
opportunities…

• Peter Linneman, Wharton finance
professor & Real Estate department chair
• #7 Driver: Hard Work
• It's just all hard work -- showing up everyday in
the morning, studying plans, walking around
seeing what other people are doing. If you wait
for 'eureka,' you are never going to have
innovation …

• #8: Internal Development
• Build from within. Talented people.
• #9: Targeted Acquisitions
• “Rifle-shot” or complementary
• #10: Agility
• Reshape development plans
Ten Traits of Creative Leaders

•Creative leaders continually
meet new challenges, and
recognize and pursue new
opportunities through bold
innovations.
Ten Traits
1. Ideas
Great at generating many ideas –
innovative, game changing and
even commonplace. Follow
through on ideas.
Ten Traits
2. Experiment
Always looking to experiment with
good ideas. Sometimes, trying out
multiple times. e.g Edison
Ten Traits
3. Belief
Unwavering belief in their creativity
and innovation, coupled with
originality in thinking.
Ten Traits
4. Self-image
Smart and bright with a positive
self-image. More often, they are
not born geniuses.
Ten Traits
5. Passionate
Passionate, expressive and
sensitive to their teams,
colleagues and surroundings.
Ten Traits
6. Superior Judgment
Demonstrate superior judgment,
and do not make quick decisions
(although have a gut feel).
Ten Traits
7. Independent
Non-conformists and independent,
requiring less social approval than
most people.
Ten Traits
8. Problem Solvers
Innate ability to understand and
solve the problem, and manage
the consequences.
Ten Traits
9. Realist Dreamers
Born dreamers with strong
imagination; however, manage to
keep things in perspective.
Ten Traits
10. Gamer Changers

Create and launch game changing
products meeting a high level of
quality and design.
Seven Characteristics of
Innovative Teams
• Today’s Teams
• Highly Connected
• Distributed and Global
• Diverse
• Dotted Line Responsibilities
• Multiple Overlapping Priorities
Seven Characteristics of
Innovative Teams
TEAMS, TEAMS, TEAMS
• Managers need Great Teams!!
• Teams do the real innovative work
• As the manager of a group of creative
employees, how do you consistently
create constant Team Innovation?
Seven Characteristics
•1. The atmosphere is relaxed and
informal, and work is fun
•2. The task and goals are clearly
understood by all group members
•3. Ideas and feelings are
expressed freely and openly, and
with creativity
•4. Conflict is productive and often,
centered on issues as opposed to
on people
• 5. The group is aware of its own
functioning and dynamics, including
inefficiencies
• 6. In almost all cases, decisions are
made by consensus, and consensus
is not forced
• 7. When individual tasks are
assigned, they are accepted and
carried out in a timely manner by
group members
Innovative Team Examples

• Unleashing Team
Innovation
• Kitchen Crew at a
Restaurant
• Goal:
• Product Innovation

• Team Achievement:
Creative and fun
group, that created
great camaraderie
and spirit in the
kitchen that led to
new innovations in
food and service.

• What made it an innovative team?
• A spirit of creative freedom was
fostered by everyone, from the top
down. Always time for a pet
project.

• People were able to put aside
their egos and give each other
constant feedback on the quality
of the new dish. A great new dish
will emerge with little resemblance

• People were publicly praised and
recognized for a job well done

• There was a common passion
and enthusiasm for what the crew
was doing. The owners seemed to
be very good at attracting and
recruiting such talent.

• What could have been done
better?
• Many individuals eventually left
and opened their own restaurants
in the area.
• Entrepreneurship

better?
• Ownership was at times
unreasonable, did not tolerate or
forget mistakes.

better?
• The kitchen atmosphere took on
an "us against them" mentality,
which ironically brought the
kitchen crew members together.
Ten Principles to Unleash

Team Innovation
• How do leaders create highest
performing teams that unleash
unmatched creativity and innovation,
thereby making the best products
built on repeatable processes in the
marketplace?
Ten Principles
• 1. Establish the reasons and
objectives of forming a team.
Create a concise team vision and
mission statement that is crisp and
well understood.
Ten Principles
• 2. Recruit the best team players
who will be the most adept at
achieving the said team objectives,
vision and mission. A players only!
Ten Principles
• 3. Establish clear, participatory,
effective and elevating team goals
and plans. Complete commitment
from team members towards
achieving these objectives.
Ten Principles
• 4. Articulate and communicate
team task functions and
relationship functions, and help the
team understand the differences
through examples. Build Trust and
Open Communications.
Ten Principles
• 5. Develop healthy and productive
group and meeting norms, grow
team cohesiveness by building
collaboration, and manage social
loafing consequences.
Ten Principles
• 6. Proactively manage team
behaviors and conflicts that could
either encourage or harm member
relations, and regulate situations
where individual needs are not
satisfied.
Ten Principles
• 7. Cultivate and unleash Group
Creativity and Innovation.
• Basic Brainstorming, Nominal Group
Technique (NGT), and NGT-
Storming. “Any Creative Ideas
Today?”
Ten Principles
• 8. Analyze, update and maneuver
team communication according to
the twelve categories comprising
Bales’ Interaction Analysis - Positive
reactions, Attempted answers,
Questions and Negative reactions.
Ten Principles
• 9. Create a Team Assessment
Inventory on the team’s general
productivity, team goals, processes
and procedures, and member
relationships every three months to
analyze and calibrate the team
performance.
Ten Principles
• 10. Have fun!! Create an
environment wherein the team
members enjoy their work, and the
team morale remains high.
Bales’ Interaction Analysis

• Understanding Team Interaction
• A. Social-Emotional: Positive Reactions
• 1. Shows solidarity, gives help
• 2. Shows tension release, laughs, shows
satisfaction
• 3. Agrees, shows understanding, concurs

• B. Task Area: Attempted Answers
• 1. Gives suggestions, direction
• 2. Gives opinion, evaluation, analysis,
expresses feelings
• 3. Gives orientation, information, repeats,
clarifies, confirms

• C. Task Area: Asks Questions
• 1. Asks for clarification, information
• 2. Asks for opinions, analysis
• 3. Asks for suggestions, direction, possible
actions

• D. Social-Emotional: Negative Reactions
• 1. Disagrees, shows passive rejection,
withholds help
• 2. Shows tension, asks for help, withdraws
• 3. Shows antagonism, defends or asserts
self
Bales Interaction Analysis
Burton G & Dimbleby R (1988) Between

Ourselves: an Inroduction to
www.InnovationMain.com Interpersonal Communication London:
Edward Arnold 1988
Nominal Group Technique - NGT

Six Steps to Team Innovation Success…
Step 1. Each team or group member generates
a list of ideas and questions using one of the
Creativity Techniques and shares this with the
entire group.
• You can limit the list per team member to “#”
• Idea or Question must be something “new”
• Idea or Question must be “relevant”

Step 2. Ideas are recorded by the secretary until
everyone is out of ideas. There is no dumb or
absurd idea.
• At this stage, the key is to record everything
• Make sure all ideas are openly communicated
and shared for complete transparency
• Provide a deadline (can be rolling)

