Innovation Case Studies

Growth through Innovation
Automotive Distribution and Financial Services

Client Situation:
The client, a regional automotive distributor and financial service provider, was seeking a fourth and fifth leg for its business to main strong growth. Over the last 10 years the company had experienced double digit revenue growth. However, cut-throat market dynamics in the automotive market were challenging continued growth and profitability. In addition, the client was highly dependent on one automotive OEM and had experienced a series of unsuccessful growth initiatives in the past.

Approach:
MI conducted a critical assessment of the growth potential of each of the client’s current core businesses over the next four years. The client’s past initiatives were analyzed in terms of specific success factors and barriers to success. These assessments along with a detailed evaluation of the client’s unique and base capabilities led to the development of fourth and fifth leg opportunities.

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Growth through Innovation
Business Process Outsourcing Firm

Client Situation:
The client, a business process outsourcing (BPO) firm, was searching for new sources of profitable growth. Its legacy BPO business had grown significantly, but the profitability had been below target. Its BPO service was mainly targeted at large enterprise customers and based on extracting inefficiencies from its customer’s operations. The client had a portfolio of contracts with varying levels of profitability and varying degrees of customization. The key question was what alternative models, which are based on more standardized asset based platforms, may exist.

Approach:
An initial phase focused on business concept development, evaluating the attractiveness of alternative business models. First the BPO market was segmented into archetypes: customized operations, labor based processing centers, and standardized technology platforms. Alternative standardized platforms were also developed, evaluated, and prioritized. The second phase of the project focused on business concept design for prioritized platforms: map customer needs, behavior and economics; design concept architecture and define offering; define required channels and partnerships; map operational economics and define asset strategy; and develop business plan.

Results:
MI’s approach resulted in the identification and development of growth platforms representing significant untapped market opportunity. The profitability and scalability potential of these platforms are significantly higher then the legacy BPO business.

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High Performance Innovation
Fast Moving Consumer Goods

Client Situation:
The client, a global multi-billion dollar fast moving consumer goods (FMCG) company, had successfully instituted a “fast follower” strategy. Growth had come through acquisitions, both smaller ones in existing categories and larger ones in adjacent FMCG fields. The leaders in the industry had refocused their efforts on competing through innovation, speeding up the rate of new product introductions. Retailers had emerged as the leaders of “fast following”. The client wanted to transform into an innovation leader.

Approach:
MI implemented a three phased approach: Innovation Assessment, Program Development & Piloting and Implementation. The innovation assessment highlighted critical issues within the organization that needed to be fixed immediately. In Phase II the capability building tools were created tested and tailored to the company. In Phase III the capability building was started in three different strategic business units, while also the wider implementation plan was created.

Results:
MI helped the client develop a range of new high value ideas with historical high concept testing results. In addition, 5-7 year innovation roadmaps and pipelines in three strategic business units were created. To achieve the desired growth path, the client initiated relationships with potential innovation partners and new insights from external partners. Several innovation processes were instituted: idea generation and management, innovation teams and charters, and a high-level blueprint for building an innovation organization. The client witnessed a cultural change within the organization, six highly motivated innovation teams, range of success stories, and spontaneous adoption of the approach within the organization.

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Partnering in Innovation/Open Innovation
Fast Moving Consumer Goods

Client Situation:
The client, a fast moving consumer goods company, had focused over the past three to four years on stripping costs and reducing its organizational complexity.  Now the company was seeking opportunities to grow and become more innovative by leveraging the capabilities of its suppliers.

Approach:
MI reviewed the current and past projects and proposals that had been presented to the client from its suppliers, but had not been integrated into the client’s products quickly and effectively. MI conducted an extensive, quantitative, innovation survey among the client’s suppliers. In addition, Best Practices on open innovation involving suppliers and “out-of-the-box” open innovation models from other industries were profiled. Four pilot projects were created and launched.

Results:
The pilot projects performed significantly better, an average of 35%, on all dimensions versus past open innovation projects. The suppliers involved were very positive about the new process, citing improved communication and feedback channels and early involvement in the project. Improvements are being incorporated in the strategic alignment, speed of decision making, and prioritization processes. The lessons learned from the pilot projects were rolled out to the other parts of the organization.

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Growth through Innovation
Industrial Minerals

Client Situation:
The client, a leading industrial minerals company with international operations, was faced with a growth gap, having experienced several years of flat sales. The company had recently initiated a global expansion program, but realized that this endeavor would be limited and insufficient in meeting its future growth goals. The company’s track record in organic growth and innovation was limited. The challenge was to improve the company’s innovation capacity, identify new growth opportunities, and have a show case success within two years.

Approach:
MI diagnosed the client’s current situation, its portfolio of products and past innovation successes and failures.  Based upon these findings, recommendations for enhancing the company’s innovation capacity were made. Through a highly structured ideation process, MI and the client identified and clustered ideas into platforms. The various platforms were created, evaluated, and prioritized. The high priority platforms were further expanded with detailed product and service value propositions.

