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Characteristics of Leading Innovators

INNO-Views Policy Workshop “Innovation Culture” Eindhoven, December 13 th , 2007

Kristina Wagner

Innovators INNO-Views Policy Workshop “Innovation Culture” Eindhoven, December 13 t h , 2007 Kristina Wagner
Innovators INNO-Views Policy Workshop “Innovation Culture” Eindhoven, December 13 t h , 2007 Kristina Wagner
The „European Best Innovator" contest raises awareness for innovation management and condenses Best Practices

The „European Best Innovator" contest raises awareness for innovation management and condenses Best Practices

Participating Countries Participating Countries
Participating Countries
Participating Countries

Participating Industries

Engineering

Pharmaceutical

Automotive

Process industries

Financial institutions

Software

Construction

Telecommunication

Chemicals

Tourism

Electrics/High tech

Transportation

Consumer goods

Insurances

Health care

Utilities

Winners (selection)

BarclayCard

Faurecia

BMW

Henkel

BoschSiemens Appliances

Kühne & Nagel

Pirelli

Brembo

Phonak

Credit Suisse

SEB

Clariant

Siemens Medical

Danone

Smith&Nephew Wound Mgmt.

ENEL

Ferrari

TAGHeuer

France Telekom

Volkswagen

The innovation management capability assessment is structured along the A.T. Kearney House of Innovation House

The innovation management capability assessment is structured along the A.T. Kearney House of Innovation

House of Innovation

1 Inno- vation Strategy
1
Inno-
vation
Strategy
2 Innovation Organization and an Innovative Culture
2
Innovation Organization
and an Innovative Culture
3 Innovation Life Cycle Management (Processes) Idea Generation Product/ Process development Launch/ Cont.
3 Innovation Life Cycle Management
(Processes)
Idea
Generation
Product/ Process
development
Launch/ Cont.
Improvement
4
Enabler, et al. HR Mgmt., Controlling
and IT (supporting factors)
et al. HR Mgmt., Controlling and IT (supporting factors) Innovation success 5 More profitable growth of

Innovation success

5
5

More profitable growth of revenue compared to competition

Large share of turnover by new products

Innovation leaders base their strategy innovation process on profound analysis Example Consumer Goods Today Short-term

Innovation leaders base their strategy innovation process on profound analysis

Example Consumer Goods

process on profound analysis Example Consumer Goods Today Short-term Medium-term Long-term Retropolation
process on profound analysis Example Consumer Goods Today Short-term Medium-term Long-term Retropolation
process on profound analysis Example Consumer Goods Today Short-term Medium-term Long-term Retropolation
Today Short-term Medium-term Long-term Retropolation
Today
Short-term
Medium-term
Long-term
Retropolation
Product market segments Search Application Fields Fields Food Serve@home Robotic Initiative I Strategy Cleaning
Product market
segments
Search
Application
Fields
Fields
Food
Serve@home
Robotic
Initiative I
Strategy
Cleaning &
Maintenance
Ongoing
Beauty/
Well-being
business
Clothing &
activity
Initiative II
Hygiene
Technology
Automation and Robotic
Warehousing
& Logistics
Initiative III
Micro-technology
New
Sensors
materials
Home
Health, Leisure,
Wellness
Networks

Shaping

Factors Society
Factors
Society
Politics Economy
Politics
Economy
Environment
Environment
Technology
Technology
Customer
Customer
Competition
Competition
Extrapolation
Extrapolation

Source: Best Innovator 2007 Competition

Remark: Extrapolation and Retropolation are complementary tools

A.T. Kearney 29/03.2007/12482b

4

Innovation leaders implement a communication-driven innovation culture in their corporations Innovation environment and

Innovation leaders implement a communication-driven innovation culture in their corporations

Innovation environment and culture

in their corporations Innovation environment and culture Features of an innovation-driving environment Innovation
in their corporations Innovation environment and culture Features of an innovation-driving environment Innovation
in their corporations Innovation environment and culture Features of an innovation-driving environment Innovation

Features of an innovation-driving environment

Innovation

readiness

Motivation

Values and

 

norms

Innovation

capability

Competence of innovation management

Creativity

Bad Degree Very good 0-1 1-2 2-3 3-4 4-5
Bad
Degree
Very good
0-1
1-2
2-3
3-4
4-5
Creativity Bad Degree Very good 0-1 1-2 2-3 3-4 4-5 The best companies "live" innovation •

