innovate or die: applied innovation

Carter, Kelly & MadhuMBA from University of Toronto, Canada

EMBA from University of St. Gallen, Switzerland

TorontoBuenos AiresSao PauloRio de JaneiroShanghaiHong KongMacauGenevaSt Gallen (Zurich)BudapestViennaChennaiJaipurAgraNew DelhiMumbaiIstanbulDubaiVancouver!

APPLIED INNOVATION

INNOVATE OR DIE

George E. P. Box one of the great statistical minds of the 20th century

“Essentially, all models are wrong, but some are useful.”

APPLIED INNOVATION

Applied Research

Phase I

Entrepreneurship Curriculum

Disruptive Innovation

+

Phase II

Early Adopters

Paid Pilot


+

Phase III

Scale

Paid Pilot

+

Commercialization

a b

d f

g i

c

e

h

c

e

need solution

THOUGHT PROCESS

h

PROUST “THE REAL ACT OF DISCOVERY CONSISTS NOT IN FINDING NEW

LANDS, BUT IN SEEING WITH NEW EYES

✤ We focus on bias - and the decision making process.✤ We explore new ideas and other perspectives.✤ We use foresight to contemplate and discuss possible futures.

”

✤ We leverage this to create new realities

Image: http://www.sgha.net

BIAS VS FACTS

http://www.mbtitalk.com/all-posts/type-around-the-globe/attachment/world-globe-2/

• We hold a number of Cognitive Biases (+170)

• This Limits our Ability as Managers to make good decisions

• Cause of Decision Paralysis and Doomed Projects

• So what is the solution...

BIAS FRAMEWORK

UNDERSTANDTHINK

REFLECT

FRINGE

3RULES

IS IT CRAZY?

CAN YOU FEEL IT?“NOT EVERYTHING THAT CAN BE COUNTED COUNTS, AND NOT EVERYTHING THAT COUNTS CAN BE COUNTED.”

IS IT CRAZY ENOUGH?“IF AT FIRST THE IDEA IS NOT ABSURD, THEN THERE IS NO HOPE FOR IT.”

What is the Context?

Why?

QUESTION

WHAT IS THIS ?

AND THIS ?

AND THIS ?

Image: le monde “Atlas der Globalisierung”

Export

Import

WEAPONS TRADE

HUMAN TRAFFICKING

DRUGS

Image: le monde “Atlas der Globalisierung”

You

Other FamiliesOther Tribes

Other Communities Friends of Friends Friends of Family Other People

TYPICAL APPROACH

Frien

ds Family

Industry

Alternate Services

Inputs & Producers

Other Users of Inputs

New Entrants Related Services Other Buyer Demands

DISCOVERING THE FRINGE

Supp

liers

Consumers

DIVERGE

Create Choices

CONVERGE

Make Choices

CONVERGENCE

DIVERGENCE

Industry

Alternate Services

Inputs & Producers

Other Users of Inputs New Entrants Related Services Other Buyer Demands

DISCOVERING THE FRINGE

Supp

liers

Consumers

Cheese

Gro

cery

Sto

re Connoisseur

Cheese Shop Restaurant

Cake BakerRefrigerators

Aircraft Manufacturing Energy Companies

DIVERGE

Create Choices

CONVERGE

Make Choices

CONVERGENCE

DIVERGENCE

SCENARIO PLANNING

“SCIENCE JUST PREDICTS DISASTER, SINCE IT’S BOUND TO COME TRUE

SOONER OR LATER.”

AnecdoteMastlin’s advice to Kepler, Taleb

THE BLACK SWAN

SCENARIO PLANNING PROCESS

DRIVERS ASSUMPTIONS

SCENARIO 1

SCENARIO 2

SCENARIO 3

IMPLICATIONS

IMPLICATIONS

IMPLICATIONS

Hypothesis Fringe Indicators



+ -

+ -

+ -

P E S T LE

FRAMEWORK

Polit

ical

Econ

omic

al

Soci

al

Tech

nolo

gica

l

Envi

ronm

enta

l

Lega

l

Source: Emma Coats, http://www.slideshare.net/powerfulpoint/pixar-22rulestophenomenalstorytellingpowerfulpointslideshare

STORY TELLING

http://www.slideshare.net/powerfulpoint/pixar-22rulestophenomenalstorytellingpowerfulpointslideshare

APPLIED INNOVATION

Applied Research

Phase I

Entrepreneurship Curriculum


+

Phase II

Early Adopters

Paid Pilot


+

Phase III

Scale

Paid Pilot

+

Commercialization

– Ben Horowitz

“By definition they are not obvious. In fact, they seem insane. If they didn’t seem insane at the time,

they wouldn’t be breakthroughs”

Source: http://ilovefaygoslushies.deviantart.com/art/Insane-Base-415796210

http://ilovefaygoslushies.deviantart.com/art/Insane-Base-415796210

“ASK YOURSELF THREE QUESTIONS.”

1. WHAT KIND OF INNOVATION DO I WANT?2. HOW MUCH INNOVATION DO I WANT?3. WHEN DO I WANT IT?

Projected cash stream from investing in Innovation & Marketing

More likely cash stream resulting from doing nothing

DCF and NPV methodologies implicitly make this comparison

Companies should be making this comparison

Assumed cash stream resulting from doing nothing

B

A

C

PETER DRUCKER, “BECAUSE THE PURPOSE OF BUSINESS IS TO CREATE A CUSTOMER, THE

BUSINESS ENTERPRISE HAS TWO – AND ONLY TWO – BASIC FUNCTIONS: MARKETING AND INNOVATION. MARKETING AND INNOVATION

PRODUCE RESULTS; ALL THE REST ARE COSTS. ”

The Unexpected SuccessFailureOutside Event (Eureka Moment !)

