APQC,ASME,andtheOpenStandardsBenchmarkingCollaborativePresentedbyCathyHill,APQCASMEIndustryAdvisoryBoardMeetingApril18,2007©2007APQC.ALLRIGHTSRESERVED.2APQC’sMissionToworkwithorganizationsworldwidetoimproveproductivityandqualityby:•Discoveringeffectivemethodsofimprovement•Broadlydisseminatefindings•Connectindividualsandtheknowledgetheyneedtoimprove©2007APQC.ALLRIGHTSRESERVED.3WhoisAPQC?Member-basednon-profitresearchandeducationorganizationLonghistoryinResearch&Development(R&D)andInnovationMembershipofmorethan500organizationsgloballyConductedmorethan6,000benchmarkingstudiesDirectedmorethan250consortiumandbestpracticestudiesStrongadherencetoCodeofConductthatensuresthatalldatasharedwithAPQCwillbekeptconfidentialAPQCconductsthreetypesofresearch•Custom-foruniqueorconfidentialneeds•Consortium-multi-companybestpracticecollaborationaroundcommonsetofissuesorprocesses•OSBC-globalmetricresearchandbenchmarkingbasedonOpenStandards©2007APQC.ALLRIGHTSRESERVED.4OpenStandardBenchmarkingCollaborativeSMTheOSBCisaglobalinitiativetodevelopacommon,standardframeworkforprocessdefinitions,measures,andbenchmarksthatareavailabletoparticipatingorganizationsworldwidetoimproveperformance.Thegoalistoaccelerateinnovationandimprovementwithinorganizations.Hundredsofglobalfirmsareparticipating.GovernanceincludesanAdvisoryCouncilof14globalorganizations.APQCservesasstewardoftheOpenStandards.APQCmembersserveasvoiceofthecustomertovalidateprocess,measurementandbenchmarkingrequirements.©2007APQC.ALLRIGHTSRESERVED.5OSBCResearchDatabaseOver1,000individualmetricsandperformancedriverscoveringapproximately65processesandfunctionsDatacollectedfromFortune1000companiesacrossavarietyofindustriesandgeographiesTodate,over3,500surveyshavebeencollectedacrossthevariousprocessareasandindustriesMetricsarevalidated,normalized,andaggregatedbeforereportingDatabaseisrefreshedcontinuously40%Americas,40%EMEA,20%AsiaPacParticipantsreceivedcustomizedperformancelevelreportCompareacrossmultipledimensions•Industrypeers,geographic,relevantsize,etc.©2007APQC.ALLRIGHTSRESERVED.6Innovation“Pains”Organizationsarefacingpressuretogrowfromshareholders,andotherinternalandexternalsources.The“street”wantstoseepaybackonR&Dinvestmentswithinayear–cananythingsurvivethepressure?Intoday'scorporateworldofeverincreasingexpectations,asuccessfulinnovationstrategyiscriticaltoremainingcompetitiveandattractivetoinvestors.Buthowdoyoumeasureinnovation?Consideringthatinnovationencompassesproductsandservices,operations,businessmodels,andkeyenablers,noonemeasureissufficienttogiveanorganizationanassessmentofitsinnovationperformance.©2007APQC.ALLRIGHTSRESERVED.7InnovationResearchBackgroundTheresearchinitiativebuildsuponpriorresearchconductedbyAPQCandIBM.Severaloftheserecentresearchprojectsinclude:•2006InnovationMetricsSurvey-jointresearchbyIBMandAPQC•120+responses•Geographicallydispersedorganizations•Diversesectorsrepresented•Participantswereaskedtoevaluatetheeffectivenessofeachmetricinmeasuringinnovation•IBM’sCEOSurvey•APQC’s“Innovation:PuttingIdeasintoAction”consortiumbenchmarkingstudy(2006)•APQC’s“SuccessfullyEmbeddingInnovation:StrategiesandTactics”consortiumbenchmarkingstudy(2007)©2007APQC.ALLRIGHTSRESERVED.8ObjectivesoftheInnovationSurveyExaminehoworganizationsaremeasuringinnovationProvideparticipatingorganizationswiththeirrelativeperformanceusinganinclusivedefinitionofinnovation:•Productandserviceinnovation,•operationalinnovation,•businessmodelinnovation,and•enablersofinnovation.©2007APQC.ALLRIGHTSRESERVED.9InnovationCapacity,Processes,andSpendingOutcomesMeasures•Revenue•Costofcontinuingoperations•Costofgoodssold•Time-to-market•Time-to-profitability/payback28questions16questionsTypesofResearchQuestions©2007APQC.ALLRIGHTSRESERVED.10Innovation-WherewearetodateTotalnumberofsurveysreceived:60NextDeadline:May31,2007Early-stagefindingsandobservations:•Pleaseseesamplereportsection“InnovationAnalysisandFindings”•Thefollowingslidesprovideafewillustrationsoftheseearlystagefindingsandobservations©2007APQC.ALLRIGHTSRESERVED.11Amongrespondingorganizations,externalcollaborationappearstobehighestinR&Dfunction,followedbyIT,Marketing,andSalesExtenttowhichorganizationcollaboratesexternally(5,6,7on7pointscale)21.627.531.437.341.243.152.90.020.040.060.080.0100.0EnvirHealth&SafetyCustomerServiceOperationsSalesMarketingITR&DFrequencyofResponse©2007APQC.ALLRIGHTSRESERVED.12IdeaGeneration–Almost2/3ofideascomefrominsidetheorganizationWhatpercentageofthedevelopmentofnewideaswouldyouattributetoexternal(outsidetheorganization)orinternalsources?35.4%64.6%0%10%20%30%40%50%60%70%80%90%100%ExternalsourcesInternalsourcesMeanofAllRespondentsQuestion24,N=51©2007APQC.ALLRIGHTSRESERVED.13ExternalSourcesforIdeas–CustomersleadthelistOfthepercentageofideationyouattributedtoexternalsources,howmuchwouldyouattributetoeachofthefollowinggroups?6.6%9.7%10.4%15.7%17.8%39.7%0%10%20%30%40%50%OtherConsultantsSuppliersPartnersCompetitorsClients/CustomersMeanofAllRespondentsQuestion25,N=51Other:GovernmentlegislationInventorsResearchdepartmentR