Innovation to Products to Ventures

Real innovation requires real customers

Richard A D Jones — Sun, 30 Jul 2006 14:32:39 +0100

I get to work with a lot of new companies and corporate ventures and, you know what, they frequently have no clue about what a real customer wants. Cambridge (the UK one) is a great place for technology innovation but even the smartest people don't always understand about having a real market. They have the “Field of Dreams” view about customers - 'if I build it, they will come." However, this mistake isn't limited to startups - I worked with a European electronics multinational and I couldn’t believe their approach to innovation.

The division I worked with produced equipment for automating factories - essentially like computers with input and output connections to make machines work. Here were two classic conversations with them.

"Good news Richard - we have done a deal with M****** (identity masked to protect the innocent) and will be distributing their single board computer series. Our arrangement means we will have the same market price as them."

"Okay. What do you mean by market price?"

"Our list price is identical to their’s."

"Hang on," say I, "our normal customer gets a discount of 10% whereas M****** give a discount of 30% as standard. Our real market price to users or distributors is going to be significantly higher than their’s. In what way do you think that is market pricing?"

....silence....

Portfolio management - slightly trickier now

Richard A D Jones — Mon, 28 Nov 2005 18:46:10 +0000

In another post, I put up the graphic above as an approach to assessing different projects within a porfolio and understanding the overall ‘balance’. The projects here represent a company that is sticking pretty close to home in terms of what it does but is expending significant money in trying to develop technology led approaches to their market (the diameter of the circle represents the money committed to the project).

A simple guide to portfolio management (rocket science omitted)

Richard A D Jones — Sun, 27 Nov 2005 17:10:30 +0000

This is start of a ‘back of an envelope’ guide to portfolio management.

Portfolio management is the set of activities that seek to find and maintain the optimum current and future balance of R&D projects to support the busines strategy.*

I wrote this almost 10 years ago but exactly the same problems face companies today.

There are many approaches to selecting individual projects such as simple project attractiveness ratings, however selecting a set of projects (or portfolio) requires you to:

nntake account of overlaps and common resource requirements between projects
nfollow the direction provided by the overall strategy and the technology strategy
ndevelop an iterative process refining the portfolio to find the optimum balance between available projects and the strategic direction

Portfolio management - a few more models

Richard A D Jones — Sat, 26 Nov 2005 15:12:00 +0000

People often forget that the reason you try to understand what you are currently doing in R&D is so you can make better decisions in future. Representing projects graphically allows you to understand the portfolio at a higher level and is ideal for the senior management team when they are contemplating where they are compared to where they are trying to get to. There are a couple of other blogs about this but I was too tired to put in these final diagrams. Again, there’s no right or wrong – just different ways of viewing what you have. I think they’re pretty self-explanatory. I’d write more but there’s a guy playing his i-Pod so loud I could sing along and I’m just off to garrott him with his own headphone cable. If there are no more posts – please come visit me in prison.

Technology only rolls one way - downhill!

Richard A D Jones — Thu, 17 Nov 2005 23:39:02 +0000

Something is a specialist skill that only a few people can do and gradually it becomes more widely available, cheaper and easier to use (no punchcards in computers now - only blue screens of death and sanctimonious Mac users to deal with). This article talks about the inexorable march of technologies and produsts from high cost, scarcities to being cheap and on your desktop etc.

Physical interfacing of your team

Richard A D Jones — Tue, 11 Oct 2005 18:36:57 +0100

This is really simple but works. Think about the processes involved in going from innovation to product/feature delivery. If they are supposed to work closely together then put them close together. Is that it? Okay not quite.

To maximise the interactions between different groups, try to increase the size of the physical interface between them. I'd say that in English if I could.

Maybe an example will help - doubt it but worth a try.

If you have a development team and an industrialisation team say - then don't design the office so they are separated. See if you can set it up so that as many people as possible are next to someone from the other department. I don't mean mixing them up completely as you want each group to still function well on their own. I just mean think about how you can create long borders between groups where colleagues from the different groups can talk.

How do you make better decisions? Get senior management out of the process!

Richard A D Jones — Fri, 07 Oct 2005 14:25:54 +0100

When your project has reached a decision point, do you really want to wait until the management team can assemble? Are you sure they will have time to get to your part of the agenda? You've probably been in a project that gets bounced from at least one meeting and has to wait. The key here is to remove senior management physically from the decision making process.

How to assess projects - simple weighted averages

Richard A D Jones — Tue, 27 Sep 2005 21:09:18 +0100

This approach provides a simple way to compare the 'attractiveness' of different candidate projects.

Just changing job titles is not a change process

Richard A D Jones — Wed, 21 Sep 2005 19:07:55 +0100

You can't create a change in behaviours by changing a job title (sadly - it would be much easier if you could). The person will return to work on Monday morning, sit down and start doing the same things they were doing before you changed their title.

Monitoring the effectiveness of innovation

Richard A D Jones — Sun, 11 Sep 2005 18:18:54 +0100

Innovation is like a sales funnel, you get prospects in one end and hopefully ‘sales’ out of the other end. The costs associated with generating concepts, clustering, evaluating etc. can be very significant and the business should really understand how these costs are spent throughout the process.

Matrix organisations

Richard A D Jones — Sun, 04 Sep 2005 18:24:24 +0100

I love matrix organisations. I love seeing them done well and I take secret pleasure at seeing a group of intelligent people in an organisation occasionally tie themselves in knots with them.

Portfolio Management and Tyrannosaurus Bossus

Richard A D Jones — Sat, 03 Sep 2005 18:29:01 +0100

Part of the point of having portfolio management processes and, in particular, decision making criteria is to ensure that individual projects are not derailed

The impact of physical layout of organisations

Richard A D Jones — Wed, 03 Aug 2005 17:56:48 +0100

If you want people to talk, you have to give them a fighting chance by putting them in relative proximity....There was some work done that showed that the probability of communication between two individuals was significantly lower if they were in different groups and decayed rapidly based on physical distance

Consistency in leadership – say how you intend to work and stick to it

Richard A D Jones — Mon, 01 Aug 2005 18:32:36 +0100

People are cynical animals. More so perhaps in Europe than in the United States. When someone starts in a new role, they will not just take what they are told about fresh starts, new ways or working or anything at face value. They probably don’t believe it’s going to happen and wait to pounce on the first outward sign that the person involved is not actually doing as they said they will do.

Managing different types of portfolio

Richard A D Jones — Sat, 23 Jul 2005 18:24:56 +0100

The types of portfolio of innovation, development and innovatin project to manage vary between a vertically led (by area of activity, product type etc.) approach or a process one where the portfolios reflect the life cycle of an idea through to maturity.

Put your best person on key tasks

Richard A D Jones — Mon, 13 Jun 2005 18:31:10 +0100

It’s actually a broader point but if you want to launch or support a top-priority initiative in an organisation, you have to put a top person on it. If you just dig out someone because they are ‘available’ then you immediately send a signal to the rest of the personnel – it’s not really important!

Change hurts – so make it as quick and as clear as possible.

Innovation partnerships - co-innovation

Richard A D Jones — Sat, 26 Feb 2005 17:38:27 +0000

Relationships between companies have been changing for the last 10 years plus. Suppliers in car companies have moved from ‘Just In Time’ delivery of components (or Just In Trouble occasionally) to being made responsible for complete sub-systems of the cars. They no longer just