Step 3. Each idea that has been recorded is
discussed by the group openly and honestly.
This discussion can go on for days in a live
session or via emails.
• Brainstorming on each idea is paramount
• Everyone should be allowed to express an
opinion, and can back it with facts/stats

Six Steps to Team Innovation Success….
Step 4. The team participants individually rank
their top twenty ideas (1 through 20) and give
this to secretary. Provide the ranks in group
setting or send via email.
• Create an objective criteria for evaluating ideas
• Ensure that the criteria makes sense
• Allow team members subjectivity in ranking
• Share the rankings openly

Step 5. An average ranking for each idea is
tabulated by the secretary and openly shared
with each member.
• Once all the rankings are received, secretary
provides the final tally
• At this point, a team member can communicate
openly if a particular ranking is in question

Step 6. If there is a clear winner, go with that
idea. Otherwise, take the top few ideas and
lead the group in reaching agreement on one of
them.
• Based on available resources and time, either
go with one idea, top three ideas, or prioritize
when ideas will be implemented. Repeat.
Today’s Agenda
• Leadership and Innovation – Ten Drivers
• Ten Traits of Creative Leaders
• Seven Characteristics of Innovative Teams
• Examples of Innovative Teams
• Ten Principles to Unleash Team Innovation
• Bales Team Interaction Analysis
• Nominal Group Technique
Questions?
• Innovation happens when you find
answers…
Bootcamp Schedule
Contact Us
• Main: 1-877-904-6660
• Fax: 1-949-861-9320
WELCOME!!

February - 2009
Brought to you by:
Driving Business
Sanjay Dalal
Chief Innovator
Bootcamp Schedule
Today’s Agenda
• Innovators Case Studies
• Apple – Top Innovative Company
• Google – Innovations in Search
• Netflix – Innovations in Movie Rentals
• Toyota – Innovations in Hybrids
• Deloitte – Innovations in Consulting
SUCCESS
Building an
Innovation Factory
Apple in 2000
• October 2000: Quarterly Results
• Apple posted a net profit of $170 million.
• Apple quarterly revenues were $1.87 billion
• Gross margins were 25.0%, down from
28.7% in the year ago quarter.
• 1,122,000 units shipped including over
570,000 iMac™ systems.
Apple in 2000
• October 2000:
• ―We have identified several factors which we
believe contributed to our sales shortfall last
quarter, and we are taking strong steps to
remedy them going forward,‖ said Steve Jobs,
Apple’s CEO. ― …. Our plan is to be back on
track for the January quarter, and we remain
very excited about our products and
programs for 2001.‖
Apple in 2000
• October 2000:
• Apple stock was around $10
• Apple market cap was less than a tenth of
today’s market cap
• Apple was considered ―dead alley‖ by most
industry observers and analysts
Apple in 2001
• Why was Steve Jobs excited about 2001?
• Apple introduced iPod and iTunes in 2001
and changed the way people buy, hear and
organize music
• Apple created an industry first business
model of purchasing songs from iTunes
store for only 99 cents
Apple in 2001
• January 2001: ―Apple® introduced iTunes, the
world’s best and easiest to use ―jukebox‖
software that lets users create and manage their
own music library on their Mac®.‖
• iTunes ―lets Mac users import songs from their favorite
CDs; compress them into the popular MP3 format and
store them on their computer’s hard drive; organize their
music using powerful searching, browsing and play list
features; and burn their own audio CDs.‖
www.InnovationMain.com Apple.com
Apple Fast Forward
• Apple Computer, Inc.
• or
• Apple, Inc.
• Question:
• What is Apple today?
Apple Today
• ―We’re armed with the strongest
product line in our history, the most
talented employees and the best
customers in our industry. And $25
billion of cash safely in the bank
with zero debt,‖ Steve Jobs, CEO of
Apple, October, 2008 Earnings
Apple Today
• October 2008:
• Quarterly revenue of $7.9 billion and profit of
$1.14 billion. Revenue up 27%, Profits up
26% year over year
• Gross margin 34.7 percent, up from 33.6
percent in the year-ago quarter.
• International sales growing: 41 percent
Apple Today
• October 2008:
• Apple shipped 2,611,000 Macintosh®
computers up 21% unit growth and 17%
revenue growth,
• Sold 11,052,000 iPods up 8% unit growth and
3% percent revenue growth, and
• Sold 6,892,000 iPhones compared to 1,119,000
in the year-ago-quarter, up over 500%.
How did Apple do it?

• Increase revenue more than 400% in 8
years…
• Increase net profit more than 650% in 8
years…
• Increase market cap more than ten times
to over $85 billion and counting…

• ― There's an old Wayne Gretzky quote
that I love. 'I skate to where the puck
is going to be, not where it has been.'
And we've always tried to do that at
Apple. Since the very very beginning.
And we always will." ‖ —Steve Jobs
Answer…
• Creativity and Innovation
• Innovation in Products
• Innovation in Business Model
• Innovation in Customer Experience
• Innovation and Leadership
• Steve Jobs
Innovation in Products
• Redefined Macintosh line of desktops and laptops
beginning with iMac in 1998 and iBook in 1999
• iTunes store and iPod player in 2001.
• Innovative Macintosh desktops and laptops with new
line of MacBook, Mac Pro and Mac Mini in 2006
• Smartphone revolution with iPhone in 2007 and
iPhone 3G in 2008
• Software innovation with OS X and Leopard, and
internet, design and productivity applications
iMac Design
―The iMac design has
continuously
improved generation
after generation,
resulting in increased
material efficiency,
decreased packaging
mass and volume,
and decreased
energy consumption ―
Environmental friendly design

• MacBook packaging uses 41% less volume
resulting in 25% more units per shipping container.
• Packaging for the current generation 20-inch iMac
uses 66% less plastic and 42% less paper than the
20-inch iMac G4 flat panel, while taking up 41% less
space.
• iPod classic packaging consumes 35% less weight
and 82% less volume than the first generation iPod.
Innovation in Business Model

• Apple created industry first business model
on iTunes store by offering music downloads
to consumers for only 99 cents a song
• Apple created strategic partnerships with
major music labels to get royalty per sale
• Apple expanded these partnerships to movie
studios and TV networks to offer movie
rentals, new movies and TV shows

• Apple has better margins today on better
designed and higher quality products. How?
• ―..Obtain stellar products and services within tight
timeframes, at a cost that represents the best
possible value to our customers and shareholders.
If that sounds like a daunting task, it’s the same one
we assign ourselves.‖
• Suppliers – meet highest standards for goods and
services, quality, social resp., agility, solutions
Innovation in Production Model
Design – Send out

Launch – First version
RFPs to Suppliers and Development – Obtain
ready for shipment to
Manufacturers in SID, and Integrate various
Apple stores, partners,
Negotiate Pricing and supplier parts,
Apple online store.
timeframes, Choose Manufacture and test
Demand necessitates
the Best of the Prototype, Repeat until
greater production.
Suppliers based on product meets quality
Second major
experience, costs, goals, Mass
versions typically go
quality, agility, manufacturing begins
back to Design stage.
timeliness
Compressed Time

