2. © Copyright Custell Pty Ltd 2004 - 2009 1 The Relationship Lifeblood: Leverage the Relationship Improve Intimacy Create Value Reduce cost Partnering for Innovation All concepts and ideas contained within this document are the intellectual property of Custell Pty Ltd. Content must not be copied or used without written approval from Custell. Turn on your sound to hear the presentation Click Here for Next Slide

3. © Copyright Custell Pty Ltd 2004 - 2009 2 Key Supplier Quality, on time, to specification, solution delivery Differentiation Reducing Costs Adding value Innovation Providing expertise Vendor Trader Price is No.1 requirement Little differentiation Low Margins Little Loyalty Partner Shared 1.Trust 2.Strategy and information 3.Vision and Goals 4.Risks and Benefits Discover, create, provide world-class products and services Degree of: complexity competitive advantage customer satisfaction innovation Business Value (Reference – Tony Lendrum – The Strategic Partnering Handbook Effectiveness Objectives "Solve my problems” Competitive Advantage "Make Me Money" Efficiency Objectives "Make It Cheaper" Relationship Characteristics Click Here for Next Slide

4. © Copyright Custell Pty Ltd 2004 - 2009 3 “Innovation is the Lifeblood for sustaining business relationships” Tony Lendrum Innovation is about people and enterprises, not about science and technology – its all about attitudes. Australian Business Council Partnering for Innovation Click Here for Next Slide

5. © Copyright Custell Pty Ltd 2004 - 2009 4 RETENTION LIKELY RETENTION UNLIKELY Typical Relationship Cycle over a 5 year services contract (Key assumption – Supplier is consistently meeting SLM’s) Custell Research 2004 - 2008 Customer Decision Point Renewal or Tender? With Partnering & Innovation Without Partnering & Innovation Relationship Life-Cycle Click Here for Next Slide

6. © Copyright Custell Pty Ltd 2004 - 2009 5 Innovation or Invention Innovation Process of change that adds value. An enhancement modification, add on or alternative application of an existing product/service or process in such a way as to increase its value to the user ‘Incremental’ ‘Discontinuous’ ‘Disruptive’ ‘Architectural’ Invention (Breakthrough innovation) Product, service or process without precedent “Breakthrough” “Radical” Click Here for Next Slide

7. © Copyright Custell Pty Ltd 2004 - 2009 6 Challenges to Innovation In Relationships 1. Assess Innovativeness 2. Plan Change 3. Map the Journey 4. Systemise Innovation 5. Measure & Manage INNOVATION CHANGE MODEL 1.Audit and assess Innovativeness 2.Plan and Implement Change - Break down the barriers to Innovation 3.Map the journey – Empower the teams 4.Systemise Innovation – Collaborate and manage progression 5.Measure, Manage and reward 6.Assess Program – Drive continuous improvement Innovation Change Program 1. Assess Innovativeness 2. Plan Change 3. Map the Journey 4. Systemise Innovation 5. Measure & Manage Click Here for Next Slide

8. © Copyright Custell Pty Ltd 2004 - 2009 7 Innovation Model Model $ $ Business Case Business Case REALISING $ $ COMMITTING COMMITTING Break Down the Barriers SUPPLIER &CUSTOMER CREATING THE CLIMATE SUPPLIER & CUSTOMER Facilitate Innovative Ideas IDEAS SEARCHING IDEAS Opportunity Funnel Tracking Impact/Scope Impact/Scope EXPLORING EXPLORING OPTIMISING Reference - Barnes & Conti Innovation Journey Map Click Here for Next Slide

9. © Copyright Custell Pty Ltd 2004 - 2009 8 Innovation Model Model Manage an Innovation Manage the Pipeline CREATING THE CLIMATE PREPARATION & TRAINING SUPPLIERCUSTOMER SEARCHING (Facilitation, Identifying, Hunting, Gathering) SEARCHING (Facilitation, Identifying, Hunting, Gathering) INNOVATION WORKSHOP PROGRAM INNOVATION BUSINESS INTEGRATION IDEAS REALISING COMMITTING (Business Case) Commit? COMMITTING (Business Case) Commit? Tracking EXPLORING (Evaluate, Qualify, Quantify, Prioritise) Filter EXPLORING (Evaluate, Qualify, Quantify, Prioritise) Filter $ $ OPTIMISING CREATING THE CLIMATE SUPPLIERCUSTOMER SEARCHING IDEAS REALISING COMMITTING COMMITTING Tracking EXPLORING EXPLORING $ $ OPTIMISING Reference - Barnes & Conti Innovation Journey Map 8 Click Here for Next Slide

