INNOVATION PRACTICE

1. INNOVATION PRACTICE ENGAGING THE ORGANIZATION IN TOP-LINE REVENUE GROWTH BIOMEDICAL ENGINEERING AND ENTREPRENEURSHIP SEPTEMBER 25, 2013

2. What we know... CEOs have recognized an innovation imperativeIf you want to grow your business, you need to innovate “The only future source of profit­the only reason to invest in companies in the future­is the ability to innovate and their ability to differentiate.” - Jeffery Immelt, GE

3. What we know... Relying on sporadic idea generation, thinking employees will figure it out on their own, or making it the sole responsibility of a separate small team… …isn’t the way to outperform your competition Instead, you need to effectively infuse and harness an innovation-based competency throughout your enterprise

4. What is your Innovation Effectiveness? The return on innovationROI2varies among companies within their industries... 2Xindustry average 10Xworst performers Example: Best performers in the consumer healthcare industry Source: Booz Allen Hamilton

5. A few ideas drive most of the new profits A study of 108 new product launches by the authors of Blue Ocean Strategy revealed the positive revenue and profit impact that came from offerings that could be characterized as truly “innovative.” Innovations that created a new “market space” Innovations that were not all that innovative

6. The True Growth Driver Expanding your innovation potential Individuals Enterprise ...is central to bringing the innovation imperative to life in your organization

7. Holistic Innovation Covers 3 Areas • Value Creation: • Multi-dimensional Research • Strategy Formulation • Ideation & Design • Value Capture: • 4. Portfolio development & management • Intellectual Property • Processes • Financial Management • Value Delivery: • Organizational Development • Leadership & Culture • Incentives & Expectations • Collaboration & Outsourcing 2 1 3 11 4 5 10 9 7 6 8

8. What we’ve learned at Fisher about Value Creation recognizes what happens before and after generating an idea are also critical to success in innovation. For that reason, our approach to Innovation Strategy Training begins before and extends beyond our best practices in Ideation Training, captured in a framework we call SPARK. Key learning

10. SPARK Begin with choiceful strategies and a longer view and evaluate options against a bigger picture S P A R K RAPID DEVELOPMENT Concepts, prototypes and revenue models STRATEGY Beginning with focus and aligning with corporate strategy KILLER IDEAS Killing ideas to get to killer ideas PROBLEMS & ANSWERS Uncovering customer wants and needs and their solutions

11. S Start with strategy Instead of a ‘cold start’, teams ground their work in strategic relevance: determining areas of strategic importance or disruption to the future of the company, customer, or brand.

12. P Problems worth solving Client’s have business objectives; innovation begins with uncovering and identifying customers’ unmet needs, future dreams and problems within selected strategies. This results in problems worth solving and opportunities for incremental and radical innovation.

13. A Answers for the market Teams use brainstorming techniques as well as participatory design methods and tools to generate early ideas and initial concepts based on opportunities and problem statements.

14. R Rapid development Challenge ideators to develop ideas into concepts. Ideas that come out of brainstorming usually require further development to become concrete. Often everyone is excited about an idea but can’t define what “IT” might look like or how it might make money. Developing a minimally viable prototype makes ideas more tangible and begins to tackle the design and engineering aspects.

15. K Killing ideas to get to killer ideasConsider what criteria to use to evaluate the value of ideas to the company including financial and strategic elements. Build better ideas in an iterative process and consider a portfolio across 3 horizons of growth.

20. Ethnography + Behavioral Psychology = Empathology™

21. UNCOVERING DISCONNECTS With a connected POS Doctors, nurses Doctors and patients Patients

22. CUSTOMERS AS PARTNERS Codevelopment

23. Disruptive innovation SINGLESGAME CHANGERS Line extensions New ideas/markets Predictable Risk Obvious/ Stretch/ easier to understand imagination Short-term revenue Initially, lower profit Low differentiation Breakthrough

24. Disruptive innovation Do customers always want more? Computer and iPad (sorry, Verizon ads)

25. Disruptive innovation Does more= features or value? Blockbuster. Bigness. Profitability. Category driver of breadth of titles. Best customers. Badwill. Redbox, Netflix

26. Two views of change ResistorsChallengers See Risk See Potential Ask Why? Ask Why not? Already is Could be Too small/niche Open space Best customers New customers Maintain position New order

27. How can we see opportunity in change? Trends are a way to look at what’s coming, and actively speculate on the opportunity that could be available.

28. We look at two types TRENDS in an industry Near-term opportunities, 12-24 months Illustrate with examples for context Go deep: implications, opportunities

29. We look at two types TRENDS that challenge an industry No one has combined peanut butter and chocolate yet With an exercise called TRENDstorming

30. coffee

31. How could you sell coffee for $100/lbin regular grocery stores?

32. TREND 1. SOLO: LIVING ALONE trend Single households are more prevalent. Single parents, whether single from the start or from divorce, are managing work and parenting alone, or students move between two households in shared custody situations.

33. TRENDstorming 1 coffee trend SOLO: LIVING ALONE: Single households are more prevalent • Keurig Once you buy the machine, you’re hooked into the k cups. At $1/serving, that’s about $87 a pound

34. KEURIG

35. TREND 2. COLLECTIVE CONSUMPTION trend Fractional ownership or usage of services/things you don’t need all the time.

36. ZIPCAR

37. TREND 3 DIY HEALTH trend Seeking out and taking health action outside of traditional pharmaceutical solutions and Doctor advice.

38. WEB MD

39. TREND 4. SCREEN CULTURE trend Thanks to the continued explosion of touchscreensmartphones, tablets, and the “cloud’, the screen culture will be not only more pervasive but more personal, more immersive and more interactive than ever.

40. PANDORA

41. TREND 5. CROWDSOURCING trend The practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers.

42. KICKSTARTER

43. TREND 6. CASH-LESS trend Will coins and notes completely disappear in 2013. No. But a cashless feature is (finally) upon us, as major players such as MasterCard and Google work to build a whole new eco-system of payments, rewards and offers around new mobile technologies.

44. SQUARE

45. TREND 7. DEALER CHIC trend Consumers continue to hunt for deals and discounts, but they will do so with relish. Deals are now about more than just saving money; it’s about the thrill, the pursuit, the control, and the perceived smartness, and thus a source of status too.

46. GROUPON

47. TREND 8 AUTO-PILOT & ROBOTICS trend Turning tasks over to computers and using systems, without assistance from a person, so that continuous attention is not required, or to improve performance of humans.

48. SELF-DRIVING CARS

49. DA VINCI, BIONIC HANDS

50. TREND 9 NANOTECHNOLOGY trend the manipulation of matter on an atomic and molecular scale, often with a technological goal of fabricating macroscale products.