Scott Edgett CEO Stage-Gate International October, …2014.innofin.org/public/docs/Proceedings/Edgett.pdfInnovation is a Journey… Executive Roundtable Innovation is probably the

© Stage-Gate International 2014

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Driving

Innovation:

A Critical

Capability

Scott Edgett

CEO

Stage-Gate International

October, 2014

[email protected]


www.stage-gate.com

Innovation is a Journey… Executive Roundtable

Innovation is probably the most complex thing we do in our organization. It touches all aspects of our business. We realized that unless we do this successfully we will not be able to survive in a market as competitive as ours. Our challenge is how to do this right and then internalize it so that being a successful innovative company is at the heart of our culture and the way we do business.


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Innovations are Rapidly Emerging as Technologies Evolve and Consumers Expect More

CONVENIENT SECURE DISRUPTIVE

MOBILE and DIGITAL


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Global Players are Leading Banking Innovation

Product and Service Innovation

Channel Innovation

Innovation in Internal Process Improvement

Innovation in Societal & Community Impact

Disruptive Innovation in Banking

Most Innovative Bank

Source: Retail Banker International (RBO) awards of excellence in retail banking 2014


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However, Many Organizations are Struggling…

1. Late to market

2. Revenue levels are not met; poor return on innovation

3. Not meeting customer needs

4. Competitors seem to have an innovation edge

5. Pipeline is clogged – not enough is coming out

6. Too many low value projects – too much incremental

7. Lack an innovation engine – too much focus on the short term/no balance

8. Process seems too slow and bureaucratic versus an enabler

9. Increasingly becoming a ‘commodity’ offering

10. Have we lost our innovation edge? How do we regain it?


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How Can We Improve Our Capabilities to Drive Innovation More Successfully

Within Our Organizations?


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Align to an innovation vision

Do projects right

Invest in the right projects Create the right environment

Innovation & Technology Strategy

Portfolio Management

Culture & Leadership

Idea-to-Launch Process: Stage-Gate®

Innovation Performance Framework™


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Do projects right








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Practice is in Place and Working Well

3.9

5.4

7.2

0 1 2 3 4 5 6 7 8 9 10

Well defined innovation strategy

1. Innovation & Technology Strategy

Top Performers Average Performers Bottom Performers

Clearly articulated Innovation Strategy with defined goals/objectives Role in achieving goals is clear and well communicated Strategic arenas clearly defined - areas of strategic focus Strategic buckets - funds are allocated to defined arenas of focus Good balance - long-term strategic needs vs. short-term Innovation roadmap in place - multi-year/product/service


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Attack Planning

Business Strategy

Defining & Selecting

New Service/Product Innovation Strategy Working Model

Arenas

Industry

Company

Situational Analysis

Arena

Goal

Plan

Arena

Goal

Plan

Arena

Goal

Plan

Arena

Goal

Plan

Investments ($’s, FTEs, #’s)

Deployment Portfolio Alignment Roadmaps

Future Analysis 1. 2. 3.

Actions:

Degree of Fit Gaps 1. 2. 3.

Portfolio Alignment 1. 2. 3.

Sufficiency & Affordability

Sufficiency

Critical Drivers

Roles

Goals

Strategic Buckets

Type Market


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Do projects right








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Strategically Aligned Portfolio


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3.8

5.3

6.9

0 1 2 3 4 5 6 7 8 9 10

Portfolio management process inplace and working well

Portfolio Management Can Have a Big Impact on your Innovation Performance


Ensure that you have… 1. Well defined portfolio management process in place 2. Projects are aligned with Business's strategy 3. Spending (resources) breakdown reflects Business's strategy 4. Excellent balance in project types 5. Portfolio contains high value-to-the-business projects 6. Good job of ranking/prioritizing projects 7. Good balance between number of projects & resources available


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Unfortunately many are struggling with portfolio management

Pipeline is clogged – • Not enough is coming out • Too many projects underway • And, often the wrong ones • Too many incremental

Not enough resources – • Spreading resources too thinly across too many projects; often low value

Too much focus on the short- term/no balance

• Lack an innovation engine

Metrics are not used effectively • Or, tracking the wrong metrics • Not using the information • Data quality can be an issue

• Projects take too long to get to market

• Much work goes to low-

value projects • Poor success rate

• Poor return on

investment

• Projects take too long to get to market

• Much work goes to low-

value projects • Poor success rate

• Poor return on

investment


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Do projects right








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4.9

6.6

8.0

0 1 2 3 4 5 6 7 8 9 10

Idea-to-launch process in place andworking well

Idea-to-launch Process


Ensure that you have… Well defined Idea-to-Launch process in place Flexible, adaptable, scalable process Clear governance: Go/No Go decision meetings are effective

with defined decision makers Accountable, empowered cross-functional teams Process is really used


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Three key yet simple questions…

“Real, Win, Worth”

Is it Real?

Can we Win?

Is it Worth it?

Gate 1

Idea Screen

Gate 2

2nd Screen

Gate 3

Go to Development

Gate 4

Go to Test

Gate 5

Go to Launch

PLR

Post Launch Review

Discovery Stage 1: Concept

Stage 2: Feasibility

Stage 3: Development

Stage 4: Testing,

Operations

Stage 5: Launch/

Commercialization

The Customer or User

Flexible Speed Adaptive Accelerated

Modern Stage-Gate Processes are Efficient, Scalable, Flexible and Adaptable

For Less Complex and Smaller Development Projects,

Use an Abbreviated Version: 2-3 Gates


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Do projects right








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Practice is in Place and Working Well

4.8

6.2

7.5

0 1 2 3 4 5 6 7 8 9 10

Strong culture and leadershp forinnovation

4. Culture and Leadership for Innovation


Culture clearly supports innovation Senior management committed - provides strong and visible support People rewarded/recognized Open communication among employees across functions/locations Business's climate is not risk averse - invest in some risky projects


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Do projects right






Innovation Performance Framework™ the Four Cornerstones of Performance


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Desired Results

More effective

More efficient

Faster and …

More successful developments

Better results

What distinguishes top performing firms

is how they implement the Innovation Framework


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Do projects right








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Thank You

Stage-Gate® is a registered trademark and Innovation Performance Framework™ is a trademark of Stage-Gate Inc. © 2014 Stage-Gate International

United States 888.405.8758

Andean Region +57.301.288.0532

Corporate Head Office 1.905.304.8797

www.stage-gate.com © 2000-2014 Stage-Gate International

Stage-Gate® is a registered trademark and Innovation Performance Framework™ is a trademark of Stage Gate Inc.


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Dr. Scott J. Edgett

Internationally recognized as one of the world’s top experts in product innovation and is a pioneer of portfolio management for product innovation.

Chief Executive Officer and co-founder of both Stage-Gate

International and the Product Development Institute.

Has spent more than 25 years researching and implementing innovation best practices, and working with multinational companies in a wide range of industries around the globe to work with many of the world’s best innovators and companies.

A prolific author, having published more than 80 articles and

coauthored seven books including the popular Product Innovation and Technology Strategy.

Dr. Edgett is a Faculty Scholar at the Institute for the Study of Business Markets (ISBM) at Penn State University and a former professor at the School of Business, McMaster University.

He has a Bachelor of Business Administration in Accounting, an MBA in Marketing/Finance and a Ph.D. in Marketing (New Product Development).

Scott Edgett CEO Stage-Gate International October, …2014.innofin.org/public/docs/Proceedings/Edgett.pdfInnovation is a Journey… Executive Roundtable Innovation is probably the

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