INNOVATION PLANNING A CATALYST FOR PROFITABLE GROWTH CeMAT - PowerPoint PPT Presentation

INNOVATION PLANNING A CATALYST FOR PROFITABLE GROWTH CeMAT SOUTHEAST ASIA 3 rd Mar 2017 ANTON HARJANTO, MBA HEAD OF PRODUCT GROUP SUPPLY CHAIN PT UNILEVER INDONESIA Tbk

CONTENT  WHAT IS INNOVATION PLANNING ?  INNOVATION PLANNING ROLE & PROCESS  WHY INNOVATION FAILS ?  SURVIVAL IN FIERCE COMPETITION

FORBES RANKING ON THE WORLD’S MOST INNOVATIVE COMPANIES 2016 Based on Innovation Premium methodology by Jeff Dyer, Hal Gregersen, and Clayton Christensen in the book The Innovator’s DNA .

PT UNILEVER INDONESIA Tbk OUR STRATEGY • The Unilever Sustainable Living Plan is our blueprint for achieving our vision to grow our business, whilst decoupling our environmental footprint from our growth and increasing our positive social impact. • These are huge challenges. They are also huge opportunities for people and business to grow and succeed.

WHAT IS INNOVATION PLANNING ? Innovation planning is the process of conducting systematic preparation to ensure successful execution of innovation which for new products involves demand estimation, capacity preparation, and delivery of new products to satisfy market demand. The same systematic preparation is also needed to ensure successful change(s) in operational (business) process or change in business model.

INNOVATION PLANNING ROLE BRIDGING OPERATIONAL EXCELLENCE & INNOVATION EXCELLENCE Operational Excellence (Perfect Order, Total Supply Chain Cost) Innovation Excellence (Time to Value, Return on R&D) Source: Gartner (May 2013)

INNOVATION PLANNING PROCESS Including: 1. Setting goals 2. Identifying existing and needed resources and capabilities 3. Assigning and prioritizing tasks 4. Developing timelines 5. Establishing evaluation measures 6. Developing protocols for dealing with the unexpected Fundamentals : project management, risk mitigation, cross-functional collaboration and communication, and buying-in from executives and key stakeholders.

MASTER INNOVATION VALUE CHAIN IDEATION SELECTION DEVELOPMENT LAUNCH New product Strategy and Disciplined and Marketing and • • • • and technology new product effective investment ideas linkages stage/gate planning New business Governance of process Consumer • • • concepts and new initiatives • Time-to-market profiling and opportunities Tracking and Bottleneck segmentation • • Consumer definition elimination and Competitive • • insights • Project identification of response and Trend analysis approval project timing • and anticipation decision-making “congestion” • Advertising and New-to-the- processes Parallel promotion • • world and Use of advanced planning of decision making • extensions of valuation work steps • Product tracking existing ideas methodologies Resource • allocation Source: Booz Allen Hamilton

MASTER INNOVATION VALUE CHAIN IDEATION New product • Innovation Description and technology Type ideas New Product Diversification 1 development Cost Reduced cost or priced versions of New to the New business • Improvements the product for the existing market Company concepts and Line extensions New to the 2 New, improved versions of existing Product world opportunities products / services, targeted to the Improvements current market Consumer • 3 Incremental innovations added to Market insights Line Market existing product lines and targeted to penetration Extensions development Cost Trend analysis • the current market Current reductions, 4 and anticipation Product Market Taking existing products / services to New Markets improvements Extensions new markets New-to-the- • world and 5 New New to the company product and new Current New Category to the company market, but not new to extensions of Market Entries the general market existing ideas 6 Radically different products / services New vs. current offerings and markets Ansoff Matrix to the World served

MASTER INNOVATION VALUE CHAIN No Product Project Project Product Technology / No of Project Leader Incremental TO & GP Capex Timing Status Group Name Description Market Matrix SKU 1 A Alfa Market Development Arman 5 iTO: 80; iGP 25 0 Jan-18 2 B Bravo Product Development Budi 9 iTO: 100; iGP 40 10 Feb-19 3 B Charlie Market Development Chandra 12 iTO: 150; iGP 50 0 Mar-18 4 C Delta Market Penetration Dedi 3 iTO: 110; iGP 20 0 Apr-19 5 A Echo Product Development Eko 7 iTO: 75; iGP 15 20 May-18 6 A Foxtrot Diversification Fitri 5 iTO: 200; iGP 100 50 Jun-19 7 B Golf Diversification Gita 6 iTO: 300; iGP 200 100 Jul-19 8 B Hotel Market Penetration Herman 9 iTO: 80; iGP 20 0 Aug-18 9 C India Product Development Ivan 4 iTO: 100; iGP 40 10 Sep-19 10 A Juliett Market Penetration Julia 2 iTO: 50; iGP 10 0 Oct-18

MASTER INNOVATION VALUE CHAIN SELECTION Strategy and • new product linkages Governance of • new initiatives Tracking and • definition Project • approval decision-making processes • Use of advanced valuation methodologies

MASTER INNOVATION VALUE CHAIN DEVELOPMENT Disciplined and • effective stage/gate Uncertainty process • Time-to-market Bottleneck • Amounts elimination and at Stake identification of project “congestion” Parallel • planning of work steps Resource • allocation IDEA TIME LAUNCH Adapted from R. G. Cooper and B. Little

MASTER INNOVATION VALUE CHAIN LAUNCH Marketing and • Importance of Post-Launch Evaluation investment planning Consumer Problems and pitfalls: • profiling and • A lack of a market orientation segmentation • Poor quality of execution Competitive • • Moving too quickly response and • Not enough homework timing • A lack of differentiation Advertising and • • No focus, too many projects, and lack of resources promotion decision making • Product tracking

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WHY INNOVATION FAILS Roger Calantone and Robert Cooper published a study in the Journal of the Academy of Marketing Science and found that :  28% were ‘better mousetraps’ that nobody wanted  24% were ‘me too’ products that offered little differentiation from rivals  15% were technical dogs that didn’t work properly  13% failed because of price cuts by competitors  13% were too expensive for most consumers  7% failed because of ‘plain and simple ignorance’ ‘ There are no bad ideas or bad products or bad innovations, Just bad applications for them and bad contexts.’ Nick Jankel-Elliott ‘ Plans are worthless, but planning is everything’. Dwight D. Eisenhower

SURVIVAL IN FIERCE COMPETITION • Disruptive innovation, sustaining innovation, efficiency innovation – Clayton Christensen • Differentiate or Die – Jack Trout

INNOVATION PLANNING ROLE & MATURITY LEVEL BRIDGING OPERATIONAL EXCELLENCE & INNOVATION EXCELLENCE Operational Excellence (Perfect Order, Total Supply Chain Cost) Innovation Excellence (Time to Value, Return on R&D) Source: Gartner (May 2013)

THE ROLE OF INNOVATION PLANNING AS A CATALYST FOR PROFITABLE GROWTH

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