Customer Experience Innovation Summit 2006




                 Customer Experience Innovation
                 and Strate...
Growth
                 Innovation
                 Strategy

All Rights Reserved 2006 Idris Mootee
Which is the oldest
                 company in the world ?




All Rights Reserved 2006 Idris Mootee
Build to Last: Kongo Gumi




                 Kongo Gumi, started more than 1,410
                 years ago, is believed...
Which is the oldest
                 company in the US ?




All Rights Reserved 2006 Idris Mootee
Build to Last: Avedis Zildijian




                Avedis Zildjian celebrates 380th birthday and
                honored ...
What Do They Have In Common?



                                                         What you are
                    ...
Built to last
                Built for growth
                Built for sale



All Rights Reserved 2006 Idris Mootee
Dr. John S. Pemberton




All Rights Reserved 2006 Idris Mootee
Steve Job and Steven Wozniak




All Rights Reserved 2006 Idris Mootee
Larry Page and Sergey Brin




All Rights Reserved 2006 Idris Mootee
Growth. How achievable?




All Rights Reserved 2006 Idris Mootee
In general, only 1/3 companies
                managed to grow their revenues at a rate
                faster that the gr...
Warren Buffett on Growth:

                “Growth benefits investors only when a
                business can invest when...
Constraints on Growth



                 Competitive environment                               77%
                      ...
How fast does Sony to
                 produce and launch new
                 products?



All Rights Reserved 2006 Idris...
Every 20 minutes.




                 Elizabeth Debold, What is Enlightenment?


All Rights Reserved 2006 Idris Mootee
What Capabilities Will Be Most Important for Growth




                 Ability to innovate                              ...
Can Large Companies Innovate?



                  Game-changing innovations that
                  produce a competitive ...
How Large Companies Innovate?

                According to IBM’s “Global CEO Study 2006,” 76%
                of the 750 ...
Why?



                  Understanding what is necessary to stay
                  ahead is one thing, very few have the
...
Let’s spend more on R&D




All Rights Reserved 2006 Idris Mootee
Innovation Performance

                                                      100%
                                       ...
We should do better market forecast




All Rights Reserved 2006 Idris Mootee
“This ‘telephone’ has too many shortcomings
               to be seriously considered as a means of
               communi...
It is not how much you spend on R&D
                It is not about the number of patents
                It is not about ...
So what is it about?




All Rights Reserved 2006 Idris Mootee
Only 25% extended the scope of their
                business boundaries for growth. 83% of
                those used acq...
A Dell for every industry

                                        Fortune Magazine Oct 1998




All Rights Reserved 2006 ...
Be Careful About Consultants

                 There’s always desires to imitate the strategies that
                 make...
It’s Really a Revolution of One

                 Dell invented a business model that was widely
                 admired ...
Why? Two Vital Pre-Conditions:



                 Standardized Component
                 No Legacy Channel




All Right...
Where is Dell going next?


                 It’s competitive advantage is eroding and
                 soon they will str...
Strategy Is Not A Product

                 Many did not think about under what
                 conditions cause certain ...
The Problem Is…..


                 Suddenly everyone was obsessed
                 about (at best) yesterday’s
         ...
What about competitive
                 advantages for tomorrow?

                 Here’s the answer…




All Rights Reser...
Customer Experience Innovation
                is now the “tool” for Disruption
                Experience Design is the “...
In the last 30 years the concepts of
               competitive advantage were based
               upon steep scale econo...
The other source of competitive advantage is
                 economies of scope (large enough to absorb
                 ...
In The Past….



                 By bringing scale, scope, control and
                 discipline to what had been fragm...
We now live in a world where
                everything is becoming better …
                they are also increasingly th...
The Sigmoid Curve
                                                         Frog in the Kettle


                          ...
The Sigmoid Curve
                                            Those who lead the first
                                   ...
INNOVATION: Defenders see
                future as more of the same but
                better. Attackers see future mean...
All Rights Reserved 2006 Idris Mootee
DEFENDERS: Think Kodak.
                Think Polaroid. Think Xerox. Think
                Sony. Think Disney. Think Lego....
Here we are….




