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Five Principles forBuilding Innovation
Capabilities
Tendayi VikiPhD MBA
Learn Build
Measure
Situations emerge in the process of creative destruction in which many
firms may have to perish that nevertheless would be able to live on vigorously and usefully if they
weather a particular storm...
Joseph Schumpeter1883-1950
Author – Capitalism, Socialism and Democracy
The basic problem confronting an organization is to engage in
sufficient exploitation to ensure its current viability and, at the same
time, devote enough energy to exploration to ensure its future
viability...
James G. MarchStanford Professor
Author – Explorations in Organizations
The fear of cannibalizing sales of existing products is often cited as a
reason why established firms delay the introduction of
new disruptive technologies...
Clayton ChristensenHarvard Professor
Author – Innovator’s Dilemma
Meanwhile At An MBA Near You...
Disrupting Education
Searching While Executing
Innovation = +
An Innovation Ecosystem
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Principle 1 - Innovation Thesis
We invest in large networks of engaged users,
differentiated by user experience, and defensible through network effects.
Fred WilsonVenture Capitalist
Union Square Ventures
Principle 2 - Innovation Portfolio
A Balanced Portfolio
A Couple of Years Back...
We now have several internal global initiatives
aimed at redressing this imbalance...
Principle 3 - Innovation Framework
Idea
Explore
Validate
Grow
Sustain
Retire
Practice
Jobs to Be DoneBusiness Model Design Customer Development
Minimum Viable Products
Growth EnginesSales Forces
OptimizationsFeature Building
Focus Early Adopters, Early Majority Late Majority, Laggards
Duration Days Weeks Months Years
Metrics Lean Analytics, Pirate Metrics Revenues, Profit-Margins, ROI, IRR, NPV
Idea Explore Validate Grow Sustain Retire
The Lean Product Lifecycle
A Nonlinear Process
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An accountable, focused group making clear data driven decisions
The ProductCouncil
Principle 4 - Innovation Accounting
Product Council Investment Approval Thresholds*
RIGHT SIDE: Product-Market fit with a working business model
Increase transparency of mature investments to ensure alignment to strategy
LEFT SIDE: Validate assumptions and hypotheses
Reduces the risk of wasted investment and allows teams to pivot to new and better ideas
*Amounts need to be validated, by Business Model, and are subject to the thresholds established by the Schedule of Authority
Explore
Grow
Quarterly
Quarterly
Validate
Sustain
RetireIdea <£50kto Explore
<£250kTo Validate
Financial validation template required to secure
ongoing investment
Investment Governance
Product Council
ProductCouncil
Explore
✓
Can you identify a core user problem in
a target market?
Have you validated
customer and learner needs
in context?
Can you demonstrate
Product/Market Fit or validated
business model?
ValidateIdea
✗
ProductCouncil
✓
✗
<£50k <£250k
Sustain
Quarterly Performance
Review
Quarterly Performance
Review
ProductCouncil
GrowProductCouncil Retire
Quarterly
ProductCouncil
Quarterly
Investment Governance
Reducing Investment Risk
Funding & Evidence
Risk
Time
Idea Explore Validate Grow
Moneyball for Innovation reworked on slide 11
£0
£<50k
£<250k
£ P&L
✓✗✗
✗
✓ ✓ ✓
✓
✓
✓
✗
✗
✓ ✓
✓
✓ ✓✓
✗✗
✗
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Principle 5 - Innovation Best Practice
The PLC EcosystemPlaybook to support adoption of best practice
Training to establish cohorts of embedded coaches across each area of the company
Communities to help share best practices and deepen cultural impact
Product Councils to manage investments using PLC criteria
Templates, Reports and Portfolio tools for Product Teams and Investment Councils
http://thecorporatestartupbook.com/
Thank You Learn Build
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