• Apple created an exclusive relationship with
AT&T in U.S. for the iPhone launch – a first!
• Apple obtained subscription payment from AT&T
from the monthly data plans, besides one time
payment – a first!
• Apple significantly expanded iPhone 3G
distribution by establishing carrier relationships
in over 70 countries – still exclusive with AT&T
Innovation in Customer Experience

• Apple introduced Apple Retail Stores in 2001
• Over 200 stores worldwide including 8
countries outside the U.S.
• Theme: ―Come to shop. Return to learn‖
• All things Apple. Great experience.
• Apple sells Apple products and accessories
through Apple Online Store
• iTunes store: Music, Movies, TV, Apps
Innovation in Customer Experience

• Apple Retail Stores
• Highest sales per square foot
• Innovative storefront design
• Open, customer-friendly atmosphere with
highly knowledgeable sales reps
• Great customer experience
• Apple Online Store
• iTunes store - #1 Music Store + Movies, TV, Apps
Innovation and Leadership

• Steve Jobs, Chairman and CEO, Visionary & Innovator
• Timothy D. Cook, Chief Operating Officer
• Peter Oppenheimer, Senior VP & CFO
• Daniel Cooperman, Senior VP, General Counsel & Secretary
• Scott Forstall, Senior VP, iPhone Software
• Jonathan Ive, Senior VP, Industrial Design
• Ron Johnson, Senior VP, Retail
• Bob Mansfield, Senior VP, Mac Hardware Engineering
• Philip W. Schiller, Senior VP & Worldwide Product Marketing
• Bertrand Serlet, Senior VP, Software Engineering
• Sina Tamaddon, Senior VP, Applications
Steve Jobs
• Chairman and CEO, Visionary & Innovator

• Made Apple #1 Innovative Company
• Steve Jobs co-founded Apple in 1976
• Member of Board of Directors at Disney
• Co-founder of Pixar Animation Studios
Apple iPod
Apple iPod
Apple iPod
iPod made Apple #1

•iPod, introduced in 2001, combines
outstanding design, easy-to-use intuitive
interface, superb performance, and an
experience like no other.
• Apple assumed the world’s number one
innovative company position in large part due
to the exponential growth of iPod – aptly
called the iPod Phenomenon.
• About 200 million iPods sold worldwide.
iPod made Apple #1

• iPod fans are walking, driving, jogging,
exercising, chatting, playing, humming, relaxing,
singing, rocking, screaming, and above all
enjoying their daily iPod experience
• What began as a new product quickly became
a revolution!
• Apple's Hardware engineer Jon Rubinstein
assembled a team of engineers to design and
build the first iPod in less than 12 months.
iPod made Apple #1

• Over 20 versions of iPod since launch
• Latest: iPod touch hand held console market
• ―In the years since (2001), the iPod's market share
has grown tremendously, iPods have shrunk in size,
Apple's iTunes Music Store has taken the lion's share
of legal digital music downloads, and the iPod
accessory market has exploded and taken on a life of
its own. All this has made the iPod as synonymous
with "MP3 player" as Kleenex is with facial tissues.‖ –
PC Magazine
iPod made Apple #1

• Why do people love iPod?
• iPod innovation: Simple yet elegant design
that makes it extremely easy-to-use,
exceptional sound, video and imagery, and
the amazing experience. iPod touch adds
YouTube, Internet, and games and cool
applications from the new App Store.
• Endless customization and personalization
with available accessories from Apple.
iPod made Apple #1

• Retail research firm NPD Group says:
―Apple's iPods still maintain a lock on the top
spot in U.S. sales of digital music and media
players, with as much as 75% of the market.‖
• Apple created innovation with another Top
20 Innovator of the Innovation Index, Nike:
Nike Plus. ―Ultimate synthesis of sport and
music: a pair of Nike+ shoes, an iPod nano,
and the Nike + iPod Sport Kit."
Disruptive Innovation
Apple iPod
iPod – Disruptive Innovation

• About 75% market share of MP3 music
players
• Disrupted established players in MP3
market.
• Disrupted Sony Walkman music player
• Who is the #2 player? (most people don’t
know)
• Zen, Sony, Archos, Zune, S3, O2 and host of
others
iPod and Apple Revenue
Millions
Fiscal year
iPod & Apple Revenue Growth
iPod Growth Challenges
iPod Turnaround?
1. Apple has introduced the new iPod touch at lower prices. Existing
iPod owners will upgrade, and lower prices will find new buyers.
2. Apple has lowered the starting price of iPod Shuffle to only $49 so as
to lure first-time iPod buyers.
3. Apple is experimenting with newer business models for the iTunes
store to provide better value, cheaper songs and DRM free music.
4. New App Store adds games & apps to iPod Touch.
5. Apple has introduced the new pink model of iPod nano, and also
expanded the partnership with Nike for the gym.
6. Apple reduced the iPod prices further in Summer 2008.
7. Apple promoted free iPod to new buyer of MAC for Fall 2008 school.
Millions of songs. Thousands of movies.

iPod touch Hundreds of games. The new iPod touch
Apple iPod Touch (second generation, 8GB) – CNET review

Apple has delivered the iPod Touch we've been waiting for, at a price
that makes sense. The second-generation iPod Touch is miles away
from the device we first saw in September 2007--the hardware is sexier,
the features run rings around the competition, and the open-ended
development of the App Store can bring nothing but improvements.
(chart from Forbes)
iPod Opportunity
iTunes App Store potentially redefines iPod touch

