How Are You Going to Survive as an Innovation Champion? American Creativity Association 5/1/04

1. How Are You Going to Survive as an Innovation Champion?American Creativity Association5/1/04 Jack Hipple, Innovation-TRIZ Tampa, FL jwhinnovator@earthlink.net www.innovation-triz.com

2. QUESTIONS ARE YOU AN INNOVATION CHAMPION? IN WHAT CONTEXT? HAVE YOU SURVIVED?

5. THE AMI STUDY

6. ASSOCIATION FOR MANAGERS OF INNOVATION (AMI) • An informal group of 50 innovators, most of whom have (had) responsibility for innovation programs within large companies, government agencies, or non-profits • Meets twice yearly with outside stimulus speakers and sharing of experiences • Active since 1986 • Sponsored by Stan Gryskiewiecz at CCL

7. AN OBSERVATION WAS MADE….. • A large percentage of corporate innovation managers had become consultants or joined start-ups, after downsizings and early retirements • These were usually associated with termination of the function • With further passage of time, the percentage rose more, with 15 people (out of 30-40 active members) identified • Note: trend has continued, now 25 people identified

11. AMI DECIDED TO….. • Survey and study this phenomenon • Jack Hipple, Innovation-TRIZ • David Hardy, Bank of Montreal • Steve Wilson, Eastman Chemical • James Michalski, Eastman Chemical • See if there were any learnings that could be shared • Publish if possible

12. Survey Questions • MBTI, KAI profiles • Funding mechanism • Leadership/sponsorship • Ideation process • Tools used • Personal insights

13. LEARNINGS FROM STUDY • Significant differences between “styles” of innovation champions and “norm” around them • KAI™ and Myers Briggs Type Indicator™ analyses can help assess • Personal learnings and experiences--what would be done differently? KAI is a registered trademark of M.J. Kirton Myers Briggs Type Indicator is a registered trademark of CPP, Inc.

15. IMPACT OF MBTI™ DELTAS • Change always seems bigger to an “S” than an “N” • “N’s” are more comfortable with change in general • If desired change is not defined clearly, conflicts will result

16. EXAMPLES…. • “We need to do different things in this company…” • Does this mean get into an entirely new business, make an acquisition? • Does this mean we need to process existing orders more efficiently?

17. A COMPANY CAN HAVE A CULTURE…. • SJ---Likes stage gates, continuous improvement teams (80% of corporate managers) • NJ---Likes targeted breakthroughs • SP---Continuous improvement, bottoms up • NP---Internal venturing, sustaining ideas

19. KAI™ DIFFERENCES • Managerial “norm” is 95 • Total norm around 90 • Average of innovation champs was 135 • Friction visible with differentials of 10-15 (at any point) • Warfare visible with differentials of 30+

20. KAI™ DISTRIBUTION NORM

21. IMPACT OF KAI™ DELTAS….. • Replacing vs. improving • Reaction to internal vs. external threats • Appreciation for detail • “Right” vs. risk

23. ACCEPTANCE OF PERSON AND THEIR IDEAS DISLIKE IGNORE SABOTAGE ATTITUDE TOWARD PERSON SUPPORT ENCOURAGE HELP LIKE HIGH LOW Source: Charlie Prather NOVELTY OF IDEA

25. ACCEPTANCE OF IDEA EQUIVOCALITY HIGH LOW MOTIVATION DISTANCE BLACK HOLE GRAND SLAM DEAD IN THE WATER LONG SHOT HIGH LOW COMMUNICATION Source: National Center for Mfg Sciences Study

26. RECENT PERSONNEL TRENDS • Dramatic decline in loyalty, downsizings • Increased specialization • “Temporary” assignments and more rapid turnover Impact Capturing and broadening of intellectual property (not just patents, but “know how”) much more important AND difficult

28. WHAT ELSE HAS CHANGED?

29. A DRAMATIC CHANGE…. GENERATING COST OF INFORMATION Source: Jim Palmer, P&G DISSEMINATING TIME

30. HOW SHOULD WE DO IT RIGHT--IN AN ORGANIZATIONAL SENSE?HOW CAN YOU HELP?

31. “Money isn’t everything…..but it’s right up there with oxygen” Rita Davenport, Entrepreneur