The best companies "live" innovation

Innovation is reflected in the vision and embedded in the company

Communication is systematic and takes place company-wide

Financial resources are available for innovations

Successes are celebrated, failures are worked out

Employees have time for innovative activities

Innovators are provided with career opportunities systematically

are provided with career opportunities systematically Leading companies within the dimension Average of all

Leading companies within the dimension

systematically Leading companies within the dimension Average of all participants Source: Best Innovator 2007

Average of all participants

Source: Best Innovator 2007 Competition

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5

Tag Heuer incorporated the drive for exploration in its culture Cooperation with other companies and

Tag Heuer incorporated the drive for exploration in its culture

Heuer incorporated the drive for exploration in its culture Cooperation with other companies and with design
Heuer incorporated the drive for exploration in its culture Cooperation with other companies and with design
Heuer incorporated the drive for exploration in its culture Cooperation with other companies and with design
Heuer incorporated the drive for exploration in its culture Cooperation with other companies and with design
Heuer incorporated the drive for exploration in its culture Cooperation with other companies and with design
Heuer incorporated the drive for exploration in its culture Cooperation with other companies and with design

Cooperation with other companies and with design universities are sought pro-actively

Lead user suggestions (e.g. sport professionals as Tiger Woods) serve as research missions for Tag Heuer

The drive to constantly explore new technology spheres is a key element of the company culture

Innovative luxury watches for special applications
Innovative luxury
watches for special
applications

Source: Tag Heuer, A.T. Kearney

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Innovation leaders systematically optimize their time-to- market Duration of time-to-market Time-to-market in relation to

Innovation leaders systematically optimize their time-to- market

leaders systematically optimize their time-to- market Duration of time-to-market Time-to-market in relation to
leaders systematically optimize their time-to- market Duration of time-to-market Time-to-market in relation to

Duration of time-to-market

Time-to-market in relation to average life cycle duration

30%

10%
10%

Innovation

Leaders

Average of all participants

Reduction of time-to-market between 2003 and 2005

20%

10%
10%

Innovation

Leaders

Average of all participants

Significant levers to reduce time-to-market

Product strategies that stimulate the consistent application of platforms/modules

Application of virtual technologies in product development (avoiding prototypes) and the development of production and assembly processes

Source: Best Innovator 2007

and the development of production and assembly processes Source: Best Innovator 2007 A.T. Kearney 29/03.2007/12482b 7

A.T. Kearney 29/03.2007/12482b

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Innovation leaders have an excellent project management % of projects deviating from the original target

Innovation leaders have an excellent project management

Innovation leaders have an excellent project management % of projects deviating from the original target Deviation

% of projects deviating from the original target

Deviation from launch dates

Deviation from cost targets

Deviation from quality targets

8% 27% 7% 16% 2% 13% 0% 10% 20% 30%
8%
27%
7%
16%
2%
13%
0%
10%
20%
30%

Leading companiesquality targets 8% 27% 7% 16% 2% 13% 0% 10% 20% 30% Average of all participants

Average of all participants27% 7% 16% 2% 13% 0% 10% 20% 30% Leading companies Source: Best Innovator 2007 Competition

Source: Best Innovator 2007 Competition

of all participants Source: Best Innovator 2007 Competition Innovation leaders harness benefits from: • Fewer
of all participants Source: Best Innovator 2007 Competition Innovation leaders harness benefits from: • Fewer
of all participants Source: Best Innovator 2007 Competition Innovation leaders harness benefits from: • Fewer

Innovation leaders harness benefits from:

Fewer late changes thanks to more effective customer involvement

Better project management tools

More realistic objectives

Culture of permitting red lights, more open communication and more constructive problem-solving

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Controlling is build around key drivers to effectively and efficiently manage the lifecycle of innovations