into a hand-held gaming console and can
significantly expand Apple’s footprint into the
gaming market! Games are cheap!
(chart from Forbes)
iPod Turnaround?
• Latest Quarter Results – Jan, 2009
• Record 22,727,000 units shipped
• 3% Unit Growth (22.7 million)
• However, iPod revenue falls to $3,371
billion from $3,997 billion year over
year, a drop of 15.7%
• iPod price / unit drops to $148
iPod Turnaround?
• In effect, Apple is shipping more iPods
and yet earning less revenue per iPod
sold
• However, Apple grows leadership
• iPhone cannibalizes iPod market?
• iTunes store shows revenue growth
Apple iTunes
Apple iTunes
•The world’s #1 music store — and more.
• Over 8 million 99¢ songs. Now 69¢ and $1.29
• Special Recommendations from the Genius sidebar.
iTunes Exclusives. Share songs by creating an iMix.
• Rent or buy blockbuster movies, get HD episodes of
favorite TV shows, download applications for iPhone
or iPod touch using the App Store.
• Subscribe to free podcasts, and shop for
audiobooks.
Apple iTunes
• Innovation in Business Model
• Industry first Partnerships with
major music labels, TV networks,
movie publishers preceded by
partnerships with key CD music
software makers
• 99 cents music downloads, $2.99+
movie rentals, $1.99+ TV shows and
$9.99+ new movie downloads
Apple iTunes
• Innovation in Customer Experience
• Intuitive, Easy-to-use, User-friendly
interface
• Social networking through sharing
of music – now DRM free
• Personalization & Customization
• Free downloads including music,
podcasts, applications and more
• Customers use it everyday!
Apple iTunes
• Disruptive Innovation
• Disrupted CD industry and overtook Wal-
Mart (#1 Music Store)
• Disrupted MP3 download industry (>70%
market) by making it legal
• Potentially disrupts Movie Rental and
New Movie Download markets
• Creates new paid TV Show download
industry
• Another new market with App Store
iTunes Challenges
• Challenges
• High Performance, Quality and Availability for
hundreds of millions of end users worldwide
• Confused Identity – Music store, Movie store,
Game store, Media store, or Application store?
• Keeping it simple and intuitive for the majority
of users
• Win-win partnerships with Music labels, Movie
studios, TV networks, Application vendors
• Increase the flat year/year growth rate
iTunes Opportunities
• Opportunities – Sky is the limit!
• Become #1 Music Store in the World
• Become #1 Movie Download Store
• Become #1 Movie Rental Store
• Become #1 TV Shows Store
• Become #1 Gaming Store
• Become #1 Application Store
• Become the King of online Media and
Entertainment market
• Become a $1 billion quarterly business
Apple Strategic Innovation Shifts

• Apple introduces new iPod models in 2007
and 2008 - iPod touch, iPod nano, iPod shuffle
• Apple lowers iPod pricing in 2008 across the
board to grow iPod business
• Apple introduces new iPhone in 2007,
iPhone 2.0 in early 2008 and iPhone 3G in
summer 2008
• Apple expands iTunes Store to sell iPhone
applications - iPhone App Store in summer
2008*
Apple iPhone
Apple iPhone
• In July 2008, Apple began selling iPhone 3G,
the second-generation iPhone.
• Vastly superior iPhone with 3G networking, built-
in GPS, increased capacity, faster performance,
app store, corporate email, calendar and
contacts, and lower ownership cost!
• Significantly expanded distribution by
establishing carrier relationships in over 70
countries
Apple iPhone
• In July 2008, Apple began selling iPhone 3G,
the second-generation iPhone.
• Vastly superior iPhone with 3G networking, built-
in GPS, increased capacity, faster performance,
app store, corporate email, calendar and
contacts, and lower ownership cost!
• Significantly expanded distribution by
establishing carrier relationships in over 70
countries
Apple iPhone
• ―iPhone 3G had a stunning opening weekend,‖
said Steve Jobs, Apple’s CEO. ―It took 74 days
to sell the first one million original iPhones, so
the new iPhone 3G is clearly off to a great start
around the world.‖
• Over 1 million units of iPhone 3G sold in 3 days
• Over 10 million iPhone apps downloaded in 1st
weekend of launch
Apple iPhone
Apple iPhone
• In fiscal Q4, 08, iPhone revenue was $806
million representing 10.2% of Apple’s total
revenue of $7.9 billion.
• iPhone deferred annual revenue totaled
$4.7 billion making Apple the 3rd largest
player in the cell phone market
• Over 12 million iPhones in 2008 (est)
Apple iPhone
• iPhone App
Store hosted
by iTunes
• e.g. Epocrates
Rx application
• Healthcare
• Over 125K
downloads
Apple iPhone
• Disruptive Innovation
• Disrupted Smartphone market category in
the worldwide mobile phone market share
• Overtook RIM, the established leader, in
new unit sales in the U.S.
• Can potentially expand and accelerate the
market of Smartphones further with ―Nano‖
• App Store provides new $$ opportunities
beyond mobile applications into the realm of
gaming, enterprise, entertainment & more
Apple Leadership
•Steve Jobs – CEO of Apple
• Apple’s innovation and growth is first and
foremost driven by inner conviction about the
outer world – a conviction that is manifested
by Steve Jobs and largely led by him and
people around him.
• This conviction is about changing how
consumers live around music or
entertainment. – Erich Joachimsthaler
How does Apple innovate?

• Apple develops a notion of the changing consumer
landscape.
• Around 2000, there were already some consumers
who downloaded songs from Napster and Kazaa
• Apple sees how the demand landscape is changing
and the product leaders develop their own thinking,
―structured thinking‖, around how to create a
transformative experience for consumers
• Don’t rely solely on consumer input and focus groups
How does Apple innovate?

• In the process, Steve Jobs reframes the entire
opportunity space for Apple – from a computer company,
to a music company, to be an entertainment company.
• Apple seems to have followed little of the standard
advice from marketers or advertising professionals.
• Apple’s program of connecting with consumers is about
the 2,000 accessories that they have licensed to Bose
and others so that we can absorb and assimilate the
iPod into our 1,440 minutes we all live every day.
- Hidden in Plain Sight Interview
Latest example…
• Precision aluminum unibody enclosure.
• Ultrathin 13.3-inch LED-backlit display.
• Up to 5x faster NVIDIA graphics
performance.
• All-new, smooth glass Multi-Touch trackpad.
• New design. New features. New
technologies.
• All engineered to standards that don’t exist
yet!
Latest example…
• GO GREEN
Latest example…
NEW MacBOOK
• Advanced chemistry, intelligent monitoring of the

system and battery, and Adaptive Charging
technology to create a revolutionary new
notebook battery that delivers up to eight hours
of wireless productivity on a single charge and
up to 1,000 recharges without adding thickness,
weight or cost to the MacBook Pro’s incredible
design.* The longer battery lifespan equals
fewer depleted batteries and less waste, which
is better for the environment.
How Apple Innovates?

• Establish Apple as the best COOL brand
• Marketing, Website, Retail stores, Products – Everything!!
• Envision & Create the best COOL products
• iPod, iPhone, MacBook, Air, Pro, Retail Stores..Next generation
• Deliver best-of-breed, highest quality products & service
• Precision, Performance, Design, Technology, Experience
• Capture emerging consumer landscapes & trends
• Media & Entertainment confluence, Entertainment + Hand-held
gaming consoles, Business & Leisure, Green, Mobile Apps
• Grow the ecosystem of partners
How Apple Innovates?

• Products
• Simplicity, Intuitive, Experience, ―Cool‖, Must Have
• Markets
• Teenagers, College Students, Young Professionals,
Designers, and now Parents of the above….
• Customers
• iPhone or iPod touch -> iTunes -> Music, Games,
Apps -> Spend monthly on Apple -> MacBook
• MacBook or Mac -> Software -> iTunes -> iPod or
iPhone -> Music, Games, Apps
Top-Down Bottom-Up
Source of ideas Management / Customers and
Your Organization users
Drivers Internal resources, Deep
product, understanding of
positioning customer needs
managed non-linear
participate
Processes Linear and strictly Emergent and
defined spontaneous
surveys, focus crowdsourcing,
social media

Questions?
answers…
• ―The important thing is never to stop
questioning.‖ - Albert Einstein
Apple Innovation Takeaways

• Build Products that are ―Cool‖, intuitive, simple
to use and provide amazing experience
• Capture the changing landscape of the
markets and buyers
• Grow the market with buyers as they grow
• Provide multiple products / touch points to
buyers so they can buy more products
Bootcamp Schedule
Contact Us
• Main: 1-877-904-6660
• Fax: 1-949-861-9320
WELCOME!!

