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Ten Types of Innovation:

Multiple Ways to Change the Game and Win

Kirk Froggatt
Sr. Fellow and Gemini Chair in Technology Management
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Today’s Agenda

Ten Types of Innovation:

Multiple Ways to Change the Game and Win

5 minutes Welcome & Intro to TLI

10 minutes Context: The Ten Types of Innovation

10 minutes Small Group Discussions: Insights & Implications

12 minutes Context: Driving Business Model Innovation

13 minutes Small Group Discussions: Insights & Implications
5 minutes Context: Overcoming the Enemy Within
5 minutes Personal Insight-to-Action Huddles
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Developing the Technology Leadership Pipeline

MS in Management of
TLI develops Technology
business leaders
for technology-intensive
organizations MS in Medical Device
Innovation

MS in Security
Technologies
CSE develops
strong engineers and
scientists
Graduate Minor in
Management of Technology

MOT 4001
and MIN-Corps
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U of M Technological Leadership Institute

Innovation leaders translate new ideas, or new combinations of ideas,
into customer solutions that generate economic value.
Innovation
Leadership"

Leadership &" Business Acumen"

Team Effectiveness Skills"
• Mindset
• Tool set
Innovation & Technology Management Practices" • Skill set
• Network

Technical Expertise and Skills"

(Absolutely necessary but not sufficient)"

Technical
Expertise"
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True or False?

1. Innovation is the responsibility of R&D.

2. Innovation is solely the responsibility of R&D.

3. Where else does innovation occur in technology companies?

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Innovation Occurs Across the Value Delivery System

Source:
The Ten Types of Innovation: The Discipline of Building Breakthroughs
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The Ten Types of Innovation (Doblin Model)

http://www.youtube.com/watch?v=2DMJ8cHwD0I
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Key Takeaways?
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Case in Point: Apple’s Music Offering

Which types of innovation did Apple exploit in its music business?

 7 Minute Huddle in Small Groups

!  Which types of innovation are you best at today? Worst at today?

Which type(s) of innovation would add the greatest customer and

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business value for you / your group going forward? Why?

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Driving Business Model Innovation: Where to Start?

Let’s start with a definition.

What is a business model?

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What is a Business Model?

A business model is the way a company organizes and manages itself

to deliver useful products and/or services for customers
in exchange for economic value for itself.

Technical Business Economic

Inputs Model Outputs

In The Innovator's Solution, Christensen replaced the term “disruptive

technology” with the term “disruptive innovation” because he recognized
that few technologies are intrinsically disruptive or sustaining in character. "
"
It is the strategy or business model that creates the disruptive impact.!
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The Business Model Canvas

Infrastructure: Offer: Customers:

What core competencies What Who are your target
must you develop yourself differentiated customer segments?
to deliver your solution will
What are pains and desired
differentiation? address
gains for each segment—
customer
What partners will you need functional, social,
pains and
Product-Market Fit emotional?
to deliver the rest? gains?
How will you get, keep and
grow customers?

Financials:
What revenue model and pricing structure will be attractive to customers?
What cost structure will be competitive and sustainable?

(Source: Business Model Generation by Osterwalder & Pigneur)

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The Business Model Canvas

Product-Market Fit

(Source: Business Model Generation by Osterwalder & Pigneur)

Business Model Canvas At-A-Glance (Adapted from www.businessmodelgeneration.com)

Key Partners Key Activities Value Customer Customer

Reasons for partnerships: • What are the most
Proposition Relationships Segments
• Cost / flexibility important activities we
• What problem(s) are we • What type of relationship • Who are our most
• Acquisition of key must do well to deliver our
helping our target do our customers expect? important customers?
resources or activities value proposition to our
customers solve? What will they not accept? Why?
• Reduction of risk and chosen segment(s)?
• Which relationships are • What are the key
uncertainty • What unique /
they comfortable with characteristics of our
differentiated value can we
now? target segment(s)?
• Who are key suppliers? deliver relative to others?
• Which are most cost • Which segment(s) will we
• Who are key partners?
• What bundle of products effective? NOT target initially? Why?
• Which key resources will
and/or services will we • Is this segment(s) viable
we acquire from partners?
need to offer? and attractive for growth?
• Which key activities will
partners perform for us? Key Resources • Which customer needs Channels • Are our customers and
consumers the same or
are we satisfying?
• What are the most • How do our customers different?
• Performance/newness
important resources we • Getting the job done want to be reached?
must own/manage directly • Price/cost reduction • Which channels work
to deliver our value • Convenience/accessibility best?
proposition to our chosen • Design • Which are most cost
segment(s)? • Customization effective?
• Risk reduction • How are we integrating
• Brand status our various channels to
• Other? optimize the customer
experience AND cost?

Cost Structure Revenue Streams

• Is our business model more cost or value driven? • For what value are our target customers willing to pay?
• What are the important costs that must be incurred to • What do they currently pay?
deliver our value proposition well? • How do they currently pay? How do they prefer to pay?
• How we can maintain a strong variable/fixed cost ratio? • How does our pricing compare to alternatives or substitutes?
• What levers can we pull to keep costs as low as • What is the relative contribution of our various revenue stream options?
possible?
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Driving Business Model Innovation: Where to Start?

http://www.youtube.com/watch?v=C5Q10Pz3uJU&list=PL4F7C5F900AB50805
 10 Minute Huddle in Small Groups

"  What did you find most interesting?

"  What could/should you/your group continue / start / stop doing?
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Key Takeaways?
The invisible enemy of innovation is cultural inertia.
 Cultural inertia begins and ends with(in) ME!

The virtuous cycle of renewal…...

Political
Cognitive Challenge
Challenges Realigning
Denial and talent and
status quo traps capital
Ideological
Unconscious Challenges
incompetence Embracing new
principles
Over-reliance
on strengths

Strategic Challenge
Generating new strategic options

Source:
Gary Hamel, “Leading the Revolution” …..too often becomes the vicious cycle of inertia.
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Bottom Line: We have to Find the Innovation Sweet Spot

2.
What is our unique differentiation (functional, social, emotional)?
Is it sustainable?

4a.
1a.
What business model will
What is the problem that
enable success
matters?
(value creation +
For whom, specifically?
efficiency)?
1b.
4b.
What is our proprietary
Can we sustain profitable
technology or application?
growth?
3.
What macro-trends will support
or constrain success?

Is it REAL? Can we WIN? Is it WORTH it?

 3 Minute Huddle in Pairs

!  What are 2 insights you will take away from today’s discussion?

!  What will you do to translate these insights into effective action?

“Don’t let what you cannot do interfere with what you CAN do.”
Former UCLA coach John Wooden
 Additional Resources

www.doblin.com/tentypes
www.steveblank.com
Free online course (Udacity.com):
How to Build a Startup
 Thanks for joining us!

To learn more about TLI, visit tli.umn.edu