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Intrapreneurship: Tackling The Challenges of Bringing New Innovation to Market

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Organizations are increasingly dependent on new innovation for revenue growth ... an essential driver of organic growth for all companies regardless of size, sector or geography. Despite their ability …

Organizations are increasingly dependent on new innovation for revenue growth ... an essential driver of organic growth for all companies regardless of size, sector or geography. Despite their ability to innovate, many organizations actually struggle to bring their own organic innovation to market and not enough is known about the reasons why.

Join Craig Rhinehart as he shares insights on why large organizations struggle to commercialize new innovation. Craig will discuss his experiences in this area as well as preview some results from the forthcoming The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation.

About the Speaker:
Craig Rhinehart has spent his professional lifetime building businesses and bringing innovative products and solutions to market - including being involved with 8 acquisitions totaling over $2 billion. Today, he is an Intrapreneur at IBM and leads business strategy and market development for IBM's Smarter Care initiative.

You can participate in Craig's latest research here: http://svy.mk/SXNlho.

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  • 1. © 2014 AIPMM www.aipmm.com AIPMM Webinar Series www.aipmm.com
  • 2. © 2014 AIPMM www.aipmm.com
  • 3. © 2014 AIPMM www.aipmm.com Follow: @AIPMM @CraigRhinehart @hmdelcastillo Use: #AIPMM #ProdBOK Tweet!
  • 4. © 2014 AIPMM www.aipmm.com Participate and Win! Must be present to win! One lucky winner will get a free copy of the Guide to the Product Management and Marketing Body of Knowledge (ProdBOK®)
  • 5. © 2014 AIPMM www.aipmm.com Moderator: Hector Del Castillo, CPM, CPMM @hmdelcastillo Today’s Speaker Presenter: Craig Rhinehart Intrapreneur Director, IBM Smarter Care Strategy and Market Development Software Group http://CraigRhinehart.com Craig@Rhinehart.com @CraigRhinehart
  • 6. CopyrightCraigRhinehart2014 Intrapreneurship: Tackling The Challenges of Bringing New Innovation to Market 6 Craig Rhinehart Intrapreneur Director, IBM Smarter Care Strategy and Market Development IBM Software Group Blog: http://CraigRhinehart.com Twitter: @CraigRhinehart Email: Craig@Rhinehart.com Information is my own and doesn’t necessarily represent IBM’s positions, strategies or opinions
  • 7. CopyrightCraigRhinehart2014 • Penicillin: When Alexander Fleming was looking for his wonder drug to cure diseases, he probably never thought it would look like mold. Yes, had Dr. Fleming been a little more tidy and a little less innovative, he might have just cleaned the mold from a contaminated Petri dish he found. Instead, he noticed it was dissolving all the bacteria around it and investigated further. Voila! Wonder drug. • Pacemakers: Electrical engineer John Hopps was conducting research on hyperthermia when he discovered that if a heart stopped beating due to cooling, it could be started again by artificial stimulation. This led to the invention of the pacemaker, and countless lives have been saved ever since. • Microwaves: Percy Spencer of the Raytheon Company was conducting radar research with vaccuum tubes when he accidentally melted a candy bar in his pocket. He put some popcorn in his experiment, and thus was born the microwave popcorn industry. • Corn Flakes: What happened the last time you left a pot on the stove too long? When John Kellogg and his brother Will left a pot of boiled grain on the stove for several days, the resulting mess became the launching point for their famous breakfast cereal. • The Slinky: Naval engineer Richard Jones wasn’t trying to invent what is arguably the best toy ever (your opinion may vary – see Silly Putty). He was working on tension springs designed to monitor power on naval battleships when one of them fell to the floor. Killer Question from that moment: Is this fun or what? 7 http://philmckinney.com/archives/2013/10/unintended- consequences-5-innovation-failures-that-changed-the-world.html … and they almost didn’t happen 5 Innovations That Mattered
