Innovation & Creativity: Selectively Drawing Upon Best Practices for a unified, disciplined approach September 2013 Joseph S. O’Hannigan Director, Learning Solutions, 4:11 Business Associates Senior Associate Director, Custom & International Programs, Stayer Center for Executive Education, Mendoza College of Business, University of Notre Dame

Provide a powerful new framework Objectives & Outcomes Provide a powerful new framework See the world differently Lead innovation & change more effectively Leverage your native ability to be creative Integrate powerful tools & techniques Create a dynamic new network with other leaders Accessing the ‘cast Image Volume Two-way communication Participating in the dialogue Strategically placed queries Verbal interruptions Etiquette Jumping in Name; to whom directing question or comment

Creativity & Innovation: It is within YOU Review & Look Ahead Creativity & Innovation: It is within YOU o What do we mean by “creativity?” By “innovation?” o Why are some people and organizations so good at this? o Exploding some myths about innovation Do NOT focus on your products and services o Really. Everyone focuses here. Don’t. o Broaden your view to see all TEN areas to innovate (Products & Services are just 2) Some of the best: creating a unified, disciplined approach to innovation o There are hundreds of tools and models and stories Start with the Ten Types Then on to effective approaches

Levels of Innovation Common Business definitions Extension of product/service New model, finish, design New to Company New to World Lean Design definitions Extension Incremental Breakthrough Disruptive Continuous feedback loops We will actively solicit your feedback, immediately after program pieces Need your constructive feedback in order to practice continuous improvement for subsequent portions of this program, and for future deliveries Proactively reach-out to Notre Dame Exec Ed administrators to voice questions and concerns Exec Ed faculty are usually going to provide you with their contact info, and will generally encourage you to communicate with them outside of class Leverage this! Please copy Exec Ed, so we can gage volume of correspondence Don’t abuse it, or they will charge for consulting =) Recognize that major program elements (content and faculty and timing) are difficult, if not impossible to change during program delivery Multiple types, even with small innovations, can produce Breakthrough and Disruptive results!

What areas might YOU Innovate? © 2013 Doblin; Deloitte Consulting LLP

Focus on differentiating VALUE from WASTE Recall: Lean Thinking Focus on differentiating VALUE from WASTE (Everyone is a “Waste Detective”) “Doing More and More with Less and Less, While Coming Closer and Closer to Giving the Customer Exactly What is Wanted” (Toyota Production System)

A Lean Innovation Approach Using similar “Lean” thinking, we apply tools and concepts to the “fuzzy front end” of the Product Development Process to: Identify & Differentiate Value from Waste Give the customers exactly what they want Reduce the time to market Provide innovation focus

Apply Lean Innovation Tools Apply Lean Innovation Tools *derived from 40 years of innovation tools and models *organized by Bart Huthwaite’s Institute for Lean Design Bart Huthwaite, Lean Design Coach Founder, Institute for Lean Design

The “Mountain Model” End In View – “What, Why & When” Action Plan Tactics Metrics Strategy Hurdles End In View End In View – “What, Why & When” Obstacles – Boundaries & Hurdles Strategy – Ten Types – Value Creation & Waste Prevention Metrics – Measurement System & Baselines Tactics – Innovative Tools Action Plan – 90-day “What, Who & When” Special thanks to Bart Huthwaite, Sr. and the Institute for Lean Design

Begin with the End in View Why? First step in bridging the gap from where you are to where you want to go. Makes sure everyone is climbing the same mountain. Builds “common ground.”

