Innovation in Times of Economic Crisis

James Champy

Chairman Emeritus, Consulting, Dell Services

Culture

• The shared values and beliefs of an enterprise –

usually manifested in the behaviors of people.

• Can an organization change its culture and/or

behaviors?

2©.

Processes

• A group of activities that uses one or more kinds of

input to create an output a customer values

• Do you change how people think and then change

what they do, or change what people do and then

change what they think?

3©.

change what they think?

• VISION OUTSMART!

Where ideas come from

• CUSTOMER INSPIRE!

Why customers come back

4©.

• EXECUTION DELIVER!

The importance of the every day

Business Models Are Changing

The Flaws in Business Models That Created the Crisis:

• Too much tolerance for risk

• Inefficient supply chains

5©.

The Environment

We are in a

condition of

overcapacity in

many industries

Technology has

enabled enterprises

to become

dramatically more

efficient

The economy has

required enterprises

to drive for even

further efficiency

6©.

In some economies, new jobs will only be

created when new businesses are created

and begin hiring

Customers will

continue to demand

and expect more

for less

Business Models Are Changing

Characteristics of New Business Models:

• Technology enabled

• Lean

• Scalable

7©.

• Scalable

Counterintuitive (or Forgotten) Principles

• You can find ideas in many places. Innovation is as much

about process as about products.

• Most new business models require a combination of high-

tech and high-touch.

• Engaging customers is about aligning with their values –

8©.

• Engaging customers is about aligning with their values –

authenticity is required.

• Resources are available for innovation – even in difficult

times – but hard decisions must be made.

• Efficiency can drive quality.

Outsmart! Case Study

WHAT IT DOES:

Provides access to a global

community of over120,000

performers.

WHAT IT SAW:

A global love for music, but

an inability to globally

access performers; a

“cottage” industry that could

9©.

“cottage” industry that could

be transformed.

HOW IT OPERATES:

• Performers register with their

portfolios

• Customers subscribe to the

service

• Services are booked over the

Internet

Questions

• What are the unmet needs of the communities /

customers you serve?

• What processes or services can you offer to meet

those needs?

• Do you serve a market that needs to be organized?

10©.

• Do you serve a market that needs to be organized?

Create “communities”?

WHAT IT DOES:

Provides non-critical, clinical

care from a facility.

WHAT IT SAW:

Most healthcare providers have

focused on diagnosis and

treatment. Minute Clinic’s

founders saw the opportunity to

change how healthcare is

Outsmart! Case Study

11©.

change how healthcare is

delivered.

HOW IT OPERATES:

• A retailer mentality

• Staffed by nurse practitioners

• Enabled by information technology

• Open 7 days a week

• Patients are seen in ten to fifteen minutes

• Complements the healthcare system

Questions

• Are there assumptions about how you operate that

prevent your delivering the services the market

requires?

• Can a change in a “frame of reference” help you think

differently about the services that you offer?

12©.

differently about the services that you offer?

WHAT IT DOES:

Provides customized, pre-packaged

supplements and medications for

horses.

WHAT IT SAW:

Most barn operations fail to manage

the complexity of providing a horse

with multiple supplements and

medications on a daily basis. The

potency of supplements and

Outsmart! Case Study

13©.

potency of supplements and

medications were also being

reduced.

HOW IT OPERATES:

• Delivers a 30-day supply of supplements and medications customized for each horse

• Substances are contained in a single plastic container for each day, clearly marked with the horse’s name

• Works with suppliers to achieve efficiencies and bulk discounts

• Provides a high-level of customer service

Questions

• What are the confounding challenges that your

constituencies encounter?

• Can you provide “solutions” to these challenges?

• What services can be better enabled by “high-tech,

and what service still require “high-touch”?

14©.

and what service still require “high-touch”?

Inspire! Case Study

15©.

Vision to provide

reliable and

convenient access

to on-demand

transportation

Offering a new

model of automobile

for transportation

Elegantly combines

the promise of the

Internet with

wireless

communications and

online communities

Example of how

innovative

businesses can

harmonize business

goals with the

values of their

customers and their

communities

Questions

• What processes can you move to your constituencies

to help serve them better?

• Do your processes and business model align with the

values of your constituencies?

16©.

Inspire! Case Study

17©.

Member-centered

approach to health

benefits

Strives to be an

advocate in

prescription care

Focused on

renewing the

relationships

patients have with

their trusted

physicians and

pharmacists through

increased face-to-

face communication

Providing

exceptional

customer service to

the more than 1.2

million members

Questions

• What are your channels to market?

• Who are your channel partners?

• Do your partners enhance or detract from the value

you deliver?

18©.

Deliver! Case Study

19©.

Deliver! Case Study

20©.

Questions

• Are you making hard choices that enable innovation?

• What management style best serves your enterprise?

• Do you have an approach for managing change –

process and behavior?

21©.

Deliver! Case Study

22©.

Questions

• How efficient and effective are your operations?

• How do you measure quality – “customer” experience?

• What processes can be reengineered to deliver both

efficiency and quality?

23©.

Deliver! Case Study

24©.

Questions

• How will technology change the way you operate?

• Do your processes align the interests of everyone

engaged in the system of your work?

• Do you express an elevated sense of purpose?

25©.

OUTSMART!

INSPIRE!

• Ambition matters

• Intuition reigns

• Focus prevails

• Customers rule

• Risk is tolerated

HOW SMART COMPANIES

BEHAVE

26©.

INSPIRE!

DELIVER!

• Risk is tolerated

• Innovation lives

• Culture drives

• Everyone plays

• People are held accountable

• Attention to process

• Focus on quality

• Model for change

• Authenticity