You are on page 1of 20

Chapter 1

Driving Success:
How You Innovate
Determines What You
Innovate
Julie Gavin
Alison McHale
Innovation Is the Power to
Redefine the Industry
• Competitive Markets

• Noncompetitive/Non Profit
Organizations
Achieving a leadership
position is not easy,
maintaining a leadership
position is a challenge.
Case Study: Long-Term
Innovation

Company: Coca-Cola

• 1990’s – 15-20% growth/year
• 1998-2000 – 3 years of falling profit

Major Cause:
• Demand was Decreasing
• Competitors Entering Market
• Substitute Products

• New Demands Emerging
• Children
• Young Adults
• Adults

 One Core Product


Coca Cola’s Response
• “Play-to-Win” Innovation Strategy

• Employed Innovative Technology & Business
Models

• “Think Local, Act Local”
Coca Cola’s Results
• Coke Identified 32 Beverage Occasions Each
Day
• New Beverage Types Have Emerged
• New Brands

Will They Succeed?


The Innovation Imperative:
Driving Long Term Growth
in Top and Bottom Lines
How to Make Innovation Work:
How You Innovate Determines
What you Innovate
• Your company is perfectly designed to yield
the innovation it is currently producing
• Special touches
• Less innovation
Research Bites: Transitioning
from the First Breakthrough
Innovation to an Innovative
Company
• Innovation approach yielding insufficient
growth
• Redesign innovation approach
Elements of Innovation
• Leadership
• Strategy
• Processes
• Resources
• Performance Metrics
• Measurement
• Incentive Rewards
Seven Innovation Rules
1.Exert strong leadership on the innovation strategy
and portfolio decisions.
2.Integrate innovation into the company’s basic
business mentality.
3.Align the amount and type of innovation to the
company’s business.
4.Manage the natural tension between creativity and
value capture.
5.Neutralize organizational antibodies.
6.Recognize that the basic unit (or fundamental
building block) of innovation is a network that
includes people and knowledge both inside and
outside the organization.
7.Create the right metrics and rewards for innovation.
Exert strong leadership on
innovation direction and
decisions
• Strong leadership from management
• Most important factors for investing
• Management strength
• Market dominance in the industry
• Technology leadership
• Senior management – innovations strategy,
level of risk, and amount of investment.
• Create a portfolio of technology and
business model innovation

Integrate innovation into
the business mentality
• Innovation must be an integral part of the
business mentality
• Innovation
• Technological
• Strategic
• Requires resources in many areas of the
organization and outside the organization

Match innovation to
company strategy
• The amount and type of innovation must
match the strategy.
• Senior management must determine the
correct path.
• The innovation strategy must be the central
focus in every element of the business.
Manage the natural tension
between creativity and value
capture
• Innovation includes management of
creativity
• Business Manager:
• Artist or Movie Director
• There must be a balance between
commercialization and creativity.

Neutralize organizational
antibodies
• The more radical the innovation or the
greater the past success, the more
resistance there will be.
• What brought success in the past will not
necessarily work in the future.
• Communication is necessary with
customers, competitors, other industries,
and suppliers to gain insights
Cultivate an innovative
network beyond the
organization
• A network both within and outside the
company is a building block of innovation.

• Innovation platforms – focus on an area of
competition and innovations that can
result

Crate the right metrics and
rewards for innovation
• Companies establish rewards to drive
performance.
• Few reward systems are linked to innovation
strategy
• There needs to be reward systems in place
to recognize long term breakthroughs.

In Conclusion
c y c l e
o r t l ife v e n
ea s h i o n e
s h a v n o v a t
te n c i e f o r i n od
m p e n e e d e s g o
• Cor
e co k in g t h e
n re q u i r
o s p h ere
y m a o v a ti o n a t m
ere b . I n n n d a t h e
th e r s a i s t
great t p r a c t i ce
a t w i l l a s s
c t i ve s .
e m e n a s t h o b j e
g e
mana rewards id g long term
th a t i n m e e t i n
a n y
comp