No painter begins with an unlimited canvas… Boundaries vs. Hurdles No painter begins with an unlimited canvas… …This allows us to identify the limits of the task at hand. Boundaries are fixed and cannot be changed. Hurdles are challenges that can be overcome if the correct resources are brought to bear

Deliver Optimum Value, Prevent Lifecycle Waste -ilities, or Value Brothers Wasteful -ings or Gremlins The LEAN DESIGN EQUATION… “Optimize Strategic -ilities, Minimize Evil -ings”

All Customers Crave Eight Primary Values… Customer Primary Values What It Means Performability Will the product perform functionally the way I expect? Affordability Will it be within my cost expectation? Featureability Will it have the features that enhance its functions to provide me added benefits? Deliverability Will it be ready for me when I want it? Usability Can I quickly and easily install it, learn how to use it? Maintainability How easy will it be for me to keep in service? Durability Is it robust enough to withstand the abuse myself, and others give it? Imageability Will it convey the image of quality and prestige I desire?

Eight Primary Values Every Company Seeks… Company Value What It Means Profitability Will the product deliver profits quickly & at a level acceptable to our company? Investability Will it require investment in people & equipment beyond expectations? Riskability Will it expose our company, either today or tomorrow, to excessive risk? Produceability Do we have, or can we acquire, the skills, experience, and equipment to build the product? Marketability Will we be able to sell it easily using our existing distribution channels? Growthability Does the market for the product offer significant growth and/or market share expansion? Leveragability Will it enable us to enter new growth markets? Respectability Will it convey the image of quality and prestige we desire?

Measuring the -ilities and -ings : Market Opportunities What Your Products/Services Lack Opportunities to Reduce Cost Where You Differentiate Performability Affordability Deliverability Useabiilty Durability Featureability Maintainability Imageability

Scoring the -Ilities Rating -Ility Value Level 9-10 Extremely high value. Sets the standard for the industry 7-8 High value. Superior to that of most competitors 5-6 Acceptable. Meets expectations most of the time 3-4 Low value. Frequently does not meet expectations 1-2 Extremely low value. Well below that of all competitors

Identify Opportunities

Maintain Differentiation… Performability 10 9 8 Imageability 7 Affordability 6 5 4 3 2 1 Durability Featurability Maintainability Deliverability Useability Product 1 Product 2

Customizing the –ilities Makes Strategy a Part of the Language Company #1 Imageability Knowledgeability Dell-ability Innovatability Credibility Breadth-ability Sensible Indulgence Easy Integrated Solution Company #2 Install-ability McDonald’s-ability Flexibility Trust-ability Target-ability Dependability

Products & Services are becoming obsolete the minute they are introduced… The Three Sharks of Marketplace Technology Competition are eating the value in our products, services & organizations…

Three Sharks Exercise to “See the Future” Step - Now (months/years ) Stretch - Tomorrow ( months/years ) Leap - Future (months /years ) Marketplace Technology Competition Does your design strategy address all the Eight Primary Values? Are you delivering too much? Too little? What are the top 5-7 changes you anticipate in your customer’s Eight Primary Values? Are there any “disruptive” marketplace changes on the horizon? Does your design take advantage of all existing technology? Are you pushing the technology too far? What new technologies do you anticipate emerging? Do you have the capability to develop these internally? Are there any “disruptive” technologies emerging in the distant future that could obsolete your entire business? Are there any new competitors who may try to enter your market space by offering a “simplified” solution compared to yours? Would a merger of competitors endanger your market position? Are overseas producers a threat? How competitive are you today? What are your differentiators?

7 Design Flaws that Add Cost & Reduce Reliability Seven Evils Description Complexity Many different processes required to deliver the product’s value both on factory floor and for the customer’s use. Precision Solution requiring precision at the outer limits of manufacturer’s ability to produce the product or customer’s ability to use it. Variability Specification of difficult to control processes on the factory floor or in the customer’s domain Sensitivity Solution easily flawed during factory operations or in the customer’s domain Immaturity Use of solution not previously validated for a specific application Danger Solutions with potential dangerous impact on humans or environment High Skill Solutions requiring high degree of training and experience

Scoring the -ings Rating -Ing Waste Level 9-10 7-8 5-6 3-4 1-2 Intolerable. Highest waste in the industry. 7-8 Excessive. Worse than most competitors. 5-6 Tolerable. High, but controllable. 3-4 Low. Minimum impact on cost & quality. 1-2 Extremely low. Well below that of all competitors