  • 8. CopyrightCraigRhinehart2014 • Background on Intrapreneurship • Why Organizations Struggle to Commercialize Innovation • Types of Innovation / Commercialization Process • Real World IBM Commercialization Examples • Invitation: Take The Survey - Get the Full Results and Report • Q&A Session Intrapreneurship Webinar Agenda This presentation will feature preliminary findings from: The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation 8
  • 9. CopyrightCraigRhinehart2014 "A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk- taking and innovation” Intrapreneur Defined The term is generally credited to Gifford Pinchot as far back as 1982 The American Heritage Dictionary: • Not a perfect definition because every company has people who do this • There is a collaboration and decision making component in support of risk taking • Also requires strategy, execution and delivery of results 9
  • 10. CopyrightCraigRhinehart2014 Intrapreneur Definition? PRELIMINARY SURVEY FINDINGS 66% 32% “the definition focuses on the executing part. It does not include "coming up with ideas". Creativity is part of the making of entrepreneurs and should be the same with Intrapreneurs” “… an Intrapreneur could be a member of an intrapreneur team driving a part of the effort” “needs to say something about overcoming obstacles” “Employees in larger organizations DO NOT take risks for fear of job loss” “why does the corporation have to be large?” “It might be that the idea isn´t a product, but a simple change on the way something is done or produced” The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation 10
  • 11. CopyrightCraigRhinehart2014 • 67% of the most innovative companies say innovation is a competitive necessity regardless of sector or geography (1) • Leading innovators have grown 16% higher then the least innovative (1) • Innovation transformation underway (1) • 91% of companies believe innovation is a strategic priority (2) The Importance of Innovation A key driver of organic growth for all companies (1) (1) PWC Report “Breakthrough Innovation and Growth” - September 2013 (2) GE Report “Global Information Barometer” - January 2013 11
  • 12. CopyrightCraigRhinehart2014 Intrapreneurs: Similarities • Requires vision and strategy • Uses leadership and strong execution to succeed • Needs internal funding • Similar process of validate, plan, build, launch and grow • Opportunity driven Intrapreneurs: Differences • Usually Fearful Fear of failure, career embarrassment, confrontation or peer perception • Stakeholders and Motives Not just financial … NIH syndrome, lack of alignment (on priorities) or lack of skills • Navigates Existing Culture May have little or no influence over culture • Has Starting Points Ability to leverage customers Entrepreneurs: Similarities • Requires vision and strategy • Uses leadership and strong execution to succeed • Needs external funding • Similar process of validate, plan, build, launch and grow • Opportunity driven Entrepreneurs: Differences • Usually Fearless Simply start over or pivot mentality • Stakeholder Motives Almost exclusively financial (investors) • Creates New Culture • Starts from Blank Page Must create customer base Intrapreneur or Entrepreneur? Mostly similar, the main differences are in fears and stakeholder motivesWho REALLY has the most at stake? 12
  • 13. CopyrightCraigRhinehart2014 Public Company Innovation Funding “Continuing budget reductions are like dying a painful death by a thousand cuts” • The larger the company, the more acute the problem • Quarter to quarter financial decisions (cutbacks) have unintended downstream innovation consequences • There is tension between organic innovation investment and fiduciary shareholder budget responsibility where innovation almost always loses 13