10. © Copyright Custell Pty Ltd 2004 - 2009 9 Innovation Program - Summary Registers – tracking progress Two Registers: 1.Opportunities Identifies opportunities for innovative solutions Provides focus for innovative activity Visual to all parties Sets ‘Value’ objectives 2.Innovations List of innovations in the funnel by Opportunity Description, status, value, team members Basis for tracking progress Used for pipeline management Benefits: Provides focus for innovation Simplifies tracking Single source of summary information Click Here for Next Slide

11. © Copyright Custell Pty Ltd 2004 - 2009 10 Innovation Program - Summary Collaborative Workbenches Benefits: Effective cross functional teaming Easy management Workbenches Provide: Maintenance of Registers Single source of information across diverse organisations Secure Team Collaboration Journey map Guidance Visual workflow Templates Content Management Document Management Discussion Threads Team Workbenches – 3 levels: 1.Overall Program 2.Each Opportunity 3.Each Innovation Click Here for Next Slide

12. © Copyright Custell Pty Ltd 2004 - 2009 11 Team Collaboration Solution Creation Tools & Techniques Assessment Tool Prioritisation Methods Pipeline Management Measurement – progress & value Tools Deployed Click Here for Next Slide

13. © Copyright Custell Pty Ltd 2004 - 2009 12 Innovation Program - Summary Innovate for Outcomes System based teaming tool for facilitators Focuses the team on a specific Opportunity or challenge Creatively generates ideas that achieve required outcomes Uses fishbone method incorporates a team voting tool to prioritise ideas “Innovate” Searching Tools Root cause solution System based teaming tool for facilitators Focuses the team on analysing and solving the root cause of a problem Creatively generates ideas that will correct the root cause Uses fishbone method incorporates a team voting tool to prioritise solutions Click Here for Next Slide

14. © Copyright Custell Pty Ltd 2004 - 2009 13 Innovation Program - Summary 1. “Innovate” for Teams (Custell - half day course) Understand what makes an effective innovation program Assess and rank an innovative idea relative to its value and scope Manage an idea through a process Participate in ‘enterprise to enterprise’ teaming tactics to create value 2. “Innovate” Team Leader Accreditation (Custell - One Day course) Articulate the characteristics of an effective innovation program Use Innovate tools to facilitate team meetings to ‘search’ Use facilitation tools from Innovate to ‘explore’ and ‘commit’ Manage the Realising and Optimising phases Manage the innovation pipeline 3. Managing Innovation (Barnes & Conti - 1 day course) Clarify how innovation can become an important part of the way that you do your job and live your life. Develop the mind-sets and skill sets that are appropriate to each phase of the innovation journey. Suggest practical ways in which you can apply skills and insights to your area of influence. “Innovate” Training Click Here for Next Slide

15. © Copyright Custell Pty Ltd 2004 - 2009 14 Innovation Program - Summary An end to end Innovation Solution INNOVATION CLIMATE: A change program to improve your innovativeness by breaking down the barriers to innovation, TEAM TRAINING: Training programs to improve your peoples skills in creativity, leadership and innovation management, SYSTEM: A team based collaboration and innovation management system to support your innovation teams. PROCESS: Deploy a process (or journey map of your choice) to provide an easy and consistent way for teams to progress innovative ideas. METHODS: Tools and techniques to generate and test new, creative ideas. Innovation Program - Summary Click Here for Next Slide

16. © Copyright Custell Pty Ltd 2004 - 2009 15 Drive measurable value for the customer Create revenue opportunities for the supplier Build Competitive Advantage Build trust in the relationship Increase Intimacy & Loyalty Productivity - Maximise return from scarce resources Easy to manage www.custell.com Innovation Program Benefits Benefits Click Here for Next Slide

17. © Copyright Custell Pty Ltd 2004 - 2009 16 Leveraging Relationships