Measure the Evil –ings like the -ilities

Using the Cube to Brainstorm Company Ilities Profitability Investability Riskability Produceability Marketability Growthability Leveragability Respectability Customer Ilities - Performability - Affordability - Featureability - Deliverability - Usability - Maintainability - Durability - Imageability Ilities From “The Lean Design Solution: A Practical Guide to Streamlining Product Design and Development” Copyright by Bart Huthwaite, Sr. and the Institute of Lean Design 2005 Lean Innovation Tactics Innovation Levels Opportunity Targets Lifecycle Domains - Sacrifice - Shrink - Switch - Divide - Unify - Recycle - Off-the-Shelf - Plus Up - Fix Up - Incremental - Extension - Breakthrough - Disruptive - Functions - Parts - Materials - Processes - People - Customer Use - Design - Supply Chain - Operations Evil Ings - Complex - Precise - Variable - Sensitive - Immature - Dangerous - High Skill The Three Sharks Marketplace Technology Competition Optimize Strategic Ilities, Minimize Evil Ings

Using the Cube to Brainstorm

For Any/ All of the Ten Areas to Innovate, © 2013 Doblin; Deloitte Consulting LLP

There Are Generally Five “Opportunity Targets” Functions Materials Parts Processes People

Apply Lean Design Tactics to the Targets Sacrifice? Shrink? Plus Up? Functions Switch? Parts People Off-the-Shelf? Processes Divide? Materials Re-Cycle? Unify?

Integrated new functions Parts Materials Processes People Sacrifice Solutions Eliminate finish Eliminate metal parts in waterway Eliminate plating Eliminate Brazing,bright dip, plating, & buffing Outsource design or manufacture Shrinkage Solutions Reduce spout travel Reduce # of nuts Wall thicknesses Tube length Assembly parts using tubes Reduce assembly complexity Switch Solutions Switch sprayer w/ other side functions Switch diverter & side spray with flexible spout Non-metallic waterways Threaded instead of brazed Substitute Injection Molding for machining brazing, buffing & coating Cross-train employees Division Solutions Sell side spray separately Separate faucet from baseplate Separate veggie sprayer from faucet Separate water contact & structural materials Sell side spray & faucet separately Dedicate team project time Style development by channel Unity Solutions One hole and 8” spread Combine valve body & cartridge One piece body One piece valve Combine models into one One piece flow for machining Platform partnerships Re-Cycle Solutions Directional sprayer 2-function sprayer Use Chrome appearance and PEX supplies Diamond valve Use stainless for plated look Machine plastic rod with screw machines Capture peoples’ ideas Partner with others Off-The-Shelf Solutions Flow aerator Quick connects Purchase existing vendor model Use sister product components Purchase spout & cartridge Outsource design, market research, etc. Plus Up Solutions Integrated new functions Top-down mounting New valve cartridge Extend spout length New handles Robotic buffing Induction brazing Training & Skills

Next Steps… Classify new ideas from the 8x5 Matrix into “Step, Stretch, & Leap” timeframes Rank projects within the four levels of innovation by potential marketplace acceptance New to world? New to Organization? Incremental? Use marketplace feedback & internal team rankings

Developing the Product Road Map Conduct Gap Analysis Look for holes in the Road Map Conduct more focused brainstorming to address these Identify “stretch” & “leap” concepts that require immediate resources The result can be visual…

The Product Road Map

Worksheets & Application Tips johannig@nd.edu

Three Sharks Exercise Marketplace Technology Competition Step - Now (months/years ) Stretch - Tomorrow ( months/years ) Leap - Future (months /years ) Marketplace Technology Competition Does your design strategy address all the Eight Primary Values? Are you delivering too much? Too little? What are the top 5-7 changes you anticipate in your customer’s Eight Primary Values? Are there any “disruptive” marketplace changes on the horizon? Does your design take advantage of all existing technology? Are you pushing the technology too far? What new technologies do you anticipate emerging? Do you have the capability to develop these internally? Are there any “disruptive” technologies emerging in the distant future that could obsolete your entire business? Are there any new competitors who may try to enter your market space by offering a “simplified” solution compared to yours? Would a merger of competitors endanger your market position? Are overseas producers a threat? How competitive are you today? What are your differentiators?

