Tilting at Windmills: Intrapreneurship in large organizations from Lean UX NYC 2014

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How to innovate in large organizations with a three-maxima model of management. Looks at Lean Startup and other business models (Innovator's Dilemma, Three Horizons) and why large organizations resist change.

Considers the impact of technology that makes small batches possible, and why this in turn makes experimentation easier, shifting the key competitive advantage from scale to cycle time.

Presented on April 10 at Lean UX NYC

Published in: Design

Tilting at Windmills: Intrapreneurship in large organizations from Lean UX NYC 2014

  1. 1. Tilting at Windmills Innovation in large organizations. Photo by Echiner on Flickr. Used under a creative commons license. https:// www.flickr.com/photos/decadence/249922560 Thursday, April 10, 14
  2. 2. Back in 2008. Thursday, April 10, 14
  3. 3. Today. Thursday, April 10, 14
  4. 4. That escalated quickly. Thursday, April 10, 14
  5. 5. When you’re a startup your goal is to find a sustainable, repeatable business model. Thursday, April 10, 14
  6. 6. When you’re a big company, your goal is to perpetuate one. Thursday, April 10, 14
  7. 7. Instead of: Companies are what they repeatedly do. Thursday, April 10, 14
  8. 8. How about: Organizations that do things repeatedly are companies. Thursday, April 10, 14
  9. 9. Once, this was all about scale. Thursday, April 10, 14
  10. 10. How to perpetuate something. Photo by Kamal Hamid. Used under a creative commons license. https:// www.flickr.com/photos/evergreenkamal/395448039 Thursday, April 10, 14
  11. 11. Daniel Craig McCallum. Thursday, April 10, 14
  12. 12. How’s that working out for you? Thursday, April 10, 14
  13. 13. F500 lifespan history Thursday, April 10, 14
  14. 14. Fortune 500 Life Expectancy (http://csinvesting.org/2012/01/06/fortune-500-extinction/) 1950 2010... 75 years 15 years Thursday, April 10, 14
  15. 15. Fortune 500 Life Expectancy (http://csinvesting.org/2012/01/06/fortune-500-extinction/) 1950 2010... 75 years 15 years Growth by entering a new business Corporate Strategy Board 95 % fail 99 % fail Clay Christensen Thursday, April 10, 14
  16. 16. The innovation problem isn’t new. Picture by James Whatley on Flickr. Used under a Creative Commons license. https://www.flickr.com/photos/whatleydude/6202872135 Thursday, April 10, 14
  17. 17. Companies die because they fail to move to new business models. Thursday, April 10, 14
  18. 18. Clay Christensen, The Innovator’s Dilemma CostperMB $1000 $100 $10 $1 Time The Innovator’s Dilemma Thursday, April 10, 14
  19. 19. Clay Christensen, The Innovator’s Dilemma CostperMB $1000 $100 $10 $1 Time 14” M ainfram e The Innovator’s Dilemma Thursday, April 10, 14
  20. 20. Clay Christensen, The Innovator’s Dilemma CostperMB $1000 $100 $10 $1 Time 14” M ainfram e 8” M inicom puter The Innovator’s Dilemma Thursday, April 10, 14
  21. 21. Clay Christensen, The Innovator’s Dilemma CostperMB $1000 $100 $10 $1 Time 14” M ainfram e 8” M inicom puter 5.25” D esktop The Innovator’s Dilemma Thursday, April 10, 14
  22. 22. Clay Christensen, The Innovator’s Dilemma CostperMB $1000 $100 $10 $1 Time 14” M ainfram e 8” M inicom puter 5.25” D esktop 3.5” N otebook The Innovator’s Dilemma Thursday, April 10, 14
  23. 23. $1000 $100 $10 $1 Time 8” 5.25” Technologies outstrip what the market needs, driven by feedback from the “best” current customer. Thursday, April 10, 14
  24. 24. $1000 $100 $10 $1 Time 8” 5.25” Technologies outstrip what the market needs, driven by feedback from the “best” current customer. High end customer Thursday, April 10, 14
  25. 25. $1000 $100 $10 $1 Time 8” 5.25” Technologies outstrip what the market needs, driven by feedback from the “best” current customer. High end customer Low end customer Thursday, April 10, 14
  26. 26. $1000 $100 $10 $1 Time 8” 5.25” The new market has different criteria for success, which are uninteresting to incumbents. Thursday, April 10, 14
  27. 27. $1000 $100 $10 $1 Time 8” 5.25” The new market has different criteria for success, which are uninteresting to incumbents. Storage capacity Thursday, April 10, 14
  28. 28. $1000 $100 $10 $1 Time 8” 5.25” The new market has different criteria for success, which are uninteresting to incumbents. Storage capacity Portability Thursday, April 10, 14
  29. 29. Amazon Web Services and the server value network Server computing • Density • Heat • GHz • MIPS Capex, financing, TCO, ROI CIO, enterprise IT Value criteria Money Buyer Thursday, April 10, 14
  30. 30. Amazon Web Services and the server value network Server computing • Density • Heat • GHz • MIPS Capex, financing, TCO, ROI CIO, enterprise IT Value criteria Money Buyer Cloud computing • Instances • Objects • Spinup time • Scaleout Opex, demand, time to result CTO, coder, app owner, line of business, startup Thursday, April 10, 14