February - 2009
Brought to you by:
Driving Business
Sanjay Dalal
Chief Innovator
Bootcamp Schedule
Today’s Agenda
SUCCESS
Building an
Innovation Factory
Google
Google
• Google's mission is to organize the world's
information and make it universally accessible
and useful.
• Four key elements of Google search:

Relevance, Comprehensiveness, Speed and
User experience.
www.InnovationMain.com Google.com
Google
• Singular Focus on developing the "perfect
search engine," defined by co-founder Larry
Page as something that, "understands exactly
what you mean and gives you back exactly what
you want” in less than half a second.
• Unique Technology: PageRank and

HyperText-Matching
Google Business
• Search services and advertising
• Google AdWords advertisers create ads to drive
qualified traffic to their sites and generate leads
• Google publishing partners and Google Search deliver
those ads targeted to relevant search results powered by
Google AdSense.
• With AdSense, the publisher shares in the revenue
generated when readers click on the ads.
• Readers have to click for payment to get triggered.
Google Principles
•Ten Design Innovation Principles:
•1. Focus on people – their lives, their
work, their dreams.
•2. Every millisecond counts.
•3. Simplicity is powerful.
•4. Engage beginners and attract experts.
•5. Dare to innovate.
Google Principles
•Ten Design Innovation Principles
•6. Design for the world.
•7. Plan for today's and tomorrow's
business.
•8. Delight the eye without distracting the
mind.
•9. Be worthy of people's trust.
•10. Add a human touch.
Google Innovation Process

• BCG Matrix before 2006

• Structured BCG matrix approach is
excellent for incremental innovation.
• Google abandoned this engineering
management approach concluding that
while productivity was high, creativity and
innovation were poor.
• The process is poor at discrete
innovation, at launching new products.
www.InnovationMain.com blog.eucap.com

• In 2006 - 70-20-10 rule
• “Google is not as high as 70% in the core of
search/ads, focus again to adjust (in other words, we're
doing more search again...).
• 20% represents Google's bargain with technical
people, allowing them to roam free to encourage
creativity---where all the most interesting products
emerge.
• 10% is for wacky ideas that might not work out but feel
worth pursuing.” – Eric Schmidt, CEO of Google

• An "exhaustive drama of arguments and reviews" in "ceaseless
GPS [Google Product Strategy] reviews---so much that it's produced
a recent internal traffic jam on the servers with so many such
teams.“
• A monthly formal revenue force and reordering around product
investment.
"The goal is to systematize anything...The only way to deal with the
growth in scale, is a systematic approach to each and everything we
do...Google's making significant storage/computing capacity
investments, reusing and combing data from one application to
another...."

• Late 2006 – 90-10 approach
• Ninety percent standard incremental
development, and Ten percent disruptive
original products.
• The problem being that the continuous
stream of new products have been badly
integrated and are confusing to users.

• Late 2006 – 90-10 approach
Sergey Brin states
"It's worse than that, it's that I was getting lost in the
sheer volume of the products that we were releasing.“
Eric Schmidt, Google's CEO
"The result occurred precisely because we told these
incredible engineering teams to run as fast as possible
to solve new problems. But then that created this other
problem."
Google versus Yahoo
Google versus Yahoo
Google versus Yahoo
Google versus Yahoo
Google versus Yahoo
Google versus Yahoo
Google Grows
• Key reasons why Google is doing well:
•1. Quality of innovations
•2. Meaningful acquisitions (Earth, YouTube
and Double Click)
•3. Execution on core Search strategy
•4. International Search business (50%)
•New innovations: Android, phone the first
complete, open, and free mobile platform:
cheaper, better!
Google Grows
• Sales rose 18% to $5.7 billion
• Earnings of $5.10 a share, up from $4.92
• "The performance was really very impressive,"
says Jeffrey Lindsay, an analyst with Sanford C.
Bernstein.
• Search advertising continues to look more
attractive to marketers than other kinds of ads
• Microsoft lost $1.6 billion last year alone on its
online business.
Yahoo Falters
• "Yahoo's challenges are distinct between
search and display advertising and there needs
to be a plan to address fundamental and
competitive issues..," Martin Pyykkonen of
Wunderlich Securities
• Net revenue fell 2% to $1.38 billion, first decline
"since the '01 tech bubble." Leadership issues
• New CEO has set “really low” expectations
Netflix
Netflix Innovation
About Netflix
• Netflix is the world's largest online movie
rental service, with more than eight million
subscribers.
• For one low monthly price, Netflix members
get DVDs delivered to their homes
• Members can instantly watch movies and
TV episodes streamed to their TVs and PCs,
all in unlimited amounts.
NO LATE FEES
Business Model
NETFLIX = NO LATE FEES
1. Bet that Customers are OK for movies to
arrive instead of going to store to pick up
2. Customers will pay monthly subscription
3. Convenience, user reviews, choice
BLOCKBUSTER = LATE FEES

Tried Redefining Business Model
Total Access -> early success
Choice: Online or In-store
Did not click!
(Customers don’t want to go to stores)
Netflix disrupts Blockbuster
Netflix market value seven times that of Blockbuster
Netflix vs. iTunes
Who will win?