32. OTHER IMPORTANT ISSUES • Identification and early assessment • The B-2 • New monomer at Dow “Six months in the lab will save you at least an hour in the library”—Rita Davenport • Use new forecasting techniques, talk to competitors of your customers—what will replace them • TRIZ Lines and Patterns of Evolution

33. “Six months in the lab will save at least an hour in the library”

34. Peter Drucker, 1982 “Innovative companies do not start out with a research budget. They end with one. They start out by determining how much innovation is needed for the business to stay even. They assume that all existing products, services, and markets are becoming obsolete--and pretty fast at that. They try to assess the probable speed of decay of whatever exists, and then determine the “gap” which innovation has to fill for the company not to go downhill. They know that their program must include promises several times the “innovation gap”, for more than a third of such promises--if that many-- ever becomes reality. And then they know how much of an innovation effort--and how large the innovative budget--they need as the very minimum”

35. Hamel and Prahalad “Slimming down the workforce and cutting back on investment are less intellectually demanding for top management than discovering ways to grow output on a static or only slowing growing resource base. Cutting the buck is easier than expanding the band; thus organizations prefer the former over the latter. Managers and operational improvement consultants must ask themselves just how much of the efficiency problem they’re working on. If their view of “efficiency” encompasses only the denominator, if they don’t have a view of resource leverage that addresses the numerator, they have no better than half a chance of achieving and sustaining world class efficiency”

36. Hamel and Prahalad (2) “Few companies seem to have asked themselves what is the opportunity cost of the hundreds of millions--or even billions-- of dollars that have been written off for re-engineering and restructuring. What if all that “redundant” brain power had been applied to creating tomorrow’s markets? Far from being a tribute to senior management’s steely resolve or far-sightedness, a large restructuring and re-engineering charge is simply the penalty that a company must pay for not having anticipated the future” …Competing for the Future

37. Desi DeSimone, ex CEO, 3M “Why did you get into a position that you had to lay off a bunch of people? How come you’re so smart now that you’ve laid off a bunch of people?” Fortune, 1985

38. PERSONAL CHALLENGES FOR INNOVATION CHAMPIONS • Recognize that your social style is most likely to be “N” (intuitive) vs. the “S” (sensing”) which characterizes over 80% of corporate management • You will be very comfortable with vague, broadly shaped exciting opportunities without necessarily being specific about sales and profit dollars and timing • Those who are funding your effort, as excited as they may be about new stuff, will quickly want to know who is going to buy the new stuff, when they will start buying, what it will compete with, how much the plant will cost, and when it can start producing • As you progress in this role, follow one of the well established quality rules and know what your customer wants--- and frame your “gut feels” into hard data. If you need help to do this, get it!

39. More challenges…… • Recognize that your “problem solving” style is likely to be much more unstructured and not obvious to those around you, especially those in corporate management. This is your problem to deal with, not theirs • They are the ones who will have to commit large sums of money at risk and it is important for you to recognize this. Our experience in this area is that a gap of 15-20 in a KAI score is sufficient to cause dissension in problem solving and communication • The study of the failed corporate innovation programs showed that it is likely that the difference between your KAI profile and that of corporate management around you is closer to 35-45 points, setting up a potentially significant communication gap in the area of technical opportunity definition and the perceived need for hard data and analysis, group focus, etc. Again, this is your problem to deal with • Clearly explain how your data and information supports your ideas and conclusions, focus your meeting and communication processes. Again, if you need help to do this, find an adaptive KAI person and gain their insights. Study what these differences imply and use these differences pro-actively

40. More challenges… • Be flexible in evaluating possibilities and options and help those around you do this as well. • As opposed to the last generation of innovation efforts, the large scale of most significant new business opportunities and the focus of most large organizations on their “core competencies” argue for flexible commercial strategies including in-licensing, out-licensing, joint ventures, temporary collaboration, and global manufacturing options. • Help those around you see all the possibilities out there, before large amounts of money are committed.

41. And still more… • Use both inside-out and outside-in thinking and help those around you see the value in both. Though the days of “here’s what I have or can make, now go sell it” are long gone, it is important to have external driving forces and current customer input balanced by considering what opportunities exist to expand the commercial impact of existing core competencies as well as talking with potential customers who might replace your current customers • There may need to be some tact and diplomacy needed here, but it is imperative that these externally generated imperatives do not come solely from short term product improvement needs.