All Rights Reserved 2006 Idris Mootee
It’s blurring…




All Rights Reserved 2006 Idris Mootee
Internet



                                                                         A byproduct of
                      ...
Customer
                                                          Experience
                                            ...
Convergence of Socialtech
                 IMAGINE: MSN preserves, for the first time, everything
                 we’ve e...
Convergence of Gadgets




All Rights Reserved 2006 Idris Mootee
The future is exciting….




All Rights Reserved 2006 Idris Mootee
From open source
               software to open
               source branding



All Rights Reserved 2006 Idris Mootee
From voice over IP to
               everything over IP




                 A world of billions of chattering devices and...
From mass
               amateurization to mass
               professionaliztion



All Rights Reserved 2006 Idris Mootee
Demand side begin
               to supply itself



                 The Sims’ User-Created Ikea Furniture   Users actual...
Red Ocean Strategy   Blue Ocean Strategy




All Rights Reserved 2006 Idris Mootee
Red Ocean Strategy                     Blue Ocean Strategy
                         Compete in existing market            ...
These are only half truths…




All Rights Reserved 2006 Idris Mootee
Two Reasons:



                They are not mutually exclusive
                The big wins mostly happen in the
        ...
Red Ocean Strategy   Blue Ocean Strategy
                            Microsoft            Webvan
                         ...
Blue Ocean Players…




All Rights Reserved 2006 Idris Mootee
Red Ocean Strategy           Blue Ocean Strategy
                                        Compete in existing market   Crea...
Advancement Activities
                                        Survival Activities



                   Manage volume gro...
Survival Activities   Advancement Activities




                                           Customer Experience Innovation...
CX Innovation Impact Scoring (Illustrative)
                                                             5
               ...
Key takeaways…




All Rights Reserved 2006 Idris Mootee
Customer Experience Innovation
                 happens at the intersections of
                 customer unmet needs, tec...
Customer Experience Innovation
                 occurs not only as a top-down process
                 shaped by corporate...
Customer Experience Innovation are
                 made, not born.
                 It is the art and science of making l...
Danke
                 Gracias
                 Merci
                 Thank you
                 Grazie
                 ...
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Innovation and Strategic Growth

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Innovation and Strategic Growth

