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  • Predictive Innovation Practitioner In a nutshell Predictive Innovation is a structured

  • way to describe what people want and how to provide it.

  • Anything that can be made or done can be described. If you can describe it you can also describe

  • the ideal version.

  • The Ideal Product does What I want, When I want, Where I want, with whom I want, in the

  • way I want, for the price I want with no hassle.

  • If you step backwards from the ideal to what is available today, each of those steps is

  • an innovation. There isn't just one straight path to the ideal, and many of those paths

  • are dead ends. Predictive Innovation gives you a structured way to describe the entire

  • idea space showing you all those paths. Describing all possible innovations:

  • reduces risk increases profits

  • maximizes return on investment and allows you to calculate the Total Innovation

  • Value making it easier to choose and get support for good projects

  • The most common approach to New Product Development is to use a Staged Gate Process starting with

  • a huge number of ideas then filtering them down through a number of stages until what

  • is hoped to be a successful product is launched. Despite the typical Staged Gate Process having

  • 7 stages the failure rate of new product launches is 40%, basically random. Despite 50 years

  • of attempts to improve Staged Gate the failure rate has remained 40%.

  • A study of 576 projects at 360 Fortune 500 companies revealed there was a huge difference

  • between the results of product managers at the same companies using the same process.

  • The bottom 1/3 had an average of $2 million profits with the 40% failure rate. The middle

  • 1/3 had an average profit of $21 million again with the 40% failure but the top 1/3 had $189

  • million profits, 95 times as profitable as the bottom 1/3. Instead of a 40% failure rate

  • they had a 96% success rate. Clearly the top 1/3 were doing something very different from

  • the bottom and middle.

  • The best definition of innovation is: Profitably satisfy unmet desires.

  • Profitable doesn't just mean money. Consumers profit from using the innovation. They give

  • money to get their desire satisfied. Businesses profit monetarily. Charities profit from doing

  • good. Whoever is involved with an innovation all of them must benefit or it just won't

  • happen. Unmet desire is one that has not yet been

  • satisfied some other way. Innovation does something new or better.

  • To innovate you need to know what to do, how to do it and you must do it correctly. So

  • there are two basic types of innovation systems, thinking systems and doing systems. Staged

  • Gate is the most common doing system. Creativity is the most common thinking system.

  • Creativity is unpredictable, unreliable, unfocused, inefficient, highly emotional. Its often said

  • in brainstorming sessions to leave egos at the door which shows you how emotional it

  • is. Creativity is also person specific depending on people with special talent. Anyone can

  • do Predictive Innovation without being particularly creative.

  • Staged Gate manages the risk but you can see that the risk is caused by using creativity

  • for ideas. If you use a different Thinking System Staged Gate can focus on the risks

  • of doing and achieve the 6-Sigma results you want.

  • The Staged Gate Process using creativity starts with a large number of ideas and filters them

  • down. On average it takes 300 ideas to produce 1 product. That filtering process costs 9

  • times as much as developing a single project. When we analyzed innovation as a process we

  • discovered there are 7 Essential Functions to the innovation process.

  • Those steps are: Reveal emerging expectations, the things customers

  • demand in the near future Generate ideas that satisfy the emerging expectations

  • Convert ideas into designs Make new products or set up systems to perform

  • services Communicate value, both internally and externally

  • Deliver new product or service Get and use feedback that is meaningful, and

  • start again with generating ideas Notice that you don't need to reveal emerging

  • expectations again. Emerging expectations are the criteria for ideas and products. This

  • is what to measure and the current measurement. Since in the first step you defined the emerging

  • expectations you already know what customers will want, it is something closer to the ideal.

  • The ideal product perfectly satisfies all the criteria for a product. Each improvement

  • between the ideal and what is available today is an innovation. Feedback tells you how close

  • to the ideal your product is and how much closer is needed for the next improvement

  • to be accepted by customers. The second step is generate ideas that satisfy

  • the emerging expectations. There is such a thing as a bad idea. Any idea you spend time

  • or money on that doesn't profitably satisfy a customer's desire is a bad idea. If you

  • skip revealing emerging expectations then the ideas are a random mess and you end up

  • spending huge amounts of time and money sorting and testing the ideas hoping to find a good

  • one. If instead, you start by defining the criteria of the emerging expectations you

  • know what customer's will want so you can focus on generating ideas that match the criteria.

  • Predictive Innovation also gives you a structure for ideas so you can quickly identify the

  • right idea and all the related ideas. This makes it possible to choose the best idea

  • and have a sequence of future products related to that core idea.

  • Once you know what to make you need to know how to make it this is what you do when you

  • Convert ideas into designs. Even if customers want an idea if you can't profitably make

  • it then its not a good idea for you. Being able to solve the technical challenges so

  • that you can profitably make what customers want is essential to success.

  • After you have the design you must efficiently follow it. Making the product or setting up

  • the system to perform the services is where the doing system takes over. This is where

  • Staged Gate and other process control methods like 6 Sigma will help you the most. You will

  • still need a thinking system to improve your process and overcome unexpected challenges

  • and Predictive Innovation helps you there as well.

  • Communicating value is really done throughout the entire process. You must get approval

  • from stakeholders, funding for projects, and motivate workers in addition to selling to

  • customers. The criteria revealed with the emerging expectations provides you the tools

  • to effectively communicate value to everyone in their own language.

  • Innovation hasn't occurred until the customer has the product and is using it to satisfy

  • their desires. So you must deliver the new product. And finally you should get and use

  • feedback from all the steps. Knowing the criteria again is essential to asking the right questions

  • and determining how to measure the results. Without first revealing the emerging expectations

  • the entire process suffers. Using Predictive Innovation changes everything.

  • Instead of filtering down from a pile of random ideas you start with accurate criteria to

  • build up a family of successful products. This increases profits and reduces risk at

  • the same time.

  • Predictive Innovation Overview There are 6 dimensions to Predictive Innovation,

  • these are: Actors

  • Desires Scenarios

  • Alternatives Outcomes

  • Elements For Practitioner we will focus on Alternatives,

  • Outcomes, and Elements.

  • Every scenario has approximately 7 outcomes and each outcomes has 7 types of elements

  • with 15 types of alternatives. This makes the hypercube of the idea space.

  • 15 Alternatives times 7 elements times approximately 7 outcomes produce approximately 735 types

  • of ways to innovate for any scenario. These are types so there can be multiples

  • for each type but there is at least one of each type, this defines the idea space.

  • The complete idea space must have at least one of each of the 735 types. Most products

  • don't properly satisfy one or more outcomes and only cover 3 elements with 1 Alternative.

  • This means that less than 1% of the idea space is covered by most products. That leaves a

  • huge amount of space available for innovation. By not covering the entire idea space a large

  • amount of the possible profits are ignored. Most products cover less than 1% of the idea

  • space and only 13% of the idea space is even explored. This is a huge area of missed opportunity.

  • That ignored space is not only missed opportunity it causes risk. That unexplored region is

  • open to competition, might have easier higher profit ideas that better satisfy customers

  • desires. If you remember the difference between the profitability of the different project

  • managers its very close to the same ratio. The reason the top 1/3 of product managers

  • are 95 times as profitable is because they reduce the risk and increase the opportunities

  • by covering the entire idea space.

  • Conclusion Describing all possible innovations:

  • reduces risk increases profits

  • maximizes return on investment and allows you to calculate the Total Innovation

  • Value making it easier to choose and get support for good projects

Predictive Innovation Practitioner In a nutshell Predictive Innovation is a structured

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