  31. 31. HP and Dell missed the disruption and the change in the value network. $1000 $100 $10 $1 Time Thursday, April 10, 14
  32. 32. HP and Dell missed the disruption and the change in the value network. $1000 $100 $10 $1 Time Physical servers: MIPS, heat, density, cost per cycle. Sold to CIOs Thursday, April 10, 14
  33. 33. HP and Dell missed the disruption and the change in the value network. $1000 $100 $10 $1 Time Physical servers: MIPS, heat, density, cost per cycle. Sold to CIOs Cloud computing: Opex cost, time to spin up, scaleout, objects stored. Sold to developers, marketers, startups Thursday, April 10, 14
  34. 34. HP and Dell missed the disruption and the change in the value network. $1000 $100 $10 $1 Time Elastic resources mean we can scale up to huge, and shrink costs when not in use. Thursday, April 10, 14
  35. 35. YOU ARE HERE This is a problem of local maxima. Thursday, April 10, 14
  36. 36. YOU ARE HERE LOCAL MAXIMUM OPTIMIZATION OF CURRENT METRICS Thursday, April 10, 14
  37. 37. YOU ARE HERE GLOBAL MAXIMUMINNOVATION WITH NEW RULES Thursday, April 10, 14
  38. 38. YOU ARE HERE SHORT-TERM INVESTORS HATE GOING DOWNHILL Thursday, April 10, 14
  39. 39. By trying to innovate in a big organization, you are going against its mandate to perpetuate an existing business model. Thursday, April 10, 14
  40. 40. You are a pariah. Thursday, April 10, 14
  41. 41. You are a pariah. Bad listener: Wilfully ignore feedback from your best customers. Thursday, April 10, 14
  42. 42. You are a pariah. Bad listener: Wilfully ignore feedback from your best customers. Cannibal: If successful, destroying existing revenue streams. Thursday, April 10, 14
  43. 43. You are a pariah. Bad listener: Wilfully ignore feedback from your best customers. Cannibal: If successful, destroying existing revenue streams. Job killer: Automation & lower margins are your favorite tools. Thursday, April 10, 14
  44. 44. You are a pariah. Bad listener: Wilfully ignore feedback from your best customers. Cannibal: If successful, destroying existing revenue streams. Job killer: Automation & lower margins are your favorite tools. Security risk: Advocate of transparency, open data, communities. Thursday, April 10, 14
  45. 45. You are a pariah. Bad listener: Wilfully ignore feedback from your best customers. Cannibal: If successful, destroying existing revenue streams. Job killer: Automation & lower margins are your favorite tools. Security risk: Advocate of transparency, open data, communities. Narcissist: Worry constantly about how you’ll get attention. Thursday, April 10, 14
  46. 46. You are a pariah. Bad listener: Wilfully ignore feedback from your best customers. Cannibal: If successful, destroying existing revenue streams. Job killer: Automation & lower margins are your favorite tools. Security risk: Advocate of transparency, open data, communities. Narcissist: Worry constantly about how you’ll get attention. Slum lord: Sell to those with less money, deviants, and weirdos. Thursday, April 10, 14
  47. 47. But there’s hope. Photo by Tom Grydeland on Flickr. Used under a creative commons license. https://www.flickr.com/photos/thunderchild5/225675725 Thursday, April 10, 14
  48. 48. Small batches change everything. Thursday, April 10, 14
  49. 49. 3D printing. Photo by Keith Kissel on Flickr. Used under a creative commons license. https://www.flickr.com/photos/kakissel/6165114664 Thursday, April 10, 14
  50. 50. http://www.flickr.com/photos/fdctsevilla/4052593758/ Cloud computing and shared services. Thursday, April 10, 14
  51. 51. Social platforms. Photo by Michael-Davis Burchat on Flickr. Used under a creative commons license. https://www.flickr.com/photos/curious_e/10473440064 Thursday, April 10, 14
  52. 52. Crowdfunding. Thursday, April 10, 14
  53. 53. Digital channels. PhotobyGaryLerudeonFlickr.Usedunderacreativecommonslicense. https://www.flickr.com/photos/garylerude/7511464618 Thursday, April 10, 14
  54. 54. What happens when the prototype costs what the product does? Thursday, April 10, 14
  55. 55. Iteration wins. Thursday, April 10, 14
  56. 56. In a small-batch, digital-channel world, cycle time trumps scale. Thursday, April 10, 14
  57. 57. Ultimately, successful businesses must become organisms designed to learn. Thursday, April 10, 14
  58. 58. Three kinds of innovation Thursday, April 10, 14
  59. 59. Three kinds of innovation Sustain/core (optimizing for more of the same) Thursday, April 10, 14
  60. 60. Three kinds of innovation Sustain/core (optimizing for more of the same) Improve along current metrics... Thursday, April 10, 14