Controlling is build around key drivers to effectively and efficiently manage the lifecycle of innovations

and efficiently manage the lifecycle of innovations Key success parameters Product line extension Revenue
Key success parameters Product line extension Revenue Cumulated Idea Profit Idea Idea Idea Idea Idea
Key success parameters
Product line
extension
Revenue
Cumulated
Idea
Profit
Idea
Idea
Idea
Idea
Idea
generation
and
Time-to-Market
Idea
selection
Idea
Time
Idea
T 0
T Launch
T Profit
T End of Life
Idea
Idea
Idea
Time-to-Profit
Effectiveness
Efficiency
Idea Idea Idea Time-to-Profit Effectiveness Efficiency Innovation leaders… • …Define revenue with new
Idea Idea Idea Time-to-Profit Effectiveness Efficiency Innovation leaders… • …Define revenue with new
Idea Idea Idea Time-to-Profit Effectiveness Efficiency Innovation leaders… • …Define revenue with new

Innovation leaders…

…Define revenue with new products as a strategic key figure

…Realize shares of revenue with new products that are almost twice as high in the first year as the average

…Understand innovation as a task of the whole organization that is proactively spurred and requested by top management

Source: Best Innovator 2007 competition

spurred and requested by top management Source: Best Innovator 2007 competition A.T. Kearney 29/03.2007/12482b 9

A.T. Kearney 29/03.2007/12482b

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Summarizing, companies with successful Innovation Management grow faster and more profitable Success of Innovation Leaders

Summarizing, companies with successful Innovation Management grow faster and more profitable

Innovation Management grow faster and more profitable Success of Innovation Leaders EBIT as % of revenue

Success of Innovation Leaders

EBIT as % of revenue

37%

24% +
24%
+

Average

Performers

Leaders

Significantly higher growth rate than peer competition

Commonalities among Innovation Leaders

Long term innovation strategy as an integral part of the business strategy based on deep "Customer Intelligence"

Responsibility for entire product lifecycle process (or at least until "time-to-profit")

Efficient use of internal & external innovation networks

Systematic generation of ideas and realization of a high transfer rate from development projects into successful products

Applying most recent IT-technologies as enablers for "speed" and "quality"

as enablers for "speed" and "quality" Source: A.T. Kearney’s European Best Innovator Competition

Source: A.T. Kearney’s European Best Innovator Competition

Source: A.T. Kearney’s European Best Innovator Competition database with more than 500 companies A.T. Kearney

database with more than 500 companies

A.T. Kearney 29/03.2007/12482b

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For SMEs the IMP³rove platform was designed to enhance the Innovation Management performance Approach IMP³rove

For SMEs the IMP³rove platform was designed to enhance the Innovation Management performance

designed to enhance the Innovation Management performance Approach IMP³rove Consulting Process Bench- m a r k
designed to enhance the Innovation Management performance Approach IMP³rove Consulting Process Bench- m a r k

Approach

IMP³rove Consulting Process

Bench-

marking

Consulting

Follow-up

Financial actors

Online self- assessment

Benchmark

database

Inno-

vation

strategy

Innovation

organization

and culture

Innovation life

Toolbox

Trainings

Case studies

Policy makers

IMC listing and ranking

Idea

manage-

ment

cycle management

Product/

process

development

KPIs

Library

Launch/

continuous

improve-

ment

Intermediaries and Consultancies

Enabler, e.g. Human Resource Management, Knowledge Management, Project and Program Management, Controlling and IT

SMEs

SME= Small and medium sized enterprise; IMC= Innovation Management Consultancy; KPI= Key performance indicator Source: IMP³rove Core Team 2006

“Innovation distinguishes between leader and follower”¹ 1) Steve Jobs, Apple A.T. Kearney 29/03.2007/12482b 1 2
“Innovation distinguishes between leader and follower”¹
“Innovation distinguishes between
leader and follower”¹

1) Steve Jobs, Apple

Thank you very much for your kind attention! Kristina Wagner Tel: +49 (0)30 2066 3418

Thank you very much for your kind attention!

Thank you very much for your kind attention! Kristina Wagner Tel: +49 (0)30 2066 3418 Fax:
Thank you very much for your kind attention! Kristina Wagner Tel: +49 (0)30 2066 3418 Fax:
Thank you very much for your kind attention! Kristina Wagner Tel: +49 (0)30 2066 3418 Fax:

Kristina Wagner

Tel: +49 (0)30 2066 3418 Fax: +49 (0)175 13 2659 266 Kristina.Wagner@atkearney.com

www.atkearney.com