  • 14. CopyrightCraigRhinehart2014 1. Innovation or Ideation Phase • Differentiate, expand or otherwise extend through new invention(s) or other forms of innovation 2. Commercialization Phase • Commercialize, license or otherwise prepare the innovation for go-to- market / market adoption • Approaches will be driven by type of innovation (incremental, enabling, breakthrough) 3. Market Adoption Phase • Repeatable and scalable adoption / revenue growth from new innovation 3 Phases of Innovation Success 1 2 3 14
  • 15. CopyrightCraigRhinehart2014 • Incremental Innovation * Logical extension, module or expansion to an existing offering that extends the current value as well as leverages existing paths to market • Enabling Innovation * Significant innovation that enables new value to be delivered … or something new to be achieved but still leverages existing paths to market • Breakthrough Innovation ** Significant innovation that enables new value to be delivered… or something new to be achieved but requires new paths to market * Similar to Sustained Innovation ** Similar to Disruptive Innovation Commercialization Approaches Will Vary Tactics are innovation specific (experiments, milestones, funding, process, agility, biz model) 15
  • 16. CopyrightCraigRhinehart2014 • The Innovator’s Dilemma • The Innovator’s Solution both by Clayton Christensen • Ten Types of Innovation: The Discipline of Building Breakthroughs by Larry Keeley, Helen Walters, Ryan Pikkel, Brian Quinn • The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators by Jeff Dyer, Hal Gregersen, Clayton Christensen • Business Model Generation by Alexander Osterwalder and Yves Pigneur Innovation Bookshelf Presenters Opinion: The Most Impactful Books on Innovation 16
  • 17. CopyrightCraigRhinehart2014 • Everett Rogers: Demonstrated the application of diffusion theory to technology adoption in 1962 book “Diffusion of Innovations” • Geoffrey Moore: Expanded the model with “Crossing The Chasm” in 1991 … is now the de facto way to bring new technology solutions to market • Moore’s book introduced a systematic method and tools to prevent new products and solutions from ending up in the “chasm” Proven Adoption Models Exist Entrepreneurs and large enterprises drive adoption that fuels growth THROUGHOUT BUSINESS LIFE CYCLE VEL BUSINESS ACUMEN P r2 CRAIG RHINEHART Marketing Solutions Spanning the Business Life Cycle Rogers’s Original Model NEUR DRIVING ECONOMIC GROWTH THROUGHOUT BUSINESS LIFE CYCLE NG INFORMED INTUITION AND C-LEVEL BUSINESS ACUMEN P r2 CRAIG RHINEHART Marketing Solutions Spanning the Business Life Cycle 703.868.0120 hartprofile art rt.wordpress.com hburn, VA 20147 EUR DRIVING ECONOMIC GROWTH THROUGHOUT BUSINESS LIFE CYCLE NG INFORMED INTUITION AND C-LEVEL BUSINESS ACUMEN P r2 CRAIG RHINEHART Marketing Solutions Spanning the Business Life Cycle 03.868.0120 artprofile rt t.wordpress.com burn, VA 20147 Moore’s “Chasm” Model The “Chasm” 17
  • 18. CopyrightCraigRhinehart2014 Innovation commercialization is not a well understood process • 68% of the corporate entrepreneurs we surveyed described their approach to innovation as unstructured and free- flowing (1) • 40% said that their companies came up with lots of good ideas but couldn’t get enough of them to the commercialization stage (1) • Research shows that structured and formal processes for innovation are more likely to result in viable new ideas (1) • More important, the absence of a formal process correlated with poor performance in bringing new products and services to market (1) (1) Ernst & Young Report “Igniting Innovation: How Hot Companies Fuel Growth from Within” - 2010 Some Innovation Killers 18
  • 19. CopyrightCraigRhinehart2014 • Even though 84% of executives say innovation is extremely or very important to their companies’ growth strategy ... only 39% say their companies are good at commercializing new products or services (1) There is a Sizable Gap Most organizations struggle to bring organic innovation to market (1) McKinsey & Company Report “Innovation and Commercialization” - 2010 19