  61. 61. Three kinds of innovation Sustain/core (optimizing for more of the same) Improve along current metrics... ...or alter the rate of improvement Thursday, April 10, 14
  62. 62. Three kinds of innovation Sustain/core (optimizing for more of the same) Innovate/adjacent (introduce nearby product, market, or method) Improve along current metrics... ...or alter the rate of improvement Thursday, April 10, 14
  63. 63. Three kinds of innovation Sustain/core (optimizing for more of the same) Innovate/adjacent (introduce nearby product, market, or method) Improve along current metrics... ...or alter the rate of improvement Switch to a new value model Thursday, April 10, 14
  64. 64. Three kinds of innovation Sustain/core (optimizing for more of the same) Innovate/adjacent (introduce nearby product, market, or method) Disrupt/transform (Fundamentally reframing the business model & value) Improve along current metrics... ...or alter the rate of improvement Switch to a new value model Thursday, April 10, 14
  65. 65. Three kinds of innovation Sustain/core (optimizing for more of the same) Innovate/adjacent (introduce nearby product, market, or method) Disrupt/transform (Fundamentally reframing the business model & value) Improve along current metrics... ...or alter the rate of improvement Switch to a new value model Change the business model entirely Thursday, April 10, 14
  66. 66. A three-maxima approach See also: Three horizons model, Geoffrey Moore, etc. Thursday, April 10, 14
  67. 67. Current state A three-maxima approach See also: Three horizons model, Geoffrey Moore, etc. Thursday, April 10, 14
  68. 68. Current state Business optimization A three-maxima approach See also: Three horizons model, Geoffrey Moore, etc. Thursday, April 10, 14
  69. 69. Current state Business optimization Product, market, method innovation A three-maxima approach See also: Three horizons model, Geoffrey Moore, etc. Thursday, April 10, 14
  70. 70. Current state Business optimization Product, market, method innovation Business model innovationA three-maxima approach See also: Three horizons model, Geoffrey Moore, etc. Thursday, April 10, 14
  71. 71. Current state Business optimization Product, market, method innovation Business model innovation You can convince execs of this because it’s somewhat familiar. A three-maxima approach See also: Three horizons model, Geoffrey Moore, etc. Thursday, April 10, 14
  72. 72. Current state Business optimization Product, market, method innovation Business model innovation You can convince execs of this because it’s somewhat familiar. This terrifies them because it eats their young. A three-maxima approach See also: Three horizons model, Geoffrey Moore, etc. Thursday, April 10, 14
  73. 73. Good Intrapreneurs embrace the harsh light of data. Thursday, April 10, 14
  74. 74. Thursday, April 10, 14
  75. 75. Thursday, April 10, 14
  76. 76. Times a song in “heavy rotation” is played daily 2007 2012 0 15 30 EVERY 4h EVERY 55m Thursday, April 10, 14
  77. 77. Times a song in “heavy rotation” is played daily 2007 2012 0 15 30 EVERY 4h EVERY 55m Thursday, April 10, 14
  78. 78. Times a song in “heavy rotation” is played daily 2007 2012 0 15 30 EVERY 4h EVERY 55m Thursday, April 10, 14
  79. 79. Good Intrapreneurs take baby steps. Thursday, April 10, 14
  80. 80. Netflix Thursday, April 10, 14
  81. 81. Tesla http://www.hdwallpapersinn.com/wp-content/uploads/2012/12/600-tesla.jpg Thursday, April 10, 14
  82. 82. Twitter’s 140-character limit isn’t arbitrary. It’s constrained by the size of SMS (160 characters) and username (20 characters.) http://i.i.cbsi.com/cnwk.1d/i/tim/2011/11/18/ sms_screen_twitter_activity_stream_270x405.png Thursday, April 10, 14
  83. 83. Good Intrapreneurs reframe. Thursday, April 10, 14
  84. 84. http://www.flickr.com/photos/maladjusted/5207565912 Thursday, April 10, 14
  85. 85. Blockbuster had a lot going for it. Thursday, April 10, 14
  86. 86. Plenty of inventory, of course. But that matters less than... Thursday, April 10, 14
  87. 87. ...market intelligence, customers, existing payment approval, and customer history. Thursday, April 10, 14
  88. 88. The problem was framing: Blockbuster thought it was in the video store management business. Netflix realized it was in the entertainment delivery business. Thursday, April 10, 14
  89. 89. Thursday, April 10, 14
  90. 90. Good Intrapreneurs are subversive. Thursday, April 10, 14
  91. 91. http://www.flickr.com/photos/bootbearwdc/1243690099/ Thursday, April 10, 14
  92. 92. Ultimately, good Intrapreneurs know cycle time trumps scale. Thursday, April 10, 14
  93. 93. www.tiltthewindmill.com Alistair Croll acroll@gmail.com @acroll Windmill by Eric Bennett on Flickr. Used under a Creative Commons license. Thanks! Thursday, April 10, 14

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