Value Creation


Value Creation Ultimately Robert’s Rules of Innovation is all about VALUE CREATION. The key to optimizing sustainable Innovation programs is value creation. The customer/consumer value proposition is the goal to ultimately gain a financial payback. Customer value can be created through the actual value-added of the new product, once you find that delicate balance between cost, price and return. Pick up Robert’s Rules of Innovation to discover more about value creation in the Innovation process.

Innovation Balancing Act

 

On June 15th of this year, Nik Wallenda became the first person ever to walk across the roaring Niagra Falls on a 2-inch wire.

After battling wind swells, and thick mist, Wallenda completed his walk crossing from the United States into Canada.

 

 

He was greeted by a Canadian customs agent who asked, “What is the purpose of your trip sir?”  Wallenda’s response: “To inspire people around the world to follow their dreams and never give up”.

There are many possible roads to innovation. Successful innovation means defining your own road. Much like Nik Wallenda’s walk across Niagra Falls, some of the best innovations come from stepping outside your own comfort zone and balancing the many different facets of innovation.

The formula for success in innovation is about finding the middle ground, walking the tightrope between risk and innovation; between ideation and value creation. The Innovation Balancing Act.

Successfully managing the process of innovation ensures the outcome results in a superior return on investment (ROI).

Risk/Innovation

It’s safe to say that companies are not naturally inclined to try new approaches without clear evidence that those approaches are likely to work. Like many innovators, you may find yourself struggling to innovate in advance of an anticipated economic recovery, while still working to keep costs down in a decidedly uncertain business arena. To increase initiative and innovation, you have to encourage and even embrace failure. You must have a willingness to invest without ROI assurance (see Innovation is Creativity X Risk Taking).

Keep in mind:

  • Milton Hershey started three unsuccessful companies before Hershey’s Chocolate.
  • Michael Jordan was told he was too short to play on his high school varsity basketball team.
  • The Beatles were originally rejected by Decca Recording studios, who said “we don’t like their sound” and “they have no future in show business”.
  • At age 30, Apple’s Board of Directors decided to take the business in a different direction, and Steve Jobs was fired from the company he created. Not only did Jobs go back to his former company, but he changed the market in an astounding way. Jobs claims that his career success and his strong relationship with his family are both results of his termination from Apple.

Are you creating the next Hershey’s or Apple?

 Ideation/Value Creation

The key to optimizing sustainable Innovation programs is value creation. While the creation of the idea is important, the creation of value for the customer is equally paramount. Adding perceived value to a new product or service will drive ROI. The value proposition is the key to successful innovation.
Customer value can be created through the actual value-added of the new product, once you find that delicate balance between cost, price and return. Balance is found, in part, by seeking stakeholder input and customer feedback during development of any innovation process (see Value Creation).Remember:

  • A means to an end – Think of innovation as a process that uses intellectual capital to generate positive business results, new findings and as a result, even more innovation.
  • Key Considerations – Remember to monitor start-up costs, speed to market, scale to volume and other metrics.
  • Customer is king – develop an innovation with high perceived value and strong sales will follow.
  • IP Protection – IP and Patent protection lock in your competitive advantage and support sales results and market share.

You can learn more about the above points, including how to protect your ideas, by reading  Robert’s Rules of Innovation. Robert Brands is the founder of InnovationCoach.com and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman, published by Wiley.

 

Value Proposition: The Key to Successful Innovation

What defines successful Innovation? Innovation is the process of using intellectual capital to create new products or services that generate positive business results in the form of financial returns. Discovering new findings then spurs more innovation which leads to further financial returns, and so on.

Innovation is successful when positive outcomes result in return on investment (ROI). That is why Value Creation is so important. Adding perceived value to a new product or service will drive ROI. The value proposition is the key to successful innovation. Develop an innovation with high perceived value to your customer, and strong sales will follow.

It’s all about understanding your customer and giving them what they want. Customer input and feedback is key. Look at Ford for example. The car manufacturer observed and listened to their large customer base on what they wanted in a car. They launched the “Your Ideas” initiative that invited people to make suggestions for improvement in all areas of comfort, convenience, connectivity, performance and safety. The result? Ford added iPod, MP3 player and USB connections, touch screens, voice activated communication systems, intelligent push-start buttons and more. Sales are soaring – not because of the traditional four wheels and performance but because of perceived value added features. Ford Motor Company now has the highest customer satisfaction rating among all major automakers.

When was the last time you tried or experienced your product or customer experience? Create value and not just onerous processes. Consumer input should be considered at multiple stages of your new product development process in order to increase perceived value. Enhanced product value means higher margins, greater returns, improved loyalty and increased stakeholder value.

Finally, when you find that delicate balance between cost, manufacturability and consumer perceived value, be sure to protect your intellectual property (IP) portfolio through patents. Invest the time and money into constantly updating patents and managing your product or service portfolio because it will lock in the value of your Innovation IP.

For more tips on Innovation and Value Creation, look for Robert’s Rules of Innovation. Robert Brands is the founder of InnovationCoach.com and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman, published by Wiley.

Cashing In On Intellectual Property

Maximizing Innovation by Translating Intellectual Property into Revenue

What’s in your IP cupboard?

Progressive companies create innovation teams. They invest countless man-hours, dollars and other resources in investigating and pursuing innovation. Yet they often leave their intellectual property untouched, thereby failing to translate patents and other IP into revenue opportunities.

American industry and academia hold some two million current patents granted by the U.S. Patent and Trademark Office. Yet, the vast majority remain idle. In a tight economy – and even in the best of times, failure to exploit existing patents for profit means more than money’s being left on the table. New opportunities – and the possibilities they spawn in kind – are lost.

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Redefining Innovation’s True Reward: Amassing Intellectual Property and Value Creation

What is the ultimate goal of process-driven innovation? Open a bottle of Coca-Cola – and read its performance reports – to get a true taste of the answer.

In 1980, the Coca-Cola Company was struggling, and its market share was underperforming compared to its competitors. So at a worldwide management conference in 1981, CEO Roberto Críspulo Goizueta decided to refocus the entire organization on putting value creation first.

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Value Creation: The Ultimate Goal of Innovation

Why innovate?

Some would argue that companies innovate to achieve a heightened competitive advantage, streamline the organization, or create intellectual property – including patents, trademarks and other protected property – that create value in the portfolio.

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