1. No category

What have we learned so far?
Innovation is important for competitive
advantage.
 Innovation is a complex process leading to
innovative outcomes that benefit the
company and the consumer.
 Innovations can be categorized in many
ways, internally and externally.
 Innovation involves solving problems and
creating value.

Innovation can be radical (blue ocean) or
incremental (red ocean).
 A company needs to define it’s innovation
strategy.
 We have looked at examples of creating a
culture of innovation (Best Buy), of business
model innovation (experience-wine), and
considered the importance of learning.

Tonight…
Discussion of processes for innovating, and
an example.
 Stamypor: applying a formal stage gate
process to both radical and incremental
innovations.

FORMAL INNOVATION
PROCESSES
Formal innovation
Identify a problem > find a solution
Stage Gate System
How to move a new-product project from idea to launch.
http://www.prod-dev.com/stage-gate.shtml
Balancing Risk with Investment
Level of Risk
Accumulated investments
progressively increase
Failure risk progressively
decreases due to stagegate process
Time
INFORMAL INNOVATION
PROCESSES
Informal Innovation Processes
Experiment with solutions > find a problem
Example: Think Tanks
Community of experts, intellectuals, scientists, or other
appropriate individuals brought together for the
purpose of “thinking” about prescribed topics. A think
tank's purpose is to raise awareness about certain
topics and "gather" communal thoughts toward that
topic.
Research Laboratories (Labs)
http://www.zurich.ibm.com/
COLLABORATIVE
INNOVATION
Collaboration:


… is a purposeful, strategic way of working that
leverages the resources of each party for the benefit
of all by coordinating activities and communicating
information within an environment of trust and
transparency.
… opens up the possibility of accessing the
resources, knowledge, and relationships the other
party has and using both parties’ resources for
mutual benefit. It also raises the specter of counting
on someone who has no stake in your success.
Collaborative Network Management: An emerging role for alliance management. Volume 6 in White
Paper Series, Collaborative Business by Jeffrey Shuman and Janice Twombly, The Rhythm of
Collaboration Innovation
Is prevalent.
 Requires:

Trust
 Communication
 Connections

Innovation Communities

Connecting your company with people
outside the organization “whose passions
match your problems” (Gary Hamel).
Larry Huston, former vice president for
innovation and knowledge at P&G

“You can’t possess all the science and
brilliant minds … In our R&D organization
we have 7,500 people in 150 science areas,
but there are 1.5 million high-quality people
outside P&G. It doesn’t take a genius to
figure out that if you can engage the brains
of your 7,500, plus the key ones from that
1.5 million, you can build better products.”
Examples of Innovation
Communities
P&G’s InnovationNet
 Scientific networks such as InnoCentive,
NineSigma, UTEK’s U2B
 Google Labs where services like Google
Maps, Google Desktop, Google News Alerts
and Google Video first started
 IBM’s AlphaWorks

What company is this?
Contribute
to progress in
mobility
"We have one profession and one
mission: contribute to long-term
progress in the field of mobility."
MAKING IT HAPPEN:
MICHELIN CORPORATION
Sells over 200 million tires per year in 170
countries
 17.2% of World Tire Market
 2007 Net Sales = 16,867 million euro
 2007 Net Income = 774 million euro
 2007 Operating Income = 1,645 million euro
 2007 Operating Margin = 9.8%

MISSION

To make a sustainable contribution to
progress in the mobility of goods and
people by constantly enhancing freedom
of movement, safety, efficiency and
pleasure when on the move.
STRATEGY
To achieve its objectives in an ever
demanding environment, Michelin focuses on
three levers:
1.
2.
3.
Keep delivering ever higher-performing products and
services to optimize professional customers’ value and
bottom line through customization and innovation;
Accelerate expansion in the higher-growth markets;
Improve competitive position.
INNOVATION STRATEGY
LEADERSHIP THROUGH INNOVATION
Ever since Michelin was first set up, the dynamics
of innovation and the search for new
technologies for the customer's benefit have
been at the core of Michelin's strategy and
success.
INNOVATE in order to…
Leverage differentiation, Accelerate growth,
Strengthen competitiveness
INNOVATION
How do innovations like this come about
in a large, structured organization?
 Formal Processes (Ladoux Technology
Center)
 Informal Processes (Think Tank)
 Partnerships
http://www.michelin.com/ladoux/index.html?lang=en
MICHELIN’S INNOVATION
TIME LINE
STAMYPOR
What type of innovation is Stamypor?
 Why have a separate NBD unit?
 What should Rein Nieland report to the NBD
board?

Stamypor Progress Against
Criteria
1.
2.
3.
4.
5.
Stamypor could not be framed within the
charter of one of the BGs.
Technology fits the company culture,
strategy and competencies.
Synergy in raw materials, technology and
market.
Fits within the NBD portfolio.
No high upfront costs.
Financial criteria?
6.
7.
8.
9.
Potential turnover 3-5 years; €1 – 3 million?
Potential turnover > 5 years, €10 million?
Gross margin > 50%
IRR (10 years); >20%
Lessons
Stage gate process
 Team composition
 Technical problems
 Market problems
 Financial issues