Movie Rentals + Downloads:
Netflix – Momentum + Partners
TiVo, Xbox, LG, Roku, Samsung
Blockbuster – Disarray
Apple – Worthy: Apple TV, iTunes
Amazon.com - Chasing
Toyota
Toyota
• Generates one million new creative ideas
each year
• Perennial top ten profitable companies of the
world
• Achieves market leadership while relentlessly
pursuing perfection and delivering some of the
best new innovations the world has ever seen.
Toyota Innovations
•Matthew E. May, a senior University of Toyota
advisor, and the author of “The Elegant Solution:
Toyota's Formula for Mastering Innovation”
• How Toyota creates new innovations at the
breakneck speed of over 2,500 new ideas
implemented every day…
• History, foundation, guiding principles and
practice
Toyota Innovations
• Guiding Principles for Driving Innovation
• 1. The Art of Ingenuity
• An individual has to be both an artist and a scientist.
“Is there a better way?”
• Ingenious vehicles such as Camry, RAV4, 4-Runner,
RX
•2. The (relentless) Pursuit of Perfection
• Rigorously search for an optimal solution – one that
yields low-cost, low-risk, high-impact breakthrough
Toyota Innovations
•2. The (relentless) Pursuit of Perfection
• Innovation happens at Toyota through
systematic pursuit of perfection at every level,
every department, in everything Toyota does.
• For example, the Lexus cars made by
Toyota epitomize perfection in the form of car
design, function, performance, service and
total satisfaction.
Toyota Innovations
• 3. The Rhythm of Fit
• How can a great innovation shape and then
change the attitudes and behaviors of people,
the way they think, they work, they live?
• A change that fits in the current time and
environment.
• For example, the Toyota Prius car.
Toyota Innovations
• Blocking Innovation
• Obstacles or temptations that hinder
sustainable business innovation which Toyota
has tactfully avoided through out its history.
• Taking short cuts, trying to hit a home run every
time, creating products too complex that are top
loaded with extra dressing, and without a real
understanding of the innate customer need.
Toyota Innovations
• Three Innovation Blockers
• 1. Swinging For Fences
• High risk. High reward. NOT. Build a
sustainable batting average, lasting innovation
• 2. Getting Too Clever
• Avoid extra "bells and whistles" that the
customer does not care about
• 3. Solving Problems Frivolously
• Creating without rigor and analysis
Toyota Innovations
• Ten Principles for Making Innovation
• 1. Let Learning Lead
• Education and learning, especially
experiences, can drive substantial innovation.
• 2. Learn to See
• Unearth the latent needs of the customers,
and perceive the emerging needs.
• 3. Design for Today
• Focus on clear and present needs .
Toyota Innovations
• 4. Think in Pictures
• “Make your intentions visual -- you'll surprise
yourself with the image”
• 5. Capture the Intangible
• Capture the latent perceptions and emotions
• 6. Leverage the Limits
• Constraints and limits can spur ingenuity
Toyota Innovations
• 7. Master the Tension
• Learn to deliver when all else fails
• 8. Run the Numbers
• Sound technical analysis based on facts
• 9. Make Kaizen Mandatory
• Discipline – create standard, follow it, better it
• 10. Keep It Lean
Toyota Challenges
• November U.S. car sales down 34% from last
year; luxury division (Lexus) sales down 40%
• $1.8 billion loss for the October-December
quarter, down sharply from ~$5 billion profit.
• Quarterly sales plunged 28.4 percent
• Expects a net loss of $3.85 billion for the
fiscal year through March - a stunning reversal
from the record ~$18 billion profit previous year
• First annual loss since 1950
Toyota Challenges
• Turnaround Sales
• Cutting costs - Shutting down production at its
11 plants in Japan for 14 days
• New products. Committed to developing gas-
electric hybrids as a pillar of its growth strategy
• New Prius launched in January 09
• Increased and real competition from Ford and
Honda (profits) – Quality (Ford overtook),
Hybrids (good) and Innovations (Sync)
Deloitte
• Accounting innovation can be "sexy".
• Strategic Innovation at Deloitte
• Deloitte is a worldwide organization
consisting of 147,000 employees
• Offices in more than 140 countries
• Revenue of $23.1 billion in fiscal year
2007
• More than 80% of the Fortune Global 500
References: Rick Rayson Presentation
Deloitte Vision
•Strategic Innovation imperative at Deloitte
Achieving Deloitte's vision:
To be the First Choice of:
* The world’s most coveted talent

* The most sought-after clients
Deloitte Innovation Strategy

•Deloitte's Innovation and Creativity strategy to
match its bold vision.
"To develop new services, new ways to serve

our clients and new ways to attract, develop
and retain the talent we must have for this
growth"
Deloitte Innovation
•Deloitte has an urgent need to innovate on two
fronts:
* In our services to clients (for their often
unusual or difficult problems), and
* In our internal talent management and
execution (while facing a shrinking talent pool and
competition to recruit and harness the best talent).
Deloitte “Edge”
• Innovation at Deloitte is driven by the thousands of
talented people working at the “edge” on client service
engagements
• Deloitte innovates by harnessing innovation that happens
at the edge, bringing it back to the core, and then pushing
it back out to the edge
• Deloitte consultants think of new ways to help solve their
clients’ business problems by leveraging thousands of
experiments in the field.
Deloitte “Edge”
• Innovation for Deloitte is about :
• Accelerating the process of finding and
refining good ideas at the core,
• And then pushing them back out to the edge
• Speeding up the process of turning personal
innovation that happens in the field into
institutionalized innovation that can be
systematically delivered to our clients.
Deloitte “Edge”
• How to find ways to efficiently and effectively
commercialize the ideas happening at the
“edge.”
• Deloitte has created Talent Innovation centers,
and Strategy, Research and Innovation Groups,
Innovation Quests, and Centers of Excellence
as part of the Client Innovation Services to
create game changing innovations.
Deloitte “Edge”
• Enterprise Value Map: a tool that gives a
comprehensive view of all the drivers of value in
an organization.
• EVM has now morphed into a comprehensive
Value Map that all Deloitte clients benefit from..
Deloitte Talent Innovation

• Create a "youthful" yet "energetic" image of a
company on the move towards hiring new talent
by developing innovative approaches to the
attraction, retention & development of talent.
• A different approach to career management, to
dealing with generational differences, to women
and diversity needs, and fostering a culture of
learning and coaching
Deloitte India Talent

• In 2000, created an offshore India center.
• Not just offshoring of back-office but also
client-facing functions, all delivered with high
standards of quality.
• The lower cost of employing talent in India has
a significant impact on ROI; at the same time,
the high quality work delivered by the offshore
group has a significant impact on growth!
Deloitte Innovation Highway

• Past: "Distributed Reactive" : Innovation that
happened at the edge, was chronically under-
invested and usually following another’s lead.
• Present: "Programmed Proactive“: Proactively
focused on connecting the edge to the core
(e.g. Innovation Quest), by challenging some
norms, and realizing that it is not just a means
to an end.
Deloitte Innovation Highway

• Future: "Culturally Ingrained" - innovation as
part of Deloitte's core DNA (processes, people,
and technology), innovation as efficient and
effective, and as an externally recognized
differentiator.
• From the "Edge" to the "Core" back to the
"Edge"
Today’s Agenda
Questions?
answers…
Bootcamp Schedule
Contact Us
• Main: 1-877-904-6660
• Fax: 1-949-861-9320
WELCOME!!

February - 2009
Brought to you by:
Driving Business
Sanjay Dalal
Chief Innovator
Bootcamp Schedule
SUCCESS
Building an
Innovation Factory
Today’s Agenda
• Tools to Spark Ideas and Creativity
• Three Wave Pattern of Change
• Example of Innovation Process
• Five Principles for Driving Innovation
• Building an Innovation Factory
Today’s Agenda
Tools to Spark Ideas

& Unleash Creativity
Ask Ridiculous Questions

• There is no such thing as dumb question
Change the environment:
• What would happen if we tried this
• underwater? space? ocean? island? mall?
home? garage? school? another place?
• What would happen if X could fly, run, walk,
swim, jump, dance, climb, crawl?
www.InnovationMain.com Adapted from eCornell

Ridiculous Questions
There is no such thing as dumb question
Make connections to other objects or ideas
• Do we know any relevant proverbs or analogies?
• Does my favorite cartoon or Superhero have anything to
do with this? My favorite song? My favorite movie?
• How many roads must a man or woman walk down
before he can X? or make X? or do X?
• Could we make this more humorous? More beautiful?
• How could food be involved? Music? Sex? Nature?
Velcro? Love?
What would your relatives or people you know think?
• What would my mother think? What would my best friend
think? What would my adversary think?
• What questions would a five-year-old child ask in this
situation?
• How would a teenager behave in this situation?
• Would my father do this? my son? my daughter?
• What does this have to do with the values of my
generation? The values of my organization?