  • 20. CopyrightCraigRhinehart2014 Polling Question 1 • Innovation is important to the long-term health and/or competitive advantage of an organization? 1. Strongly agree 2. Agree 3. Somewhat agree 4. Disagree 5. Strongly disagree 20
  • 21. CopyrightCraigRhinehart2014 Importance of Innovation? PRELIMINARY SURVEY FINDINGS 100% 88% 9% 3% The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation 21
  • 22. CopyrightCraigRhinehart2014 Polling Question 2 • How would you characterize your organizations ability to commercialize its own innovation? 1. Exceptional 2. Above average 3. Average 4. Below average 5. Poor 22
  • 23. CopyrightCraigRhinehart2014 Ability to Commercialize Innovation? PRELIMINARY SURVEY FINDINGS 72% 20% 8% 8% 38% 26% The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation 23
  • 24. CopyrightCraigRhinehart2014 Mountains of Innovation – Top 10 Companies 1. IBM - 6,809 (patents) 2. Samsung - 4,675 3. Canon - 3,825 4. Sony - 3,098 5. Microsoft - 2,660 6. Panasonic - 2,601 7. Toshiba - 2,416 8. Hon Hai Precision Company - 2,279 9. Qualcomm - 2,103 10. LG Electronics - 1,947 Other innovative notables include Apple, Google, Hewlett-Packard 2013 was the 21st consecutive year that IBM topped the annual list with 6,809 patents • In 2013, the United States Patent and Trademark Office (USPTO) granted more than 270,000 patents • The USPTO awarded 76,850 patents to the top 50 companies alone. http://www.huffingtonpost.com/2014/01/18/innovat ive-companies_n_4624014.html24
  • 25. CopyrightCraigRhinehart2014 • IBM Case Manager IBM Software that adds case management functions and value to existing business process management platform http://www-03.ibm.com/software/products/en/casemana • IBM Cúram Solution for Healthcare Reform IBM Software that adds healthcare reform specific functions and value to existing social services platform .. supported by multiple modules http://www-03.ibm.com/software/products/en/healthcare-reform • IBM Content Collector for Email IBM Software that adds email integration, specific functions and value to existing content collection engine … also extended by other “collectors” http://www-03.ibm.com/software/products/en/contcollforemai Incremental Innovation 25
  • 26. CopyrightCraigRhinehart2014 • IBM Patient Similarity Analytics (Research Version) • IBM Advanced Care Insights (Commercial Version) Originally invented by IBM Research, now commercially available IBM Software that enables a new type of advanced analysis of big data http://www.research.ibm.com/healthcare/projects_patientsimilarity.shtml http://www-03.ibm.com/software/products/en/advanced-care-insights • IBM TAKMI (Research Version) • IBM Content Analytics (Commercial Version) Originally invented by IBM Research (a top 100 invention), now commercially available IBM Software that analyzes and visualizes unstructured data ... core natural language processing engine also used in IBM Watson http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/takmi/ http://www-03.ibm.com/software/products/en/category/content-analytics Enabling Innovation 26
  • 27. CopyrightCraigRhinehart2014 • IBM DeepQA (Research and Jeopardy! Versions) • IBM Watson (Commercial Version) Originally invented by IBM Research, now commercially available IBM Software that processes information more like a human than a computer … by understanding natural language, generating hypotheses based on evidence and learning as it goeshttp://researcher.watson.ibm.com/researcher/view_group.php?id=2099 http://www.ibm.com/smarterplanet/us/en/ibmwatson/ Breakthrough Innovation IBM DeepQA IBM Watson 20112007 2014 Jeopardy! Challenge QeepQA Research Begins Ecosystem Announced Healthcare Solution Announced New Business Unit Formed Business Unit Expanded Commits $1 Billion 27
  • 28. CopyrightCraigRhinehart2014 Validation Iteration Early Adoption 5 Must Haves for Any Successful Project 1. Strong Executive Support / Sponsorship 2. The “Right” Innovation / Alignment Supported by Strong Business Case 3. Experiments, Metrics and Milestones 4. Realistic / Flexible Plan and Timeline 5. Right Team with Persevering Leader 28
