corporate entrepreneurship

© 2015 ConceptSpring

Elaine Chen

2015

Corporate

Entrepreneurship

The old way

The new way

Test and experiment:

Validate hypotheses at every step

Minimum

Viable

Product

Common challenges and solutions

• Need “Air Cover”

• Brand reputation risk

• Sales cannibalization risk

• No budget

• Competing priorities

• Legacy employee behaviors

• Silo thinking

• Slow, regimented processes

• Counterproductive incentive systems

• Marginalized projects

• Orphaned projects

• Get buy-in from a high-ranking executive

• Test in small/limited ways under a fake brand

• Test in small numbers within test markets

• Secure budget (existing or new)

• Dedicated space and team

• Select team members by eship aptitude/interest

• Actively promote cross functional collaboration

• Invent new, autonomous management processes

• Invent new reward systems

• Choose projects relevant/important to parent biz

• Follow through with tech transfer

Challenges Solutions

Case Study: Internal service to optimize

logistics for iron-ore mining

Top 3 challenges




• No budget



• Silo thinking





• Division VP became a champion – opened doors



• Make do this year; propose new budget next year





• New project included in performance review



Challenges Ideas

Result

• VP helped them get access to port operators for

primary market researches

• 5-10 interviews completed

• Defined problem and proposed MVP

• Secured funding for next budget cycle

• Developed program plan / recruited team members for

2 phases: before budget / after budget

• Project is still ongoing

Case Study: SaaS pricing for MCAD

• Testing an existing enterprise mechanical CAD

software product against a low-end market using a

SaaS based pricing structure

Pricing model: One time fee of $3,995 per named user license + $1,200 / year annual subscription fee Target Market: Large Enterprises ($500M+ annual revenue)

Enterprise pricing model SaaS pricing model

Pricing model: $100 / month per named user, no contract Target Market: Startups and SMEs (Pre-revenue to <$5M revenue)

Top 3 challenges




• No budget



• Silo thinking





• Biz Unit General Manager became the champion

• Secretly do A/B test – stop test after 100 hits


• Postpone investment projects and do this instead








Challenges Ideas

Result

• 100 sample points collected on A/B testing

• Results uninspiring – original assumptions of target

market, value proposition etc. in question

• Team decided not to proceed with project based on

these results – saved $$$ and opportunity cost

Case Study: GE Monogram Refrigerator

Before

• Product revision every 5 years

• Keep product under wraps until release

• Big planning team

• Big development team

• Big budget

• Heads-down during development/production

• First market feedback available after launch

“You’re going to change every part the customer sees. You won’t have a lot of money. There will be a very small team. There will be a working product in 3 months. And you will have a production product in 11 or 12 months.” - Chip Blankenship, CEO of GE Appliances – January 2013

Top 3 challenges




• No budget



• Silo thinking





• Biz Unit CEO became the champion

• Secretly do A/B test – stop test after 100 hits


• Postpone investment projects and do this instead


• Clear expectations lead to different behaviors


• New processes across the board




Challenges Ideas

After

• Working “product” in 3 months

• 5 prototypes tested in 2013

• 3 more prototypes in 2014

• V8 went to production in Oct 2014

• Annual releases thereafter

=> 22 months elapsed time from V1 prototype

Result

“Half the program cost, twice the program speed, and currently selling over two times the normal sales rate.”

– “How GE Applies Lean Startup Practices”, Harvard Business Review, April 2014.

https://hbr.org/2014/04/how-ge-applies-lean-startup-practices/

https://hbr.org/2014/04/how-ge-applies-lean-startup-practices/

Not only was it faster, it made a better

product

• 1/2: The length of the assembly line was reduced by 50 percent.

• 20: Lean eliminated 20 parts from just one assembly area, the vegetable pan. GE estimates they’ve eliminated more than 100 parts in the average refrigerator compared to previous models.

• The new bottom-freezer refrigerator line achieved the ENERGY STAR® rating that is 20 percent better than current guidelines for refrigerators, meeting 2014 requirements.

• 25%: Using Lean’s cross-functional team approach, the team brought the product to the shelf in 25 percent less time, since steps could be done concurrently rather than consecutively.

• 1 out of 2: Even though the new refrigerators will have more features than the previous model, the Lean team removed 50 percent of the wiring.

- “The Skinny on Lean: Use It or Lose It – GE Appliances and the Lean Process” – GE Appliances Press Room

http://pressroom.geappliances.com/facts/the-skinny-on-lean-230762

“The Diesel Engine MVP”

19 https://www.youtube.com/watch?v=rkdsYTlEGfQ

https://www.youtube.com/watch?v=rkdsYTlEGfQ



Other examples

20

One last case study: Parker Hannifin

Craig Maxwell Corporate VP of Technology and Innovation, Parker Hannifin; creator of

the Parker Hannifin Tech Incubator

Ryan Farris, Ph.D.

Beyond traditional motion control: Investing in an exoskeleton for paraplegics from Vanderbilt

Prototypes relaxing in the Parker

Hannifin Incubator

Indego exoskeleton in action

It has been done. It can be done.




• No budget



• Silo thinking





• Get buy-in from a high-ranking executive



• Secure budget (existing or new)





• Invent new reward systems



Challenges Solutions

You can be the Craig Maxwell for

your organization

@chenelaine blog.conceptspring.com

Thank you