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Growth through Innovation
Postal and Logistics

Client Situation:
The client, a leading postal and logistics company, was facing declining mail volumes. The client realized that it did not have a process or infrastructure to deal with new business areas / ideas that were outside or in-between the existing business units. The dilemma was how to establish an innovation unit could deal with new business ideas beyond its core letter business.  

Approach:
MI created a client-Monitor team to run a “Proof Phase”. The team created a business growth and innovation process from identification and prioritization of growth areas to generating and prioritizing the ideas and developing and testing the concepts.

Results:
The client’s Board recognized the value of innovation management and approved the creation of a new innovation unit. In addition, the Board approved the advancement of three business ideas to the next stage of development.

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Innovation Diagnostic
Global Transportation Systems Company

Client Situation:
The client, a major transportation company, had experienced greater than expected growth in recent history. Now, they were faced with the challenge of maintaining this growth into the future. The company had initiated several initiatives that were not successful, which created a sense of being “stuck”. The company was having difficulty identifying which of its capabilities were truly differentiated and could be leveraged into new growth opportunities.

Approach:
Through a detailed innovation diagnostic tool, MI was able to identify areas in which the company could improve its innovation performance and climate. The client’s project portfolio was analyzed for its balance of short-, medium- and long-term projects and the past projects for root causes behind the successes and failures.  MI evaluated and mapped the company’s capabilities and assessed the distinctiveness of each and potential for future growth.

Results:
MI created a high degree of consensus and alignment around the role of innovation within in the management team. MI also addressed several areas where innovation could be improved through the creation of an Innovation Leadership Team, company innovation performance metrics, incentive systems, and HR review process. In addition, MI identified new growth opportunities based upon the client’s key capabilities, such as a patented technology in application for the automotive subsystem market. The client’s project portfolio was rebalanced with options created, targets established, and a project review process with clear “go / no-go” initiatives set in place.

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Technology Case Studies

Technology Life Cycle and Product Development Strategy
Biotechnology and Chemicals Company

Situation:
The client, a leading biotechnology and chemicals company had recently acquired several companies and needed to find a way to integrate their strategic technology portfolio and development pipelines. The company needed to more effectively exploit the numerous potential synergies for rationalization, accelerated revenue growth, and strategic platform development that its new acquisitions created. It also needed to respond to the investment community that was increasingly questioning the value of the acquisitions.

Approach:
MI worked with the client to create a pipeline assessment and valuation, and analyzed how that value could be enhanced. MI also determined where the greatest opportunities were for strategic platform development to support new and more powerful growth engines or franchises for the business. With platform mapping methodologies based on both market-in and technology/capability-out assessments, MI was able to help the client understand what was needed to create more compelling growth engines and technology platforms. In addition, MI determined which platforms could be used as organizational vehicles or processes to drive accelerated business success.

Results:
After working with MI, the client was able to create a more convincing and compelling value proposition, new platforms, and growth engines that emerged out of its acquisitions. It had more credible valuations of its technology portfolio and development pipeline, and greatly improved its system for technology management and valuation. Finally, the client improved metrics and performance measures to drive collaborative technology development activities across business boundaries, and revised its portfolios and pipelines development strategies with better course, speed, and value implications.

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Technology Assessment and Sourcing
Digital Technology Company

Client Situation:
A digital technology company had done little to develop synergies between newly merged companies over the past several years. The company wanted to develop a five year strategic plan that would also address the potential synergies. As part of that challenge the R&D and innovation processes and structure were to be reviewed to ensure they could support the foreseen growth. The client needed to know: the value of its pipeline and resulting gap, the strength of the portfolio and possible options, potential synergies, and systems required for sustainable growth.

Approach:
MI benchmarked current position against the top R&D spending organizations within the wider electronics industry. The team gathered and analyzed data, conducted status workshops and site visits to prepare a set of improvement proposals and implementation plans. Furthermore MI analyzed the R&D project portfolio allowing several optimization decisions to be made in conjunction with the business teams and produced forecast budgets for required R&D FTEs and total costs several years out. Finally the team developed agreed upon recommendations.

Results:
The project stopped low-yield projects — approximately 25 % of projects — and refocused effort, bringing hi-potential projects forward by providing more resources. Prioritized improvement areas and quick-wins were immediately acted upon — e.g., in joint technology scouting using the Group’s combined sourcing potential. Technology improvement plans were developed. Clearly identified Centers of Excellence for Technologies were designated to be used in leveraging technologies in future acquisitions. Furthermore there were agreed upon innovation metrics and targets.