  • 29. CopyrightCraigRhinehart2014 Polling Question 3 • Which tools do you use to assess or advance innovative ideas within your organization? 1. SWOT Analysis 2. Business Modeling Tool (such as Business Model Canvas) 3. Business Case or ROI Analysis 4. We have an in-house tool 5. Other 29
  • 30. CopyrightCraigRhinehart2014 Innovation Tools in Use? PRELIMINARY SURVEY FINDINGS The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation 30
  • 31. CopyrightCraigRhinehart2014 World Famous Innovation Failures Bad vision, poor execution and lack of market validation all contributed to these 1. Ford Edsel (1957) 2. Sony Betamax (1979) 3. Colgate Kitchen Entrees (1982) 4. New Coke (1985) 5. Premier Smokeless Cigarettes (1988) 6. The Newton of Apple (1993) 7. Harley Davidson Perfume (1994) 8. BIC Women’s Underwear (1998) 9. The Zune of Microsoft (2006) 10. Cocaine Energy Drinks (2006) http://www.linkedin.com/today/post/article/20130923083142- 206580-world-famous-innovation-failures 31
  • 32. CopyrightCraigRhinehart2014 1. Initiate or help improve your Intrapreneurship program 2. Improve your individual intrapreneurship skills 3. Look for an intrapreneurial project to get involved with Explore AIPMM Product Innovation Leadership certification http://www.aipmm.com/html/certification/strategic-innovation.php 3 Things You Can Do To Make A Difference 32
  • 33. CopyrightCraigRhinehart2014 • The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation https://www.surveymonkey.com/s/intrapreneurshipbenchmark • Launched May 21, 2014 • Closes June 30, 2014 • Full Report Available in Q3 Take The Survey … Get The Results Supporting Blog: Help Stop the Senseless Killing of Important Innovation http://wp.me/pKZJd-ez 33
  • 34. CopyrightCraigRhinehart2014 • First job at 14 (paper boy) … First startup at 19 (photo retouching) … first acquisition at 22 (computer business) • 30+ years as both intrapreneur and entrepreneur in business strategy, innovation, products and marketing • Former Founder and CEO including several start- ups and early stage companies • Emphasis on enterprise software and systems integration in ECM, analytics, cognitive computing, photography, broadcast video, interactive learning • Industry expertise includes healthcare, life sciences, government, legal, education, insurance, media and entertainment • 8 career acquisitions (3 buy and 5 sell) • 8 years at IBM … 4 years at FileNet • Acquired twice by IBM (Tarian and FileNet) About The Speaker 34 Mentors entrepreneurs - multiple programs: • American Corporate Partners • Accelerate DC (George Washington University, Virginia Tech University, Johns Hopkins University) • George Mason University • University of Maryland School of Business
  • 35. CopyrightCraigRhinehart2014 Q&A 35 Craig Rhinehart Presenter / Contact Information Blog: http://CraigRhinehart.com Twitter: @CraigRhinehart Email: Craig@Rhinehart.com or craigrhinehart@us.ibm.com The First Annual Intrapreneurship Benchmark Survey on Commercializing Innovation https://www.surveymonkey.com/s/intrapre neurshipbenchmark Moderator: Hector Del Castillo, CPM, CPMM Email: @hmdelcastillo
  • 36. © 2014 AIPMM www.aipmm.com Join AIPMM! For a limited time, get a one-year AIPMM membership when you purchase a copy of the Guide to the Product Management and Marketing Body of Knowledge (ProdBOK®). Learn more here: http://bit.ly/1iUknEx.
  • 37. © 2014 AIPMM www.aipmm.com Upcoming Courses For more information visit: http://bit.ly/CILCourse.
  • 38. © 2014 AIPMM www.aipmm.com Please Join Us Again! Finding Your Distinctive Value Proposition! June 27th AIPMM Webinar Series: http://aipmm.com/aipmm_webinars Global Product Management Talk http://www.blogtalkradio.com/prodmgmttalk Call For Speakers: http://www.boldpm.com/call_for_speakers Topic Suggestions: support@aipmm.com Announcements: http://www.aipmm.com/subscribe LinkedIn: http://www.linkedin.com/company/aipmm Membership: http://www.aipmm.com/join.php Certification: http://aipmm.com/html/certification/

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