Marketplace Technology Competition Step - Now ( ) Stretch - Tomorrow ( ) Stretch - Tomorrow Leap - Future ( ) Marketplace Technology Competition

Setting Our Objectives… What we are trying to accomplish Why we want to accomplish it When (by what date) we have to implement the plan “If we don’t know where we’re going any road will take us there…”

Begin with the End in View Why? First step in bridging the gap from where you are to where you want to go. Makes sure everyone is climbing the same mountain. Builds “common ground”.

What? Why? When?

Boundaries & Hurdles No painter begins with an unlimited canvas… This allows us to identify the limits of the task at hand. Boundaries are fixed and cannot be changed. Hurdles are challenges that can be overcome if the correct resources are brought to bear

Boundaries Hurdles

All Customers Crave Eight Primary Values… Customer Primary Values What It Means Performability Will the product perform functionally the way I expect? Affordability Will it be within my cost expectation? Featureability Will it have the features that enhance its functions to provide me added benefits? Deliverability Will it be ready for me when I want it? Usability Can I quickly and easily install it, learn how to use it? Maintainability How easy will it be for me to keep in service? Durability Is it robust enough to withstand the abuse myself, and others give it? Imageability Will it convey the image of quality and prestige I desire?

Performability Affordability Featureability Deliverability Usability Customer Domain Primary Values Rating (1-10) Reasons Why Performability Affordability Featureability Deliverability Usability Maintainability Durability Imageability

Scoring the -ilities Rating -Ility Value Level 9-10 Extremely high value. Sets the standard for the industry 7-8 High value. Superior to that of most competitors 5-6 Acceptable. Meets expectations most of the time 3-4 Low value. Frequently does not meet expectations 1-2 Extremely low value. Well below that of all competitors

…Eight Primary Values Every Company Seeks… Company Value What It Means Profitability Will the product deliver profits quickly & at a level acceptable to our company? Investability Will it require investment in people & equipment beyond expectations? Riskability Will the it expose our company, either today or tomorrow, to excessive risk? Produceability Do we have, or can we acquire, the skills, experience, and equipment to build the product? Marketability Will we be able to sell it easily using our existing distribution channels? Growthability Does the market for the product offer significant growth and/or market share expansion? Leveragability Will it enable us to enter new growth markets? Respectability Will it convey the image of quality and prestige we desire?

Profitability Investability Riskability Produceability Marketability Customer Domain Primary Values Rating (1-10) Reasons Why Profitability Investability Riskability Produceability Marketability Growthability Leverageability Respectability

Scoring the -ilities Rating -Ility Value Level 9-10 Extremely high value. Sets the standard for the industry 7-8 High value. Superior to that of most competitors 5-6 Acceptable. Meets expectations most of the time 3-4 Low value. Frequently does not meet expectations 1-2 Extremely low value. Well below that of all competitors

Current State Mapping…

Performability Affordability Featureability Deliverability Usability Customer Domain Primary Values Rating (1-10) Reasons Why Performability Affordability Featureability Deliverability Usability Maintainability Durability Imageability

Scoring the -ilities Rating -Ility Value Level 9-10 Extremely high value. Sets the standard for the industry 7-8 High value. Superior to that of most competitors 5-6 Acceptable. Meets expectations most of the time 3-4 Low value. Frequently does not meet expectations 1-2 Extremely low value. Well below that of all competitors