  1. 1. Customer Experience Innovation Summit 2006 Customer Experience Innovation and Strategic Growth Idris Mootee SVP Strategy and Innovation Blast Radius Inc. Les Vegas All Rights Reserved 2006 Idris Mootee
  2. 2. Growth Innovation Strategy All Rights Reserved 2006 Idris Mootee
  3. 3. Which is the oldest company in the world ? All Rights Reserved 2006 Idris Mootee
  4. 4. Build to Last: Kongo Gumi Kongo Gumi, started more than 1,410 years ago, is believed to be the oldest family-run enterprise in the world. All Rights Reserved 2006 Idris Mootee
  5. 5. Which is the oldest company in the US ? All Rights Reserved 2006 Idris Mootee
  6. 6. Build to Last: Avedis Zildijian Avedis Zildjian celebrates 380th birthday and honored as oldest business in U.S. according to Dun & Bradstreet formally. All Rights Reserved 2006 Idris Mootee
  7. 7. What Do They Have In Common? What you are deeply passionate about? What you can What drives be the best in your economic the world at? engine? Jim Collins, Good to Great All Rights Reserved 2006 Idris Mootee
  8. 8. Built to last Built for growth Built for sale All Rights Reserved 2006 Idris Mootee
  9. 9. Dr. John S. Pemberton All Rights Reserved 2006 Idris Mootee
  10. 10. Steve Job and Steven Wozniak All Rights Reserved 2006 Idris Mootee
  11. 11. Larry Page and Sergey Brin All Rights Reserved 2006 Idris Mootee
  12. 12. Growth. How achievable? All Rights Reserved 2006 Idris Mootee
  13. 13. In general, only 1/3 companies managed to grow their revenues at a rate faster that the growth of GDP from 1995- 2005 while at the same time delivering shareholder returns above those of the S&P 500 index. All Rights Reserved 2006 Idris Mootee
  14. 14. Warren Buffett on Growth: “Growth benefits investors only when a business can invest when each dollar used to finance the growth creates over a dollar of long term market value. In the case of a low-return business requiring incremental funds, growth hurts the investor.” All Rights Reserved 2006 Idris Mootee
  15. 15. Constraints on Growth Competitive environment 77% 73% Cost / availability of talent Increasingly sophisticated customers 64% Innovation by competitors 60% Excess regulations 52% Less of access to capital 37% Inadequate legal protection 33% Rising health care costs 32% Rising natural resource costs 31% McKinsey & Co. All Rights Reserved 2006 Idris Mootee
  16. 16. How fast does Sony to produce and launch new products? All Rights Reserved 2006 Idris Mootee
  17. 17. Every 20 minutes. Elizabeth Debold, What is Enlightenment? All Rights Reserved 2006 Idris Mootee
  18. 18. What Capabilities Will Be Most Important for Growth Ability to innovate 43% Ability to allocate best talent 25% Ability to manage globally 17% Ability to allocate capital 10% Ability to manage costs 4% McKinsey & Co. All Rights Reserved 2006 Idris Mootee
  19. 19. Can Large Companies Innovate? Game-changing innovations that produce a competitive advantage or drive new business models are unusual for large corporations. All Rights Reserved 2006 Idris Mootee
  20. 20. How Large Companies Innovate? According to IBM’s “Global CEO Study 2006,” 76% of the 750 of CEOs and business leaders interviewed for the study ranked business partner and customer collaboration as top sources for new ideas. This greatly contrasts with internal R&D, which ranked eighth as a source for new ideas — cited by only 14% of CEOs. However, only 51% say their organizations currently collaborate extensively. All Rights Reserved 2006 Idris Mootee
  21. 21. Why? Understanding what is necessary to stay ahead is one thing, very few have the conviction and discipline to act on it. Myths about innovation. All Rights Reserved 2006 Idris Mootee
  22. 22. Let’s spend more on R&D All Rights Reserved 2006 Idris Mootee
  23. 23. Innovation Performance 100% Y=0.0112x+0.0852 R=0.0073 Apple 75% 25% Topline Growth % 0% 0 1 2 3 4 5 6 Xerox -25% -50% -75% Indexed R&D/Sales Ratio Apple’s R&D 5.9% vs. Industry Average 7.6% All Rights Reserved 2006 Idris Mootee
  24. 24. We should do better market forecast All Rights Reserved 2006 Idris Mootee
  25. 25. “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communications. The device is inherently of no value to us.” - Western Union, 1876 All Rights Reserved 2006 Idris Mootee
