1. Innovation in Times of Economic Crisis James Champy Chairman Emeritus, Consulting, Dell Services

2. 2 ©. Culture The shared values and beliefs of an enterprise – usually manifested in the behaviors of people. Can an organization change its culture and/or behaviors?

3. 3 ©. Processes A group of activities that uses one or more kinds of input to create an output a customer values Do you change how people think and then change what they do, or change what people do and then change what they think?

4. 4 ©. VISION OUTSMART! Where ideas come from CUSTOMERINSPIRE! Why customers come back EXECUTIONDELIVER! The importance of the every day

5. 5 ©. Business Models Are Changing The Flaws in Business Models That Created the Crisis: Too much tolerance for risk Inefficient supply chains

6. 6 ©. The Environment We are in a condition of overcapacity in many industries Technology has enabled enterprises to become dramatically more efficient The economy has required enterprises to drive for even further efficiency In some economies, new jobs will only be created when new businesses are created and begin hiring Customers will continue to demand and expect more for less

7. 7 ©. Business Models Are Changing Characteristics of New Business Models: Technology enabled Lean Scalable

8. 8 ©. Counterintuitive (or Forgotten) Principles You can find ideas in many places. Innovation is as much about process as about products. Most new business models require a combination of high- tech and high-touch. Engaging customers is about aligning with their values – authenticity is required. Resources are available for innovation – even in difficult times – but hard decisions must be made. Efficiency can drive quality.

9. 9 ©. Outsmart! Case Study WHAT IT DOES: Provides access to a global community of over120,000 performers. WHAT IT SAW: A global love for music, but an inability to globally access performers; a “cottage” industry that could be transformed. HOW IT OPERATES: Performers register with their portfolios Customers subscribe to the service Services are booked over the Internet

10. 10 ©. Questions What are the unmet needs of the communities / customers you serve? What processes or services can you offer to meet those needs? Do you serve a market that needs to be organized? Create “communities”?

11. 11 ©. WHAT IT DOES: Provides non-critical, clinical care from a facility. WHAT IT SAW: Most healthcare providers have focused on diagnosis and treatment. Minute Clinic’s founders saw the opportunity to change how healthcare is delivered. HOW IT OPERATES: A retailer mentality Staffed by nurse practitioners Enabled by information technology Open 7 days a week Patients are seen in ten to fifteen minutes Complements the healthcare system Outsmart! Case Study

12. 12 ©. Questions Are there assumptions about how you operate that prevent your delivering the services the market requires? Can a change in a “frame of reference” help you think differently about the services that you offer?

13. 13 ©. WHAT IT DOES: Provides customized, pre-packaged supplements and medications for horses. WHAT IT SAW: Most barn operations fail to manage the complexity of providing a horse with multiple supplements and medications on a daily basis. The potency of supplements and medications were also being reduced. HOW IT OPERATES: Delivers a 30-day supply of supplements and medications customized for each horse Substances are contained in a single plastic container for each day, clearly marked with the horse’s name Works with suppliers to achieve efficiencies and bulk discounts Provides a high-level of customer service Outsmart! Case Study

14. 14 ©. Questions What are the confounding challenges that your constituencies encounter? Can you provide “solutions” to these challenges? What services can be better enabled by “high-tech, and what service still require “high-touch”?

15. 15 ©. Inspire! Case Study Vision to provide reliable and convenient access to on-demand transportation Offering a new model of automobile for transportation Elegantly combines the promise of the Internet with wireless communications and online communities Example of how innovative businesses can harmonize business goals with the values of their customers and their communities

16. 16 ©. Questions What processes can you move to your constituencies to help serve them better? Do your processes and business model align with the values of your constituencies?

17. 17 ©. Inspire! Case Study Member-centered approach to health benefits Strives to be an advocate in prescription care Focused on renewing the relationships patients have with their trusted physicians and pharmacists through increased face-to- face communication Providing exceptional customer service to the more than 1.2 million members

18. 18 ©. Questions What are your channels to market? Who are your channel partners? Do your partners enhance or detract from the value you deliver?

19. 19 ©. Deliver! Case Study

20. 20 ©. Deliver! Case Study

21. 21 ©. Questions Are you making hard choices that enable innovation? What management style best serves your enterprise? Do you have an approach for managing change – process and behavior?

22. 22 ©. Deliver! Case Study

23. 23 ©. Questions How efficient and effective are your operations? How do you measure quality – “customer” experience? What processes can be reengineered to deliver both efficiency and quality?

24. 24 ©. Deliver! Case Study

25. 25 ©. Questions How will technology change the way you operate? Do your processes align the interests of everyone engaged in the system of your work? Do you express an elevated sense of purpose?

26. 26 ©. OUTSMART! INSPIRE! DELIVER! Ambition matters Intuition reigns Focus prevails Customers rule Risk is tolerated Innovation lives Culture drives Everyone plays People are held accountable Attention to process Focus on quality Model for change Authenticity HOW SMART COMPANIES BEHAVE