Incongruity in Reality Asymmetry in Experience

Innovation on Process Need

Bridging a Gap

Change in Market Structure

Demographics

Changes in Perception Society Bites Back

New Knowledge

Drucker 7-Sources Christensen Disruption

Problem is Undefined

New Market (blue ocean)

Innovation is a dramatic

game changer

Customer doesn’t know

Market is Unpredictable

Traditional Models Fail

Talk to Early Adopter

Customer Development

The Domain of the Outsider (Fringe)

What:

1) Simpler, Cheaper, & Good Enough

2) Micro-Market Underserved & Uncontested

How:

1) Job-to-be-Done 2) Combinatory 3) Adjacencies 4) Trade-offs

TOGETHER BE OPEN AND LISTEN

Breakthrough DisruptionOptimization Sustaining

Horizon 1 Horizon 2 Horizon 3



Saving $ Defend your Core

Spending $ Build Momentum

Networks & Fans Create Options for futures



Efficiency Sustaining Empowering



Soon to be Non-‐Customers

Customers Refusing Non-‐Customers

Unexplored Non-‐Customers






Saving $ Spending $ Networks & Fans




Refusing Non-‐Customers


Finite

Infinite






Finite Infinite







Finite Infinite

- $ $ + $$$






FiniteShort-term

InfiniteLong-term






Comfortable

Uncomfortable



High individual project probability in short term Low aggregate sustaining probability in long term (virtually all industries disrupted at some point of time)Line of business oriented

Low individual probability (virtually infinite number of plausible disruptive scenarios) High aggregate probability of disrupting industry (virtual certainty disruption will come from below/fringe) Core competency + bottom up / fringe application



Saving $ Spending $ Networks & Fans



Order Chaos

More Options & Possibilities

More Insights & Patterns



Order Chaos



Conceptual KnowledgeUnderstanding &

Organization

Source: Knowledge System (Artistry Unleashed - Hilary Austen)

Order Chaos

Directional KnowledgeIdentity & Motivation

Experiential KnowledgeSkills & Awareness

– Albert Einstein

“I rarely think in words at all. A thought comes and I may try to explain it in words afterwards.”





Organization



Mastery: Applying Developed Knowledge

Recognition, Effectiveness, Expertise, Purpose, Focus

Guides

Guides

Informs

Informs

Originality: Generating New Knowledge

Perception, Creativity, Innovation, Flexibility, Openness



Organization



Mastery: Applying Developed Knowledge

Recognition, Effectiveness, Expertise, Purpose, Focus

Guides

Guides

Informs

Informs

Originality: Generating New Knowledge

Perception, Creativity, Innovation, Flexibility, Openness

THE LEARNING & INNOVATION LOOP

BUT

WHO WILL IMPLEMENT IT?

WE HAVE ALREADY MOVED FROM MANAGEMENT TO LEADERSHIP – AND

NOW WE’RE GOING BEYOND LEADERSHIP TO INSPIRATION…

TO SENSE

OPPORTUNITIES AS THEY ARISE IN TODAY’S FAST PACED ENVIRONMENT

LEADERS MUST HELP PEOPLE ACCESS THEIR SOURCES OF INSPIRATION, INTUITION AND IMAGINATION…

“SO ASK YOURSELF THREE QUESTIONS.” (AGAIN)

1. WHAT KIND OF INNOVATION DO I WANT?

2. HOW MUCH INNOVATION DO I WANT?

3. WHEN DO I WANT IT?

=Innovation Evolution==

Innovation

Leadership

Change Management

Change Management

Before After

SEA SQUIRT

https://goodheartextremescience.wordpress.com/2010/01/27/meet-the-creature-that-eats-its-own-brain/

https://goodheartextremescience.wordpress.com/2010/01/27/meet-the-creature-that-eats-its-own-brain/

“INNOVATE OR DIE”

@carterhurlburt @margomartins15 @madhuvenkatesan

AppendixInnovation concepts as a story

Forget about looking for good ideas, find good people.

Don’t love your idea until the world loves it, too.

Test your hypothesis and key assumptions, when you get a better question, test that.

If you can’t tell it as a story, it probably won’t work.

When you Converge, subtract… change the system logic

What is your competitive advantage? What happens when that goes away or market logic changes?

Know where you want to end up...not how to get there (or even the exact destination...but get close)

Test something, launch something and Practice, Practice, Practice.

Remember buff-naked Einstein...the absurd - even remotely plausible - may hold the best path forward.

Know your bias.

Write/Draw things on paper. We learn by writing.

Go for the fringe...mainstream doesn’t have the best “stuff ”...surprise is your friend !

Don’t be lame. Push boundaries, think strategically, think opposite of your natural disposition.

Have conviction in your strategy...break it down into the most basic fundamentals.

Context.

Solve the big, “game changing”, industry wrecking problems...brand yourself as the protagonist.

Keep trying...don’t be afraid to shelve a great idea for something that is possible now v. probable then.

Test, test, test...solve up to the next bottleneck...don’t “refine” the plan to avoid them.

The fringe will knock you off balance...the likelihood you will be able to capitalize on another fringe event is small.

What don’t you like...fix it...but keep most if not all of the same pieces. Justify - plausibly - anything you remove.

Don’t hunt for “the-next-big-thing”, find something that makes you want to take action.

Can you test the basic assumptions at little to no cost?

innovate or die: applied innovation

Leadership & Management