  26. 26. It is not how much you spend on R&D It is not about the number of patents It is not about accurate market forecast All Rights Reserved 2006 Idris Mootee
  27. 27. So what is it about? All Rights Reserved 2006 Idris Mootee
  28. 28. Only 25% extended the scope of their business boundaries for growth. 83% of those used acquisitions to enter those new markets All Rights Reserved 2006 Idris Mootee
  29. 29. A Dell for every industry Fortune Magazine Oct 1998 All Rights Reserved 2006 Idris Mootee
  30. 30. Be Careful About Consultants There’s always desires to imitate the strategies that makes the most successful companies successful. The nonintegrated business model of Dell is held up as a model for all to emulate. If it’s good for Dell, it must be good for everyone. All Rights Reserved 2006 Idris Mootee
  31. 31. It’s Really a Revolution of One Dell invented a business model that was widely admired and everyone wanted to copy. After 10 years, almost nobody has. All Rights Reserved 2006 Idris Mootee
  32. 32. Why? Two Vital Pre-Conditions: Standardized Component No Legacy Channel All Rights Reserved 2006 Idris Mootee
  33. 33. Where is Dell going next? It’s competitive advantage is eroding and soon they will struggle with growth. By 2007 they will need some serious rethinking about their business strategy All Rights Reserved 2006 Idris Mootee
  34. 34. Strategy Is Not A Product Many did not think about under what conditions cause certain factor to be a competitive advantage How and why do competitive actions erode the underpinnings of those advantages? So everyone wanted to be Dell, Amazon and most recently Apple. All Rights Reserved 2006 Idris Mootee
  35. 35. The Problem Is….. Suddenly everyone was obsessed about (at best) yesterday’s competitive advantage. All Rights Reserved 2006 Idris Mootee
  36. 36. What about competitive advantages for tomorrow? Here’s the answer… All Rights Reserved 2006 Idris Mootee
  37. 37. Customer Experience Innovation is now the “tool” for Disruption Experience Design is the “soul” of Customer Value All Rights Reserved 2006 Idris Mootee
  38. 38. In the last 30 years the concepts of competitive advantage were based upon steep scale economics (high fixed costs vs. variable costs) Then technology allows us to flatten the scale economics. All Rights Reserved 2006 Idris Mootee
  39. 39. The other source of competitive advantage is economies of scope (large enough to absorb the complexity-driven overhead costs of developing, manufacturing or distributing of full product line) The power of data networks changes this economics. The emergence of social networks changes the bargaining power of customers. All Rights Reserved 2006 Idris Mootee
  40. 40. In The Past…. By bringing scale, scope, control and discipline to what had been fragmented and chaotic industries, Du Pont, GM, Shell and a handful of others invented the modern corporation. All Rights Reserved 2006 Idris Mootee
  41. 41. We now live in a world where everything is becoming better … they are also increasingly the same. What happened to differentiation? All Rights Reserved 2006 Idris Mootee
  42. 42. The Sigmoid Curve Frog in the Kettle Difficult to abandon Hard to mobilize the first curve the resources A B Charles Handy, The Age of Paradox All Rights Reserved 2006 Idris Mootee
  43. 43. The Sigmoid Curve Those who lead the first curve is not the one who lead the second curve A B Keep the first curve going long enough to support to the second curve All Rights Reserved 2006 Idris Mootee
  44. 44. INNOVATION: Defenders see future as more of the same but better. Attackers see future means a new world. Few defenders survive. All Rights Reserved 2006 Idris Mootee
  45. 45. All Rights Reserved 2006 Idris Mootee
  46. 46. DEFENDERS: Think Kodak. Think Polaroid. Think Xerox. Think Sony. Think Disney. Think Lego. Think Siebel. Think HP. Think Microsoft. Think Blockbuster. Think ToyRUs. etc… All Rights Reserved 2006 Idris Mootee
  47. 47. Here we are…. All Rights Reserved 2006 Idris Mootee
  48. 48. It’s blurring… All Rights Reserved 2006 Idris Mootee
  49. 49. Internet A byproduct of Social social applications Networks such as e-mail, SMS and photo sharing etc. Wireless Media All Rights Reserved 2006 Idris Mootee
  50. 50. Customer Experience Innovation Convergence of Infotech and Sociotech Disruptive Business Models All Rights Reserved 2006 Idris Mootee
