like everyone, we are clear that innovation is a key competence for every organization to develop, unlike

everyone else we have a proven methodology to do it. first a note of caution, these steps have been
rather dramatically condensed into headline form so this presentation can be brief to actually effectively
and consistently deploy them in an organization, require some focused developmental work and the
assistance of an experienced coach.

step 1: start with why then recognize and explore the context:

1 why are you wanting to innovate?

if you have a compelling answer to that question, one that is bigger than we want to make more money,
then your people are much more likely to get engaged in the process, and please be clear most
innovation comes from the people who are engaged in the day-to-day work of your company, not from
the managerial rings, we want to improve health care worker safety, generated a new type of injection
needle that dramatically reduced dangerous accidental sticks, we want better margins would have never
produced the same result, as soon as you have a compelling narrative about why then you need to focus
on what we call:

#far3i the context:

customers are often not buying what companies think they're selling, be very clear about the context
that your product or service is operating in, what is it you're really selling?

step2: narrow the search space:

ready, set, innovate, is an invitation to disappointment. you have to narrow the search space so that
your innovators have a workable set of targets, innovation occurs inside of specific domains like product
features, process improvement, organizational design, or system sequencing. narrow the search space
and improve your odds for success, the bigger the search space the less likely is success. if you give
someone the global assignment to come up with some innovations, there has low probability that
anything of value is going to be developed.

step 3 look for what's missing:

we have a map for how to do this effectively. it's more complex when we have time for now but as a
headline one thing it means is:

#far3i looking in adjacent spaces:

if I'm in the credit card business and my primary market is suburban high income households then the
easiest way for me to innovate is to make offers in the adjacent space of underserved markets, and
underserved market might be college students or it might be high-risk urban customers, that each
requires some innovations and how we reach and serve them, but this is much easier to manage than
looking at getting into the mortgage business.
step 4 look for possible combinations:

these perfect combinations leave everyone going, why didn't I think of that? they are clearly elegantly
obvious in hindsight, here are some easily recognizable examples to illustrate the point:

the cassette deck combined with the portable radio gave us the Walkman, the Walkman combined with
the laptop computer gave us the iPod, the telephone combined with the walkie-talkie gave us the first
cell phone, the iPod combined with the cell phone gave us the iPhone and spawned, the explosion of
handhelds that are now everywhere. scotch tape used with the three by five card was the way we kept
notes around us until the combination gave us the post-it, the athletic shoe combined with the waffle
iron not appearing you would likely think of, brought us the waffle sole and Nike now.

so, we are clear not all innovations are about products or things, innovation occurs across a wide range
of aspects of the business. products, services, systems, processes, practices, organizational design, and
others. combinations of products and features are simple ways to produce great innovations.

step 5: manage the action cycle to take it from idea to innovation:

we don't want to disappoint but again this is more complex and a couple of sentences can contend
with. what you need to know is that HP too has a simple and dare we say it innovative methodology that
will allow you to consistently take great ideas and ensure that become innovations, they change the way
people move in the world, we call this methodology the ACTION CYCLE, and it's designed as the means
for consistently moving projects from the ideas stage through to implementation.
Think big and think different. Steve Jobs did it, bill gates did it – so why can ‘t you?

we are living at a time where innovation is a driving power in every industry. new ideas are crucial to the
competitiveness of every business venture, and if today a company is not constantly innovating then it is
also getting constantly outdated. as a consequence, organizations cannot grow or win new
opportunities. here comes the need for innovation.

there are two types of innovation closed and open innovation the traditional way to achieve innovation
is within a company's own research and development department, we call it the closed innovation
process, closed innovation is based on the organization's complete control over the whole innovation
process, however this means that the organization is strictly keeping the developed IP out of external
reach. but what are the shortcomings? large investments for supplying the internal research and
development departments, high levels of patent costs slow innovation process. ideas down the drain
limited market share larger risk for companies during their innovation process due to long term planning
of resource allocation, the new concept that opposes closed innovation is open innovation

open innovation is based on permitting the free flow of organization's internal knowledge and benefiting
from external innovative solutions. but how would these models work? as sharing and gaining
knowledge is always secured by IP rights, today misleading perceptions are that:

open innovation means actually open to everybody or that open means for free or even that open
means IP free zone, all of these are wrong. open innovation is about exchanging knowledge and ideas
between business partners, customers, universities, scientific actors, and public institutions.
innovation offers opportunities to reduce research costs. increase differentiation in the market and
create new revenue streams it is the new way for achieving bigger and greater success for business.