“Innovation distinguishes a leader from a follower” Steve Jobs VL

1. “Innovation distinguishes a leader from a follower” Steve Jobs VL

2. Context • Why Innovate? How can we lower the risk of this process? • Main Causes of new Product and Service failure • The critical success factors • The old Product process • The new NPSD Process (Maltezana Beach Hotel Case)

3. ASTYPALEA

4. Maltezana Beach Hotel Maltezana Beach Hotel is the biggest hotel in Astypalea. The hotel offers a wide gamma of tourist services and facilities. In addition, Maltezana Beach hotel through its subsidiary travel agency fulfills a significant part of the Astypalea’s tourist product. The company recorded revenues of $639.964 thousand during the financial year ended January 2009, a decrease of 5.7% over 2008. The operating profit of the company was $223.510 thousand during FY 2009. The net profit was $157.856 thousand in FY 2009, a decrease of 12.21% over 2008. The decline in net profit was partially due to reduced sales during 2009 as well as due to the change in tax policy.

5. Innovation: A history of business life through failure and success • Innovation in business world functions as the front cortex part of our brain • Innovation is a vital reason of business longevity • 40% of the major corporations that existed in America in 1975 no longer exist today! • 25 to 45 % of new products launched, fail. Percentage will vary by industry! • Coca-Cola became a market leader with only one product!

6. Main causes of new product and service failure • Poor or not at all the existence of a strategic plan • Poor orientation to the market needs • Inefficient market analysis (market oriented approach) • Product or Service problems or defects • Lack of effective marketing effort • Higher costs than anticipated (low ROI) • Poor timing of introduction • Technical or production problems • ..but the most important cause is the lack of a clear and efficient NPSD process

7. The critical success factors • A superior product or service that delivers unique benefits to the user • A well-defined product prior to the development phase • Quality of execution of technological activities • Technological leverage • Marketing leverage • Quality of execution of marketing activities (build in the voice of the customer) • Market attractiveness (more attractive markets lead to more successful products or services)

8. The old NPD process

9. Problems with that process • Not enough ideas (missed opportunities) • The entrance of the management is late • Not structural phases and steps in the process • Resources and funds don’t specific demonstrated • Too vague to teach this process • The whole process is not under a group of independent (killers) people • The risk before launching the product is still high because there is a lack of preventing mechanisms

10. Goldsmith’s NPSD process

11. A superior process for superior products and services • Well organized and well structured process • Easy to teach it • It’ s a powerful tool that brings together all the business’s departments • Can be applied in any business type and in any level • Can be customized and it is flexible for producing profit and non profit products and services • It brings under the same umbrella all the necessary resources, tools and mechanisms to ensure the consistency of the process • It builds the necessary environment to develop, execute and transform productively an idea to a product or service • Expectations met • Increases creativity, productivity and efficiency • Blocks ideas that do not contribute positively to the company • Decreases the risk of failure.

12. Before implementing the NPSD process • Understand and leverage the whole process. Build it up according to your company’s needs (stakeholders, employees, customers, society) • Establish a) the screens and the necessary criteria to pass through your ideas b) the go/kill points • Formulate the appropriate NPSD team and the appropriate Gate/keepers teams • Put a time frame in each phase of the process.

13. Phases and Gates of NPSD • Phase 1: Ideation • Ideation • Ideation screen • Phase 2: Elimination • Expansion and surface evaluation • Surface evaluation screen • Detailed evaluation • Phase 3: Development • Cross-functional Development CFD gate • Testing Testing Gate • Deployment Deployment Gate • Launch • Pro Launch Review PLR gate

14. Phase 1: Ideation • This is the first step of our procedure • Expand the mouth of the funnel • Idea generation • The most ideas we input in the system, the better probability we have in terms of developing a successful product or service

15. Creating Ideas • Idea Bank • Direct research • Technological innovation • Alliances/acquisition/licensing • National policy • Creative methods • Exploratory customer studies • Facilitating lead user analysis • Linking marketing and technology

16. Hotel’s Idea Bank • External Sources • Suppliers • Tourist Market Professionals • Press – Media – Internet related with the Travel Market • Research • Internal Sources • Front line Personnel (maids, waiters, front desk assistants, maintainers) • Managers (from all the hotel’s departments) • Questionnaires (guests opinions and suggestions)

17. Triggers of Innovation • Wear others’ hat • Spend more mental time in the future • Awaken your childhood consciousness (family market) • Change your physical workspace (sea view) • Storyboard ideas (the hotel service itself is a story) • Cross pollinate (combination of leisure and hobby) • Take fields-trips (see other approaches) • Take the international perspective (tourist product has a worldwide audience)