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Technology Risk Management
Display Manufacturer

Client Situation:
The client, one of the top manufacturers of LCD displays, was involved in a highly successful joint venture and was evaluating a decision for a multi-billion plant investment. Before placing such a large bet, the company needed to evaluate competing display technologies, potential LCD manufacturing technology breakthroughs. Given uncertainties related to the market and the technology, the company wondered whether it would build the plant at once or stage the investment.

Approach:
Through external interviews and a large expert and client based Technology Forecasting workshop, MI developed an integrated view of competing technologies for the Flat Panel Display TV market over a 10 year time horizon.  MI also combined internal and external interviews with proprietary valuation methodologies to prioritize the current pipeline of manufacturing technologies. In addition, MI used its technology unbundling methodologies to develop a set of longer term innovation opportunities evaluated on risk and potential impact.

Results:
MI validated the necessary market opportunity for LCD in future flat panel displays in the face of industry-wide increases in supply and competing technologies. This consulting project resulted in exposed additional investment risks and demonstrated the value of a staged investment that hedges against technology risks and uncertainties. Finally, MI helped the client prioritize areas for technology innovation that can reduce the required capital expenditure for future plant investments.

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Technology Life Cycle and Product Development Strategy
Electric Component Company

Situation:
A young, publicly traded company developed a novel technology to improve the performance of an electric motor and was testing with various commercially available components, preparing to commercialize its development. The company was challenged with accelerating commercialization and optimizing value capture from the technology. The question was in which market should they commercialize the technology first and how to have its value proposition. The company needed help optimizing value capture, and understanding the appropriate commercialization and adoption pathways for its technology.

Approach:
MI developed a long list of potential opportunities for technology commercialization, and developed and applied a set of screens to filter opportunities down to the most attractive applications. MI profiled high priority opportunities to validate commercial viability, fit with customer needs, economic potential and ease of adoption, and for those that were validated, defined optimal commercialization paths, timing, and impact on the client’s overall operating model.

Results:
MI helped the management team develop and operationalize a new commercialization strategy that included: shifting the initial exclusive focus on a new market that resulted in a series of short-mid term commercial applications, and combining near-term targets with recommendations for building the necessary capabilities to capture long-term high-potential markets. For each selected application, the relevant steps and players in the value chain were identified for targeting, including a commercialization strategy that met with early success.

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Technology Life Cycle and Product Development Strategy
Fuel Cell Manufacturer

Client Situation:
The client, a leading fuel cell company, had the ambition to be a leader in commercializing its fuel cell technology. Several issues had to be resolved to achieve commercialization: the current diversification strategy had created a large cash burn that was unsustainable, the business and technology strategies were not aligned, and investors and employees were losing confidence in the company’s leadership. 

Approach:
MI worked with the client to develop a commercial strategy that was based upon a review and re-evaluation of various fuel cell applications and markets, an in-depth analysis of the automotive fuel cell market opportunity, and the client’s position under various scenarios. Through an analysis of the company’s technology and capabilities, identification of focus areas, and a re-prioritization and sequencing of technology investments, an integrated technology strategy was developed. Lastly, a detailed analysis of the financial implications for the client was evaluated.

Results:
MI provided a fact-base, detailed analysis that supported the client’s decision to focus development efforts on automotive fuel cells. Clear business and technology milestones that would ensure the liquidity of the firm and returns for the investors were established. The result was a clear strategy that showed the role technology would play in recapturing industry leadership.     

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Technology Assessment and Sourcing
Medical Device Manufacturer

Situation:
The client, a leading medical device company was launching a major new growth product. This product would contribute significant sales growth over the next 2 to 3 years. The executives were anxious to maintain long-term sustainability and technology differentiation. Having been focused on this new product launch, the company had curtailed seed investments in other product areas. Many other competitors would be entering this space and our client needed a clear vision of how to sustain its leadership position.

Approach:
MI worked with the client on a four phase approach to Identify, Narrow, Quantify and Select the programs that would create a strong technology strategy to maintain the company's leadership position. MI first identified the future markets and technologies. This was achieved through a detailed analysis of the company's competitors' product development pipelines. In addition, a historical perspective of product introductions in this area revealed that customers would readily switch to new products that met key market needs. In the second phase of the project MI spoke extensively to opinion leaders, innovators and academics to solicit a range of high value product and technology innovation areas. These technology areas, combined with the technology scan conducted in phase one, were mapped against the key market needs to Narrow the opportunities down to specific technology applications. In phase three, each of the technology options were quantified in terms of technical and clinical feasibility, the client's preparedness, estimated market value, competitive impact, and client's competitive position. This then fed into the selection process in phase four and the best sourcing (make, buy and collaborate) decisions and investment recommendations.

Results:
MI created a portfolio of differentiated products for the client's product pipeline to ensure market leadership. For each of the products a strategic plan for achieving success and the associated resources required was developed. The plan revealed to the client the capability areas in which it possessed a strong position and those in which it was weak and would require external partnerships to develop. Through this project, the client soon realized that its delivery device could evolve into a high growth franchise.

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