What would happen if we Change this?
• What would happen if we turned it upside-down? Inside-
out? What if we break this into small parts?
• How can we pretend X is something else?
• What color should we use?
• What should it taste like? Smell like? Feel like? Sound
like?
• If I had unlimited time and money, how would I do it?
• What is the lifetime of X? Can it go on forever?
Ask the “Real” Question

• Ask “Goal precedence” and “Target
directed” questions
• “What other goals or values will be sacrificed
in the pursuit of the goal in question?”
• “How can we make more money this quarter?
• In trying to make more money, do we earn
less, customers pay more, we work harder, we
hire more employees?

Ask the “Real” Question

• Ask “Goal precedence” and “Target
directed” questions
• Target-directed questions ask, “What is really
wanted?”
• “How can we make more money this quarter?
• Am I really trying to impress my investors, or
get a raise, or invest into new projects? Are
there better ways to do these?

Ask “This List of Questions”

• People ask these questions about objects and
actions.
• People ask these questions in any situation.
• Certain questions may be silly or misplaced
for certain situations.
• Often these questions lead to the most
creative ideas.

Your Question
• Let us begin with your question…
• My Question:
•____________________________

The List of Questions

• 1. Where From Object Rules
• Where did you get XYZ? Is it easy to find this?
• 2. Function
• What do you do with XYZ? Who wants XYZ?
• 3. Enablement
• How did you get XYZ? What resources?
• 4. Habits
• How does doing XYZ fit? What changes?
• 5. Associated Objects
• What goes in, around, with XYZ?

Object Rules
• 6. Results
• What will you do after XYZ? Before
XYZ?
• What if you don’t like after XYZ?
• 7. Problems
• What issues will be caused by XYZ?
• What issues without XYZ?
• What is the perception of having XYZ?


Action Rules
• 1. Next Event
• What happens or might happen next?
• 2. Preceding and Enabling Events
• What caused XYZ? What led up? Able to?
• 3. Associated Objects
• How do you XYZ without ABC? How did you
get ABC that enabled XYZ?
• 4. Other Actors
• Who else XYZs? Or creates XYZs?


Action Rules
• 5. Associated Actions
• What happens with or goes along XYZ?
• 6. Physical Results
• Do we want state ABC due to XYZ? Why?
• 7. Scripts
• What else was going on to cause XYZ?
• 8. Reason
• Why did XYZ take place? Facts causing this


• 9. Alternative Plans Action Rules
• Why don’t we do ABC instead?
• Is there a different path to get XYZ?
• Who will help us get there, and why?
• 10. History
• What was going on, the frequency and
causes XYZ to happen?
• 11. Emotional or Social Effect
• Do you love XYZ? Does it make a
difference? Everyone wants XYZ

Make Connections
• Combine or unite the contents of two or more
boxes that have never been united before
• e.g. Netflix
• Movies (Flix)
• Mail (Delivery)
• Postman (Person)
• Internet (Net)
• e.g. WebVan, YouTube, MySpace,
• Wikipedia, Craigslist, Facebook

Lists and Proverbs

• Locksmiths – Lists & Proverbs
• Locksmiths help one get the keys to the new boxes.
More, unrelated boxes the better
• Lists
• Easy access to a lot of unobvious connections. Use
unrelated lists.
• For instance, Table of Contents
• Index of a bestseller
• Chamber or Yellow Pages directory

Proverbs
• “Proverbs not only reflect the tried and true
wisdom of our culture, but that they also
reflect the way our brains are organized.”
• Roger Schank: Proverbs are an excellent
example of rules for understanding or
operating in the world e.g. explanation
patterns, or XPs.

Proverbs
Schank 3 Step Technique for Proverbs:
• 1. The first step is to look in a book of proverbs
under some of the headings that relate to this
problem
• 2. The next step in the process is to translate
the proverb into neutral terms
• 3. The third step is to relate the sound advice
in these proverbs to your own situation

Proverbs
Let us examine Your Question:
• 1. Associated Proverb:
•________________________
•
•2. Translate into neutral terms
•________________________
• 3. Relate to your own situation

•________________________
Today’s Agenda
Change
Three Wave Pattern of Change

Innovation Brings About Change

Answer these Questions for Success!
• What is the Change?
• Who does it Change?
• Why does it Change?
• How does it Change?
• When and Where does it Change?
• What will you do to effect Change?
• What will stop you from this Change?

Why Even Good Innovations Fail?
• Real Marketing
• Sales and Channel Readiness & Incentives
• Service and Support Readiness & Incentives
• Customer Perceptions and Emotions
• Transformative Customer Experience
• Decreased Funding and Resources
• Change in Management and Direction
Today’s Agenda
Innovation
Process
The Innovator’s Guide to Growth

• Putting Disruptive Innovation to Work
• Anthony, Johnson, Sinfield, Altman
• Three Principles:
• 1. Overshooting Creates Conditions for Disruption
• 2. Disruption Comes from Breaking the Rules
• 3. Business Model Innovation Often Powers
Disruption
www.InnovationMain.com The Innovators Guide to Growth


• Hallmarks of Disruptive Innovation
• Simplicity
• Convenience
• Accessibility
• Affordability


• Three Critical Precursors to Innovation:
• 1. Gain Control over your Existing Assets
• 2. Build a Game Plan for Growth
– Calculate the Growth Gap
– Map out a balanced innovation portfolio
– Create a Train Schedule
– Identify Goals and Boundaries
– Pick Growth Domains
• 3. Mastery of the resource allocation process
– Financial, Human, Time (could be the scarcest)

• Identifying Opportunities
• 1. Do not target demanding customers
• 2. Customers who cannot consume (why?)
• 3. Least demanding customers (possibly
seeking a different solution)
• 4. Don’t ask what solutions customers want –
Understand problems they cannot adequately
solve today – Identify jobs to be done

• Developing Disruptive Ideas
• 1. Start by Targeting Overshot
Customers or Non-consumption
• 2. Good Enough Can Be Great
• 3. Do What Competitors Won’t
• Southwest, Netflix, Salesforce.com, Nintendo
Wii


• Tips for Generating New Ideas
• 1. Draw on Analogies
• 2. Run Focused Ideation Session
• 3. Search For Fallen Angels
• 4. Seek Internal and External
Submissions


Innovation Structures and Systems

Potential Structures
Stimulate Training Unit Advisory Board
Shepherd Growth Council Intrapreneur fund
Spearhead Incubator Growth group
Strengthen Corporate venturing Business
unit development
group

Innovation Structures and Systems

Metrics
Input Metrics Process metrics Output Metrics
Allocated financial Process speed # innovations
resources launched
Allocated human Breadth of idea- % of revenue from
resources generation new offerings
Ring-fenced resources Portfolio balance % of profits from new
customers
Senior management Growth gap % of profits from new
time categories
# of patents Distinct processes / Return on innovation
tools investment

Today’s Agenda
Five
Principles
Five Principles to Unleash Innovation

1. Establish the Innovation Vision and Mission to
create great new products, business models
or processes that grow new business. Align
this to company vision and mission.
• From the CEO to CFO, product manager to VP of
Sales, the company needs a strong vision and
mission to create great new products and services.
Everyone must be aligned to this vision and mission.