18. Ideation Screen • Eliminate your ideas from 100 to 7 by implementing broad criteria such as: • Must be service and not product • From 5000 Euros to 50000 Euros • Brand new service and not a new approach of an old one • Guest-centered service • Related with families’ holiday activities

19. Phase 2: Elimination • This is the second step of eliminating our ideas (from 7 to 3 ideas) • It is divided in four steps: • Surface Evaluation • Surface Evaluation Screen • Detailed Evaluation • Detailed Evaluation Screen

20. Surface Evaluation • Fields that we have to consider in this step: • Strategic compatibility • Product superiority • Market attractiveness • Research • Laws and Policies in specific regions

21. Surface Evaluation Screen • Specific criteria that we have to implement in this step: • No more than five months of development • No more than three employees to run the service • Compatible with the hotel’s philosophy which is “to create memorable vacation time through an aesthetic place where functionality meets your personality” • Easy access and transfer of any demandable resource to launch the service

22. Detailed Evaluation • In-depth detailed review of the existing ideas • Gathering as much information as we can: • Competitive analyses • in-depth investigation with customers • target market • product strategy • product benefits • value proposition • features, attributes • market studies • cost to manufacture • ROI • investment • Extent of research and time, amount and format of research data

23. Detailed Evaluation Screen • Specific criteria that we have to implement in this step: • Net contribution to hotel’s revenue >5% • Compatible with the specific and general legislations that this service is required to fulfill • ROI no more than two seasons • Cost of failure no more than 1/8 of the total investment • This is the last step before the company starts to invest a significant amount of money in developing the service • Only one idea passes on to the next phase • We move from the thinking investment to the money investment in our process

24. Phase 3: Development • Our idea is going to be developed under a strict and careful process • Gate keepers are going to regulate the process (my parents are going to play the role of the referees) • This is the five stages and four gates of the Development process • Cross functional Development/CFD Gate • Testing/Testing Gate • Deployment/Deployment Gate • Launch • Post Launch Review/Post Launch Review Gate

25. Cross-Functional Development • This is the stage that we start transforming our idea into a product or service • In this step we formulate cross – functional teams in order to contribute with their experience from the previous phase in building the appropriate characteristics of the product or the service • Sub-NPSD processes start running from separate departments (we want the ideal support for our departments)

26. Cross-Functional Development Gate • Gatekeepers ensure all essential activities which has been performed • For example: • They check the quality of your work • Review your financials

27. Testing • Build a variety of scenarios and run your prototype product or service into these scenarios • Analyze and evaluate the service through a variety of characteristics: • During Christmas and Easter the hotel is going to offer this service, by inviting for free accommodation and vacation, in a variety of people like loyal guests, friends, suppliers and tourist professionals • Review our financials

28. Testing Gate • Gatekeepers evaluate the tests and check if the outcomes meet the criteria • Were the tests conducted properly? • Did the testers build a representative scenarios for the service (ask the right questions?) • Did the testers do their jobs without emotional attachments? Did they act independently? • Were questions skewed or was the test skipped altogether?

29. Deployment • Set up all the necessary resources, activities and teams in order to start launching the service • This stage gives the chance to the company to adjust everything before launching • In our case, to make sure that we have the necessary verifications and insurances before launcing

30. Deployment Gate • The one last checking point before launch • This is the most vital gate which our service is going to pass through

31. Launch • Put life and offer our service to guests • Launch the service • Place advertisements and other promotions to press, internet, magazines, and tourist exhibitions • Fill the distribution channel ( tour operators and travel agencies)

32. Post Launch Review • A stage that we try to excellence the whole development procedure of the product or service • In this point we need to take under consideration: • Costs (Are my actual costs meet my estimation costs?) • Profits (Are my profits the desirable ones?) • Team members (Did my team members do their job accurately/independently?) • Make a SWOT Analysis for my new service • Place of improvement (Can I provide the same service faster, cheaper and better) • What has been learned • Source of competitive advantage

33. Post-Launch Review Gate • It contains the final check point that compares the desirable characteristics of our new service with the actual characteristics of the service.

34. A suggestion to think about.. • Don’t fall in love with your own ideas..we paid to think not to love our thinking! • Put them as all the other ideas in a well structured and customized NPSD process without exceptions • Minimize the risk and any challenge of failure • Maximize your desire outcomes by offering a more sophisticated and superior product or service • Goldsmith’s NPSD process guarantees better results THANK YOU