  51. 51. Convergence of Socialtech IMAGINE: MSN preserves, for the first time, everything we’ve ever typed. Gmailers are all bloggers who don’t know it. Next, some of us will store everything we’ve ever said. Then everything we’ve ever seen. This storage (and processing, and bandwidth) will continue to make us all networkable in ways and at a level we never imagined. Lifeblog, SenseCam are early examples of “LifeLogs” or “LifeStories” Systems for auto-archiving and auto-indexing all life experience. What will this turn into? All Rights Reserved 2006 Idris Mootee
  52. 52. Convergence of Gadgets All Rights Reserved 2006 Idris Mootee
  53. 53. The future is exciting…. All Rights Reserved 2006 Idris Mootee
  54. 54. From open source software to open source branding All Rights Reserved 2006 Idris Mootee
  55. 55. From voice over IP to everything over IP A world of billions of chattering devices and gadgets All Rights Reserved 2006 Idris Mootee
  56. 56. From mass amateurization to mass professionaliztion All Rights Reserved 2006 Idris Mootee
  57. 57. Demand side begin to supply itself The Sims’ User-Created Ikea Furniture Users actually living off their game income in Second Life All Rights Reserved 2006 Idris Mootee
  58. 58. Red Ocean Strategy Blue Ocean Strategy All Rights Reserved 2006 Idris Mootee
  59. 59. Red Ocean Strategy Blue Ocean Strategy Compete in existing market Create uncontested market space space Beat the competition Make the competition irrelevant Exploit existing demand Create n capture new demand Make the value-cost trade-off Break the value-cost trade-off Chan Kim and Renée Maub, Blue Ocean Strategy All Rights Reserved 2006 Idris Mootee
  60. 60. These are only half truths… All Rights Reserved 2006 Idris Mootee
  61. 61. Two Reasons: They are not mutually exclusive The big wins mostly happen in the red ocean All Rights Reserved 2006 Idris Mootee
  62. 62. Red Ocean Strategy Blue Ocean Strategy Microsoft Webvan Dell Iridium Pixar Kozmo Virgin Flexplay Google N-Gage iPod Segway All Rights Reserved 2006 Idris Mootee
  63. 63. Blue Ocean Players… All Rights Reserved 2006 Idris Mootee
  64. 64. Red Ocean Strategy Blue Ocean Strategy Compete in existing market Create uncontested market space space The Paradox: To invite an energizing, disparate, invigorating, unpredictable force into you organization so that you can use its chaotic energy to direct continuous renewal. All Rights Reserved 2006 Idris Mootee
  65. 65. Advancement Activities Survival Activities Manage volume growth, Explore new opportunities, repetitive operational tasks develop new and maximum efficiencies competencies and in a deeply conservatory challenge industry rules and tightly controlled while relentlessly pushing fashion. for adoption. Between the two extremes lies the art of strategy. Here one is simultaneously conservative and radical. Idris Mootee, Escape Velocity All Rights Reserved 2006 Idris Mootee
  66. 66. Survival Activities Advancement Activities Customer Experience Innovation All Rights Reserved 2006 Idris Mootee
  67. 67. CX Innovation Impact Scoring (Illustrative) 5 Disruptive Opportunities to improve New Business brand relevance 4 Models Brand Impact Score 3 2 Opportunities to Opportunities for improve business service enhancement 1 economics 0 0 1 2 3 4 5 Business Impact Score Bubble indicates relative size of customer experience innovation opportunity All Rights Reserved 2006 Idris Mootee
  68. 68. Key takeaways… All Rights Reserved 2006 Idris Mootee
  69. 69. Customer Experience Innovation happens at the intersections of customer unmet needs, technology discontinuities and market opportunities. All Rights Reserved 2006 Idris Mootee
  70. 70. Customer Experience Innovation occurs not only as a top-down process shaped by corporate decision makers ….. It is also a bottom-up process shaped by consumer participations. All Rights Reserved 2006 Idris Mootee
  71. 71. Customer Experience Innovation are made, not born. It is the art and science of making luck. Every once in a while you walk down that path and it opens up into huge huge avenue. That makes it all worthwhile. All Rights Reserved 2006 Idris Mootee
  72. 72. Danke Gracias Merci Thank you Grazie Arigatou-Gozaimasita Visit my blog at: mootee.typepad.com All Rights Reserved 2006 Idris Mootee

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