Doblin’s ten types of Innovation

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In 1999, a Chicago based consulting firm called Doblin categorized Business Innovation into ten types. This framework, that has become increasingly popular as an standard for innovation classification, categorizes the innovations into four different areas: Finance, Process, Offering and Delivery depending on what area of the business is impacted by innovation.

Under the finance category we find ways in which we organize our company for maximum benefit under two different categories:

  • Business model, that is, how does your company make money.
  • Networking, meaning how you partner with other companies in order to achieve mutual benefit.

Under process we find process innovation under two more categories:

  • Enabling processes related to all those processes that support the company´s core processes and activities
  • And the Core processes themselves.

Offering is the category that is more usually coming to mind when thinking about innovation as it is related with the creation of new products and services under three different categories:

  • Product performance or how do we design  new products as part of our core product offering that will give us a competitive advantage in the marketplace
  • Product systems meaning how do we organize/arrange our product offering under one or several product platforms providing common look and feel, consistency of approach, opportunities for volume leverage, …
  • Service or how do we complement our product offering and provide value to our customers with an additional service offering beyond and around our products.

Finally the delivery category where we focus on how we make our products and services available to customers:

  • Channels or how we get our offerings to the market using the most effective channels for maximum reach and coverage of our desired customer base
  • Brand or how do we communicate this offering and create an image of our company and products for our customers.
  • And finally customer experience, innovating around the way customers feel when they interact with our products and services.

In the attached chart you will find examples of companies that at some point were considered to be best practices in each one of the Innovation categories. Where are you in these innovation categories? What should be the targeted ones in your company and what can you do yourself to drive innovation?

doblin

Heuristic Bias… does it sound familiar?

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During a recent holiday I was reading an economic history book, “The ascent of money” by Niall Ferguson (by the way, strongly recommended if you want to put the current economic crisis into some kind of historic perspective) when I found these definitions of “heuristic biases” (skewed modes of thinking or learning).

Though the author was referring in his text to skewed ways of evaluating financial risk, I immediately found a clear link to our experience as operation excellence consultants related to the way people understood and utilized data in projects.

This is Dr. Ferguson´s classification. I hope you enjoy it

  • Availability bias causes us to base decisions on data that is more readily available than the data we really need
  • Hindsight bias causes us to attach  higher probabilities to events after they have happened  than we did before they happened
  • The problem of induction which leads us to formulate general rules on the basis of insufficient information
  • The fallacy of conjunction which means that we tend to overestimate the probability of simultaneous occurrance of multiple events of very high probability compared to the probability of ocurrance of only one of  multiple events of low probability
  • Confirmation bias which inclines us to look for confirming evidence of an initial hypothesis rather than evidence that would disprove it
  • Contamination effects, whereby we allow irrelevant but proximate information to influence decisions
  • The affect heuristic whereby preconceived value judgements interfere with assessment of things
  • The failure of invariance that leads to risk aversion for events leading to positive outcomes while risk seeking for negative ones.
  • Scope neglect which prevents us from adjusting our efforts and actions to the relative importance or magnitude of an  issue
  • Overconfidence in calibration which leads us to overestimate the confidence intervals within which our estimates will be robust
  • Bystander apathy which inclines us to abdicate individual responsibility when in a group

A funny way of looking at Takt Time

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For some people Takt Time is still a new concept, but it has been used (even if not always knowingly) for a long period. You probably know that in order for your process to flow, process step cycle times have to be in line with customer demand rates as defined by Takt Time.

Well, sometimes this is easier said than done. This 1950s video from I love Lucy (the most successful comedy series of that period in US) shows in very clear terms that adapting to Takt Time is not always easy.

Enjoy it!

Lean and Six Sigma

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Still today we are getting questions from people that do not quite understand the differences between Lean and Six Sigma, what is the focus area of each of them, when each one should be used and so on.

Lean is a philosophy that tries to improve response time to customers by reducing process lead times through the reduction of waste. Its roots can be tracked back to the  Kaizen philosophy in the 1890s, Henry Ford`s assembly chains at the beginning of the 20th century and the Toyota Production system started in the 1930s.

what is lean

 

On the other hand, Six Sigma, created by Motorola in the 1980s, uses a rigorous methodology (DMAIC) that is strongly based on statistical analysis for the continuous improvement of business processes. Six Sigma focuses on reducing variation through the identification and control of vital inputs and process factors.

What is six sigma

 

So, we have an approach to be used when trying to reduce lead times and eliminate waste (LEAN) and another one to be used when trying to reduce process variation (Six Sigma), correct?. Well, yes and no, though the statement is basically correct Lean and Six Sigma are not mutually exclusive. You can use Lean tools within a Six Sigma project or run a Lean project using the structured approach of Six Sigma and the combination of both, Lean Six Sigma provides the best of both worlds by focusing on speed and variation simultaneously.

what is lean six sigma

Kairos Management

Blog Launch

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Hi, Kairos Management friends,

We are starting our blog today. We have finally decided to establish a direct communication channel through the social networks with all friends that had some contact with us in the past and eventually with anybody  that might be interested in innovation and operational excellence.

The center of our network activity will be our Facebook page and its heart will be this blog where we will try to regularly share with you news, information, project examples, stories about  our products and services and, in general, share with you the knowledge and experience that our team has acquired through many years of working in operational excellence and innovation, trying to make today´s businesses better and more efficient and productive for the future.

Please join us by becoming a friend in our Facebook page, joining our Linkedin company network or subscribing to this blog for automatic e-mail notification. Feel free to participate, we want to make this a collaborative experience so please comment on the blog, post in our Facebook wall, share with us your experiences and share our contact and blog posts with your colleagues and friends so that we can make this a real operational excellence community and a useful resource for all of us.

We will be in contact soon with our first “real” post. Looking forward to this new experience.

The Kairos Management Team.