Current State Mapping…

Does the Consumer Agree? Up until now, we have used our INTERNAL assessments of the company and competition to generate our scores. We must market-test these opinions to see if we are connected to reality. Market Surveys Talking with the Customer and the Consumer “Communities of Interest”

Scoring the Evil –Ings… You don’t need to be in the design field to address the evil –Ings. Use the evil –Ings scoring system to let your product designers know where there are opportunities to fix current problems The evil –Ings spider chart becomes a way to communicate issues between manufacturing and design

7 Design Flaws that Add Cost, Reduce Reliability Seven Evils Description Complexity Many different processes required to deliver the product’s value both on factory floor and for the customer’s use. Precision Solution requiring precision at the outer limits of manufacturer’s ability to produce the product or customer’s ability to use it. Variability Specification of difficult to control processes on the factory floor or in the customer’s domain Sensitivity Solution easily flawed during factory operations or in the customer’s domain Immaturity Use of solution not previously validated for a specific application Danger Solutions with potential dangerous impact on humans or environment High Skill Solutions requiring high degree of training and experience

Scoring the -Ings Rating -Ing Waste Level 9-10 7-8 5-6 3-4 1-2 Intolerable. Highest waste in the industry. 7-8 Excessive. Worse than most competitors. 5-6 Tolerable. High, but controllable. 3-4 Low. Minimum impact on cost & quality. 1-2 Extremely low. Well below that of all competitors

The Seven Evils Why Rating Complexity Precision Variability Sensitivity Immaturity Danger High Skill

Future State Mapping… Based on the information we now have, including the end-in-view, boundaries & hurdles, and three sharks, what does our future state look like? In your groups, come to consensus about what one or two Customer –ilities you want to move and what single –ing you want to address.

Future State Mapping…

Future State Mapping

Targets and Tactics… These two or three items are now the Strategy input to our focused brainstorming Ask yourself – “What can I do to improve my –ility (or –ing) score from X to Y?” Use the 8 x 5 Matrix to drive your brainstorming

Using the Cube to Brainstorm Company Ilities Profitability Investability Riskability Produceability Marketability Growthability Leveragability Respectability Customer Ilities - Performability - Affordability - Featureability - Deliverability - Usability - Maintainability - Durability - Imageability Ilities From “The Lean Design Solution: A Practical Guide to Streamlining Product Design and Development” Copyright by Bart Huthwaite, Sr. and the Institute of Lean Design 2005 Lean Innovation Tactics Innovation Levels Opportunity Targets Lifecycle Domains - Sacrifice - Shrink - Switch - Divide - Unify - Recycle - Off-the-Shelf - Plus Up - Fix Up - Incremental - Extension - Breakthrough - Disruptive - Functions - Parts - Materials - Processes - People - Customer Use - Design - Supply Chain - Operations Evil Ings - Complex - Precise - Variable - Sensitive - Immature - Dangerous - High Skill The Three Sharks Marketplace Technology Competition Optimize Strategic Ilities, Minimize Evil Ings

Functions Parts Materials Processes People Sacrifice Solutions Shrinkage Solutions Switch Solutions Division Solutions Unity Solutions Re-Cycle Solutions Off-The-Shelf Solutions Plus Up Solutions

Next Steps… Classify new ideas from the 8x5 Matrix into “Step, Stretch, & Leap” timeframes Rank projects within the four levels of innovation by potential marketplace acceptance New to world? New to organization? Incremental? Use marketplace feedback & internal team rankings

johannig@nd.edu What Do I Do Next? Market test your concepts Add your current design projects to the map Target “Step”, “Stretch” & “Leap” projects for concurrent development Assess Resource Availability johannig@nd.edu

Questions & Answers johannig@nd.edu

On the way of wisdom I direct you, I lead you on straight paths. 4:11 Business Associates On the way of wisdom I direct you, I lead you on straight paths. When you walk your step will not be impeded, And should you run, you will not stumble. Hold fast to instruction, never let it go; Keep it, for it is your life. Proverbs 4: 11- 13 johannig@nd.edu