• Define and establish the Innovation vision and
mission
• Define and establish the Innovation strategy,
business plan and roadmap
• Analyze and Calibrate every quarter

• The Innovation business plan must identify
problems, opportunities, markets, challenges,
stakeholders, objectives, resources, costs,
deliverables.
• Analyze and Calibrate every quarter.

2. Establish systematic processes and rigor that
stimulate creativity, innovation and learning to
execute on the innovation vision and mission
• Define key processes that will identify hot
opportunities, develop creativity, stimulate ideas, filter
ideas, test ideas quickly, and create innovations with
successful ideas
• Give innovators the room, time, resources to
experiment

2. Establish systematic processes and rigor that
stimulate creativity, innovation and learning to
execute on the vision
• Establish processes to develop institutional
memories. Identify key innovators.
• Detail past innovation failures and mistakes
• Detail past innovation successes and reasons
• Detail past experiences, highlights & lowlights

2. Establish systems to make Innovators focus
on clear and present customer needs and the
intangible.
• Innovators need to uncover the latent needs
• Uncovering the intangible requires the process to
think from the mindset of the customer, and the
ingenuity to create a transformative experience.
• Create the discipline to think outside-the-box and
develop creativity of individuals and the group

3. Establish systems to make Innovators focus
on market facts, the numbers and marketing
• Create blueprint for Innovation Design, Product,
Customer service, Business Model Requirements.
• Create Innovation Cycle, Launch and Innovation
Program Management Processes.
• Create Innovation Marketing, Sales, Channel and
Business Development Processes
• Create go-to-market plans and strategies

4. Assemble growth-oriented creative
leadership with passionate, innovative team
that is decisive, inclusive, focused, takes
risks, has domain expertise and executes.
• Great leaders make innovation happen in a timely
and consistent manner within available resources
with repeatable, scalable processes with great teams.
• Find great leaders and best team members to drive
new ideas and innovations to fruition.

4. Create High Performance Innovative Teams:
• Establish Team Goals and Objectives (aligned with
Innovation Mission and Vision)
• Develop Team Tasks, Relationships and Norms
• Develop Team Creativity Processes
• Provide Team “Time + Resources to experiment”
• Understand and Promote Healthy Team Dynamics
• Ten principles to unleash Team Innovation
• Create a Fun, Healthy, Hard-working environment

5. Establish Recognition system for innovators
who generate ideas & experiment. Create
Story-telling Culture.
• Rapid Experiment. Repeat. Quick Fail. New
Experiment. Seize Opportunities. Find Success.
• Reward and recognition of key innovators
• Objective system – recognize contributions frequently
• Tell stories about innovators, innovations, successes
and ideas. Have fun!
Top-Down Bottom-Up
Source of ideas Management / Your Customers and
Partners
Organization users
Drivers Internal resources, Deep understanding Innate
product, positioning of customer needs need
managed non-linear Open
Co-creation
participate
Processes Linear and strictly Emergent and Ordered
defined serendipitous Chaos
surveys, focus crowdsourcing, Web 2.0
social media

SUCCESS
Building an
Innovation Factory
Key Takeaways
• Innovation is a strategic business growth driver, and
provides sustainable competitive advantage
• Be an Innovator – Learn, Inspire, Innovate
• Questions, Ideas, Creativity Tools, Institutional
memory, Don’t repeat Mistakes, Common sense,
Hard work, Six ways, Bottom-Up, Success stories
• Build an Innovation Factory
• Products, Design, Experience, Business Model,
People, Culture, Processes, Partners, Networks
Questions?
Bootcamp Schedule
Contact Us
• Phone: 877-904-6660
• Email: info@innovationmain.com
• Sanjay Dalal: ceo@innovationmain.com
• Fax: 949-861-9320
Welcome to the Innovation Bootcamp!
On Demand Case Studies, Best Practices & Insights
Jump start Innovation at your Business!

We offer on-site Innovation Bootcamp delivered by
Sanjay Dalal, chief innovator
On Demand Innovation Consulting

Industry Leading Innovation eBook
Get Started today:

949.544.1334
info@innovationmain.com

Innovation Bootcamp

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Welcome to the Innovation Bootcamp!

On Demand Case Studies, Best Practices & Insights

Jump start Innovation at your Business!

On Demand Innovation Consulting

Get Started today:

THE INNOVATION BOOTCAMP

What do you See?

What do you See?

Obvious: Zero, Circle, Dot

What do you See?

What do you See?

What do you See?

Creativity And Innovation Driving Business

• No-nonsense insights, strategy and solutions with

Creativity And Innovation Driving Business

Faculty eBook is a 185-

Benchmarking and Leading with Innovation

Current State of Innovation

• Defining Innovation and Creativity

• Creativity is the generation of new ideas

Wisdom from Innovators

Never Lost Money

Wisdom from Innovators

Leadership and Innovation

Thomas Alva Edison – An Innovator

Thomas Alva Edison – Innovations

• Prolific - Over 1,000 Patents

Leonardo Da Vinci – An age-old

• “There are three classes of people:

Steve Jobs – Today’s Innovator

• “Innovation distinguishes between a

Steve Jobs – Today’s Innovator

• Leadership – Leader & Follower

• WATCH OUT FROM BELOW

• Disruption and Commoditization happen

• Lose market to Disruption

• Lose profits to Commoditization

The Innovation Index

Top 20 Innovators - 2008

Top Global Innovators

The Innovation Index

The Innovation Index

Co-relationship between Stock Performance and Innovations

Co-relationship between Stock Performance and Innovations

Processes Linear and strictly Emergent and Ordered

www.InnovationMain.com Source: dicole.com

Time Within 3 years from Launch

Launched June 2007

Business Model Innovation

Web 2.0 business models

www.InnovationMain.com Source: dicole.com

Types of Business Models

www.InnovationMain.com Source: Michael Rappa

THE INNOVATION BOOTCAMP

Blocking Creativity & Innovation

Nine Processes to Unblock

www.InnovationMain.com Reference: eCornell

Failures Driving Innovation

Failures Driving Innovation

Failures Driving Innovation

Failures Driving Innovation

Failures Driving Innovation

3M Idea Generation Process